What changed in this filing

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Item 1A. Risk Factors

2025-03-26 compared with 2024-03-28 · 254 added, 261 removed, 453 unchanged (53% of the section changed)

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million, and our losses are continuing.

Although we generated in net income in 2023, of approximately $3.6 million on revenues of approximately

Although we generated net income in 2023, of approximately $2.3 million on revenues of approximately

$13.2 million, the revenue and net income resulted from one-time, paid-up licenses in consideration for the grant of certain intellectual

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Intelligent Partners may make it difficult for us to generate cash flow from our operations .

We have an agreement with QFL pursuant

to which QFL agreed to make available to us a financing facility of (i) up to $25,000,000 for the acquisition of mutually agreed patent

rights that the Company intends to monetize, of which we have received $2,653,000 as of December 31, 2023;

(ii) up to $2,000,000 for operating

expenses from which the Company may, at its discretion, draw up to $200,000 per calendar quarter, of which we have drawn down $2,000,000

as of December 31, 2023, and (iii) $1,750,000 which was used to fund the cash payment portion of the restructure of our obligations to

Intelligent Partners.

We also have an agreement with QF3 pursuant to which QF3 agreed to make available to us a financing facility of

(i) up to $25,000,000 for the acquisition of mutually agreed patent rights that the Company intends to monetize:

(ii) up to $4,000,000

for operating expenses from which the Company may, at its discretion, draw up to $500,000 per calendar quarter, of which we have drawn

down $2,500,000 as of December 31, 2023, and (iii) $3,300,000 which was used to fund purchase of a patent portfolio from Tower.

to the QFL and QF3 agreements, QFL and QF3 receive all proceeds payable to us from the monetization of those patents which have been financed

by QFL and QF3, respectively, until QFL and QF3 has received its negotiated rate of return, respectively, then we and QFL and QF3, respectively,

share equally in the proceeds from monetization until QFL and QF3, respectively has received its investment return and thereafter we receive

all of the net proceeds.

Pursuant to our restructure agreement with Intelligent Partners, we have an obligation to pay TMPO totaling $2,805,000.

Under our amended monetization proceeds agreements with Intelligent Partners, we pay Intelligent Partners 60% of the net monetization

proceeds from associated intellectual property portfolios.

Further, until we have paid Intelligent Partners a total of $2,805,000 under

all of the monetization proceeds agreements, for net proceeds between $0 and $1,000,000 we are to pay Intelligent Partners 10% of the

net proceeds realized from new assets acquired by us, provided, that, if, in any calendar quarter, our net proceeds realized exceed $1,000,000,

Intelligent Partner’s entitlement for that quarter shall increase to 30% on the portion of net proceeds in excess of $1,000,000

but less than $3,000,000, and if in the same calendar quarter, net proceeds exceed $3,000,000, Intelligent Partners’ entitlement

for that quarter shall increase to 50% on the portion of net proceeds in excess of $3,000,000.

These payments come from our share of the

proceeds after QFL and QF3 have recovered their negotiated rate of return, respectively.

In these agreements, the monetization proceeds

is determined after payment of contingent legal fees and certain other expenses, including payments due by us to as part of the purchase

price for intellectual property rights.

We cannot assure you that, as a result of these provisions, that we will generate any meaningful

cash flow from the intellectual property we acquire.

If we do not generate sufficient cash flow from our monetization activities, we may

not be able to fund our operations or continue in business.

We have an agreement with QF3 pursuant

to which QF3 agreed to make available to us a financing facility of (i) up to $25,000,000 for the acquisition of mutually agreed patent

rights that the Company intends to monetize:

(ii) up to $4,334,000 for operating expenses from which the Company may, at its discretion,

draw up to $500,000 per calendar quarter, of which we have drawn down $4,334,000 as of December 31, 2024, and (iii) $3,300,000 which was

used to fund purchase of a patent portfolio from Tower.

Although we have paid QFL the money due QFL, QFL continues to have an interest

in the cash flow from patents financed by QFL.

Pursuant to the QFL and QF3 agreements, QFL and QF3 receive all proceeds payable to us

from the monetization of those patents which have been financed by QFL and QF3, respectively, until QFL and QF3 have received their respective

negotiated rate of return, then we and QFL and QF3, respectively, share equally in the proceeds from monetization until QFL and QF3, have

received their respective investment return and thereafter we receive all of the net proceeds.

Pursuant to our restructure agreement with

Intelligent Partners, we have an obligation to pay TMPO totaling $2,805,000.

