What changed in this filing

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Item 1A. Risk Factors

2022-04-01 compared with 2021-04-15 · 687 added, 695 removed, 13 unchanged (99% of the section changed)

investment in our common stock involves a high degree of risk.

You should carefully consider the risks described below together

with all of the other information included in this annual report before making an investment decision with regard to our securities.

The statements contained in this annual report include forward-looking statements that are subject to risks and uncertainties

that could cause actual results to differ materially from those set forth in or implied by forward-looking statements.

set forth below are not the only risks facing us.

Additional risks and uncertainties may exist that could also adversely affect

our business, prospects or operations.

If any of the following risks actually occurs, our business, financial condition or results

of operations could be harmed.

In that case, the trading price of our common stock could decline, and you may lose all or a significant

part of your investment.

Relating to our Financial Conditions and Operations

have a history of losses and are continuing to incur losses .

During the period from 2008, when we changed our business to become

an intellectual property management company, through December 31, 2020, we generated a cumulative loss of approximately $21.3 million

on cumulative revenues of less than $21.3 million, and our losses are continuing.

We did not generate any revenue during the fourth quarter

Our total assets were approximately $3.5 million at December 31, 2020, of which approximately $2.2 million represented the book

value of patents we acquired from Intellectual Ventures and its affiliates.

At December 31, 2020, we had a working capital deficiency

of approximately $8.2 million.

Our working capital deficiency reflected a loan payable to Intelligent Partners of approximately $4.7 million,

which loan payable has been terminated as part of the restructure agreement with Intelligent Partners.

We cannot give assurance that we

can or will ever operate profitably.

did not generate any revenue during the fourth quarter of 2020 .

During the fourth quarter of 2020, we did not generate any

Because we were in default under our loans to Intelligent Partners (as successor to United Wireless), with Intelligent

Partners having the ability to declare a default on our notes in the principal amount of $4,672,810, with the possibility of our

seeking protection under the Bankruptcy Act, we ceased our monetization activities, since no counsel would represent us on a contingent

basis in view of the default and possible bankruptcy, and devoted our efforts in negotiating the agreements with QFL and Intelligent

independent auditors have included a going concern qualification in their report on our financial statements for the year ended

December 31, 2020 .

Because of our history of losses, deficiency in stockholders’

equity, working capital deficiency

and the uncertainty of generating revenues in the future, our independent auditors have included a going concern qualification

in their report on our financial statements for the year ended December 31, 2020.

require significant funding in order to develop our business .

Our business requires substantial funding to evaluate and acquire

intellectual property rights and to develop and implement programs to monetize our intellectual property rights, including the

prosecution of any litigation necessary to enable us to monetize our intellectual property rights.

Our failure to develop and

implement these programs could both jeopardize our relationships under our existing agreements and could inhibit our ability to

generate new business, either through the acquisition of intellectual property rights or through exclusive management agreements.

We cannot be profitable unless we are able to obtain the funding necessary to develop our business, including litigation to monetize

our intellectual property.

Although we have an agreement with QFL which provides a funding line to acquire and monetize intellectual

property rights, QFL must approve any intellectual property we acquire and, if QFL does not fund an intellectual property acquisition,

we may not be able to acquire and monetize the intellectual property.

We cannot assure you that we will be able to obtain necessary

funding or to develop our business.

terms of our agreements with QFL and Intelligent Partners may make it difficult for us to generate cash flow from our operations .

Although 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;

An investment in our common stock involves

a high degree of risk.

You should carefully consider the risks described below together with all of the other information included in

this annual report before making an investment decision with regard to our securities.

The statements contained in this annual report

include forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from

those set forth in or implied by forward-looking statements.

The risks set forth below are not the only risks facing us.

Additional risks

and uncertainties may exist that could also adversely affect our business, prospects or operations.

If any of the following risks actually

occurs, our business, financial condition or results of operations could be harmed.

In that case, the trading price of our common stock

could decline, and you may lose all or a significant part of your investment.

Risks Relating to our Financial Conditions

and Operations

We have a history of losses and are continuing

to incur losses .

During the period from 2008, when we changed our business to become an intellectual property management company,

through December 31, 2021, we generated a cumulative loss of approximately $25.4 million on cumulative revenues of less than $23.3 million,

and our losses are continuing.

We did not generate any revenue during the fourth quarter of 2020 or during the first three quarters of

Our total assets were approximately $817,000 at December 31, 2021, of which approximately $539,000 represented the book value of

patents we acquired from AI in October of 2021.

At December 31, 2021, we had a working capital deficiency of approximately $8.1 million.

We did not generate any revenue during the

fourth quarter of 2020 or the first three quarters of 2021 .

During the fourth quarter of 2020 and the first three quarters of 2021,

we did not generate any revenue.

Because we were in default under our loans to Intelligent Partners (as successor to United Wireless),

with Intelligent Partners having the ability to declare a default on our notes in the principal amount of $4,672,810, with the possibility

of our seeking protection under the Bankruptcy Act, we ceased our monetization activities, since no counsel would represent us on a contingent

basis in view of the default and possible bankruptcy, and devoted our efforts in negotiating the agreements with QFL and Intelligent Partners.

We resumed our monetization activities following in February 2021 after we entered into our agreements with QFL and Intelligent Partners.

However, the intellectual property monetization cycle is lengthy and may be unsuccessful.

Monetization activities initiated may take several

quarters to generate revenues if ever.

Our independent auditors have included a going

concern qualification in their report on our financial statements for the year ended December 31, 2021 .

Because of our history of

losses, deficiency in stockholders’ equity, working capital deficiency and the uncertainty of generating revenues in the future,

our independent auditors have included a going concern qualification in their report on our financial statements for the year ended December

We require significant funding in order to

develop our business .

Our business requires substantial funding to evaluate and acquire intellectual property rights and to develop

and implement programs to monetize our intellectual property rights, including the prosecution of any litigation necessary to enable us

to monetize our intellectual property rights.

Our failure to develop and implement these programs could both jeopardize our relationships

under our existing agreements and could inhibit our ability to generate new business, either through the acquisition of intellectual property

rights or through exclusive management agreements.

We cannot be profitable unless we are able to obtain the funding necessary to develop

our business, including litigation to monetize our intellectual property.

Although we have an agreement with QFL which provides a funding

line to acquire and monetize intellectual property rights, QFL must approve any intellectual property we acquire and, if QFL does not

fund an intellectual property acquisition, we may not be able to acquire and monetize the intellectual property.

We cannot assure you

that we will be able to obtain necessary funding or to develop our business.

The terms of our agreements with QFL and

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

Although 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 $2,210,000 as of March 15, 2022;

(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;

and (iii) $1,750,000

to fund the cash payment portion of the restructure of our obligations to Intelligent Partners, which was paid directly to Intelligent

Pursuant to the QFL agreement, QFL receive all proceeds payable to us from the monetization of those patents which have

been financed by QFL until QFL has received its negotiated rate of return, then we and QFL share equally in the proceeds from

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

$1,200,000 as of March 15, 2022, and (iii) $1,750,000 which was used to fund the cash payment portion of the restructure of our obligations

to Intelligent Partners.

Pursuant to the QFL agreement, QFL receive all proceeds payable to us from the monetization of those patents

which have been financed by QFL until QFL has received its negotiated rate of return, then we and QFL share equally in the proceeds from

monetization until QFL 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 total monetization proceeds obligations (“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 Intellectual

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 Partner’s 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 has recovered it negotiated rate

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

expenses, including payments due by us to the party that sold us the 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.

