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Item 1A. Risk Factors

2026-03-17 compared with 2025-03-24 · 523 added, 661 removed, 50 unchanged (96% of the section changed)

Risks Related to Our Business

We could be adversely affected by information

security breaches or cyber security attacks.

Our web and cloud services involve the storage

and transmission of our customers’ and employees’ proprietary information.

Our business relies on our digital technologies,

computer and email systems, software and networks to conduct our operations.

Our technologies, systems and networks may become the target

of criminal cyber-attacks or information security breaches that could result in the unauthorized release, gathering, monitoring, misuse,

loss or destruction of confidential, proprietary and other information of us or third parties with whom we deal, or otherwise disrupt

our or our customers’ or other third parties’ business operations.

It is critical to our business strategy that our facilities

and infrastructure remain secure and are perceived by the marketplace to be secure.

Although we believe we employ appropriate security

technologies, we cannot guarantee that the security technologies (including data encryption processes, intrusion detection systems) we

employ, the comprehensive risk assessments we conduct, or our other internal control procedures will ensure the security of our customers’

If our security measures are breached due to third-party action, employee error or otherwise, and as a result, our customers’

data becomes available to unauthorized parties, we could incur liability and our reputation would be damaged, which could lead to the

loss of current and potential customers.

Related to Our Business

could be adversely affected by information security breaches or cyber security attacks.

web and cloud services involve the storage and transmission of our customers’ and employees’ proprietary information.

business relies on our digital technologies, computer and email systems, software and networks to conduct our operations.

Our technologies,

systems and networks may become the target of criminal cyber-attacks or information security breaches that could result in the unauthorized

release, gathering, monitoring, misuse, loss or destruction of confidential, proprietary and other information of us or third parties

with whom we deal, or otherwise disrupt our or our customers’ or other third parties’ business operations.

It is critical

to our business strategy that our facilities and infrastructure remain secure and are perceived by the marketplace to be secure.

we believe we employ appropriate security technologies, we cannot guarantee that the security technologies (including data encryption

processes, intrusion detection systems) we employ, the comprehensive risk assessments we conduct, or our other internal control procedures

will ensure the security of our customers’ data.

If our security measures are breached due to third-party action, employee error

or otherwise, and as a result, our customers’ data becomes available to unauthorized parties, we could incur liability and our

reputation would be damaged, which could lead to the loss of current and potential customers.

Furthermore, we maintain a work-from-home policy

10 unchanged sentences

Additionally,

the rapid evolution and increasing prevalence of AI technologies may also increase our cybersecurity risks.

Moreover, globally there has

been an increase in cybersecurity attacks since Russia invaded Ukraine.

The risk of state-supported and geopolitical-related cyber-attacks

may increase in connection with the war in Ukraine and any related political or economic responses and counter-responses.

We may not discover

all such incidents or activity or be able to respond or otherwise address them promptly, in sufficient respects or at all.

In addition, we have in the past and may in the

future be required to expend significant capital and other resources to detect, remedy, protect against or alleviate breaches of our network

and security, and we may not be able to remedy these problems in a timely manner, or at all.

Because techniques used by outsiders to obtain

unauthorized network access or to sabotage systems change frequently and generally are not recognized until launched against a target,

we may be unable to anticipate these techniques or implement adequate preventative measures.

For example, in early 2018, following an unauthorized

third party misappropriating three of NTS’s domain names, NTS’s management and forensic investigators determined that attackers

compromised a portion of its shared webhosting system, and may have acquired certain customer information limited to its shared webhosting

customers and/or gained access to certain of its shared webhosting servers.

In response, NTS took a range of steps designed to further

secure its systems, enhance its security protections, enhance access controls and prevent future unauthorized activity.

Further, any breaches to our security measures

in the future as a result of third-party action, employee error or otherwise could increase the cost of cybersecurity insurance, which,

in turn, could adversely affect our financial condition and results of operations.

Our existing general liability insurance coverage and

the coverage we carry for cyber-related liabilities may not continue to be available on acceptable terms or be available in sufficient

amounts to cover one or more large claims or that the insurer will not deny coverage as to any future claim.

The successful assertion

of one or more large claims against us that are not covered or exceed available insurance coverage, or the occurrence of changes in our

insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could harm our business.

We rely on third-party license agreements

with the owners of the Data Centers to operate our secure private cloud which, if terminated, could have an adverse material effect on

our business.

We operate a secure private cloud from private

suites in completely isolated areas that are leased within two Tier 3 data center facilities located in Phoenix, Arizona, and Edison,

We are party to license agreements with Aligned Data Centers (Phoenix) PropCo, LLC and Iron Mountain Data Centers LLC with

respect the Data Centers located in Phoenix, Arizona, and Edison, New Jersey, respectively, through which we offer our secure private

cloud hosting services.

The Data Centers host our critical infrastructure and are designed to conform to the global standards for such

Although the terms of the license agreements for the Data Centers located in Arizona and New Jersey currently extend through

2027 and 2026, respectively, such license agreements may not continue to be available on commercially reasonable terms, or at all.

Additionally,

termination of such license agreements would require us to identify replacement facilities for our secure private cloud hosting services,

which may not be available at all.

Any delay or interruption in our ability to meet demand for our secure private cloud hosting services

and other IT-related services will result in the loss of potential revenues and could have a material adverse effect on our business,

results of operations, and financial condition.

We operate in a highly competitive industry

in which technological change can be rapid.

The information technology industry involves a

broad range of rapidly changing technologies, including AI.

Our equipment and the technologies on which it is based may not remain competitive

over time, and others may develop superior technologies that render our products non-competitive, without significant additional capital

expenditures.

Some of our competitors are significantly larger and have substantially greater market presence, as well as greater financial,

technical, operational, marketing and other resources and experience than we do.

In the event that such a competitor expends significant

sales and marketing resources in one or several markets in which we operate, we may not be able to compete successfully in such market(s).

We believe that competition will continue to increase, placing downward pressure on prices.

Such pressure could adversely affect our gross

margins if we are not able to reduce our costs commensurate with such price reductions.

We rely on a limited number of customers

for a material portion of our revenues and income.

Prior to the consummation of the Transactions,

during the 2023 and 2024 fiscal years, NTS relied on a limited number of customers for a material portion of its revenues.

the rapid evolution and increasing prevalence of AI technologies has increased our cybersecurity risks.

Moreover, globally there has been

an increase in cybersecurity attacks, particularly as a result of international conflicts.

The risk of state-supported and geopolitical-related

cyber-attacks may increase in connection with the war, including the conflicts in Ukraine, Iran and the Middle East, and any related political

or economic responses and counter-responses.

We may not discover all such incidents or activity or be able to respond or otherwise address

them promptly, in sufficient respects or at all.

addition, we have in the past and may in the future be required to expend significant capital and other resources to detect, remedy,

protect against or alleviate breaches of our network and security, and we may not be able to remedy these problems in a timely manner,

Because techniques used by outsiders to obtain unauthorized network access or to sabotage systems change frequently and generally

are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative

any breaches to our security measures in the future as a result of third-party action, employee error or otherwise could increase the

cost of cybersecurity insurance, which, in turn, could adversely affect our financial condition and results of operations.

general liability insurance coverage and the coverage we carry for cyber-related liabilities may not continue to be available on acceptable

terms or be available in sufficient amounts to cover one or more large claims or that the insurer will not deny coverage as to any future

The successful assertion of one or more large claims against us that are not covered or exceed available insurance coverage, or

the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance

requirements, could harm our business.

rely on third-party license agreements with the owners of the Data Centers to operate our secure private cloud which, if terminated,

could have an adverse material effect on our business.

operate a secure private cloud from private suites in completely isolated areas that are leased within two Tier 3 data center facilities

located in Phoenix, Arizona, and Edison, New Jersey.

We are party to license agreements with Aligned Data Centers (Phoenix) PropCo, LLC

and Iron Mountain Data Centers LLC with respect to the Data Centers located in Phoenix, Arizona, and Edison, New Jersey, respectively,

through which we offer our secure private cloud hosting services.

The Data Centers host our critical infrastructure and are designed

to conform to the global standards for such centers.

Although the terms of the license agreements for the Data Centers located in Arizona

and New Jersey currently extend through 2032 and 2026, respectively, such license agreements may not continue to be available on commercially

reasonable terms, or at all.

Additionally, termination of such license agreements would require us to identify replacement facilities

for our secure private cloud hosting services, which may not be available at all.

Any delay or interruption in our ability to meet demand

for our secure private cloud hosting services and other IT-related services will result in the loss of potential revenues and could have

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

operate in a highly competitive industry in which technological change can be rapid.

information technology industry involves a broad range of rapidly changing technologies, including AI.

Our equipment and the technologies

on which it is based may not remain competitive over time, and others may develop superior technologies that render our products non-competitive,

without significant additional capital expenditures.