Under our amended monetization proceeds agreements with Intelligent

Partners, we pay Intelligent Partners 60% of the net monetization proceeds from associated intellectual property portfolios.

until we have paid Intelligent Partners a total of $2,805,000 under all of the monetization proceeds agreements, for net proceeds between

$0 and $1,000,000 we are to pay Intelligent Partners 10% of the net proceeds realized from new assets acquired by us, provided, that,

if, in any calendar quarter, our net proceeds realized exceed $1,000,000, Intelligent Partner’s entitlement for that quarter shall

increase to 30% on the portion of net proceeds in excess of $1,000,000 but less than $3,000,000, and if in the same calendar quarter,

net proceeds exceed $3,000,000, Intelligent Partners’ entitlement for that quarter shall increase to 50% on the portion of net proceeds

in excess of $3,000,000.

These payments come from our share of the proceeds after QFL and QF3 have recovered their negotiated rate of

return, respectively.

In these agreements, the monetization proceeds is determined after payment of contingent legal fees and certain

other expenses, including payments due by us to as part of the purchase price for intellectual property rights.

We cannot assure you that,

as a result of these provisions, that we will generate any meaningful cash flow from the intellectual property we acquire.

generate sufficient cash flow from our monetization activities, we may not be able to fund our operations or continue in business.

We are dependent upon our chief executive officer .

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result in significant dilution to our stockholders .

Because of our financial position, our continuing losses and our negative working

capital from operations, we do not expect that we will be able to obtain any debt financing for our operations.

Our stock price has generally

been trading at a price which is less than $1.00 per share for more than the past two years.

As a result, it will be very difficult for

us to raise funds in the equity markets.

However, in the event that we are able to raise funds in the equity market, the sale of shares

would result in significant dilution to the present stockholders, and even a modest equity investment could result in the issuance of

a very significant number of shares.

Because of our financial position, our continuing losses, our negative working

capital from operations, and our low stock price, we do not expect that we will be able to obtain any debt financing for our operations.

Our stock price has generally been trading at a price which is less than $1.00 per share for more than the past two years.

it will be very difficult for us to raise funds in the equity markets.

However, in the event that we are able to raise funds in the equity

market, the sale of shares would result in significant dilution to the present stockholders, and even a modest equity investment could

result in the issuance of a very significant number of shares.

We may be subject to cybersecurity risks .

We will face significant and persistent cybersecurity risks due to the need to protect both our business generally, including our intellectual

property and our negotiations with respect to the the acquisition and monetization of intellectual property rights, as well as the need

to protect the confidentiality of information concerning our personnel and others with whom we conduct business.

We will face threats

from bad actors who seek to disrupt our business as well as others who are engaging in malicious activities for profit, to make a political

property and our negotiations with respect to the acquisition and monetization of intellectual property rights, as well as the need to

protect the confidentiality of information concerning our personnel and others with whom we conduct business.

We will face threats from

bad actors who seek to disrupt our business as well as others who are engaging in malicious activities for profit, to make a political

point or for no particular reason other than creating disruption.

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Our inability to acquire intellectual property

portfolios will impair our ability to generate revenue and develop our business .

We do not have the personnel to develop patentable

technology by ourselves.

Thus, we need to depend on acquiring rights to intellectual property and intellectual property portfolios from

third parties on an ongoing basis.

In acquiring intellectual property rights, there are delays in (i) identifying the intellectual property

which we may want to acquire, (ii) negotiating an agreement with the owner or holder of the intellectual property rights, and (iii) generating

revenue from those intellectual property rights which we acquire.

During these periods, we will continue to incur expenses with no assurance

that we will generate revenue.

We currently hold intellectual property portfolios from which we have not generated any revenue to date,

and we cannot assure you that we will generate revenue from our existing intellectual property portfolios or any additional intellectual

properties which we may acquire.

portfolios on reasonable terms will impair our ability to generate revenue and develop our business .

We do not have the personnel

to develop patentable technology by ourselves.

Thus, we need to depend on acquiring rights to intellectual property and intellectual property

portfolios from third parties on an ongoing basis.

In acquiring intellectual property rights, there are delays in (i) identifying the

intellectual property which we may want to acquire, (ii) negotiating an agreement with the owner or holder of the intellectual property

rights, (iii) obtaining a financing source to enable us to acquire the intellectual property rights, and (iv) generating revenue from

those intellectual property rights which we acquire.

During these periods, we will continue to incur expenses with no assurance that we

will generate revenue.

We currently hold intellectual property portfolios from which we have not generated any revenue to date, and we

cannot assure you that we will generate revenue from our existing intellectual property portfolios or any additional intellectual properties

which we may acquire.

We may be unable to enforce our intellectual

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our litigation.