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

Our failure to make required payments to sellers

of two of our patent portfolios may result in a default under the agreements .

Pursuant to our subsidiaries’

agreements with

IV 34/37, with respect to the CTX portfolio, and IV 113/108 with respect to the M-RED portfolio, respectively, our subsidiaries are to

pay to the sellers 50% of net recoveries, as defined, from the respective portfolios which we purchased from them, IV 34/37 and IV 113/108.

These agreements provided that if the cumulative distributions did not equal or exceed specified amounts, the subsidiaries would pay the

As of the date of this annual report, the cumulative unpaid distributions were $600,000 to IV 34/37 and approximately

$260,000 to IV 113/108.

In April 2021, the parties entered into a non-binding letter of intent pursuant to which IV 34/37 and IV 113/108

would not take any action with respect to the delinquent payment while the parties negotiated an amended payment schedule.

no assurance that we will be able to negotiate an amended payment schedule or that IF 34/38 or IV 113/108 will not take action to enforce

its remedies under the patent purchase agreement, A default under these agreements could result in a default under our agreements with

QFL, and , even if it does not declare a default, QFL may be reluctant to finance our intellectual property acquisition if we are in default

under any of our patent acquisition agreements with Intellectual Venture affiliates.

Further, it may be necessary for CXT or M-RED to

seek protection under the Bankruptcy Act if we are not able to enter into modification agreements with the Intellectual Ventures affiliates

business may be impaired by the effects of the COVID-91 pandemic and the effects of the response to the pandemic .

we do not manufacture or sell products, the COVID-19 pandemic and the work shutdown imposed in the United States and other countries

to limit the spread of the virus can have a negative impact on our business.

Our revenue is generated almost exclusively from

license fees generated from litigation seeking damages for infringement of our intellectual property rights.

The work shutdown

has affected the court system and, with courts operating on a reduced schedule.

As a result, patent infringement actions are likely

to be lower priority items in allocation of court resources, with the effect that deadlines are likely to be postponed which delays

may give defendants an incentive to delay negotiations or offer a lower amount than they might otherwise accept.

the effect of the COVID-19 and the public response may adversely affect the financial condition and prospects of defendants and

potential defendants, which would make it less likely that they would be willing to settle our claim.

COVID-19 pandemic and the response to limit the spread of the infection may affect the financial condition of financing sources

and the willingness of potential financing sources to provide funding for our litigation.

In addition, these factors may affect

a law firms’

ability and willingness to provide us with legal services on a contingent or partial contingent and may result

in the impairment or discontinuation of business of or the filing of a petition under the Bankruptcy Act by or against any defendant

or potential defendant.

to the extent that holders of intellectual property rights see these factors impacting our ability to generate revenue from their

intellectual property, they may be reluctant to sell intellectual property to us on terms which are acceptable to us.

are dependent upon our chief executive officer .

We are dependent upon Jon Scahill, our chief executive officer and president

and sole full-time employee, for all aspects of our business including locating, evaluating and negotiating and performing due

diligence with respect to intellectual property rights from the owners, managing our intellectual property portfolios, engaging

in licensing activities and monetizing the rights through licensing and managing and monitoring any litigation with respect to

our intellectual property as well as defending any actions by potential licensees seeking a declaratory judgment that they do

not infringe.

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 has recovered its negotiated rate of return.

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.

Our business may be impaired by the effects

of the COVID-19 pandemic and the effects of the response to the pandemic .

Although we do not manufacture or sell products, the COVID-19

pandemic and the work shutdown imposed in the United States and other countries to limit the spread of the virus can have a negative impact

on our business.

Our revenue is generated almost exclusively from license fees generated from litigation seeking damages for infringement

of our intellectual property rights.

The work shutdown affected the court system courts operating on a reduced schedule.

even though many court are operating on a near normal schedule, patent infringement actions are likely to be lower priority items in allocation

of court resources, with the effect that deadlines are likely to be postponed which delays may give defendants an incentive to delay negotiations

or offer a lower amount than they might otherwise accept.

In addition, the effect of the COVID-19 and new variants and subvriants the

public response may adversely affect the financial condition and prospects of defendants and potential defendants, which would make it

less likely that they would be willing to settle our claim.

The COVID-19 pandemic and the response to limit

the spread of the infection may affect the financial condition of financing sources and the willingness of potential financing sources

to provide funding for our litigation.

In addition, these factors may affect a law firms’ ability and willingness to provide us

with legal services on a contingent or partial contingent and may result in the impairment or discontinuation of business of or the filing

of a petition under the Bankruptcy Act by or against any defendant or potential defendant.

Further, to the extent that holders of intellectual

property rights see these factors impacting our ability to generate revenue from their intellectual property, they may be reluctant to

sell intellectual property to us on terms which are acceptable to us.

We are dependent upon our chief executive officer .

We are dependent upon Jon Scahill, our chief executive officer and president and sole full-time employee, for all aspects of our business

including locating, evaluating and negotiating and performing due diligence with respect to intellectual property rights from the owners,

managing our intellectual property portfolios, engaging in licensing activities and monetizing the rights through licensing and managing

and monitoring any litigation with respect to our intellectual property as well as defending any actions by potential licensees seeking

a declaratory judgment that they do not infringe.

The loss of Mr.

Scahill would materially impair our ability to conduct our business.

Although we have an employment

agreement with Mr.

Although we have an employment agreement with Mr.

Scahill, the employment agreement does not ensure that Mr.

Scahill will remain with us.

equity funding we obtain may 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 $0.01 per share for more than the past

two years, and, because our stock price fell below $0.01 per share, our stock is traded on the OTC Pink Market.

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.

Relating to Monetizing our Intellectual Property Rights

may not be able to monetize our intellectual property portfolios .

Although our business plan is to generate revenue from our

intellectual property portfolios, we have not been successful in generating any significant revenue from our portfolios and we

have not generated any revenues from several of our intellectual property portfolios.

We cannot assure you that we will be able

to generate any significant revenue from our existing portfolios or that we will be able to acquire new intellectual property

rights that will generate significant revenue.

we are not successful in monetizing our portfolios, we may not be able to continue in business .

Although we have ownership

of some of our intellectual property, we also license the rights pursuant to agreements with the owners of the intellectual property.

If we are not successful in generating revenue for those parties who have an interest in the results of our efforts, those parties

may seek to renegotiate the terms of our agreements with them, which could both impair our ability to generate revenue from our

intellectual property and make it more difficult for us to obtain rights to new intellectual property rights.

If we continue to

be unable to generate revenue from our existing intellectual property portfolios and any new portfolios we may acquire, we may

be unable to continue in business.

we are not successful in patent litigation, the defendants may seek to have the court award attorneys’

fees to them against

us which could result in the bankruptcy of the plaintiff subsidiary and may result in a default under our agreement QFL .

United States patent laws provide that “the court in exceptional cases may award reasonable attorney fees to the prevailing

party.”

Although the patents are owned by our subsidiaries and any judgment would be awarded against the subsidiaries, the

subsidiaries have no assets other than the patent rights.

Our funding sources for our patent litigation do not provide for the

funding source to pay any judgment against us.