Some of our competitors are significantly larger and have substantially greater

market presence, as well as greater financial, technical, operational, marketing and other resources and experience than we do.

event that such a competitor expends significant sales and marketing resources in one or several markets in which we operate, we may

not be able to compete successfully in such market(s).

We believe that competition will continue to increase, placing downward pressure

Such pressure could adversely affect our gross margins if we are not able to reduce our costs commensurate with such price

rely on a limited number of customers for a material portion of our revenues and income.

A substantial portion of our revenue is derived

from a limited number of customers.

For instance, Newtek is currently the largest customer of the Company, accounting for 32.5% of our

revenue for the fiscal year ended December 31, 2025.

The loss of, or a reduction in orders from, any one of our significant customers,

adverse changes in their procurement strategies, or their decision to terminate or not renew contracts—many of which are terminable

on short notice—could materially and adversely affect our business, financial condition, and results of operations.

technology solutions business depends on the efficient and uninterrupted operation of our Data Centers and computer and communications

hardware systems and infrastructure.

precautions we implement against possible failure of our systems, interruptions could result from natural disasters, power loss, the

inability to acquire fuel for our backup generators, telecommunications failure, terrorist attacks and similar events.

We also lease

telecommunications lines from local, regional and national carriers whose service may be interrupted.

Our business, financial condition

and results of operations could be harmed by any damage or failure that interrupts or delays our operations.

Our insurance may not cover

all of the losses or compensate us for the possible loss of clients occurring during any period that we are unable to provide service.

Additionally,

during 2024, NTS’s second largest customer informed NTS it would cease utilizing its services due to a consolidation of its vendors.

Following the completion to the Transactions, this customer has since resumed utilizing our services, but we cannot be certain at what

level, or for what period, the customer relationship will continue.

A loss of one or more of our customers, if not replaced, could adversely

impact our financial condition and prospects.

Our technology solutions business depends

on the efficient and uninterrupted operation of our Data Centers and computer and communications hardware systems and infrastructure.

Despite precautions we implement against possible

failure of our systems, interruptions could result from natural disasters, power loss, the inability to acquire fuel for our backup generators,

telecommunications failure, terrorist attacks and similar events.

We also lease telecommunications lines from local, regional and national

carriers whose service may be interrupted.

Our business, financial condition and results of operations could be harmed by any damage or

failure that interrupts or delays our operations.

Our insurance may not cover all of the losses or compensate us for the possible loss

of clients occurring during any period that we are unable to provide service.

Additionally, since the Data Centers through which

we operate rely on third parties to provide power sufficient to meet operational needs, the Data Centers could have a limited or inadequate

amount of electrical resources necessary to meet our customer requirements.

The operators for the Data Centers attempt to limit exposure

to system downtime due to power outages by using backup generators and power supplies.

However, these protections may not limit our exposure

to power shortages or outages entirely.

Any system downtime resulting from insufficient power resources or power outages could cause physical

damage to equipment, increase our susceptibility to security breaches, damage our reputation and lead us to lose current and potential

customers, which would harm our business, financial condition and results of operations.

Failure to have reliable Internet, telecommunications

and fiber optic network connectivity and capacity from third-party providers may adversely affect our results of operations.

Our success depends in part upon the capacity,

reliability and performance of our network infrastructure, including our Internet, telecommunications and fiber optic network connectivity

We depend on these companies to provide uninterrupted and error-free service through their telecommunications networks.

of these providers are also our competitors.

We exercise little control over these providers, which increases our vulnerability to problems

with the services they provide.

We have experienced, and expect to continue to experience, interruptions or delays in network service.

Any failure on our part or the part of our third-party suppliers to achieve or maintain high data transmission capacity, reliability or

performance could significantly reduce customer demand for our services and have a material and adverse effect on our business, financial

condition and results of operations.

As our customers’ usage of telecommunications

capacity increases, we will be required to make additional investments in our capacity to maintain adequate data transmission speeds,

the availability of which may be limited or the cost of which may be on terms unacceptable to us.

If adequate capacity is not available

to us as our customers’ usage increases, our network may be unable to achieve or maintain sufficiently high data transmission capacity,

reliability or performance.

In addition, our business and results of operations would suffer if our network suppliers increased the prices

for their services and we were unable to successfully pass along the increased costs to our customers.

Real or perceived errors, failures or bugs

in our customer solutions, software or technology could adversely affect our business, financial condition and results of operations.

Undetected real or perceived errors, failures,

bugs or defects may be present or occur in the future in our customer solutions, software or technology or the technology or software

we license from third parties, including open source software.

Despite testing by us, real or perceived errors, failures, bugs or defects

may not be found until our customers use our services.

Real or perceived errors, failures, bugs or defects in our customer solutions could

result in negative publicity, loss of or delay in market acceptance of our services and harm to our brand, weakening of our competitive

position, claims by customers for losses sustained by them or failure to meet the stated service level commitments in our customer agreements.

In such an event, we may be required, or may choose, for customer relations or other reasons, to expend significant additional resources

to help correct the problem.

Any real or perceived errors, failures, bugs or defects in our customer solutions could also impair our ability

to attract new customers, retain existing customers or expand their use of our services, which could adversely affect our business, financial

since the Data Centers through which we operate rely on third parties to provide power sufficient to meet operational needs, the Data

Centers could have a limited or inadequate amount of electrical resources necessary to meet our customer requirements.

The operators

for the Data Centers attempt to limit exposure to system downtime due to power outages by using backup generators and power supplies.

However, these protections may not limit our exposure to power shortages or outages entirely.

Any system downtime resulting from insufficient

power resources or power outages could cause physical damage to equipment, increase our susceptibility to security breaches, damage our

reputation and lead us to lose current and potential customers, which would harm our business, financial condition and results of operations.

to have reliable Internet, telecommunications and fiber optic network connectivity and capacity from third-party providers may adversely

affect our results of operations.

success depends in part upon the capacity, reliability and performance of our network infrastructure, including our Internet, telecommunications

and fiber optic network connectivity providers.

We depend on these companies to provide uninterrupted and error-free service through

their telecommunications networks.

Some of these providers are also our competitors.

We exercise little control over these providers,

which increases our vulnerability to problems with the services they provide.

We have experienced, and expect to continue to experience,

interruptions or delays in network service.

Any failure on our part or the part of our third-party suppliers to achieve or maintain high

data transmission capacity, reliability or performance could significantly reduce customer demand for our services and have a material

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

our customers’ usage of telecommunications capacity increases, we will be required to make additional investments in our capacity

to maintain adequate data transmission speeds, the availability of which may be limited or the cost of which may be on terms unacceptable

If adequate capacity is not available to us as our customers’ usage increases, our network may be unable to achieve or maintain

sufficiently high data transmission capacity, reliability or performance.

In addition, our business and results of operations would suffer

if our network suppliers increased the prices for their services and we were unable to successfully pass along the increased costs to

our customers.

or perceived errors, failures or bugs in our customer solutions, software or technology could adversely affect our business, financial

condition and results of operations.

If we are unable to attract new customers,

retain existing customers and sell additional services at comparable gross margins to customers, our revenue and results of operations

could be adversely affected.

Our ability to maintain or increase our revenues

and make a profit may be impacted by a number of factors, including our ability to attract new customers, retain existing customers and

sell additional services at comparable gross margins to our customers.

In addition, as we seek to grow our customer base, we expect to

incur higher customer acquisition costs and, to the extent we are unable to retain and sell additional services to existing customers,

our revenue and results of operations may decrease.

Growth in the demand for our services may be

inhibited, and we may be unable to profitably maintain or grow our customer base for a nu mber

of reasons, such as:

inability to provide compelling services or effectively market them to new and existing customers;

migration to platforms that we do not have expertise in managing;

inability of customers to differentiate our services from those of our competitors or our

inability to effectively communicate such distinctions;

decision of customers to host internally, in third-party cloud infrastructure, or in third-party

colocation facilities as an alternative to the use of our services;

decision of customers to use internal or other third-party resources to manage their platforms

and applications;

in IT spending by customers or potential customers;

reduction in the demand for our services due to macroeconomic factors in the markets in which

inability to strengthen awareness of our brand;

or future cybersecurity-related incidents;

● reliability,

quali ty or compatibility problems with our services.

Moreover, we may face difficulty retaining existing

customers over the long term.

Certain customer contracts, frequently have initial terms (typically from 24 to 36 months) and, unless terminated,

may be renewed or automatically extended for shorter, rolling periods after the initial term.

Our customers have no obligation to renew

their services after their initial contract periods expire and any termination fees associated with an early termination may not be sufficient

to recover our costs associated with such contracts.

In addition, most of our services can be canceled at any time without penalty.

a result, we may face high rates of customer churn if we are unable to meet our customer needs, requirements and preferences.

Our costs associated with generating revenue from

existing customers are generally lower than costs associated with generating revenue from new customers, and depending on the customer

and the service offering, there may be substantial variation in the gross margins associated with existing and new customers.

by us in continuing to attract new customers or grow our revenue from existing customers could have a material and adverse effect on our

business, financial condition and results of operations.

