What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2021-04-15 compared with 2020-03-27 · 483 added, 531 removed, 132 unchanged (88% of the section changed)

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

common stock trades on the OTCQB market under the symbol QPRC.

Any over-the-counter market quotations reflect inter-dealer prices,

without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

As of March 27, 2020, we had 438 record holders of our common stock.

common stock trades on the OTC Pink market under the symbol QPRC.

Any over-the-counter market quotations reflect inter-dealer

prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

As of April 13, 2021, we had 426 record holders of

our common stock.

Stock Transfer & Trust Company, One State Street, 30th floor, New York, New York 10004-1561 is the transfer agent for our

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Plan category

Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted- average exercise price of outstanding options, warrants and rights

Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)

of securities to be issued upon exercise of outstanding options, warrants and rights

average exercise price of outstanding options, warrants and rights

of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in

As of December 31, 2020

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warrants or options were granted or exercised in 2020.

February 19, 2021, the board of directors amended the 2017 Equity Incentive Plan (the “Plan”) increasing the shares

the Company can issue under the plan to 500,000,000 shares of common stock pursuant to non-qualified stock options, restricted

stock grants and other equity-based incentives, and the amendment to the Plan became effective upon the closing of the agreements

with QFL, which was February 22, 2021.

In connection with the increase in the shares of common stock issuable pursuant to the

plan, the board;

restricted stock grants for 10,000,000 share, which vested immediately, to each of three

consultants pursuant to agreements with the consultants;

restricted stock grants for a total of 69,000,000 shares to our directors, Jon C.

(49,000,000 shares), Timothy J.

Scahill (10,000,000 shares) and Dr.

(10,000,000 shares) as compensation for services rendered;

a restricted stock grant to Ryan T.

Logue for 5,000,000 shares upon his acceptance of

his appointment as a director;

ten-year non-qualified stock options to purchase 30,000,000 shares to each of three consultants

pursuant to agreements with the consultants, the options to vest as provided in their

a ten-year non-qualified stock option to purchase 60,000,000 shares to Jon C.

which vest in installments as described under Item 11.

Executive Compensation.

sales of unregistered securities.

did not sell any unregistered securities during 2019.

did not sell any unregistered securities during since the beginning of the year ended December 31, 2020 other than issuances that

were reported in our SEC filings.

SELECTED FINANCIAL DATA

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primarily from litigation relating to enforcement of our intellectual property rights.

packaging sales, which relate to the sale of licensed products.

Licensed packaging

sales, which relate to the sale of licensed products, although we did not generate any revenue from licensed packaging sales

in the year ended December 31, 2020.

previously received management fees for managing litigation related to our intellectual property rights.

We do not currently receive

these fees, we do not have any agreements that provide for such payments and we cannot assure you that we will generate revenue

from such fees in the future.

these fees, we do not have any agreements that provide for such payments and we may not generate revenue from such fees in the

a significantly lesser extent, we generate revenue from sale of packaging materials based on our TurtlePak TM technology.

We did not generate any revenue from our TurtlePak TM in the year ended December 31, 2020.

Our gross profit from sales

reflects the cost of contract manufacturing and labor.

We did not generate any revenue from the TurtlePak TM Portfolio

other than from the sale of products using our technology.

of the nature of our business transactions to date, we recognize revenues from licensing upon execution of a license agreement

following settlement of litigation and not over the life of the patent.

Thus, we would recognize revenue when we receive the license

fee or settlement payment.

Although we intend to seek to develop portfolios of intellectual property rights that provide us for

a continuing stream of revenue, to date we have not been successful in doing so, and we cannot give you any assurance that we

will be able to generate any significant revenue from licenses that provide a continuing stream of revenue.

Thus, to the extent

that we continue to generate cash from single payment licenses, our revenues can, and are likely to, vary significantly from quarter

to quarter and year to year.

Our gross profit from license fees reflects any royalties which we pay in connection with our license.

Thus, we would recognize revenue when we enter into the

agreement pursuant to which we are to receive the license fee or settlement payment.

Although we intend to seek to develop portfolios

of intellectual property rights that provide us for a continuing stream of revenue, to date we have not been successful in doing

so, and we cannot give you any assurance that we will be able to generate any significant revenue from licenses that provide a

continuing stream of revenue.

Thus, to the extent that we continue to generate cash from single payment licenses, our revenues

can, and are likely to, vary significantly from quarter to quarter and year to year.

Our gross profit from license fees reflects

any royalties which we pay in connection with our license.

agreements with our funding sources have typically provided that the funding source pay the litigation costs and receive a percentage

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represents us on a contingent fee basis, our recovery would also be reduced by the percentage of the settlement payable to counsel.

Under our agreements with Intelligent Partners, as the assignee of United Wireless, and under the terms of our agreements to purchase

certain intellectual property portfolios, a portion of our recovery may be payable to Intelligent Partners or the seller of the

intellectual property rights.

All of these payments, which are reflected as cost of revenues, significantly reduce the net payment

a significantly lesser extent, we generate revenue from sale of packaging materials based on our TurtlePak TM technology.

Our gross profit from sales reflects the cost of contract manufacturing and labor.

We did not generate any revenue from the TurtlePak TM

Portfolio other than from the sale of products using our technology.

From September 2015 until December 2020, under our agreements with Intelligent Partners, as the assignee of United Wireless, and

under the terms of our agreements to purchase certain intellectual property portfolios, a portion of our recovery may be payable

to Intelligent Partners or the seller of the intellectual property rights.

All of these payments, which are reflected as cost

of revenues, significantly reduce the net payment to us.

October 22, 2015, we, together with certain of our subsidiaries, and United Wireless, entered into a securities purchase agreement

and related agreements, pursuant to which, among other actions, we issued our 10% secured convertible promissory notes due September

30, 2020 to United Wireless.

The rights of United Wireless under the securities purchase agreement and the related notes were

assigned to Intelligent Partners.

The proceeds of the notes were used to purchase certain of our intellectual portfolios.

30, 2020, promissory notes in the aggregate principal amount of $4,672,810 were outstanding.

The notes became due by their terms

on September 30, 2020, and we did not have the resources to make, and we did not make, payments due on September 30, 2020.

a result of the possibility that Intelligent Partners could declare a default under the securities purchase agreement and the

note, which would likely to result in our seeking protection under the Bankruptcy Act, we were not able to obtain any litigation

financing and no litigation counsel would represent us on a contingency fee basis.

Accordingly, we did not generate any revenue

during the fourth quarter of 2020, and we devoted our efforts to negotiating a funding agreement with QFL and a restructure of

our agreement with Intelligent Partners, which was required by QFL as a condition to entering into a funding agreement with us.

for QFL and Intelligent Partners

February 22, 2020, we entered into a funding agreement with QFL and a restructure agreement with Intelligent Partners.

to the Purchase Agreement with QFL, QFL agreed to make available to us a financing facility of:

(a) up to $25,000,000 for the

acquisition of mutually agreed patent rights that we intend to monetize;

(b) up to $2,000,000 for operating expenses;

$1,750,000 to fund the cash payment portion of the restructure of our obligations to Intelligent Partners.

In return we transferred

to QFL a right to receive a portion of net proceeds generated from the monetization of those patents.

We used $1,750,000 of proceeds

from the QFL financing as the cash payment portion of the restructure of our obligations to Intelligent Partners.

Our obligations

to QFL are secured by the proceeds from the patents acquired with their funding, the patents and all general intangibles now or

hereafter arising from or related to the foregoing and the proceeds and products of the foregoing.