Thus, if any defendants obtain a judgment against one of our subsidiaries, they

may seek to enforce their judgment against the patents owned by the subsidiary or seek to put the subsidiary into bankruptcy and

acquire the patents in the bankruptcy proceeding.

As a result, it is possible that an adverse verdict in a petition for legal

fees could result in the loss of the patents owned by the subsidiary and a default under our agreement with QFL.

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.

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.

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.

may be unable to enforce our intellectual property rights unless we obtain third party funding .

Because of the expense of

litigation and our lack of working capital, we may be unable to enforce our intellectual property rights unless we obtain the

agreement of a third party to provide funding in support of our litigation.

We cannot assure you that QFL 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 need to rely on third-party funding sources to provide us with funds to enforce our intellectual property rights we are dependent

upon the perception by potential funding sources of the value of our intellectual property .

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, 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

Under our agreement with QFL, QFL is allocated all of the net proceeds (after allowable expenses) until it has received

a negotiated return.

Unless QFL or any other funding source believes that it will generate a sufficient return on investment,

it will not fund litigation.

Scahill will remain with

Any equity funding we obtain may 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 $0.02 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.

Risks Relating to Monetizing our Intellectual

Property Rights

We may not be able to monetize our intellectual

property portfolios .

Although our business plan is to generate revenue from our intellectual property portfolios, we have not been

successful in generating any significant positive cash flow from our portfolios, we have not generated any revenues from several of our

intellectual property portfolios and we have ceased allocating resources toward the monetization of several of our portfolios.

assure you that we will be able to generate any significant revenue from our existing portfolios or that we will be able to acquire new

intellectual property rights that will generate significant revenue.

If we are not successful in monetizing our

portfolios, we may not be able to continue in business .

Although we have ownership of some of our intellectual property, we also license

the rights pursuant to agreements with the owners of the intellectual property.

If we are not successful in generating revenue for those

parties who have an interest in the results of our efforts, those parties may seek to renegotiate the terms of our agreements with them,

which could both impair our ability to generate revenue from our intellectual property and make it more difficult for us to obtain rights

to new intellectual property rights.

If we continue to be unable to generate revenue from our existing intellectual property portfolios

and any new portfolios we may acquire, we may be unable to continue in business.

If we are not successful in patent litigation,

the defendants may seek to have the court award attorneys’ fees to them against us which could result in the bankruptcy of the plaintiff

subsidiary and may result in a default under our agreement QFL .

The United States patent laws provide that “the court in exceptional

cases may award reasonable attorney fees to the prevailing party.” Although the patents are owned by our subsidiaries and any judgment

would be awarded against the subsidiaries, the subsidiaries have no assets other than the patent rights.

Our funding sources for our patent

litigation do not provide for the funding source to pay any judgment against us.

Thus, if any defendants obtain a judgment against one

of our subsidiaries, they may seek to enforce their judgment against the patents owned by the subsidiary or seek to put the subsidiary

into bankruptcy and acquire the patents in the bankruptcy proceeding.

As a result, it is possible that an adverse verdict in a petition

for legal fees could result in the loss of the patents owned by the subsidiary and a default under our agreement with QFL.

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.

We may be unable to enforce our intellectual

property rights unless we obtain third party funding .

Because of the expense of litigation and our lack of working capital, we may

be unable to enforce our intellectual property rights unless we obtain the agreement of a third party to provide funding in support of

our litigation.

We cannot assure you that QFL 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.

Because we need to rely on third-party funding

sources to provide us with funds to enforce our intellectual property rights we are dependent upon the perception by potential funding

sources of the value of our intellectual property .

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, 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 agreement with QFL, QFL is allocated all of the net proceeds (after allowable expenses)

until it has received a negotiated return.

Unless QFL or any other funding source believes that it will generate a sufficient return on

investment, it will not fund litigation.

If QFL 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.

we have a funding agreements with QFL, there is no assurance that we will generate revenue from the funded litigation .

the funding source makes its evaluation as to the likelihood of success, patent litigation is very uncertain, and we cannot assure

you that, just because we obtain litigation funding, we will be successful or that any recovery we may obtain will be significant.

QFL and Intelligent Partners hold a security interest in almost all of our intellectual property and the proceeds from our intellectual

property, we may not be able to raise funds through a debt financing .

Pursuant to our agreements with QFL 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 would

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.

of our financial condition and our having generated a loss from operations in 2019 and 2020 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 or license may not be favorable to us.

we cannot assure you that we will be able to acquire intellectual property rights to the technology for which there is a strong

market demand.

acquisitions may present risks, and we may be unable to achieve the financial or other goals intended at the time of any potential

acquisition .

Our ability to grow depends, in large part, on our ability to acquire interests in intellectual property, including

patented technologies, patent portfolios, or companies holding such patented technologies and patent portfolios.

we intend to engage in acquisitions to expand our intellectual property portfolios and we intend to continue to explore such acquisitions.

Such acquisitions are subject to numerous risks, including 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

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

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.

we are unable to manage these risks and other risks effectively as part of any acquisition, our business could be adversely affected.

acquisition of intellectual property rights may be time consuming, complex and costly, which could adversely affect our operating

Acquisitions of patent or other intellectual property assets, which are and will be critical to the development of

our business, are often time consuming, complex and costly to consummate.

We may utilize many different transaction structures

in our acquisitions and the terms of such acquisition agreements tend to be heavily negotiated.

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.

We may also identify intellectual

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

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.

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 QFL,

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

any funded litigation .

Although the funding source makes its 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 and Intelligent Partners hold a

security interest in almost all of our intellectual property and the proceeds from our intellectual property, we may not be able to raise

funds through a debt financing .

Pursuant to our agreements with QFL 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 would 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 2021 and 2020 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

or license may not be favorable to us.

Accordingly, we cannot assure you that we will be able to acquire intellectual property rights

to the technology for which there is a strong market demand.

Potential acquisitions may present risks, and

we may be unable to achieve the financial or other goals intended at the time of any potential acquisition .

Our ability to grow depends,

in large part, on our ability to acquire interests in intellectual property, including patented technologies, patent portfolios, or companies

holding such patented technologies and patent portfolios.

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

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

Such acquisitions are subject to numerous risks, including

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.

If we are unable to manage these risks and other

risks effectively as part of any acquisition, our business could be adversely affected.

Our acquisition of intellectual property rights

may be time consuming, complex and costly, which could adversely affect our operating results .

Acquisitions of patent or other intellectual

property assets, which are and will be critical to the development of our business, are often time consuming, complex and costly to consummate.

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.

we acquire technologies that are in the early stages of market development, we may be unable to monetize the rights we acquire .

We may acquire patents, technologies and other intellectual property rights that are in the early stages of adoption in the commercial,

industrial and consumer markets.

Demand for some of these technologies will likely be untested and may be subject to fluctuation

based upon the rate at which companies may adopt our intellectual 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.

intellectual property monetization cycle is lengthy and costly and may be unsuccessful .

We expect to incur significant marketing,

legal and sales expenses prior to entering into monetization events that generate revenue for us.

We will also spend considerable

resources educating potential licensees on the benefits of entering into an agreement with us that may include a non-exclusive

license for future use of our intellectual property rights.

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 operations.

may not be successful in obtaining judgments in our favor .

We have commenced litigation seeking to monetize our intellectual

property portfolios and it will be necessary for us to commence ligation in the future.

All litigation is uncertain, and a number

of the actions we commenced have been dismissed by the trial court.

