What changed in this filing

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Item 1A. Risk Factors

2021-12-16 compared with 2020-12-17 · 527 added, 463 removed, 53 unchanged (95% of the section changed)

Investing in our

common stock involves a high degree of risk.

You should carefully consider the following Risk Factors before deciding whether

to purchase or sell stock in the Company.

Additional risks and uncertainties not presently known to us, or that we currently

deem immaterial, may also impair our business operations or our financial condition.

If any of the events discussed in the

Risk Factors below occur, our business, consolidated financial condition, results of operations or prospects could be

materially and adversely affected.

In such case, the value and marketability of the common stock could decline.

Investing in our common stock

involves a high degree of risk.

You should carefully consider the following risk factors before deciding whether to purchase or sell stock

in the Company.

Additional risks and uncertainties not presently known to us, or that we currently deem immaterial, may also impair our

business operations or our financial condition.

If any of the events discussed below occur, our business, consolidated financial condition,

results of operations or prospects could be materially and adversely affected.

In such case, the value and marketability of the common

stock could decline.

Risks Relating to Our Business, Liquidity and Operations

Our results of operations have been

negatively impacted by the coronavirus pandemic.

The COVID-19 pandemic

has spread across the globe and continues to negatively impact worldwide economic activity and has impacted our

Company in a number of ways.

COVID-19 has increased the risk that the Company or its employees, suppliers, customers

and other commercial partners may be prevented from conducting business for an indefinite period of time, including due to the

spread of the disease or shutdowns requested or mandated by governmental authorities.

Specifically, COVID-19 has increased the

risk of customers’

inability to pay for our design services and has the potential to continue to impact collections on the

distribution side of the business.

The Company has transitioned some of its employees to working remotely, which subjects

the Company to increased cybersecurity risks and may reduce workplace efficiency.

Business shutdowns have disrupted our supply

chain and the manufacture or shipment of our products and have delayed the rollout of our smart enabled retail products to big

box retail stores.

The full extent of

COVID-19’s negative impact on our business remains uncertain and it is not possible at this time to estimate the full impact

that COVID-19 will have on our business.

Any of the issues discussed above could have a material adverse effect on our business

if this continues for an extended period of time.

If we incur significant declines in customer orders, increased aging of accounts

receivable or other negative consequences due to COVID-19, the extent of which remains highly uncertain, it will have a material

adverse effect on our business, financial condition and results of operations.

During Fiscal 2020, we generated an

operating loss and negative cash flow from operations, we cannot assure you that we will regain profitability in the future.

In Fiscal 2020, we

generated an operating loss of $1,982,000 and had net cash used in operating activities of $263,000.

Although we generated net

income in Fiscal 2018 and 2017, we incurred significant losses from operations in Fiscal 2019 and Fiscal 2020.

The ongoing COVID-19 pandemic and measures

intended to prevent its spread have had, and may continue to have, a material and adverse effect on our business and results of operations.

Global health concerns relating

to the COVID-19 pandemic and related government actions taken to reduce the spread of the virus have been weighing on the macroeconomic

environment, and the pandemic has significantly increased economic uncertainty and reduced economic activity.

Small businesses, which

represent a large portion of our design customers, have been impacted particularly hard.

The pandemic has resulted in government authorities

and businesses implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter

in place or total lock-down orders, school closures, and business limitations and shutdowns.

Such measures have contributed significantly

to increased unemployment and negatively impacted consumer and business spending.

Business shutdowns have disrupted our supply chain and

the manufacture or shipment of our products and delayed the rollout of our retail distribution products.

The pandemic has caused us

to modify our business practices to help minimize the risk of the virus to our employees, our customers, and the communities in which

we participate, which could negatively impact our business.

We continue to permit employees to work remotely, which subjects the Company

to increased cybersecurity risks and may reduce workplace efficiency.

As the availability of vaccines increased and COVID-19 case rates

diminished, we gradually re-opened our offices.

We continue to employ additional safety measures in our offices, including enhanced cleaning

and sanitation, mask wearing, suspending international business travel for our employees and limiting domestic business travel, limiting

external guests visiting our offices, and holding most meetings and events virtually.

Local conditions may require us to move back under

more restrictive guidelines, which could include mandatory remote work and additional safety measures.

Given the continually evolving

situation, including new variants, there is no certainty that the measures we have taken will be sufficient to mitigate the risks posed

by the virus.

The full extent to which

the COVID-19 pandemic will continue to impact our business, results of operations, and financial condition remains uncertain and will

depend on developments that remain uncertain and difficult to predict, including, but not limited to, the duration and spread of the pandemic,

its severity, the actions to contain the virus or treat its impact, the availability, distribution and efficacy of vaccines, and acceptance

by the population to get the vaccine and how quickly and to what extent normal economic and operating conditions resume.

Even after the

COVID-19 pandemic has subsided, we may experience material and adverse impacts to our business as a result of the virus’s global

economic impact, including the availability of credit, bankruptcies or insolvencies of customers, and recession or economic downturn.

Any of the issues discussed

above could have a material adverse effect on our business if this continues for an extended period of time.

If we incur significant declines

in customer orders, increased aging of accounts receivable or other negative consequences due to COVID-19, the extent of which remains

highly uncertain, it will have a material adverse effect on our business, financial condition and results of operations.

During Fiscal 2021, we generated an operating

loss and negative cash flow from operations.

We cannot assure you that we will regain profitability in the future.

In Fiscal 2021, we generated

an operating loss of approximately $765,000 and had net cash used in operating activities of approximately $528,000.

We can provide no

assurance that we will not continue to experience operating losses.

In addition to our $1,300,000 commercial line of credit (the

“Line of Credit”) of which $1,000,000 has been utilized as of the date of this report, Forward China holds a $1,600,000

note which is due December 31, 2021.

Forward China, which is owned by our Chief Executive Officer and Chairman of the Board, has

agreed to extend this note numerous times to assist the Company with its liquidity resources.

We cannot provide you with any assurance

that he will continue to grant us extensions on this note.

If we cannot generate sufficient revenues to operate profitably, we

may be forced to cease, limit or suspend operations, or we may be required to raise capital to maintain or grow our operations.

There is no assurance that we will be able to raise such capital and if so on terms that are not onerous and dilutive to the Company

and its shareholders.

While we believe that

our existing cash resources are sufficient to support our growth strategy, there can be no assurances that our growth strategy

In addition to our $1,300,000 commercial line of credit (the “Line

of Credit”), none of which has been utilized as of the date of this report, Forward China holds a $1,600,000 note which is due December

Forward China, which is owned by our Chief Executive Officer and Chairman of the Board, has previously agreed to extend this

note numerous times to assist the Company with its liquidity resources.

We cannot provide you with any assurance that Forward China will

continue to grant us extensions on this note.

If we cannot generate sufficient revenues to operate profitably, we may be forced to cease,

limit or suspend operations, or we may be required to raise capital to maintain or grow our operations.

There is no assurance that we

will be able to raise such capital and if so on terms that are not onerous and dilutive to the Company and its shareholders.

believe that our existing cash resources are sufficient to support our growth strategy, there can be no assurances that our growth strategy

will be successful or that we will earn a return on these investments.