We also granted QFL a ten-year

warrant to purchase a total of up to 96,246,246 shares of our common stock, with an exercise price of $0.0054 per share which

may be exercised from February 19, 2021 through February 18, 2031on a cash or cashless basis, subject to certain limitations on

exercisability.

The warrant also contains certain minimum ownership percentage antidilution rights pursuant to which the aggregate

number of shares of common stock purchasable upon the initial exercise of the Warrant shall not be less than 10% of the aggregate

number of outstanding shares of our capital stock (determined on a fully diluted basis).

A portion of any gain from sale of the

shares, net of taxes and costs of exercise, realized prior to the completion of all monetization activities shall be credited

against the total return due to QFL pursuant to the Purchase Agreement.

We also agreed to take all commercially reasonable steps

necessary to regain compliance with the OTCQB eligibility standards as soon as practicable, but in no event later than 12 months

from the closing date, and granted QFL registration rights with respect to the common stock issuable upon exercise of the warrants.

We also granted QFL certain board observation rights.

Pursuant to the Purchase Agreement, the all of the net proceeds from the

monetization of the intellectual property acquired with funds from QFL are paid directly to QFL.

After QFL has received a negotiated

rate of return, we and QFL share net proceeds equally until QFL achieves its investment return, as defined in the agreement.

we retain 100% of all net proceeds.

Except in an Event of Default, as defined therein, all payments by us to QFL pursuant to the

Purchase Agreement are non-recourse and shall be paid only if and after net proceeds from monetization of the patent rights owned

or acquire by us are received, or to be received.

Contemporaneously

with the execution of the agreement with QFL, we entered into a restructure agreement with Intelligent Partners to eliminate

any obligations we had with respect to the outstanding notes and the securities purchase agreement.

As part of the restructure

of our agreements with Intelligent Partners, we amended the existing MPAs and granted Intelligent Partners certain rights in the

monetization proceeds from any new intellectual property we acquire.

Under these MPAs, Intelligent Partners receives a 60% interest

in the proceeds from our intellectual property owned by the eight Subsidiary Guarantors.

Intelligent Partners also participates

in the monetization proceeds from new intellectual property that we acquire until the total payments under all the monetization

participation agreements equal $2,805,000, as follows:

for net proceeds between $0 and $1,000,000, Intelligent Partners receives

10% of the net proceeds realized from new patents, except that if, in any calendar quarter, net proceeds realized by us exceed

$1,000,000, Intelligent Partners’

entitlement for that quarter only shall increase to 30% on the portion of net proceeds

in excess of $1,000,000 but less than $3,000,000.

If in the same calendar quarter, net proceeds exceed $3,000,000, Intelligent

Partners’

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

The payments with respect to the new patents terminate once total payments to Intelligent Partners under all monetization participation

agreements reach $2,805,000.

The payments to Intellectual Partners with respect new patents are payable from the proceeds which

are allocated to us under the QFL agreements, which start after QFL has received a negotiated rate of return.

Royalties, Contingent Litigation Funding Fees and Contingent Legal Expenses

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such a judgement may result in the bankruptcy of the subsidiary and/or the loss of the patents, which are the subsidiaries’

January 19, 2017, the court in the Mobile Data Portfolio litigation granted certain defendants’

motion for summary judgment

of non-infringement, and Quest Licensing Corporation has appealed the summary judgment.

Following the court’s decision granting

the defendant’s motion for summary judgment, the defendants moved for an award of attorneys’

fees under Section 285

of the patent act which provides that “the court in exceptional cases may award reasonable attorney fees to the prevailing

party.”

On June 29, 2017, the defendants’

motion for attorney fees in the Mobile Data litigation was denied, without

prejudice and with leave to renew their motion thirty days from the decision of the appellate court on our appeal of the district

court’s decision granting the defendant’s motion for summary judgment.

On June 8, 2018 the appellate court affirmed

the lower court’s decision.

On June 9, 2018 Quest Licensing Corporation filed a petition for rehearing with the appellate

On July 30, 2018 the appellate court denied Quest Licensing Corporations petition for rehearing.

On August 8, 2018, the

defendants’

renewed their motion for an award of attorneys’

fees under Section 285 of the Patent Act.

2019 the defendants’

motion for attorney fees in the Mobile Data litigation was denied.

Acquisition of Patents;

Agreements with United Wireless

United Wireless transferred its note and assigned all of its

remaining rights under the agreements to Intelligent Partners, which is an affiliate of United Wireless.

As a result, Intelligent

Partners holds the rights under the notes and the agreements we signed with United Wireless.

On October 22, 2015, we acquired three patent portfolios from

Intellectual Ventures, which we assigned to three newly-formed subsidiaries.

We paid the purchase price of $3,000,000 with the

proceeds of three loans from United Wireless, each in the amount of $1,000,000, with the third and final payment being made on

November 15, 2017.

Pursuant to our agreements with United Wireless:

We sold to United Wireless 50,000,000 shares of common stock for $250,000.

We borrowed a total of $3,900,000 from United Wireless through December 31, 2019, for which we issued our 10% promissory notes due September 30, 2020.

Of this amount, $3,000,000 was paid directly to Intellectual Ventures as the purchase price of the patents we purchased from Intellectual Ventures, $25,000 was paid to IV 34/37 as the initial payment for the purchase of intellectual property and $875,000 was paid to us for working capital, including costs of the financing.

As of December 31, 2019 we owe Intelligent Partners, $4,790,590, which represents the notes issues and interest accrued through, and added to principal on September 30, 2016, 2017 and 2018 in accordance with the terms of the note and $117,780 relates to interest accrued through December 31, 2019.

We granted United Wireless an option to purchase a total of 50,000,000 shares of common stock.

We entered into a monetization proceeds agreement pursuant to which we gave United Wireless a 15% interest in the net monetization proceeds, as defined in the agreement, generated from both the patents acquired from Intellectual Ventures and our financial data and mobile data portfolios, which continues as long as we receive revenue, whether from litigation or otherwise, from these patents.

We granted United Wireless a security interest in the proceeds of the patents acquired from Intellectual Ventures and IV 34/37 and our financial data and mobile data portfolios and a pledge of the stock of the three subsidiaries that own the patents we acquired from Intellectual Ventures.

In the event that certain events of default, which are called Conversion Eligible Events of Default, have occurred, the outstanding notes become convertible at a conversion price equal to 90% of the closing sale price of our common stock on the principal market on which the common stock is trading on the trading day immediately preceding the date the holder gives notice of conversion.

In addition to our obligation to increase our authorized common

stock to 1,250,000,000, which we satisfied by amending our certificate of incorporation in January 2016, we agreed, in the event

that, in the future, the number of authorized shares of common stock is not sufficient to enable the full conversion of the notes,

unless the share price subsequently increases so that we would have sufficient shares, the Company will have 135 days from the

last such date we had sufficient shares to enable full conversion of the notes to take all corporate action necessary so that we

have sufficient shares of common stock for full conversion of the notes (including, without limitation an increase in authorized

common stock, reverse split of a combination of an increase in authorized common stock and a reverse split).

The failure to do

so may be a Conversion Eligible Event of Default.

As a result of a decline in our stock price, at February 13, 2017, we did not

have sufficient authorized shares of common stock to meet the required authorized common stock necessary for United Wireless to

convert its notes.

On June 15, 2017, we amended our certificate of incorporation to increase our authorized common stock to 10,000,000,000

In the event that 10,000,000,000 authorized shares become insufficient to satisfy our obligations to United Wireless, we

will have 135 days to increase our authorized common stock or effect a reverse split or a combination such that we are in compliance

with our authorized stock requirement under the United Wireless agreements.