We cannot assure you that any litigation will be decided in

our favor or that, if damages are awarded or a license is negotiated, that we will generate any significant revenue from the litigation

or that any recovery may be allocated to counsel and third party funding source which may result in little if any revenue to us.

financial condition may cause both intellectual property rights owners and potential licensees to believe that we do not have

the financial resources to commence and prosecute litigation for infringement .

Because of our financial condition, both intellectual

property rights owners and potential licensees may believe that we do not have the ability to commence and prosecute sustained

and expensive litigation to protect our intellection rights with the effect that (i) intellectual property rights owners may be

reluctant to grant us rights to their intellectual property and (ii) potential licensees may be less inclined to pay for license

rights from us or settle any litigation we may commence on terms which generate any meaningful monetization.

patents which may be issued to us pursuant to patent applications which we filed or may file may fail to give us necessary protection .

We cannot be certain that patents will be issued as a result of any pending or future patent applications, or that any of our

patents, once issued, will provide us with adequate protection from competing products.

For example, issued patents may be circumvented

or challenged, declared invalid or unenforceable, or narrowed in scope.

In addition, since publication of discoveries in scientific

or patent literature often lags behind actual discoveries, we cannot be certain that we will be the first to make additional new

inventions or to file patent applications covering those inventions.

It is also possible that others may have or may obtain issued

patents that could prevent us from commercializing our products or require us to obtain licenses requiring the payment of significant

fees or royalties in order to enable us to conduct our business.

As to those patents that we may acquire, our continued rights

will depend on meeting any obligations to the seller and we may be unable to do so.

Our failure to obtain or maintain intellectual

property rights for our inventions would lead to the loss of our investments in such activities, which would have a material adverse

effect on us.

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.

such a case, the plaintiff could choose the court in which to bring the action and we would be the defendant in the action.

claims for declaratory judgment in patent cases are claims of non-infringement, patent invalidity and unenforceability.

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 the action.

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.

2014 Supreme Court decision could significantly impair business method and software patents .

In June 2014, the United States

Supreme Court, in Alice v.

CLS Bank , struck down patents covering a computer-implemented scheme for mitigating “settlement

by using a third party intermediary, holding the patent claims to be ineligible as being drawn to a patent-ineligible

abstract idea.

The courts have been dealing for many years over what business methods are patentable.

We cannot predict the extent

to which the decision in Alice as well as prior Supreme Court decisions dealing with patents, will be interpreted by courts.

To the extent that the Supreme Court decision in Alice gives businesses reason to believe that business model and software

patents are not enforceable, it may become more difficult for us to monetize patents which are held to be within the ambit of

the patents before the Supreme Court in Alice and for us to obtain counsel willing to represent us on a contingency basis.

As a result, the decision in Alice could materially impair our ability to obtain patent rights and monetize those which

we do obtain.

regulations or rules related to obtaining patents or enforcing patents could significantly increase our operating costs and decrease

our revenue .

We may apply for patents and may spend a significant amount of resources to enforce those patents.

If legislation,

regulations or rules are implemented either by Congress, the United States Patent and Trademark Office, or the courts that impact

the patent application process, the patent enforcement process or the rights of patent holders, these changes could negatively

affect our expenses and revenue.

For example, new rules regarding the burden of proof in patent enforcement actions could significantly

both increase the cost of our enforcement actions and make it more difficult to sign licenses without litigation, changes in standards

or limitations on liability for patent infringement could negatively impact our revenue derived from such enforcement actions,

and any rules requiring that the losing party pay legal fees of the prevailing party could also significantly increase the cost

of our enforcement actions.

United States patent laws were recently amended with the enactment of the Leahy-Smith America Invents

Act, or the America Invents Act, which took effect on March 16, 2013.

The America Invents Act includes a number of significant

changes to U.S.

In general, the legislation attempts to address issues surrounding the enforceability of patents and

the increase in patent litigation by, among other things, establishing new procedures for patent litigation.

For example, the

America Invents Act changes the way that parties may be joined in patent infringement actions, increasing the likelihood that

such actions will need to be brought against individual parties allegedly infringing by their respective individual actions or

The America Invents Act and its implementation increases the uncertainties and costs surrounding the enforcement of

our patented technologies, which could have a material adverse effect on our business and financial condition.

In addition, the

Department of Justice has conducted reviews of the patent system to evaluate the impact of patent assertion entities on industries

in which those patents relate.

It is possible that the findings and recommendations of the Department of Justice could impact

the ability to effectively license and enforce standards-essential patents and could increase the uncertainties and costs surrounding

the enforcement of any such patented technologies.

legislation may affect our ability 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.

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

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.

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.

unpredictability of our revenues may harm our financial condition .

Our revenues from licensing have typically been lump sum

payments entered into at the time of the license, which may be in connection with the settlement of litigation, and not from licenses

that pay an ongoing royalty.

Due to the nature of the licensing business and uncertainties regarding the amount and timing of

the receipt of license and other fees from potential infringers, stemming primarily from uncertainties regarding the outcome of

enforcement actions, rates of adoption of our patented technologies, the growth rates of potential licensees and certain other

factors, our revenues, if any, may vary significantly from quarter to quarter, which could make our business difficult to manage,

adversely affect our business and operating results, cause our quarterly results to fall below market expectations and adversely

affect the market price of our common stock.

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

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.

reliance on representations, warranties and opinions of third parties may expose us to certain material liabilities .

time to time, we rely upon the representations and warranties of third parties, including persons claiming ownership of intellectual

property rights, and opinions of purported experts.

In certain instances, we may not have the opportunity to independently investigate

and verify the facts upon which such representations, warranties and opinions are made.

By relying on these representation, warranties

and opinions, we may be exposed to liability in connection with the licensing and enforcement of intellectual property and intellectual

property rights which could have a material adverse effect on our operating results and financial condition.

connection with patent enforcement actions, counterclaims may be brought against us and a court may rule against us in counterclaims

which may expose us and our operating subsidiaries to material liabilities .

If we acquire technologies that are in the

early stages of market development, we may be unable to monetize the rights we acquire .

We may acquire patents, technologies and other

intellectual property rights that are in the early stages of adoption in the commercial, industrial and consumer markets.

Demand for some

of these technologies will likely be untested and may be subject to fluctuation based upon the rate at which companies may adopt our intellectual

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.

Our intellectual property monetization cycle

is lengthy and costly and may be unsuccessful .

We expect to incur significant marketing, legal and sales expenses prior to entering

into monetization events that generate revenue and cash flow from operations for us.

We will also spend considerable resources educating

potential licensees on the benefits of entering into an agreement with us that may include a non-exclusive license for future use of our

intellectual property rights.

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

We may not be successful in obtaining judgments

in our favor .

We have commenced litigation seeking to monetize our intellectual property portfolios and it will be necessary for us

to commence ligation in the future.

All litigation is uncertain, and a number of the actions we commenced have been dismissed by the trial

We cannot assure you that any litigation will be decided in our favor or that, if damages are awarded or a license is negotiated,

that we will generate any significant revenue from the litigation or that any recovery may be allocated to counsel and third party funding

source which may result in little if any revenue to us.

Our financial condition may cause both intellectual

property rights owners and potential licensees to believe that we do not have the financial resources to commence and prosecute litigation

for infringement .