Our business depends on Microsoft Corporation

and others for the licenses to use software and other intellectual property in the managed technology solutions business.

Our managed technology business is built on technological

platforms that rely on the Microsoft Windows products and other intellectual property that we currently license.

As a result, if we are

unable to continue to have the benefit of those licensing arrangements, or if the products upon which our platform is built become obsolete,

our business could be materially and adversely affected.

If we fail to hire and retain qualified

employees and management personnel, our strategies and our business could be harmed.

Our ability to be successful and to execute on

our strategies depends on our ability to identify, hire, train and retain qualified executives, IT professionals, technical engineers,

software developers, operations employees and sales and senior management personnel who maintain relationships with our customers and

who can provide the technical, strategic and marketing skills required for our company to grow.

Our ability to execute on our sales strategy

is also dependent on our ability to identify, hire, train and retain a sufficient number of qualified sales personnel.

There is a shortage

of qualified personnel in these fields, and like many other companies we have recently encountered additional challenges in hiring and

retaining qualified personnel.

We compete with other companies for this limited pool of potential employees.

Furthermore, the implementation

of our strategies may result in changes throughout our business, which may create uncertainty for our employees.

Such uncertainties may

impair our ability to attract, retain and motivate key personnel and could cause customers, suppliers and others who deal with us to seek

to change existing business relationships.

In addition, the industry in which we operate is generally characterized by significant competition

for skilled personnel, and as our industry becomes more competitive, it could become especially difficult to retain personnel with unique

in-demand skills and knowledge, whom we would expect to become recruiting targets for our competitors.

We may not be able to recruit or

retain qualified personnel or successfully transition knowledge from departing employees, and any failure to do so could cause a dilution

of our service-oriented culture and weaken our ability to develop and deliver existing or new operations and services, either of which

could cause our business to be negatively impacted.

Our future success is dependent, in part,

on the performance and continued service of our executive officers.

Without their continued service, we may be forced to interrupt or

eventually cease our operations.

We are dependent to a great extent upon the experience,

abilities and continued service of Jason Katz, our Chief Executive Officer and Chairman of the Board of Directors (the “Board”),

Jenny, our Chief Financial Officer and director, Jared Mills, our President, and Adam Zalko, our Chief Operating Officer.

loss of the services of these individuals would substantially affect our business or operations and could have a material adverse effect

on our business, results of operations or financial condition.

Because we recognize revenue from subscriptions

over the term of the subscription, the full impact of downturns or upturns in subscription sales may not be immediately reflected in our

results of operations or financial condition.

We recognize subscription revenue from ManyCam

customers monthly over the term of the subscription, which are offered in twelve- and twenty-four-month terms.

As a result, much of the

subscription revenue we report in each period is deferred revenue from subscription agreements entered into during previous periods.

Consequently,

a decline in new or renewed subscriptions in any one quarter will negatively affect our revenue in future quarters.

In addition, we might

not be able to immediately adjust our costs and expenses to reflect these reduced revenues.

Accordingly, the effect of significant downturns

in user acceptance of ManyCam may not be fully reflected in our results of operations until future periods.

Our subscription model for

ManyCam also makes it difficult for us to quickly increase revenue generated from ManyCam through additional sales in any period, as revenue

from new subscribers must be recognized over the term of the subscription.

As a result, you should not rely on the amount of subscription

revenue generated in prior quarters as an indication of future results.

Our business is affected by general economic

conditions, including inflation, and uncertainties affecting markets in which we operate, and economic volatility could adversely impact

our business.

Our overall performance depends in part on worldwide

economic and geopolitical conditions.

The United States has experienced cyclical downturns from time to time in which economic activity

was impacted by rising inflation, falling demand for a variety of goods and services, restricted credit, poor liquidity, reduced corporate

profitability, volatility in credit and fluctuating interest rates, equity and foreign exchange markets, bankruptcies and overall uncertainty

with respect to the economy.

These economic conditions can arise suddenly, and the full impact of such conditions can remain uncertain.

In addition, geopolitical developments, such as existing and potential wars, trade wars or other conflicts, changes in foreign policy

and other events are beyond our control.

Any form of civil unrest or other conflict can increase levels of political and economic unpredictability

regionally or globally and has the potential to increase the volatility of global financial markets.

Any of these effects could have a

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

Sustained levels of high inflation could cause

Federal Reserve and other central banks to continue to increase interest rates, which could have the effects of raising the cost

of capital and depressing economic growth, either of which, or the combination thereof, could hurt the financial and operating results

of our business and impact our ability to raise capital.

We may need additional capital to execute

our business plan.

If we are not able to obtain additional financing, it could have a material adverse effect on our business, results

real or perceived errors, failures, bugs or defects may be present or occur in the future in our customer solutions, software or technology

or the technology or software we license from third parties, including open source software.

Despite testing by us, real or perceived

errors, failures, bugs or defects may not be found until our customers use our services.

Real or perceived errors, failures, bugs or

defects in our customer solutions could result in negative publicity, loss of or delay in market acceptance of our services and harm

to our brand, weakening of our competitive position, claims by customers for losses sustained by them or failure to meet the stated service

level commitments in our customer agreements.

In such an event, we may be required, or may choose, for customer relations or other reasons,

to expend significant additional resources to help correct the problem.

Any real or perceived errors, failures, bugs or defects in our

customer solutions could also impair our ability to attract new customers, retain existing customers or expand their use of our services,

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

we are unable to attract new customers, retain existing customers and sell additional services at comparable gross margins to customers,

our revenue and results of operations could be adversely affected.

ability to maintain or increase our revenues and make a profit may be impacted by a number of factors, including our ability to attract

new customers, retain existing customers and sell additional services at comparable gross margins to our customers.

In addition, as we

seek to grow our customer base, we expect to incur higher customer acquisition costs and, to the extent we are unable to retain and sell

additional services to existing customers, our revenue and results of operations may decrease.

in the demand for our services may be inhibited, and we may be unable to profitably maintain or grow our customer base for a number of

reasons, such as:

our inability to provide

compelling services or effectively market them to new and existing customers;

customer migration to platforms

that we do not have expertise in managing;

the inability of customers

to differentiate our services from those of our competitors or our inability to effectively communicate such distinctions;

the decision of customers

to host internally, in third-party cloud infrastructure, or in third-party colocation facilities as an alternative to the use of

our services;

the decision of customers

to use internal or other third-party resources to manage their platforms and applications;

reductions in IT spending

by customers or potential customers;

a reduction in the demand

for our services due to macroeconomic factors in the markets in which we operate;

our inability to strengthen

awareness of our brand;

past or future cybersecurity-related

reliability, quality or

compatibility problems with our services.

we may face difficulty retaining existing customers over the long term.

Certain customer contracts, frequently have initial terms (typically

from 24 to 36 months) and, unless terminated, may be renewed or automatically extended for shorter, rolling periods after the initial

Our customers have no obligation to renew their services after their initial contract periods expire and any termination fees associated

with an early termination may not be sufficient to recover our costs associated with such contracts.

In addition, most of our services

can be canceled at any time without penalty.

As a result, we may face high rates of customer churn if we are unable to meet our customer

needs, requirements and preferences.

costs associated with generating revenue from existing customers are generally lower than costs associated with generating revenue from

new customers, and depending on the customer and the service offering, there may be substantial variation in the gross margins associated

with existing and new customers.

Any failure by us in continuing to attract new customers or grow our revenue from existing customers

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

business depends on Microsoft Corporation and others for the licenses to use software and other intellectual property in the managed

technology solutions business.

managed technology business is built on technological platforms that rely on the Microsoft Windows products and other intellectual property

that we currently license.

As a result, if we are unable to continue to have the benefit of those licensing arrangements, or if the products

upon which our platform is built become obsolete, our business could be materially and adversely affected.

we fail to hire and retain qualified employees and management personnel, our strategies and our business could be harmed.

ability to be successful and to execute on our strategies depends on our ability to identify, hire, train and retain qualified executives,

IT professionals, technical engineers, software developers, operations employees and sales and senior management personnel who maintain

relationships with our customers and who can provide the technical, strategic and marketing skills required for our company to grow.

Our ability to execute on our sales strategy is also dependent on our ability to identify, hire, train and retain a sufficient number

of qualified sales personnel.

There is a shortage of qualified personnel in these fields, and like many other companies, we have encountered

additional challenges in hiring and retaining qualified personnel.

We compete with other companies for this limited pool of potential

Furthermore, the implementation of our strategies may result in changes throughout our business, which may create uncertainty

for our employees.

Such uncertainties may impair our ability to attract, retain and motivate key personnel and could cause customers,

suppliers and others who deal with us to seek to change existing business relationships.

In addition, the industry in which we operate

is generally characterized by significant competition for skilled personnel, and as our industry becomes more competitive, it could become

especially difficult to retain personnel with unique in-demand skills and knowledge, whom we would expect to become recruiting targets

for our competitors.