Our failure to have sufficient shares of common stock

available may give United Wireless the right to declare a Conversion Eligible Event of Default under the notes.

We granted United Wireless certain registration rights with

respect to the shares issued at the closing, the shares issuable upon exercise of the purchase option and, if requested by the

note holders, the common stock issuable upon conversion of the note if the notes become convertible.

As long as United Wireless’, or its principals’

stockholdings exceed 10%, United Wireless has the right to designate one member of the board of directors and at such time and

for as long as United Wireless’

stockholdings exceed 24.9%, United Wireless may nominate a second director to the board.

Unless a Conversion Eligible Event of Default shall have occurred, United Wireless agreed not to seek to elect a majority of the

board for a period of at least three years from the initial closing date.

We agreed that the size of the board would not exceed

five for the two years following the closing.

The 50,000,000 shares of common stock purchased by United Wireless at the closing

have been transferred to Andrew C.

Fitton (35,000,000 shares) and Michael R.

Carper (15,000,000 shares).

Because of both our financial position and the terms of our

agreements with United Wireless, including the possibility that the notes may become convertible at a discount from market and

United Wireless’

rights if a Conversion Eligible Event of Default occurs, it is very difficult for us to raise any funds

in the equity or debt market.

Our only potential source funds would be from funding sources who would finance litigation for one

or more of our patent portfolios.

Such funding sources would typically pay our litigation counsel and would only receive any funds

if we are successful in the litigation, in which event the funding source would receive its compensation for providing the funding

based on a percentage of the recovery, as defined in the particular agreement.

At present, we are pursuing litigation with respect to our power

management/bus control portfolio, CXT portfolio and MRED portfolio.

We cannot estimate when or whether we will receive any revenue

from these litigations, or whether, in the event we do not prevail, the defendant will not obtain an award of legal fees against

our plaintiff subsidiary which could result in the bankruptcy of the subsidiary and a default under our agreement with United Wireless.

present, we are pursuing litigation with respect to the CXT portfolio and MRED portfolio.

The actions are described in Item 1.

If we are unable to monetize our patents, we cannot assure you

that we will be able to pay the notes held by Intelligent Partners, as transferee of United Wireless, which could result in our

inability to continue in business and could result in our bankruptcy.

Results of Operations

Years Ended December 31, 2019 and 2018

The following table shows the revenue and cost of revenue from

our two categories of revenue for the years ended December 31, 2019 and 2018:

We cannot estimate when or whether we will receive any revenue from these litigations, or whether, in the event we do

not prevail, the defendant will not obtain an award of legal fees against our plaintiff subsidiary which could result in the bankruptcy

of the subsidiary and a default under our agreements with QFL and Intelligent Partners.

Stock Grants and Options

February 2021, we issued restricted stock grants to consultants (30,000,000 shares) and to our officers and directors (74,000,000

shares) all of which vested immediately.

The value of the shares will be reflected as non-cash compensation in the first quarter

Also in February 2021, we granted restricted stock options to consultants (90,000,000 shares) and to our chief executive

officer (60,000,000 shares).

With respect to two of the consultants and the chief executive officer the options become cumulatively

exercisable as follows:

1/3 rd at an exercise price of $0.01 per share, becoming exercisable upon the commencement of

trading of the Common Stock on the OTCQB;

1/3 rd at an exercise price of $0.03 per share becoming exercisable on the

first day on which we file with the SEC a Form 10-K or Form 10-Q with stockholders’

equity of at least $5,000,000;

at an exercise price of $0.05 per share on the date on which the Common Stock is listed for trading on the Nasdaq Stock

Market or the New York Stock Exchange.

We will incur non-cash compensation with respect to the value of the options, based of

Black-Scholes valuation, as the options become exercisable.

of Operations

Ended December 31, 2020 and 2019

following table shows the revenue and cost of revenue from our two categories of revenue for the years ended December 31, 2020

Year ended December 31,

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Management support services

Revenues for the year ended December 31, 2019 were $4,143,169,

as compared with $7,069,004 in 2018, a decrease of $2,925,835, or approximately 41%.

The decrease in 2019 principally reflects

a decrease in patent licensing fees of $2,931,105.

Our licensing fees reflect the settlement of litigation for infringement of

our patent rights.

These fees are one-time fees, with the result that there is no continuity of revenues from period to period,

and any revenue we generate in future period will be solely dependent upon the results of pending and future litigation.

assure you that we will generate any revenue from patent licensing fees in the future.

The patent licensing fees of $4,117,895

in 2019 resulted from the licensing and settlements of Power Management/Bus Control Portfolio, the CXT Portfolio, the Anchor Structure

for the year ended December 31, 2020 were $5,488,088, as compared with $4,143,169 in 2019, an increase of $1,344,919, or approximately

The increase in 2020 principally reflects an increase in patent licensing fees of $1,370,193, or 33.3%.

Our licensing fees

reflect the settlement of litigation for infringement of our patent rights.

These fees are one-time fees, with the result that

there is no continuity of revenues from period to period, and any revenue we generate in future periods will be solely dependent

upon the results of pending and future litigation.

We cannot assure you that we will generate any revenue from patent licensing

fees in the future.

The patent licensing fees for 2020 resulted from licensing and settlements of Power Management/Bus Control

Portfolio, the CXT Portfolio, the MRED Portfolio and the Financial Data Portfolio.

The patent licensing fees of $4,117,895 in

2019 resulted from the licensing and settlements of Power Management/Bus Control Portfolio, the CXT Portfolio, the Anchor Structure

Portfolio and the CMOS Portfolio litigations.

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Effects of the COVID-19 Pandemic on our Business.”

The licensing fees for 2018 resulted from the settlement of actions relating to the Power Management/Bus Control Portfolio.

addition, licensed sales increased approximately $5,000.

Cost of revenues was approximately $3,391,000 for 2019 as compared

with approximately $6,082,000 for 2018.

Our cost of revenue includes expenses which we incurred in connection with our pending

litigations and fees we pay to litigation funding sources, legal counsel and pursuant to monetization proceeds agreements in connection

with license fees.

Cost of revenues for 2019 includes approximately $3,384,000 of litigation and licensing fees paid to litigation

funding sources and legal counsel in connection with the Power Management/Bus Control, the CXT Portfolio, the Anchor Structure

Portfolio and the CMOS Portfolio licenses, approximately $2,000 for management support services in connection with management of

the Mobile Data Portfolio, and approximately $5,000 relating to TurtlePak TM .

Cost of revenues for 2018 includes approximately

$6,072,000 of litigation and licensing fees paid in connection with the Power Management/Bus Control licenses, approximately $7,000

for management support services in connection with management of the Mobile Data Portfolio litigation, and approximately $4,000

relating to TurtlePak TM .

Selling, general, and administrative expenses for 2019 increased

by approximately $264,000, or approximately 29%, from approximately $958,000 in 2018 to approximately $1,222,000 in 2019.

Our principal

selling, general and administrative expense for 2019 and 2018 was amortization expense of approximately $529,000 and approximately

$438,000 for 2019 and 2018, respectively, related to amortization of the patent assets acquired from Intellectual Ventures in October

2015, IV 34/37 in July 2017, and IV 62/71 and IV 64 in January 2018.

Selling, general and administrative expenses also reflect

executive compensation, which was approximately $300,000 for 2019 and 2018.

Other expense consists primarily of interest expense of approximately

$808,000 in 2019 as compared with approximately $651,000 in 2018.

In 2019, we recognized a $55,000 loss on derivative liability

as compared with a loss on derivative liability of $450,000 in 2018.