Because of our financial condition, both intellectual property rights owners and potential licensees may believe

that we do not have the ability to commence and prosecute sustained and expensive litigation to protect our intellection rights with the

effect that (i) intellectual property rights owners may be reluctant to grant us rights to their intellectual property and (ii) potential

licensees may be less inclined to pay for license rights from us or settle any litigation we may commence on terms which generate any

meaningful monetization.

Any patents which may be issued to us pursuant

to patent applications which we filed or may file may fail to give us necessary protection .

We cannot be certain that patents will

be issued as a result of any pending or future patent applications, or that any of our patents, once issued, will provide us with adequate

protection from competing products.

For example, issued patents may be circumvented or challenged, declared invalid or unenforceable,

or narrowed in scope.

In addition, since publication of discoveries in scientific or patent literature often lags behind actual discoveries,

we cannot be certain that we will be the first to make additional new inventions or to file patent applications covering those inventions.

It is also possible that others may have or may obtain issued patents that could prevent us from commercializing our products or require

us to obtain licenses requiring the payment of significant fees or royalties in order to enable us to conduct our business.

patents that we may acquire, our continued rights will depend on meeting any obligations to the seller and we may be unable to do so.

Our failure to obtain or maintain intellectual property rights for our inventions would lead to the loss of our investments in such activities,

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.

A 2014 Supreme Court decision could significantly

impair business method and software patents .

In June 2014, the United States Supreme Court, in Alice v.

CLS Bank , struck down

patents covering a computer-implemented scheme for mitigating “settlement risk” by using a third party intermediary, holding

the patent claims to be ineligible as being drawn to a patent-ineligible abstract idea.

The courts have been dealing for many years over

what business methods are patentable.

We cannot predict the extent to which the decision in Alice as well as prior Supreme Court

decisions dealing with patents, will be interpreted by courts.

To the extent that the Supreme Court decision in Alice gives businesses

reason to believe that business model and software patents are not enforceable, it may become more difficult for us to monetize patents

which are held to be within the ambit of the patents before the Supreme Court in Alice and for us to obtain counsel willing to

represent us on a contingency basis.

As a result, the decision in Alice could materially impair our ability to obtain patent rights

and monetize those which we do obtain.

Legislation, regulations or rules related to

obtaining patents or enforcing patents could significantly increase our operating costs and decrease our revenue .

We may apply for

patents and may spend a significant amount of resources to enforce those patents.

If legislation, regulations or rules are implemented

either by Congress, the United States Patent and Trademark Office, or the courts that impact the patent application process, the patent

enforcement process or the rights of patent holders, these changes could negatively affect our expenses and revenue.

For example, new

rules regarding the burden of proof in patent enforcement actions could significantly both increase the cost of our enforcement actions

and make it more difficult to sign licenses without litigation, changes in standards or limitations on liability for patent infringement

could negatively impact our revenue derived from such enforcement actions, and any rules requiring that the losing party pay legal fees

of the prevailing party could also significantly increase the cost of our enforcement actions.

United States patent laws were amended

with the enactment of the Leahy-Smith America Invents Act, or the America Invents Act, which took effect on March 16, 2013.

Invents Act includes a number of significant changes to U.S.

In general, the legislation attempts to address issues surrounding

the enforceability of patents and the increase in patent litigation by, among other things, establishing new procedures for patent litigation.

For example, the America Invents Act changes the way that parties may be joined in patent infringement actions, increasing the likelihood

that such actions will need to be brought against individual parties allegedly infringing by their respective individual actions or activities.

The America Invents Act and its implementation increases the uncertainties and costs surrounding the enforcement of our patented technologies,

which could have a material adverse effect on our business and financial condition.

In addition, the U.S.

Department of Justice has conducted

reviews of the patent system to evaluate the impact of patent assertion entities on industries in which those patents relate.

It is possible

that the findings and recommendations of the Department of Justice could impact the ability to effectively license and enforce standards-essential

patents and could increase the uncertainties and costs surrounding the enforcement of any such patented technologies.

Proposed legislation may affect our ability

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.

The unpredictability of our revenues may harm

our financial condition .

Our revenues from licensing have typically been lump sum payments entered into at the time of the license,

which may be in connection with the settlement of litigation, and not from licenses that pay an ongoing royalty.

Due to the nature of

the licensing business and uncertainties regarding the amount and timing of the receipt of license and other fees from potential infringers,

stemming primarily from uncertainties regarding the outcome of enforcement actions, rates of adoption of our patented technologies, the

growth rates of potential licensees and certain other factors, our revenues, if any, may vary significantly from quarter to quarter, which

could make our business difficult to manage, adversely affect our business and operating results, cause our quarterly results to fall

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

and opinions of third parties may expose us to certain material liabilities .

From time to time, we rely upon the representations and

warranties of third parties, including persons claiming ownership of intellectual property rights, and opinions of purported experts.

In certain instances, we may not have the opportunity to independently investigate and verify the facts upon which such representations,

warranties and opinions are made.

By relying on these representation, warranties and opinions, we may be exposed to liability in connection

with the licensing and enforcement of intellectual property and intellectual property rights which could have a material adverse effect

on our operating results and financial condition.

In connection with patent enforcement actions,

it is possible that a defendant may file counterclaims against us or a court may rule that we have violated statutory authority,

regulatory authority, federal rules, local court rules, or governing standards relating to the substantive or procedural aspects

of such enforcement actions.

In such event, a court may issue monetary sanctions against us or our operating subsidiaries or award

attorney’s fees and/or expenses to the counterclaiming defendant, which could be material, and if we or our operating subsidiaries

are required to pay such monetary sanctions, attorneys’

fees and/or expenses, such payment could materially harm our operating

results, our financial position and our ability to continue in business.

judges and juries may find it difficult to understand complex patent enforcement litigation, and as a result, we may need to appeal

adverse decisions by lower courts in order to successfully enforce our patents .

It is difficult to predict the outcome of

patent enforcement litigation at the trial level.

It is often difficult for juries and trial judges to understand complex, patented

technologies, and, as a result, there is a higher rate of successful appeals in patent enforcement litigation than more standard

business litigation.

Regardless of whether we prevail in the trial court, appeals are expensive and time consuming, resulting

in increased costs and delayed revenue, and attorneys may be less likely to represent us in an appeal on a contingency basis especially

if we are seeking to appeal an adverse decision.

Although we may diligently pursue enforcement litigation, we cannot predict the

decisions made by juries and trial courts.

patent applications are filed each year resulting in longer delays in getting patents issued by the United States Patent and Trademark

We hold a number of pending patents and may file or acquire rights to additional patent applications.

We have identified

a trend of increasing patent applications each year, which we believe is resulting in longer delays in obtaining approval of pending

patent applications.

The application delays could cause delays in recognizing revenue, if any, from these patents and could cause

us to miss opportunities to license patents before other competing technologies are developed or introduced into the market.

Federal courts are becoming more crowded, and, as a result, patent enforcement litigation is taking longer .

Patent enforcement

actions are almost exclusively prosecuted in federal district courts.

In May 2017, the United States Supreme Court, in TC Heartland

Kraft Foods Groups Brands , held that a corporate defendant may be sued either in its state of incorporation, or where it

has committed acts of infringement and has a regular and established place of business.

To the extent that the Supreme Court decision

in TC Heartland concentrates patent litigation in districts within states popular for business incorporation, such as the

Federal District Court for the District of Delaware, such courts may become increasingly crowded.

