What changed in this filing

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Item 1A. Risk Factors

2022-01-11 compared with 2020-12-30 · 514 added, 443 removed, 45 unchanged (96% of the section changed)

3 unchanged sentences

The following discussion highlights some of the risks that may affect future operating results.

risks and uncertainties not presently known to us, which we currently deem immaterial or which are similar to those faced by other

companies in our industry or businesses in general, may also impair our businesses operations.

If any of the following risks or

uncertainties actually occur, our business, financial condition and operating results could be adversely affected in a material

This could cause the trading prices of our common stock to decline, perhaps significantly, and you may lose part or all of

your investment.

Please see “Cautionary Notes Regarding Forward-Looking Statements.”

Related to Our Business

recorded revenues increased in fiscal year 2020 as compared to fiscal year 2019

reported revenues decreased significantly in fiscal year 2020 to approximately $3,038,000 from $4,518,000 in the prior year, a

decrease of approximately $1,480,000 or 33%, primarily due to the acceleration of deferred revenues in 2019, and franchisees that

were provided a discount by the Company due to the impact of the COVID-19 pandemic on their operations.

While the company

experienced slightly lower master franchise sales, through a series of cost cutting measures, the Company was able to generate

a profit in all four quarters of the reporting year.

Should we begin to incur losses or be unable to reverse its decline in revenues,

our ability to attract new franchisees and maintain positive working relationships with our current franchisees may be impaired.

In addition, if we incur losses, we may need to seek additional financing which could be dilutive to our stockholders.

recent COVID-19 outbreak has been declared a pandemic by the World Health Organization, has spread to the United States and many

other parts of the world and has adversely affected our business operations, employee availability, financial condition, liquidity

and cash flow and the length of such impacts are uncertain.

outbreak of the COVID-19 continues to grow both in the United States and globally, and related government and private sector responsive

actions have and will continue to adversely affect our business operations.

It is impossible to predict the effect and ultimate

impact of the COVID-19 pandemic as the situation is rapidly evolving.

spread of COVID-19 has caused public health officials to recommend precautions to mitigate the spread of the virus, including

warning against congregating in heavily populated areas, such as malls and shopping centers.

Among the precautions has been the

closure of a substantial portion of the schools in the United States, which will adversely impact our royalty revenue from franchisees

and our ability to sell new franchises.

There is significant uncertainty around the breadth and duration of these school closures

and other business disruptions related to COVID-19, as well as its impact on the U.S.

Additional risks and

uncertainties not presently known to us, which we currently deem immaterial or which are similar to those faced by other companies

in our industry or businesses in general, may also impair our businesses operations.

If any of the following risks or uncertainties

actually occur, our business, financial condition and operating results could be adversely affected in a material way.

cause the trading prices of our common stock to decline, perhaps significantly, and you may lose part or all of your investment.

Please see “Cautionary Notes Regarding Forward-Looking Statements.”

Risks Related to Our Business

Nature of our Business is Uncertain

On December 7, 2021,

we entered into an agreement to effect the Share Exchange, which will result in our acquisition of DIA by the issuance of a new

series of preferred stock that will be convertible into approximately 85% of our common stock on a fully diluted basis.

same date, we entered into a separate agreement to dispose of our Learning Business to an entity controlled by our chief executive

The disposal of the Learning Business will not occur until after we complete the acquisition of DIA.

The acquisition of

DIA is subject to a number of material conditions, including that DIA and us raise at least $700,000 in a private placement of

our common stock and warrants (the “DIA Financing”).

DIA operates a mobility platform that enables car dealers to sell

more vehicles in a seamless way through eCommerce.

If the Share Exchange

and the disposition of the Learning Business closes, the nature of our business and capital structure will change dramatically.

All of the risk factors set forth below that relate to the Learning Business will be irrelevant to an investment in our common

At or shortly after the Share Exchange closes, we plan to file a Current Report on Form 8-K that includes, among other things,

information about DIA’s business and risk factors related to an investment in its business.

Until that Form 8-K is filed,

investors in our common stock may not have sufficient information with which to evaluate the risks of an investment in our common

stock as it will exist if the Share Exchange and sale of the Learning Business closes.

Our recorded revenues decreased

in fiscal year 2021 as compared to fiscal year 2020

Our reported revenues

decreased significantly in fiscal year 2021 to approximately $2,195,000 from $3,038,000 in the prior year, a decrease of approximately

$843,000 or 28%, The primary cause of the decrease in royalties and technology fees was due to the fewer franchises paying royalties

and technology fees as a result of the termination of non-performing franchisees from the system, and the interruption of normal

operation at remaining franchises because of the COVID-19 pandemic.

Also, due to the impact of the COVID-19 pandemic on the business

of our franchisees, we voluntarily elected to cease pursuing collections of our marketing fees from our franchisees in March 2020,

which continued for all of fiscal 2021.

While the company experienced no master franchise sales, through a series of cost cutting

measures, the Company was able to generate a profit in all four quarters of the reporting year.

Should we begin to incur losses

or be unable to reverse its decline in revenues, our ability to attract new franchisees and maintain positive working relationships

with our current franchisees may be impaired.

In addition, if we incur losses, we may need to seek additional financing which could

be dilutive to our stockholders.

The recent COVID-19 outbreak has

been declared a pandemic by the World Health Organization, has spread to the United States and many other parts of the world and

has adversely affected our business operations, employee availability, financial condition, liquidity and cash flow and the length

of such impacts are uncertain.

The outbreak of the

COVID-19 continues to grow both in the United States and globally, and related government and private sector responsive actions

have and will continue to adversely affect our business operations.

It is impossible to predict the effect and ultimate impact

of the COVID-19 pandemic as the situation is rapidly evolving.

The spread of COVID-19

has caused public health officials to recommend precautions to mitigate the spread of the virus, including warning against congregating

in heavily populated areas, such as malls and shopping centers.

Among the precautions was the cessation of in-person learning at

a substantial portion of the schools in the United States, which will adversely impact our royalty revenue from franchisees and

our ability to sell new franchises.

There is significant uncertainty around the breadth and duration of these school closures and

other business disruptions related to COVID-19, as well as its impact on the U.S.

and global economy.

The extent to which

COVID-19 impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including

new information that may emerge concerning the severity of COVID-19 and the actions taken to contain it or treat its impact.

have asked our corporate employees whose jobs allow them to work remotely to do so for the foreseeable future.

Such precautionary

measures could create operational challenges as we adjust to a remote workforce, which could adversely impact our business.

financial results are affected by the operating and financial results of and our relationships with our franchisees.

substantial portion of our revenues come from royalties, which have been generally based on a percentage of our franchisees’

As a result, our financial results have been largely dependent upon the operational and financial results of our franchisees.

Negative economic conditions, including inflation, increased unemployment levels and the effect of decreased consumer confidence

or changes in consumer behavior, could materially harm our franchisees’

financial condition, which would cause our royalty

and other revenues to decline and materially and adversely affect our results of operations and financial condition as a result.

In addition, if our franchisees fail to renew their franchise agreements, stop operating their franchise business or enter into

a termination agreement with the Company, these revenues may decrease, which in turn could materially and adversely affect our

results of operations and financial condition.