We cannot assure you that QFL, QF3 or any other funding source provide us the any necessary funding, and the failure to

obtain such funding may impair our ability to monetize our intellectual property portfolio or continue in business.

We cannot assure you that QF3 or any other funding source provide us the any necessary funding, and the failure to obtain

such funding will impair our ability to monetize our intellectual property portfolio or continue in business.

Because we need to rely on third-party funding

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Because we do not have funds to pursue litigation to enforce our intellectual property

rights, we are dependent upon the valuation which potential funding sources, which currently is QFL and QF3, give to our intellectual

property or any intellectual property we may acquire.

In determining whether to provide funding for intellectual property litigation,

the funding sources need to make an evaluation of the strength of our patents, the likelihood of success, the nature of the potential

defendants and a determination as to whether there is a sufficient potential recovery to justify a significant investment in intellectual

property litigation.

Typically, such funding sources receive a percentage of the recovery after litigation expenses, and seek to generate

a sufficient return on investment to justify the investment.

Under our agreements with QFL and QF3, QFL and QF3 are allocated all of the

net proceeds (after allowable expenses), respectively, until it has received a negotiated return.

Unless QFL, QF3 or any other funding

source believes that it will generate a sufficient return on investment, it will not fund litigation.

If QFL or QF3 does not fund our

acquisition or monetization of intellectual property we propose to acquire, we cannot assure you that we will be able to negotiate funding

agreements with third-party funding sources on terms reasonably acceptable to us, if at all.

Because of our financial condition, we may

only be able to obtain funding on terms which are less favorable to us than we would otherwise be able to obtain.

Although we have funding agreements with QFL

and QF3, there is no assurance that QFL or QF3 will provide funding for portfolios we are looking to acquire or that we will generate

revenue from any funded litigation .

Although the funding sources makes their evaluation as to the likelihood of success, patent litigation

is very uncertain, and we cannot assure you that we will obtain litigation funding or that, if we obtain litigation funding, we will be

successful or that any recovery we may obtain will generate any significant positive cash flow from operations for us.

rights, we are dependent upon the valuation which potential funding sources, which currently is QF3, give to our intellectual property

or any intellectual property we may acquire.

In determining whether to provide funding for intellectual property litigation, the funding

sources need to make an evaluation of the strength of our patents, the likelihood of success, the nature of the potential defendants and

a determination as to whether there is a sufficient potential recovery to justify a significant investment in intellectual property litigation.

Typically, such funding sources receive a percentage of the recovery after litigation expenses, and seek to generate a sufficient return

on investment to justify the investment.

Under our agreements with QFL and QF3, QFL and QF3 are allocated all of the net proceeds (after

allowable expenses), respectively, until it has received a negotiated return.

QFL is no longer providing us with funding for intellectual

property acquisitions but it retains its interest in the assets it funded.

Unless QF3 or any other funding source believes that it will

generate a sufficient return on investment, it will not fund litigation.

If QF3 does not fund our acquisition or monetization of intellectual

property we propose to acquire, we cannot assure you that we will be able to negotiate funding agreements with third-party funding sources

on terms reasonably acceptable to us, if at all.

Because of our financial condition, we may only be able to obtain funding on terms which

are less favorable to us than we would otherwise be able to obtain.

Although we have a funding agreement with QF3,

there is no assurance that QF3 will provide funding for portfolios we are looking to acquire or that we will generate revenue from any

funded litigation .

Although the funding sources makes their evaluation as to the likelihood of success, patent litigation is very

uncertain, and we cannot assure you that we will obtain litigation funding or that, if we obtain litigation funding, we will be successful

or that any recovery we may obtain will generate any significant positive cash flow from operations for us.

Because QFL, QF3 and Intelligent Partners hold

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Pursuant to our agreements with QFL, QF3 and Intelligent Partners, we granted them a security

interest in the stock of our subsidiaries that hold the intellectual property acquired from Intellectual Ventures and in the proceeds

from the monetization of intellectual property acquired from Intellectual Ventures and our mobile data and financial data portfolios.

The inability to grant a security interest in these assets to a new lender is likely to materially impair our ability to obtain debt financing

for our operations, and may also impair our ability to obtain financing to acquire additional intellectual property rights.

interest in the stock of our subsidiaries that hold the intellectual property covered by their agreements and in the proceeds from the

monetization of such intellectual property.

The inability to grant a security interest in these assets to a new lender, as well as our

financial condition in general, is likely to materially impair our ability to obtain debt financing for our operations, and may also impair

our ability to obtain financing to acquire additional intellectual property rights.

Because of our financial condition and our

having generated a loss from operations in 2022 and 2021 from our existing portfolios, we may not be able to obtain intellectual property

rights to the most advanced technologies .