Other expense in 2019 also reflect a $28,000 gain on forgiveness

of debt, we did not have a similar gain in 2018.

Because it is possible that we will not have sufficient authorized shares of common

stock to satisfy our obligations in the event that the notes to United Wireless become convertible, we have classified the options

issued to United Wireless and other options and warrants that were then outstanding as derivative liabilities.

See Note 4 of Notes

to Consolidated Financial Statements.

As a result of the foregoing we had a net loss of approximately

$1,309,000, or $0.00 per share (basic and diluted) for 2019 compared to net loss of approximately $2,110,000, or $0.01 per share

(basic and diluted), for 2018.

Liquidity and Capital Resources

of revenues was approximately $4,693,000 for 2020 as compared with approximately $3,391,000 for 2019.

Our cost of revenue includes

expenses which we incurred in connection with our pending litigations and fees we pay to litigation funding sources, legal counsel,

prior owners and pursuant to monetization proceeds agreements in connection with license fees.

Cost of revenue for 2020 includes

approximately $4,693,000 of litigation and licensing fees paid to litigation funding sources and legal counsel in connection with

the Power Management/Bus Control, the CXT Portfolio, the MRED Portfolio and the Financial Data Portfolio licensing programs.

of revenues for 2019 includes approximately $3,384,000 of litigation and licensing fees paid to litigation funding sources and

legal counsel in connection with the Power Management/Bus Control, the CXT Portfolio, the Anchor Structure Portfolio and the CMOS

Portfolio licenses, approximately $2,000 for management support services in connection with management of the Mobile Data Portfolio,

and approximately $5,000 relating to TurtlePak TM .

We did not have any sales or cost of sales relating to TurtlePak TM

general, and administrative expenses for 2020 increased by approximately $292,000, or approximately 24%, from approximately $1,222,000

in 2019 to approximately $1,514,000 in 2020.

Our principal selling, general and administrative expense for 2020 and 2019 was amortization

expense of approximately $648,000 and approximately $529,000 for 2020 and 2019, respectively, related to amortization of the patent

assets acquired from Intellectual Ventures in October 2015, IV 34/37 in July 2017, and IV 62/71 in January 2018 and IV 113/108.

Selling, general and administrative expenses also reflect executive compensation, which was approximately $300,000 for 2020 and

expense consists primarily of interest expense of approximately $804,000 in 2020 as compared with approximately $808,000 in 2019.

In 2020, we recognized a $275,000 gain on derivative liability as compared with $55,000 loss on derivative liability in 2019.

Other income in 2020 reflects miscellaneous income of $1,000.

Other expense in 2019 reflect a $28,000 gain on forgiveness of debt.

As a result of the termination of our obligations under the United Wireless notes, commencing in 2021, we no longer have a derivative

See Note 4 of Notes to Consolidated Financial Statements.

had an income tax expense of approximately $65,000 for 2020 as compared with approximately $5,000 in 2019.

The income tax expense results

primarily from foreign taxes paid with respect to certain of our settlement agreements.

a result of the foregoing we had a net loss of approximately $1,313,000, or $0.00 per share (basic and diluted) for 2020 compared

to net loss of approximately $1,309,000, or $0.00 per share (basic and diluted), for 2019.

and Capital Resources

At December 31, 2020, we had current assets of approximately

$1,287,000, current liabilities of approximately $9,497,000.

Our current liabilities include approximately $569,000 payable to

Intellectual Ventures, approximately $4,483,000 payable to Intelligent Partners and loans payable of $147,000 and accrued interest

of approximately $270,000 due to former directors and minority stockholders.

As of December 31, 2019, we have an accumulated deficit

of approximately $19,969,000 and a negative working capital of approximately $7,141,000.

Other than salary to our chief executive

officer, we do not contemplate any other material operating expense in the near future other than normal general and administrative

Our current liabilities at December 31, 2020 include approximately $4,673,000

payable to Intelligent Partners, which was due and payable on September 30, 2020 and subsequently restructured, and loans payable of $147,000

and accrued interest of approximately $285,000 due to former directors and minority stockholders.

As of December 31, 2020, we have an

accumulated deficit of approximately $21,281,000 and a negative working capital of approximately $8,210,000.

Other than salary to our

chief executive officer, we do not contemplate any other material operating expense in the near future other than normal general and administrative

expenses, including expenses relating to our status as a public company filing reports with the SEC.

Because our agreements with

our litigation funding sources do not require us to make any payments relating to the litigation, we do not incur expenses with

respect to litigation covered by the funding sources.

For 2019, we had cash flow from operations $746,523 in our operations,

reflecting our loss of $1,310,295, which was offset principally by depreciation and amortization of our intellectual property rights

of $529,486, amortization of debt discount on the loan from United Wireless of $349,691, an increase in accounts receivable of

$1,850,375, an increase in account payable and accrued liabilities of $954,806,and decreased by the $55,000 loss on derivative

liability, and increased by a gain on forgiveness of debt of $27,628 and accrued but unpaid interest of $8,700.

For 2018, we used cash of $378,635 in our operations, reflecting

our loss of $2,111,860, which was offset principally by depreciation and amortization of our intellectual property rights of $437,720,

interest accrued and not paid of $443,782, amortization of debt discount on the loan from United Wireless of $207,306, a decrease

in accounts receivable of $2,846 and an increase in account payable of $191,392, and decreased by the $450,000 gain on derivative

Cash flow from financing activities in both 2019 and 2018 related

to loans from United Wireless of $0 in 2019 and $250,000 in 2018.

Cash flows from financing activities in 2018 also include proceeds

of $150,000 from the sale to a third party litigation funder of future revenues from our litigation funded by the third party.

Under the agreement, the third party receives an interest in the net proceeds, as defined in the agreement, from such litigation,

and we have no other obligation to the third party.

In 2019 cash flow from financing activities included repayments to the third

party in the amount of approximately $130,000.

In 2019 cash flow from financing activities also included payment of purchase price

of patents of approximately $156,000.

Because our agreements with our litigation

funding sources do not require us to make any payments relating to the litigation, we do not incur expenses with respect to litigation

covered by the funding sources.

a result of our restructure of our agreement with Intelligent Partners, the outstanding notes to Intelligent Partners were cancelled

and replaced with agreements that provide for payments if we receive proceeds from our intellectual property as described above

under “Agreements for QFL and Intelligent Partners.”

If the note payable to Intelligent Partners were excluded from

current liabilities, we would have a pro forma working capital deficiency of approximately $3,500,000.

For 2020, we used approximately $246,000 in operations.

Our cash flow

used in operations for 2020 reflected our loss of approximately $1,300,000, and the amount used in operations increased primarily by a

decrease in accounts payable and accrued expenses of approximately $471,000, and the gain on derivative liability of $275,000 offset by

a decrease in accounts receivable of approximately $750,000, depreciation and amortization of approximately $648,000, amortization of

debt discount of approximately $435,000 and bad debt expense of $66,000.

2019, we had cash flow from operations $746,523 in our operations, reflecting our loss of $1,310,295, which was offset principally

by depreciation and amortization of our intellectual property rights of $529,486, amortization of debt discount on the loan from

United Wireless of $349,691, an increase in accounts receivable of $1,850,375, an increase in account payable and accrued liabilities

of $954,806,and decreased by the $55,000 loss on derivative liability, and increased by a gain on forgiveness of debt of $27,628

and accrued but unpaid interest of $8,700.

Cash flow from financing activities for 2020 reflected

the proceeds of an SBA loan of approximately $172,000, the payment of the purchase price of patents of approximately $194,000 and proceeds

from the sale of future revenues of approximately $95,000 offset by payment made on the sale of future revenues of approximately $20,000.

