What changed in this filing

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Item 9A. Controls and Procedures

2022-04-01 compared with 2021-04-15 · 1394 added, 1300 removed, 283 unchanged (90% of the section changed)

CONTROLS AND PROCEDURES

Management’s

Conclusions Regarding Effectiveness of Disclosure Controls and Procedures

conducted an evaluation of the effectiveness of our “disclosure controls and procedures”

(“Disclosure Controls”),

as defined by Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),

as of December 31, 2020, the end of the period covered by this Annual Report on Form 10-K.

The Disclosure Controls evaluation

was done under the supervision and with the participation of management, including our chief executive officer and chief financial

officer, who is the same person and our sole full-time employee.

There are inherent limitations to the effectiveness of any system

Management’s Conclusions Regarding Effectiveness

of Disclosure Controls and Procedures

Accordingly, even effective disclosure controls and procedures can only provide reasonable

assurance of achieving their control objectives.

Based upon this evaluation, our chief executive officer and chief financial officer

concluded that, due to our limited internal audit function and our very limited staff, our disclosure controls were not effective

as of December 31, 2020, such that the information required to be disclosed by us in reports filed under the Securities Exchange

Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and

forms and (ii) accumulated and communicated to the chief executive officer/chief financial officer, as appropriate to allow timely

decisions regarding disclosure.

Management’s

Report on Internal Control over Financial Reporting

management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules

13a-15(f) and 15d-15(f) under the Securities Exchange Act.

Our management is also required to assess and report on the effectiveness

of our internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 (“Section

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2020.

making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission

(COSO) in Internal Control - Integrated Framework.

During our assessment of the effectiveness of internal control over financial

reporting as of December 31, 2020, management identified material weaknesses related to (i) our internal audit functions (ii)

inadequate levels of review of the financial statements and (iii) a lack of segregation of duties within accounting functions.

We conducted an evaluation of the effectiveness

of our “disclosure controls and procedures” (“Disclosure Controls”), as defined by Rules 13a-15(e) and 15d-15(e)

of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of December 31, 2021, the end of the period covered

by this Annual Report on Form 10-K.

The Disclosure Controls evaluation was done under the supervision and with the participation

of management, including our chief executive officer and chief financial officer, who is the same person and our sole full-time employee.

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures.

Accordingly, even effective disclosure

controls and procedures can only provide reasonable assurance of achieving their control objectives.

Based upon this evaluation, our chief

executive officer and chief financial officer concluded that, due to our limited internal audit function and our very limited staff, our

disclosure controls were not effective as of December 31, 2021, such that the information required to be disclosed by us in reports filed

under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the

SEC’s rules and forms and (ii) accumulated and communicated to the chief executive officer/chief financial officer, as appropriate

to allow timely decisions regarding disclosure.

Management’s Report on Internal Control

over Financial Reporting

Our management is responsible for establishing

and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange

Our management is also required to assess and report on the effectiveness of our internal control over financial reporting in accordance

with Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”).

Management assessed the effectiveness of our internal

control over financial reporting as of December 31, 2021.

In making this assessment, we used the criteria set forth by the Committee of

Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework.

During our assessment of the effectiveness

of internal control over financial reporting as of December 31, 2021, management identified material weaknesses related to (i) our internal

audit functions (ii) inadequate levels of review of the financial statements and (iii) a lack of segregation of duties within accounting

Therefore, our internal controls over financial reporting were not effective as of December 31, 2021.

has determined that our internal controls contain material weaknesses due to the absence of segregation of duties, as well as

lack of qualified accounting personnel and excessive reliance on third party consultants for accounting, financial reporting and

related activities.

The lack of any separation of duties, with the same person, who is our only full time employee, serving as

both chief executive officer and chief financial officer, and who does not have an accounting background, makes it unlikely that

we will be able to implement effective internal controls over financial reporting in the near future.

to our size and nature, segregation of all conflicting duties is not possible.

However, to the extent possible, we plan to implement

procedures to assure that the initiation of transactions, the custody of assets and the recording of transactions will be performed

by separate individuals if and when we have sufficient income to enable us to hire such individuals, and we cannot give any assurance

that we will be able to hire such personnel.

Since we became engaged in the intellectual property management business in 2008

we have not had the financial resources 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 financial condition makes it difficult for us to implement

a system of internal controls over financial reporting.

we generate significantly greater revenues and employ accounting personnel, it is doubtful that we will be able implement any

system which provides us with any degree of internal controls over financial reporting.

Due to the nature of this material weakness

in our internal control over financial reporting, there is more than a remote likelihood that misstatements which could be material

to our annual or interim financial statements could not be prevented or detected.

material weakness (within the meaning of PCAOB Auditing Standard No.

5) is a deficiency, or a combination of deficiencies, in

internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual

or interim financial statements will not be prevented or detected on a timely basis.

A significant deficiency is a deficiency,

or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet

important enough to merit attention by those responsible for oversight of our financial reporting.

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Projections of

any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes

in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

in Internal Control over Financial Reporting.

the period ended December 31, 2020, there was no change in our internal control over financial reporting (as such term is defined

in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal

control over financial reporting.

Management has determined that our internal controls

contain material weaknesses due to the absence of segregation of duties, as well as lack of qualified accounting personnel and excessive

reliance on third party consultants for accounting, financial reporting and related activities.

The lack of any separation of duties,

with the same person, who is our only full time employee, serving as both chief executive officer and chief financial officer, and who

does not have an accounting background, makes it unlikely that we will be able to implement effective internal controls over financial

reporting in the near future.

Due to our size and nature, segregation of all

conflicting duties is not possible.

However, to the extent possible, we plan to implement procedures to assure that the initiation of

transactions, the custody of assets and the recording of transactions will be performed by separate individuals if and when we have sufficient

income to enable us to hire such individuals, and we cannot give any assurance that we will be able to hire such personnel.

Since we became

engaged in the intellectual property management business in 2008 we have not had the financial resources 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 financial

condition makes it difficult for us to implement a system of internal controls over financial reporting.

Until we generate significantly greater revenues

and employ accounting personnel, it is doubtful that we will be able implement any system which provides us with any degree of internal

controls over financial reporting.

Due to the nature of this material weakness in our internal control over financial reporting, there

is more than a remote likelihood that misstatements which could be material to our annual or interim financial statements could not be

prevented or detected.

A material weakness (within the meaning of PCAOB

Auditing Standard No.

5) is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there

is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected

on a timely basis.

A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting

that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of our financial

Because of its inherent limitations, internal

control over financial reporting may not prevent or detect misstatements.

Projections of any evaluation of effectiveness to future periods

are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the

policies and procedures may deteriorate.

Changes in Internal Control over Financial

During the period ended December 31, 2021, there

was no change in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that

has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

following table presents information with respect to our officers, directors:

Chief executive

officer, president, acting chief financial officer, secretary and director

Chief technology

officer and director

DISCLOSURE REGARDING FOREIGN JURISDICTIONS

THAT PREVENT INSPECTIONS.

Not applicable.

DIRECTORS, EXECUTIVE OFFICERS AND

CORPORATE GOVERNANCE

The following table presents information with

respect to our officers, directors:

Chief executive officer, president, acting chief financial officer, secretary and director

Chief technology officer and director

William Ryall Carroll

to January 2016, our directors were elected to serve for a term of one year until our next annual meeting of the stockholders

or unless he resigns earlier.

On January 22, 2016, following approval by the stockholders, we amended and restated our certificate

of incorporation.

Our amended and restated certificate of incorporation provides for a classified board of directors.

Our classified

board of directors has three classes of directors –

Class I directors, Class II directors and Class III directors.

I director has a term of which expired in 2020, the Class II director has a term which expired in 2018, and the Class III director

has a term which expired in 2019.

Prior to January 2016, our directors were elected

to serve for a term of one year until our next annual meeting of the stockholders or unless he resigns earlier.

On January 22, 2016, following

approval by the stockholders, we amended and restated our certificate of incorporation.

Our amended and restated certificate of incorporation

provides for a classified board of directors.

Our classified board of directors has three classes of directors – Class I directors,

Class II directors and Class III directors.

The Class I director has a term of which expired in 2020, the Class II director has a term

which expired in 2018, and the Class III director has a term which expired in 2019.

Directors are elected for a term of three years.

Since we did not have an annual meeting of

stockholders in 2018, 2019 and 2020, the Class I, Class II and Class III directors continue in office until the next meeting of

stockholders, at which all directors will be elected.

Scahill, a Class I director, has been president and chief executive officer since January 2014 and a director since 2007.

was appointed secretary in April 2014.

He also served as president and chief operating officer from May 2007 to December 2013.

we did not have an annual meeting of stockholders in 2018, 2019 and 2020, the Class I, Class II and Class III directors continue in office

until the next meeting of stockholders, at which all directors will be elected.

Scahill, a Class I director, has been president

and chief executive officer since January 2014 and a director since 2007.

He was appointed secretary in April 2014.

He also served as

president and chief operating officer from May 2007 to December 2013.

From December 2006 to May 2007, Mr.

Scahill was founder and managing director of the Urban-Rigney Group, LLC, a private consultancy

specializing in new business/new venture development, operations optimization, and strategic analysis.

Prior to launching his

consultancy business, Mr.

Scahill held numerous positions in sales and marketing, technical management, and product development

in the consumer products/flexible packaging arena.

Scahill was founder and managing

director of the Urban-Rigney Group, LLC, a private consultancy specializing in new business/new venture development, operations optimization,

and strategic analysis.

Prior to launching his consultancy business, Mr.

Scahill held numerous positions in sales and marketing, technical

management, and product development in the consumer products/flexible packaging arena.

Scahill holds a B.S.

in chemical engineering from the University of Rochester,

an MBA in finance, strategy and operations from Rochester’s Simon Graduate School of Business and a JD from Pace Law School.

Scahill is admitted to practice in New York, Florida and the District of Columbia, and he is a registered patent attorney

admitted to practice before the United States Patent and Trademark Office.

Scahill, a Class II director, has a director since October 2014 and our chief technology officer since 2007.

also currently a managing partner of Managed Services Team LLC, an IT services provider.

Prior to Managed Services Team, he was

president of Layer 8 Group, Inc.

from August 2005 to December 2012, at which time Layer 8 merged with Structured Technologies

in chemical engineering

from the University of Rochester, an MBA in finance, strategy and operations from Rochester’s Simon Graduate School of Business

and a JD from Pace Law School.

Scahill is admitted to practice in New York, Florida and the District of Columbia, and he is a registered

patent attorney admitted to practice before the United States Patent and Trademark Office.

Scahill, a Class II director, has a

director since October 2014 and our chief technology officer since 2007.

Scahill is also currently a managing partner of Managed Services

Team LLC, an IT services provider.

Prior to Managed Services Team, he was president of Layer 8 Group, Inc.

from August 2005 to December

2012, at which time Layer 8 merged with Structured Technologies Inc.

to form Managed Services Team LLC.

In his roles he has taken the responsibility for business strategy, acquisition, execution,

as well as financial management.

His entrepreneurial acumen and proven record of successful management with sole discretionary

responsibility, demonstrate the scope of his capability and his value to delivering results.

He serves on the boards of the Upstate

New York Technology Council, is an investor in Greater Rochester Enterprise, Pariemus Rochester and also serves on the Corporate

Advisory Board for Habitat for Humanity.

He is a member of Greater Rochester Enterprise and CEO Roundtable Chair.

William Ryall Carroll, a Class III director, has been a director since October 2014.

Carroll has been associate professor

and chairman of the marketing department at St.

John’s University College of Business since July 2014.

From September 2008

until June 2014, Dr.

Carroll was an assistant professor in the marketing department of St.

John’s University College of

Carroll is founder, chief executive officer and owner of Raiserve Inc., a web-based platform for monetizing non-profit

programmatic work in the area of service formed in October 2014.

Carroll’s research focuses on consumer behavior and

behavioral decision theory.

Carroll’s work has been published in top academic journals including the Journal of Advertising,

Marketing Letters, as well in books such as Psycholinguistic Phenomena in Marketing Communications.

In addition to his research

Carroll has taught Marketing at the executive, graduate and undergraduate level across in the United States, Europe and Asia.

In his roles he has taken the

responsibility for business strategy, acquisition, execution, as well as financial management.

His entrepreneurial acumen and proven record

of successful management with sole discretionary responsibility, demonstrate the scope of his capability and his value to delivering results.

He serves on the boards of the Upstate New York Technology Council, is an investor in Greater Rochester Enterprise, Pariemus Rochester

and also serves on the Corporate Advisory Board for Habitat for Humanity.

He is a member of Greater Rochester Enterprise and CEO Roundtable

William Ryall Carroll, a Class III director,

has been a director since October 2014.

Carroll has been associate professor and chairman of the marketing department at St.

University College of Business since July 2014.

From September 2008 until June 2014, Dr.

Carroll was an assistant professor in the marketing

department of St.

John’s University College of Business.

Carroll is founder, chief executive officer and owner of Raiserve Inc.,

a web-based platform for monetizing non-profit programmatic work in the area of service formed in October 2014.

Carroll’s research

focuses on consumer behavior and behavioral decision theory.

Carroll’s work has been published in top academic journals including

the Journal of Advertising, Marketing Letters, as well in books such as Psycholinguistic Phenomena in Marketing Communications.

to his research Dr.

Carroll has taught Marketing at the executive, graduate and undergraduate level across in the United States, Europe

Prior to pursuing his academic career, Dr.

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and Ralston Purina Company.

Carroll earned his BA in Economics from the University of Rochester, his MS in Marketing Research

from the University of Texas in Arlington, and his PhD from City University of New York –

Baruch College.

Logue, a Class I director, is an investment advisory representative Lincoln Investment, a position he has held since 2019.

Prior to joining Lincoln Investment, he spent 16 years with Morgan Stanley in the private wealth management department.

has spent the majority of his career focused on investing in both public and private opportunities department.

Logue graduated

with a BA from Colgate University and an MBA from Columbia University and has previously served on the board of the Columbia Alumni

Association of Fairfield County.

Carroll earned his BA in Economics from the University of Rochester, his MS in Marketing Research from

the University of Texas in Arlington, and his PhD from City University of New York – Baruch College.

Logue, a Class I director, is an investment

advisory representative Lincoln Investment, a position he has held since 2019.

Prior to joining Lincoln Investment, he spent 16 years

with Morgan Stanley in the private wealth management department.

Logue has spent the majority of his career focused on investing in

both public and private opportunities department.

Logue graduated with a BA from Colgate University and an MBA from Columbia University

and has previously served on the board of the Columbia Alumni Association of Fairfield County.

Scahill and Jon C.

Scahill are first cousins.

Scahill are first

Director Independence

Carroll and Mr.

Logue are “independent”

directors based on the definition of independence in the listing standards

have not yet adopted a code of ethics that applies to our principal executive officers, principal financial officer, principal

accounting officer or controller, or persons performing similar functions, since we have been focusing our efforts on developing

our business.

Logue are “independent”

directors based on the definition of independence in the listing standards of the NYSE.

Code of Ethics

We have not yet adopted a code of ethics that

applies to our principal executive officers, principal financial officer, principal accounting officer or controller, or persons performing

similar functions, since we have been focusing our efforts on developing our business.

We expect to adopt a code as we develop our business.

of the Board of Directors

do not have any committees of our board of directors.

with Section 16(a) of the Securities Exchange Act of 1934

16(a) of the Securities Exchange Act of 1934, as amended, requires executive officers and directors of issuers whose securities

are registered pursuant to the Securities Exchange Act and persons who own more than 10% of a registered class of our equity securities

to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning

their ownership of the our common stock and other equity securities, on Form 3, 4 and 5 respectively.

Because our common stock

is not registered pursuant to the Securities Exchange Act, our officers, directors and 10% stockholders are not required to make

such filings.

EXECUTIVE COMPENSATION

following summary compensation table sets forth information concerning compensation for services rendered in all capacities during

the years ended December 31, 2020 and 2019, earned by or paid to our executive officers.

and Principal

Committees of the Board of Directors

We do not have any committees of our board of

Compliance with Section 16(a) of the Securities

Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of

1934, as amended, requires executive officers and directors of issuers whose securities are registered pursuant to the Securities Exchange

Act and persons who own more than 10% of a registered class of our equity securities to file with the SEC initial statements of beneficial

ownership, reports of changes in ownership and annual reports concerning their ownership of the our common stock and other equity securities,

on Form 3, 4 and 5 respectively.

Because our common stock is not registered pursuant to the Securities Exchange Act, our officers, directors

and 10% stockholders are not required to make such filings.

The following summary compensation table sets

forth information concerning compensation for services rendered in all capacities during the years ended December 31, 2021 and 2020, earned

by or paid to our executive officers.

Name and Principal Position

Options/ Warrant

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Deferred Earnings

Compensation (3)

CEO and President

Represents the payments

made by the Company under the SEP IRA adopted in March 2020

Represents the value of 49,000,000 shares granted Mr.

Scahill in 2021

Represents the value of an option to purchase 20,000,000 shares of

Represents the payments made by the Company under the SEP IRA adopted in March 2020

Employment Agreements

Pursuant to the restated employment agreement,

1 unchanged sentence

Scahill as president and chief executive officer for a term of three years, commencing

January 1, 2014, and continuing on a year-to-year basis unless terminated by either party on not less than 90 days’

January 1, 2014, and continuing on a year-to-year basis unless terminated by either party on not less than 90 days’ notice prior

to the expiration of the initial term or any one-year extension.

2 unchanged sentences

In March 2016, the board of directors increased Mr.

Scahill’s

annual salary to $300,000, effective January 1, 2016.

13 unchanged sentences

In the event that we terminate Mr.

Scahill’s employment other than for cause or as a result

of his death or disability, we will pay him severance equal to his salary for the balance of the term and, if he received a bonus for

8 unchanged sentences

employee covered by the plan.

March 2020, we adopted a SEP IRA plan for our employees pursuant to which we deposit into a SEP IRA account of each of our participating

employees a percentage of the employee’s compensation, subject to statutory limitations on the amount of the contribution

all as set forth in the IRS Form 5305-SEP presented to and reviewed by the directors of this Corporation.

For the year ending

December 31, 2020 the percentage was set at 19%.

Scahill is our only employee covered by the plan.

Pension Benefits

In March 2020, we adopted a SEP IRA plan for our

employees pursuant to which we deposit into a SEP IRA account of each of our participating employees a percentage of the employee’s

compensation, subject to statutory limitations on the amount of the contribution all as set forth in the IRS Form 5305-SEP presented to

and reviewed by the directors of this Corporation.