Our distribution business remains highly

Our OEM distribution business remains highly

concentrated in our diabetic products line.

If our Diabetic Products Line were to suffer the loss of a principal customer or a

material decline in revenues from any such large customer, our business would be materially and adversely affected.

Revenues from diabetic

products to distribution customers accounted for 83% of our distribution net revenues in Fiscal 2020.

As a result, our financial

condition and results of operations are subject to higher risk from the loss of a major diabetic products customer or changes in

their business practices.

For example, in 2018 a new diabetes monitoring product was brought to the market which does not use a

carrying case.

If our customers use new solutions in their diabetes product lines that do not use carrying cases, our business

would be materially and adversely affected.

If our diabetic products line were to suffer the loss of a principal customer or a material

decline in revenues from any such large customer, our business would be materially and adversely affected.

Revenues from diabetic products

accounted for 86% of our OEM distribution net revenues in Fiscal 2021.

As a result, our financial condition and results of operations

are subject to higher risk from the loss of a major diabetic products customer or changes in their business practices.

For example, in

2018 a new diabetes monitoring product was brought to the market which does not use a carrying case.

If our customers use new solutions

in their diabetes product lines that do not use carrying cases, our business would be materially and adversely affected.

The loss of any of, or a material reduction

in orders from, our largest customers would materially and adversely affect our results of operations and financial condition.

Our distribution business

is and has been characterized by a high degree of customer concentration.

Our four largest distribution customers accounted for

79% and 87% of distribution net revenues in Fiscal 2020 and Fiscal 2019, respectively.

Additionally, three of our largest design

and development customers accounted for 46% of design and development net revenues in both Fiscal 2020 and Fiscal 2019.

we continue our efforts to diversify our business, we cannot provide any assurance that we will be successful.

The loss of any

of these customers would have a material adverse effect on our financial condition, liquidity and results of operations.

If any one or more of our distribution

customers elect to reduce or discontinue inclusion of cases “in box”, our results of operations and financial condition

would be materially and adversely affected.

The predominant percentage

of our revenues is derived from sales of case accessories to our OEM customers who package our cases “in box”

their electronics.

During recent years, there have been numerous federal legislative and administrative actions that have affected

government programs, including adjustments that have reduced or increased payments to healthcare providers and patients.

to restrict healthcare spending could result in decreased sales of our products.

If one or more of our distribution customers reduce

or discontinue the practice of including carry case accessories “in box”

or if our customers experience reduced demand

for their products as a result of political changes, we may incur a significant decline in our revenues and our results of operations

and financial condition would be materially and adversely affected.

Rising threats of international tariffs,

including tariffs applied to goods between the U.S.

Our OEM distribution

business is and has been characterized by a high degree of customer concentration.

Our four largest distribution customers accounted

for 85% and 83% of OEM distribution net revenues in Fiscal 2021 and Fiscal 2020, respectively.

Although we continue our efforts to

diversify our business, we cannot provide any assurance that we will be successful.

The loss of any of these customers would have a

material adverse effect on our financial condition, liquidity and results of operations.

If any one or more of our OEM distribution

customers elect to reduce or discontinue inclusion of cases “in box”, our results of operations and financial condition would

be materially and adversely affected.

The predominant

percentage of our OEM distribution revenues is derived from sales of case accessories to our OEM customers who package our cases

“in box” with their electronics.

During recent years, there have been numerous federal legislative and administrative

actions that have affected government programs, including adjustments that have reduced or increased payments to healthcare

providers and patients.

Any measures to restrict healthcare spending could result in decreased sales of our products.

If one or more

of our distribution customers reduce or discontinue the practice of including carry case accessories “in box” or if our

customers experience reduced demand for their products as a result of political changes, we may incur a significant decline in our

revenues and our results of operations and financial condition would be materially and adversely affected.

Rising threats of international tariffs, including

tariffs applied to goods between the U.S.

and China, may materially and adversely affect our business.

Rising threats of

international tariffs, including tariffs applied to goods traded between the U.S.

and China, could materially and adversely affect

our business and results of operations.

Since the beginning of 2018, there has been increasing rhetoric, in some cases coupled

with legislative or executive action, from several U.S.

and foreign leaders regarding the possibility of instituting tariffs on

the foreign imports of certain materials and products.

Rising threats of international

tariffs, including tariffs applied to goods traded between the U.S.

and China, could materially and adversely affect our business and

results of operations.

Since the beginning of 2018, there has been increasing rhetoric, in some cases coupled with legislative or executive

action, from several U.S.

and foreign leaders regarding the possibility of instituting tariffs on the foreign imports of certain materials

and products.

More specifically, throughout 2020 and 2019, the U.S.

and China imposed

tariffs or announced proposed tariffs to be applied in the future to certain of each other’s exports.

As of the date of this

report, the Company had not been directly affected by the tariffs implemented by President Trump on the medical technology industry.

However, we do not know what the new administration will implement when President-Elect Biden takes office.

If any such tariffs

or any restrictions are imposed on products that we import to our customers, we would be required to raise our prices which may

result in the loss of customers and harm our business.

Additionally, some of our non-diabetic distribution customers and customers

in the design and development business have been affected by these tariffs, specifically those who manufacture electronic products.

This may cause these customers to reduce the amount of discretionary spending they use on outsource product design and engineering

services supplied by our design segment.

Changes in political

conditions in China and changes in the state of China-U.S.

relations, including the current trade tensions, are difficult to predict

and could adversely affect the operations or financial condition of the Company.

In addition, because of our involvement in the

Chinese market, any deterioration in political or trade relations might cause a public perception in the U.S.

or elsewhere that

might cause our business to become less attractive.

and China imposed tariffs or announced proposed tariffs to be applied

in the future to certain of each other’s exports.

As of the date of this report, the Company had not been directly affected by any

tariffs previously implemented by former President Trump on the medical technology industry.

However, we do not know if the new administration

will implement any.

If any such tariffs or any restrictions are imposed on products that we import to our customers, we would be required

to raise our prices, which may result in the loss of customers and harm our business.

Additionally, some of our non-diabetic distribution

customers and customers in the design and development business have been affected by these tariffs, specifically those who manufacture

electronic products.

This may cause these customers to reduce the amount of discretionary spending they use on outsource product design

and engineering services supplied by our design segment.

Changes in political conditions

in China and changes in the state of China-U.S.

relations, including any tensions relating to potential military conflict between China

and Taiwan, are difficult to predict and could adversely affect the operations or financial condition of the Company.

In addition, because

of our involvement in the Chinese market, any deterioration in political or trade relations might cause a public perception in the U.S.

or elsewhere that might cause our business to become less attractive.

Such an impact could adversely affect our revenues and cash flows.

We continue to encounter pressure from

our largest distribution customers to maintain or even decrease prices, or to supply lower priced carry solutions, and expect such

pressure to persist.

The effects of such price constraints on our business may be exacerbated by inflationary pressures that affect

our costs of supply.