We may not be able to recruit or retain qualified personnel or successfully transition knowledge from departing

employees, and any failure to do so could cause a dilution of our service-oriented culture and weaken our ability to develop and deliver

existing or new operations and services, either of which could cause our business to be negatively impacted.

future success is dependent, in part, on the performance and continued service of our executive officers.

Without their continued service,

we may be forced to interrupt or eventually cease our operations.

are dependent to a great extent upon the experience, abilities and continued service of Jason Katz, our Chief Executive Officer and Chairman

of the Board of Directors (the “Board”), Kara B.

Jenny, our Chief Financial Officer and director, Jared Mills, our President,

and Adam Zalko, our Chief Operating Officer.

The loss of the services of these individuals would substantially affect our business or

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

we recognize revenue from subscriptions over the term of the subscription, the full impact of downturns or upturns in subscription sales

may not be immediately reflected in our results of operations or financial condition.

Based on the variability of contract and service

type offered with our managed IT security services, professional services and secure private cloud hosting, we report deferred revenue

for any unearned portion of revenue from contracts we entered into during previous periods.

In addition, we recognize subscription revenue

from ManyCam customers monthly over the term of the subscription, which are offered in twelve- and twenty-four-month terms.

much of the subscription revenue we report in each period is deferred revenue from subscription agreements or other contracts entered

into during previous periods.

Consequently, a decline in certain new or renewed agreements in any one quarter will negatively affect our

revenue in future quarters.

In addition, we might not be able to immediately adjust our costs and expenses to reflect these reduced revenues.

Accordingly, the effect of significant downturns in user demand for our products and services may not be fully reflected in our results

of operations until future periods.

Our subscription model for ManyCam also makes it difficult for us to quickly increase revenue generated

from ManyCam through additional sales in any period, as revenue from new subscribers must be recognized over the term of the subscription.

As a result, you should not rely on the amount of subscription revenue generated in prior quarters as an indication of future results.

business is affected by general economic conditions, including inflation, and uncertainties affecting markets in which we operate, and

economic volatility could adversely impact our business.

overall performance depends in part on worldwide economic and geopolitical conditions.

The United States has experienced cyclical downturns

from time to time in which economic activity was impacted by rising inflation, falling demand for a variety of goods and services, restricted

credit, poor liquidity, reduced corporate profitability, volatility in credit and fluctuating interest rates, equity and foreign exchange

markets, bankruptcies and overall uncertainty with respect to the economy.

These economic conditions can arise suddenly, and the full

impact of such conditions can remain uncertain.

In addition, geopolitical developments, such as existing and potential wars, trade wars

or other conflicts, changes in foreign policy and other events are beyond our control.

Any form of civil unrest or other conflict can

increase levels of political and economic unpredictability regionally or globally and has the potential to increase the volatility of

global financial markets.

Any of these effects could have a material and adverse impact on our business, financial condition and results

of operations.

Sustained levels of high inflation could cause the U.S.

Federal Reserve and other central banks to increase interest rates,

which could have the effects of raising the cost of capital and depressing economic growth, either of which, or the combination thereof,

could hurt the financial and operating results of our business and impact our ability to raise capital.

may need additional capital to execute our business plan.

If we are not able to obtain additional financing, it could have a material

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

might need to raise additional capital or financing through debt or equity offerings to support our expansion, marketing efforts and

application development programs in the future.

For instance, we might require additional capital or financing to:

hire and retain talented

employees, including technical employees, executives, and marketing experts;

effectuate our long-term

growth strategy and expand our application development programs;

market and advertise our

products and solutions to acquire additional customers.

may be unable to obtain future capital or financing on favorable terms or at all.

If we cannot obtain additional capital or financing,

we may need to reduce, defer or cancel planned initiatives, marketing or advertising expenses or costs and expenses.

The failure to obtain

necessary additional capital or financing on favorable terms, if at all, could have a material adverse effect on our business, results

of operations or financial condition.

We might need to raise additional capital or financing

through debt or equity offerings to support our expansion, marketing efforts and application development programs in the future.

For instance,

we might require additional capital or financing to:

● hire and retain talented employees,

including technical employees, executives, and marketing experts;

● effectuate our long-term growth

strategy and expand our application development programs;

● market and advertise our products

and solutions to acquire additional customers.

We may be unable to obtain future capital or financing

on favorable terms or at all.

If we cannot obtain additional capital or financing, we may need to reduce, defer or cancel planned initiatives,

marketing or advertising expenses or costs and expenses.

The failure to obtain necessary additional capital or financing on favorable

terms, if at all, could have a material adverse effect on our business, results of operations or financial condition.

We may make or attempt to make acquisitions

in the future, which could require significant management attention, disrupt our business, dilute our stockholders and significantly harm

our business.

As part of our business strategy, we have made

in the past, and intend to make in the future, acquisitions to add specialized employees and complementary companies, products and technologies.

In the future, we may not be able to find suitable acquisition candidates, and we may not be able to complete acquisitions on favorable

terms, if at all.

Our previous and future acquisitions may not achieve our goals, and any future acquisitions we complete could be viewed

negatively by customers, advertisers or investors.

In addition, if we fail to successfully close transactions or integrate new teams,

or integrate the products and technologies associated with these acquisitions into our company, our business could be seriously harmed.

Any integration process may require significant time and resources, and we may not be able to manage the process successfully.

not successfully evaluate or use the acquired products, technology and personnel, or accurately forecast the financial impact of an acquisition

transaction, including accounting charges.

We may also incur unanticipated liabilities that we assume as a result of acquiring companies.

We may have to pay cash, incur debt or issue equity securities to pay for any acquisition, any of which could negatively impact our business

and financial condition.

Issuing equity to finance any such acquisitions would also dilute our existing stockholders.

Incurring debt would

increase our fixed obligations and could also include covenants or other restrictions that would impede our ability to manage our operations.

Risks Related to the Transactions

Shares issuable upon conversion of the Series

A Preferred Stock, could depress our stock price.

As partial consideration for the Acquisition,

we issued Newtek 4,000,000 shares of the Company’s Series A Non-Voting Common Equivalent Stock, par value $0.001 per share (the

“Series A Preferred Stock”).

As of March 14, 2025, Newtek owns approximately 30.2% of our issued and outstanding common stock

or common-equivalent equity (on an as-converted and fully-diluted basis), calculated based on the number of shares of our common stock

outstanding as of March 14, 2025.

As a holder of our Series A Preferred Stock, Newtek does not have voting rights, except with respect

to certain protective matters, such as amendments to the Charter or Series A Preferred Stock Certificate of Designations (the “Certificate

of Designations”) that significantly and adversely affect the preferences, rights, privileges or powers of the Series A Preferred

The Series A Preferred Stock is convertible into

common stock only upon certain qualifying transfers to third parties.

In addition, we entered into a Registration Rights Agreement with

Newtek at the closing of the Acquisition (the “Registration Rights Agreement”), pursuant to which, among other things, we

are obligated to use our reasonable best efforts to prepare and file a registration statement registering the resale the shares of our

common stock issuable upon conversion of the Series A Preferred Stock.

Once registered, the shares of common stock issuable upon conversion

of the Series A Preferred Stock held by Newtek generally will not require further registration under the Securities Act, provided ,

however, that to the extent that Newtek is deemed to be our affiliate for purposes of the Securities Act, its sales of common stock issuable

upon conversion of the Series A Preferred Stock will be subject to the resale restrictions of Rule 144 under the Securities Act.

Pursuant to the Registration Rights Agreement,

Newtek is subject to certain lockup and transfer restrictions with respect to the Series A Preferred Stock for one year following the

closing of the Acquisition.

Following this lockup period, Newtek may wish to dispose of some or all of its Series A Preferred Stock, and

as a result, may seek to sell its shares of Series A Preferred Stock, which would automatically convert into shares of our common stock

upon the occurrence of certain qualifying transfers.

Any such sale (or the perception that any such a sale may occur), coupled with the

increase in the outstanding number of shares of our common stock following the conversion of the Series A Preferred Stock upon transfer,

could have a dilutive effect to our existing stockholders and may affect the market for, and the market price of, shares of common stock

in an adverse manner.

We may not be able to effectively integrate

the businesses of NTS or realize the anticipated benefits and synergies expected from the Acquisition .

The success of the Acquisition and the transactions

contemplated thereby will depend, in part, on our ability to realize the anticipated benefits from acquiring NTS and its business.

anticipated benefits and estimates of future growth, synergies and optimizations of the Acquisition may not be realized fully or at all,

may take longer to realize than expected or could have other adverse effects that we do not currently foresee.