For the year ending December 31, 2021 the percentage was set at 19%.

our only employee covered by the plan.

2017 Equity Incentive Plan

November 10, 2017, the board of directors adopted the 2017 Equity Incentive Plan (the “Plan”) pursuant to which 150,000,000

shares of common stock may be issued.

In February 2021, the board amended the Plan to increase the number of shares subject to

the plan to 500,000,000.

Set forth below is a summary of the plan, as amended, but this summary is qualified in its entirety by

reference to the full text of the plan, a copy of which is included as an exhibit to this annual report.

plan provides for the grant of non-qualified options, stock grants and other equity-based incentives to employees, including officers,

directors and consultants.

February 19, 2021, the board of directors:

restricted stock grants for 10,000,000 share, which vested immediately upon grant, to

each of three consultants pursuant to agreements with the consultants;

restricted stock grants for a total of 69,000,000 shares, which vested immediately upon

grant, to our directors, Jon C.

On November 10, 2017, the board of directors adopted

the 2017 Equity Incentive Plan (the “Plan”) pursuant to which 150,000,000 shares of common stock may be issued.

2021, the board amended the Plan to increase the number of shares subject to the plan to 500,000,000.

Set forth below is a summary of

the plan, as amended, but this summary is qualified in its entirety by reference to the full text of the plan, a copy of which is included

as an exhibit to this annual report.

The plan provides for the grant of non-qualified

options, stock grants and other equity-based incentives to employees, including officers, directors and consultants.

On February 19, 2021, the board of directors:

granted restricted stock grants for 10,000,000 shares, which vested in full immediately upon issuance, to each of three consultants pursuant to agreements with the consultants;

granted restricted stock grants for a total of 69,000,000 shares, which vested in full immediately upon issuance, to our directors, Jon C.

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

Scahill (10,000,000

shares) and Dr.

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;

granted a restricted stock grant to Ryan T.

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

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

which vest in installments as described under Item 11.

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

Scahill, which vest in installments as described under Item 11.

Executive Compensation.

options granted to two of the consultants, William Gates and Crystal Nicolson, become exercisable as follows:

shares at an exercise price of $0.01 per share becoming exercisable upon the commencement

of trading of the Common Stock on the OTCQB.

shares at an exercise price of $0.03 per share, becoming exercisable on the first day

on which the Company files with the SEC a Form 10-K or Form 10-Q which stockholders’

equity of at least $5,000,000, and

shares at an exercise price of $0.05/share becoming exercisable on the date on which

the Common Stock is listed for trading on the Nasdaq Stock Market or the New York Stock

options granted the third consultant, Jeff Toler, become exercisable as follows:

shares at an exercise price of $0.01 per share upon the first anniversary of the agreement.

shares at an exercise price of $0.03 per share upon the second anniversary of the agreement;

shares at an exercise price of $0.05 per share upon the third anniversary of the agreement.

options granted to Jon C.

Scahill become exercisable as follows:

shares at an exercise price of $0.01 per share becoming exercisable upon the commencement

of trading of the Common Stock on the OTCQB.

shares at an exercise price of $0.03 per share, becoming exercisable on the first day

on which the Company files with the SEC a Form 10-K or Form 10-Q which stockholders’

equity of at least $5,000,000, and

shares at an exercise price of $0.05/share becoming exercisable on the date on which

the Common Stock is listed for trading on the Nasdaq Stock Market or the New York Stock

Equity Awards at Fiscal Year-End

were no outstanding equity awards granted to and held by the officers as of December 31, 2020.

Directors’

do not have any agreements or formal plan for compensating our directors for their service in their capacity as directors, although

our board has, and may in the future, award stock grants or options to purchase shares of common stock to our directors.

following table provides information concerning the compensation of each member of our board of directors whose compensation is

not included in the Summary Compensation Table for his services as a director for 2020.

The options granted to two of the consultants become exercisable as

10,000,000 shares at an exercise price of $0.01 per share becoming exercisable upon the commencement of trading of the Common Stock on the OTCQB which occurred on May 7, 2021.

10,000,000 shares at an exercise price of $0.03 per share, becoming exercisable on the first day on which the Company files with the SEC a Form 10-K or Form 10-Q which stockholders’ equity of at least $5,000,000, and

10,000,000 shares at an exercise price of $0.05 per share becoming exercisable on the date on which the Common Stock is listed for trading on the Nasdaq Stock Market or the New York Stock Exchange.

The options granted the third consultant become exercisable as follows:

10,000,000 shares at an exercise price of $0.01 per share became exercisable

on February 22, 2022, which was the first anniversary of the date of the agreement.

10,000,000 shares at an exercise price of $0.03 per share upon the second anniversary of the date of the agreement;

10,000,000 shares at an exercise price of $0.05 per share upon the third anniversary of the date of the agreement.

The options granted to Jon C.

Scahill become exercisable

20,000,000 shares at an exercise price of $0.01 per share becoming exercisable upon the commencement of trading of the Common Stock on the OTCQB, which occurred on May 7, 2021.

20,000,000 shares at an exercise price of $0.03 per share, becoming exercisable on the first day on which the Company files with the SEC a Form 10-K or Form 10-Q which stockholders’ equity of at least $5,000,000, and

20,000,000 shares at an exercise price of $0.05/share becoming exercisable on the date on which the Common Stock is listed for trading on the Nasdaq Stock Market or the New York Stock Exchange.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth information as to the outstanding equity

awards granted to and held by the officers named in the Summary Compensation Table as of December 31, 2021.

Option awards

unexercisable

20,000,000 (1)

20,000,000 (2)

20,000,000 (3)

Represents 20,000,000 shares granted to Mr.

Scahill on February 22, 2021 at an exercise price of $0.01 per share becoming exercisable upon the commencement of trading of the Common Stock on the OTCQB.

The Company regained such compliance on May 7, 2021, at which time the common stock recommenced trading on the OTCQB.

Represents 20,000,000 shares granted to Mr.

Scahill on February 22, 2021 at an exercise price of $0.03 per share, becoming exercisable on the first day on which the Company files with the SEC a Form 10-K or Form 10-Q which stockholders” equity of at least $5,000,000

Represents 20,000,000 shares granted to Mr.

Scahill on February 22, 2021 at an exercise price of $0.05 per share becoming exercisable on the date on which the Common Stock is listed for trading on the Nasdaq Stock Market or the New York Stock Exchange

Directors’ Compensation

We do not have any agreements or formal plan for

compensating our directors for their service in their capacity as directors, although our board has, and may in the future, award stock

grants or options to purchase shares of common stock to our directors.

The following table provides information concerning

the compensation of each member of our board of directors whose compensation is not included in the Summary Compensation Table for his

services as a director for 2020.

William Ryall Carroll

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table provides information as to shares

of common stock beneficially owned as of April 13, 2021, by:

The amount under Stock Awards reflects the value

of the stock issued to the named directors.

SECURITY OWNERSHIP OF CERTAIN

BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table provides information as to

shares of common stock beneficially owned as of March 31, 2022, by:

Each director;

Each current officer

named in the summary compensation table;

Each person owning

of record or known by us, based on information provided to us by the persons named below, at least 5% of our common stock;

All directors and

officers as a group.

For purposes of the following table, “beneficial

ownership”

means the sole or shared power to vote, or to direct the voting of, a security, or sole or shared investment power with

Each current officer named in the summary compensation table;

Each person owning of record or known by us, based on information provided to us by the persons named below, at least 5% of our common stock;

All directors and officers as a group.

For purposes of the following table, “beneficial

ownership” means the sole or shared power to vote, or to direct the voting of, a security, or sole or shared investment power with

respect to a security, or any combination thereof, and the right to acquire such power (for example, through the exercise of warrants

granted by us) within 60 days of April 13, 2021.

granted by us) within 60 days of March 31, 2022.

Name and Address (1) of Beneficial Owner

300 Bowie St., Apt.

Austin, TX 78703

Intelligent Partners, LLC (3)

3 unchanged sentences

Austin, TX 78729

3463 State Street

Santa Barbara, CA 93105

William Ryall Carroll

All officers and directors as a group (four individuals)

The address of Jon

The address of Jon C.

Carroll, Timothy J.

Scahill and Ryan T.

Logue is c/o Quest Patent Research Corporation, 411 Theodore Fremd

Ave., Suite 206S, Rye, New York 10580-1411.

Represents (a) 67,407,407

shares owned by Mr.

Logue is c/o Quest Patent Research Corporation, 411 Theodore Fremd Ave., Suite 206S, Rye, New York 10580-1411.

Represents (a) 67,407,407 shares owned by Mr.

Fitton and (b) 50,000,000 shares issuable upon exercise of an option held by Intelligent Partners.

Represents 50,000,000

shares of common stock issuable upon exercise of options held by Intelligent Partners.

Fitton and Michael R.

as the members of Intelligent Partners, have the right to vote and dispose of the shares owned by Intelligent Partners.

Represents (a) 28,888,889

shares of common stock owned by Mr.

Carper and (b) 50,000,000 shares issuable upon exercise of an option held by Intelligent

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

a result of the September 2015 sale to United Wireless of 50,000,000 shares of common stock, representing 13.0% of our common

stock and its right to name a director, United Wireless is a related party as of December 31, 2020.

United Wireless had no relationship

with us prior to the closing of the securities purchase agreement and related agreements in October 2015.

United Wireless transferred

its shares to its principals, Andrew C.

Represents 50,000,000 shares of common stock issuable upon exercise of options held by Intelligent Partners.

Fitton and Michael R.

Carper, it transferred its option, the notes and its remaining rights

under the agreements to Intelligent Partners LLC, of which Mr.

Fitton and Mr.

Carper are the members.

is made to the discussion of our agreements with Intelligent Partners, Mr.

Fitton and Mr.

Carper under “Item 1.

Recent Developments”

and “Overview”

Services Team LLC, an entity for which Timothy Scahill, our chief technology officer and a director, is a managing partner, provides

information technology services to us.

We are obligated to pay for these services at usual and customary rates.

The cost of these

services for 2020 and 2019 was approximately $464 and $464, respectively.

We contracted with a law firm more than 10 percent

owned, but not controlled, by the father-in-law of the chief executive officer.

The firm is engaged on a contingent fee basis and serves

as escrow agent in connection with monetization of our intellectual property rights on matters in which the firm is serving as counsel

In connection with the engagement, we recorded patent service costs of approximately $909,000 and $0 for the years ended December

31, 2020 and 2019, respectively.

The amount recorded in 2020 includes approximately $407,000 in accrued expenses and outstanding as of

Carper, as the members of Intelligent Partners, have the right to vote and dispose of the shares owned by Intelligent Partners.

Represents (a) 28,888,889 shares of common stock owned by Mr.

Carper and (b) 50,000,000 shares issuable upon exercise of an option held by Intelligent Partners.

CERTAIN RELATIONSHIPS AND RELATED

TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Related Transactions

In prior periods, we incurred interest expense

on our 10% notes issued to United Wireless pursuant to the securities purchase agreement dated October 22, 2015 more fully described in

our annual report on Form 10-K for the year ended December 31, 2020.

The notes were extinguished in February 2021 and we did not incur

interest expense on the notes for the year ended December 31, 2021.

The interest expense was approximately $351,000 for the year ended

December 31, 2020.

In prior periods, we engaged a firm at which the father-in-law of the chief executive was formerly a partner.

his interest in the prior firm was less than 10%, the prior firm was not considered a related party in prior periods.

Reference is made to the discussion of our agreements

with Intelligent Partners, Mr.

Fitton and Mr.

Carper under “Item 1.

Business – Summary of Agreements with Intelligent Partners”

and “Agreements with QFL and Intelligent Partners” in Item 7.

Managed Services Team LLC, an entity for which

Timothy Scahill, our chief technology officer and a director, is a managing partner, provides information technology services to us.

are obligated to pay for these services at usual and customary rates.

The cost of these services was approximately $434 and $464 for the

year ended December 31, 2021 and 2020, respectively.

During 2021, we contracted with a law firm more

than 10% owned, but not controlled, by the father-in-law of the chief executive officer.

The firm is engaged on a contingent fee basis

and serves as escrow agent in connection with monetization of our patents in matters where the firm is serving as counsel to us.

In connection

with the engagement, we recorded patent service costs of approximately $763,000 and $909,000 for the years ended December 31, 2021 and

2020 respectively.

The amount recorded in 2020 includes approximately $407,000 in accrued expenses and outstanding as of December 31,

The accrued liability is recorded in “accounts payable and accrued liabilities.” The accrued liability was resolved

as part of a resolution with the firm at which the father-in-law of the chief executive was formerly a partner.

In prior periods, we engaged

a firm at which the father-in-law of the chief executive was formerly a partner.

Because his interest in the prior firm was less than

10%, the prior firm was not considered a related party in prior periods.

Director Independence

Carroll and Mr.

Logue are “independent”

directors based on the definition of independence in the listing standards of the NYSE.

PRINCIPAL ACCOUNTING FEES AND SERVICES

following table sets forth the fees billed by our independent accountants, Malone Bailey, LLP, for each of our last two fiscal

years for the categories of services indicated.

The following table sets forth the fees billed by our independent accountants,

MaloneBailey for 2020 and the first quarter of 2021, and Rosenberg Rich Baker Berman P.A.

(“RRBB”) for the remainder of 2021

for the categories of services indicated.

Fiscal Year Ended

Audit –

All other fees

fees consist of fees related to professional services rendered in connection with the audit of our annual financial statements.

other fees relate to professional services rendered in connection our registration statement.

policy is to pre-approve all audit and permissible non-audit services performed by the independent accountants.

These services

may include audit services, audit-related services, tax services and other services.

Under our audit committee’s policy,

pre-approval is generally provided for particular services or categories of services, including planned services, project based

services and routine consultations.

In addition, the audit committee may also pre-approve particular services on a case-by-case

Our board approved all services that our independent accountants provided to us in the past two fiscal years.

Audit fees – MaloneBailey

Audit fees – RRBB

Audit – related fees

All other fees – Malone Bailey

Audit fees consist of fees related to professional

services rendered in connection with the audit of our annual financial statements.

All other fees relate to professional services

rendered in connection our registration statement.

Our policy is to pre-approve all audit and permissible

non-audit services performed by the independent accountants.

These services may include audit services, audit-related services, tax services

and other services.

Since we do not have an audit committee, the pre-approval is made by the board of directors.

Our board approved all

services that our independent accountants provided to us in the past two fiscal years.

Amended and Restated Articles of Incorporation of the Company.(5)

20 unchanged sentences

Purchase Agreement dated February 19, 2021 among the Company and QPRC Finance LLC (7)

A to Purchase Agreement –

Security Agreement dated February 19, 2021 among the Company and QPRC Finance LLC.

B to Purchase Agreement –

Subsidiary Continuing Guaranty Agreement dated February 19, 2021 among Quest Licensing Corporation, Mariner IC Inc., Semcon IP Inc., IC Kinetics Inc., Quest NetTech Corporation, CXT Systems, Inc., M-Red Inc., Audio Messaging Inc.

A to Purchase Agreement – Security Agreement dated February 19, 2021 among the Company and QPRC Finance LLC.

B to Purchase Agreement – Subsidiary Continuing Guaranty Agreement dated February 19, 2021 among Quest Licensing Corporation, Mariner IC Inc., Semcon IP Inc., IC Kinetics Inc., Quest NetTech Corporation, CXT Systems, Inc., M-Red Inc., Audio Messaging Inc.

and QPRC Finance LLC.

C to Purchase Agreement –

Subsidiary Patent Proceeds Security Agreement dated February 19, 2021 among the Company, Quest Licensing Corporation, Mariner IC Inc., Semcon IP Inc., IC Kinetics Inc., Quest NetTech Corporation, CXT Systems, Inc., M-Red Inc., Audio Messaging Inc.

C to Purchase Agreement – Subsidiary Patent Proceeds Security Agreement dated February 19, 2021 among the Company, Quest Licensing Corporation, Mariner IC Inc., Semcon IP Inc., IC Kinetics Inc., Quest NetTech Corporation, CXT Systems, Inc., M-Red Inc., Audio Messaging Inc.

and QPRC Finance LLC.

D to Purchase Agreement –

Warrant Issuance Agreement dated February 19, 2021 among the Company and QPRC Finance LLC.

E to Purchase Agreement –

Board Observation Rights Agreement dated February 19, 2021 among the Company and QPRC Finance LLC.

Registration Rights Agreement –

dated February 19, 2021 among the Company and QPRC Finance LLC.

Form of Warrant –

dated February 19, 2021 among the Company and QPRC Finance LLC (7)

D to Purchase Agreement – Warrant Issuance Agreement dated February 19, 2021 among the Company and QPRC Finance LLC.

E to Purchase Agreement – Board Observation Rights Agreement dated February 19, 2021 among the Company and QPRC Finance LLC.

Registration Rights Agreement – dated February 19, 2021 among the Company and QPRC Finance LLC.

Form of Warrant – dated February 19, 2021 among the Company and QPRC Finance LLC (7)

Restructure Agreement dated February 19, 2021 among the Company, Quest Licensing Corporation, Mariner IC Inc., Semcon IP Inc., IC Kinetics Inc., Quest NetTech Corporation, CXT Systems, Inc., M-Red Inc., Audio Messaging Inc.

19 unchanged sentences

Form of Option Agreement (8)

Certification

of Chief Executive and Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Executive and Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Section 1350 Certification of the Chief Executive Officer and Chief Financial Officer.

XBRL Instance Document

XBRL Taxonomy Schema Document

XBRL Taxonomy Calculation Document

XBRL Taxonomy Linkbase Document

XBRL Taxonomy Label Linkbase Document

XBRL Taxonomy Presentation Linkbase Document

Incorporated by

reference to the Form 10-K for the year ended December 31, 2012, which was filed by the Company on December 15, 2014.

Filed as an exhibit

to the Company’s Form 8-K, which was filed with the SEC on October 28, 2015 and incorporated herein by reference.

Filed as an exhibit

to the Company’s Form 10-K, for the year ended December 31, 2013, which was filed with the SEC on April 10, 2015.

Filed as exhibit

to Amendment No.

1 to the Company’s registration statement on Form S-1, which was filed with the SEC on February 3,

2016, and incorporated herein by reference.

Filed as an exhibit

to the Company’s Form 8-K, which was filed with the SEC on January 26, 2016 and incorporated herein by reference.

Incorporated by

reference to the Form 10-K for the year ended December 31, 2017, which was filed by the Company on April 2, 2018.

