What changed in this filing

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Item 1A. Risk Factors

2023-03-31 compared with 2022-04-01 · 293 added, 271 removed, 429 unchanged (57% of the section changed)

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

Risks Relating to our Financial Conditions

and Operations

Risks Relating to our Financial Conditions and Operations

We have a history of losses and are continuing

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

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

and our losses are continuing.

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

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

patents we acquired from AI in October of 2021.

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

We did not generate any revenue during the

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

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

we did not generate any revenue.

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

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

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

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

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

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

Monetization activities initiated may take several

quarters to generate revenues if ever.

Our independent auditors have included a going

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

Because of our history of

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

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

through December 31, 2022, we generated a cumulative loss of approximately $26.2 million on cumulative revenues of approximately $23.8

million, and our losses are continuing.

Our total assets were approximately $1,227,000 at December 31, 2022, of which approximately $1,131,000

represented the book value of patents we acquired from AI in October of 2021.

At December 31, 2022, we had a working capital deficiency

of approximately $9,490,000.

During 2021 and 2022 our business was impacted by our default under our loans to Intelligent Partners (as

successor to United Wireless), with Intelligent Partners having the ability to declare a default on our notes in the principal amount

of $4,672,810, with the possibility of our seeking protection under the Bankruptcy Act.

As a result, we ceased our monetization activities,

since no counsel would represent us on a contingent basis in view of the default and possible bankruptcy, and we devoted our efforts to

negotiating the agreements with QFL and Intelligent Partners.

We resumed our monetization activities following in February 2021 after

we entered into our agreements with QFL and Intelligent Partners.

However, the intellectual property monetization cycle is lengthy and

may be unsuccessful.

Monetization activities initiated may take several quarters, if not years, to generate revenues if ever.

the revenue for 2021 was generated pursuant to litigation which was commenced prior to 2021.

Our independent auditors have included a substantial

doubt going concern explanatory paragraph in their report on our financial statements for the year ended December 31, 2022 .

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

in the future, our independent auditors have included a substantial doubt going concern explanatory paragraph in their report on our financial

statements for the year ended December 31, 2022.

We require significant funding in order to

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our business, including litigation to monetize our intellectual property.

Although we have an agreement with QFL which provides a funding

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

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

We cannot assure you

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

The terms of our agreements with QFL and

Although we have agreements with QFL and QF3 which provide a

funding to acquire intellectual property rights, QFL or QF3 must approve any intellectual property we acquire and, if QFL or QF3 does

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

We cannot assure

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

The terms of our agreements with QF3, QFL and

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

Although we have an agreement with QFL

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

patent rights that the Company intends to monetize, of which we have received $2,210,000 as of March 15, 2022;

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

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

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

to Intelligent Partners.

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

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

monetization until QFL has received its investment return and thereafter we receive all of the net proceeds.

Pursuant to our restructure

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

Under our amended monetization proceeds agreements

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

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

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

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

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

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

in excess of $3,000,000.

These payments come from our share of the proceeds after QFL has recovered its negotiated rate of return.

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

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

We cannot assure you that, as a result of these

provisions, that we will generate any meaningful cash flow from the intellectual property we acquire.

If we do not generate sufficient

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

We have an agreement with QFL pursuant

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

rights that the Company intends to monetize, of which we have received $2,653,000 as of March 15, 2023;

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

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

as of March 15, 2023, and (iii) $1,750,000 which was used to fund the cash payment portion of the restructure of our obligations to Intelligent

We also have an agreement with QF3 pursuant to which QF3 agreed to make available to us a financing facility of (i) up to $25,000,000

for the acquisition of mutually agreed patent rights that the Company intends to monetize:

(ii) up to $4,000,000 for operating expenses

from which the Company may, at its discretion, draw up to $500,000 per calendar quarter, of which we have drawn down $500,000 as of March

15, 2023, and (iii) $3,300,000 which was used to fund purchase of a patent portfolio from Tower Semiconductor Ltd.

Pursuant to the QFL

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

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

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

all of the net proceeds.

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

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

proceeds from associated intellectual property portfolios.

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

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

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

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

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

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

These payments come from our share of the

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

In these agreements, the monetization proceeds

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

price for intellectual property rights.