In part to support franchisee growth and financial planning and to enrich relations

with our franchisees, we altered its royalty fee structure beginning and effective October 1, 2015 to change it to a fixed monthly

charge on an escalating scale over five years.

franchisees could take actions that harm our business.

franchisees are independent third party business owners who are contractually obligated to operate in accordance with the operational

and other standards set forth in the franchise agreement.

Although we engage in a thorough screening process when reviewing potential

franchisee candidates, we cannot be certain that our franchisees will have the business acumen or financial resources necessary

to operate successful franchises in their approved territories.

In addition, certain state franchise laws may limit our ability

to terminate, not renew or modify these franchise agreements.

As independent business owners, the franchisees oversee their own

daily operations.

As a result, the ultimate success and quality of any franchise rests with the franchisee.

If franchisees do

not successfully operate in a manner consistent with required standards and comply with local laws and regulations, franchise

fees and royalties paid to us may be adversely affected and our brand image and reputation could be harmed, which in turn could

adversely affect our results of operations and financial condition.

although we believe we generally maintain positive working relationships with our franchisees, disputes with franchisees could

damage our brand image and reputation and our relationships with our franchisees, generally.

success depends substantially on the value of our brand.

success is substantially dependent upon our ability to maintain and enhance the value of our brand, the customers of our franchisees’

connection to our brand and a positive relationship with our franchisees.

Brand value can be severely damaged even by isolated

incidents, particularly if the incidents receive considerable negative publicity or result in litigation.

Some of these incidents

may relate to the way we manage our relationships with our franchisees, our growth strategies, our development efforts or the

ordinary course of our, or our franchisees’, businesses.

Other incidents that could be damaging to our brand may arise from

events that are or may be beyond our ability to control, such as:

taken (or not taken) by one or more franchisees or their employees relating to health, safety, welfare or otherwise;

security breaches or fraudulent activities associated with our and our franchisees’

electronic payment systems;

and legal claims;

misappropriation, dilution or infringement of our intellectual property;

activity targeted at us or others.

demand for our products and services and our brand’s value could diminish significantly if any such incidents or other matters

erode consumer confidence in us or our products or services, which would likely result in fewer sales of our products and services

and, ultimately, lower royalty revenue, which in turn could materially and adversely affect our results of operations and financial

we fail to successfully implement our growth strategy, our ability to increase our revenues and net income could be adversely

growth strategy relies in large part upon new business development by existing and new franchisees.

Our franchisees face many

challenges in growing their businesses, including:

and cost of financing;

required domestic or foreign governmental permits and approvals;

in new geographic regions and acceptance of our products and services;

with competing franchise systems;

training and retention of qualified personnel;

economic and business conditions.

particular, because the majority of our business development is funded by franchisee investment, our growth strategy is dependent

on our franchisees’

(or prospective franchisees’) ability to access funds to finance such development.

If our franchisees

(or prospective franchisees) are not able to obtain financing at commercially reasonable rates, or at all, they may be unwilling

or unable to invest in business development, and our future growth could be adversely affected.

growth strategy also relies on our ability to identify, recruit and enter into franchise agreements with a sufficient number of

qualified franchisees.

In addition, our ability and the ability of our franchisees to successfully expand into new markets may

be adversely affected by a lack of awareness or acceptance of our brand as well as a lack of existing marketing efforts and operational

execution in these new markets.

To the extent that we are unable to implement effective marketing and promotional programs and

foster recognition and affinity for our brand in new markets, our franchisees may not perform as expected and our growth may be

significantly delayed or impaired.

In addition, franchisees may have difficulty securing adequate financing, particularly in new

markets, where there may be a lack of adequate history and brand familiarity.

Our franchisees’

business development efforts

may not be successful, which could materially and adversely affect our business, results of operations and financial condition.

future growth could place strains on our management, employees, information systems and internal controls, which may adversely

impact our business.

future growth may place significant demands on our administrative, operational, financial and other resources.

Any failure to

manage growth effectively could seriously harm our business.

To be successful, we will need to continue to implement management

information systems and improve our operating, administrative, financial and accounting systems and controls.

We will also need

to train new employees and maintain close coordination among our executive, accounting, finance, legal, human resources, risk

management, marketing, technology, sales and operations functions.

These processes are time-consuming and expensive, increase

management responsibilities and divert management attention, and we may not realize a return on our investment in these processes.

Our failure to successfully execute on our planned expansion could materially and adversely affect our results of operations and

Many public schools resumed

some or all in person learning in the Fall of 2021, but many have since reverted back to remote learning with the advent of the

Omicron strain of COVID-19 in December 2021.

The extent to which COVID-19 impacts our results will depend on future developments,

which are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of COVID-19

and the actions taken to contain it or treat its impact.

We have asked our corporate employees whose jobs allow them to work remotely

to do so for the foreseeable future.

Such precautionary measures could create operational challenges as we adjust to a remote workforce,

which could adversely impact our business.

Our financial results are affected

by the operating and financial results of and our relationships with our franchisees.

A substantial portion

of our revenues come from royalties, which have been generally based on a percentage of our franchisees’ revenues.

our financial results have been largely dependent upon the operational and financial results of our franchisees.

Negative economic

conditions, including inflation, increased unemployment levels and the effect of decreased consumer confidence or changes in consumer

behavior, could materially harm our franchisees’ financial condition, which would cause our royalty and other revenues to

decline and materially and adversely affect our results of operations and financial condition as a result.

In addition, if our

franchisees fail to renew their franchise agreements, stop operating their franchise business or enter into a termination agreement

with the Company, these revenues may decrease, which in turn could materially and adversely affect our results of operations and

financial condition.

economic conditions, including unemployment rates, may reduce demand for our products and services.

revenues and other financial results are subject to general economic conditions.

Our revenues depend, in part, on the number of

dual-income families and working single parents who require child development or educational services.

A deterioration of general

economic conditions, including a soft housing market and/or rising unemployment, may adversely impact us because of the tendency

of out-of-work parents to diminish or discontinue utilization of these services.

Finally, there can be no assurance that demographic

trends, including the number of dual-income families in the workforce, will continue to lead to increased demand for our products

and services.

may require additional financing to execute our business plan and fund our other liquidity needs.

currently have no revolving credit facility or other committed source of recurring capital.

While the company is currently on

positive financial footing, should an economically catastrophic event transpire, and if we are unable to increase our revenues

or decrease our operating expenses from recent historical run-rate levels, we expect that we would need to obtain additional capital

to fund our planned operations.

Should our cash flows from operations not meet or exceed our projections, we may need to pursue

one or more alternatives, such as to:

or delay planned capital expenditures or investments in our business;

additional financing or restructure or refinance all or a portion of our indebtedness at or before maturity;

assets or businesses;

additional equity;

our operations.

such actions may materially and adversely affect our future prospects.

In addition, we cannot ensure that we will be able to raise

additional equity capital, restructure or refinance any of our indebtedness or obtain additional financing on commercially reasonable

terms or at all.

long-term indebtedness we may incur could adversely affect our business and limit our ability to expand our business or respond

to changes, and we may be unable to generate sufficient cash flow to satisfy our debt service obligations.

currently have no outstanding debt, other than the current liabilities reflected in the accompanying consolidated financial statements.