Filed as an exhibit

to the Company’s Form 8-K, which was filed with the SEC on February 24, 2021 and incorporated herein by reference.

Certain portions

of this exhibit are omitted pursuant to an order granting confidential treatment.

The omitted information has been filed separately

with the SEC.

Certain confidential

information has been deleted from this Exhibit.

Inline XBRL Instance Document.

Inline XBRL Taxonomy Extension Schema Document.

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

Inline XBRL Taxonomy Extension Definition Linkbase Document.

Inline XBRL Taxonomy Extension Label Linkbase Document.

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Incorporated by reference to the Form 10-K for the year ended December 31, 2012, which was filed by the Company on December 15, 2014.

Filed as an exhibit to the Company’s Form 8-K, which was filed with the SEC on October 28, 2015 and incorporated herein by reference.

Filed as an exhibit to the Company’s Form 10-K, for the year ended December 31, 2013, which was filed with the SEC on April 10, 2015.

Filed as exhibit to Amendment No.

1 to the Company’s registration statement on Form S-1, which was filed with the SEC on February 3, 2016, and incorporated herein by reference.

Filed as an exhibit to the Company’s Form 8-K, which was filed with the SEC on January 26, 2016 and incorporated herein by reference.

Incorporated by reference to the Form 10-K for the year ended December 31, 2017, which was filed by the Company on April 2, 2018.

Filed as an exhibit to the Company’s Form 8-K, which was filed with the SEC on February 24, 2021 and incorporated herein by reference.

Incorporated by reference to the Form 10-K for the year ended December 31, 2020, which was filed by the Company on April 15, 2021.

Certain portions of this exhibit are omitted pursuant to an order granting confidential treatment.

The omitted information has been filed separately with the SEC.

Certain confidential information has been deleted from this Exhibit.

FORM 10-K SUMMARY

to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf

by the undersigned thereunto duly authorized.

April 15, 2021

PATENT RESEARCH CORPORATION

Executive Officer and President

to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf

of the registrant and in the capacities and on the dates indicated.

Each person whose signature appears below hereby authorizes

Scahill as his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution for him or

her and in his or her name, place and stead, in any and all capacities to sign any and all amendments to this report, and to file

the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission.

Director, chief

executive officer, acting chief financial officer and president

(principal executive,

financial and accounting officer)

Not applicable.

Pursuant to the requirements of the Securities

Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

March 31, 2022

QUEST PATENT RESEARCH CORPORATION

Chief Executive Officer and President

Pursuant to the requirements of the Securities

Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and

on the dates indicated.

Each person whose signature appears below hereby authorizes Jon C.

Scahill as his true and lawful attorney-in-fact

and agent, with full power of substitution and resubstitution for him or her and in his or her name, place and stead, in any and all capacities

to sign any and all amendments to this report, and to file the same, with all exhibits thereto and other documents in connection therewith,

with the Securities and Exchange Commission.

Director, chief executive officer,

March 31, 2022

acting chief financial officer and president

(principal executive, financial and accounting officer)

/s/ Timothy J.

March 31, 2022

William Ryall Carroll

William Ryall

PATENT RESEARCH CORPORATION

to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2020 and 2019

Consolidated Statements of Operations for the years ended December 31, 2020 and 2019

Consolidated Statements of Changes in Stockholders’

Deficit for the years ended December 31, 2020 and 2019

Consolidated Statements of Cash Flows for the years ended December 31, 2020 and 2019

Notes to Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board

of Directors of Quest Patent Research Corporation

March 31, 2022

William Ryall Carroll

March 31, 2022

QUEST PATENT RESEARCH CORPORATION

DECEMBER 31, 2021

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (Rosenberg Rich Baker Berman P.A.

Report of Independent Registered Public Accounting Firm (MaloneBailey, LLP - PCAOB ID:

Consolidated Balance Sheets as of December 31, 2021 and 2020 F-5

Consolidated Statements of Operations for the years ended December 31, 2021 and 2020 F-6

Consolidated Statements of Changes in Stockholders’ Deficit for the years ended December 31, 2021 and 2020 F-7

Consolidated Statements of Cash Flows for the years ended December 31, 2021 and 2020 F-8

Notes to Consolidated Financial Statements F-9

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Stockholders and Board of Directors

of Quest Patent Research Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated

balance sheets of Quest Patent Research Corporation and its subsidiaries (collectively, the “Company”) as of December 31,

2020 and 2019, and the related consolidated statements of operations, changes in stockholders’

deficit, and cash flows for the years

then ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial

statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results

of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the

United States of America.

balance sheets of Quest Patent Research Corporation and its subsidiaries (collectively, the “Company”) as of December 31,

2021, and the related consolidated statement of operations, changes in stockholders’ deficit, and cash flows for the year then ended,

and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present

fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of their operations and

their cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB")

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged

to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal

control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material

misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures

included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included

evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation

of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Emphasis of Matter

The accompanying financial statements have been

prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the financial statements, the Company has

suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue

as a going concern.

Management's plans in regard to these matters are also described in Note 2.

The financial statements do not include

any adjustments that might result from the outcome of this uncertainty.

Our opinion is not modified with respect to that matter.

Critical Audit Matters

Critical audit matters are matters arising from

the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and

(1) relate to accounts or disclosures that are material the financial statements and (2) involved our especially challenging, subjective,

or complex judgments.

We determined that there were no critical audit matters.

/s/ Rosenberg Rich Baker Berman, P.A.

We have served as the Company's auditor since 2021.

Somerset, New Jersey

March 31, 2022

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Stockholders and Board of Directors of

Quest Patent Research Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated

balance sheet of Quest Patent Research Corporation and its subsidiaries (collectively, the “Company”) as of December 31, 2020,

and the related consolidated statements of operations, changes in stockholders’ deficit, and cash flows for the year then ended,

and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present

fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of their operations and

their cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern Matter

The accompanying financial statements have

been prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the financial statements, the Company

has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue

The accompanying financial statements have been

prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the financial statements, the Company has

suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue

as a going concern.

4 unchanged sentences

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB")

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)

and are required to be independent with respect to the Company in accordance with the U.S.

1 unchanged sentence

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with

the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the

financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we

engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding

We conducted our audit in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged

to perform, an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal

1 unchanged sentence

Accordingly, we express no such opinion.

Our audits included performing procedures

to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that

respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as

evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Our audit included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below

is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to

the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our

especially challenging, subjective, or complex judgments.

The communication of critical audit matter does not alter in any way our opinion

on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate

opinion on the critical audit matter or on the accounts or disclosures to which they relate.

Impairment of Intangible

The critical audit matter communicated below is

a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the

audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially

challenging, subjective, or complex judgments.

The communication of critical audit matter does not alter in any way our opinion on the

financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion

on the critical audit matter or on the accounts or disclosures to which they relate.

Impairment of Intangible Assets

Description of the Matter

As discussed in Note 2 to the financial

statements, the Company’s intangible assets consist of patents which are amortized using the straight-line method over the estimated

useful lives and are reviewed for impairment upon any triggering event that may give rise to the assets ultimate recoverability.

As discussed in Note 2 to the financial statements,

the Company’s intangible assets consist of patents which are amortized using the straight-line method over the estimated useful

lives and are reviewed for impairment upon any triggering event that may give rise to the assets ultimate recoverability.

We identified

1 unchanged sentence

significant estimates involved, the audit of which required a high degree of auditor judgment.

How We Addressed the Matter

We tested the Company’s determination

of the carrying value of the intangible assets by comparing the year-end balances to the undiscounted future cash flows and evaluated

the reasonableness of the inputs of the future cash flows to verifiable data.

How We Addressed the Matter in Our Audit

We tested the Company’s determination of

the carrying value of the intangible assets by comparing the year-end balances to the undiscounted future cash flows and evaluated the

reasonableness of the inputs of the future cash flows to verifiable data.

/s/ MaloneBailey, LLP

www.malonebailey.com

We have served as the Company's auditor

We have served as the Company’s auditor since

Houston, Texas

April 15, 2021

Patent Research Corporation and Subsidiaries

Balance Sheets

Quest Patent Research Corporation and Subsidiaries

Consolidated Balance Sheets

Current assets

Cash and cash equivalents

Accounts receivable, net

Accounts receivable, net of allowance for doubtful accounts of $ 0 and $ 66,000 , respectively

Other current assets

1 unchanged sentence

Patents, net of accumulated amortization of $ 715,519 and $ 2,266,158 , respectively

LIABILITIES AND STOCKHOLDERS’

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities

Accounts payable and accrued liabilities

Loans payable –

Loans payable

Purchase price of patents, current portion

Loan payable –

related party, net of unamortized discount and debt issuance costs of $0 and $189,705, respectively

Accrued interest –

loans payable related party

Accrued interest - loans payable third party

Derivative liability

Funding Liability

Loan payable – related party

Warrant liability

Accrued interest

Total current liabilities

Non-current liabilities

Contingent funding liabilities

Loan payable - SBA

1 unchanged sentence

Total liabilities

Stockholders’

Preferred stock, par value $0.00003 per share –

authorized 10,000,000 shares –

no shares issued and outstanding

Stockholders’ deficit

Preferred stock, par value $ 0.00003 per share – authorized 10,000,000 shares – no shares issued and outstanding

Common stock, par value $ 0.00003 per share;

authorized 10,000,000,000 at December 31, 2021 and 2020;

shares issued and outstanding 383,038,334 at December 31, 2020 and 2019

shares issued and outstanding 533,334,630 and 383,038,334 at December 31, 2021 and 2020, respectively

Additional paid-in capital

Accumulated deficit

Total Quest Patent Research Corporation stockholders’

( 25,435,978 )

( 21,281,179 )

Total Quest Patent Research Corporation stockholders’ deficit

( 7,926,951 )

( 6,841,906 )

Non-controlling interest in subsidiary

Total stockholders’

Total liabilities and stockholders’

accompanying notes to consolidated financial statements

Patent Research Corporation and Subsidiaries

Statements of Operations

Total stockholders’ deficit

( 7,926,723 )

( 6,841,678 )

Total liabilities and stockholders’ deficit

See accompanying notes to consolidated financial

Quest Patent Research Corporation and Subsidiaries

Consolidated Statements of Operations

Patent licensing fees

Licensed packaging sales

Operating expenses

Cost of revenues:

Cost of sales

Litigation and licensing expenses

Management support services

Selling, general and administrative expenses

Total operating expenses

Income (loss) from operations

Loss from operations

( 3,113,539 )

Other expense

Gain (loss) on derivative liability

Gain on forgiveness of debt

Gain on settlement of accounts payable and accrued expenses

Warrant expense

( 1,154,905 )

Change in fair market value of warrant liability

Change in fair market value of derivative liability

Loss on conversion of debt

Loss on debt extinguishment

Loss on impairment of assets

( 1,651,614 )

Interest expense

Total other expense

( 1,039,454 )

Net loss before income tax

( 4,152,993 )

( 1,247,159 )

Provision for income taxes

( 4,154,799 )

( 1,312,522 )

Net income attributable to non-controlling interest in subsidiary

2 unchanged sentences

$ ( 1,312,511 )

Net loss per share –

Basic and Diluted

Weighted average shares outstanding –

Basic and Diluted

accompanying notes to consolidated financial statements

Patent Research Corporation and Subsidiaries

Statements of Changes in Stockholders’

Net loss per share – Basic and Diluted

Weighted average shares outstanding – basic

Weighted average shares outstanding - diluted

See accompanying notes to consolidated financial

Quest Patent Research Corporation and Subsidiaries

Consolidated Statements of Changes in Stockholders’

Non-controlling

Stockholders’

Balances as of December 31, 2019

( 19,968,668 )

Balances as of December 31, 2019

( 5,849,156 )

Resolution of derivative liability

( 1,312,511 )

( 1,312,522 )

Balances as of December 31, 2020

1 unchanged sentence

( 6,841,678 )

accompanying notes to consolidated financial statements

Patent Research Corporation and Subsidiaries

Statements of Cash Flows

Restricted shares issued for services

Shares issued for conversion of debt

Option issued for debt extinguishment

Options granted for compensation

( 4,154,799 )

Balances as of December 31, 2021

$ ( 25,435,978 )

$ ( 7,926,723 )

Quest Patent Research Corporation and Subsidiaries

Consolidated Statements of Cash Flows

Cash flows from operating activities:

1 unchanged sentence

Amortization of debt discount

Loss/(gain) on derivative liability

Loss/(gain) on forgiveness of debt

Depreciation and amortization

Change in fair market value of warrant liability

Change in fair market value of derivative liability

Stock based compensation

Warrant expense

Gain on settlement of accounts payable

Gain on forgiveness of debt

Amortization of intangible assets

Loss on conversion of debt

Loss on impairment of assets

Bad debt expense

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Accounts receivable

Accrued interest –

loans payable related party

Accrued interest –

loans payable third party

Other current assets

Accrued interest

Accounts payable and accrued expenses

Other current asses

Net cash provided by/(used in) operating activities

3 unchanged sentences

Cash flows from financing activities:

Proceeds from sale of future revenues

Proceeds from SBA loans

Payment on loan – related party

Loan payable – third party

Proceeds from third party loan

Repayment of purchase price of patents

Loan payable –

Proceeds from sale of future revenues

Repayment from sale of future revenues

Net cash from/(used in) financing activities

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Net increase (decrease) in cash

Cash at beginning of year

Cash at end of year

Non Cash Investing and Financing Activities

Accounts payable for patent purchase, net of imputed interest of $336,781

Shares issued for conversion of debt

Resolution of derivative liability

Options granted for settlement of debt

Accrued interest added to principal

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Income taxes, including foreign taxing authorities withheld taxes of $ 0 and $ 60,255 during the years ended December 31, 2021, and 2020 respectively.

accompanying notes to consolidated financial statements

Patent Research Corporation and Subsidiaries

to Consolidated Financial Statements

DESCRIPTION OF BUSINESS

Company is a Delaware corporation, incorporated on July 17, 1987 and has been engaged in the intellectual property monetization

business since 2008.

As used herein, the “Company”, “we”,

“us”

or “our”

refers to Quest Patent Research Corporation and its wholly and majority-owned and controlled operating

See accompanying notes to consolidated financial

Quest Patent Research Corporation and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 1 – DESCRIPTION OF BUSINESS

The Company is a Delaware corporation, incorporated

on July 17, 1987 and has been engaged in the intellectual property monetization business since 2008.

As used herein, the “Company”, “we”,

“us” or “our” refers to Quest Patent Research Corporation and its wholly and majority-owned and controlled operating

subsidiaries unless the context indicates otherwise.

All intellectual property acquisition, development, licensing and enforcement activities

are conducted by the Company’s wholly and majority-owned and controlled operating subsidiaries.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of consolidation and financial statement presentation

consolidated financial statements are prepared in accordance with U.S.

generally accepted accounting principles (“US GAAP”)

and present the consolidated financial statements of the Company and its wholly owned and majority owned subsidiaries as of December

31, 2020 and 2019.

consolidated financial statements include the accounts and operations of:

Patent Research Corporation (“The Company”)

Licensing Corporation (NY) (wholly owned)

Licensing Corporation (DE) (wholly owned)

Packaging Solutions Corporation (90% owned)

Nettech Corporation (65% owned)

are conducted by the Company’s wholly and majority-owned and controlled operating subsidiaries.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING

Principles of consolidation and financial statement

The consolidated financial statements are prepared

in accordance with U.S.

generally accepted accounting principles (“US GAAP”) and present the consolidated financial statements

of the Company and its wholly owned and majority owned subsidiaries as of December 31, 2021 and 2020.

The consolidated financial statements include

the accounts and operations of:

Quest Patent Research Corporation (“The

Quest Licensing Corporation (NY) (wholly owned)

Quest Licensing Corporation (DE) (wholly owned)

Quest Packaging Solutions Corporation ( 90 % owned)

Quest Nettech Corporation ( 65 % owned)

Semcon IP, Inc.

(wholly owned)

Mariner IC, Inc.

(wholly owned)

Kinetics, Inc.

IC Kinetics, Inc.

(wholly owned)

Systems, Inc.

CXT Systems, Inc.

(wholly owned)

Imaging Solutions Inc.

Photonic Imaging Solutions Inc.

(wholly owned)

Messaging Inc.

Audio Messaging Inc.

(wholly owned)

Licensing LLC (wholly owned)

to April 2019, the operations of Wynn Technologies, Inc.

were not included in the Company’s consolidated financial statements

as there were significant contingencies related to its control of Wynn Technologies, Inc.

The sole asset of Wynn Technologies,

was US Patent No.

Wynn Technologies, Inc.

could not transfer, assign, sell, hypothecate or otherwise encumber

US Patent No.

RE38,137E without the express written consent of Sol Li, owner of 35% of Wynn Technologies, Inc., unless, as of

the date of such transfer, assignment, sale, hypothecation or other encumbrance, Mr.

Li had received a total of at least $250,000.

US Patent No.

RE38,137E expired on September 28, 2015.

The Company accounted for its 65% interest in Wynn Technologies, Inc.

the equity method whereby the investment accounts were increased for contributions by the Company plus its 60% share of income

pursuant to the contractual agreement which provides that Sol Li, owner of 35% of Wynn Technologies, Inc.

retained 40% of the

income, and reduced for distributions and its 60% share of losses incurred, respectively, with the restriction whereby the account

balances cannot go below zero.

On April 11, 2019, Quest NetTech Corporation merged with Wynn Technologies, Inc.

with Quest NetTech

Corporation being the surviving entity.

Pursuant to the merger agreement, we issued to Mr.

Li a 35% interest in Quest NetTech

Significant intercompany transaction and balances have been eliminated in consolidation.

preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management

is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of

contingent assets and liabilities at the date of the financial statements and revenue and expenses during the reporting period.

Actual results could differ from those estimates.

and Cash Equivalents

Company considers all highly liquid investments with original maturity dates of three months or less when purchased, to be cash

Peregrin Licensing LLC (wholly owned)

Taasera Licensing LLC (wholly owned)

Soundstreak Texas, LLC (wholly owned)

Multimodal Media LLC (wholly owned)

LS Cloud Storage Technologies, LLC (wholly owned)

Significant intercompany transaction and balances have been eliminated

in consolidation.

Use of Estimates

In preparing financial statements in conformity

with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions

that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the

financial statements and revenue and expenses during the reporting period.

On an on-going basis, management evaluates estimates including

the allowance for doubtful accounts, income taxes and contingencies.

