What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2022-04-01 compared with 2021-04-15 · 45 added, 606 removed, 9 unchanged (99% of the section changed)

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

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

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

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

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

our common stock.

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

common stock.

have not paid any cash dividends to date and do not anticipate or contemplate paying dividends in the foreseeable future.

the present intention of management to utilize all available funds for the development of our business.

Authorized for Issuance under Equity Compensation Agreements

following table gives information concerning common stock that may be issued upon the exercise of options granted to certain officers,

directors and consultants under their respective individual compensation agreements with us as of December 31, 2020.

MARKET FOR REGISTRANT’S

COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market Information

Our common stock trades on the OTCQB market under

the symbol QPRC.

Any over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and

may not necessarily represent actual transactions.

Stockholders of Record

As of March 22, 2022, we had 417 record holders

of our common stock.

Transfer Agent

Continental Stock Transfer & Trust Company,

One State Street, 30th floor, New York, New York 10004-1561 is the transfer agent for our common stock.

We have not paid any cash dividends to date and

do not anticipate or contemplate paying dividends in the foreseeable future.

It is the present intention of management to utilize all

available funds for the development of our business.

Securities Authorized for Issuance under Equity

Compensation Agreements

The following table gives information concerning

common stock that may be issued upon the exercise of options granted to certain officers, directors and consultants under their respective

individual compensation agreements with us as of December 31, 2021.

Equity Compensation Agreements Information

Plan category

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

average exercise price of outstanding options, warrants and rights

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

available for

As of December 31, 2021

1 unchanged sentence

Equity compensation plans not approved by security holders (1)

summary of the status of our equity grants and changes is set forth below:

10, 2017, the board of directors adopted the 2017 Equity Incentive Plan pursuant to which we can issue up to 150,000,000 shares

of common stock pursuant to non-qualified stock options, restricted stock grants and other equity-based incentives.

31, 2020, 80,000,000 shares are available under the plan.

warrants or options were granted or exercised in 2020.

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

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

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

with QFL, which was February 22, 2021.

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

plan, the board;

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

consultants pursuant to agreements with the consultants;

A summary of the status of our equity grants and

changes is set forth below:

On November 10, 2017, the board of directors adopted the 2017 Equity Incentive Plan (the “Plan”) pursuant to which we can issue up to 150,000,000 shares of common stock pursuant to non-qualified stock options, restricted stock grants and other equity-based incentives.

On February 19, 2021, the board of directors amended the Plan increasing the shares we can issue under the plan to 500,000,000 shares of common stock pursuant to non-qualified stock options, restricted stock grants and other equity-based incentives, and the amendment to the Plan became effective upon the closing of the agreements with QFL, which was February 22, 2021.

At December 31, 2021, 176,000,000 shares are available under the plan.

In connection with the increase in the shares

of common stock issuable pursuant to the plan, the board in 2021;

● granted restricted stock grants for 10,000,000 shares, which vested

immediately, to each of three consultants pursuant to agreements with the consultants;

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

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

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

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

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

Scahill (10,000,000

shares) and Dr.

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

a restricted stock grant to Ryan T.

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

his appointment as a director;

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

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

Logue for 5,000,000 shares upon his acceptance of his appointment as a director;

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

the options to vest as provided in their agreements;

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

which vest in installments as described under Item 11.

Scahill, which vest in installments as described under

Executive Compensation.

sales of unregistered securities.

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

were reported in our SEC filings.

SELECTED FINANCIAL DATA

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

the information under this item.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

following discussion and analysis of financial condition and results of operations should be read in conjunction with our consolidated

financial statements and related notes included elsewhere in this report.

This discussion contains forward-looking statements

that involve risks, uncertainties and assumptions.

See “Note Regarding Forward-Looking Statements.”

Our actual results

could differ materially from those anticipated in the forward-looking statements as a result of certain factors discussed in “Risk

Factors”

and elsewhere in this report.

principal operations include the development, acquisition, licensing and enforcement of intellectual property rights that are

either owned or controlled by us or one of our wholly owned subsidiaries.