Under the agreement with the litigation funder, the third party lender receives an interest in the proceeds.

flow from financing activities in 2019 included repayments to the third party in the amount of approximately $130,000, the payment

of the purchase price of patents of approximately $156,000 and the payment of $16,000 of a loan from a third party.

2020 and 2019, cash flow from investing activities included $95,000 and $75,000, respectively for the purchase of patents from

third parties.

2020 we did not have non-cash investing and financing activities.

In 2019, non-cash investing and financing activities consisted

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at closing and imputed interest of $336,781.

In 2018, we had no non-cash investing and financing.

We cannot assure you that we will be successful in generating

future revenues, in obtaining additional debt or equity financing or that such additional debt or equity financing will be available

on terms acceptable to us, if at all, or that we will be able to obtain any third party funding in connection with any of our intellectual

property portfolios.

We have no credit facilities.

Historically, our only source of financing was loans from officers

and directors.

In October 2015, we entered into an agreement with United Wireless, pursuant to which, as of December 31, 2019 we

had borrowed $3,900,000 from United Wireless and United Wireless has no further obligation to provide us with additional loans,

as described under “Item 1.

Business –

Agreements with United Wireless.”

We have agreements with funding sources which are providing

litigation financing in connection with our pending litigations relating to our anchor structure, power management/bus control,

CMOS and M-RED portfolios.

We cannot predict the success of any pending or future litigation.

Our obligations on our notes to Intelligent

Partners are not contingent upon the success of any litigation.

If we fail to generate a sufficient recovery in these actions (net

of any portion of any recovery payable to the funding source or our legal counsel) in a timely manner to enable us to pay Intelligent

Partners on the present loans, we would be in default under our agreements with United Wireless.

The agreements with the funding

sources provide we have no obligation to the funding source with respect to legal expenses in connection with litigation covered

by the funding sources until and unless there is a recovery, in consideration of which the funding sources will participate in

any recovery which is generated.

To the extent that litigation counsel provides services on a contingent fee or partial contingent

fee basis, counsel may also participate in the recovery.

Our agreements with United Wireless provide that United Wireless also

participates in any recovery.

To the extent that the funding source, counsel or United Wireless participate in any recovery, the

amount allocated to us is reduced.

We believe that our financial condition, our history of losses and negative cash flow from operations,

and our low stock price make it difficult for us to raise funds in the debt or equity markets.

In April and June 2014, as part of a structured licensing program,

Quest Licensing Corporation brought patent infringement suits in the U.S.

District for the District of Delaware against Bloomberg

al., FactSet Research Systems Inc., Interactive Data Corporation, SunGard Data Systems Inc.

and The Charles Schwab Corporation

These cases have been consolidated for trial.

In June and August 2016, Quest Licensing Corporation entered into a settlement

agreement with SunGard Data Systems Inc.

and FactSet Research Systems Inc.

On January 19, 2017, the court granted the remaining

defendants’

motion for summary judgment of non-infringement, which we have appealed.

Following the court’s decision

granting the defendant’s motion for summary judgment, those defendants moved for an award of attorneys’

Section 285 of the patent act which provides that “the court in exceptional cases may award reasonable attorney fees to the

prevailing party.”

On June 29, 2017, the defendants’

motion for attorney fees was denied, without prejudice.

may renew their motion thirty days from the decision of the appellate court on Quest Licensing Corporation’s appeal.

June 8, 2018 the appellate court affirmed the lower court’s decision.

On June 9, 2018 Quest Licensing Corporation filed a

petition for rehearing with the appellate court.

On July 30, 2018 the appellate court denied Quest Licensing Corporations petition

for rehearing.

On August 8, 2018, the defendants’

renewed their motion for an award of attorneys’

fees under Section

285 of the Patent Act.

On March 27, 2019 the defendants’

motion for attorney fees in the Mobile Data litigation was denied.

As noted below, there is a substantial doubt about our ability

to continue as a going concern.

Critical Accounting Policies

The discussion and analysis of our financial condition and results

of operations is based upon our financial statements that have been prepared in accordance with accounting principles generally

accepted in the United States of America.

The preparation of these financial statements requires us to make estimates and judgments

that affect the reported amounts of assets and liabilities.

On an on-going basis, we evaluate our estimates including the allowance

for doubtful accounts, the salability and recoverability of our products, income taxes and contingencies.

We base our estimates

on historical experience and on other assumptions that we believe to be reasonable under the circumstances, the results of which

form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other

Actual results may differ from these estimates under different assumptions or conditions.

Principles of Consolidation

The condensed consolidated financial statements are prepared

in accordance with US GAAP and present the financial statements of us and our wholly-owned subsidiary.

In the preparation of our

consolidated financial statements, intercompany transactions and balances are eliminated.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with generally

accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect

the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial

statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those

Revenue Recognition

We adopted ASC Topic 606, Revenue from

Contracts with Customers as of January 1, 2018 using the modified retrospective transition method.

The core principle of the

revenue recognition standard is that a company should recognize revenue to depict the transfer of promised goods or services to

customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods

cannot assure you that we will be successful in generating future revenues, in obtaining additional debt or equity financing or

that such additional debt or equity financing will be available on terms acceptable to us, if at all, or that we will be able

to obtain any third party funding in connection with any of our intellectual property portfolios.

Historically,

our only source of financing was loans from officers and directors.

In October 2015, we entered into an agreement with United

Wireless, pursuant to which provided us with funds to purchase intellectual property.

cannot predict the success of any pending or future litigation seeking to enforce our intellectual property rights.

February 2021, we signed a funding agreement with QFL, as described in “Overview”

and under “Recent Developments”

noted below, there is a substantial doubt about our ability to continue as a going concern.

Accounting Policies

discussion and analysis of our financial condition and results of operations is based upon our financial statements that have

been prepared in accordance with accounting principles generally accepted in the United States of America.

The preparation of

these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities.

On an on-going basis, we evaluate our estimates including the allowance for doubtful accounts, the salability and recoverability

of our products, income taxes and contingencies.

We base our estimates on historical experience and on other assumptions that

we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying

values of assets and liabilities that are not readily apparent from other sources.

Actual results may differ from these estimates

under different assumptions or conditions.

of Consolidation

consolidated financial statements are prepared in accordance with US GAAP and present the financial statements of us and our wholly-owned

In the preparation of our consolidated financial statements, intercompany transactions and balances are eliminated.

of Estimates and Assumptions

preparation of financial statements in conformity with generally accepted accounting principles in the United States of America

requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure

of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses

during the reporting period.

Actual results could differ from those estimates.

adopted ASC Topic 606, Revenue from Contracts with Customers as of January 1, 2018 using the modified retrospective transition

The core principle of the revenue recognition standard is that a company should recognize revenue to depict the transfer

of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled

in exchange for those goods or services.

The following five steps are applied to achieve that core principle:

Identify the contract with the customer

Identify the performance obligations in the contract

Determine the transaction price

Allocate the transaction price to the performance obligations in the contract

Recognize revenue when the company satisfies a performance obligation

A performance obligation is a promise in

a contract to transfer a distinct good or service to the customer and is the unit of account in ASC 606.

In order to identify the

performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and

identify each promised good or service that is distinct.

A performance obligation meets ASC 606’s definition of a “distinct”

good or service (or bundle of goods or services) if both of the following criteria are met:

The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct).

The entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).

If a good or service is not distinct, the

good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct.

The transaction price is the amount of

consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer.