The Company bases its estimates on historical experience and on other

assumptions that management believes to be reasonable under the circumstances, the results of which form its basis for making judgments

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

Actual results could differ from

those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments

with original maturity dates of three months or less when purchased, to be cash equivalents.

Cash equivalents were $ 0 as of December

31, 2021 and 2020.

Accounts Receivable

Accounts receivable, which generally relate to

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when collection of the individual accounts appears doubtful.

The Company recorded an allowance for doubtful accounts of $66,000 and $0

at 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 (hereinafter, 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, including intangible assets with a finite life, are reviewed for impairment whenever events or changes in circumstances

indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to

result from the use and eventual disposition of the assets.

Whenever any such impairment exists, an impairment loss will be recognized

for the amount by which the carrying value exceeds the fair value.

Financial Instruments

Company 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, the Company 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

value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in

the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on

the measurement date.

A fair value hierarchy is used which requires an entity to maximize the use of observable inputs and minimize

the use of unobservable inputs when measuring fair value.

See Note 4 for information about derivative liabilities.

fair value hierarchy based on the three levels of inputs that may be used to measure fair value are as follows:

Quoted prices in active markets for identical assets or liabilities.

Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities;

or other inputs

that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Unobservable inputs that are supported by little or no market activity and that are financial instruments whose

values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments

for which the determination of fair value requires significant judgment or estimation.

The Company recorded an allowance for doubtful accounts of approximately

$ 0 and $ 66,000 at December 31, 2021 and 2020, respectively.

Intangible Assets

Intangible assets consist of patents which are

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

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

to impairment of long-lived assets.

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

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

Patents include the cost of patents or patent

rights (hereinafter, 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 twenty years from the date of filing.

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.

Impairment of long-lived assets

Long-lived assets, including intangible assets with a finite life,

are reviewed for impairment in accordance with Accounting Standards Codification (“ASC”) 360, “ Property, Plant, and

Equipment ” whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable

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

Whenever any such

impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value.

that management decides to no longer allocate resources to a patent portfolio, an impairment loss equal to the remaining carrying value

of the asset is recorded.

The Company recorded non-cash impairment charges of approximately $1,652,000 and $ 0 at December 31, 2021 and

2020, respectively, to write down finite lived intangible assets in the Power Management/Bus Controller, CXT and M-RED portfolios.

Warrant liability

The Company reflects a warrant liability with

respect to warrants for which number of shares underlying the warrants is not fixed until the date of the initial exercise.

of the liability is determined at the end of each fiscal period and the period to period change in the amount of warrant liability is

reflected as a gain or loss in warrant liability and is include under other income (expense).

Fair value of financial instruments

Fair value is defined as the exchange price that

would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset

or liability in an orderly transaction between market participants on the measurement date.

A fair value hierarchy is used which requires

an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

4 for information about warrant liabilities.

The fair value hierarchy based on the three levels

of inputs that may be used to measure fair value are as follows:

Level 1 – Quoted prices in active

markets for identical assets or liabilities.

Level 2 – Observable inputs other

than Level 1 prices, such as quoted prices for similar assets or liabilities;

or other inputs that are observable or can be corroborated

by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs that

are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted

cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant

judgment or estimation.

The carrying value reflected in the consolidated

3 unchanged sentences

rates of interest approximate current market rates.

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

transition method.

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

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

in exchange for those goods or services.

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

Identify the contract with the customer

Identify the performance obligations in the contract

Determine the transaction price

Allocate the transaction price to the performance obligations in the contract

Recognize revenue when the company satisfies a performance obligation

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:

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).

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:

consideration

estimates of variable consideration

existence of a significant financing component in the contract

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, the Company is required to make certain judgments and estimates in connection with the accounting for revenue contracts

with customers.

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

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

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

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

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

for licensed sales.

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 (i) the nature of the promise, within the context of the contract, is to transfer combined items to which the promised intellectual

property rights are inputs and (ii) the Company’s promise to transfer each individual intellectual property right described

above to the customer is not separately identifiable from other promises to transfer intellectual property rights in the contract.

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.

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

Revenue Recognition

Patent Licensing Fees

Revenue is recognized upon transfer of control

of promised bundled intellectual property rights and other contractual performance obligations to licensees in an amount that reflects

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

Revenue contracts that provide promises to

grant “the 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.

For the periods presented, revenue contracts executed

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

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

Intellectual property rights granted included the following, as applicable:

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

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

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

The intellectual property rights granted were perpetual in

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

The individual intellectual property rights are not accounted

for as separate performance obligations, as (i) the nature of the promise, within the context of the contract, is to transfer combined

items to which the promised intellectual property rights are inputs and (ii) the Company’s promise to transfer each individual intellectual

property right described above to the customer is not separately identifiable from other promises to transfer intellectual property rights

in the contract.

Since the promised intellectual property rights

are not individually distinct, the Company combined each individual IP right in the contract into a bundle of IP rights that is distinct,

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

The intellectual

property rights granted were “functional IP rights” that have significant standalone functionality.

The Company’s subsequent

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

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

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

The contracts provide for

the grant (i.e.

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

of the contract.

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

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.

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, from licensed sales, is not significant but includes sales-based revenue contracts pursuant to purchase

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.

Estimates are generally based on historical

levels of activity, if available.

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

been satisfied –

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 cost of revenue to the extent that the Company has no obligation with respect to such fees prior to a settlement or license.

Royalties, Litigation Funding Fees and Contingent Legal Expenses.

connection with the investment in certain patents and patent rights, certain of the Company’s operating subsidiaries may

execute related agreements which grant to the inventors and/or former owners of the respective patents or patent rights, the right

to receive a percentage of future net revenues (as defined in the respective agreements) generated as a result of licensing and

otherwise enforcing the respective patents or patent portfolios.

Company’s operating subsidiaries may retain the services of law firms that specialize in patent licensing and enforcement

and patent law in connection with their licensing and enforcement activities.

These law firms may be retained on a contingent

fee basis whereby such law firms are paid a percentage of any negotiated fees, settlements or judgments awarded.

Company’s operating subsidiaries may engage with funding sources that specialize in providing financing for patent licensing

and enforcement.

These litigation finance firms may be engaged on a non-recourse basis whereby such litigation finance firms

are paid a percentage of any negotiated fees, settlements or judgments awarded in exchange for providing funding for legal fees

and out of pocket expenses incurred as a result of the licensing and enforcement activities.

economic terms of the inventor agreements, operating agreements, contingent legal fee arrangements and litigation financing agreements

associated with the patent portfolios owned or controlled by the Company’s operating subsidiaries, if any, including royalty

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

Inventor/former

owner royalties, payments to non-controlling interests, contingent legal fees expenses and litigation finance 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/former owner royalties, contingent legal fees expenses and litigation finance expenses will continue to fluctuate and

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

and development

and development costs are expensed as incurred.

We did not incur any research and development costs in the years ended December

31, 2020 and 2019.

income tax assets and liabilities are recognized for the expected future income tax consequences of events that have been included

in the consolidated financial statements or income tax returns.

Deferred income tax assets and liabilities are determined based

on differences between the financial statement and tax bases of assets and liabilities using tax rates in effect for the years

in which the differences are expected to reverse.

evaluating the ultimate realization of deferred income tax assets, management considers whether it is more likely than not that

the deferred income tax assets will be realized.

Management establishes a valuation allowance if it is more likely than not that

all or a portion of the deferred income tax assets will not be utilized.

The ultimate realization of deferred income tax assets

is dependent on the generation of future taxable income, which must occur prior to the expiration of the net operating loss carryforwards.

Company also follows the guidance related to accounting for income tax uncertainties.

In accounting for uncertainty in income

taxes, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority

would more likely than not sustain the position following an audit.

For tax positions meeting the more likely than not threshold,

the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50% likelihood of

being realized upon ultimate settlement with the relevant tax authority.

No liability for unrecognized tax benefits was recorded

as of December 31, 2020 and 2019.

The Company records revenues on a gross basis,

before deduction for income taxes.

The Company incurred income tax expenses of approximately $65,000 and $5,000 for the years ended December

31, 2020 and 2019, respectively.

The Company recognizes 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 January 1, 2019, non-employee services, are acquired.

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

plans and stock appreciation rights.

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

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

That expense is recognized over the period during which an

employee or non-employee is required to provide services in exchange for the award, known as the requisite service period (usually the

vesting period).

(loss) per share

Basic earnings per share is calculated by dividing

net income available to common stockholders by the weighted average number of shares of the Company’s common stock outstanding during

Diluted earnings per share reflects the potential dilution that could occur if our share-based awards and convertible securities

were exercised or converted into common stock.

The dilutive effect of our share-based awards is computed using the treasury stock method,

which assumes all share-based awards are exercised and the hypothetical proceeds from exercise are used to purchase common stock at the

average market price during the period.

The incremental shares (difference between shares assumed to be issued versus purchased), to the

extent they would have been dilutive, are included in the denominator of the diluted earnings per share calculation.

Because the Company

incurred losses in all periods covered by the financial statements and would be anti-dilutive, the diluted earnings per share is the same

as the basic earnings per share.

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.

Company 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.

Concentration

of credit risk

Company maintains its cash in bank deposit accounts, which at times, may exceed federally insured limits.

The Company has not

experienced any such losses in these accounts.

Company reports each material operating segment in accordance with ASC 280, “Segment Reporting.”

Operating segments

are defined as components of an enterprise about which separate financial information is available that is evaluated regularly

by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

The Company’s

chief operating decision maker is the chief executive officer.

The Company operates in two operational segments;

property licensing and licensed packaging sales.

Licensed packaging sales segment is not reported separately as revenue constitutes

less than 10% of the combined revenue of all segments, reported profit is less than the combined profit of all operating segments

that did not report a loss, and assets are less than 10% of the combined assets of all operating segments.

Certain corporate expenses

are not allocated to segments.

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.

During the period from 2008, when the Company

changed its business to become an intellectual property management company, through 2020, the Company generated a cumulative loss of approximately

$21.3 million.

The Company’s total current assets were approximately $1.3 million at December 31, 2020.

At December 31, 2020, the

Company had a working capital deficiency of approximately $8.2 million.

The Company requires funding for its operations.

Because of the

Company’s continuing losses, the working capital deficiency, the uncertainty of future revenue, the Company’s low stock price

and the absence of a trading market in its common stock, the ability of the Company to raise funds in equity market or from lenders is

severely impaired, and there exists substantial doubt about the ability of the Company to continue as a going concern.

Although the Company

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.

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

SHORT TERM DEBT AND LONG-TERM LIABILITIES

following table shows the Company’s debt at December 31, 2020 and 2019.

payable –

price of patents –

current portion

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.

Cost of Revenues

Cost of revenues include the costs and expenses

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

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

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

of patent-related investment costs.

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

statements of operations.

No such fees are recognized as cost of revenue to the extent that the Company has no obligation with respect

to such fees prior to a settlement or license.

Inventor Royalties, Litigation Funding Fees

and Contingent Legal Expenses.

In connection with the investment in certain patents

and patent rights, certain of the Company’s operating subsidiaries may execute related agreements which grant to the inventors and/or

former owners of the respective patents or patent rights, the right to receive a percentage of future net revenues (as defined in the

respective agreements) generated as a result of licensing and otherwise enforcing the respective patents or patent portfolios.

The Company’s operating subsidiaries may

retain the services of law firms that specialize in patent licensing and enforcement and patent law in connection with their licensing

and enforcement activities.

These law firms may be retained on a contingent fee basis whereby such law firms are paid a percentage

of any negotiated fees, settlements or judgments awarded.

The Company’s operating subsidiaries may

engage with funding sources that specialize in providing financing for patent licensing and enforcement.

These litigation finance

firms may be engaged on a non-recourse basis whereby such litigation finance firms are paid a percentage of any negotiated fees, settlements

or judgments awarded in exchange for providing funding for legal fees and out of pocket expenses incurred as a result of the licensing

and enforcement activities.

The economic terms of the inventor agreements,

operating agreements, contingent legal fee arrangements and litigation financing agreements associated with the patent portfolios owned

or controlled by the Company’s operating subsidiaries, if any, including royalty rates, contingent fee rates and other terms, vary

across the patent portfolios owned or controlled by such operating subsidiaries.

Inventor/former owner royalties, payments to non-controlling

interests, contingent legal fees expenses and litigation finance 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/former owner royalties, contingent legal fees expenses

and litigation finance expenses will continue to fluctuate and may continue to vary significantly period to period, based primarily on

these factors.

Research and development

Research and development costs are expensed as

We did not incur any research and development costs in the years ended December 31, 2021 and 2020.

Deferred income tax assets and liabilities are

recognized for the expected future income tax consequences of events that have been included in the consolidated financial statements

or income tax returns.

Deferred income tax assets and liabilities are determined based on differences between the financial statement

and tax bases of assets and liabilities using tax rates in effect for the years in which the differences are expected to reverse.

In evaluating the ultimate realization of deferred

income tax assets, management considers whether it is more likely than not that the deferred income tax assets will be realized.

establishes a valuation allowance if it is more likely than not that all or a portion of the deferred income tax assets will not be utilized.

The ultimate realization of deferred income tax assets is dependent on the generation of future taxable income, which must occur prior

to the expiration of the net operating loss carryforwards.

The Company also follows the guidance related

to accounting for income tax uncertainties.

In accounting for uncertainty in income taxes, the Company recognizes the financial statement

benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following

For tax positions meeting the more likely than not threshold, the amount recognized in the consolidated financial statements

is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.

No liability for unrecognized tax benefits was recorded as of December 31, 2021 and 2020.

Stock-based compensation

The Company recognizes 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 non-employee services, are acquired.

Transactions include incurring liabilities, or issuing

or offering to issue shares, options and other equity instruments such as employee stock ownership plans and stock appreciation rights.

Stock-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial

statements based on their fair values.

That expense is recognized over the period during which an employee or non-employee is required

to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

In February 2016, the FASB issued ASU 2016-02,

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

apply a “right-of-use” model in accounting for all leases (including subleases) and eliminate the concept of operating leases

and off-balance-sheet leases.

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

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

Concentration of credit risk

The Company maintains its cash in bank deposit

accounts, which at times, may exceed federally insured limits.

The Company has not experienced any such losses in these accounts.

Business Acquisitions

The acquisition of STX and LS Cloud Storage Technologies, LLC (“LSC”)

did not constitute acquisition of a business and therefore were accounted for as asset acquisitions in accordance with ASC 805, Business

Combinations (“ASC 805”).

ASC 805 provides, among other things, that asset acquisitions be accounted for using a cost accumulation

and allocation model under which the cost of the acquisition is allocated to the assets acquired and liabilities assumed.

with regarding the STX and LSC acquisitions.

Gain from Cancelation of Indebtedness

The Company recognized a gain from the elimination

of liability for minimum cumulative net proceeds distributions constituting a portion of the purchase price due to the seller of two of

the Company’s patent portfolios and the reduction of liability for legal services resulting from the settlement of the Company’s

recorded obligation for unpaid legal services.

Net Loss Per Share

The Company calculates net losses per share by

dividing losses allocated to the Company’s stockholders by the weighted average number of shares of common stock outstanding for

Diluted weighted average shares is computed using basic weighted average shares plus any potentially dilutive securities outstanding

during the period using the treasury-stock-type method and the if-converted method, except when their effect is anti-dilutive.

the Company incurred losses in all periods covered by the financial statements the inclusion of diluted weighted average shares would

be anti-dilutive, the diluted net loss per share is the same as the basic net loss per share.

Recent Accounting Pronouncements

Management does not believe that there are any

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

financial statements.

Going Concern

As shown in the accompanying financial statements,

the Company has an accumulated deficit of approximately $ 25.4 million and negative working capital of approximately $ 8.1 million as of

December 31, 2021.

Because of the Company’s continuing losses, its working capital deficiency, the uncertainty of future revenue,

the Company’s obligations to Intellectual Ventures, Intelligent Partners, QPRC Finance LLC (“QFL”), the Company’s

low stock price and the absence of an active trading market in its common stock, the ability of the Company to raise funds in the equity

market or from lenders is severely impaired.

These conditions, together with the effects of the COVID-19 pandemic and the steps taken

by the states to slow the spread of the virus and its effect on its business raise substantial doubt as to the Company’s ability

to continue as a going concern.

Although the Company may seek to raise funds and to obtain third party funding for litigation to enforce

its intellectual property rights, the availability of such funds, particularly in view of the COVID-19 pandemic, is uncertain.

The financial

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

NOTE 3 – SHORT TERM DEBT AND LONG-TERM

On July 23, 2021, the Company paid $ 1,150,000

in full satisfaction of the disputed and unpaid legal services performed by the Company’s former legal counsel for services relating

to the monetization of the Company’s intellectual property rights.

The Company recognized a gain on settlement of accounts payable

of approximately $ 1,726,000 in conjunction with the resolution of the dispute.

The Company’s obligation to its former counsel is

included under accounts payable and accrued liabilities on the Company’s December 31, 2020 balance sheet.

The following table shows the Company’s

debt at December 31, 2021 and 2020.

Short-term debt:

payable –

related party

loans payable –

related party

payable - SBA

Loans payable

Funding liability

Loan payable – related party

Purchase price of patents – current portion

Unamortized discount

Net short-term debt

Long-term liabilities:

Loans payable - SBA

price of patents

purchase price of patents –

funding liabilities:

contingent funding liabilities

The loan payable –

third party are demand

loans made to former officers and directors, now unrelated third parties, and shareholders in the amount of $147,000.

During the years

ended December 31, 2020 and 2019 the Company paid $0 and $16,000, respectively, against the loans.

The loans are payable on demand plus

accrued interest at 10% per annum.

The loan payable –

related party at December

31, 2020 represents the principal amount of the Company’s 10% note to Intelligent Partners, as transferee of the notes issued to

United Wireless Holdings, Inc.

(“United Wireless”), in the principal amount of $4,672,810 pursuant to a securities purchase

agreement (“SPA”) dated October 22, 2015.

The note payable to Intelligent Partners, as transferee of United Wireless, has

been classified as a current liability as of December 31, 2020.

on all notes issued pursuant to the securities purchase agreement, accrued through September 30, 2018, with accrued interest being

added to principal on September 30, 2016, 2017 and 2018.

Accordingly, the accrued interest is included in loans payable, related

Since September 30, 2018, the Company has been required to pay interest quarterly.

During the year ended December 31, 2020

the Company paid approximately $468,560 in interest on the notes.

At September 30, 2020, the notes in the aggregate principal amount

of $4,672,810 were outstanding.