We currently own, control or manage ten intellectual

property portfolios, which principally consist of patent rights.

As part of our intellectual property asset management activities

and in the ordinary course of our business, it has been necessary for either us or the intellectual property owner who we represent

to initiate, and it is likely to continue to be necessary to initiate, patent infringement lawsuits and engage in patent infringement

generate revenue from two sources:

Patent licensing

fees relating to our intellectual property portfolio, which includes fees from the licensing of our intellectual property,

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

Licensed packaging

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

in the year ended December 31, 2020.

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

We do not currently receive

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

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

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

Our gross profit from sales

reflects the cost of contract manufacturing and labor.

We did not generate any revenue from the TurtlePak TM Portfolio

other than from the sale of products using our technology.

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

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

Thus, we would recognize revenue when we enter into the

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

Although we intend to seek to develop portfolios

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

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

continuing stream of revenue.

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

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

Our gross profit from license fees reflects

any royalties which we pay in connection with our license.

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

of the recovery, thus reducing our recovery in connection with any settlement of the litigation.

To the extent that our counsel

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

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

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

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

All of these payments, which are reflected as cost

of revenues, significantly reduce the net payment to us.

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

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

30, 2020 to United Wireless.

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

assigned to Intelligent Partners.

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

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

The notes became due by their terms

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

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

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

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

Accordingly, we did not generate any revenue

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

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

for QFL and Intelligent Partners

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

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

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

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

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

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

In return we transferred

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

We used $1,750,000 of proceeds

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

Our obligations

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

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

We also granted QFL a ten-year

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

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

exercisability.

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

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

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

A portion of any gain from sale of the

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

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

We also agreed to take all commercially reasonable steps

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

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

We also granted QFL certain board observation rights.

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

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

After QFL has received a negotiated

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

we retain 100% of all net proceeds.

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

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

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

Contemporaneously

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

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

As part of the restructure

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

monetization proceeds from any new intellectual property we acquire.

Under these MPAs, Intelligent Partners receives a 60% interest

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

Intelligent Partners also participates

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

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

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

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

$1,000,000, Intelligent Partners’

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

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

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

Partners’

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

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

agreements reach $2,805,000.

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

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

Royalties, Contingent Litigation Funding Fees and Contingent Legal Expenses

connection with the investment in certain patents and patent rights, certain of our operating subsidiaries executed agreements

which grant to the former owners of the respective patents or patent rights, the right to receive inventor royalties based on

future net revenues (as defined in the respective agreements) generated as a result of licensing and otherwise enforcing the respective

patents or patent portfolios.

operating subsidiaries may engage third party funding sources to provide funding for patent licensing and enforcement.

The agreements

with the third party funding sources may provide that the funding source receives a portion of any negotiated fees, settlements

or judgments.

In certain instances, these third party funding sources are entitled to receive a significant percentage of any

proceeds realized until the third party funder has recouped agreed upon amounts based on formulas set forth in the underlying

funding agreement, which may reduce or delay and proceeds due to us.

operating subsidiaries may retain the services of law firms in connection with their licensing and enforcement activities.

law firms may be retained on a contingent fee basis whereby the law firms are paid by the funding source on a scaled percentage

of any negotiated fees, settlements or judgments awarded based on how and when the fees, settlements or judgments are obtained.

Depending on the amount of any recovery, it is possible that all the proceeds from a specific settlement may be paid to the funding

source and legal counsel.

economic terms of the inventor agreements, funding agreements and contingent legal fee arrangements associated with the patent

portfolios owned or controlled by our operating subsidiaries, if any, including royalty rates, proceeds sharing rates, contingent

fee rates and other terms, vary across the patent portfolios owned or controlled by the operating subsidiaries.

Inventor royalties,

payments to non-controlling interests, payments to third party funding providers and contingent legal fees expenses fluctuate

period to period, based on the amount of revenues recognized each period, the terms and conditions of revenue agreements executed

each period and the mix of specific patent portfolios with varying economic terms and obligations generating revenues each period.