We may incur indebtedness in the future.

Any long-term indebtedness we may incur and the fact that a substantial portion of our

cash flow from operating activities could be needed to make payments on this indebtedness could have adverse consequences, including

the following:

the availability of our cash flow for our operations, capital expenditures, future business opportunities, and other purposes;

our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate, which would

place us at a competitive disadvantage compared to our competitors that may have less debt;

our ability to borrow additional funds;

our vulnerability to general adverse economic and industry conditions;

to comply with the covenants in our debt agreements could result in all of our indebtedness becoming immediately due and payable.

ability to borrow any funds needed to operate and expand our business will depend in part on our ability to generate cash.

ability to generate cash is subject to the performance of our business as well as general economic, financial, competitive, legislative,

regulatory, and other factors that are beyond our control.

If our business does not generate sufficient cash flow from operating

activities or if future borrowings are not available to us in amounts sufficient to enable us to fund our liquidity needs, our

operating results, financial condition, and ability to expand our business may be adversely affected.

Moreover, our inability

to make scheduled payments on our debt obligations in the future would require us to refinance all or a portion of our indebtedness

on or before maturity, sell assets, delay capital expenditures or seek additional equity

are subject to a variety of additional risks associated with our franchisees.

franchise business model subjects us to a number of risks, any one of which may impact our royalty revenues collected from our

franchisees, may harm the goodwill associated with our brand, and may materially and adversely impact our business and results

of operations.

of franchisees.

In part to support franchisee growth and financial planning and to enrich relations with our franchisees,

we altered its royalty fee structure beginning and effective October 1, 2015 to change it to a fixed monthly charge on an escalating

scale over five years.

Our franchisees could take actions

that harm our business.

Our franchisees are

independent third-party business owners who are contractually obligated to operate in accordance with the operational and other

standards set forth in the franchise agreement.

Although we engage in a thorough screening process when reviewing potential franchisee

candidates, we cannot be certain that our franchisees will have the business acumen or financial resources necessary to operate

successful franchises in their approved territories.

In addition, certain state franchise laws may limit our ability to terminate,

not renew or modify these franchise agreements.

As independent business owners, the franchisees oversee their own daily operations.

As a result, the ultimate success and quality of any franchise rests with the franchisee.

If franchisees do not successfully operate

in a manner consistent with required standards and comply with local laws and regulations, franchise fees and royalties paid to

us may be adversely affected and our brand image and reputation could be harmed, which in turn could adversely affect our results

of operations and financial condition.

Moreover, although

we believe we generally maintain positive working relationships with our franchisees, disputes with franchisees could damage our

brand image and reputation and our relationships with our franchisees, generally.

Our success depends substantially

on the value of our brand.

Our success is substantially

dependent upon our ability to maintain and enhance the value of our brand, the customers of our franchisees’ connection to

our brand and a positive relationship with our franchisees.

Brand value can be severely damaged even by isolated incidents, particularly

if the incidents receive considerable negative publicity or result in litigation.

Some of these incidents may relate to the way

we manage our relationships with our franchisees, our growth strategies, our development efforts or the ordinary course of our,

or our franchisees’, businesses.

Other incidents that could be damaging to our brand may arise from events that are or may

be beyond our ability to control, such as:

actions taken (or not taken) by one or more franchisees or their employees relating to health, safety, welfare or otherwise;

data security breaches or fraudulent activities associated with our and our franchisees’ electronic payment systems;

litigation and legal claims;

third-party misappropriation, dilution or infringement of our intellectual property;

illegal activity targeted at us or others.

Consumer demand for

our products and services and our brand’s value could diminish significantly if any such incidents or other matters erode

consumer confidence in us or our products or services, which would likely result in fewer sales of our products and services and,

ultimately, lower royalty revenue, which in turn could materially and adversely affect our results of operations and financial

If we fail to successfully implement

our growth strategy, our ability to increase our revenues and net income could be adversely affected.

Our growth strategy

relies in large part upon new business development by existing and new franchisees.

Our franchisees face many challenges in growing

their businesses, including:

availability and cost of financing;

securing required domestic or foreign governmental permits and approvals;

trends in new geographic regions and acceptance of our products and services;

competition with competing franchise systems;

employment, training and retention of qualified personnel;

general economic and business conditions.

In particular, because

the majority of our business development is funded by franchisee investment, our growth strategy is dependent on our franchisees’

(or prospective franchisees’) ability to access funds to finance such development.

If our franchisees (or prospective franchisees)

are not able to obtain financing at commercially reasonable rates, or at all, they may be unwilling or unable to invest in business

development, and our future growth could be adversely affected.

Our growth strategy

also relies on our ability to identify, recruit and enter into franchise agreements with a sufficient number of qualified franchisees.

In addition, our ability and the ability of our franchisees to successfully expand into new markets may be adversely affected by

a lack of awareness or acceptance of our brand as well as a lack of existing marketing efforts and operational execution in these

To the extent that we are unable to implement effective marketing and promotional programs and foster recognition

and affinity for our brand in new markets, our franchisees may not perform as expected and our growth may be significantly delayed

In addition, franchisees may have difficulty securing adequate financing, particularly in new markets, where there

may be a lack of adequate history and brand familiarity.

Our franchisees’ business development efforts may not be successful,

which could materially and adversely affect our business, results of operations and financial condition.

Our future growth could place

strains on our management, employees, information systems and internal controls, which may adversely impact our business.

Our future growth

may place significant demands on our administrative, operational, financial and other resources.

Any failure to manage growth effectively

could seriously harm our business.

To be successful, we will need to continue to implement management information systems and improve

our operating, administrative, financial and accounting systems and controls.

We will also need to train new employees and maintain

close coordination among our executive, accounting, finance, legal, human resources, risk management, marketing, technology, sales

and operations functions.

These processes are time-consuming and expensive, increase management responsibilities and divert management

attention, and we may not realize a return on our investment in these processes.

Our failure to successfully execute on our planned

expansion could materially and adversely affect our results of operations and financial condition.

Changing economic conditions,

including unemployment rates, may reduce demand for our products and services.

Our revenues and

other financial results are subject to general economic conditions.

Our revenues depend, in part, on the number of dual-income

families and working single parents who require child development or educational services.

A deterioration of general economic

conditions, including a soft housing market and/or rising unemployment, may adversely impact us because of the tendency of out-of-work

parents to diminish or discontinue utilization of these services.

Finally, there can be no assurance that demographic trends, including

the number of dual-income families in the workforce, will continue to lead to increased demand for our products and services.

We may require additional financing

to execute our business plan and fund our other liquidity needs.

We currently have

no revolving credit facility or other committed source of recurring capital.

While the company is currently on positive financial

footing, should an economically catastrophic event transpire, and if we are unable to increase our revenues or decrease our operating

expenses from recent historical run-rate levels, we expect that we would need to obtain additional capital to fund our planned

Should our cash flows from operations not meet or exceed our projections, we may need to pursue one or more alternatives,

reduce or delay planned capital expenditures or investments in our business;

seek additional financing or restructure or refinance all or a portion of our indebtedness at or before maturity;

sell assets or businesses;

sell additional equity;

curtail our operations.