During Fiscal 2020,

we continued to experience significant pricing pressure from our largest distribution customers to reduce the prices we charge

When we are unable to extract comparable concessions from our suppliers on prices they charge us, our product sales margins

In addition, competitors may reduce their average selling prices faster than we are able to reduce costs, which can also

accelerate the rate of decline of our selling prices.

In addition to margin

compression from customers in general, we are encountering increased pricing from our Chinese suppliers who are reacting to inflationary

increases in materials and labor costs incurred by them.

In addition, prices that our Chinese vendors charge to us may reflect

appreciation of the Chinese currency against the U.S.

We continue to encounter pressure from our

largest OEM distribution customers to maintain or even decrease prices, or to supply lower priced carry solutions, and expect such pressure

The effects of such price constraints on our business may be exacerbated by inflationary pressures that affect our costs of

During Fiscal 2021, we continued

to experience significant pricing pressure from our largest OEM distribution customers to reduce the prices we charge them.

unable to extract comparable concessions from our suppliers on prices they charge us, our product sales margins erode.

In addition, competitors

may reduce their average selling prices faster than we are able to reduce costs, which can also accelerate the rate of decline of our

selling prices.

In addition to margin compression

from customers in general, we are encountering increased pricing from our Chinese suppliers who are reacting to inflationary increases

in materials and labor costs incurred by them.

In addition, prices that our Chinese vendors charge to us may reflect appreciation of the

Chinese currency against the U.S.

dollar, which can be passed through to us in the form of higher U.S.

This in turn will tend to reduce gross profit if we are unable to raise our prices.

Any decrease in demand for our products,

coupled with pressure from the market and our customers to decrease our prices, would materially adversely affect our business,

financial condition, and results of operations.

Increasingly, our distribution customers

dollar prices.

This in turn will

tend to reduce gross profit if we are unable to raise our prices.

Any decrease in demand for our products, coupled with pressure from

the market and our customers to decrease our prices, would materially adversely affect our business, financial condition, and results

of operations.

Increasingly, our OEM distribution customers

are requesting that we enter into supply agreements with them that have restrictive terms and conditions.

These agreements typically

include provisions that increase our financial exposure, which could result in significant costs to us.

Increasingly, our

distribution customers are requesting that we enter into supply agreements with them.

These agreements typically do not include

volume commitments but do include provisions that generally serve to increase our exposure for product liability and limited sales

returns, which could result in higher costs to us as a result of such claims.

In addition, these agreements typically contain provisions

that seek to limit our operational and pricing flexibility and extend payment terms, which could materially adversely affect our

cash flow, business, financial condition, and results of operations.

Our distribution business depends on

a single exclusive buying agent who, in turn, depends on a limited number of key suppliers .

Our Chairman, Chief

Executive Officer and largest shareholder is the owner of Forward China, our exclusive sourcing agent in the Asia Pacific region.

We have entered into a Buying Agency and Supply Agreement with Forward China whereby Forward China will act as the Company’s

exclusive agent to arrange for sourcing, manufacturing and exporting the Company’s distribution products.

Historically, Forward

China has relied on a limited number of suppliers to supply the component parts and pieces necessary for the production of our

carry and protective solutions products.

As a result, our ability to effectively push back against rising material costs may diminish,

although historically Forward China has absorbed these costs.

In addition, any inability to obtain supplies from a single or limited

number of suppliers may result in difficulty obtaining the supplies necessary for our business and may restrict our ability to

produce our carry and protective solutions products.

Where practical, we intend to establish alternative sources through Forward

China to mitigate the risk that the failure of any single supplier will adversely affect our business.

Nevertheless, either a prolonged

inability to obtain certain components or the failure of one of our suppliers to do so could impair our ability to ship products

and generate revenues, which could adversely affect our operating results and damage our customer relationships.

In addition, we depend

significantly on Forward China as our exclusive buying agent for substantially all of our component parts.

As a result, we have

limited visibility as to our supplier base, making it difficult to forecast future events and to plan our operations.

if Forward China fails to satisfactorily perform its obligations, including payment obligations, to our suppliers or its duties

to us as our exclusive buying agent as a result of financial or other difficulties or for any other reason, or if our relationship

with Forward China was to suffer or we are unable to extend our agreement with Forward China which expires in October 2023, we

could suffer irreparable harm resulting in substantial harm to the distribution business.

Our distribution business has benefited

These agreements typically include

provisions that increase our financial exposure, which could result in significant costs to us.

Increasingly, our OEM distribution

customers are requesting that we enter into supply agreements with them.

These agreements typically do not include volume commitments

but do include provisions that generally serve to increase our exposure for product liability and limited sales returns, which could result

in higher costs to us as a result of such claims.

In addition, these agreements typically contain provisions that seek to limit our operational

and pricing flexibility and extend payment terms, which could materially adversely affect our cash flow, business, financial condition,

and results of operations.

Our distribution business depends on a single

exclusive buying agent who, in turn, depends on a limited number of key suppliers .

Our Chairman, Chief Executive

Officer and largest shareholder is the owner of Forward China, our exclusive sourcing agent in the Asia Pacific region.

We have entered

into a Buying Agency and Supply Agreement with Forward China whereby Forward China will act as the Company’s exclusive agent to

arrange for sourcing, manufacturing and exporting the Company’s distribution products.

Historically, Forward China has relied on

a limited number of suppliers to supply the component parts and pieces necessary for the production of our carry and protective solutions

As a result, our ability to effectively push back against rising material costs may diminish, although historically Forward

China has absorbed these costs.

In addition, any inability to obtain supplies from a single or limited number of suppliers may result

in difficulty obtaining the supplies necessary for our business and may restrict our ability to produce our carry and protective solutions

Where practical, we intend to establish alternative sources through Forward China to mitigate the risk that the failure of any

single supplier will adversely affect our business.

Nevertheless, either a prolonged inability to obtain certain components or the failure

of one of our suppliers to do so could impair our ability to ship products and generate revenues, which could adversely affect our operating

results and damage our customer relationships.

In addition, we depend significantly

on Forward China as our exclusive buying agent for substantially all of our component parts.

As a result, we have limited visibility as

to our supplier base, making it difficult to forecast future events and to plan our operations.

In addition, if Forward China fails to

satisfactorily perform its obligations, including payment obligations, to our suppliers or its duties to us as our exclusive buying agent

as a result of financial or other difficulties or for any other reason, or if our relationship with Forward China was to suffer or we

are unable to extend our agreement with Forward China which expires in October 2023, we could suffer irreparable harm resulting in substantial

harm to the distribution business.

Our OEM distribution business has benefited

from customers deciding to outsource their carry and protective solutions assembly needs to us.

If our distribution customers choose

to provide these services in-house or select other providers, our distribution business could suffer.

Our future distribution

revenue growth partially depends on new outsourcing opportunities from our distribution customers.

If our OEM distribution customers choose

to provide these services in-house or select other providers, our OEM distribution business could suffer.

Our future OEM distribution

revenue growth partially depends on new outsourcing opportunities from our OEM distribution customers.

Current and prospective customers

continuously evaluate our performance against other providers.