In order to generate meaningful revenues from intellectual property rights, we need to be

able to identify, negotiate rights to and offer technologies for which there is a developing market.

Because of our financial condition

and the terms under which we obtain financing for our litigation, we may be unable to negotiate rights to technology for which there which

having generated a loss from operations in 2024 from our existing portfolios, we may not be able to obtain intellectual property rights

to the most advanced technologies .

In order to generate meaningful revenues from intellectual property rights, we need to be able

to identify, negotiate rights to and offer technologies for which there is a developing market.

Because of our financial condition and

the terms under which we obtain financing for our litigation, we may be unable to negotiate rights to technology for which there which

will be a strong developing market, or, if we are able to negotiate agreements for such intellectual property, the terms of our purchase

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holding such patented technologies and patent portfolios.

Accordingly, we intend to engage in acquisitions to expand our intellectual

Accordingly, we intend to seek to engage in acquisitions to expand our intellectual

property portfolios and we intend to continue to explore such acquisitions.

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the following:

● our failure to have sufficient funding to enable us to make

the acquisition, together with the terms on which such funding is available, if at all;

● our failure to have sufficient personal to satisfy the seller

that we have the personnel to monetize the assets we propose to acquire;

● dilution to our stockholders to the extent that we use equity

in connection with any acquisition;

● our inability to enter into a definitive agreement with respect

to any potential acquisition, or if we are able to enter into such agreement, our inability to consummate the potential acquisition;

● difficulty integrating the operations, technology and personnel

of the acquired entity;

● our inability to achieve the anticipated financial and other

benefits of the specific acquisition;

● difficulty in maintaining controls, procedures and policies

during the transition and monetization process;

● diversion of our management’s attention from other

business concerns, especially considering that we have only one full-time employee/officer who is responsible for performing due diligence,

negotiating agreements, negotiating funding and implementing a monetization program;

● our failure, in our due diligence process, to identify significant

issues, including issues with respect to patented technologies and intellectual property portfolios, and other legal and financial contingencies.

our failure to have sufficient funding to enable us to make the acquisition, together with the terms on which such funding is available, if at all;

our failure to have sufficient personal to satisfy the seller that we have the personnel to monetize the assets we propose to acquire;

dilution to our stockholders to the extent that we use equity in connection with any acquisition;

our inability to enter into a definitive agreement with respect to any potential acquisition, or if we are able to enter into such agreement, our inability to consummate the potential acquisition;

difficulty integrating the operations, technology and personnel of the acquired entity;

our inability to achieve the anticipated financial and other benefits of the specific acquisition;

difficulty in maintaining controls, procedures and policies during the transition and monetization process;

diversion of our management’s attention from other business concerns, especially considering that we have only one full-time employee/officer who is responsible for performing due diligence, negotiating agreements, negotiating funding and implementing a monetization program;

our failure, in our due diligence process, to identify significant issues, including issues with respect to patented technologies and intellectual property portfolios, and other legal and financial contingencies.

If we are unable to manage these risks and other

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We may utilize many different transaction structures in our acquisitions and the terms of such acquisition agreements tend to be heavily

As a result, we expect to incur significant operating expenses and may be required to raise capital during the negotiations

even if the acquisition is ultimately not consummated.

Even if we are able to acquire particular intellectual property assets, there is

no guarantee that we will generate sufficient revenue related to those intellectual property assets to offset the acquisition costs.

may also identify intellectual property assets that cost more than we are prepared to spend with our own capital resources.

significant costs to organize and negotiate a structured acquisition that does not ultimately result in an acquisition of any intellectual

property assets or, if consummated, proves to be unprofitable for us.

These higher costs could adversely affect our operating results.

negotiated, particularly in view of our financial condition and need to obtain financing for any payments we may be required to make.

As a result, we expect to incur significant operating expenses and may be required to obtain funding during the negotiations even if the

acquisition is ultimately not consummated.

Even if we are able to acquire particular intellectual property assets, there is no guarantee

that we will generate sufficient revenue related to those intellectual property assets to offset the acquisition costs.

We may also identify

intellectual property assets that cost more than we are prepared or able to spend with our own capital resources and any financing sources.

We may incur significant costs to organize and negotiate a structured acquisition that does not ultimately result in an acquisition of

any intellectual property assets or, if consummated, proves to be unprofitable for us.

These higher costs could adversely affect our operating

If we acquire technologies that are in the

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property in their products and services.

As a result, there can be no assurance as to whether technologies we acquire or develop will

have value that we can monetize.