Any such actions

may materially and adversely affect our future prospects.

In addition, we cannot ensure that we will be able to raise additional

equity capital, restructure or refinance any of our indebtedness or obtain additional financing on commercially reasonable terms

Any long-term indebtedness we

may incur could adversely affect our business and limit our ability to expand our business or respond to changes, and we may be

unable to generate sufficient cash flow to satisfy our debt service obligations.

We currently have

no outstanding debt, other than the current liabilities reflected in the accompanying consolidated financial statements.

incur indebtedness in the future.

Any long-term indebtedness we may incur and the fact that a substantial portion of our cash flow

from operating activities could be needed to make payments on this indebtedness could have adverse consequences, including the

reducing the availability of our cash flow for our operations, capital expenditures, future business opportunities, and other purposes;

limiting our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate, which would place us at a competitive disadvantage compared to our competitors that may have less debt;

limiting our ability to borrow additional funds;

increasing our vulnerability to general adverse economic and industry conditions;

failing to comply with the covenants in our debt agreements could result in all of our indebtedness becoming immediately due and payable.

Our ability to borrow

any funds needed to operate and expand our business will depend in part on our ability to generate cash.

Our ability to generate

cash is subject to the performance of our business as well as general economic, financial, competitive, legislative, regulatory,

and other factors that are beyond our control.

If our business does not generate sufficient cash flow from operating activities

or if future borrowings are not available to us in amounts sufficient to enable us to fund our liquidity needs, our operating results,

financial condition, and ability to expand our business may be adversely affected.

Moreover, our inability to make scheduled payments

on our debt obligations in the future would require us to refinance all or a portion of our indebtedness on or before maturity,

sell assets, delay capital expenditures or seek additional equity

We are subject to a variety of

additional risks associated with our franchisees.

Our franchise business

model subjects us to a number of risks, any one of which may impact our royalty revenues collected from our franchisees, may harm

the goodwill associated with our brand, and may materially and adversely impact our business and results of operations.

Bankruptcy of

A franchisee bankruptcy could have a substantial negative impact on our ability to collect payments due under

such franchisee’s franchise agreement(s).

In a franchisee bankruptcy, the bankruptcy trustee may reject its franchise agreement(s)

1 unchanged sentence

bankruptcy code, in which case there would be no further royalty payments from such

franchisee, and we may not ultimately recover those payments in a bankruptcy proceeding of such franchisee in connection with

a damage claim resulting from such rejection.

changes in control.

franchisee, and we may not ultimately recover those payments in a bankruptcy proceeding of such franchisee in connection with a

damage claim resulting from such rejection.

Franchisee changes

Our franchises are operated by independent business owners.

Although we have the right to approve franchise

owners, and any transferee owners, it can be difficult to predict in advance whether a particular franchise owner will be successful.

If an individual franchise owner is unable to successfully establish, manage and operate its business, the performance and quality

of its service could be adversely affected, which could reduce its sales and negatively affect our royalty revenues and brand

Although our franchise agreements prohibit “changes in control”

of a franchisee without our prior consent as

the franchisor, a franchise owner may desire to transfer a franchise.

In addition, in any transfer situation, the transferee may

not be able to successfully operate the business.

In such a case the performance and quality of service could be adversely affected,

which could also reduce its sales and negatively affect our royalty revenues and brand image.

Although we have the right to approve franchise owners,

and any transferee owners, it can be difficult to predict in advance whether a particular franchise owner will be successful.

an individual franchise owner is unable to successfully establish, manage and operate its business, the performance and quality

of its service could be adversely affected, which could reduce its sales and negatively affect our royalty revenues and brand image.

Although our franchise agreements prohibit “changes in control” of a franchisee without our prior consent as the franchisor,

a franchise owner may desire to transfer a franchise.

In addition, in any transfer situation, the transferee may not be able to

successfully operate the business.

In such a case the performance and quality of service could be adversely affected, which could

also reduce its sales and negatively affect our royalty revenues and brand image.

Franchisee insurance.

Our franchise agreements require each franchisee to maintain certain insurance types and levels.

Losses arising

from certain extraordinary hazards, however, may not be covered, and insurance may not be available (or may be available only

at prohibitively expensive rates) with respect to many other risks.

Moreover, any loss incurred could exceed policy limits and

policy payments made to franchisees may not be made on a timely basis.

Any such loss or delay in payment could have a material

adverse effect on a franchisee’s ability to satisfy its obligations under its franchise agreement or other contractual obligations,

which could cause a franchisee to terminate its franchise agreement and, in turn, negatively affect our operating and financial

of our franchisees are operating entities.

Losses arising from certain extraordinary

hazards, however, may not be covered, and insurance may not be available (or may be available only at prohibitively expensive rates)

with respect to many other risks.

Moreover, any loss incurred could exceed policy limits and policy payments made to franchisees

may not be made on a timely basis.

Any such loss or delay in payment could have a material adverse effect on a franchisee’s

ability to satisfy its obligations under its franchise agreement or other contractual obligations, which could cause a franchisee

to terminate its franchise agreement and, in turn, negatively affect our operating and financial results.

Some of our franchisees

are operating entities.

Franchisees may be natural persons or legal entities.

Our franchisees that are

operating companies (as opposed to limited purpose entities) are subject to business, credit, financial and other risks, which

may be unrelated to the operation of their franchise businesses.

These unrelated risks could materially and adversely affect a

franchisee that is an operating company and its ability to service its customers and maintain its operations while making royalty

payments, which in turn may materially and adversely affect our business and operating results.

agreement termination;

Each franchise agreement is subject to termination by us as the franchisor in the event

of a default, generally after expiration of applicable cure periods, although under certain circumstances a franchise agreement

may be terminated by us upon notice without an opportunity to cure.

Our right to terminate franchise agreements may be subject

to certain limitations under any applicable state relationship laws that may require specific notice or cure periods despite the

provisions in the franchise agreement.

The default provisions under the franchise agreements are drafted broadly and include,

among other things, any failure to meet operating standards and actions that may threaten the licensed intellectual property.

Moreover, a franchisee may have a right to terminate its franchise agreement in certain circumstances.

addition, each franchise agreement has an expiration date.

Upon the expiration of a franchise agreement, we or the franchisee

may, or may not, elect to renew the franchise agreement.

If the franchise agreement is renewed, the franchisee will receive a

“successor”

Our franchisees that are operating companies

(as opposed to limited purpose entities) are subject to business, credit, financial and other risks, which may be unrelated to

the operation of their franchise businesses.

These unrelated risks could materially and adversely affect a franchisee that is an

operating company and its ability to service its customers and maintain its operations while making royalty payments, which in

turn may materially and adversely affect our business and operating results.

Franchise agreement

Each franchise agreement is subject to termination by us as the franchisor in the event of a default,

generally after expiration of applicable cure periods, although under certain circumstances a franchise agreement may be terminated

by us upon notice without an opportunity to cure.