Federal trial courts that hear

patent enforcement actions also hear criminal and other civil cases.

Criminal cases always take priority over patent enforcement

As a result, it is difficult to predict the length of time it will take to complete any enforcement action.

we believe there is a trend in increasing numbers of civil lawsuits and criminal proceedings, and, as a result, we believe that

the risk of delays in patent enforcement actions will have a significant effect on our business in the future unless this trend

reductions in the funding of the United States Patent and Trademark Office could have an adverse impact on the cost of processing

pending patent applications and the value of those pending patent applications .

Our primary assets are our patent portfolios,

including pending patent applications before the United States Patent and Trademark Office.

The value of our patent portfolios

is dependent upon the issuance of patents in a timely manner, and any reductions in the funding of the United States Patent and

Trademark Office could negatively impact the value of our assets.

Further, reductions in funding from Congress could result in

higher patent application filing and maintenance fees charged by the United States Patent and Trademark Office, causing an unexpected

increase in our expenses.

rapid development of technology may impair our ability to monetize intellectual property that we own .

In order for us to generate

revenue from our intellectual property, we need to offer intellectual property that is used in the manufacture or development

Rapid technological developments have reduced the market for products using less advanced technology.

To the extent

that technology develops in a manner in which our intellectual property is not a necessary element or to the extent that others

design around our intellectual property, our ability to license our intellectual property portfolios or successfully prosecute

litigation will be impaired.

We cannot assure you that we will have rights to intellectual property for most advanced technology

or that there will be a market for products which require our technology.

intellectual property management business is highly competitive .

A large number of other companies seek to obtain rights to

new intellectual property and to market existing intellectual property.

Most of these companies have significantly both greater

resources that we have and industry contacts which place them in a better position to generate new business.

Further, our financial

position, our lack of executive personnel and our inability to generate revenue from our portfolio can be used against us by our

We cannot assure you that we will be successful in obtaining intellectual property rights to new developing technologies.

intellectual property enforcement litigation becomes more prevalent, it may become more difficult for us to voluntarily license

our intellectual property .

We believe that the more prevalent intellectual property enforcement actions become, the

more difficult it will be for us to voluntarily license our intellectual property rights.

As a result, we may need to increase

the number of our intellectual property enforcement actions to cause infringing companies to license the intellectual property

or pay damages for lost royalties.

global economic conditions may cause potential licensees to delay entering into licensing agreements, which could prolong our

litigation and adversely affect our financial condition and operating results .

Our business depends significantly on strong

economic conditions that would encourage potential licensees to enter into license agreements for our intellectual property rights.

The United States and world economies have recently experienced weak economic conditions.

Uncertainty about global economic conditions

poses a risk as businesses may postpone spending in response to tighter credit, negative financial news and declines in income

or asset values.

This response could have a material adverse effect on the willingness of parties infringing on our assets to

enter into settlements or other revenue generating agreements voluntarily.

we are unable to adequately protect our intellectual property, we may not be able to compete effectively .

to compete depends in part upon the strength of the intellectual property and intellectual property rights that we own or may

hereafter acquire in our technologies, brands and content and our ability to protect such intellectual property rights.

on a combination of patent and intellectual property laws and agreements to establish and protect our patent, intellectual property

counterclaims may be brought against us and a court may rule against us in counterclaims which may expose us and our operating subsidiaries

to material liabilities .

In connection with patent enforcement actions, it is possible that a defendant may file counterclaims against

us or a court may rule that we have violated statutory authority, regulatory authority, federal rules, local court rules, or governing

standards relating to the substantive or procedural aspects of such enforcement actions.

In such event, a court may issue monetary sanctions

against us or our operating subsidiaries or award attorney’s fees and/or expenses to the counterclaiming defendant, which could

be material, and if we or our operating subsidiaries are required to pay such monetary sanctions, attorneys’ fees and/or expenses,

such payment could materially harm our operating results, our financial position and our ability to continue in business.

Trial judges and juries may find it difficult

to understand complex patent enforcement litigation, and as a result, we may need to appeal adverse decisions by lower courts in order

to successfully enforce our patents .

It is difficult to predict the outcome of patent enforcement litigation at the trial level.

is often difficult for juries and trial judges to understand complex, patented technologies, and, as a result, there is a higher rate

of successful appeals in patent enforcement litigation than more standard business litigation.

Regardless of whether we prevail in the

trial court, appeals are expensive and time consuming, resulting in increased costs and delayed revenue, and attorneys may be less likely

to represent us in an appeal on a contingency basis especially if we are seeking to appeal an adverse decision.

Although we may diligently

pursue enforcement litigation, we cannot predict the decisions made by juries and trial courts.

More patent applications are filed each year

resulting in longer delays in getting patents issued by the United States Patent and Trademark Office .

We hold a number of pending

patents and may file or acquire rights to additional patent applications.

We have identified a trend of increasing patent applications

each year, which we believe is resulting in longer delays in obtaining approval of pending patent applications.

The application delays

could cause delays in recognizing revenue, if any, from these patents and could cause us to miss opportunities to license patents before

other competing technologies are developed or introduced into the market.

Federal courts are becoming more crowded,

and, as a result, patent enforcement litigation is taking longer .

Patent enforcement actions are almost exclusively prosecuted in

federal district courts.

In May 2017, the United States Supreme Court, in TC Heartland v.

Kraft Foods Groups Brands , held that

a corporate defendant may be sued either in its state of incorporation, or where it has committed acts of infringement and has a regular

and established place of business.

To the extent that the Supreme Court decision in TC Heartland concentrates patent litigation

in districts within states popular for business incorporation, such as the Federal District Court for the District of Delaware, such courts

may become increasingly crowded.

Federal trial courts that hear patent enforcement actions also hear criminal and other civil cases.

cases always take priority over patent enforcement actions.

As a result, it is difficult to predict the length of time it will take to

complete any enforcement action.

Moreover, we believe there is a trend in increasing numbers of civil lawsuits and criminal proceedings,

and, as a result, we believe that the risk of delays in patent enforcement actions will have a significant effect on our business in the

future unless this trend changes.

Any reductions in the funding of the United

States Patent and Trademark Office could have an adverse impact on the cost of processing pending patent applications and the value of

those pending patent applications .

Our primary assets are our patent portfolios, including pending patent applications before the

United States Patent and Trademark Office.

The value of our patent portfolios is dependent upon the issuance of patents in a timely manner,

and any reductions in the funding of the United States Patent and Trademark Office could negatively impact the value of our assets.

reductions in funding from Congress could result in higher patent application filing and maintenance fees charged by the United States

Patent and Trademark Office, causing an unexpected increase in our expenses.

The rapid development of technology may impair

our ability to monetize intellectual property that we own .

In order for us to generate revenue from our intellectual property, we

need to offer intellectual property that is used in the manufacture or development of products.

Rapid technological developments have

reduced the market for products using less advanced technology.

To the extent that technology develops in a manner in which our intellectual

property is not a necessary element or to the extent that others design around our intellectual property, our ability to license our intellectual

property portfolios or successfully prosecute litigation will be impaired.

We cannot assure you that we will have rights to intellectual

property for most advanced technology or that there will be a market for products which require our technology.

The intellectual property management business

is highly competitive .

A large number of other companies seek to obtain rights to new intellectual property and to market existing

intellectual property.