It may also be necessary for us to develop additional intellectual property and file new patent applications

as the underlying commercial market evolves, as a result of which we may incur substantial costs with no assurance that we will ever be

able to monetize our intellectual property.

As a result, there can be no assurance as to whether technologies we acquire will have value

that we can monetize.

It may also be necessary for us to develop additional intellectual property and file new patent applications as

the underlying commercial market evolves, as a result of which we may incur substantial costs with no assurance that we will ever be able

to either file the new patent application or monetize our intellectual property.

Our intellectual property monetization cycle

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Thus, we may incur significant losses in any particular period before any associated revenue stream begins.

If our efforts to convince potential licensees of the benefits of a settlement arrangement are unsuccessful, we may need to continue with

the litigation process or other enforcement action to protect our intellectual property rights and to realize revenue from those rights.

We may also need to litigate to enforce the terms of existing agreements, protect our trade secrets, or determine the validity and scope

of the proprietary rights of others.

Enforcement proceedings are typically protracted and complex.

The costs are typically substantial,

and the outcomes are unpredictable.

Enforcement actions will divert our managerial, technical, legal and financial resources from business

If our efforts to convince potential licensees of the benefits of a settlement arrangement without litigation are unsuccessful, which

is typically the case, we may need to continue with the litigation process or other enforcement action to protect our intellectual property

rights and to realize revenue from those rights.

We may also need to litigate to enforce the terms of existing agreements, protect our

trade secrets, or determine the validity and scope of the proprietary rights of others.

Enforcement proceedings are typically protracted

The costs are typically substantial, and the outcomes are unpredictable.

Enforcement actions will divert our managerial,

technical, legal and financial resources from business operations.

We may not be successful in obtaining judgments

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which would have a material adverse effect on us.

The provisions of Federal Declaratory Judgment

Act may affect our ability to monetize our intellectual property .

Under the Federal Declaratory Judgment Act, it is possible for a

party who we consider to be infringing upon our intellectual property to commence an action against us seeking a declaratory judgment

that such party is not infringing upon our intellectual property rights.

In such a case, the plaintiff could choose the court in which

to bring the action and we would be the defendant in the action.

Common claims for declaratory judgment in patent cases are claims of

non-infringement, patent invalidity and unenforceability.

Although the commencement of an action requires a claim or controversy, a court

may find a letter from us to the alleged infringer seeking a royalty for the use of our intellectual property rights to form the basis

of a controversy.

In such a case, the plaintiff, rather than we, would choose the court in which to bring the action and the timing of

In addition, when we commence an action as plaintiff, we may be able to enter into a contingent fee arrangement with counsel,

it is possible that counsel may be less willing to accept such an arrangement if we are the defendant.

Further, we would not have the

opportunity of choosing against which party to bring the action.

An adverse decision in a declaratory judgment action could significantly

impair our ability to monetize the intellectual property rights which are the subject of the litigation.

We have been a defendant in one

declaratory judgment action, which resulted in a settlement.

We cannot assure you that potential infringers will not be able to use the

Declaratory Judgment Act to reduce our ability to monetize the patents that are the subject of the action.

Our ability to monetize our intellectual property

depends in part upon our ability to retain the qualified legal counsel to represent us in patent enforcement litigation on a contingent

or partial contingent fee basis.

The success of our licensing business may depend upon our ability to retain the qualified legal counsel

to prosecute patent infringement litigation.

As our patent enforcement actions increase, it will become more difficult to find the preferred

choice for legal counsel to handle all of our cases because many of these firms may have a conflict of interest that prevents their representation

of us or because they are not willing to represent us on a contingent or partial contingent fee basis.

Because of our financial position,

we are not likely to be able to commence litigation unless the legal fees are on a contingent fee basis unless the funding source pays

the legal fees, which is not usually the case.

The provisions of Federal Declaratory Judgment Act may affect our

ability to monetize our intellectual property .

Under the Federal Declaratory Judgment Act, it is possible for a party who we consider

to be infringing upon our intellectual property to commence an action against us seeking a declaratory judgment that such party is not

infringing upon our intellectual property rights.

In such a case, the plaintiff could choose the court in which to bring the action and

we would be the defendant in the action.

Common claims for declaratory judgment in patent cases are claims of non-infringement, patent

invalidity and unenforceability.

Although the commencement of an action requires a claim or controversy, a court may find a letter from

us to the alleged infringer seeking a royalty for the use of our intellectual property rights to form the basis of a controversy.

a case, the plaintiff, rather than we, would choose the court in which to bring the action and the timing of the action.

when we commence an action as plaintiff, we may be able to enter into a contingent fee arrangement with counsel, it is possible that counsel

may be less willing to accept such an arrangement if we are the defendant.