Our right to terminate franchise agreements may be subject to certain limitations

under any applicable state relationship laws that may require specific notice or cure periods despite the provisions in the franchise

The default provisions under the franchise agreements are drafted broadly and include, among other things, any failure

to meet operating standards and actions that may threaten the licensed intellectual property.

Moreover, a franchisee may have a

right to terminate its franchise agreement in certain circumstances.

In addition, each

franchise agreement has an expiration date.

Upon the expiration of a franchise agreement, we or the franchisee may, or may not,

elect to renew the franchise agreement.

If the franchise agreement is renewed, the franchisee will receive a “successor”

franchise agreement for an additional term.

Such option, however, is contingent on the franchisee’s

execution of our then-current form of franchise agreement (which may include increased royalty revenues, marketing fees and other

fees and costs), the satisfaction of certain conditions and the payment of a renewal fee.

If a franchisee is unable or unwilling

to satisfy any of the foregoing conditions, the expiring franchise agreement will terminate upon expiration of its term.

to elect to not renew a franchise agreement may be subject to certain limitations under any applicable state relationship laws

that may require specific notice periods or “good cause”

for non-renewal despite the provisions in the franchise agreement.

Such option, however, is contingent on the franchisee’s execution of our then-current

form of franchise agreement (which may include increased royalty revenues, marketing fees and other fees and costs), the satisfaction

of certain conditions and the payment of a renewal fee.

If a franchisee is unable or unwilling to satisfy any of the foregoing

conditions, the expiring franchise agreement will terminate upon expiration of its term.

Our right to elect to not renew a franchise

agreement may be subject to certain limitations under any applicable state relationship laws that may require specific notice periods

or “good cause” for non-renewal despite the provisions in the franchise agreement.

Franchisee litigation;

effects of regulatory efforts.

We and our franchisees are subject to a variety of litigation risks, including,

but not limited to, customer claims, personal injury claims, litigation with or involving our relationship with franchisees, litigation

alleging that the franchisees are our employees or that we are the co-employer of our franchisees’

employees, employee allegations

We and our franchisees are subject to a variety of litigation risks, including, but not limited

to, customer claims, personal injury claims, litigation with or involving our relationship with franchisees, litigation alleging

that the franchisees are our employees or that we are the co-employer of our franchisees’ employees, employee allegations

against the franchisee or us of improper termination and discrimination, landlord/tenant disputes and intellectual property claims,

8 unchanged sentences

efforts to categorize

franchisors as the co-employers of their franchisees’

franchisors as the co-employers of their franchisees’ employees;

legislation to categorize individual franchised businesses

4 unchanged sentences

and negatively affect our ability to sell new franchises.

agreements and franchisee relationships.

Our franchisees develop and operate their business under terms set forth in our franchise

These agreements give rise to long-term relationships that involve a complex set of mutual obligations and mutual

We have a standard set of franchise agreements that we typically use with our franchisees, but various franchisees

have negotiated specific terms in these agreements.

Furthermore, we may from time to time negotiate terms of our franchise agreements

with individual franchisees or groups of franchisees (e.g., a franchisee association).

We seek to have positive relationships

with our franchisees, based in part on our common understanding of our mutual rights and obligations under our agreements, to

enable both the franchisees’

Franchise agreements

and franchisee relationships.

Our franchisees develop and operate their business under terms set forth in our franchise agreements.

These agreements give rise to long-term relationships that involve a complex set of mutual obligations and mutual cooperation.

We have a standard set of franchise agreements that we typically use with our franchisees, but various franchisees have negotiated

specific terms in these agreements.

Furthermore, we may from time to time negotiate terms of our franchise agreements with individual

franchisees or groups of franchisees (e.g., a franchisee association).

We seek to have positive relationships with our franchisees,

based in part on our common understanding of our mutual rights and obligations under our agreements, to enable both the franchisees’

business and our business to be successful.

However, we and our franchisees may not always

maintain a positive relationship or always interpret our agreements in the same way.

Our failure to have positive relationships

with our franchisees could individually or in the aggregate cause us to change or limit our business practices, which may make

our business model less attractive to our franchisees or our members.

our franchisee revenues are not concentrated among one or a small number of parties, the success of our business is significantly

affected by our ability to maintain contractual relationships with profitable franchisees.

A typical franchise agreement has a

ten-year term.

If we fail to maintain or renew our contractual relationships on acceptable terms, or if one or more significant

franchisees were to become insolvent or otherwise were unwilling to pay amounts due to us, our business, reputation, financial

condition and results of operations could be materially adversely affected.

business is subject to various laws and regulations, and changes in such laws and regulations, or failure to comply with existing

or future laws and regulations, could adversely affect our business.

are subject to the FTC Franchise Rule promulgated by the FTC that regulates the offer and sale of franchises in the United States

and that requires us to provide to all prospective franchisees certain mandatory disclosure in a FDD.

In addition, we are subject

to state franchise sales laws in 14 states that regulate the offer and sale of franchises by requiring us to make a franchise

filing and, in some instances, or obtain approval by the state franchise agency of that filing prior to our making any offer or

sale of a franchise in those states and to provide a FDD to prospective franchisees in accordance with such laws.

subject to franchise laws in certain provinces in Canada, which, like the FTC Franchise Rule, require presale disclosure to prospective

franchisees prior to the sale of a franchise.

We must also comply with international laws, including franchise laws, in the countries

where we have franchise operations or conduct franchise offer and sales activities.

Failure to comply with such laws may result

in a franchisee’s right to rescind its franchise agreement and to seek damages, and may result in investigations or actions

from federal or state franchise authorities, civil fines or penalties, and stop orders, among other remedies.

We are also subject

to franchise relationship laws in approximately 24 states that regulate many aspects of the franchisor-franchisee relationship,

including renewals and terminations of franchise agreements, franchise transfers, the applicable law and venue in which franchise

disputes must be resolved, discrimination and franchisees’

right to associate, among others.

Our failure to comply with

such franchise relationship laws could result in fines, damages, restitution and our inability to enforce franchise agreements

where we have violated such laws.

Our non-compliance with federal and state franchise laws could result in liability to franchisees

and regulatory authorities (as described above), inability to enforce our franchise agreements, required rescission of franchise

agreements and a reduction in our anticipated royalty revenue, which in turn may materially and adversely affect our business

and results of operating.

and our franchisees are also subject to the Fair Labor Standards Act of 1938, as amended, and various other laws in the United

States and foreign countries governing such matters as minimum-wage requirements, overtime and other working conditions.

A significant

number of our and our franchisees’

employees are paid at rates related to the U.S.

federal minimum wage, and past increases

federal minimum wage have increased labor costs, as would future increases.

Any increases in labor costs might result

in our and our franchisees inadequately staffing stores.