The notes became due by their terms on September 30, 2020, and the Company did not make any payment on

account of principal of and interest on the notes.

to the securities purchase agreement and the related agreements that were executed contemporaneously with the securities purchase

Company granted United Wireless an option to purchase 50,000,000 shares of common stock at varying exercise prices.

expired unexercised on September 30, 2020.

Company agreed to pay United Wireless 15% of the net monetization proceeds from the patents

acquired in October 2015 and the intellectual property in the Company’s mobile

data and financial data portfolios.

The allocation of proceeds resulted in a discount

from the note payable of $188,023.

In addition, the Company recognized a discount associated

with the 15% interest in net monetization proceeds of $450,000.

These discounts and debt

issuance costs of $60,958, total $698,981, were amortized and charged to interest expense

over the life of the notes using the effective interest rate method.

As of December 31,

2020 and December 31, 2019, $698,981 and $509,276 of the discount and debt issuance cost

have been amortized, respectively.

Subsequent to December 31, 2020, the Company entered into a restructure

agreement with Intelligent Partners.

See Note 11-Subsequent Events for a summary of the restructured agreement with Intelligent Partners.

term liabilities

payable-SBA at December 31, 2020 represents:

An unsecured loan from JPMorgan Chase Bank, N.A.

in the aggregate amount of $20,832, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, which was enacted March 27, 2020.

The loan, which was taken down on April 23, 2020, matures on April 23, 2022 and bears interest at a rate of 0.98% per annum, with interest payable monthly commencing on November 23, 2020.

The loan may be prepaid by the Company at any time prior to maturity with no prepayment penalties.

Funds from the loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations incurred before February 15, 2020.

The Company has used the entire loan amount for qualifying expenses.

Under the terms of the PPP, certain amounts of the loan may be forgiven if they are used for qualifying expenses as described in the CARES Act.

A secured Economic Injury Disaster Loan from the U.S.

Small Business Association (“SBA”) in the aggregate amount of $150,000, pursuant to Section 7(b) of the Small Business Act as part of the COVID-19 relief effort.

The Company’s obligations on the loan are set forth in the Company’s note dated May 14, 2020 which matures on May 14, 2050 and bears interest at a rate of 3.75% per annum, payable monthly commencing on May 14, 2021.

The Note may be prepaid by the Company at any time prior to maturity with no prepayment penalties.

Funds from the Loan may be used solely as working capital to alleviate economic injury caused by disaster occurring in the month of January 31, 2020 and continuing thereafter and to pay Uniform Commercial Code (UCC) lien filing fees and a third-party UCC handling charge of $100 which were deducted from the loan amount stated above.

In addition to the loan, as part of the COVID-19 relief effort, the Company obtained an Emergency EIDL Grant from the SBA in the amount of $1,000.

The Company is not required to repay the grant.

purchase price of patents at December 31, 2020 represents the non-current portion of minimum payments due under the agreements between:

CXT Systems, Inc.

(“CXT”), a wholly owned subsidiary, and Intellectual

Ventures Assets 34, LLC and Intellectual Ventures 37, LLC (“IV 34/37”) pursuant to which at closing CXT acquired by assignment

all right, title, and interest in a portfolio of thirteen United States patents (the “CXT Portfolio”).

Under the agreement,

CXT will distribute 50% of net recoveries, as defined, to IV 34/37.

CXT advanced $25,000 to IV 34/37 at closing, and agreed, pursuant

to an amendment dated January 26, 2018, that in the event that, on December 31, 2018, December 31, 2019 and December 31, 2020, cumulative

distributions to IV 34/37 total less than $100,000, $375,000 and $975,000, respectively, CXT shall pay the difference necessary to achieve

the applicable minimum payment amount within ten days after the applicable date;

with any advances being credited toward future distributions

As of December 31, 2020, $600,000 of the minimum future cumulative distributions were presented as short-term debt based

on payment due date.

As of December 31, 2020, cumulative distributions did not total $975,000 and CXT did not pay the difference to IV

34/37 within ten days.

Non-payment which is not cured within 30 days after written notice from IV 34/37 would constitute an Acceleration

Event under the agreement, following which, in addition to any other remedies available under the agreement, all outstanding minimum cumulative

distributions would become due and payable within thirty days.

As of the date of filing, no such written notice of non-payment has been

given by IV 34/37.

Accrued interest

Net loans payable - SBA

Purchase price of patents

Unamortized discount

Net purchase price of patents – long-term

Short-term debt

The loan payable – third party are demand

loans made to former officers and directors, now unrelated third parties, and shareholders in the amount of $ 138,000 and $ 147,000 as of

December 31, 2021 and 2020, respectively.

During the years ended December 31, 2021 and 2020 the Company paid $ 9,000 and $ 0 , respectively,

against the loans.

The loans are payable on demand plus accrued interest at 10 % per annum.

Funding Liability

The funding liability at December 31, 2021 represents

the principal amount of the Company’s obligations to QFL, a non-affiliated party, pursuant to a purchase agreement (“Purchase

Agreement”) dated February 22, 2021 between the Company and QFL, as described below.

The obligation to QFL is classified as a current

liability as of December 31, 2021.

On February 22, 2021, the Company entered into

a series of agreements, all dated February 19, 2021,with QFL, including a Prepaid Forward Purchase Agreement (the “Purchase Agreement),

a security agreement (the “Security Agreement”), a subsidiary security agreement (the “Subsidiary Security Agreement”),

a subsidiary guaranty (the “Subsidiary Guarantee”), a warrant issue agreement (the “Warrant Issue Agreement”),

a registration rights agreement (the “Registration Rights Agreement”) and a board observation rights agreement (the “Board

Observation Rights Agreement” together with the Security Agreement, the Subsidiary Guaranty, the Subsidiary Security Agreement,

Warrant Issuance Agreement, Registration Rights Agreement and the Purchase Agreement, the “Investment Documents”) pursuant

to which, at the closing held contemporaneously with the execution of the agreements:

(i) Pursuant to the Purchase Agreement, QFL agreed to make available to the Company a financing facility of:

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

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

and (iii) $ 1,750,000 to fund the cash payment portion of the restructure of the Company’s obligations to Intelligent Partners.

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

(ii) The Company used $ 1,750,000 of proceeds from the QFL financing as the cash payment portion of the restructure of the Company’s obligations to Intelligent Partners pursuant to the Restructure Agreement executed contemporaneously with the closing of the Investment Documents.

The payment was made directly from QFL to Intelligent Partners.

Pursuant to the Security Agreement, the Company’s obligations under the Purchase Agreement with QFL are secured by:

(a) the proceeds (as defined in the Purchase Agreement);

(b) the patents (as defined in the Purchase Agreement;

and (d) proceeds (including, without limitation, cash proceeds and insurance proceeds) and products of the foregoing (a)-(c).

Pursuant to the Subsidiary Guaranty, eight of the Company’s subsidiaries –QLC, NetTech, Mariner, Semcon, IC, CXT, M-Red, and AMI, collectively, the “Subsidiary Guarantors”) guaranteed the Company’s obligations to QFL under the Purchase Agreement.

Pursuant to the Subsidiary Security Agreement, the Subsidiary Guarantors granted QFL a security interest in the proceeds from the future monetization of their respective patent portfolios.

(vi) Pursuant to the Warrant Issue Agreement, the Company granted QFL ten-year warrants to purchase a total of up to 96,246,246 shares of the Company’s common stock, at an exercise price of $ 0.0054 per share which may be exercised from the date of exercise through February 18, 2031 on a cash or cashless basis.

Exercisability of the warrant is limited if, upon exercise, the holder or any of holder’s affiliates would beneficially own more than 4.99 % (the “Maximum Percentage”) of the Company’s common stock, except that by written notice to the Company, the holder may change the Maximum Percentage to any other percentage not in excess of 9.99 % provided any such change will not be effective until the 61 st day following notice to the Company.

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 capital stock of the Company (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.

See Notes 4 and 5 for information on the warrant issuance and associated liability.

The Company regained compliance with the OTCQB Eligibility Requirements on May 7, 2021, at which time the common stock recommenced trading on the OTCQB.

(viii) The Company granted QFL certain registration rights with respect to the 96,246,246 shares of common stock issuable upon exercise of the warrant.

See Note 5 for information on the warrant issuance.

Pursuant to the Board Observation Rights Agreement, until the later of the date on which QFL or its affiliates (i) have received the entirety of their Investment Return (as defined in Purchase Agreement), and (ii) no longer hold any Securities (the “ Observation Period ”), the Company granted QFL the right, exercisable at any time during the Observation Period, to appoint a representative to attend meetings (including, without limitation, telephonic or other electronic meetings) of the Board or any committee thereof, including executive sessions, in an observer capacity.

On February 26, 2021, the Company entered into

an agreement with Peter K.

Trzyna (“PKT”) pursuant to which PKT assigned to the Company all right, title, and interest in

a portfolio of eight United States patents (the “Peregrin Portfolio”).

Under the agreement, the Company paid PKT $350,000

at closing and agreed that upon the realization of gross proceeds, if any, the Company shall make a second installment payment or payments

in the aggregate amount of $93,900 representing reimbursement to PKT, as the prosecuting attorney, for legal fees associated with prosecution

of the portfolio, such reimbursement shall be due and payable to PKT from time to time as gross proceeds are realized, and paid to PKT

along with and in proportion to reimbursement to other third parties of costs incurred in realizing gross proceeds from the Peregrin Portfolio.

Thereafter, PKT is entitled to a percentage of gross proceeds realized, if any, from the Peregrin Portfolio.

The Company requested and

received a capital advance from QFL in the amount of $350,000 pursuant to the Purchase Agreement, which was used to make payment to PKT.

On May 20, 2021, Taasera Licensing LLC, a wholly

owned subsidiary, entered into an agreement with Taasera, Inc.

to acquire all right, title, and interest in a portfolio of seven United

States patents (the “Taasera Portfolio”) for $250,000.

The Company requested and received a capital advance from QFL in the

amount of $250,000 pursuant to the Purchase Agreement, which was used to make payment to Taasera, Inc.

On October 15, 2021, the Company’s wholly

owned subsidiary, Multimodal Media LLC (“MML”), acquired all right, title, and interest in a portfolio of nine United States

patents (the “MML Portfolio”) for a purchase price of $ 550,000 pursuant to an agreement with AI, pursuant to which MML retains

an amount equal to the purchase price plus any fees incurred out of net proceeds, as defined in the agreement, after which AI is entitled

to a percentage of further net proceeds realized, if any.

The Company requested and received a capital advance from QFL in the amount

of $550,000 pursuant to the Purchase Agreement, which was used to make payment to AI.

The Company requested and received operating capital

advances in the amount of $ 1,000,000 from QFL pursuant to the Purchase Agreement during the year ended December 31, 2021.

Loan Payable Related Party

The loan payable – related party at December

31, 2021 represents the current amount of a non-interest bearing total monetization proceeds obligation (the “TMPO”) to Intelligent

Partners, LLC (“Intelligent Partners”) of $2,805,000, pursuant to a restructure agreement (“Restructure Agreement”)

dated February 22, 2021 whereby the Company and Intelligent Partners, extinguished the Company’s 10% note to Intelligent Partners

as transferee of the notes issued to United Wireless Holdings, Inc.

(“United Wireless”), in the amount of $4,672,810 pursuant

to securities purchase agreement dated October 22, 2015 between the Company and United Wireless.

The notes became due by their terms on

September 30, 2020, and the Company did not make any payment on account of principal and interest on the notes.

Subsequent to September

30, 2020, the Company engaged in negotiations with Intelligent Partners in parallel with the Company’s negotiations with QFL, with

a view to restructuring the Company’s obligations under the United Wireless agreements, including the notes, so that the Company

no longer had any obligations under the notes or the SPA.

These negotiations resulted in the Restructure Agreement, described below, which

provided for the payment to Intelligent Partners of $1,750,000 from the proceeds from the Company’s agreements with QFL.

of the restructure of the Company’s agreements with Intelligent Partners, the Company amended the existing monetization proceeds

agreements (“MPAs”) and granted Intelligent Partners certain rights in the monetization proceeds from any new intellectual

property the Company acquires, as describe below.

Under these MPAs, Intelligent Partners participates in the monetization proceeds the

Company receives with respect to new patents after QFL has received its negotiated rate of return.

On or prior to the date of the Restructure Agreement,

Intelligent Partners transferred to Fitton and Carper $ 250,000 of the notes (the “Transferred Note”), thereby reducing the

principal amount of the notes held by Intelligent Partners to $ 4,422,810 .

On February 22, 2021, the Company and Intelligent

Partners agreed to extinguish the notes and Transferred Note, and terminate or amend and restate the SPA and Transaction Documents, pursuant

to a series of agreements including:

a Restructure Agreement (the “Restructure Agreement”), a Stock Purchase Agreement (the

“Stock Purchase Agreement”), an Option Grant (the “Option Grant”), an Amended and Restated Pledge Agreement (the

“Pledge Agreement”), an Amended and Restated Registration Rights Agreement (the “Registration Rights Agreement”),

a Board Observation Agreement (the “Board Observation Agreement”), a MPA-NA Security Interest Agreement (the “MPA-NA

Security Interest Agreement”), an Amended and Restated Patent Proceeds Security Agreement (the “Patent Proceeds Security Agreement”,

an Amended and Restated MPA-CP (the “MPA-CP”), an Amended and Restated MPA-CXT (the “MPA-CXT”), a MPA-MR (the

“MPA-MR”), a MPA-AMI (the “MPA-AMI,” and together with the MPA-CP, MPA-CXT and MPA-MR, each a Restructure MPA

and together the Restructure MPAs) and a MPA-NA (the “MPA-NA”).

(i) Pursuant to the Restructure Agreement, the Company paid Intelligent Partners $ 1,750,000 at closing, which the Company received from QFL and which QFL paid directly to Intelligent Partners, and recognized the TMPO, which shall, from and after the Restructure Date, be reduced on a dollar for dollar basis by (a) payments to Intelligent Partners pursuant to the restructure agreement, the Restructure MPAs and the MPA-NA and (b) any election by the Intelligent Partners to pay the Exercise Price of the Restructure Option, in whole or part, by means of a reduction in the then outstanding TMPO.

The TMPO has been classified as a current liability as of September 30, 2021.

(ii) Pursuant to the Stock Purchase Agreement, the Company issued to Fitton and Carper, as holders of the Transferred Note, a total of 46,296,296 shares of common stock at a purchase price of $ 0.0054 per share, which purchase price was paid by the conversion and in full satisfaction of the Transferred Note (the “Conversion Shares”).

For purposes of extinguishment, the issuance of the Conversion Shares in full satisfaction of the Transferred Note balance of $ 250,000 is included in the reacquisition price of the debt.

The Company recognized a loss on debt conversion of $ 305,556 which is the difference between the agreed conversion price and the fair value of the Conversion Shares at the date of conversion.

See Note 5 for information on the share issue.

(iii) Pursuant to the Option Grant, the Company granted Intelligent Partners an option to purchase a total of 50,000,000 shares of common stock, with an exercise price of $ 0.0054 per share which vests immediately and may be exercised through September 30, 2025.

The Company valued the option at approximately $ 598,000 using the Black-Scholes pricing model.

The proceeds were allocated to the repurchase price of the debt extinguishment based on its fair value.

See Note 5 for information on the option grant.

(iv) Pursuant to the restructured monetization proceeds agreement, Intelligent Partners has a right to receive 60 % of the net monetization proceeds from the patents currently owned by the Subsidiary Guarantors.

The agreement has no termination provisions, so Intelligent Partners will be entitled to its percentage interest as long as revenue is generated from the intellectual property covered by the agreement.

(v) Pursuant to the MPA-NA, until the TMPO has been paid in full, Intelligent Partners is entitled to receive 10% of the net proceeds realized from new assets acquired by the Company.

If, in any calendar quarter, net proceeds realized 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.

After satisfaction of the TMPO, the MPA-NA and Intelligent Partners’ interest in new asset proceeds shall terminate.

(vi) The Company granted Intelligent Partners, Andrew Fitton and Michael Carper certain registration rights with respect to (i) the 50,000,000 shares currently owned by Fitton and Carper;

(ii) the 46,296,296 Conversion Shares issued to Fitton and Carper, and (iii) the 50,000,000 shares of common stock issuable upon exercise of the option.

Pursuant to the Subsidiary Security Agreement, the Company’s obligations under its agreements with Intelligent Partners, including its obligations under the Restructure Agreement and the Restructure MPAs are secured by a security interest in the net proceeds realized from the future monetization of the patents currently owned by the eight subsidiaries named above.

Pursuant to the MPA-NA-Security Interest Agreement, our obligations under the MPA-NA are secured by a security interest in net proceeds realized from the future monetization of new patents acquired until the TMPO is satisfied, provided Intelligent Partners’ secured interest shall be limited to its entitlement in Net Proceeds under the MPA-NA.

After satisfaction of the TMPO the security interest in proceeds from new assets shall terminate.

Pursuant to the Board Observation Rights Agreement, until the Total Monetization Proceeds Obligation has been satisfied (the “ Observation Period ”), the Company granted Intelligent Partners the option and right, exercisable at any time during the Observation Period, to appoint a representative to attend meetings of the Board or any committee thereof, including executive sessions, in an observer capacity.

Intelligent Partners has no right to appoint a director to the board.

Events of Default include (i) a Change of Control

of the Company (ii) any uncured default on payment due to Intelligent Partners in an amount totaling in excess of $275,000, which is not

the subject of a Dispute or other formal dispute resolution proceeding initiated in good faith pursuant to this Agreement or other Restructure

Documents (iii) the filing of a voluntary petition for relief under the United States Bankruptcy Code by Company or any of its material

subsidiaries, (iv) the filing of an involuntary petition for relief under the United States Bankruptcy Code against the Company, which

is not stayed or dismissed within sixty (60) days of such filing, except for an involuntary petition for relief filed solely by Intelligent

Partners, or any Affiliate or member of Intelligent Partners, or (v) acceleration of an obligation in excess of $ 1 million dollars to

another provider of financing following a final determination by arbitration or other judicial proceeding that such obligation is due

The Company recognized a loss on extinguishment

of the note of $ 730,378 reflected as follows:

Carrying amount as of the restructure date

Net carrying amount

Reacquisition Price

Cash payment via QFL

( 1,750,000 )

Conversion of transferred note

Fair value of option grant

TMPO undiscounted future cash flows

( 2,805,000 )

Loss on debt extinguishment

$ ( 730,378 )

Because of its ownership percentage, Intelligent

Partners is treated as a related party.