The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both.

When determining

the transaction price, an entity must consider the effects of all of the following:

the contract with the customer

the performance obligations in the contract

the transaction price

the transaction price to the performance obligations in the contract

revenue when the company satisfies a performance obligation

performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account

In order to identify the performance obligations in a contract with a customer, a company must assess the promised

goods or services in the contract and identify each promised good or service that is distinct.

A performance obligation meets

ASC 606’s definition of a “distinct”

good or service (or bundle of goods or services) if both of the following

criteria are met:

The customer can

benefit from the good or service either on its own or together with other resources that are readily available to the customer

(i.e., the good or service is capable of being distinct).

The entity’s

promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e.,

the promise to transfer the good or service is distinct within the context of the contract).

a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods

or services is identified that is distinct.

transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised

goods or services to a customer.

The consideration promised in a contract with a customer may include fixed amounts, variable

amounts, or both.

When determining the transaction price, an entity must consider the effects of all of the following:

Variable consideration

Constraining estimates of variable consideration

The existence of a significant financing component in the contract

Constraining estimates

of variable consideration

The existence of

a significant financing component in the contract

Noncash consideration

Consideration payable to a customer

Variable consideration is included in the

transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized

will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

The transaction price is allocated to each

performance obligation on a relative standalone selling price basis.

The transaction price allocated to each performance obligation

is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate.

In general, we are required to make certain judgments and estimates

in connection with the accounting for revenue contracts with customers.

Such areas may include identifying performance obligations

in the contract, estimating the timing of satisfaction of performance obligations, determining whether a promise of consideration,

whether a license to intellectual property or an entitlement to payment of a percentage of net proceeds, is distinct from other

promised goods or services, evaluating whether consideration transfers to a customer at a point in time or over time, allocating

the transaction price to separate performance obligations, determining whether contracts contain a significant financing component,

and estimating revenues recognized at a point in time for licensed sales.

Patent Licensing Fees

Revenue is recognized upon transfer of control of promised bundled

intellectual property rights and other contractual performance obligations to licensees in an amount that reflects the consideration

we expect to receive in exchange for those intellectual property rights.

Revenue contracts that provide promises to grant “the

to use intellectual property rights as they exist at the point in time at which the intellectual property rights are

granted, are accounted for as performance obligations satisfied at a point in time and revenue is recognized at the point in time

that the applicable performance obligations are satisfied and all other revenue recognition criteria have been met.

For the periods presented, revenue contracts executed by the

Company primarily provided for the payment of contractually determined, one-time, paid-up license fees in consideration for the

grant of certain intellectual property rights for patented technologies owned or controlled by the Company’s operating subsidiaries.

Intellectual property rights granted included the following, as applicable:

(i) the grant of a non-exclusive, retroactive

and future license to manufacture and/or sell products covered by patented technologies, (ii) a covenant-not-to-sue, (iii) the

release of the licensee from certain claims, and (iv) the dismissal of any pending litigation.

The intellectual property rights

granted were perpetual in nature, extending until the legal expiration date of the related patents.

The individual intellectual

property rights are not accounted for as separate performance obligations, as (i) the nature of the promise, within the context

of the contract, is to transfer combined items to which the promised intellectual property rights are inputs and (ii) the Company’s

promise to transfer each individual intellectual property right described above to the customer is not separately identifiable

from other promises to transfer intellectual property rights in the contract.

Since the promised intellectual property rights are not individually

distinct, the Company combined each individual IP right in the contract into a bundle of IP rights that is distinct, and accounted

for all of the intellectual property rights promised in the contract as a single performance obligation.

The intellectual property

rights granted were “functional IP rights”

Consideration payable

to a customer

consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount

of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently

transaction price is allocated to each performance obligation on a relative standalone selling price basis.

transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point

in time or over time as appropriate.

general, we are required to make certain judgments and estimates in connection with the accounting for revenue contracts with

Such areas may include identifying performance obligations in the contract, estimating the timing of satisfaction of

performance obligations, determining whether a promise of consideration, whether a license to intellectual property or an entitlement

to payment of a percentage of net proceeds, is distinct from other promised goods or services, evaluating whether consideration

transfers to a customer at a point in time or over time, allocating the transaction price to separate performance obligations,

determining whether contracts contain a significant financing component, and estimating revenues recognized at a point in time

for licensed sales.

Licensing Fees

is recognized upon transfer of control of promised bundled intellectual property rights and other contractual performance obligations

to licensees in an amount that reflects the consideration we expect to receive in exchange for those intellectual property rights.

Revenue contracts that provide promises to grant “the right”

to use intellectual property rights as they exist at

the point in time at which the intellectual property rights are granted, are accounted for as performance obligations satisfied

at a point in time and revenue is recognized at the point in time that the applicable performance obligations are satisfied and

all other revenue recognition criteria have been met.

the periods presented, revenue contracts executed by the Company primarily provided for the payment of contractually

determined, one-time, paid-up license fees in consideration for the grant of certain intellectual property rights for

patented technologies owned or controlled by the Company’s operating subsidiaries.

Intellectual property rights granted

included the following, as applicable:

(i) the grant of a non-exclusive, retroactive and future license to manufacture

and/or sell products covered by patented technologies, (ii) a covenant-not-to-sue, (iii) the release of the licensee from

certain claims, and (iv) the dismissal of any pending litigation.

The intellectual property rights granted were

perpetual in nature, extending until the legal expiration date of the related patents.

The individual intellectual property

rights are not accounted for as separate performance obligations, as (a) the nature of the promise, within the context of the

contract, is to transfer combined items to which the promised intellectual property rights are inputs and (b) the

Company’s promise to transfer each individual intellectual property right described above to the customer is not

separately identifiable from other promises to transfer intellectual property rights in the contract.

the promised intellectual property rights are not individually distinct, the Company combined each individual IP right in the

contract into a bundle of IP rights that is distinct, and accounted for all of the intellectual property rights promised in the

contract as a single performance obligation.

The intellectual property rights granted were “functional IP rights”

that have significant standalone functionality.

The Company’s subsequent

activities do not substantively change that functionality and do not significantly affect the utility of the IP to which the licensee

The Company’s subsidiaries have no further obligation with respect to the grant of intellectual property rights,

including no express or implied obligation to maintain or upgrade the technology, or provide future support or services.

contracts provide for the grant (i.e.

transfer of control) of the licenses, covenants-not-to-sue, releases, and other significant

deliverables upon execution of the contract.

Licensees legally obtain control of the intellectual property rights upon execution

The Company’s subsequent activities do not substantively change that functionality

and do not significantly affect the utility of the IP to which the licensee has rights.

The Company’s subsidiaries have

no further obligation with respect to the grant of intellectual property rights, including no express or implied obligation to

maintain or upgrade the technology, or provide future support or services.

The contracts provide for the grant (i.e.

of control) of the licenses, covenants-not-to-sue, releases, and other significant deliverables upon execution of the contract.

legally obtain control of the intellectual property rights upon execution of the contract.

As such, the earnings process is complete

and revenue is recognized upon the execution of the contract, when collectability is probable and all other revenue recognition

criteria have been met.

Revenue contracts generally provide for payment of contractual amounts within 30-90 days of execution

of the contract.

As such, the earnings process is complete and revenue is recognized upon the execution of the contract, when

collectability is probable and all other revenue recognition criteria have been met.

Revenue contracts generally provide for payment

of contractual amounts within 30-90 days of execution of the contract.

Contractual payments made by licensees are generally non-refundable.