Such increases in labor costs and other changes in labor laws could affect

franchisee performance and quality of service, decrease royalty revenues and adversely affect our brand.

have identified material weaknesses in our internal controls over financial reporting in the past.

our remedial measures are insufficient to address the material weakness or if additional material weaknesses or significant deficiencies

in our internal control are discovered or occur in the future, we may be unable to accurately report our financial results, or

report them within the required timeframes, our consolidated financial statements may contain material misstatements and we could

be required to restate our financial results in the future, which could cause investors and others to lose confidence in our financial

statements, limit our ability to raise capital and could adversely affect our reputation, results of operations and consolidated

financial condition.

markets for our services are competitive, and we may be unable to compete successfully.

markets for our services are competitive, and we may be subject to increased competition in our markets in the future.

existing competitors and new entrants into the markets where we do business to constantly revise and improve their business models

in light of challenges from us or other companies in the industry.

If we cannot respond effectively to advances by our competitors,

our business and financial performance may be adversely affected.

Increased competition may result in new products and services

that fundamentally change our markets, reduce prices, reduce margins or decrease our market share.

We may be unable to compete

successfully against current or future competitors, some of whom may have significantly greater financial, technical, manufacturing,

marketing, sales and other resources than we do.

quarterly revenues and operating results are difficult to predict and may fluctuate significantly in the future.

quarterly revenues and operating results are difficult to predict and may fluctuate significantly from quarter to quarter.

fluctuations may cause the market price of our common stock to decline.

We base our planned operating expenses in part on expectations

of future revenues, and our expenses are relatively fixed in the short term.

If revenues for a particular quarter are lower than

we expect, we may be unable to proportionately reduce our operating expenses for that quarter, which would harm our operating

results for that quarter.

In future periods, our revenue and operating results may be below the expectation of analysts and investors,

which may cause the market price of our common stock to decline.

However, we and our franchisees may not always maintain a positive relationship or

always interpret our agreements in the same way.

Our failure to have positive relationships with our franchisees could individually

or in the aggregate cause us to change or limit our business practices, which may make our business model less attractive to our

franchisees or our members.

While our franchisee

revenues are not concentrated among one or a small number of parties, the success of our business is significantly affected by

our ability to maintain contractual relationships with profitable franchisees.

A typical franchise agreement has a ten-year term.

If we fail to maintain or renew our contractual relationships on acceptable terms, or if one or more significant franchisees were

to become insolvent or otherwise were unwilling to pay amounts due to us, our business, reputation, financial condition and results

of operations could be materially adversely affected.

Our business is subject to various

laws and regulations, and changes in such laws and regulations, or failure to comply with existing or future laws and regulations,

could adversely affect our business.

We are subject to

the FTC Franchise Rule promulgated by the FTC that regulates the offer and sale of franchises in the United States and that requires

us to provide to all prospective franchisees certain mandatory disclosure in a FDD.

In addition, we are subject to state franchise

sales laws in 14 states that regulate the offer and sale of franchises by requiring us to make a franchise filing and, in some

instances, or obtain approval by the state franchise agency of that filing prior to our making any offer or sale of a franchise

in those states and to provide a FDD to prospective franchisees in accordance with such laws.

We are also subject to franchise

laws in certain provinces in Canada, which, like the FTC Franchise Rule, require presale disclosure to prospective franchisees

prior to the sale of a franchise.

We must also comply with international laws, including franchise laws, in the countries where

we have franchise operations or conduct franchise offer and sales activities.

Failure to comply with such laws may result in a

franchisee’s right to rescind its franchise agreement and to seek damages, and may result in investigations or actions from

federal or state franchise authorities, civil fines or penalties, and stop orders, among other remedies.

We are also subject to

franchise relationship laws in approximately 24 states that regulate many aspects of the franchisor-franchisee relationship, including

renewals and terminations of franchise agreements, franchise transfers, the applicable law and venue in which franchise disputes

must be resolved, discrimination and franchisees’ right to associate, among others.

Our failure to comply with such franchise

relationship laws could result in fines, damages, restitution and our inability to enforce franchise agreements where we have violated

Our non-compliance with federal and state franchise laws could result in liability to franchisees and regulatory authorities

(as described above), inability to enforce our franchise agreements, required rescission of franchise agreements and a reduction

in our anticipated royalty revenue, which in turn may materially and adversely affect our business and results of operating.

We and our franchisees

are also subject to the Fair Labor Standards Act of 1938, as amended, and various other laws in the United States and foreign countries

governing such matters as minimum-wage requirements, overtime and other working conditions.

A significant number of our and our

franchisees’ employees are paid at rates related to the U.S.

federal minimum wage, and past increases in the U.S.

minimum wage have increased labor costs, as would future increases.

Any increases in labor costs might result in our and our franchisees

inadequately staffing stores.

Such increases in labor costs and other changes in labor laws could affect franchisee performance

and quality of service, decrease royalty revenues and adversely affect our brand.

We have identified material weaknesses

in our internal controls over financial reporting in the past.

If our remedial measures

are insufficient to address the material weakness or if additional material weaknesses or significant deficiencies in our internal

control are discovered or occur in the future, we may be unable to accurately report our financial results, or report them within

the required timeframes, our consolidated financial statements may contain material misstatements and we could be required to restate

our financial results in the future, which could cause investors and others to lose confidence in our financial statements, limit

our ability to raise capital and could adversely affect our reputation, results of operations and consolidated financial condition.

The markets for our services are

competitive, and we may be unable to compete successfully.

The markets for our

services are competitive, and we may be subject to increased competition in our markets in the future.

We expect existing competitors

and new entrants into the markets where we do business to constantly revise and improve their business models in light of challenges

from us or other companies in the industry.

If we cannot respond effectively to advances by our competitors, our business and financial

performance may be adversely affected.

Increased competition may result in new products and services that fundamentally change

our markets, reduce prices, reduce margins or decrease our market share.

We may be unable to compete successfully against current

or future competitors, some of whom may have significantly greater financial, technical, manufacturing, marketing, sales and other

resources than we do.

Our quarterly revenues and operating results are difficult

to predict and may fluctuate significantly in the future.

Our quarterly revenues

and operating results are difficult to predict and may fluctuate significantly from quarter to quarter.

These fluctuations may

cause the market price of our common stock to decline.

We base our planned operating expenses in part on expectations of future

revenues, and our expenses are relatively fixed in the short term.

If revenues for a particular quarter are lower than we expect,

we may be unable to proportionately reduce our operating expenses for that quarter, which would harm our operating results for

that quarter.

In future periods, our revenue and operating results may be below the expectation of analysts and investors, which

may cause the market price of our common stock to decline.

Factors that are likely to cause our revenues and operating results

to fluctuate include those discussed elsewhere in this section.

rely upon trademark, copyright and trade secret laws and contractual restrictions to protect our proprietary rights, and if these

rights are not sufficiently protected, our ability to compete and generate revenues could be harmed.

rely on a combination of trademark, copyright and trade secret laws, and contractual restrictions, such as confidentiality agreements

and licenses, to establish and protect our proprietary rights.

The steps taken by us to protect our proprietary information may

not be adequate to prevent misappropriation of our technology.

We rely upon trademark, copyright

and trade secret laws and contractual restrictions to protect our proprietary rights, and if these rights are not sufficiently

protected, our ability to compete and generate revenues could be harmed.

We rely on a combination

of trademark, copyright and trade secret laws, and contractual restrictions, such as confidentiality agreements and licenses, to

establish and protect our proprietary rights.