They also evaluate the potential benefits of manufacturing their

products themselves.

To the extent that outsourcing opportunities are not available either due to these customers deciding to produce

these products themselves or to use other providers, our financial results and future growth could be materially adversely affected.

If we are unable to provide our customers

with high-quality products, and service, or if we are unable to deliver our products and/or service to our distribution customers

in a timely manner, our business, financial condition, and results of operations may be materially adversely affected.

In order to maintain

our existing customer base and obtain business from new customers, we must demonstrate our ability to produce our products and

services at the level of quality, responsiveness, timeliness, and cost that our customers require.

If our products or services

are provided at what customers believe are of a substandard quality, if they are not delivered on time, if we are not responsive

to our customers’

demands or cannot meet their needs, our reputation as a reliable supplier of our products and a sophisticated

product designer and developer would likely be damaged.

If we are unable to meet anticipated product and service standards, we

may be unable to obtain new or keep our existing distribution customers, and this would have a material adverse effect on our business,

financial condition, and results of operations.

If we fail to maintain an effective

system of internal controls over financial reporting, we may not be able to accurately report our financial results.

current and potential stockholders could lose confidence in our financial reporting, which could harm our business and the trading

price of our stock.

Effective internal

controls over financial reporting are necessary for us to provide reliable financial reports.

If we cannot maintain effective controls

and reliable financial reports, our business and operating results could be harmed.

We continue to work on improvements to our

internal controls over financial reporting.

Any failure to implement and maintain internal controls over our financial reporting

or difficulties encountered in the implementation of improvements in our controls, could cause us to fail to meet our reporting

Any failure to improve our internal controls over financial reporting or to address identified weaknesses in the future,

if they were to occur, could also cause investors to lose confidence in our reported financial information, which could have a

negative impact on the trading price of our stock.

Our results of operations are subject

to the risks of fluctuations in the values of foreign currencies relative to the U.S.

They also evaluate the potential benefits of manufacturing their products

To the extent that outsourcing opportunities are not available either due to these customers deciding to produce these products

themselves or to use other providers, our financial results and future growth could be materially adversely affected.

If we are unable to provide our customers with

high-quality products and service or if we are unable to deliver our products and/or service to our distribution customers in a timely

manner, our business, financial condition, and results of operations may be materially adversely affected.

In order to maintain our

existing customer base and obtain business from new customers, we must demonstrate our ability to produce our products and services at

the level of quality, responsiveness, timeliness, and cost that our customers require.

If our products or services are provided at what

customers believe are of a substandard quality, if they are not delivered on time, if we are not responsive to our customers’ demands

or cannot meet their needs, our reputation as a reliable supplier of our products and a sophisticated product designer and developer would

likely be damaged.

If we are unable to meet anticipated product and service standards, we may be unable to obtain new or keep our existing

distribution customers, and this would have a material adverse effect on our business, financial condition, and results of operations.

If our design teams fail to complete a project

in a timely manner, miss a required performance standard, or otherwise fail to adequately perform on a project, then we may incur a loss

on that project.

Our design engagements often

involve large-scale, complex projects.

The quality of our performance on such projects depends in large part upon our ability to manage

the relationship with our clients and our ability to effectively manage the project and deploy appropriate resources, including third-party

contractors and our own personnel, in a timely manner.

We may commit to a client that we will complete a project by a scheduled date and/or

at a fixed fee.

We may also commit that a project, when completed, will achieve specified performance standards.

If the project is not

completed by the scheduled date or fails to meet required performance standards, we may incur significant additional costs or be held

responsible for the costs incurred by the client to rectify damages due to late completion or failure to achieve the required performance

The uncertainty of the timing of a project can present difficulties in planning the amount of personnel needed for the project.

If the project is delayed or canceled, we may bear the cost of an underutilized workforce that was dedicated to fulfilling the project.

In addition, performance of projects can be affected by a number of factors beyond our control, including unavoidable delays from government

inaction, inability to obtain financing, weather conditions, unavailability of vendor materials, changes in the project scope of services

requested by our clients, industrial accidents, environmental hazards, and labor disruptions.

To the extent these events occur, the total

costs of the project could exceed our estimates, and we could experience reduced profits or, in some cases, incur a loss on a project,

which may reduce or eliminate our overall profitability on that project.

Further, any defects or errors, or failures to meet our clients’

expectations, could result in claims for damages against us.

Failure to meet performance standards or complete performance on a timely

basis could also adversely affect our reputation.

Our results of operations could suffer if we

are not able to maintain adequate utilization of our workforce.

The cost of providing our

design services, including the extent to which we utilize our workforce, affects our profitability.

The rate at which we utilize our workforce

is affected by a number of factors, including:

· our ability to transition employees from completed projects to new assignments and to hire and assimilate new employees;

· our ability to forecast demand for our services and thereby maintain an appropriate headcount in each of our operating units;

· our ability to engage employees in assignments during natural disasters or pandemics;

· our ability to manage attrition;

· our need to devote time and resources to training, business development, professional development, and other non-chargeable activities;

· our ability to match the skill sets of our employees to the needs of the marketplace.

If we over-utilize our workforce,

our employees may become disengaged, which could impact employee attrition.

If we under-utilize our workforce, our profit margin and profitability

could suffer.

Employee or agent misconduct, or our failure

to comply with anti-bribery and other laws or regulations, could harm our reputation, reduce our revenue and profits, and subject us to

criminal and civil enforcement actions.

Misconduct, fraud, non-compliance

with applicable laws and regulations, or other improper activities by one of our employees or agents could have a significant negative

impact on our business and reputation.

Such misconduct could include the failure to comply with government procurement regulations, regulations

regarding the protection of classified information, regulations prohibiting bribery and other foreign corrupt practices, regulations

regarding the pricing of labor and other costs in government contracts, regulations on lobbying or similar activities, regulations pertaining

to the internal controls over financial reporting, environmental laws, and any other applicable laws or regulations.

For example, as

previously noted, the FCPA and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries

from making improper payments to non-U.S.

officials for the purpose of obtaining or retaining business.

Our policies mandate compliance

with these regulations and laws, and we take precautions to prevent and detect misconduct.

However, since our internal controls are subject

to inherent limitations, including human error, it is possible that these controls could be intentionally circumvented or become inadequate

because of changed conditions.

As a result, we cannot assure that our controls will protect us from reckless or criminal acts committed

by our employees or agents.

Our failure to comply with applicable laws or regulations or acts of misconduct could subject us to fines

and penalties and suspension or debarment from contracting, any or all of which could harm our reputation,

reduce our revenue and profits, and subject us to criminal and civil enforcement actions.

If we fail to maintain an effective system

of internal controls over financial reporting, we may not be able to accurately report our financial results.

As a result, current and

potential stockholders could lose confidence in our financial reporting, which could harm our business and the trading price of our stock.

Effective internal controls

over financial reporting are necessary for us to provide reliable financial reports.

If we cannot maintain effective controls and reliable

financial reports, our business and operating results could be harmed.

We continue to work on improvements to our internal controls over

financial reporting.