We do not have any significant payment terms, as payment is received shortly after goods are delivered or services are provided,

therefore there is no significant financing component or consideration payable to the customer in these transactions.

Licensed Sales

The balance of our revenue, from licensed sales, is not significant

but includes sales-based revenue contracts pursuant to purchase orders.

There is only one distinct performance obligation in each

purchase order, transfer of the promised good to the customer, and the customer can benefit from the good together with other resources

We do not have any significant payment terms,

as payment is received shortly after goods are delivered or services are provided, therefore there is no significant financing

component or consideration payable to the customer in these transactions.

balance of our revenue in 2019, from licensed sales, was not significant but included sales-based revenue contracts pursuant to

purchase orders.

There was no sales-based revenue in 2020.

There is only one distinct performance obligation in each purchase

order, transfer of the promised good to the customer, and the customer can benefit from the good together with other resources

readily available to the customer.

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standalone selling price basis per the purchase order, and the Company includes in the transaction price some or all of an amount

of estimated variable consideration to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized

will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

Estimates are generally

based on historical levels of activity, if available.

Notwithstanding, revenue is recognized for a licensed sale when the performance

obligation has been satisfied –

of estimated variable consideration to the extent that it is probable that a significant reversal in the amount of cumulative

revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

are generally based on historical levels of activity, if available.

Notwithstanding, revenue is recognized for a licensed

sale when the performance obligation has been satisfied –

transfer of the good to the customer.

The purchase order generally provides for payment

of contractual amounts within 30 days of transfer of the goods to the customer, therefore there is no significant financing component

or consideration payable to the customer in these transactions.

Cost of Revenues

Cost of revenues include the costs and expenses incurred in

connection with our patent licensing and enforcement activities, including inventor royalties paid to original patent owners, contingent

litigation funding fees, contingent legal fees paid to external patent counsel, other patent-related legal expenses paid to external

patent counsel, licensing and enforcement related research, consulting and other expenses paid to third-parties and the amortization

of patent-related investment costs.

These costs are included under the caption “Cost of revenues”

in the accompanying

consolidated statements of operations.

No such fees are recognized as a cost of revenue to the extent that we have no obligation

with respect to fees prior to a settlement or license.

Inventor Royalties, Contingent Litigation Funding Fees and

Contingent Legal Expenses.

Inventor royalties are expensed in the consolidated statements

of operations in the period that the related revenues are recognized.

Contingent litigation funding and legal fees are expensed

in the consolidated statements of operations in the period that the related revenues are recognized.

In instances where there are

no recoveries from potential infringers, no contingent litigation funding fees are due.

Accounts Receivable

Accounts receivable, which generally relate to licensed sales,

are presented on the balance sheet net of estimated uncollectible amounts.

The Company records an allowance for estimated uncollectible

accounts in an amount approximating anticipated losses.

The purchase order

generally provides for payment of contractual amounts within 30 days of transfer of the goods to the customer, therefore there

is no significant financing component or consideration payable to the customer in these transactions.

of revenues include the costs and expenses incurred in connection with our patent licensing and enforcement activities, including

inventor royalties paid to original patent owners, contingent litigation funding fees, contingent legal fees paid to external

patent counsel, other patent-related legal expenses paid to external patent counsel, licensing and enforcement related research,

consulting and other expenses paid to third-parties and the amortization of patent-related investment costs.

These costs are included

under the caption “Cost of revenues”

in the accompanying consolidated statements of operations.

No such fees are recognized

as a cost of revenue to the extent that we have no obligation with respect to fees prior to a settlement or license.

Royalties, Contingent Litigation Funding Fees and Contingent Legal Expenses.

royalties are expensed in the consolidated statements of operations in the period that the related revenues are recognized.

litigation funding and legal fees are expensed in the consolidated statements of operations in the period that the related revenues

are recognized.

In instances where there are no recoveries from potential infringers, no contingent litigation funding fees are

Accounts receivable, which generally relate to

licensed sales, are presented on the balance sheet net of estimated uncollectible amounts.

The Company records an allowance for estimated

uncollectible accounts in an amount approximating anticipated losses.

Individual uncollectible accounts are written off against the allowance

when collection of the individual accounts appears doubtful.

We recorded an allowance for doubtful accounts of $0 as of December

We recorded an allowance for doubtful accounts of $66,000 and $0 as of December

31, 2020 and December 31, 2019, respectively.

Intangible Assets

Intangible assets consist of patents which are amortized using

the straight-line method over their estimated useful lives or statutory lives whichever is shorter and are reviewed for impairment

upon any triggering event that may give rise to the assets ultimate recoverability as prescribed under the guidance related to

impairment of long-lived assets.

Costs incurred to acquire patents, including legal costs, are also capitalized as long-lived assets

and amortized on a straight-line basis with the associated patent.

Patents include the cost of patents or patent rights (collectively

“patents”) acquired from third-parties or acquired in connection with business combinations.

Patent acquisition costs

are amortized utilizing the straight-line method over their remaining economic useful lives, ranging from one to ten years.

patent application and prosecution costs incurred to secure additional patent claims, that based on management’s estimates

are deemed to be recoverable, are capitalized and amortized over the remaining estimated economic useful life of the related patent

Impairment of long-lived assets

Long-lived assets are reviewed for impairment whenever events

or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted

cash flows expected to result from the use and eventual disposition of the assets.

Whenever any such impairment exists, an impairment

loss will be recognized for the amount by which the carrying value exceeds the fair value.

No impairment was recorded for the either

the year ended December 31, 2019 or of the year ended December 31, 2018.

Derivative Financial Instruments

Management evaluates the embedded conversion feature within

its convertible debt instruments under ASC 815-15 and ASC 815-40 to determine if the conversion feature meets the definition of

a liability and, if so, whether to bifurcate the conversion feature and account for it as a separate derivative liability.

derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its

fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations.

For stock-based derivative financial instruments, management uses a Black Scholes model, in accordance with ASC 815-15 “Derivative

and Hedging”

to value the derivative instruments at inception and on subsequent valuation dates.

The classification of derivative

instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each

reporting period.

Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether

net-cash settlement of the derivative instrument could be required within 12 months after the balance sheet date.

Beneficial Conversion Features

We evaluate the conversion feature for whether it was beneficial

as described in ASC 470-30.

The intrinsic value of a beneficial conversion feature inherent to a convertible note payable, which

is not bifurcated and accounted for separately from the convertible note payable and may not be settled in cash upon conversion,

is treated as a discount to the convertible note payable.

This discount is amortized over the period from the date of issuance

to the date the note is due using the effective interest method.

If the note payable is retired prior to the end of its contractual

term, the unamortized discount is expensed in the period of retirement to interest expense.

In general, the beneficial conversion

feature is measured by comparing the effective conversion price, after considering the relative fair value of detachable instruments

included in the financing transaction, if any, to the fair value of the shares of common stock at the commitment date to be received

upon conversion.

Fair Value of Financial Instruments

We adopted Financial Accounting Standards Board (“FASB”)

ASC 820, “Fair Value Measurements and Disclosures”, for assets and liabilities measured at fair value on a recurring

ASC 820 establishes a common definition for fair value to be applied to existing US GAAP that require the use of fair value

measurements which establishes a framework for measuring fair value and expands disclosure about such fair value measurements.

ASC 820 defines fair value as the price that would be received

to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use

of unobservable inputs.

assets consist of patents which are amortized using the straight-line method over their estimated useful lives or statutory lives

whichever is shorter and are reviewed for impairment upon any triggering event that may give rise to the assets ultimate recoverability

as prescribed under the guidance related to impairment of long-lived assets.