The steps taken by us to protect our proprietary information may not be adequate

to prevent misappropriation of our technology.

Our proprietary rights may not be adequately protected because:

and contractual restrictions may not prevent misappropriation of our technologies or deter others from developing similar

technologies;

unauthorized use of our products and trademarks is difficult, expensive and time-consuming, and we may be unable to determine

the extent of any unauthorized use.

laws of certain foreign countries may not protect the use of unregistered trademarks or other proprietary rights to the same extent

as do the laws of the United States.

As a result, international protection of our image may be limited and our right to use our

trademarks and other proprietary rights outside the United States could be impaired.

Other persons or entities may have rights

to trademarks that contain portions of our marks or may have registered similar or competing marks for digital signage in foreign

There may also be other prior registrations of trademarks identical or similar to our trademarks in other foreign countries.

Our inability to register our trademarks or other proprietary rights or purchase or license the right to use the relevant trademarks

or other proprietary rights in these jurisdictions could limit our ability to penetrate new markets in jurisdictions outside the

United States.

may be necessary to protect our trademarks and other intellectual property rights, to enforce these rights or to defend against

claims by third parties alleging that we infringe, dilute or otherwise violate third-party trademark or other intellectual property

Any litigation or claims brought by or against us, whether with or without merit, or whether successful or not, could

result in substantial costs and diversion of our resources, which could have a material adverse effect on our business, financial

condition, results of operations or cash flows.

Any intellectual property litigation or claims against us could result in the

loss or compromise of our intellectual property rights, could subject us to significant liabilities, require us to seek licenses

on unfavorable terms, if available at all or prevent us from manufacturing or selling certain products, any of which could have

a material adverse effect on our business, financial condition, results of operations or cash flows.

may face intellectual property infringement claims that could be time-consuming, costly to defend and result in its loss of significant

parties may assert intellectual property infringement claims against us, and our products and services may infringe the intellectual

property rights of third parties.

laws and contractual restrictions may not prevent misappropriation of our technologies or deter others from developing similar technologies;

policing unauthorized use of our products and trademarks is difficult, expensive and time-consuming, and we may be unable to determine the extent of any unauthorized use.

The laws of certain

foreign countries may not protect the use of unregistered trademarks or other proprietary rights to the same extent as do the laws

of the United States.

As a result, international protection of our image may be limited and our right to use our trademarks and

other proprietary rights outside the United States could be impaired.

Other persons or entities may have rights to trademarks that

contain portions of our marks or may have registered similar or competing marks for digital signage in foreign countries.

may also be other prior registrations of trademarks identical or similar to our trademarks in other foreign countries.

Our inability

to register our trademarks or other proprietary rights or purchase or license the right to use the relevant trademarks or other

proprietary rights in these jurisdictions could limit our ability to penetrate new markets in jurisdictions outside the United

Litigation may be

necessary to protect our trademarks and other intellectual property rights, to enforce these rights or to defend against claims

by third parties alleging that we infringe, dilute or otherwise violate third-party trademark or other intellectual property rights.

Any litigation or claims brought by or against us, whether with or without merit, or whether successful or not, could result in

substantial costs and diversion of our resources, which could have a material adverse effect on our business, financial condition,

results of operations or cash flows.

Any intellectual property litigation or claims against us could result in the loss or compromise

of our intellectual property rights, could subject us to significant liabilities, require us to seek licenses on unfavorable terms,

if available at all or prevent us from manufacturing or selling certain products, any of which could have a material adverse effect

on our business, financial condition, results of operations or cash flows.

We may face intellectual property

infringement claims that could be time-consuming, costly to defend and result in its loss of significant rights.

Other parties may

assert intellectual property infringement claims against us, and our products and services may infringe the intellectual property

rights of third parties.

We may also initiate claims against third parties to defend our intellectual property.

property litigation is expensive and time-consuming and could divert management’s attention from our core business.

is a successful claim of infringement against us, we may be required to pay substantial damages to the party claiming infringement,

Intellectual property

litigation is expensive and time-consuming and could divert management’s attention from our core business.

If there is a

successful claim of infringement against us, we may be required to pay substantial damages to the party claiming infringement,

develop non-infringing technology or enter into royalty or license agreements that may not be available on acceptable terms, if

Our failure to develop non-infringing technologies or license the proprietary rights on a timely basis could harm our

Our failure to develop non-infringing technologies or license the proprietary rights on a timely basis could harm our business.

Also, we may be unaware of filed patent applications that relate to our products.

Parties making infringement claims

may be able to obtain an injunction, which could prevent us from operating portions of our business or using technology that contains

the allegedly infringing intellectual property.

Any intellectual property litigation could adversely affect our business, financial

condition or results of operations.

depend on key executive management and other key personnel, and may not be able to retain or replace these individuals or recruit

additional personnel, which could harm our business.

of intense competition for our employees and because of other risk factors identified in this report, we may be unable to retain

our management team and other key personnel and may be unable to find qualified replacements.

All of our key employees are employed

on an “at will”

basis and we do not have key-man life insurance covering any of our employees.

The loss of the services

of any of our executive management members or other key personnel could have a material adverse effect on our business and prospects,

as we may not be able to find suitable individuals to replace such personnel on a timely basis or without incurring increased

costs, or at all.

could be subject to changes in tax rates, the adoption of new U.S.

or international tax legislation or exposure to additional

tax liabilities.

are subject to income taxes in the U.S.

Parties making infringement claims may be able

to obtain an injunction, which could prevent us from operating portions of our business or using technology that contains the allegedly

infringing intellectual property.

Any intellectual property litigation could adversely affect our business, financial condition

or results of operations.

We depend on key executive management

and other key personnel, and may not be able to retain or replace these individuals or recruit additional personnel, which could

harm our business.

Because of intense

competition for our employees and because of other risk factors identified in this report, we may be unable to retain our management

team and other key personnel and may be unable to find qualified replacements.

All of our key employees are employed on an “at

will” basis and we do not have key-man life insurance covering any of our employees.

The loss of the services of any of our

executive management members or other key personnel could have a material adverse effect on our business and prospects, as we may

not be able to find suitable individuals to replace such personnel on a timely basis or without incurring increased costs, or at

We could be subject to changes

in tax rates, the adoption of new U.S.

or international tax legislation or exposure to additional tax liabilities.

We are subject to

income taxes in the U.S.

and other foreign jurisdictions.

Significant judgment is required in determining our tax

provision for income taxes.

In the ordinary course of our business, there are many transactions and calculations where the ultimate

tax determination is uncertain.

We are subject to the examination of our income tax returns, payroll taxes and other tax matters

by the Internal Revenue Service and other tax authorities and governmental bodies.

The Company regularly assesses the likelihood

of an adverse outcome resulting from these examinations to determine the adequacy of its provision for income taxes and payroll

tax accruals.

Significant judgment is required in determining our tax provision for

income taxes.

In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination

is uncertain.

We are subject to the examination of our income tax returns, payroll taxes and other tax matters by the Internal

Revenue Service and other tax authorities and governmental bodies.

The Company regularly assesses the likelihood of an adverse

outcome resulting from these examinations to determine the adequacy of its provision for income taxes and payroll tax accruals.