Further, we would not have the opportunity of choosing against

which party to bring the action.

An adverse decision in a declaratory judgment action could significantly impair our ability to monetize

the intellectual property rights which are the subject of the litigation.

We have been a defendant in one declaratory judgment action,

which resulted in a settlement.

We cannot assure you that potential infringers will not be able to use the Declaratory Judgment Act to

reduce our ability to monetize the patents that are the subject of the action.

A 2014 Supreme Court decision could significantly

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to conduct our business .

There are presently pending or proposed a number of laws which, if enacted, may affect the ability of companies

such as us to generate revenue from our intellectual property rights.

Typically, these proposed laws cover legal actions brought by companies

which do not manufacture products or supply services but seek to collect licensing fees based on their intellectual property rights and,

if they are not able to enter into a license, to commence litigation.

Although a number of such bills have been proposed in Congress,

we do not know which, if any, bills will be enacted into law or what the provisions will be and, therefore, we cannot predict the effect,

if any, that such laws, if passed by Congress and signed by the president, would provide.

However, we cannot assure you that legislation

will not be enacted which would impair our ability to operate by making it more difficult for us to commence litigation against a potential

licensee or infringer.

To the extent that an alleged infringer believes that we will not prevail in litigation, it would be more difficult

to negotiate a license agreement without litigation.

There have been a number of laws which, if enacted, would affect the ability of companies such as us to generate

revenue from our intellectual property rights.

Typically, these proposed laws cover legal actions brought by companies which do not manufacture

products or supply services but seek to collect licensing fees based on their intellectual property rights and, if they are not able to

enter into a license, to commence litigation.

Although a number of such bills have been proposed in Congress, we do not know which, if

any, bills will be enacted into law or what the provisions will be and, therefore, we cannot predict the effect, if any, that such laws,

if passed by Congress and signed by the president, would provide.

However, we cannot assure you that legislation will not be enacted which

would impair our ability to operate by making it more difficult for us to commence litigation against a potential licensee or infringer.

To the extent that an alleged infringer believes that we will not prevail in litigation, it would be more difficult to negotiate a license

agreement without litigation.

The unpredictability of our revenues may harm

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below market expectations and adversely affect the market price of our common stock.

Our success depends in part upon our ability

to retain the qualified legal counsel to represent us in patent enforcement litigation .

The success of our licensing business may

depend upon our ability to retain the qualified legal counsel to prosecute patent infringement litigation.

As our patent enforcement actions

increase, it will become more difficult to find the preferred choice for legal counsel to handle all of our cases because many of these

firms may have a conflict of interest that prevents their representation of us or because they are not willing to represent us on a contingent

or partial contingent fee basis.

Our reliance on representations, warranties

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and limited managerial resources.

If any of the foregoing were to occur, or if we are otherwise unable to protect our intellectual property

and proprietary rights, our business and financial results could be impaired.

Commencing legal proceedings to enforce our intellectual

property rights is burdensome and expensive.

In addition, our intellectual property rights could be at risk if we are unsuccessful in,

or cannot afford to pursue, those proceedings.

We also rely on trade secrets and contract law to protect some of our intellectual property

We will enter into confidentiality and invention agreements with our employees and consultants.

Nevertheless, these agreements

may not be honored and they may not effectively protect our right to our un-patented trade secrets and know-how.

Moreover, others may

independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets and

Risks Concerning our Common Stock

Although we have obtained financing to commence litigation, we are not likely to be able to obtain financing

to defend actions against us claiming that our intellectual property infringes upon the intellectual property rights of others.

of the foregoing were to occur, or if we are otherwise unable to protect our intellectual property and proprietary rights, our business

and financial results could be impaired.

Commencing legal proceedings to enforce our intellectual property rights is burdensome and expensive.

In addition, our intellectual property rights could be at risk if we are unsuccessful in, or cannot afford to pursue, those proceedings.

We also rely on trade secrets and contract law to protect some of our intellectual property rights.

We will enter into confidentiality

and invention agreements with our employees and consultants.

Nevertheless, these agreements may not be honored and they may not effectively

protect our right to our un-patented trade secrets and know-how.

Moreover, others may independently develop substantially equivalent proprietary

information and techniques or otherwise gain access to our trade secrets and know-how.

Risks Relating to our Common Stock

If our stock price falls below $0.01 per share,

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for our common stock had closed below $0.01 per share for more than 30 consecutive days, we no longer met the Standards for Continued

Eligibility under the OTC listing standards and, if this deficiency is not met by August 21, 2022, our stock would be removed from the

OTCQB marketplace, in which event our common stock will be traded on the OTC Pink market.