The failure to realize

the anticipated benefits and synergies expected from the Acquisition could adversely affect our business, financial condition and operating

In addition, we have devoted, and continue to

devote, significant management attention and resources to integrate the respective business practices and operations of NTS.

difficulties that we may encounter as part of the integration process incl ude

the following:

inability to successfully combine our ManyCam product with the business of NTS in a manner that permits us to achieve, on a timely basis

or at all, the enhanced revenue opportunities, cost savings and other benefits anticipated to result from the Acquisition;

● complexities

associated with managing our existing business and NTS, including difficulty addressing possible differences in operational philosophies

and the challenge of integrating complex systems, technology, networks and other assets of NTS in a seamless manner that minimizes any

adverse impact on customers, suppliers, employees and other constituencies;

assumption of contractual obligations with less favorable or more restrictive terms;

unknown liabilities and unforeseen increased expenses or delays associated with the transactions.

of these issues could adversely affect our ability to maintain relationships with customers, suppliers, employees and other constituencies

or achieve the anticipated benefits of the Acquisition or could negatively impact our earnings or otherwise adversely affect our business

and financial results.

Through the Acquisition, we are entering

a new line of business which is highly competitive.

Through the Acquisition, we acquired NTS’s

existing operations.

Entering a new line of business has many risks, including the ability to generate sufficient revenue to fund operations

in the future.

While we believe we have sufficient capital to cover integration expenses, we may have to fund NTS’s operations from

cash on hand until sales are sufficient to fund ongoing operations.

A new business line may never generate significant revenues or have

enough sales to be profitable.

These risks may be further exacerbated by the sale of the Transferred Assets, which have historically been

our main source of revenue.

With respect to any new line of business, we may have competitors that are better established in the market,

have greater experience with such line of business or have greater resources than we do.

Furthermore, certain of our current employees

may have limited experience with dedicated server hosting, cloud hosting, data storage, managed security, backup and disaster recovery

and other related services and may have limited experience with respect to any other line of business we may enter into as we seek to

expand our operations.

Newtek previously identified material weaknesses

in NTS’s internal controls over financial reporting.

If the material weaknesses are not remediated, it may adversely affect our

ability to report our financial condition and results of operations in a timely and accurate manner or lower investor confidence in our

Company and, as a result, negatively affect the value of our common stock.

As disclosed in Newtek’s Annual Report on

Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on April 1, 2024, Newtek’s management concluded that NTS

did not maintain effective internal controls over financial reporting as of December 31, 2023, as a result of the material weaknesses

related to deficiencies in the conversion of NTS’s system of record for webhosting revenue and ineffective control design and implementation

over revenue recognition.

As we continue to integrate NTS’s operations into our business, we are evaluating our internal controls

over financial reporting, including internal controls related to NTS, following the Acquisition.

As a result of these integration activities,

certain internal controls may be changed.

We are permitted to exclude NTS from our assessment of internal controls over financial reporting

during the first year following the Acquisition.

If we fail to maintain adequate internal controls over financial reporting, we may be

subject to litigation or regulatory scrutiny and investors could lose confidence in our reported financial information, which could have

a negative effect on the trading price of our common stock.

We may record goodwill and other intangible

assets that could become impaired and result in material non-cash charges to our results of operations in the future .

We accounted for the Acquisition using the acquisition

method of accounting in accordance with the accounting principles generally accepted in the United States (“GAAP”).

the acquisition method of accounting, the assets and liabilities of NTS were recorded, as of completion, at their respective fair values

and added to those of the Company.

The reported financial condition and results of operations of the Company for periods after completion

of the Acquisition will reflect NTS’s balances and results after completion of the Acquisition but will not be restated retroactively

to reflect the historical financial position or results of operations of NTS for periods prior to the Acquisition.

Under the acquisition method of accounting, the

total purchase price is allocated to NTS’s tangible assets and liabilities and identifiable intangible assets based on their fair

values as of the Closing Date.

The excess of the purchase price over those fair values is recorded as goodwill.

We expect that the Acquisition

may result in the creation of goodwill based upon the application of the acquisition method of accounting.

To the extent goodwill or intangibles

are recorded and the values become impaired, we may be required to recognize material non-cash charges relating to such impairment.

operating results may be significantly impacted from both the impairment and the underlying trends in the business that triggered the

NTS historically relied on Newtek for managerial,

financial and accounting support and benefitted from Newtek’s referral network, and we expect to rely on Newtek’s referral

network in the future .

NTS historically relied on Newtek for managerial,

financial and accounting support to manage NTS’s business.

We may not be able to effectively manage our operations without the managerial

assistance of Newtek, and the Acquisition may result in the disruption of, or the loss of momentum in, our ongoing businesses or inconsistencies

in standards, controls, procedures and policies, either of which could negatively impact our ability to generate revenue and income at

the levels NTS historically performed.

In addition, NTS materially benefited from Newtek’s

referral network, including Newtek’s patented NewTracker software, to assist NTS in generating new customers and revenues.

historically approximately 40% of new NTS webhosting customers have resulted from internal and external referrals from Newtek without

material expenditures by NTS for marketing or advertising.

In connection with the Acquisition, we entered into a referral arrangement

with Newtek pursuant to which Newtek will continue to refer potential clients to us for a fee.

Our referral arrangement with Newtek is

terminable by either us or Newtek at any time.

If Newtek does not provide customer referrals to us at the same level it provided NTS,

or if Newtek terminates our referral arrangement, our ability to gain new customers would be materially adversely affected.

Newtek historically accounted for a material

portion of NTS’s revenue and income.

Newtek historically was NTS’s largest customer

in terms of revenue and income.

For example, during the fiscal year ended December 31, 2023 and the nine months ended September 30, 2024,

Newtek accounted for 16% and 27% of NTS’s revenue, respectively.

In connection with the Acquisition, we entered into master services

agreements with Newtek and Newtek Bank, National Association (“Newtek Bank”), pursuant to which we provide Newtek and Newtek

Bank with the same level of managed IT services at the same or similar billing rates as NTS provided.

If we are unable to deliver the

contracted services or a party terminates or breaches the agreements, or if Newtek or Newtek Bank fail to renew the agreements at the

end their term, the loss of revenues would materially impact our financial condition.

Legal and Regulatory Risks

Customers could potentially expose us to

lawsuits for their lost profits or damages, which could impair our results of operations.

Because our services are critical to many of our

customers’ businesses, any significant disruption in our services could result in lost profits or other indirect or consequential

damages to our customers.

Although we generally require our customers to sign agreements that contain provisions attempting to limit our

liability for service outages, a court may not enforce any contractual limitations on our liability in the event that one of our customers

brings a lawsuit against us as the result of a service interruption or other Internet site or application problems that they may ascribe

The outcome of any such lawsuit would depend on the specific facts of the case and any legal and policy considerations that we

may not be able to mitigate.

In such cases, we could be liable for substantial damage awards that may exceed our insurance coverage by

unknown but significant amounts, which could materially and adversely impair our business, financial condition and results of operations.

As a technology service provider to U.S.

financial institutions, we are subject to regulation, supervision, and enforcement authority of numerous governmental and regulatory bodies

in the jurisdictions in which we operate, which includes banking regulators.

Because we are a technology service provider to

financial institutions and host, secure and manage banking software, we are subject to regular oversight and examination by the FFIEC,

which is an inter-agency body of federal banking regulators.

The FFIEC has broad discretion in the implementation, interpretation and

enforcement of banking and consumer protection laws.

Our failure to comply with these laws, or our failure to meet the supervisory expectations

of the banking regulators, could result in adverse action against us.

The regulators have the power to, among other things, enjoin “unsafe

or unsound” practices, require affirmative actions to correct any violation or practice, issue administrative orders that can be

judicially enforced, direct the sale of subsidiaries or other assets, and assess civil money penalties.

Our failure to comply with these

laws, or our failure to meet the supervisory expectations of the banking regulators, could result in adverse action against us, which

could have a material adverse impact on our business and results of operations.

Government regulation is continuously evolving

and, depending on its evolution, may adversely affect our business, financial condition and results of operations.

may make or attempt to make acquisitions in the future, which could require significant management attention, disrupt our business, dilute

our stockholders and significantly harm our business.

part of our business strategy, we have made in the past, and intend to make in the future, acquisitions to add specialized employees

and complementary companies, products and technologies.

In the future, we may not be able to find suitable acquisition candidates, and

we may not be able to complete acquisitions on favorable terms, if at all.

Our previous and future acquisitions may not achieve our goals,

and any future acquisitions we complete could be viewed negatively by customers, advertisers or investors.

In addition, if we fail to

successfully close transactions or integrate new teams, or integrate the products and technologies associated with these acquisitions

into our company, our business could be seriously harmed.

Any integration process may require significant time and resources, and we

may not be able to manage the process successfully.

We may not successfully evaluate or use the acquired products, technology and personnel,

or accurately forecast the financial impact of an acquisition transaction, including accounting charges.

We may also incur unanticipated

liabilities that we assume as a result of acquiring companies.

We may have to pay cash, incur debt or issue equity securities to pay

for any acquisition, any of which could negatively impact our business and financial condition.

Issuing equity to finance any such acquisitions

would also dilute our existing stockholders.