Inventor royalties, payments to third party funding sources and contingent legal fees expenses will continue to fluctuate and

may continue to vary significantly period to period, based primarily on these factors.

December 2018, we entered into a funding agreement whereby a third party agreed to provide funds to us to enable us to support

our structured licensing programs for the CMOS and M-RED portfolios.

Under the funding agreement, the third party receives an

interest in the proceeds from the programs, and we have no other obligation to the third party.

As of December 31, 2020, the third

party funding source advanced $150,000 for costs and expenses, and has no further obligation to provide additional funds.

the terms of the funding agreement, the third party funder is entitled to a priority return of funds advanced from net proceeds

connection with any litigation seeking to enforce our intellectual property rights, it is possible that a defendant may request

and/or a court may rule that an operating subsidiary has 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 its operating subsidiaries or award attorney’s fees and/or expenses to

a defendant(s), which could be material, and if required to be paid by us or its operating subsidiaries, could materially harm

our operating results and financial position.

Since the operating subsidiaries do not have any assets other than the patents,

and the Company does not have any available financial resources to pay any judgment which a defendant may obtain against a subsidiary,

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

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

The actions are described in Item 1.

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

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

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

Stock Grants and Options

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

shares) all of which vested immediately.

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

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

officer (60,000,000 shares).

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

exercisable as follows:

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

trading of the Common Stock on the OTCQB;

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

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

equity of at least $5,000,000;

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

Market or the New York Stock Exchange.

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

Black-Scholes valuation, as the options become exercisable.

of Operations

Ended December 31, 2020 and 2019

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

Year ended December 31,

Patent licensing fees

Licensed packaging sales

Cost of revenues:

Cost of sales

Litigation and licensing expenses

Management support services

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

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

Our licensing fees

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

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

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

upon the results of pending and future litigation.

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

fees in the future.

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

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

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

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

Portfolio and the CMOS Portfolio litigations.

Our revenue, at least in the near future if not longer, may be affected by factors

relating to the COVID-19 pandemic.

See “Item 1.

Business –

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

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

Our cost of revenue includes

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

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

Cost of revenue for 2020 includes

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

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

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

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

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

and approximately $5,000 relating to TurtlePak TM .

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

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

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

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

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

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

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

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

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

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

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

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

See Note 4 of Notes to Consolidated Financial Statements.

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

The income tax expense results

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

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

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

and Capital Resources

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

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

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

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

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

As of December 31, 2020, we have an

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

Other than salary to our

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

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

Because our agreements with our litigation

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

covered by the funding sources.

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

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

under “Agreements for QFL and Intelligent Partners.”

If the note payable to Intelligent Partners were excluded from

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

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

Our cash flow

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

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

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

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

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

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

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

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

and accrued but unpaid interest of $8,700.

Cash flow from financing activities for 2020 reflected

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

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

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

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

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

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

third parties.

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

In 2019, non-cash investing and financing activities consisted

of an account payable of $1,238,219 representing the $1,500,000 payment due to Intellectual Ventures, net of $75,000 advanced

at closing and imputed interest of $336,781.

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

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

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

Historically,

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

In October 2015, we entered into an agreement with United

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

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

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

and under “Recent Developments”

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

Accounting Policies

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

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

The preparation of

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

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

of our products, income taxes and contingencies.

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

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

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

Actual results may differ from these estimates

under different assumptions or conditions.

of Consolidation

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

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

of Estimates and Assumptions

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

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

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

during the reporting period.

Actual results could differ from those estimates.

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

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

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

in exchange for those goods or services.

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

the contract with the customer

the performance obligations in the contract

the transaction price

the transaction price to the performance obligations in the contract

revenue when the company satisfies a performance obligation

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

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

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

A performance obligation meets

ASC 606’s definition of a “distinct”

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

criteria are met:

The customer can

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

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

The entity’s

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

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

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

or services is identified that is distinct.