Our registration rights agreement with QFL provides

that, in the event of a failure to comply with certain covenants, which includes the failure of our common stock to be traded on the OTCQB,

in addition to any other remedies available to QFL, we are to pay to QFL an amount in cash equal to 2.0% of the aggregate value of QFL’s

Registrable Securities, as defined in the Registration Rights Agreement, whether or not included in such registration statement, on each

of the following dates:

Eligibility under the OTCQB listing standards and, if this deficiency is not met by August 21, 2022, our stock would be removed from the

OTCQB marketplace, in which event our common stock would be traded on the OTC Pink market.

Our registration rights agreement with QFL

provides that, in the event of a failure to comply with certain covenants, which includes the failure of our common stock to be traded

on the OTCQB, in addition to any other remedies available to QFL, we are to pay to QFL an amount in cash equal to 2.0% of the aggregate

value of QFL’s Registrable Securities, as defined in the Registration Rights Agreement, whether or not included in such registration

statement, on each of the following dates:

(i) the initial day of a maintenance failure;

(ii) on the 30th day after the date of such a failure and (iii)

every 30th day thereafter (prorated for periods totaling less than 30 days) until such failure is cured.

In July 2022, we amended our

certificate of incorporation to effect a one-for-100 reverse split of our common stock.

We subsequently received advice from OTC Markets

Group that the deficiency had been cured.

We cannot assure you that we will continue to meet the requirements for continued listing on

the OTCQB, including the maintenance of a bid price of at least $0.01 per share.

(ii) on the 30th day after the date of such a

failure and (iii) every 30th day thereafter (prorated for periods totaling less than 30 days) until such failure is cured.

In July 2022,

we amended our certificate of incorporation to effect a one-for-100 reverse split of our common stock.

We subsequently received advice

from OTC Markets Group that the deficiency had been cured.

We cannot assure you that we will continue to meet the requirements for continued

listing on the OTCQB, including the maintenance of a bid price of at least $0.01 per share, or that if we fail to meet this maintenance

requirement, that we will be able to take any action to regain compliance.

There is a limited market for our common stock,

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common stock has frequently traded for less than $0.20 per share.

On May 23, 2022, we received notice from the OTC Markets Group that

our bid price was less than $0.01 for more than 30 consecutive trading days.

As a result of the one-for-100 reverse split, which enabled

our common stock to remain listed on the OTCQB, the number of shares in our public float declined by approximately 99%, and, as of the

date of this annual report, our public float is less than 4,000,000 shares.

Accordingly, there can be no assurance as to the liquidity

of any market that may develop for our common stock, the ability of holders of our common stock to sell their shares of our common stock,

or the prices at which holders may be able to sell our common stock.

Further, because of the thin float, the reported bid and asked prices

may have little relationship to the price you would pay if you wanted to buy shares or the price you would receive if you wanted to sell

Accordingly, there can be no assurance as to the liquidity of any market

that may develop for our common stock, the ability of holders of our common stock to sell their shares of our common stock, or the prices

at which holders may be able to sell our common stock.

Further, because of the thin float, the reported bid and asked prices may have

little relationship to the price you would pay if you wanted to buy shares or the price you would receive if you wanted to sell shares.

Because our common stock is a penny stock,

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our common stock.

Our need to restate our audited financial statements

for 2023 reflects a material weakness in our internal controls over financial reporting and may have an adverse effect on our business.

The Sarbanes-Oxley Act requires, among other things, that we maintain

effective disclosure controls and procedures and internal control over financial reporting.

Our disclosure controls and internal controls

over financial reporting are not effective.

During the preparation of our financial statements for the three months ended March 31, 2024,

on April 30, 2024, our chief executive officer determined that the litigation and licensing expenses for the quarter and year ended December

31, 2023 was understated by $1,371,109 as a result of the failure to recognize legal fees incurred during the fourth quarter of 2023 in

connection with the settlement of litigation during the fourth quarter of 2023.

As a result, our gross margin, income from operations,

income before income taxes and net income were overstated by $1,371,109 resulting in restated net income for the year ended December 31,

2023 of $2,278,473, or $0.43 per share.

We had previously reported net income of $3,649,582, or $0.68 per share, and we restated our financial

statements for the year ended December 31, 2023.

As a result of the restatement, we may be subject to regulatory or other claims and actions,

including a reluctance of potential litigation financing sources to provide us with financing which may have a material effect on our

business and financial condition.

Our lack of internal controls over financial

reporting may affect the market for and price of our common stock .

Our disclosure controls and our internal controls over financial

reporting are not effective because of material weaknesses.