Incurring debt would increase our fixed obligations and could also include covenants or

other restrictions that would impede our ability to manage our operations.

currently benefits from Newtek’s referral network, and we expect to rely on Newtek’s referral network in the future .

connection with the Acquisition, we entered into a referral arrangement with Newtek pursuant to which Newtek will continue to refer potential

clients to us at the same level it provided NTS for a fee.

Our referral arrangement with Newtek is terminable by either us or Newtek

If Newtek does not provide customer referrals to us at the same level it provided NTS, or if Newtek terminates our referral

arrangement, our ability to gain new customers would be materially adversely affected.

We paid Newtek and its affiliates $0.3 million for

the year ended December 31, 2025 in connection with the referral arrangement.

and Regulatory Risks

could potentially expose us to lawsuits for their lost profits or damages, which could impair our results of operations.

our services are critical to many of our customers’ businesses, any significant disruption in our services could result in lost

profits or other indirect or consequential damages to our customers.

Although we generally require our customers to sign agreements that

contain provisions attempting to limit our liability for service outages, a court may not enforce any contractual limitations on our

liability in the event that one of our customers brings a lawsuit against us as the result of a service interruption or other Internet

site or application problems that they may ascribe to us.

The outcome of any such lawsuit would depend on the specific facts of the case

and any legal and policy considerations that we may not be able to mitigate.

In such cases, we could be liable for substantial damage

awards that may exceed our insurance coverage by unknown but significant amounts, which could materially and adversely impair our business,

financial condition and results of operations.

a technology service provider to U.S.

financial institutions, we are subject to regulation, supervision, and enforcement authority of

numerous governmental and regulatory bodies in the jurisdictions in which we operate, which includes banking regulators.

we are a technology service provider to U.S.

financial institutions and host, secure and manage banking software, we are subject to regular

oversight and examination by the FFIEC, which is an inter-agency body of federal banking regulators.

The FFIEC has broad discretion in

the implementation, interpretation and enforcement of banking and consumer protection laws.

Our failure to comply with these laws, or

our failure to meet the supervisory expectations of the banking regulators, could result in adverse action against us.

The regulators

have the power to, among other things, enjoin “unsafe or unsound” practices, require affirmative actions to correct any violation

or practice, issue administrative orders that can be judicially enforced, direct the sale of subsidiaries or other assets, and assess

civil money penalties.

Our failure to comply with these laws, or our failure to meet the supervisory expectations of the banking regulators,

could result in adverse action against us, which could have a material adverse impact on our business and results of operations.

regulation is continuously evolving and, depending on its evolution, may adversely affect our business, financial condition and results

of operations.

We are subject to varying degrees of regulation

3 unchanged sentences

These regulations and laws may cover taxation, privacy, data protection, pricing, content, intellectual

property and proprietary rights, distribution, mobile communications, electronic device certification, electronic waste, electronic contracts

and other communications, consumer protection, web services, the provision of online payment services, unencumbered Internet access to

our services, the design and operation of websites and the characteristics and quality of services.

These laws can be costly to comply

with, can be a significant diversion to management’s time and effort and can subject us to claims or other remedies, as well as

negative publicity.

Many of these laws were adopted prior to the advent of the Internet and related technologies and, as a result, do

not contemplate or address the unique issues that the Internet and related technologies currently produce.

Some of the laws that do reference

the Internet and related technologies have been and continue to be interpreted by the courts, but their applicability and scope remain

largely uncertain.

property and proprietary rights, distribution of content, mobile communications, electronic device certification, electronic waste, electronic

contracts and other communications, consumer protection, web services, the provision of online payment services, unencumbered Internet

access to our services, the design and operation of websites and the characteristics and quality of services.

These laws can be costly

to comply with, can be a significant diversion to management’s time and effort and can subject us to claims or other remedies, as

well as negative publicity.

Many of these laws were adopted prior to the advent of the Internet and related technologies and, as a result,

do not contemplate or address the unique issues that the Internet and related technologies currently produce.

Some of the laws that do

reference the Internet and related technologies have been and continue to be interpreted by the courts, but their applicability and scope

remain largely uncertain.

Additionally,

8 unchanged sentences

impact our business and financial results.

Risks Related to Our Intellectual Property

If we are unable to protect our intellectual

property rights, we may be unable to compete with competitors developing similar technologies.

Historically, our defense of our intellectual

property rights has been a significant aspect of our business and has meaningfully contributed to our results of operations.

protect our confidential proprietary information, in part, by entering into confidentiality agreements and invention assignment agreements

with all our employees, consultants, advisors and any third parties who access or contribute to our proprietary know-how, information,

or technology.

We also rely on trademark, copyright, patent, trade secret, and domain-name-protection laws to protect our proprietary

We have filed various applications to protect aspects of our intellectual property, and we currently hold eight patents.

future we may acquire additional patents or patent portfolios, which could require significant cash expenditures.

However, third parties

may knowingly or unknowingly infringe our proprietary rights, third parties may challenge proprietary rights held by us, and pending and

future trademark and patent applications may not be approved.

In addition, effective intellectual property protection may not be available

in every country in which we operate or intend to operate our business.

In any of these cases, we may be required to expend

significant time and expense to prevent infringement or to enforce our rights.

Although we have taken measures to protect our proprietary

rights, others may offer products or concepts that are substantially similar to ours and compete with our business.

If we are unable to

protect our proprietary rights or prevent unauthorized use or appropriation by third parties, the value of our brand and other intangible

assets may be diminished, and competitors may be able to more effectively mimic our service and methods of operations.

Any of these events

could seriously harm our business.

Intellectual property infringement claims

against us could cause us to incur significant expenses, pay substantial damages or royalties and prevent us from offering our products

and solutions.

Third parties have in the past, and may in the future, claim that our

products and solutions infringe or violate their intellectual property rights.

For instance, on March 7, 2025, Cisco Systems, Inc.

Cisco Technology, Inc.

Related to Our Intellectual Property

we are unable to protect our intellectual property rights, we may be unable to compete with competitors developing similar technologies.

Historically,

our defense of our intellectual property rights has been a significant aspect of our business and has meaningfully contributed to our

results of operations.

We aim to protect our confidential proprietary information, in part, by entering into confidentiality agreements

and invention assignment agreements with all our employees, consultants, advisors and any third parties who access or contribute to our

proprietary know-how, information, or technology.

We also rely on trademark, copyright, patent, trade secret, and domain-name-protection

laws to protect our proprietary rights.

We have filed various applications to protect aspects of our intellectual property, and we currently

hold eight patents.

In the future we may acquire additional patents or patent portfolios, which could require significant cash expenditures.

However, third parties may knowingly or unknowingly infringe our proprietary rights, third parties may challenge proprietary rights held

by us, and pending and future trademark and patent applications may not be approved.

In addition, effective intellectual property protection

may not be available in every country in which we operate or intend to operate our business.

any of these cases, we may be required to expend significant time and expense to prevent infringement or to enforce our rights.

we have taken measures to protect our proprietary rights, others may offer products or concepts that are substantially similar to ours

and compete with our business.

If we are unable to protect our proprietary rights or prevent unauthorized use or appropriation by third

parties, the value of our brand and other intangible assets may be diminished, and competitors may be able to more effectively mimic

our service and methods of operations.

Any of these events could seriously harm our business.

property infringement claims against us could cause us to incur significant expenses, pay substantial damages or royalties and prevent

us from offering our products and solutions.

Third parties have in the past, and may in the

future, claim that our products and solutions infringe or violate their intellectual property rights.

For instance, on March 7, 2025,

Cisco Systems, Inc.

and Cisco Technology, Inc.

filed a complaint against the Company in the U.S.

District Court for the District of Delaware, alleging that the

Company’s ManyCam software has infringed certain patents and seeking damages and injunctive relief.

Such claim, and any future claims

of infringement, could cause us to incur significant expenses and, if successfully asserted against us, could require that we pay substantial

damages and prevent us from using licensed technology that may be fundamental to our products and solutions.

Even if we were to prevail,

any litigation regarding intellectual property could be costly and time-consuming and divert the attention of our management and key personnel

from our business operations.

We maintain insurance to protect against intellectual property infringement claims and resulting litigation,

but such insurance may not cover or may not be sufficient to cover all potential claims, liability or expenses.

We may also be obligated

to indemnify our business partners in any such litigation, which could further exhaust our resources.

Furthermore, as a result of an intellectual

property challenge, we may be prevented from offering our products and solutions unless we enter into royalty, license or other agreements.

We may not be able to obtain such agreements at all or on terms acceptable to us, and as a result, we may be precluded from offering our

District Court for the District of Delaware,

alleging that the Company’s ManyCam software has infringed certain patents and seeking damages and injunctive relief and, as of

December 31, 2025, the Company had incurred approximately $0.7 million in expense for the year ended December 31, 2025 in defense of these

Such claims, and any future claims of infringement, could cause us to incur significant expenses and, if successfully asserted

against us, could require that we pay substantial damages and prevent us from using licensed technology that may be fundamental to our

products and solutions.

Risks Related to Ownership of Our Common

Our common stock is historically thinly

traded, stockholders may be unable to sell at or near ask prices or at all and the price of our common stock may be volatile.