Costs incurred to acquire patents, including legal

costs, are also capitalized as long-lived assets and amortized on a straight-line basis with the associated patent.

include the cost of patents or patent rights (collectively “patents”) acquired from third-parties or acquired in connection

with business combinations.

Patent acquisition costs are amortized utilizing the straight-line method over their remaining economic

useful lives, ranging from one to ten years.

Certain patent application and prosecution costs incurred to secure additional patent

claims, that based on management’s estimates are deemed to be recoverable, are capitalized and amortized over the remaining

estimated economic useful life of the related patent portfolio.

of long-lived assets

assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may

not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the

Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value

exceeds the fair value.

No impairment was recorded for the either the year ended December 31, 2020 or of the year ended December

Financial Instruments

evaluates the embedded conversion feature within its convertible debt instruments under ASC 815-15 and ASC 815-40 to determine

if the conversion feature meets the definition of a liability and, if so, whether to bifurcate the conversion feature and account

for it as a separate derivative liability.

For derivative financial instruments that are accounted for as liabilities, the derivative

instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value

reported in the statements of operations.

For stock-based derivative financial instruments, management uses a Black Scholes model,

in accordance with ASC 815-15 “Derivative and Hedging”

to value the derivative instruments at inception and on subsequent

valuation dates.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities

or as equity, is evaluated at the end of each reporting period.

Derivative instrument liabilities are classified in the balance

sheet as current or non-current based on whether net-cash settlement of the derivative instrument could be required within 12

months after the balance sheet date.

Value of Financial Instruments

adopted Financial Accounting Standards Board (“FASB”) ASC 820, “Fair Value Measurements and Disclosures”,

for assets and liabilities measured at fair value on a recurring basis.

ASC 820 establishes a common definition for fair value

to be applied to existing US GAAP that require the use of fair value measurements which establishes a framework for measuring

fair value and expands disclosure about such fair value measurements.

820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction

between market participants at the measurement date.

Additionally, ASC 820 requires the use of valuation techniques that maximize

the use of observable inputs and minimize the use of unobservable inputs.

These inputs are prioritized below:

Observable inputs such as quoted market prices in active markets for identical assets or liabilities

Observable market-based inputs or unobservable inputs that are corroborated by market data

Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

In addition, FASB ASC 825-10-25 “Fair Value Option”

Observable inputs

such as quoted market prices in active markets for identical assets or liabilities

Observable market-based

inputs or unobservable inputs that are corroborated by market data

Unobservable inputs

for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

addition, FASB ASC 825-10-25 “Fair Value Option”

was effective for January 1, 2008.

ASC 825-10-25 expands opportunities to use fair value measurements in financial reporting and

permits entities to choose to measure many financial instruments and certain other items at fair value.

We record revenues on a gross basis, before deduction for income

We incurred foreign income tax expenses of approximately $5,000 and $1,039,000 for the years ended December 31, 2019 and

ASC 825-10-25 expands opportunities

to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and

certain other items at fair value.

We record revenues on a gross basis, before deduction

for income taxes.

We incurred income tax expenses of approximately $65,000 and $5,000 for the years ended December 31, 2020 and 2019,

respectively.

Stock-based Compensation

We account for stock-based compensation pursuant to ASC 718,

“Compensation —

account for stock-based compensation pursuant to ASC 718, “Compensation —

Stock Compensation,”

which prescribes accounting and reporting standards for all stock-based

payment transactions in which employee services, and, since January1, 2019, non-employee services, are acquired.

Transactions include

incurring liabilities, or issuing or offering to issue shares, options and other equity instruments such as employee stock ownership

plans and stock appreciation rights.

Stock-based payments to employees, including grants of employee stock options, are recognized

as compensation expense in the financial statements based on their fair values.

That expense is recognized over the period during

which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the

vesting period).

In February 2016, the FASB issued ASU 2016-02, “Leases”

(Topic 842), to provide a new comprehensive model for lease accounting under this guidance, lessees and lessors should apply a

“right-of-use”

model in accounting for all leases (including subleases) and eliminate the concept of operating leases

and off-balance-sheet leases.

Recognition, measurement and presentation of expenses will depend on classification as a finance

or operating lease.

Similar modifications have been made to lessor accounting in-line with revenue recognition guidance.

We adopted Topic 842 as of January 1, 2019 using the modified

retrospective transition method with no impact on the consolidated financial position or results of operations.

Recent Accounting Pronouncements

Management does not believe that there are any recently issued,

but not effective, accounting standards which, if currently adopted, would have a material effect on the Company’s financial

Going Concern

We have an accumulated deficit of approximately $19,969,000

and negative working capital of approximately $7,141,000 as of December 31, 2019.

Because of our continuing losses, our working

capital deficiency, the uncertainty of future revenue, the possible effect of a judgement against one or more of our subsidiaries

for legal fees;

our low stock price and the absence of a trading market in our common stock, our ability to raise funds in equity

market or from lenders is severely impaired.

These conditions raise substantial doubt as to our ability to continue as a going

Although we may seek to raise funds and to obtain third party funding for litigation to enforce its intellectual property

rights, the availability of such funds in uncertain, and our use of the funds from funding sources relating to the monetization

of our intellectual property may not be available for working capital purposes.

Our financial statements do not include any adjustments

that might result from the outcome of this uncertainty.

Off-balance Sheet Arrangements

We have no off-balance sheet arrangements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET

We are a smaller reporting company as defined by Rule 12b-2

of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

which prescribes

accounting and reporting standards for all stock-based payment transactions in which employee services, and, since January1, 2019,

non-employee services, are acquired.

Transactions include incurring liabilities, or issuing or offering to issue shares, options

and other equity instruments such as employee stock ownership plans and stock appreciation rights.

Stock-based payments to employees,

including grants of employee stock options, are recognized as compensation expense in the financial statements based on their

That expense is recognized over the period during which an employee is required to provide services in exchange for

the award, known as the requisite service period (usually the vesting period).

February 2016, the FASB issued ASU 2016-02, “Leases”

(Topic 842), to provide a new comprehensive model for lease accounting

under this guidance, lessees and lessors should apply a “right-of-use”

model in accounting for all leases (including

subleases) and eliminate the concept of operating leases and off-balance-sheet leases.

Recognition, measurement and presentation

of expenses will depend on classification as a finance or operating lease.

Similar modifications have been made to lessor accounting

in-line with revenue recognition guidance.

adopted Topic 842 as of January 1, 2019 using the modified retrospective transition method with no impact on the consolidated

financial position or results of operations.

Accounting Pronouncements

does not believe that there are any recently issued, but not effective, accounting standards which, if currently adopted, would

have a material effect on the Company’s financial statements.

have an accumulated deficit of approximately $21.3 million and negative working capital of approximately $8.2 million as of December

Because of our continuing losses, our working capital deficiency, the uncertainty of future revenue, the possible effect

of a judgement against one or more of our subsidiaries for legal fees;

our low stock price and the absence of a trading market

in our common stock, our ability to raise funds in equity market or from lenders is severely impaired.

These conditions raise

substantial doubt as to our ability to continue as a going concern.

Although we may seek to raise funds and to obtain third party

funding for litigation to enforce its intellectual property rights, the availability of such funds in uncertain, and our use of

the funds from funding sources relating to the monetization of our intellectual property may not be available for working capital

Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Sheet Arrangements

have no off-balance sheet arrangements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide

the information under this item.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements start on Page F-1.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON

ACCOUNTING AND FINANCIAL DISCLOSURE

financial statements start on Page F-1.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 5. Market for Registrant’s Common Equity