Since we became engaged in the intellectual property management business in

2008, we have not had the financial resources or personnel to develop or implement systems that would provide us with the necessary information

on a timely basis so as to be able to implement financial controls.

Our continued poor financial condition together with the fact that

we have one full time employee, who is both our chief executive officer and our acting chief financial officer, makes it difficult for

us to implement a system of internal controls over financial reporting, and we cannot assure you that we will be able to develop and implement

the necessary controls.

The absence of internal controls over financial reporting may inhibit investors from purchasing our shares and

may make it more difficult for us to raise debt or equity financing.

reporting and our restatement of our 2023 financial statements may affect the market for and price of our common stock .

Our disclosure

controls and our internal controls over financial reporting are not effective because of material weaknesses, which were the root cause

for the error resulting in the restatement of our financial statements for the year ended December 31, 2023.

Since we became engaged in

the intellectual property management business in 2008, we have not had the financial resources or personnel to develop or implement systems

that would provide us with the necessary information on a timely basis so as to be able to implement financial controls.

Our continued

poor financial condition together with the fact that we have one full time employee, who is both our chief executive officer and our acting

chief financial officer, makes it difficult for us to implement a system of internal controls over financial reporting, and we cannot

assure you that we will be able to develop and implement the necessary controls.

The absence of internal controls over financial reporting

may inhibit investors from purchasing our shares and may make it more difficult for us to raise debt or equity financing.

Our lack of a full-time chief financial officer

could affect our ability to develop financial controls, which could affect the market price for our common stock .

has impacted our ability to develop financial controls, which could affect the market price for our common stock .

We do not have a

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improves significantly.

The lack of an experienced chief financial officer, together with our lack of internal controls, may impair our

ability to raise money through a debt or equity financing, the market for our common stock and our ability to enter into agreements with

The lack of an experienced chief financial officer, together with our lack of internal controls, may affect the

market price of and the market price for our common stock and impair our ability to raise money through and to enter into agreements with

owners of intellectual property rights.

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in our common stock could suffer a decline in value .

As of the date of this annual report, there has only been limited trading activity

As of the date of this annual report, there has been limited trading activity

in our common stock.

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described above and general market and economic conditions:

● our low stock price, which may result in a modest dollar

purchase or sale of our common stock having a disproportionately large effect on the stock price;

● the market’s perception as to our ability to generate

positive cash flow or earnings from our intellectual property portfolios;

● changes in our or securities analysts’ estimate of

our financial performance;

● our ability or perceived ability to obtain necessary financing

for operations and for the monetization of our intellectual property rights;

● the market’s perception of the effects of legislation

or court decisions on our business;

● the market’s perception that a defendant may obtain

a judgement against a subsidiary and foreclose on the intellectual property of the subsidiary, which may result in a default under our

agreements with QFL and QF3 and, even if a default is not claimed, QFL or QF3 may not provide financing for us;

● the effects or perceived effects of the potential convertibility

of convertible notes issued by us;

● the results or anticipated results of litigation by or against

our low stock price, which may result in a modest dollar purchase or sale of our common stock having a disproportionately large effect on the stock price;

the market’s perception as to our ability to generate positive cash flow or earnings from our intellectual property portfolios;

in our, or if any securities analysts follow our stock, which is not likely because of our stock price and volume and history of losses,

the securities analysts’ estimate of our financial performance;

our ability or perceived ability to obtain necessary financing for operations and for the monetization of our intellectual property rights;

the market’s perception of the effects of legislation or court decisions on our business;

the market’s perception that a defendant may obtain a judgement against a subsidiary and foreclose on the intellectual property of the subsidiary, which may result in a default under our agreements with QFL and QF3 and, even if a default is not claimed, QF3 may not provide financing for us;

the results or anticipated results of litigation by or against us;

the anticipated or actual results of our operations;

● events or conditions relating to the enforcement of intellectual

property rights generally;

● changes in market valuations of other intellectual property

marketing companies;

● any discrepancy between anticipated or projected results

and actual results of our operations;

● the market’s perception or our ability to continue

to make our filings with the SEC in a timely manner;

● actions by third parties to either sell or purchase stock

in quantities which would have a significant effect on our stock price;

events or conditions relating to the enforcement of intellectual property rights generally;

changes in market valuations of other intellectual property marketing companies;

any discrepancy between anticipated or projected results and actual results of our operations;

the market’s perception or our ability to continue to make our filings with the SEC in a timely manner;

actions by third parties to either sell or purchase stock in quantities which would have a significant effect on our stock price;

other matters not within our control.

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

What changed 10-K

Item 1A. Risk Factors