Purchase Price of Patents

The purchase price of patents – current

portion at December 31, 2021 represents the current portion of minimum payments due under the agreements between:

● CXT and Intellectual Ventures Assets 34, LLC and Intellectual Ventures 37, LLC (“IV 34/37”) pursuant to which at closing CXT acquired by assignment all right, title, and interest in a portfolio of thirteen United States patents (the “CXT Portfolio”).

Under the agreement, CXT will distribute 50% of net recoveries, as defined, to IV 34/37.

CXT advanced $25,000 to IV 34/37 at closing, and agreed, pursuant to an amendment dated January 26, 2018, that in the event that, on December 31, 2018, December 31, 2019 and December 31, 2020, cumulative distributions to IV 34/37 total less than $100,000, $375,000 and $975,000, respectively, CXT shall pay the difference necessary to achieve the applicable minimum payment amount within ten days after the applicable date;

with any advances being credited toward future distributions to IV 34/36.

As of December 31, 2020, cumulative distributions totaling $375,000 had been made and CXT did not pay the $600,000 difference to IV 34/37 within ten days and the remaining $600,000 of the minimum future cumulative distributions due were presented as short-term debt.

On December 31, 2021 the parties amended the agreement to provide that CXT will distribute 65% of net proceeds, as defined, to IV 34/37, as long as CXT generates revenue from the CXT Portfolio and that if, on December 31, 2018 and December 31, 2019, cumulative distributions to IV 34/37 total less than $100,000 and $375,000, respectively, CXT shall pay the difference between such cumulative amounts and the amount paid to IV 34/37 within ten days after the applicable date.

As of December 31, 2019 cumulative distributions to IV 34/37 totaled $375,000, no further minimum cumulative distributions are required pursuant to the agreement as amended and the Company recorded a gain on forgiveness of $600,000.

No affiliate of CXT has guaranteed the minimum payments.

CXT’s obligations under the agreement are secured by

a security interest in the proceeds (from litigation or otherwise) from the CXT Portfolio.

During the year ended December 31, 2020, CXT

paid approximately $194,000 under the agreement.

(“M-RED”), a wholly-owned subsidiary, and Intellectual

Ventures Assets 113 LLC and Intellectual Ventures Assets 108 LLC (“IV 113/108”) pursuant to which at closing M-RED paid IV

113/108 $75,000 and IV 113/108 transferred to M-RED all right, title and interest in a portfolio of sixty United States patents and eight

foreign patents (the “M-RED Portfolio”).

Under the agreement, M-RED will distribute 50% of net proceeds, as defined, to IV

113/108, as long as we generate revenue from the M-RED Portfolio.

The agreement with IV 113/108 provides that if, on September 30, 2020,

September 30, 2021 and September 30, 2022, cumulative distributions to IV 113/108 total less than $450,000, $975,000 and $1,575,000, respectively,

M-RED shall pay the difference between such cumulative amounts and the amount paid to IV 113/108 within ten days after the applicable

CXT’s obligations under the agreement are secured by a security interest in the proceeds (from litigation or otherwise) from the CXT Portfolio.

● M-RED and Intellectual Ventures Assets 113 LLC and Intellectual Ventures Assets 108 LLC (“IV 113/108”) pursuant to which at closing M-RED paid IV 113/108 $75,000 and IV 113/108 transferred to M-RED all right, title and interest in a portfolio of sixty United States patents and eight foreign patents (the “M-RED Portfolio”).

Under the agreement, M-RED will distribute 50% of net proceeds, as defined, to IV 113/108, as long as M_RED generates revenue from the M-RED Portfolio.

The agreement with IV 113/108 provides that if, on September 30, 2020, September 30, 2021 and September 30, 2022, cumulative distributions to IV 113/108 total less than $450,000, $975,000 and $1,575,000, respectively, M-RED shall pay the difference between such cumulative amounts and the amount paid to IV 113/108 within ten days after the applicable date;

with any advances being credited toward future distributions to IV 113/108.

On September 30, 2020 cumulative distributions to IV

113/108 totaled less than $450,000 and M-RED did not pay the difference to IV 113/108 within ten days.

Non-payment which is not cured

within 30 days after written notice from IV 113/108 would constitute an Acceleration Event under the agreement, following which, in addition

to any other remedies available under the agreement, all outstanding minimum cumulative distributions would become due and payable within

As of the date of filing, no such written notice of non-payment has been given by IV 113/108.

As of December 31, 2020, $600,000

and $900,000 of the minimum future cumulative distributions were presented as long-term and short-term debt, respectively, based on payment

No affiliate of M-RED has guaranteed the minimum payments.

M-RED’s obligations under the agreement with IV 113/108 are

secured by a security interest in the proceeds (from litigation or otherwise) from the M-RED Portfolio.

The non-current portion of our obligations under the unsecured non-recourse funding agreement with a third-party funder entered into in May 2020 whereby the third-party agreed to provide acquisition funding in the amount of $95,000 for the Company’s acquisition of the audio messaging portfolio.

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

as defined, recovered until the funder has received $190,000.

The Company has no other obligation to the third party and has no liability to the funder in the event that the Company does not generate net proceeds.

Pursuant to ASC 470, the company recorded this monetization obligation as debt and the difference between the purchase price and total obligation as a discount to the debt and fully expensed to interest during the period.

As of December 31, 2020, cumulative distributions totaling $975,000 had not been made and M-RED did not pay the $900,000 difference to IV 113/108 within ten days and the remaining $900,000 of the minimum future cumulative distributions due were presented as short-term debt.

On December 31, 2021 the parties amended the agreement to provide that M-RED will distribute 100% of undistributed net proceeds, as defined, resulting from agreements signed prior to December 31, 2021 and 65% of net proceeds thereafter to IV 113/108, as long as M-RED generates revenue from the M-RED Portfolio and that if, on December 31, 2021 cumulative distributions to IV 113/108 total less than $302,113.89, M-RED shall pay the difference between such cumulative amounts and the amount paid to IV 113/108 within ten days after the applicable date.

As of December 31, 2021 cumulative distributions to IV 113/108 totaled $302,113.89, no further minimum cumulative distributions are required pursuant to the agreement as amended and the Company recorded a gain on forgiveness of approximately $1,230,000.

M-RED’s obligations under the agreement with IV 113/108 are secured by a security interest in the proceeds (from litigation or otherwise) from the M-RED Portfolio.

The purchase price of patents at December 31,

2021 represents:

The non-current portion of our obligations under

the unsecured non-recourse funding agreement with a third-party funder entered into in May 2020 whereby the third-party agreed to provide

acquisition funding in the amount of $ 95,000 for the Company’s acquisition of the audio messaging portfolio.

Under the funding agreement,

the third-party funder is entitled to a priority return of funds advanced from net proceeds, as defined, recovered until the funder has

received $ 190,000 .

The Company has no other obligation to the third party and has no liability to the funder in the event that the Company

does not generate net proceeds.

Pursuant to ASC 470, the company recorded this monetization obligation as debt and the difference between

the purchase price and total obligation as a discount to the debt and fully expensed to interest during the period.

The balance of the purchase price of the patents

7 unchanged sentences

Total current and non-current

Effective interest rate of Amortized over 2 years

Effective interest rate of Amortization over 2 years

Because the non-current minimum payment obligations

are due over the next three years, the Company imputed interest of 10% which was recorded as a discount to the liabilities and amortized

through the maturity date.

Amortization recorded to interest expense amounted to $245,710 and $159,450 for the years ended December 31,

2020 and 2019, respectively.

December 2018, the Company entered into a funding agreement whereby a third party agreed to provide funds in the amount of $150,000,

in support of the structured licensing programs of PIS and M-RED.

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.

Our relationship with the above investors meets

the criteria in ASC 470-10-25 - Sales of Future Revenues or Various Other Measures of Income (“ASC 470”), which relates to

cash received from an investor in exchange for a specified percentage or amount of revenue or other measure of income of a particular

product line, business segment, trademark, patent, or contractual right for a defined period.

Under this guidance, we recognized the fair

value of our contingent obligation to the investor, as of the acquisition date, as long-term debt in our consolidated balance sheets.

This initial fair value measurement is based on the perspective of a market participant and includes significant unobservable inputs which

are classified as Level 3 inputs within the fair value hierarchy and are discussed further within Note 2.

Our repayment obligations are

contingent upon future patent licensing fee revenues generated from the licensing programs.

Under ASC 470, amounts recorded as debt shall

be amortized under the interest method.

The Company made an accounting policy election to utilize the prospective method when there is

a change in the estimated future cash flows, whereby a new effective interest rate is determined based on the revised estimate of remaining

The new rate is the discount rate that equates the present value of the revised estimate of remaining cash flows with the

carrying amount of the debt, and it will be used to recognize interest expense for the remaining periods.

Under this method, the effective

interest rate is not constant, and any change in expected cash flows is recognized prospectively as an adjustment to the effective yield.

During periods ended December 31, 2020 and 2019, we paid the third party providing funds in support of the PIS and M-RED structured licensing

programs approximately $130,000 and $20,000, respectively, under the funding agreement, satisfying the long-term debt balance in full.

For the year ended December 31, 2020, the Company recognized amortization of $95,000.

DERIVATIVE LIABILITIES

Because there is not a fixed conversion price,

remaining compliant with the reserve requirement under the notes held by Intelligent Partners as transferee of United Wireless, is outside

of the control of the Company.

As a result of this, the Company has a potential inability to have sufficient available authorized common

shares to settle certain outstanding instruments beginning with the date that the reserve requirement went into effect on January 22,

There is no limit on the number of shares issuable under the note, and absent an increase in the stock price or an increase in authorized

shares, there are potentially not enough authorized shares to satisfy the exercise of the Company’s options, thus these options

qualify as derivative liabilities under ASC Topic 815.

On January 22, 2016, the Company reclassified all non-employee warrants and options

as derivative liabilities and revalued them at their fair values at each balance sheet date.

Any change in fair value was recorded as

non-operating, non-cash income or expense for each reporting period at each balance sheet date.

The option expired unexercised on September

Consequently, the derivative liability as of the date the options expired was credited to additional paid in capital.

of December 31, 2020, and December 31, 2019, the aggregate fair value of the outstanding derivative liability was approximately

$0 and $595,000, respectively.

Company estimated the fair value of the derivative liability using the Black-Scholes option pricing model using the following

key assumptions during the years ended December 31, 2020 and 2019:

were due over three years , the Company imputed interest of 10 % which was recorded as a discount to the liabilities and amortized through

the maturity date.

Long term liabilities

The loans payable-SBA at December 31, 2021 represents:

● An unsecured loan from JPMorgan Chase Bank, N.A.

in the aggregate amount of $ 20,832 , pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, which was enacted March 27, 2020.

The loan, which was taken down on April 23, 2020, matures on April 23, 2022 and bears interest at a rate of 0.98 % per annum, with interest payable monthly commencing on November 23, 2020.

The loan may be prepaid by the Company at any time prior to maturity with no prepayment penalties.

The Company has used the entire loan amount for qualifying expenses.

Under the terms of the PPP, certain amounts of the loan may be forgiven if they are used for qualifying expenses as described in the CARES Act.

As of December 31, 2021 the loan has been forgiven and the Company recorded a gain on loan forgiveness of $ 20,832 .

● A secured Economic Injury Disaster Loan from the U.S.

Small Business Association (“SBA”) in the aggregate amount of $ 150,000 , pursuant to Section 7(b) of the Small Business Act as part of the COVID-19 relief effort.

The Company’s obligations on the loan are set forth in the Company’s note dated May 14, 2020 which matures on May 14, 2050 and bears interest at a rate of 3.75 % per annum, payable monthly commencing on May 14, 2022.

The Note may be prepaid by the Company at any time prior to maturity with no prepayment penalties.

Funds from the Loan may be used solely as working capital to alleviate economic injury caused by disaster occurring in the month of January 31, 2020 and continuing thereafter and to pay Uniform Commercial Code (UCC) lien filing fees and a third-party UCC handling charge of $ 100 which were deducted from the loan amount stated above.

In addition to the loan, as part of the COVID-19 relief effort, the Company obtained an Emergency EIDL Grant from the SBA in the amount of $ 1,000 .

The Company is not required to repay the grant.

NOTE 4 – WARRANT LIABILITY

The Company issued warrants to purchase 96,246,246 shares of common

stock to QFL (see Note 3) in connection with its funding agreement.

If on the date of initial exercise the aggregate number of warrant

shares purchasable upon exercise of the warrant would yield less than an amount equal to 10 % of the aggregate number of outstanding shares

of capital stock of the Company (determined on a fully diluted basis), then the number of warrant shares shall be increased to an amount

equal to 10 % of the aggregate number of outstanding shares of capital stock of the Company (determined on a fully diluted basis), the

number of shares underlying the warrants is not fixed until the date of the initial exercise.

As such, the warrant issued to QFL requires

classification as a liability pursuant to ASC Topic 480, Distinguishing Liabilities from Equity and is valued at its fair value as of

the grant date and re-measured at the balance sheet date.

As of December 31, 2021, and February 22, 2021,

the aggregate fair value of the outstanding warrant liability was approximately $ 1,636,187 and $ 1,154,905 , respectively.

The Company estimated the fair value of the warrant

liability using the Black-Scholes option pricing model using the following key assumptions as of December 31, 2021 and the grant date:

Exercise price

Risk-free interest rate

1 unchanged sentence

Expected term

(1) Inputs as of valuation on expiration date of September 30, 2020

following schedule summarizes the valuation of financial instruments that are remeasured on a recurring basis at fair value in

the balance sheets as of December 31, 2020 and 2019:

The following schedule summarizes the valuation

of financial instruments that are remeasured on a recurring basis at fair value in the balance sheets as of December 31, 2021 and

Fair Value Measurements as of

1 unchanged sentence

December 31, 2020

Conversion option derivative liability

Warrant liability

Total liabilities

following table sets forth a reconciliation of changes in the fair value of derivative liabilities classified as Level 3 in the

fair value hierarchy:

The following table sets forth a reconciliation

of changes in the fair value of the warrant liabilities classified as Level 3 in the fair value hierarchy:

Significant Unobservable Inputs

Balance - December 31, 2018

Change in fair value

Balance –

December 31, 2019

Fair value at grant date

Change in fair value

Resolution of derivative liability

Balance - December 31, 2021

STOCKHOLDERS’

summary of the status of the Company’s stock options and changes is set forth below:

- December 31, 2018

December 31, 2019

- December 31, 2020

exercisable at end of year

INTANGIBLE ASSETS

See Notes 3 and 5 for information on the warrant

NOTE 5 – STOCKHOLDERS’ EQUITY

Amendment to the 2017 Equity Incentive Plan

On 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, the amendment to the

Plan and the grants of awards pursuant to the Plan, became effective upon the closing of the agreements with QFL.

Issuance of Common Stock and Options

Issuances to Intelligent Partners

On February 22, 2021, pursuant to the Restructure

Agreement, Intelligent Partners and its controlling members agreed to extinguish the notes and Transferred Note, and terminate or amend

and restate the SPA and Transaction Documents and the Company:

(i) issued to Fitton and Carper, as holders of the Transferred Note, pursuant

to the Stock Purchase Agreement a total of 46,296,296 shares of the Company’s common stock at a purchase price of $0.0054 per share,

which purchase price was paid by the conversion and in full satisfaction of the Company’s obligation under the Transferred Note

and included in the calculation of the repurchase price of the debt;

and (ii) granted Intelligent Partners, pursuant to the Option Grant,

an option to purchase a total of 50,000,000 shares of common stock, with an exercise price of $0.0054 per share which vested immediately

and may be exercised through September 30, 2025.

The Company valued the purchase option at approximately $598,000 using the Black-Scholes

pricing model.

Variables used in the valuation include (1) discount rate of 1.37 %;

(2) option life of 5 years;

(3) computed volatility

of 252 % and (4) zero expected dividends.

The fair market value of the options was included in the loss on extinguishment calculation (see

The Company granted Intelligent Partners, Andrew Fitton and Michael Carper certain registration rights with respect to (i) the

50,000,000 shares currently owned by Fitton and Carper;

(ii) the 46,296,296 Conversion Shares issued to Fitton and Carper, and (iii) the

50,000,000 shares of common stock issuable upon exercise of the option.

Commencing six months from the closing date, if the shares owned

by Fitton, Carper and Intelligent Partners cannot be sold pursuant to a registration statement and cannot be sold pursuant to Rule 144

without the Company being in compliance with the current public information requirements of Rule 144, if the Company is not in compliance

with the current public information requirements, the Company is required to pay damages to Intelligent Partners.

Consulting Agreements

On February 22, 2021, the Company entered into

advisory service agreement with three consultants pursuant to which they will provide services to the Company in connection with the development

of the Company’s business.

The agreements have a term of ten years and may be terminated by the Company for cause or upon the death

or disability of the consultants.

Pursuant to the agreements with two of the consultants,

the compensation payable to each of them consists of a restricted stock grant of 10,000,000 shares of Common Stock which vested immediately

upon issuance and a ten-year option to purchase a total of 30,000,000 shares of Common Stock, which become exercisable cumulatively as

10,000,000 shares at an exercise price of $0.01 per share becoming exercisable upon the commencement of trading of the Common Stock on the OTCQB.

The Company regained such compliance on May 7, 2021, at which time the common stock recommenced trading on the OTCQB.

10,000,000 shares at an exercise price of $0.05 per share becoming exercisable on the date on which the Common Stock is listed for trading on the Nasdaq Stock Market or the New York Stock Exchange.

The Company recorded professional fees in the

amount of $240,000 as a result the restricted stock grants to these two consultants.

The Company determined the fair value of the options

as of the grant date to be approximately $720,000 using the Black-Scholes pricing model.

Variables used in the valuation include (1) discount

rate of 1.37%;

(2) term of 10 years;

(3) computed volatility of 252% and (4) zero expected dividends.

The Company met the first performance

condition and accrued the option expense of approximately $240,000 over the period from the grant date to achievement of the performance

The Company recognized option expense of approximately $240,000 for the year ended December 31, 2021.

Pursuant to the agreement with the third consultant, the compensation

payable to the consultant consists of a restricted stock grant of 10,000,000 shares of Common Stock which immediately vests in full and

a ten-year option to purchase 30,000,000 shares of Common Stock, which becomes exercisable cumulatively as follows:

10,000,000 shares at an exercise price of $0.01 per share became exercisable on February 22, 2022, which was the first anniversary of the date of the agreement;

10,000,000 shares at an exercise price of $0.03 per share upon the second anniversary of the date of the agreement;

10,000,000 shares at an exercise price of $0.05 per share upon the third anniversary of the dare of the agreement.