Any failure to implement and maintain internal controls over our financial reporting or difficulties encountered

in the implementation of improvements in our controls, could cause us to fail to meet our reporting obligations.

Any failure to improve

our internal controls over financial reporting or to address identified weaknesses in the future, if they were to occur, could also cause

investors to lose confidence in our reported financial information, which could have a negative impact on the trading price of our stock.

Our results of operations are subject to the

risks of fluctuations in the values of foreign currencies relative to the U.S.

Our results of operations

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dollar appreciates or depreciates in value against a currency in which all or a significant

portion of revenues or other accounts receivable are denominated, such as the Euro, our results of operations can be adversely

affected or benefited, respectively.

The degree of impact is proportional to the amount of foreign currency expense or revenue,

as the case may be, and the fluctuations in exchange rates over the period in which the effect is measured on our financial statements.

In addition, such currency fluctuations may affect the comparability of our results of operations between financial periods.

Future revenues are difficult to predict

and are likely to show significant variability as a consequence of customer concentration.

Because our revenues

are highly concentrated in a few large customers, and because the volumes of these customers’

order flows to us can fluctuate

markedly in a short period of time, our quarterly revenues, and consequently our results of operations, may be highly variable

and subject to significant changes over a relatively short period of time.

Our largest distribution customers may keep consumer

products with which our carry solutions are packaged “in-box”

in active promotion for many months, or for a very short

period of time, depending on various factors, including sales trends for the product, product development cycles, new product introductions,

and our customers' competitors' product offerings.

As demand for the consumer product relating to the in-box program matures and

decreases, we may be forced to accept significant price and/or volume reductions in customer orders for our carry solutions, which

will adversely affect revenues.

Additionally, our large design and development customers may have their budgets limited from many

factors including economic declines (resulting from a pandemic or any other reason) causing discretionary budgets to decline or

may from-time-to-time choose to do their development work in-house.

All of these factors tend to lead to a high degree of variability

in our quarterly revenue levels.

Significant, rapid shifts in our operating results may occur if and when one or more of these

customers increases or decreases the size(s) of, or eliminates, their orders or engagement from us by amounts that are material

to our business.

Our gross margins, and therefore our

profitability, vary considerably by customer and by product, and if the revenue contribution from one or more distribution customers

or products changes materially, relative to total revenues, our gross profit percentage may fluctuate.

portion of revenues or other accounts receivable are denominated, such as the euro, our results of operations can be adversely affected

or benefited, respectively.

The degree of impact is proportional to the amount of foreign currency expense or revenue, as the case may

be, and the fluctuations in exchange rates over the period in which the effect is measured on our financial statements.

In addition, such

currency fluctuations may affect the comparability of our results of operations between financial periods.

Future revenues are difficult to predict and

are likely to show significant variability as a consequence of customer concentration.

Because our revenues are

highly concentrated in a few large customers, and because the volumes of these customers’ order flows to us can fluctuate markedly

in a short period of time, our quarterly revenues, and consequently our results of operations, may be highly variable and subject to significant

changes over a relatively short period of time.

Our largest OEM distribution customers may keep consumer products with which our carry

solutions are packaged “in-box” in active promotion for many months, or for a very short period of time, depending on various

factors, including sales trends for the product, product development cycles, new product introductions, and our customers' competitors'

product offerings.

As demand for the consumer product relating to the in-box program matures and decreases, we may be forced to accept

significant price and/or volume reductions in customer orders for our carry solutions, which will adversely affect revenues.

Additionally,

our large design and development customers may have their budgets limited from many factors including economic declines (resulting from

a pandemic or any other reason) causing discretionary budgets to decline or may from-time-to-time choose to do their development work

All of these factors tend to lead to a high degree of variability in our quarterly revenue levels.

Significant, rapid shifts

in our operating results may occur if and when one or more of these customers increases or decreases the size(s) of, or eliminates, their

orders or engagement from us by amounts that are material to our business.

Our gross margins, and therefore our profitability,

vary considerably by customer and by product, and if the revenue contribution from one or more distribution customers or products changes

materially, relative to total revenues, our gross profit percentage may fluctuate.

Our gross profit margins

on the distribution products we sell can vary widely depending on the product type, customer, and order size.

Because of the broad

variability in price ranges and product types, we anticipate that gross margins, and accordingly their impact on operating income

or loss, may fluctuate depending on the relative revenue contribution from each customer or product.

If our gross margins decrease,

our results of operations will be adversely affected.

Product manufacture is often outsourced

by our distribution customers to contract manufacturing firms in China and in these cases it is the contract manufacturer to which

we must look for payment.

Contract manufacturing

firms are performing manufacturing, assembly, and product packaging functions, including the bundling of our product accessories

with the distribution customer's product.

As a consequence of this business practice, we often sell our carry solutions products

directly to the contract manufacturing firm.

This is particularly significant in the case of diabetic product sales to certain

In these cases, we invoice the contract manufacturing firm and not the distribution customer.

Therefore, it is the contract

manufacturing firm to which we must look for payment in such cases and not our distribution customer.

If we fail to receive payment

from the contract manufacturer, our ability to be paid for products already delivered would be limited.

In such event, our results

of operations will be adversely affected.

Our dependence on foreign manufacturers

creates quality control and other risks to our business.

From time to time we may experience certain quality control, on-time delivery,

cost, or other issues that may jeopardize customer relationships.

Our reliance on foreign

suppliers, manufacturers and other contractors involves significant risks, including risk of product quality issues and reduced

control over quality assurance, manufacturing yields and costs, pricing, timely delivery schedules, the potential lack of adequate

manufacturing capacity and availability of product, the lack of capital and potential misappropriation of our designs.

event, our reputation and our business will be harmed.

Our shipments of distribution products

may become subject to delays or cancellation due to work stoppages or slowdowns, piracy, damage to port facilities, and congestion

due to inadequacy of port terminal equipment and other causes.

To the extent that

there are disruptions or delays in loading container cargo in ports of origin or off-loading cargo at ports of destination as a

result of labor disputes, work-rules related slowdowns, tariff or World Trade Organization-related disputes, piracy, physical damage

to port terminal facilities or equipment caused by severe weather or terrorist incidents, congestion in port terminal facilities,

inadequate equipment to load, dock and offload container vessels or energy-related tie-ups or otherwise, or for other reasons,

product shipments to our customers will be delayed.

In any such case, our customer may cancel or change the terms of its purchase

order, resulting in a cancellation or delay of payments to us.

A closure or partial closure of port facilities or other causes

of delays in the loading, importation, offloading or movement of our products to the shipping destination agreed to with our customer

could result in increased expenses, as we try to avoid such delays, delayed shipments or cancelled orders, or all of the above.

Depending on the severity of such consequences, this may have an adverse effect on our financial condition and results of operations.

Issues with our products may lead to

product liability, personal injury or property damage claims, recalls, withdrawals, replacements of products, or regulatory actions

by governmental authorities that could divert resources, affect business operations, decrease sales, increase costs, and put us

at a competitive disadvantage, any of which could have a significant adverse effect on our financial condition.