There can be no assurances as to the outcome of these examinations.

Although we believe our tax estimates are reasonable,

the final determination of tax audits and any related litigation could be materially different from our historical tax provisions

and payroll accruals.

The results of an audit or litigation could have a material effect on our consolidated financial statements

in the period or periods for which that determination is made.

Our effective income tax rate in the future could be adversely

affected by a number of factors, including changes in the mix of earnings in countries with different statutory tax rates, changes

in tax laws, the outcome of income tax audits, and any repatriation of non-U.S.

earnings for which we have not previously provided

Related to Our Common Stock

concentration of our capital stock ownership with insiders will likely limit your ability to influence corporate matters.

of December 21, 2020, our executive officers, directors, significant shareholders and affiliated persons and entities collectively,

beneficially owned approximately 42.5% of our outstanding common stock.

As a result, these persons and entities have the ability

to exercise control over most matters that require approval by our stockholders, including the election of directors and approval

of significant corporate transactions.

Corporate action might be taken even if other stockholders oppose them.

This concentration

of ownership might also have the effect of delaying or preventing a change in control of our company that other stockholders may

view as beneficial.

with the Sarbanes-Oxley Act of 2002 will require substantial financial and management resources.

404 of the Sarbanes-Oxley Act of 2002 requires that we evaluate and report on our system of internal controls and, if and when

we are no longer a “smaller reporting company,”

will require that we have such a system of internal controls audited.

If we fail to maintain the adequacy of our internal controls, we could be subject to regulatory scrutiny, civil or criminal penalties

and/or Stockholder litigation.

Although we believe our tax estimates are reasonable, the final

determination of tax audits and any related litigation could be materially different from our historical tax provisions and payroll

The results of an audit or litigation could have a material effect on our consolidated financial statements in the period

or periods for which that determination is made.

Our effective income tax rate in the future could be adversely affected by a number

of factors, including changes in the mix of earnings in countries with different statutory tax rates, changes in tax laws, the

outcome of income tax audits, and any repatriation of non-U.S.

earnings for which we have not previously provided for U.S.

Risks Related to Our Common Stock

The concentration of our capital

stock ownership with insiders will likely limit your ability to influence corporate matters.

As of December 31,

2021, our executive officers, directors, significant shareholders and affiliated persons and entities, collectively, beneficially

owned approximately 38.5% of our outstanding common stock.

If the Share Exchange and the disposition of our Learning Business occurs,

we project that officers, directors, significant shareholders and affiliated persons and entities will, through a new series of

preferred stock, control in excess of 80% of the votes on any matter that requires the approval of our stockholders.

these persons and entities have the ability to exercise control over most matters that require approval by our stockholders, including

the election of directors and approval of significant corporate transactions.

Corporate action might be taken even if other stockholders

This concentration of ownership might also have the effect of delaying or preventing a change in control of our company

that other stockholders may view as beneficial.

Compliance with the Sarbanes-Oxley

Act of 2002 will require substantial financial and management resources.

Section 404 of the

Sarbanes-Oxley Act of 2002 requires that we evaluate and report on our system of internal controls and, if and when we are no longer

a “smaller reporting company,” will require that we have such a system of internal controls audited.

If we fail to

maintain the adequacy of our internal controls, we could be subject to regulatory scrutiny, civil or criminal penalties and/or

Stockholder litigation.

Any inability to provide reliable financial reports could harm our business.

Furthermore, any failure

to implement required new or improved controls, or difficulties encountered in the implementation of adequate controls over our

financial processes and reporting in the future, could harm our operating results or cause us to fail to meet our reporting obligations.

Furthermore, any failure to

implement required new or improved controls, or difficulties encountered in the implementation of adequate controls over our financial

processes and reporting in the future, could harm our operating results or cause us to fail to meet our reporting obligations.

Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have

a negative effect on the trading price of our securities.

currently are eligible to deregister our Common Stock from SEC reporting requirements.

filing this Form 10-K and Form 10-Q for the subsequent quarter, we will be eligible to deregister our securities from the reporting

requirements of the Securities Exchange Act of 1934, as amended as we currently have less than 300 shareholders of record and

our Common Stock is not listed on a stock exchange.

If our Common Stock is deregistered, it may be more difficult to receive information

of the Company which could affect the liquidity of our Common Stock.

in our charter documents and Delaware law may discourage or delay an acquisition that stockholders may consider favorable, which

could decrease the value of our common stock.

certificate of incorporation, our bylaws, and Delaware corporate law contain provisions that could make it harder for a third

party to acquire us without the consent of our board of directors (the “Board”).

We currently are eligible to deregister

our Common Stock from SEC reporting requirements.

Upon filing this

Form 10-K and Form 10-Q for the subsequent quarter, we will be eligible to deregister our securities from the reporting requirements

of the Securities Exchange Act of 1934, as amended as we currently have less than 300 shareholders of record and our Common Stock

is not listed on a stock exchange.

If our Common Stock is deregistered, it may be more difficult to receive information of the

Company which could affect the liquidity of our Common Stock.

Provisions in our charter documents

and Delaware law may discourage or delay an acquisition that stockholders may consider favorable, which could decrease the value

of our common stock.

Our certificate of

incorporation, our bylaws, and Delaware corporate law contain provisions that could make it harder for a third party to acquire

us without the consent of our board of directors (the “Board”).

These provisions include those that:

authorize the issuance of up to 10,000,000 shares of preferred stock in one or more series without a stockholder vote.

in certain circumstances, Delaware law also imposes restrictions on mergers and other business combinations between us and any

holder of 15% or more of our outstanding common stock, though we are not currently subject to this limitation because our Common

Stock is not listed on a national securities exchange and we have less than 2,000 stockholders of record.

have not paid cash dividends to our shareholders and currently have no plans to pay future cash dividends.

plan to retain earnings to finance future growth and have no current plans to pay cash dividends to shareholders.

Any indebtedness

that we incur in the future may also limit our ability to pay dividends.

Because we have not paid cash dividends, holders of our

securities will experience a gain on their investment in our securities only in the case of an appreciation of value of our securities.

You should neither expect to receive dividend income from investing in our securities nor an appreciation in value.

authorize the

issuance of up to 10,000,000 shares of preferred stock in one or more series without a stockholder vote.

In addition, in certain

circumstances, Delaware law also imposes restrictions on mergers and other business combinations between us and any holder of 15%

or more of our outstanding common stock, though we are not currently subject to this limitation because our Common Stock is not

listed on a national securities exchange and we have less than 2,000 stockholders of record.

We have not paid cash dividends

to our shareholders and currently have no plans to pay future cash dividends.

We plan to retain

earnings to finance future growth and have no current plans to pay cash dividends to shareholders.

Any indebtedness that we incur

in the future may also limit our ability to pay dividends.

Because we have not paid cash dividends, holders of our securities will

experience a gain on their investment in our securities only in the case of an appreciation of value of our securities.

neither expect to receive dividend income from investing in our securities nor an appreciation in value.

Unresolved Staff Comments

Not applicable.

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

What changed 10-K

Item 1A. Risk Factors