The Company recorded professional fees in the amount of $120,000 as

a result the restricted stock grant to the third consultant.

The Company determined the fair value of the options as of the grant date

to be approximately $360,000 using the Black-Scholes pricing model.

Variables used in the valuation include (1) discount rate of 1.37%;

(2) term of 10 years;

(3) computed volatility of 252% and (4) zero expected dividends.

The Company recognized option expense of approximately

$188,000 for the year ended December 31, 2021.

Compensatory Arrangements of Certain Officers

On February 22, 2021, the board of directors:

(i) Granted restricted stock grants for services rendered and vesting in full upon grant, to:

Scahill – 49,000,000 shares

Scahill – 10,000,000 shares

Carroll - 10,000,000 shares

Granted Jon Scahill a ten-year option (the “Option”) to purchase 60,000,000 shares of Common Stock which become exercisable cumulatively as follows:

20,000,000 shares at an exercise price of $0.01 per share becoming exercisable upon the commencement of trading of the Common Stock on the OTCQB.

The Company regained such compliance on May 7, 2021, at which time the common stock recommenced trading on the OTCQB.

20,000,000 shares at an exercise price of $0.03 per share, becoming exercisable on the first day on which the Company files with the SEC a Form 10-K or Form 10-Q which stockholders” equity of at least $5,000,000, and

20,000,000 shares at an exercise price of $0.05 per share becoming exercisable on the date on which the Common Stock is listed for trading on the Nasdaq Stock Market or the New York Stock Exchange

(iii) Appointed Ryan T.

Logue to the board of directors and granted Mr.

Logue a restricted stock grant of 5,000,000 shares of common stock which vests upon his acceptance of his appointment as a director.

The Company recognized compensation expense of

$ 888,000 in conjunction with issuance of common stock to officers and directors.

The Company determined the fair value of the options

to be approximately $ 720,000 as of the grant date using the Black-Scholes pricing model.

Variables used in the valuation include (1) discount

rate of 1.37 %;

(2) term of 10 years;

(3) computed volatility of 252 % and (4) zero expected dividends.

The Company recognized option expense

of approximately $ 240,000 for the year ended December 31, 2021.

A summary of the status of the Company’s

stock options and changes is set forth below:

Balance - December 31, 2019

Balance - December 31, 2020

Balance – December 31, 2021

Options exercisable at end of period

The intrinsic value of the outstanding options as of December 31, 2021

is $ 930,000 .

As of December 31, 2021, there was approximately $ 1,132,000 of unrecognized

compensation expense related to nonvested stock option awards that is expected to be recognized over a weighted average expected term

Issuance of Warrants

A summary of the status of the Company’s warrants and changes

is set forth below:

Balance – December 31, 2019

Balance - December 31, 2020

Balance – December 31, 2021

The intrinsic value of the outstanding warrants

as of December 31, 2021 is $ 1,116,456 .

NOTE 6 – INTANGIBLE ASSETS

Intangible assets include patents purchased and

3 unchanged sentences

Imputed interest

( 4,362,117 )

accumulated amortization

( 2,266,157 )

Net value of intangible assets

assets are comprised of patents with estimated useful lives.

Intangible assets are comprised of patents with

estimated useful lives.

The intangible assets at December 31, 2021 represent:

acquired in October 2015 for a purchase price of $3,000,000, the useful lives of the patents, at the date of purchase, was

patents acquired in July 2017 pursuant to an obligation to pay 50% of net revenues to IV 34/37 (see Note 3);

● patents acquired in October 2015 for a purchase price of $3,000,000, the useful lives of the patents, at the date of purchase, was 6-10 years;

patents acquired in July 2017 pursuant to an agreement with IV 34/37, as amended on December 31, 2021, pursuant to which CXT has an obligation to pay 65% of net revenues to IV 34/37 (see Note 3);

the useful lives of the patents, at the date of acquisition, was 5-6 years;

patents (which were fully depreciated at the date of acquisition) acquired in January 2018 pursuant to an agreement with to Intellectual Ventures Assets 62 LLC and Intellectual Ventures Assets 71 LLC “(IV 62/71”), pursuant to which CXT has an obligation to distribute 50% of net revenues to IV 62/71;

patents (which were fully depreciated at the date of acquisition) acquired in January 2018 by Photonic Imaging Solutions Inc.

(“PIS”) from Intellectual Ventures Assets 64 LLC (“IV 64”) pursuant to which PIS is to pay IV 64 (a) 70% of the first $1,500,000 of net revenue, (b) 30% of the next $1,500,000 of net revenue and (c) 50% of net revenue in excess of $3,000,000;

patents acquired in March 2019 pursuant to an obligation to pay 50% of net revenues to IV 113/108 (see Note 3);

(which were fully depreciated at the date of acquisition) acquired in January 2018 by Photonic Imaging Solutions Inc.

from Intellectual Ventures Assets 64 LLC (“IV 64”) pursuant to which PIS is to pay IV 64 (a) 70% of the first $1,500,000

of net revenue, (b) 30% of the next $1,500,000 of net revenue and (c) 50% of net revenue in excess of $3,000,000;

patents acquired in March 2019 pursuant to an agreement with IV 113/108, as amended on December 31, 2021 to an obligation to pay 65% of net revenues to IV 113/108 (see Note 3);

the useful lives of the patents, at the date of acquisition, was approximately 9 years.

patents (which were fully depreciated at the date of acquisition) acquired in May 2020 for a purchase price of $95,000 pursuant to an agreement with Texas Technology Ventures 2, LLP (“TTV”), pursuant to which of the Company retains the first $230,000 of net proceeds, as defined in the agreement, after which the company has an obligation to distribute 50% of net proceeds to TTV.

The Company amortizes the costs of patents over

their estimated useful lives on a straight-line basis.

Costs incurred to acquire the patents, including legal costs, are also capitalized

and amortized on a straight-line basis over the life of the associated patent.

Amortization of patents is included as a selling, general

and administrative expense as reflected in the accompanying consolidated statements of operations.

patents (which were fully amortized at the date of acquisition) acquired

in February 2021 pursuant to an agreement with PKT for a purchase price of $350,000, pursuant to which $350,000 was paid at closing, and

upon the realization of gross proceeds, as defined in the agreement, the Company shall make a subsequent payments in the aggregate amount

of $93,900, representing reimbursement to PKT, as the prosecuting attorney, for legal fees associated with prosecution of the portfolio,

such reimbursement shall be due and payable to PKT from time to time as gross proceeds are realized, if any, and paid to PKT along with

and in proportion to reimbursement to other third parties of costs incurred in realizing gross proceeds.

Thereafter, PKT is entitled to

a percentage of gross proceeds realized, if any.

● patents (which were fully depreciated at the date of acquisition) acquired in May 2021 for a purchase price of $250,000.

● patents acquired in October 2021 from AI for a purchase price of $ 550,000

pursuant to which the Company retains an amount equal to the purchase price plus any fees incurred out of net proceeds, as defined in

the agreement, after which AI is entitled to a percentage of further net proceeds realized, if any;

the useful lives of the patents, at

the date of acquisition, was approximately 11 years.

The Company amortizes the costs of patents over their estimated useful

lives on a straight-line basis.

Costs incurred to acquire the patents, including legal costs, are also capitalized and amortized

on a straight-line basis over the life of the associated patent.

Amortization of patents is included as a selling, general and administrative

expense as reflected in the accompanying consolidated statements of operations.

The Company assesses intangible assets for any

impairment to the carrying values.

As of December 31, 2020, management concluded that there was no impairment to the acquired assets.

For the year ended December 31, 2021, the Company recorded non-cash impairment charges of approximately

$1,652,00 to write down finite lived intangible assets in the Power Management/Bus Controller, CXT and M-RED portfolios.

Amortization expense for patents comprised $ 1,159,865

1 unchanged sentence

Future amortization of patents is as follows:

ended December 31,

Year ended December 31,

2026 and thereafter

Company granted IV 34/37 a security interest in the patents transferred to the Company as security for the payment of the balance

of the purchase price.

The security interest of IV 34/37 is senior to the security interest of United Wireless in the proceeds

derived from such patents.

NON-CONTROLLING INTEREST

following table reconciles equity attributable to the non-controlling interest related to Quest Packaging Solutions Corporation.

beginning of year

income (loss) attributable to non-controlling interest

Company uses the liability method, where deferred tax assets and liabilities are determined based on the expected future tax consequences

of temporary differences between the carrying amounts of assets and liabilities for financial and income tax reporting purposes.

As of December 31, 2020, the Company has generated approximately $8,355,942 of net operating loss (“NOL”) carry forwards

At December 31, 2020, the Company had debt due

to Intelligent Partners pursuant to the securities purchase agreement dated October 22, 2015 between the Company and United Wireless,

and the Company was to pay 15 % of the net monetization proceeds from the patents acquired in October 2015 to Intelligent Partners, as

transferee of United Wireless.

See the caption “Loan Payable Related Party” in Note 3 in connection with the extinguishment

and restructuring of the Company’s obligations to Intelligent Partners.

NOTE 7 – NON-CONTROLLING INTEREST

The following table reconciles equity attributable

to the non-controlling interest related to Quest Packaging Solutions Corporation.

Balance, beginning of year

Net loss attributable to non-controlling interest

Balance, end of year

NOTE 8 – INCOME TAXES

The Company uses the liability method, where deferred

tax assets and liabilities are determined based on the expected future tax consequences of temporary differences between the carrying

amounts of assets and liabilities for financial and income tax reporting purposes.

As of December 31, 2021, the Company has generated

approximately $ 9,965,487 and approximately $ 2,063,797 of federal and state net operating loss (“NOL”) carry forwards, respectively,

which will begin to expire in 2024.

Internal Revenue Code section 382 (“Section 382”) restricts the use of these net

operating losses in future periods if the Company has a “substantial change in ownership”

as defined by Section 382.

The Company has had significant equity transactions in prior periods.

Due to this equity activity and the restrictions resulting

under Section 382, a portion of the Company’s NOLs may not be available to offset future taxable income.

Therefore, the

Company has fully reserved the deferred tax asset resulting from the net operating loss carry forwards.

tax asset consisted primarily of the following:

operating loss carry forward

debt reserves

Internal Revenue Code section 382 (“Section 382”) restricts the use of these net operating

losses in future periods if the Company has a “substantial change in ownership” as defined by Section 382.

The Company has

had significant equity transactions in prior periods.

Due to this equity activity and the restrictions resulting under Section 382, a

portion of the Company’s NOLs may not be available to offset future taxable income.

Therefore, the Company has fully reserved the

deferred tax asset resulting from the net operating loss carry forwards.

Deferred tax asset consisted primarily of the

Net operating loss carry forward

Bad debt reserves

Intangible assets

Valuation allowance

$ ( 2,797,739 )

$ ( 2,704,809 )

expense consisted primarily of the following:

Company’s tax expense does not reflect the statutory rate since the Company’s deferred tax asset is fully offset by

a valuation allowance.

The statute of limitations is open for the tax years ending December 31, 2017 and thereafter.

Company’s foreign tax expense reflects the tax withheld by the foreign jurisdiction on royalty income received by the Company

and not exempt under the United States tax treaty, if any, with the respective foreign jurisdiction.

In 2020, the Company was

subject to foreign source withholding tax of 20.4% in Japan.

In 2019, the Company was subject to foreign source withholding tax

of 10% in the People’s Republic of China.

RELATED PARTY TRANSACTIONS

Company has at various times entered into transactions with related parties, including officers, directors and major shareholders,

wherein these parties have provided services, advanced or loaned money, or both, to the Company needed to support its daily operations.

Balance, end of year

Tax expense consisted primarily of the following:

The Company’s tax expense does not reflect

the statutory rate since the Company’s deferred tax asset is fully offset by a valuation allowance.

Reconciliation between the effective

tax rate on income from continuing operations and the statutory rate for the year ended December 31, 2021 is as follows:

Book income before taxes

$ ( 872,129 )

State taxes, net

Tax exempt income – grant and/or SBA

Meals and entertainment

Warrant expense

Stock based compensation

Loss on conversion of debt

Valuation allowance

Derivative valuation adjustment

Effective tax rate

The statute of limitations is

open for the tax years ending December 31, 2018 and thereafter.

The Company’s foreign tax expense reflects the tax withheld by

the foreign jurisdiction on royalty income received by the Company and not exempt under the United States tax treaty, if any, with the

respective foreign jurisdiction.

In 2021, the Company was not subject to foreign source withholding tax.

In 2020, the Company was subject

to foreign source withholding tax of 20.4% in Japan.

NOTE 9 – RELATED PARTY TRANSACTIONS

The Company has at various times entered into

transactions with related parties, including officers, directors and major shareholders, wherein these parties have provided services,

advanced or loaned money, or both, to the Company needed to support its daily operations.

The Company discloses all related party transactions.

See Notes 3 and 6 in connection with transactions

with United Wireless.

During periods ended December 31, 2020 and 2019, the Company incurred interest expense on the Company’s 10%

notes issued to United Wireless and held by Intelligent Partners, an affiliate of United Wireless and a related party, pursuant to the

securities purchase agreement dated October 22, 2015.

The interest expense was approximately $351,000 and $467,000 for the year ended

December 31, 2020 and 2019, respectively.

On each of September 30, 2017 and 2018, accrued interest was added to the principal amount of

Subsequent to September 30, 2018, the Company is to pay interest quarterly.

Note 10 with respect to the employment agreement with the Company’s president and chief executive officer.

2020, the Company contracted with an entity owned by the chief technology officer for the provision of information technology

services to the Company.

The cost of these services was approximately $464 and $464 for the year ended December 31, 2020 and 2019,

respectively.

During 2020, the Company contracted with a law firm

more than 10 percent owned, but not controlled, by the father-in-law of the chief executive officer.

In prior periods, the Company incurred interest

expense on the Company’s 10 % notes issued to United Wireless pursuant to the securities purchase agreement dated October 22, 2015.

The notes were extinguished in February 2021 and the Company did not incur interest expense on the notes for the year ended December 31,

The interest expense was approximately $ 351,000 for the year ended December 31, 2020.

See Notes 3 and 5 in connection with the extinguishment

of the Company’s 10 % notes issued to United Wireless and held by Intelligent Partners as the transferee of United Wireless.

See Note 10 with respect to the employment agreement

with the Company’s president and chief executive officer.

During 2021, the Company contracted with an entity

owned by the chief technology officer for the provision of information technology services to the Company.

The cost of these services

was approximately $ 434 and $ 464 for the year ended December 31, 2021 and 2020, respectively.

During 2021, the Company contracted with a law

firm more than 10 percent owned, but not controlled, by the father-in-law of the chief executive officer.

The firm is engaged on a contingent

fee basis and serves as escrow agent in connection with monetization of the Company’s patents in matters where the firm is serving

as counsel to the Company.

In connection with the engagement, the Company recorded patent service costs of approximately $ 763,000 and

$0 for the years ended December 31, 2020 and 2019 respectively The amount recorded in 2020 includes approximately $407,000 in accrued

$ 909,000 for the years ended December 31, 2021 and 2020 respectively.

The amount recorded in 2020 includes approximately $ 407,000 in accrued

expenses and outstanding as of December 31, 2020.

The accrued liability is recorded in “accounts payable and accrued liabilities.”

In prior periods, the Company engaged a firm at which the father-in-law of the chief executive was formerly a partner.

Because his interest

in the prior firm was less than 10%, the prior firm was not considered a related party in prior periods.

COMMITMENTS AND CONTINGENCIES

to a restated employment agreement, dated November 30, 2014, with the Company’s president and chief executive officer, the

Company agreed to employ him as president and chief executive officer for a term of three years, commencing January 1, 2014, and

continuing on a year-to-year basis unless terminated by either party on not less than 90 days’

notice prior to the expiration

of the initial term or any one-year extension.

The agreement provides for an initial annual salary of $252,000, which may be increased,

but not decreased, by the board or the compensation committee.

In March 2016, the Company’s board of directors increased

the chief executive officer’s annual salary to $300,000, effective January 1, 2016.

The chief executive officer is entitled

to a bonus if we meet or exceed performance criteria established by the compensation committee.

In August 2016, the Company’s

board of directors approved annual bonus compensation equal to 30% of the amount by which our consolidated income before income

taxes exceeds $500,000, but, if the Company is subject to the limitation on deductibility of executive compensation pursuant to

Section 162(m) of the Internal Revenue Code, the bonus cannot exceed the amount which would be deductible pursuant to Section

The chief executive officer is also eligible to participate in any executive incentive plans which the Company may adopt.

The accrued liability is recorded in “accounts payable and accrued liabilities.”

The accrued liability was resolved as part of a resolution with the firm at which the father-in-law of the chief executive was formerly

See Note 3 with respect to the resolution of the dispute with the prior firm.

In prior periods, the Company engaged a firm

at which the father-in-law of the chief executive was formerly a partner.

Because his interest in the prior firm was less than 10 %, the

prior firm was not considered a related party in prior periods.

NOTE 10 – COMMITMENTS AND CONTINGENCIES

Employment Agreements

Pursuant to a restated employment agreement, dated

November 30, 2014, with the Company’s president and chief executive officer, the Company agreed to employ him as president and chief

executive officer for a term of three years, commencing January 1, 2014, and continuing on a year-to-year basis unless terminated by either

party on not less than 90 days’ notice prior to the expiration of the initial term or any one-year extension.

The agreement provides

for an initial annual salary of $ 252,000 , which may be increased, but not decreased, by the board or the compensation committee.

2016, the Company’s board of directors increased the chief executive officer’s annual salary to $300,000, effective January

The chief executive officer is entitled to a bonus if the Company meets or exceeds performance criteria established by the compensation

In August 2016, the Company’s board of directors approved annual bonus compensation equal to 30% of the amount by which

our consolidated income before income taxes exceeds $500,000, but, if the Company is subject to the limitation on deductibility of executive

compensation pursuant to Section 162(m) of the Internal Revenue Code, the bonus cannot exceed the amount which would be deductible pursuant

to Section 162(m).

The chief executive officer is also eligible to participate in any executive incentive plans which the Company may

Pension Benefits

Pursuant to the SEP IRA plan adopted by the Company in March 2020 the Company

deposited into a SEP IRA account of each of its participating employees a percentage of the employee’s compensation, subject to

statutory limitations on the amount of the contribution all as set forth in the IRS Form 5305-SEP.