Historically, shares of our common stock have

been thinly traded The Nasdaq Capital Market (“Nasdaq”), meaning that the number of persons interested in purchasing our common

stock at or near ask prices at any given time may be relatively small or non-existent.

This situation is attributable to a number of factors,

including the fact that we are a small company that is relatively unknown to stock analysts, stockbrokers, institutional investors and

others in the investment community that generate or influence sales volume.

As a consequence, there may be periods of several days or

more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer that has a large and steady volume

of trading activity that will generally support continuous sales without an adverse effect on stock price.

However, during certain periods, we have received,

and may continue to receive, a high degree of media coverage that is published or otherwise disseminated by third parties, including blogs,

articles, message boards and social and other media.

This may include coverage that is not attributable to statements made by the Company

or our Board.

Information provided by third parties may not be reliable or accurate and could materially impact the trading price of our

common stock, which could cause stockholders to lose their investments.

The market prices and trading volume of our common

stock have in the past experienced, and may continue to experience in the future, extreme volatility, which could cause purchasers of

our common stock to incur substantial losses.

We believe that the historical volatility and our historical market prices during such periods

reflected market and trading dynamics unrelated to our underlying business, or macro or industry fundamentals, and we do not know if these

dynamics will continue in the future.

Although our common stock is listed for trading

on Nasdaq, a broader or more active public trading market for our common stock may not develop or be sustained, and the current trading

level of our common stock may not be sustained.

Due to these conditions, stockholders may be unable to sell their common stock at or near

ask prices or at all if they desire to sell shares of common stock.

Even if we were to prevail, any litigation regarding intellectual property could be costly and time-consuming

and divert the attention of our management and key personnel from our business operations.

We maintain insurance to protect against intellectual

property infringement claims and resulting litigation, but such insurance may not cover or may not be sufficient to cover all potential

claims, liability or expenses.

We may also be obligated to indemnify our business partners in any such litigation, which could further

exhaust our resources.

Furthermore, as a result of an intellectual property challenge, we may be prevented from offering our products

and solutions unless we enter into royalty, license or other agreements.

We may not be able to obtain such agreements at all or on terms

acceptable to us, and as a result, we may be precluded from offering our products and solutions.

Related to Ownership of Our Common Stock

common stock is historically thinly traded, stockholders may be unable to sell at or near ask prices or at all and the price of our common

stock may be volatile.

Historically,

shares of our common stock have been thinly traded The Nasdaq Capital Market (“Nasdaq”), meaning that the number of persons

interested in purchasing our common stock at or near ask prices at any given time may be relatively small or non-existent.

This situation

is attributable to a number of factors, including the fact that we are a small company that is relatively unknown to stock analysts,

stockbrokers, institutional investors and others in the investment community that generate or influence sales volume.

As a consequence,

there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned

issuer that has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect

on stock price.

during certain periods, we have received, and may continue to receive, a high degree of media coverage that is published or otherwise

disseminated by third parties, including blogs, articles, message boards and social and other media.

This may include coverage that is

not attributable to statements made by the Company or our Board.

Information provided by third parties may not be reliable or accurate

and could materially impact the trading price of our common stock, which could cause stockholders to lose their investments.

market prices and trading volume of our common stock have in the past experienced, and may continue to experience in the future, extreme

volatility, which could cause purchasers of our common stock to incur substantial losses.

We believe that the historical volatility and

our historical market prices during such periods reflected market and trading dynamics unrelated to our underlying business, or macro

or industry fundamentals, and we do not know if these dynamics will continue in the future.

our common stock is listed for trading on Nasdaq, a broader or more active public trading market for our common stock may not develop

or be sustained, and the current trading level of our common stock may not be sustained.

Due to these conditions, stockholders may be

unable to sell their common stock at or near ask prices or at all if they desire to sell shares of common stock.

The stock markets in general have experienced

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may also adversely affect the trading price of our common stock, especially in light of the macro-economic factors including rising inflation

rates, increased interest rates, bank-specific and broader financial institution liquidity challenges, the Russia-Ukraine conflict and

the Israel-Hamas conflict.

In the past, following periods of volatility in the market price of a company’s securities, stockholders

have often instituted class action securities litigation against those companies.

Such litigation, if instituted, could result in substantial

costs and diversion of management attention and resources, which could significantly harm our profitability and reputation.

Because of the limited trading market for our

common stock, and because of the possible price volatility, stockholders may not be able to sell their shares of common stock when you

desire to do so.

The inability to sell shares in a rapidly declining market may substantially increase the risk of loss because of such

illiquidity and because the price for our common stock may suffer greater declines because of its price volatility.

The ownership of

our common stock is significantly concentrated in a small number of investors, some of whom are affiliated with our Board and management,

which could prevent stockholders from having input on the course of our operations or otherwise lead to actual or potential conflicts

As of March 14, 2025, Jason Katz, our Chairman of the Board, and our

Chief Executive Officer, and our largest stockholder, The J.

Crew Delaware Trust B, beneficially owned an aggregate of approximately 25.9%

of our outstanding common stock.

rates, increased interest rates, bank-specific and broader financial institution liquidity challenges, the Russia-Ukraine conflict, the Israel-Hamas conflict and the ongoing conflict in Iran and the Middle East.

In the past, following periods of volatility in the market

price of a company’s securities, stockholders have often instituted class action securities litigation against those companies.

Such litigation, if instituted, could result in substantial costs and diversion of management attention and resources, which could significantly

harm our profitability and reputation.

of the limited trading market for our common stock, and because of the possible price volatility, stockholders may not be able to sell

their shares of common stock when you desire to do so.

The inability to sell shares in a rapidly declining market may substantially increase

the risk of loss because of such illiquidity and because the price for our common stock may suffer greater declines because of its price

ownership of our common stock is significantly concentrated in a small number of investors, some of whom are affiliated with our Board

and management, which could prevent stockholders from having input on the course of our operations or otherwise lead to actual or potential

conflicts of interest.

As of March 13, 2026, Jason Katz, our Chairman

of the Board, and our Chief Executive Officer, and our largest stockholder, The J.

Crew Delaware Trust B, beneficially owned an aggregate

of approximately 26.5% of our outstanding common stock.

Crew Delaware Trust B is a trust formed by Mr.

Katz for the benefit of certain of his family members.

Katz is not a beneficiary of the trust and does not hold voting or dispositive power over the shares held by the trust.

Delaware Trust B and others that have significant beneficial ownership of our common stock have substantial influence regarding matters

submitted for stockholder approval, including proposals regarding:

● any merger, consolidation or

sale of all or substantially all of our assets;

● the election of members of

Katz for the benefit of

certain of his family members.

Katz is not a beneficiary of the trust and does not hold voting or dispositive power over the shares

held by the trust.

Crew Delaware Trust B and others that have significant beneficial ownership of our common stock have substantial influence

regarding matters submitted for stockholder approval, including proposals regarding:

any merger, consolidation

or sale of all or substantially all of our assets;

the election of members

of our Board;

any amendment to our Certificate

of Incorporation, as amended (the “Certificate of Incorporation”).

The current or increased

ownership position of any of these stockholders and/or their respective affiliates could delay, deter or prevent a change of control or

adversely affect the price that investors might be willing to pay in the future for our common stock.

In addition, the interests of these

stockholders and/or their respective affiliates may significantly differ from the interests of our other stockholders and they may vote

the common stock they beneficially own in ways with which our other stockholders disagree.

Our results of operations are volatile and

difficult to predict, and our stock price may decline if we fail to meet the expectations of stockholders.

Our revenue and results of operations could vary

significantly from period-to-period and year-to-year and may fail to match our past performance because of a variety of factors, many

of which are outside of our control.

Any of these events could cause the market price of our common stock to fluctuate.

Factors that may

contribute to the variability of our results of operations include:

● changes in expectations as

to our future financial performance;

● announcements by us or our

competitors of significant contracts, acquisitions, strategic partnerships or capital commitments;

● market acceptance of our new

products and solutions;

● the amount of advertising and

marketing that is available and spent on customer campaigns;

current or increased ownership position of any of these stockholders and/or their respective affiliates could delay, deter or prevent

a change of control or adversely affect the price that investors might be willing to pay in the future for our common stock.

the interests of these stockholders and/or their respective affiliates may significantly differ from the interests of our other stockholders

and they may vote the common stock they beneficially own in ways with which our other stockholders disagree.

results of operations are volatile and difficult to predict, and our stock price may decline if we fail to meet the expectations of stockholders.

revenue and results of operations could vary significantly from period-to-period and year-to-year and may fail to match our past performance

because of a variety of factors, many of which are outside of our control.

Any of these events could cause the market price of our common

stock to fluctuate.