We may experience

issues with products that we source that may lead to product liability, personal injury or property damage claims, recalls, withdrawals,

Because of the broad variability

in price ranges and product types, we anticipate that gross margins, and accordingly their impact on operating income or loss, may fluctuate

depending on the relative revenue contribution from each customer or product.

If our gross margins decrease, our results of operations

will be adversely affected.

Product manufacture is often outsourced by

our distribution customers to contract manufacturing firms in China and in these cases it is the contract manufacturer to which we must

look for payment.

Contract manufacturing firms

are performing manufacturing, assembly, and product packaging functions, including the bundling of our product accessories with the OEM

distribution customer's product.

As a consequence of this business practice, we often sell our carry solutions products directly to the

contract manufacturing firm.

This is particularly significant in the case of diabetic product sales to certain customers.

In these cases,

we invoice the contract manufacturing firm and not the OEM distribution customer.

Therefore, it is the contract manufacturing firm to

which we must look for payment in such cases and not our OEM distribution customer.

If we fail to receive payment from the contract manufacturer,

our ability to be paid for products already delivered would be limited.

In such event, our results of operations and cash flows will be

adversely affected.

Our dependence on foreign manufacturers creates

quality control and other risks to our business.

From time to time we may experience certain quality control, on-time delivery, cost,

or other issues that may jeopardize customer relationships.

Our reliance on foreign suppliers,

manufacturers and other contractors involves significant risks, including risk of product quality issues and reduced control over quality

assurance, manufacturing yields and costs, pricing, timely delivery schedules, the potential lack of adequate manufacturing capacity and

availability of product, the lack of capital and potential misappropriation of our designs.

In any such event, our reputation and our

business will be harmed.

Our shipments of distribution products may

become subject to delays or cancellation due to work stoppages or slowdowns, piracy, damage to port facilities, and congestion due to

inadequacy of port terminal equipment and other causes.

To the extent that there

are disruptions or delays in loading container cargo in ports of origin or off-loading cargo at ports of destination as a result of labor

disputes, work-rules related slowdowns, tariff or World Trade Organization-related disputes, piracy, physical damage to port terminal

facilities or equipment caused by severe weather or terrorist incidents, congestion in port terminal facilities, inadequate equipment

to load, dock and offload container vessels or energy-related tie-ups or otherwise, or for other reasons, product shipments to our customers

will be delayed.

For example, in March 2021, a container ship carrying some of our products was stuck in the Suez Canal for six days.

Although this accident did not have a material adverse effect on our business, there is no assurance that, if it happened again, that

it would not.

In any such case, our customers may cancel or change the terms of its purchase order, resulting in a cancellation or delay

of payments to us.

A closure or partial closure of port facilities or other causes of delays in the loading, importation, offloading or

movement of our products to the shipping destination agreed to with our customer could result in increased expenses, as we try to avoid

such delays, delayed shipments or cancelled orders, or all of the above.

Depending on the severity of such consequences, this may have

an adverse effect on our financial condition and results of operations.

Issues with our products may lead to product

liability, personal injury or property damage claims, recalls, withdrawals, replacements of products, or regulatory actions by governmental

authorities that could divert resources, affect business operations, decrease sales, increase costs, and put us at a competitive disadvantage,

any of which could have a significant adverse effect on our financial condition.

We may experience issues

with products that we source or develop that may lead to product liability, personal injury or property damage claims, recalls, withdrawals,

replacements of products, or regulatory actions by governmental authorities.

Any of these activities could result in increased

governmental scrutiny, harm to our reputation, reduced demand by consumers for products, decreased willingness by retailer customers

to purchase our products, absence or increased cost of insurance, or additional safety and testing requirements.

Such results could

divert development and management resources, adversely affect our business operations, decrease sales, increase legal fees and

other costs, and put us at a competitive disadvantage compared to other companies not affected by similar issues with products,

any of which could have a significant adverse effect on our financial condition and results of operations.

Although the Company

does not intend on providing warranties on the products it distributes directly, we can provide no assurances that customers will

not seek damages if any of the foregoing events took place.

The Company does not carry product liability insurance.

have not had significant claims for damages or losses from the products we distribute, any uninsured claim, if successful and of

significant magnitude, could have a material adverse effect on our business, prospects, results of operations or financial condition.

The carrying solutions distribution

business is highly competitive and does not pose significant barriers to entry.

Any of these activities could result in increased governmental

scrutiny, harm to our reputation, reduced demand by consumers for products, decreased willingness by retailer customers to purchase our

products, absence or increased cost of insurance, or additional safety and testing requirements.

Such results could divert development

and management resources, adversely affect our business operations, decrease sales, increase legal fees and other costs, and put us at

a competitive disadvantage compared to other companies not affected by similar issues with products, any of which could have a significant

adverse effect on our financial condition and results of operations.

Although the Company does provide only limited warranties and carries

product liability insurance, we can provide no assurance that customers will not seek damages beyond what we warranty or beyond our insurance

Although we have not had significant claims for damages or losses from the products we distribute, any uninsured claim, if successful

and of significant magnitude, could have a material adverse effect on our business, prospects, results of operations or financial condition.

The carrying solutions distribution business

is highly competitive and does not pose significant barriers to entry.

There are many competitors

in the sale of carry solutions products to our customers including OEMs, and competition is intense.

Since little or no significant

proprietary technology is involved in the design, production or distribution of the types of products we sell, others may enter

the business with relative ease and compete against us.

Such competition may result in the diminution of our market share or the

loss of one or more major customers, thereby adversely affecting our net revenues, results of operations, and financial condition.

Many of our competitors are larger, better capitalized and more diversified than we are and may be better able to withstand a downturn

in the general economy or in the product areas in which we specialize.

Potential customers may prefer the pricing terms offered

by competitors.

These competitors may also have less sales concentration than we do and be better able to withstand the loss of

a key customer or diminution in its orders.

If we are not effectively able to compete, our results of operations will be adversely

If we fail to retain our key personnel,

we may not be able to achieve our anticipated level of growth and our business could suffer.

Our future depends,

in part, on our ability to attract and retain key sales personnel and the continued contribution of our executive officers including

Terence Wise, our Chief Executive Officer, who would be difficult to replace.

Our design and development business employs and contracts

highly sophisticated engineers to provide our customers with a full-service product, design and development team with vast technological

knowledge and capabilities.

The loss of the services of any of our key personnel and the process to replace any key personnel would

involve significant time and expense and may significantly delay or prevent the achievement of our business objectives.

If a third party asserts that we are

infringing on its intellectual property, whether successful or not, it could subject us to costly and time-consuming litigation

or require us to obtain expensive licenses, and our business may be adversely affected.

Third party lawsuits alleging our infringement

of patents, trade secrets or other intellectual property rights could cause us to do one or more of the following:

Since little or no significant proprietary

technology is involved in the design, production or distribution of the types of products we sell, others may enter the business with

relative ease and compete against us.

Such competition may result in the diminution of our market share or the loss of one or more major

customers, thereby adversely affecting our net revenues, results of operations, and financial condition.