Most of these companies have significantly both greater resources that we have and industry contacts which place

them in a better position to generate new business.

Further, our financial position, our lack of executive personnel and our inability

to generate revenue from our portfolio can be used against us by our competitors.

We cannot assure you that we will be successful in obtaining

intellectual property rights to new developing technologies.

As intellectual property enforcement litigation

becomes more prevalent, it may become more difficult for us to voluntarily license our intellectual property .

We believe that

the more prevalent intellectual property enforcement actions become, the more difficult it will be for us to voluntarily license our

intellectual property rights, and we generally have not been successful in negotiating licenses without litigation.

As a result, we may

need to increase the number of our intellectual property enforcement actions to cause infringing companies to license the intellectual

property or pay damages for lost royalties.

Weak global economic conditions may cause potential

licensees to delay entering into licensing agreements, which could prolong our litigation and adversely affect our financial condition

and operating results .

Our business depends significantly on strong economic conditions that would encourage potential licensees to

enter into license agreements for our intellectual property rights.

The United States and world economies have recently experienced weak

economic conditions and the recent Russian invasion in Ukraine has exacerbated these conditions, including those resulting from inflation

and supply line issues.

Uncertainty about global economic conditions poses a risk as businesses may postpone spending in response to tighter

credit, negative financial news and declines in income or asset values.

This response could have a material adverse effect on the willingness

of parties infringing on our assets to enter into settlements or other revenue generating agreements voluntarily.

If we are unable to adequately protect our

intellectual property, we may not be able to compete effectively .

Our ability to compete depends in part upon the strength

of the intellectual property and intellectual property rights that we own or may hereafter acquire in our technologies, brands and content

and our ability to protect such intellectual property rights.

We rely on a combination of patent and intellectual property laws and agreements

to establish and protect our patent, intellectual property and other proprietary rights.

The efforts we take to protect our patents, intellectual

property and other proprietary rights may not be sufficient or effective at stopping unauthorized use of our patents, intellectual property

and other proprietary rights.

The efforts we take to protect our patents, intellectual property and other proprietary rights may

not be sufficient or effective at stopping unauthorized use of our patents, intellectual property and other proprietary rights.

In addition, effective trademark, patent, copyright and trade secret protection may not be available or cost-effective in every

country in which we have rights.

There may be instances where we are not able to protect or utilize our patent and other intellectual

property in a manner that maximizes competitive advantage.

If we are unable to protect our patent assets and intellectual property

and other proprietary rights from unauthorized use, the value of those assets may be reduced, which could negatively impact our

Our inability to obtain appropriate protections for our intellectual property may also allow competitors to enter our

markets and produce or sell the same or similar products as those covered by our intellectual property rights.

In addition, protecting

our intellectual property and intellectual property rights is expensive and diverts our critical 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.

If it becomes necessary for us to commence legal proceedings to enforce

our intellectual property rights, the proceedings could be 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.

Concerning our Common Stock

is a limited market for our common stock, which may make it difficult for you to sell your stock .

Our common stock trades

on the OTC Pink market under the symbol “QPRC.”

The OTC Pink market is not a national securities exchange and does

not provide the benefits to stockholders which a national exchange provides.

The OTC Pink “is for all types of companies

that are there by reasons of default, distress or design, which is why they are further segmented based on the level of information

that they provide.”

Our common stock had been traded on the OTCQB but ceased to be traded on that market because the stock

price dropped below $0.01 per share.

To be eligible for OTCQB, companies must be current in their reporting and undergo an annual

verification and management certification process.

Companies must meet $0.01 bid test and may not be in bankruptcy.”

is a limited trading market for our common stock and our common stock has frequently traded for less than $0.01.

there can be no assurance as to the liquidity of any markets that may develop for our common stock, the ability of holders of

our common stock to sell 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.

our common stock is a penny stock, you may have difficulty selling our common stock in the secondary trading market .

stock fits the definition of a penny stock and therefore is subject to the rules adopted by the SEC regulating broker-dealer practices

in connection with transactions in penny stocks.

The SEC rules may have the effect of reducing trading activity in our common

stock making it more difficult for investors to purchase and sell their shares.

The SEC’s rules require a broker or dealer

proposing to effect a transaction in a penny stock to deliver the customer a risk disclosure document that provides certain information

prescribed by the SEC, including, but not limited to, the nature and level of risks in the penny stock market.

The broker or dealer

must also disclose the aggregate amount of any compensation received or receivable by him in connection with such transaction

prior to consummating the transaction.

In addition, the SEC’s rules also require a broker or dealer to make a special written

determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement

to the transaction before completion of the transaction.

The existence of the SEC’s rules may result in a lower trading

volume of our common stock and lower trading prices.

Further, some broker-dealers will not process transactions in penny stocks.

In addition, effective trademark, patent, copyright and trade secret protection may not be available or

cost-effective in every country in which we have rights.

There may be instances where we are not able to protect or utilize our patent

and other intellectual property in a manner that maximizes competitive advantage.

If we are unable to protect our patent assets and intellectual

property and other proprietary rights from unauthorized use, the value of those assets may be reduced, which could negatively impact our

Our inability to obtain appropriate protections for our intellectual property may also allow competitors to enter our markets

and produce or sell the same or similar products as those covered by our intellectual property rights.

In addition, protecting our intellectual

property and intellectual property rights is expensive and diverts our critical 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.

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

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 Concerning our Common Stock

There is a limited market for our common stock,

which may make it difficult for you to sell your stock .

Our common stock trades on the OTCQB market under the symbol “QPRC.”

The OTCQB market is not a national securities exchange and does not provide the benefits to stockholders which a national exchange provides.

Furthermore, according to the OTC Markets website, the OTCQB “is for early-stage and developing U.S.

and international companies.

To be eligible, companies must be current in their reporting and undergo an annual verification and management certification process.

Companies must meet $0.01 bid test and may not be in bankruptcy.” There is a limited trading market for our common stock and our

common stock has frequently traded for less than $0.02.

From August 28, 2020 to May 7, 2021 our common stock was delisted from the OTCQB

and traded on the OTC Pink because our stock price fell below $0.01 per share for more than 30 consecutive trading days.

there can be no assurance as to the liquidity of any markets that may develop for our common stock, the ability of holders of our common

stock to sell 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,

you may have difficulty selling our common stock in the secondary trading market .

Our common stock fits the definition of a penny

stock and therefore is subject to the rules adopted by the SEC regulating broker-dealer practices in connection with transactions in penny

The SEC rules may have the effect of reducing trading activity in our common stock making it more difficult for investors to purchase

and sell their shares.

The SEC’s rules require a broker or dealer proposing to effect a transaction in a penny stock to deliver

the customer a risk disclosure document that provides certain information prescribed by the SEC, including, but not limited to, the nature

and level of risks in the penny stock market.

The broker or dealer must also disclose the aggregate amount of any compensation received

or receivable by him in connection with such transaction prior to consummating the transaction.

In addition, the SEC’s rules also

require a broker or dealer to make a special written determination that the penny stock is a suitable investment for the purchaser and

receive the purchaser’s written agreement to the transaction before completion of the transaction.

The existence of the SEC’s

rules may result in a lower trading volume of our common stock and lower trading prices.

Further, some broker-dealers will not process

transactions in penny stocks.

Many brokers do not trade in penny stocks and stock that are not listed on a stock exchange.

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.

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 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.

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 .