Factors that may contribute to the variability of our results of operations include:

changes in expectations

as to our future financial performance;

announcements by us or

our competitors of significant contracts, acquisitions, strategic partnerships or capital commitments;

market acceptance of our

new products and solutions;

the amount of advertising

and marketing that is available and spent on customer campaigns;

disruptions in the availability

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in our market whether by established companies or the entrance of new companies;

● additions or departures of

key personnel and the cost of attracting and retaining application developers and other software engineers;

additions or departures

of key personnel and the cost of attracting and retaining application developers and other software engineers;

general market conditions,

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with our current patent litigation or future patent litigation.

Given the rapidly evolving industry in which we

operate, our historical results of operations may not be useful in predicting our future results of operations.

In addition, metrics available

from third parties regarding our industry and the performance of our products and solutions may not be indicative of our future financial

Investor relations activities, nominal “float”

and supply and demand factors may affect the price of our common stock.

We have engaged an investor relations firm to

create investor awareness for our Company.

These campaigns may include non-deal road shows and personal, video and telephone conferences

with investors and prospective investors in which our business and business practices are described.

We provide compensation to our investor

relations firm and may in the future provide compensation to additional investor relations firms or financial advisory firms, for these

services, and pay for newsletters, websites, mailings and email campaigns that are produced by third parties based upon publicly available

information concerning us.

We do not intend to review or approve of the content of such analyst reports or other writings and communications

that are based upon analysts’ own research or methods.

Investor relations firms are generally required to disclose when they are

compensated for their efforts and the source of such compensation, but whether such disclosure is made or in compliance with applicable

laws is not under our control.

In addition, our investors may, from time to time, take steps to encourage investor awareness through similar

activities that may be undertaken at the expense of such investors.

Investor awareness activities may also be suspended or discontinued,

which may impact the trading market of our common stock.

The SEC and the Financial Industry Regulatory

Authority enforce various statutes and regulations intended to prevent manipulative or deceptive devices in connection with the purchase

or sale of any security and carefully scrutinize trading patterns and company news and other communications for false or misleading information,

particularly in cases where the hallmarks of “pump and dump” activities may exist, such as rapid share price increases or

We and our stockholders may be subjected to enhanced regulatory scrutiny due to the fact that our affiliates hold a majority

of our outstanding common stock and we have a limited number of shares of common stock that are publicly available for resale.

The Supreme Court of the United States has stated

that manipulative action is a term of art connoting intentional or willful conduct designed to deceive or defraud investors by controlling

or artificially affecting the price of securities.

Often times, manipulation is associated by regulators with forces that upset the supply

and demand factors that would normally determine trading prices.

Securities regulators have often cited thinly-traded markets, small numbers

of holders and awareness campaigns as components of their claims of price manipulation and other violations of law when combined with

manipulative trading, such as wash sales, matched orders or other manipulative trading timed to coincide with false or touting press releases.

Our activities or the activities of third parties, or the small number of potential sellers or small percentage of stock in our public

float, or determinations by purchasers or holders as to when or under what circumstances or at what prices they may be willing to buy

or sell stock, could artificially impact (or could be claimed by regulators to have affected) the normal supply and demand factors that

determine the price of our common stock.

If we are not able to comply with the applicable

continued listing requirements or standards of Nasdaq, Nasdaq could delist our securities.

Our common stock began trading on Nasdaq on August

the rapidly evolving industry in which we operate, our historical results of operations may not be useful in predicting our future results

of operations.

In addition, metrics available from third parties regarding our industry and the performance of our products and solutions

may not be indicative of our future financial performance.

relations activities, nominal “float” and supply and demand factors may affect the price of our common stock.

have engaged an investor relations firm to create investor awareness for our Company.

These campaigns may include non-deal road shows

and personal, video and telephone conferences with investors and prospective investors in which our business and business practices are

We provide compensation to our investor relations firm and may in the future provide compensation to additional investor relations

firms or financial advisory firms, for these services, and pay for newsletters, websites, mailings and email campaigns that are produced

by third parties based upon publicly available information concerning us.

We do not intend to review or approve of the content of such

analyst reports or other writings and communications that are based upon analysts’ own research or methods.

Investor relations

firms are generally required to disclose when they are compensated for their efforts and the source of such compensation, but whether

such disclosure is made or in compliance with applicable laws is not under our control.

In addition, our investors may, from time to

time, take steps to encourage investor awareness through similar activities that may be undertaken at the expense of such investors.

Investor awareness activities may also be suspended or discontinued, which may impact the trading market of our common stock.

SEC and the Financial Industry Regulatory Authority enforce various statutes and regulations intended to prevent manipulative or deceptive

devices in connection with the purchase or sale of any security and carefully scrutinize trading patterns and company news and other

communications for false or misleading information, particularly in cases where the hallmarks of “pump and dump” activities

may exist, such as rapid share price increases or decreases.

We and our stockholders may be subjected to enhanced regulatory scrutiny

due to the fact that our affiliates hold a majority of our outstanding common stock and we have a limited number of shares of common

stock that are publicly available for resale.

Supreme Court of the United States has stated that manipulative action is a term of art connoting intentional or willful conduct designed

to deceive or defraud investors by controlling or artificially affecting the price of securities.

Often times, manipulation is associated

by regulators with forces that upset the supply and demand factors that would normally determine trading prices.

Securities regulators

have often cited thinly-traded markets, small numbers of holders and awareness campaigns as components of their claims of price manipulation

and other violations of law when combined with manipulative trading, such as wash sales, matched orders or other manipulative trading

timed to coincide with false or touting press releases.

Our activities or the activities of third parties, or the small number of potential

sellers or small percentage of stock in our public float, or determinations by purchasers or holders as to when or under what circumstances

or at what prices they may be willing to buy or sell stock, could artificially impact (or could be claimed by regulators to have affected)

the normal supply and demand factors that determine the price of our common stock.

we are not able to comply with the applicable continued listing requirements or standards of Nasdaq, Nasdaq could delist our securities.

common stock began trading on Nasdaq on August 3, 2021.

However, our common stock may not continue to be listed on Nasdaq in the future.

In order to maintain our listing on Nasdaq,

we must satisfy minimum financial and other continued listing requirements and standards, including those regarding director independence

and independent committee requirements, minimum stockholders’ equity, minimum share price, and certain corporate governance requirements.

We may not be able to comply with the applicable listing standards, and Nasdaq could delist our common stock as a result.

If our common stock is delisted from Nasdaq, we

may be unable to list our common stock on another national securities exchange.

If our common stock is delisted by Nasdaq, our common

stock would likely trade on the OTCQB where an investor may find it more difficult to sell our shares or obtain accurate quotations as

to the market value of our common stock.

In order to maintain our listing on Nasdaq, we must satisfy minimum financial and other continued listing requirements and standards,

including those regarding director independence and independent committee requirements, minimum stockholders’ equity, minimum share

price, and certain corporate governance requirements.

We may not be able to comply with the applicable listing standards, and Nasdaq

could delist our common stock as a result.

our common stock is delisted from Nasdaq, we may be unable to list our common stock on another national securities exchange.

If our common

stock is delisted by Nasdaq, our common stock would likely trade on the OTCQB where an investor may find it more difficult to sell our

shares or obtain accurate quotations as to the market value of our common stock.

issuable upon conversion of the Series A Preferred Stock, could depress our stock price.

As partial consideration for the Acquisition,

we issued Newtek 4,000,000 shares of our Series A Non-Voting Common Equivalent Stock, par value $0.001 per share (the “Series A

Preferred Stock”).

As of March 13, 2026, Newtek owned approximately 30.6% of our issued and outstanding common stock or common-equivalent

equity (on an as-converted and fully-diluted basis), calculated based on the number of shares of our common stock outstanding as of March

As a holder of our Series A Preferred Stock, Newtek does not have voting rights, except with respect to certain protective matters,

such as amendments to the Company’s Certificate of Incorporation or the Series A Preferred Stock Certificate of Designations (the

“Certificate of Designations”) that significantly and adversely affect the preferences, rights, privileges or powers of the

Series A Preferred Stock.

Series A Preferred Stock is convertible into common stock only upon certain qualifying transfers to third parties.

In addition, we entered

into a Registration Rights Agreement with Newtek at the closing of the Acquisition (the “Registration Rights Agreement”),

pursuant to which, among other things, we are obligated to use our reasonable best efforts to prepare and file a registration statement

registering the resale the shares of our common stock issuable upon conversion of the Series A Preferred Stock.

Once registered, the

shares of common stock issuable upon conversion of the Series A Preferred Stock held by Newtek generally will not require further registration

under the Securities Act, provided , however, that to the extent that Newtek is deemed to be our affiliate for purposes of the

Securities Act, its sales of common stock issuable upon conversion of the Series A Preferred Stock will be subject to the resale restrictions

of Rule 144 under the Securities Act.

sale by Newtek of its shares of Series A Preferred Stock (or the perception that any such a sale may occur), coupled with the increase

in the outstanding number of shares of our common stock following the conversion of the Series A Preferred Stock upon transfer, could

have a dilutive effect to our existing stockholders and may affect the market for, and the market price of, shares of common stock in

an adverse manner.

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