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

goods or services to a customer.

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

amounts, or both.

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

Variable consideration

Constraining estimates

of variable consideration

The existence of

a significant financing component in the contract

Noncash consideration

Consideration payable

to a customer

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

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

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

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

in time or over time as appropriate.

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

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

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

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

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

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

for licensed sales.

Licensing Fees

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

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

Revenue contracts that provide promises to grant “the right”

to use intellectual property rights as they exist at

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

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

all other revenue recognition criteria have been met.

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

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

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

Intellectual property rights granted

included the following, as applicable:

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

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

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

The intellectual property rights granted were

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

The individual intellectual property

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

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

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

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

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

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

contract as a single performance obligation.

The intellectual property rights granted were “functional IP rights”

that have significant standalone functionality.

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

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

The Company’s subsidiaries have

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

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

The contracts provide for the grant (i.e.

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

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

As such, the earnings process is complete

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

criteria have been met.

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

of the contract.

Contractual payments made by licensees are generally non-refundable.

We do not have any significant payment terms,

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

component or consideration payable to the customer in these transactions.

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

purchase orders.

There was no sales-based revenue in 2020.

There is only one distinct performance obligation in each purchase

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

readily available to the customer.

For licensed sales, the transaction price is allocated to the performance obligation on a relative

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

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

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

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

Notwithstanding, revenue is recognized for a licensed

sale when the performance obligation has been satisfied –

transfer of the good to the customer.

The purchase order

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

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

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

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

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

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

These costs are included

under the caption “Cost of revenues”

in the accompanying consolidated statements of operations.

No such fees are recognized

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

Royalties, Contingent Litigation Funding Fees and Contingent Legal Expenses.

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

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

are recognized.

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

Accounts receivable, which generally relate to

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

The Company records an allowance for estimated

uncollectible accounts in an amount approximating anticipated losses.

Individual uncollectible accounts are written off against the allowance

when collection of the individual accounts appears doubtful.

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

31, 2020 and December 31, 2019, respectively.

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

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

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

Costs incurred to acquire patents, including legal

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

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

with business combinations.

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

useful lives, ranging from one to ten years.

Certain patent application and prosecution costs incurred to secure additional patent

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

estimated economic useful life of the related patent portfolio.

of long-lived assets

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

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

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

exceeds the fair value.

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

Financial Instruments

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

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

for it as a separate derivative liability.

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

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

reported in the statements of operations.

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

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

to value the derivative instruments at inception and on subsequent

valuation dates.

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

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

Derivative instrument liabilities are classified in the balance

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

months after the balance sheet date.

Value of Financial Instruments

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

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

ASC 820 establishes a common definition for fair value

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

fair value and expands disclosure about such fair value measurements.

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

between market participants at the measurement date.

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

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

These inputs are prioritized below:

Observable inputs

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

Observable market-based

inputs or unobservable inputs that are corroborated by market data

Unobservable inputs

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

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

was effective for January 1, 2008.

ASC 825-10-25 expands opportunities

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

certain other items at fair value.

We record revenues on a gross basis, before deduction

for income taxes.

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

respectively.

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

Stock Compensation,”

which prescribes

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

non-employee services, are acquired.

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

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

Stock-based payments to employees,

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

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

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

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

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

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

model in accounting for all leases (including

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

Recognition, measurement and presentation

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

Similar modifications have been made to lessor accounting

in-line with revenue recognition guidance.

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

financial position or results of operations.

Accounting Pronouncements

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

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

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

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

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

our low stock price and the absence of a trading market

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

These conditions raise

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

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

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

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

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

Sheet Arrangements

have no off-balance sheet arrangements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

the information under this item.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

financial statements start on Page F-1.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Recent sales of unregistered securities.

We did not sell any unregistered securities during

since the beginning of the year ended December 31, 2021 other than issuances that were reported in our SEC filings.

We are a smaller reporting company as defined

by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

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

What changed 10-K

Item 5. Market for Registrant’s Common Equity