We do not have a full-time chief financial officer.

At present, our chief executive officer, who

does not have an accounting background, is also acting as our chief financial officer.

We do not anticipate that we will be able

to hire a qualified chief financial officer unless our financial condition 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 owners of intellectual property

stock price may be volatile and your investment 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 in our common stock.

There can be no assurance that any significant

market will ever develop in our common stock.

Because of the low public float and the absence of any significant trading volume,

the reported prices may not reflect the price at which you would be able to sell shares if you want to sell any shares you own

or buy shares if you wish to buy share.

Further, stocks with a low public float may be more subject to manipulation than a stock

that has a significant public float.

The price may fluctuate significantly in response to a number of factors, many of which are

beyond our control.

These factors include, but are not limited to, the following, in addition to the risks 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

the effect of the

COVID-19 pandemic and the response to the pandemic on the market both generally and on penny stock;

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 agreement with United Wireless;

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 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;

other matters not

within our control.

funds by issuing equity or convertible debt securities could dilute the value of the common stock and impose restrictions on our

working capital .

If we were to raise additional capital by issuing equity securities, either alone or in connection with a

non-equity financing, the value of the then outstanding common stock could decline.

If the additional equity securities were issued

at a per share price less than the per share value of the outstanding shares, which is customary in the private placement of equity

securities, the holders of the outstanding shares would suffer a dilution in value with the issuance of such additional shares.

Because of the low price of our stock and our working capital deficiency, the dilution to our stockholders could be significant.

We may have difficulty in raising funds through the sale of debt securities because of both our financial position, the lack of

any collateral on which a lender may place a value, and the absence of any history of significant monetizing of our intellectual

property rights.

If we are able to raise funds from the sale of debt securities, the lenders may impose restrictions on our operations

and may impair our working capital as we service any such debt obligations.

failure to have filed reports with the SEC may impair the market for and the value of our common stock and may result in liability

We did not file reports with the SEC from 2003 until December 2014.

We filed our Form 10-K for the year ended December

31, 2012 on December 15, 2014;

our Form 10-K for the year ended December 31, 2013 on April 10, 2015;

and our Form 10-K for the

year ended December 31, 2014 on August 18, 2015.

Our failure to have made such filings may affect both the market for our common

stock and the value of our common stock as well as the willingness of investors to purchase our stock.

Further, because we did

not have current information concerning our business and operations available, we have potential liability resulting from our

failure to have been current in our SEC filings, and the SEC has broad power to take action against us for our failure to have

been in compliance with the reporting requirement of the Securities Exchange Act of 1934.

Although the SEC permits an issuer to

file an omnibus 10-K covering the periods for which filings were not made, the SEC is not foreclosed from seeking enforcement

action for our filing delinquencies.

Any such action could have a material adverse effect upon us and the market for and price

of our common stock.

we have a classified board of directors, it may be more difficult for a third party to obtain control of us .

As a result of

the approval by our stockholders of our amended and restated certificate of incorporation, our board of directors is a classified

board, which means that at each annual meeting, the stockholder will vote for only one-third of the board.

A classified board

of directors may make it more difficult for a third party of gain control of us which may affect the opportunity of our stockholders

to receive any potential benefit which could be available from a third party seeking to obtain control over us.

do not intend to pay any cash dividends in the foreseeable future .

We have not paid any cash dividends on our common stock

and do not intend to pay cash dividends on our common stock in the foreseeable future.

do not own or lease any real property.

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.

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 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 .

We do not have a

full-time chief financial officer.

At present, our chief executive officer, who does not have an accounting background, is also acting

as our chief financial officer.

We do not anticipate that we will be able to hire a qualified chief financial officer unless our financial

condition 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 owners of intellectual property rights.

Our stock price may be volatile and your investment

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

in our common stock.

There can be no assurance that any significant market will ever develop in our common stock.

Because of the low public

float and the absence of any significant trading volume, the reported prices may not reflect the price at which you would be able to sell

shares if you want to sell any shares you own or buy shares if you wish to buy share.

Further, stocks with a low public float may be more

subject to manipulation than a stock that has a significant public float.

The price may fluctuate significantly in response to a number

of factors, many of which are beyond our control.

These factors include, but are not limited to, the following, in addition to the risks

described above and general market and economic conditions:

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;

effect of the COVID-19 pandemic and the response to the pandemic on the market both generally and on penny stocks;

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

in our or securities analysts’ estimate of our financial performance;

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

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

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 agreement with QFL and, even if a default is not claimed, QFL may not provide

financing for us;

effects or perceived effects of the potential convertibility of convertible notes issued by us;

results or anticipated results of litigation by or against us;

anticipated or actual results of our operations;

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

in market valuations of other intellectual property marketing companies;

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

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

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

matters not within our control.

Raising funds by issuing equity or convertible

debt securities could dilute the value of the common stock and impose restrictions on our working capital .

If we were to raise additional

capital by issuing equity securities, either alone or in connection with a non-equity financing, the value of the then outstanding common

stock could decline.

If the additional equity securities were issued at a per share price less than the per share value of the outstanding

shares, which is customary in the private placement of equity securities, the holders of the outstanding shares would suffer a dilution

in value with the issuance of such additional shares.

Because of the low price of our stock and our working capital deficiency, the dilution

to our stockholders could be significant.

We may have difficulty in raising funds through the sale of debt securities because of both

our financial position, the lack of any collateral on which a lender may place a value, and the absence of any history of significant

monetizing of our intellectual property rights.

If we are able to raise funds from the sale of debt securities, the lenders may impose

restrictions on our operations and may impair our working capital as we service any such debt obligations.

Our failure to have filed reports with the

SEC may impair the market for and the value of our common stock and may result in liability to us .

We did not file reports with the

SEC from 2003 until December 2014.

We filed our Form 10-K for the year ended December 31, 2012 on December 15, 2014;

our Form 10-K for

the year ended December 31, 2013 on April 10, 2015;

and our Form 10-K for the year ended December 31, 2014 on August 18, 2015.

to have made such filings may affect both the market for our common stock and the value of our common stock as well as the willingness

of investors to purchase our stock.

Further, because we did not have current information concerning our business and operations available,

we have potential liability resulting from our failure to have been current in our SEC filings, and the SEC has broad power to take action

against us for our failure to have been in compliance with the reporting requirement of the Securities Exchange Act of 1934.

the SEC permits an issuer to file an omnibus 10-K covering the periods for which filings were not made, the SEC is not foreclosed from

seeking enforcement action for our filing delinquencies.

Any such action could have a material adverse effect upon us and the market for

and price of our common stock.

Because we have a classified board of directors,

it may be more difficult for a third party to obtain control of us .

As a result of the approval by our stockholders of our amended and

restated certificate of incorporation, our board of directors is a classified board, which means that at each annual meeting, the stockholder

will vote for only one-third of the board.

A classified board of directors may make it more difficult for a third party to gain control

of us which may affect the opportunity of our stockholders to receive any potential benefit which could be available from a third party

seeking to obtain control over us.

We do not intend to pay any cash dividends

in the foreseeable future .

We have not paid any cash dividends on our common stock and do not intend to pay cash dividends on our

common stock in the foreseeable future.

We do not own or lease any real property.

LEGAL PROCEEDINGS

MINE SAFETY DISCLOSURES.

Not Applicable

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

What changed 10-K

Item 1A. Risk Factors