Pursuant to the SEP IRA plan adopted by the Company in March 2020 the

Company deposited into a SEP IRA account of each of its participating employees a percentage of the employee’s compensation, subject

to statutory limitations on the amount of the contribution all as set forth in the IRS Form 5305-SEP.

For the year ending December 31,

the percentage was set at 19%.

The Company’s president and chief executive officer is the only participant and $57,000 was deposited

his SEP IRA account.

Royalties, Contingent Litigation Funding Fees and Contingent Legal Expenses

connection with the investment in certain patents and patent rights, certain of the Company’s 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.

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

agreements with the third party funding sources may provide that the funding source receive 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 the Company.

Company’s operating subsidiaries may retain the services of law firms in connection with their licensing and enforcement

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

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

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 the Company’s 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.

royalties, payments to noncontrolling 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

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.

Enforcement and Other Litigation

of the Company’s operating subsidiaries are engaged in litigation to enforce their patents and patent rights.

In connection

with these patent enforcement actions, 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

the Company 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 the Company or its operating subsidiaries, could materially harm the Company’s 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’

SUBSEQUENT EVENTS

of Agreements with QPRC Finance LLC (“QFL”)

February 22, 2021, we entered into a series of agreements, all dated February 19, 2021,with QFL, a non-affiliated party, including

a prepaid forward purchase agreement (the “Purchase Agreement”), a security agreement (the “Security Agreement”),

a subsidiary security agreement (the “Subsidiary Security Agreement”), a subsidiary guaranty (the “Subsidiary

Guarantee”), a warrant issue agreement (the “Warrant Issue Agreement”), a registration rights agreement (the

“Registration Rights Agreement”) and a board observation rights agreement (the “Board Observation Rights Agreement”

together with the Security Agreement, the Subsidiary Guaranty, the Subsidiary Security Agreement, Warrant Issuance Agreement,

Registration Rights Agreement and the Purchase Agreement, the “Investment Documents”) pursuant to which, at the closing

held contemporaneously with the execution of the agreements:

Pursuant to the Purchase Agreement, 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;

and (iii) $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.

The terms of the Purchase Agreement are described under “Purchase Agreement.”

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 pursuant to a restructure agreement (the “Restructure Agreement”) between the Company and Intelligent Partners executed contemporaneously with the closing of the Investment Documents.

The payment was made directly from QFL to Intelligent Partners.

The terms of the Restructure Agreement are described under “Restructure Agreement.”

Pursuant to the Security Agreement, our obligations under the Purchase Agreement with QFL are secured by:

(a) the proceeds (as defined in the Purchase Agreement);

(b) the patents (as defined in the Purchase Agreement;

and (d) proceeds (including, without limitation, cash proceeds and insurance proceeds) and products of the foregoing (a)-(c).

Pursuant to the Subsidiary Guaranty, eight of our subsidiaries –

Quest Licensing Corporation (“QLC”), Quest NetTech Corporation (“NetTech”), Mariner IC Inc.

(“Mariner”), Semcon IP Inc.

(“Semcon”), IC Kinetics Inc.

(“IC”), CXT Systems Inc.

(“CXT”), M-Red Inc.

(“MRED”), and Audio Messaging Inc.(“AMI”), collectively, the “Subsidiary Guarantors”) guaranteed our obligations to QFL under the Purchase Agreement.

Pursuant to the Subsidiary Security Agreement, the Subsidiary Guarantors grant QFL a security interest in the proceeds from the future monetization of their respective patent portfolios.

Pursuant to the Warrant Issue Agreement, we granted QFL ten-year warrants 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.

Exercisability of the warrant is limited if, upon exercise, the holder would beneficially own more than 4.99% (the “Maximum Percentage”) of our common stock, except that by written notice to us, the holder may change the Maximum Percentage to any other percentage not in excess of 9.99% provided any such change will not be effective until the 61 st day following notice to us.

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 capital stock of the Company (determined on a fully diluted basis).

We 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.

We granted QFL certain registration rights with respect to the 96,246,246 shares of common stock issuable upon exercise of the warrant.

Commencing six months from the closing date, if the shares owned by QFL cannot be sold pursuant to a registration statement and cannot be sold pursuant to Rule 144 without the Company being in compliance with the current public information requirements of Rule 144, if the Company is not in compliance with the current public information requirements, the Company is required to pay damages to QFL.

Observation Period ”), we granted QFL the right, exercisable at any time during the Observation Period, to appoint a representative to attend meetings (including, without limitation, telephonic or other electronic meetings) of the Board or any committee thereof, including executive sessions, in an observer capacity.

of Agreements with Intelligent Partners

Purchase Agreement and Related Agreements with United Wireless

together with certain of our subsidiaries, and United Wireless, entered into a Securities Purchase Agreement dated October 22,

2015 (the “SPA”) and related Transaction Documents, as defined therein, pursuant to which the Company sold 50,000,000

shares (the “Shares”) of our common stock, par value $0.00003 per share (the “Common Stock”) at $0.05

per share, or an aggregate of $250,000;

we issued our 10% secured convertible promissory notes due September 30, 2020 to United,

and granted United an option (the “2015 Purchase Option”) to purchase up to an additional 50,000,000 shares of Common

Stock in three tranches at the prices as set forth therein.

The 2015 Purchase Option expired unexercised on September 30, 2020.

The Shares are currently owned by Andrew C.

Fitton (“Fitton”) and Michael Carper (“Carper”) and United

Wireless subsequently transferred its note and assigned all of its remaining rights under the agreements to Intelligent Partners,

which is an affiliate of United Wireless and is owned by Fitton and Carper.

Our agreements with United Wireless, also included

various monetization proceeds agreements, which we refer to as MPAs, pursuant to which we granted to Intelligent Partners, as

the assignee of United Wireless, rights to the monetization proceeds from revenue generated from certain of our intellectual property,

a security agreement and a registration rights agreement.

The notes became due by their terms on September

30, 2020, and we did not make any payment on account of principal of and interest on the notes.

Subsequent to September 30, 2020, we engaged

in negotiations with Intelligent Partners in parallel with our negotiations with QFL, with a view to restructuring our obligations under

the United Wireless agreements, including the notes, so that we no longer had any obligations under the notes or the SPA.

These negotiations

resulted in the Restructure Agreement, described below, which provided for the payment to Intelligent Partners of $1,750,000 from the

proceeds from our agreements with QFL.

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, as describe

Under these MPAs, Intelligent Partners participates in the monetization proceeds we receive with respect to new patents after QFL

has received its negotiated rate of return.

On or prior to the date of the Restructure Agreement,

Intelligent Partners transferred to Fitton and Carper $250,000 of the notes (the “Transferred Note”), thereby reducing the

principal amount of the notes held by Intelligent Partners to $4,422,810.

On February 22, 2021, we and Intelligent Partners

agreed to extinguish the notes and Transferred Note, and terminate or amend and restate the SPA and Transaction Documents, pursuant to

a series of agreements including:

a Restructure Agreement (the “Restructure Agreement”), a Stock Purchase Agreement (the “Stock

Purchase Agreement”), an Option Grant (the “Option Grant”), an Amended and Restated Pledge Agreement (the “Pledge

Agreement”), an Amended and Restated Registration Rights Agreement (the “Registration Rights Agreement”), a Board Observation

Agreement (the “Board Observation Agreement”), a MPA-NA Security Interest Agreement (the “MPA-NA Security Interest Agreement”),

an Amended and Restated Patent Proceeds Security Agreement (the “Patent Proceeds Security Agreement”, an Amended and Restated

MPA-CP (the “MPA-CP”), an Amended and Restated MPA-CXT (the “MPA-CXT”), a MPA-MR (the “MPA-MR”), a

MPA-AMI (the “MPA-AMI,”

and together with the MPA-CP, MPA-CXT and MPA-MR, each a Restructure MPA and together the Restructure

MPAs) and a MPA-NA (the “MPA-NA”).

Pursuant to the Restructure Agreement, we paid Intelligent Partners $1,750,000 at closing, which we received from QFL and which QFL paid directly to Intelligent Partners, and recognized a further non-interest bearing total monetization proceeds obligation (the “TMPO”) of $2,805,000, which shall, from and after the Restructure Date, be reduced on a dollar for dollar basis by (a) payments to Intelligent Partners pursuant to the restructure agreement, the Restructure MPAs and the MPA-NA and (b) any election by the Intelligent Partners to pay the Exercise Price of the Restructure Option, in whole or part, by means of a reduction in the then outstanding TMPO.

Further details regarding the TMPO are provided under “TMPO”;

Pursuant to the Stock Purchase Agreement, we issued to Fitton and Carper, as holders of the Transferred Note, a total of 46,296,296 shares of our restricted common stock at a purchase price of $0.0054 per share, which purchase price was paid by the conversion and in full satisfaction of the Transferred Note (the “Conversion Shares”).

Pursuant to the Option Grant, we granted Intelligent Partners an option

to purchase a total of 50,000,000 shares of common stock, with an exercise price of $0.0054 per share which vests immediately and may

be exercised through September 30, 2025.

Pursuant to the restructured monetization proceeds agreement, Intelligent Partners has a right to receive 60% of the net monetization proceeds from the patents currently owned by the Subsidiary Guarantors.

The agreement has no termination provisions, so Intelligent Partners will be entitled to its percentage interest as long as revenue can be generated from the intellectual property covered by the agreement.

Pursuant to the MPA-NA, until the TMPO has been paid in full, IPLLC is entitled to receive 10% of the net proceeds realized from new assets acquired by the Company.

If, in any calendar quarter, net proceeds realized exceed $1,000,000, IPLLC’s 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, IPLLC’s entitlement for that quarter only shall increase to 50% on the portion of net proceeds in excess of $3,000,000.

After satisfaction of the TMPO, the MPA-NA and IPLLC’s interest in new asset proceeds shall terminate.

Pursuant to the Subsidiary Security Agreement, our obligations under our agreements with Intelligent Partners, including its obligations under the Restructure Agreement and the Restructure MPAs are secured by a security interest in the net proceeds realized from the future monetization of the patents currently owned by the eight subsidiaries named above.

secured interest shall be limited to its entitlement in Net Proceeds under the MPA-NA.

After satisfaction of the TMPO the security interest in proceeds from new assets shall terminate.

We granted Intelligent Partners, Andrew Fitton and Michael Carper certain registration rights with respect to (i) the 50,000,000 Shares currently owned by Fitton and Carper;

(ii) the 46,296,296 Conversion Shares being issued to Fitton and Carper, and (iii) the 50,000,000 shares of common stock issuable upon exercise of the Restructure Option;

Commencing six months from the closing date, if the shares owned by Intelligent Partners cannot be sold pursuant to a registration statement and cannot be sold pursuant to Rule 144 without the Company being in compliance with the current public information requirements of Rule 144, if the Company is not in compliance with the current public information requirements, the Company is required to pay damages to Intelligent Partners.

Pursuant to the Board Observation Rights Agreement, until the Total Monetization Proceeds Obligation has been satisfied (the “

Observation Period ”), we granted Intelligent Partners the option and right, exercisable at any time during the Observation Period, to appoint a representative to attend meetings of the Board or any committee thereof, including executive sessions, in an observer capacity.

Intelligent Partners has no right to appoint a director to the board.

of Default include (i) a Change of Control of the Company (ii) any uncured default on payment due to Intelligent Partners in an

amount totaling in excess of $275,000, which is not the subject of a Dispute or other formal dispute resolution proceeding initiated

in good faith pursuant to this Agreement or other Restructure Documents (iii) the filing of a voluntary petition for relief under

the United States Bankruptcy Code by Company or any of its material subsidiaries, (iv) the filing of an involuntary petition for

relief under the United States Bankruptcy Code against the Company, which is not stayed or dismissed within sixty (60) days of

such filing, except for an involuntary petition for relief filed solely by Intelligent Partners, or any Affiliate or member of

Intelligent Partners, or (v) acceleration of an obligation in excess of $1 million dollars to another provider of financing following

a final determination by arbitration or other judicial proceeding that such obligation is due and owing.

February 22, 2021, the Company entered into advisory service agreement with three consultants –

William Gates, Crystal Nicolson

and Jeff Toler pursuant to which they will provide services to the Company in connection with the development of the Company’s

The agreements have a term of ten years and may be terminated by the Company for cause or upon the death or disability

of the consultants.

to the agreements with Mr.

Gates and Ms.

Nicolson, the compensation payable to each of them consists of a restricted stock grant

of 10,000,000 shares of Common Stock which immediately vests in full and a ten-year option to purchase a total of 30,000,000 shares

of Common Stock, which become exercisable cumulatively as follows:

shares at an exercise price of $0.01 per share becoming exercisable upon the commencement of trading of the Common Stock on the

shares at an exercise price of $0.03 per share, becoming exercisable on the first day on which the Company files with the SEC

a Form 10-K or Form 10-Q which stockholders’

equity of at least $5,000,000, and

shares at an exercise price of $0.05/share becoming exercisable on the date on which the Common Stock is listed for trading on

the Nasdaq Stock Market or the New York Stock Exchange.

to the agreement with Mr.

Toler, the compensation payable to him consists of a restricted stock grant of 10,000,000 shares of

Common Stock which immediately vests in full and a ten-year option to purchase 30,000,000 shares of Common Stock, which becomes

exercisable cumulatively as follows:

shares at an exercise price of $0.01 per share upon the first anniversary of the agreement.

shares at an exercise price of $0.03 per share upon the second anniversary of the agreement;

shares at an exercise price of $0.05 per share upon the third anniversary of the agreement.

Compensatory Arrangements of Certain Officers

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, the amendment to the Plan and the grants of awards pursuant to the Plan, as described in Items 1.01 and 5.02, to be effective upon the closing of the agreements with QFL.

Granted restricted stock grants for services rendered and vesting in full upon grant, to:

Scahill –

49,000,000 shares

Scahill –

10,000,000 shares

Carroll - 10,000,000 shares

Granted Jon Scahill a ten-year option (the “Option”) to purchase 60,000,000 shares of Common Stock which become exercisable cumulatively as follows:

20,000,000 shares at an exercise price of $0.01 per share becoming exercisable upon the commencement of trading of the Common Stock on the OTCQB.

20,000,000 shares at an exercise price of $0.03 per share, becoming exercisable on the first day on which the Company files with the SEC a Form 10-K or Form 10-Q which stockholders’

equity of at least $5,000,000, and

20,000,000 shares at an exercise price of $0.05/share becoming exercisable on the date on which the Common Stock is listed for trading on the Nasdaq Stock Market or the New York Stock Exchange

Appointed Ryan T.

Logue to the board of directors and granted Mr.

Logue a restricted stock grant of 5,000,000 shares of common stock which vests upon his acceptance of his appointment as a director.

Patent Portfolio Acquisition

On February 26, 2021, the Company entered into an

agreement with Peter K.

Trzyna (“PKT”) pursuant to which PKT assigned to the Company all right, title, and interest in a

portfolio of eight United States patents (the “Peregrin Portfolio”).

Under the agreement, the Company paid PKT $350,000 at

closing and agreed that upon the realization of gross proceeds the Company shall make a second installment payment or payments in the

aggregate amount of $93,900, which shall be due and payable to PKT from time to time as gross proceeds are realized, paid to PKT with

reimbursement to third parties of costs incurred in realizing gross proceeds.

Thereafter, PKT is entitled to a percentage of gross proceeds

realized, if any.

The Company requested and received a capital advance in the amount of the $350,000 initial installment payment from

the facility with QFL.

2021 and 2020 the percentage was set at 19 %, respectively.

For the year ended December 31, 2021 and 2020, the Company’s president

and chief executive officer is the only participant and $ 58,000 and $ 57,000 , respectively, was deposited his SEP IRA account.

Inventor Royalties, Contingent Litigation Funding

Fees and Contingent Legal Expenses

In connection with the investment in certain patents

and patent rights, certain of the Company’s 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.

The Company’s 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 receive 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 the Company.

The Company’s operating subsidiaries may

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

These law firms may be retained on

a contingent fee basis whereby the law firms are paid 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.

The economic terms of the inventor agreements,

funding agreements and contingent legal fee arrangements associated with the patent portfolios owned or controlled by the Company’s

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 noncontrolling 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.

Patent Enforcement and Other Litigation

Certain of the Company’s operating subsidiaries

are engaged in litigation to enforce their patents and patent rights.

In connection with these patent enforcement actions, 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

In such event, a court may issue monetary sanctions against the Company 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 the Company or its operating subsidiaries,

could materially harm the Company’s 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’

NOTE 11 – BUSINESS COMBINATIONS

On August 6, 2021 the Company acquired all of

the issued and outstanding equity interests of STX from Soundstreak, LLC in exchange for an obligation to coordinate and launch a structured

licensing program around the STX patent portfolio which consists of three United States patents and one United States patent application.

Soundstreak LLC is entitled to 50 % of the net proceeds, as defined in the agreement, if any, resulting from monetization of the STX patent

On November 16, 2021 the Company acquired all

of the issued and outstanding equity interests of LS Cloud Storage Technologies, LLC (“LSC”) in exchange for assuming ownership

and management of the entity and bearing the transaction costs.

The acquisitions were accounted for in accordance

with ASC 805, Business Combinations (“ASC 805”).

ASC 805 provides, among other things, that the assets acquired and liabilities

assumed constitute a business.

If the assets acquired are not a business, the reporting entity shall account for the transaction or other

event as an asset acquisition which are accounted for using a cost accumulation and allocation model under which the cost of the acquisition

is allocated to the assets acquired and liabilities assumed.

The STX and LSC were recorded as asset acquisitions.

The cost of the LSC asset acquisition was $ 500

in legal fees, expensed at closing.

The initial cost of the STX asset acquisition was $ 0 with total consideration coming in the form of

contingent consideration, which will be recognized if and when it becomes payable.

NOTE 12 – SUBSEQUENT EVENTS

On January 27, 2022, the Company acquired, via

assignment from Intellectual Ventures Assets 181 LLC and Intellectual Ventures Assets 174 LLC, all right title and interest to four patent

portfolios consisting of fifteen United States patents and three foreign patents for a purchase price of $ 1,060,000 .

The Company requested

and received a capital advance in the amount of the $ 1,060,000 purchase price from the facility with QFL.

On February 28, 2022, the Company filed a certificate

of amendment to the certificate of incorporation of Quest Licensing Corporation, a New York corporation, changing the name of the corporation

to Digital IP Advisors Incorporated.

In March 2022, the Company received operating

capital advances in the amount of $ 200,000 from QFL pursuant to the Purchase Agreement.

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 9A. Controls and Procedures