Many of our competitors are larger,

better capitalized and more diversified than we are and may be better able to withstand a downturn in the general economy or in the product

areas in which we specialize.

Potential customers may prefer the pricing terms offered by competitors.

These competitors may also have

less sales concentration than we do and be better able to withstand the loss of a key customer or diminution in its orders.

not effectively able to compete, our results of operations will be adversely affected.

If we fail to retain our key personnel, we

may not be able to achieve our anticipated level of growth and our business could suffer.

Our future depends, in part,

on our ability to attract and retain key sales personnel and the continued contribution of our executive officers including Terence Wise,

our Chief Executive Officer, who would be difficult to replace.

Our design and development business is highly labor intensive and, therefore,

our ability to attract and retain professional and technical staff is an important factor in our future success.

The market for qualified

engineers is competitive and, from time to time, it may be difficult to attract and retain qualified individuals with the required expertise

within the timeframe demanded by our clients.

The loss of the services of any of our key personnel and the process to replace any key

personnel would involve significant time and expense and may significantly delay or prevent the achievement of our business objectives.

If a third party asserts that we are infringing

on its intellectual property, whether successful or not, it could subject us to costly and time-consuming litigation or require us to

obtain expensive licenses, and our business may be adversely affected.

Third party lawsuits alleging

our infringement of patents, trade secrets or other intellectual property rights could cause us to do one or more of the following:

stop using technology that contains the allegedly infringing intellectual property;

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attempt to obtain a license to the relevant intellectual property from third parties, which may not be available to us on reasonable terms or at all.

Third party lawsuits

alleging our infringement of patents, trade secrets or other intellectual property rights could have a material adverse effect

on our business, results of operations and financial condition.

If we experience system interruptions,

it may cause us to lose customers and may harm our business.

Third party lawsuits alleging

our infringement of patents, trade secrets or other intellectual property rights could have a material adverse effect on our business,

results of operations and financial condition.

If we experience system interruptions, it may

cause us to lose customers and may harm our business.

Our inability to maintain

and improve our information technology systems and infrastructure may result in system interruptions.

System interruptions and

slow delivery times, unreliable service levels, prolonged or frequent service outages, or insufficient capacity may prevent us

from efficiently providing services to our customers on our website, which could result in our losing customers and revenue.

We lease space for

our data center for power, security, connectivity and other services.

System interruptions and slow delivery

times, unreliable service levels, prolonged or frequent service outages, or insufficient capacity may prevent us from efficiently providing

services to our customers on our website, which could result in our losing customers and revenue.

We lease space for our data

center for power, security, connectivity and other services.

We also rely on third party providers for bandwidth.

not control these vendors and it would take significant time and effort to replace them.

We have experienced, and may experience

in the future, website disruptions, outages and other performance problems due to a variety of factors, including infrastructure

changes, human or software errors and capacity constraints.

We do not control these

vendors and it would take significant time and effort to replace them.

We have experienced, and may experience in the future, website

disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, human or software errors

and capacity constraints.

Our systems are vulnerable

to damage or interruption from terrorist attacks, floods, fires, power loss, telecommunications failures, hurricanes, computer

viruses, computer denial of service attacks or other attempts to harm our systems.

Any such damage or interruption would adversely

affect our results of operations.

Because our networks and IT systems

may be vulnerable to unauthorized persons hacking our systems, it could disrupt our operations and result in the theft of our proprietary

A party who is able

to breach the security measures on our networks could misappropriate either our or our customers’

proprietary information,

or cause interruptions or malfunctions in our operations.

Hacking of companies’

infrastructure is a growing problem.

we believe our systems and engineering team have the capability of protecting the Company from any such hacking, we can provide

you with no such assurance.

If we grow and obtain more visibility, we may be more vulnerable to hacking.

We may be required to

expend significant capital and other resources to protect against such threats or to alleviate problems caused by breaches in security,

which could have a material adverse effect on our financial performance and operating results.

Our design business uses software that

is highly technical, and undetected errors, if any, could adversely affect our business.

Our design business

may use software that is highly technical and complex.

Our software has contained, and may now or in the future contain, undetected

errors, bugs, flaws, corrupted data or vulnerabilities.

Some errors in our software code may only be discovered after the code

has been released.

Any errors, bugs, flaws or corrupted data could result in damage to our reputation, loss of users, or loss of

revenue, any of which could adversely affect our business and financial results.

We maintain cash balances in our bank

accounts that exceed the FDIC insurance limitation.

We maintain our cash

assets at commercial banks in the U.S.

in amounts in excess of the Federal Deposit Insurance Corporation insurance limit of $250,000

and in Europe in amounts that may exceed any applicable deposit insurance limits.

In the event of a failure at a commercial bank

where we maintain our deposits or uninsured losses on money market or other cash equivalents in which we maintain cash balances,

we may incur a loss to the extent such loss exceeds the insurance limitation, which could have a material adverse effect upon our

financial conditions and our results of operations.

Our Chairman and Chief Executive Officer

is a significant shareholder, which makes it possible for him to have significant influence over the outcome of all matters submitted

to our shareholders for approval and which influence may be alleged to conflict with our interests and the interests of our other

shareholders.

Terence Wise, our

Chairman and Chief Executive Officer, is a significant shareholder who beneficially owns approximately 17% of the outstanding

shares of our common stock as of September 30, 2020.

Wise has substantial influence over the outcome of all matters submitted

to our shareholders for approval, including the election of our directors and other corporate actions.

This influence may be alleged

to conflict with our interests and the interests of our other shareholders.

to damage or interruption from terrorist attacks, floods, fires, power loss, telecommunications failures, hurricanes, computer viruses,

computer denial of service attacks or other attempts to harm our systems.

Any such damage or interruption would adversely affect our results

of operations.

Because our networks and IT systems may be

vulnerable to unauthorized persons hacking our systems, it could disrupt our operations and result in the theft of our proprietary information.

A party who is able to breach

the security measures on our networks could misappropriate either our or our customers’ proprietary information, or cause interruptions

or malfunctions in our operations.

Hacking of companies’ infrastructure is a growing problem.

Although we believe our systems and

engineering team have the capability of protecting the Company from any such hacking, we can provide you with no such assurance.

grow and obtain more visibility, we may be more vulnerable to hacking.

We may be required to expend significant capital and other resources

to protect against such threats or to alleviate problems caused by breaches in security, which could have a material adverse effect on

our financial performance and operating results.

Our design business uses software that is highly

technical, and undetected errors, if any, could adversely affect our business.

Our design business may use

software that is highly technical and complex.

Our software has contained, and may now or in the future contain, undetected errors, bugs,

flaws, corrupted data or vulnerabilities.

Some errors in our software code may only be discovered after the code has been released.

errors, bugs, flaws or corrupted data could result in damage to our reputation, loss of users, or loss of revenue, any of which could

adversely affect our business and financial results.

We maintain cash balances in our bank accounts

that exceed the FDIC insurance limitation.

We maintain our cash assets

at commercial banks in the U.S.

in amounts in excess of the Federal Deposit Insurance Corporation insurance limit of $250,000 and in Europe

in amounts that may exceed any applicable deposit insurance limits.

In the event of a failure at a commercial bank where we maintain our

deposits or uninsured losses on money market or other cash equivalents in which we maintain cash balances, we may incur a loss to the

extent such loss exceeds the insurance limitation, which could have a material adverse effect upon our financial conditions and our results

of operations.

Our Chairman and Chief Executive Officer is

a significant shareholder, which makes it possible for him to have significant influence over the outcome of all matters submitted to

our shareholders for approval and which influence may be alleged to conflict with our interests and the interests of our other shareholders.

Terence Wise, our Chairman

and Chief Executive Officer, is a significant shareholder who beneficially owns approximately 17% of the outstanding shares of our common

stock as of September 30, 2021.

Wise has substantial influence over the outcome of all matters submitted to our shareholders for approval,

including the election of our directors and other corporate actions.

This influence may be alleged to conflict with our interests and

the interests of our other shareholders.

In addition, such influence by Mr.

Wise could have

the effect of discouraging potential business partners or create actual or perceived governance instabilities that could adversely

affect the price of our common stock.

Wise could have the effect of discouraging potential business

partners or create actual or perceived governance instabilities that could adversely affect the price of our common stock.

Risks Related to Our Common Stock

Due to factors beyond our control, our

stock price may be volatile.

Any of the following

factors could affect the market price of our common stock:

Due to factors beyond our control, our stock

price may be volatile.

Any of the following factors

could affect the market price of our common stock:

Our failure to increase revenue in each succeeding quarter and achieve and thereafter maintain profitability;

Our failure to meet our revenue and earnings guidance or our failure to meet financial analysts’

performance expectations;

Our failure to meet our revenue and earnings guidance or our failure to meet financial analysts’ performance expectations;

The loss of Forward China as our agent;

Cybersecurity breaches;

The loss of customers or our failure to attract more customers;

Creditworthiness and solvency of clients;

Loss of key employees;

The sale of a large amount of common stock by our shareholders;

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An adverse court ruling or regulatory action;

Changes in regulatory practices, including tariffs and taxes;

Changes in market valuations of similar companies;

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Announcements by us, or our competitors, of significant contracts, acquisitions, commercial relationships, joint ventures or capital commitments.

In the past, following

periods of volatility in the market price of a company’s securities, securities class action litigation has often been instituted.

A securities class action suit against us could result in substantial costs and divert our management’s time and attention,

which would otherwise be used to benefit our business.

Because our common stock is not actively

traded, purchasers of our stock may incur difficulty in selling their shares at or above the price they paid for them, or at all.

Our average daily

trading volume on The Nasdaq Capital Market (“Nasdaq”) has been approximately 120,000 shares of common stock for the

six trading days prior to November 30, 2020.

An active market for our common stock may never develop, or if it does, it may not

be sustained.

Accordingly, investors may experience difficulty in selling their shares of common stock at or above the price they

paid for them, or at all.

Failure to meet the continued listing

requirements of Nasdaq, could result in delisting of our common stock, which in its turn would negatively affect the price of our

common stock and limit investors’

ability to trade in our common stock.

Our common stock trades

Nasdaq rules impose certain continued listing requirements, including the minimum $1 bid price, corporate governance

standards and number of public stockholders.

At November 30, 2020, our closing bid price was $1.83.

If we fail to meet these continued

listing requirements, Nasdaq may take steps to delist our common stock.

If our common stock is delisted from The Nasdaq Capital

Market, we could face significant material adverse consequences, including:

In the past, following periods

of volatility in the market price of a company’s securities, securities class action litigation has often been instituted.

class action suit against us could result in substantial costs and divert our management’s time and attention, which would otherwise

be used to benefit our business.

Failure to meet the continued listing requirements

of Nasdaq, could result in delisting of our common stock, which in its turn would negatively affect the price of our common stock and

limit investors’ ability to trade in our common stock.

Our common stock trades on

Nasdaq rules impose certain continued listing requirements, including the minimum $1 bid price, corporate governance standards

and number of public stockholders.

At December 10, 2021, our closing price was $1.81.

If we fail to meet these continued listing requirements,

Nasdaq may take steps to delist our common stock.

If our common stock is delisted from The Nasdaq Capital Market, we could face significant

material adverse consequences, including:

a limited availability of market quotations for our common stock;

reduced liquidity with respect to our common stock;

a determination that our shares of common stock are a “penny stock”

which will require broker-dealers trading in our common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our common stock;

a determination that our shares of common stock are a “penny stock” which will require broker-dealers trading in our common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our common stock;

a limited amount of news and analyst coverage for our company;

a limited ability to issue additional securities or obtain additional financing in the future.

If we become subject to a regulatory

investigation, it could cause us to incur substantial costs or require us to change our business practices in a manner materially

If we become subject to a regulatory investigation,

it could cause us to incur substantial costs or require us to change our business practices in a manner materially adverse to our business.

From time to time, we may

receive inquiries from regulators regarding our compliance with laws and other matters.

In 2019, we incurred significant expenses responding

to an SEC investigation into potential insider trading by certain insiders of the Company.

Although that investigation has concluded,

responding to, or defending other such actions would cause us to continue to incur substantial expenses and divert our management’s

Violation of existing or

future regulatory orders or consent decrees could subject us to substantial monetary fines and other penalties that could negatively affect

our financial condition and results of operations.

In addition, it is possible that future orders issued by, or enforcement actions initiated

by, regulatory authorities could cause us to incur substantial costs or require us to change our business practices in a manner materially

adverse to our business.

From time to time,

we may receive inquiries from regulators regarding our compliance with laws and other matters.

Recently, we incurred significant

expenses responding to an SEC investigation into potential insider trading by certain insiders of the Company.

Although that investigation

has concluded, responding to, or defending other such actions would cause us to continue to incur substantial expenses and divert

our management’s attention.

Violation of existing

or future regulatory orders or consent decrees could subject us to substantial monetary fines and other penalties that could negatively

affect our financial condition and results of operations.

In addition, it is possible that future orders issued by, or enforcement

actions initiated by, regulatory authorities could cause us to incur substantial costs or require us to change our business practices

in a manner materially adverse to our business.

We do not expect to pay dividends in

the future, which means that investors may not be able to realize the value of their shares except through a sale.

We do not anticipate

that we will declare or pay a cash dividend.

We expect to retain future earnings, if any, for our business and do not anticipate

paying dividends on common stock at any time in the foreseeable future.

Because we do not anticipate paying dividends in the future,

the only opportunity for our shareholders to realize the creation of value in our common stock will likely be through a sale of

those shares.

We do not expect to pay dividends in the future,

which means that investors may not be able to realize the value of their shares except through a sale.

We do not anticipate that

we will declare or pay a cash dividend.

We expect to retain future earnings, if any, for our business and do not anticipate paying dividends

on common stock at any time in the foreseeable future.

Because we do not anticipate paying dividends in the future, the only opportunity

for our shareholders to realize the creation of value in our common stock will likely be through a sale of those shares.

UNRESOLVED STAFF COMMENTS

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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