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

cash flow from the intellectual property we acquire.

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

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

Our business may be impaired by the effects

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

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

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

on our business.

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of our intellectual property rights.

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

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

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

or offer a lower amount than they might otherwise accept.

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

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

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

The COVID-19 pandemic and the response to limit

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

to provide funding for our litigation.

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

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

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

Further, to the extent that holders of intellectual

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

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

The work shutdown affected the court system and the courts operated on a reduced schedule and some

courts may still have a backlog as a result of the pandemic.

As a result, deadlines may be postponed which may give defendants an incentive

to delay negotiations or offer a lower amount than they might otherwise accept.

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

and subvariants the public response may adversely affect the financial condition and prospects of defendants and potential defendants,

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

We are dependent upon our chief executive officer .

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Scahill will remain with

Any equity funding we obtain may result in

significant dilution to our stockholders .

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

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

Any equity funding we obtain may

result in significant dilution to our stockholders .

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

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

Our stock price has generally

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intellectual property rights that will generate significant revenue.

If we are not successful in monetizing our

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

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

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

If we are not successful in generating revenue for those

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

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

to new intellectual property rights.

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

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

If we are not successful in monetizing

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

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

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

If we are not successful in generating revenue

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

with them, which could both impair our ability to generate revenue from our intellectual property and make it more difficult for us to

obtain rights to new intellectual property rights.

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

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

If we are not successful in patent litigation,

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

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

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

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

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

Our funding sources for our patent

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

Thus, if any defendants obtain a judgment against one

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

into bankruptcy and acquire the patents in the bankruptcy proceeding.

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

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

subsidiary and may result in a default under our agreements with QFL and QF3 .

The United States patent laws provide that “the

court in exceptional cases may award reasonable attorney fees to the prevailing party.” Although the patents are owned by our subsidiaries

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

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

Thus, if any defendants obtain

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

to put the subsidiary into bankruptcy and acquire the patents in the bankruptcy proceeding.

As a result, it is possible that an adverse

verdict in a petition for legal fees could result in the loss of the patents owned by the subsidiary and a default under our agreements

with QFL and QF3.

Our inability to acquire intellectual property

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our litigation.

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

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

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

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

Because we need to rely on third-party funding

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

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

or any intellectual property we may acquire.

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

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

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

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

on investment to justify the investment.

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

until it has received a negotiated return.

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

investment, it will not fund litigation.

If QFL does not fund our acquisition or monetization of intellectual property we propose to acquire,

we cannot assure you that we will be able to negotiate funding agreements with third party funding sources on terms reasonably acceptable

to us, if at all.

Because of our financial condition, we may only be able to obtain funding on terms which are less favorable to us than

we would otherwise be able to obtain.

Although we have a funding agreement with QFL,

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

any funded litigation .

Although the funding source makes its evaluation as to the likelihood of success, patent litigation is very

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

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

Because QFL and Intelligent Partners hold a

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

funds through a debt financing .

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

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

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

The inability

to grant a security interest in these assets to a new lender would materially impair our ability to obtain debt financing for our operations,

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

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

property or any intellectual property we may acquire.

In determining whether to provide funding for intellectual property litigation,

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

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

property litigation.

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

a sufficient return on investment to justify the investment.

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

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

Unless QFL, QF3 or any other funding

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

If QFL or QF3 does not fund our

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

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

Because of our financial condition, we may

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

Although we have funding agreements with QFL

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

revenue from any funded litigation .

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

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

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

Because QFL, QF3 and Intelligent Partners hold

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

raise funds through a debt financing .

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

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

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

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

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

Because of our financial condition and our

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the following:

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

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

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

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

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

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

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

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

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

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

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

● our failure to have sufficient personal to satisfy the seller

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

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

in connection with any acquisition;

● our inability to enter into a definitive agreement with respect

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

● difficulty integrating the operations, technology and personnel

of the acquired entity;

● our inability to achieve the anticipated financial and other

benefits of the specific acquisition;

● difficulty in maintaining controls, procedures and policies

during the transition and monetization process;

● diversion of our management’s attention from other

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

negotiating agreements, negotiating funding and implementing a monetization program;

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

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

If we are unable to manage these risks and other

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

CLS Bank , struck down

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

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

The courts have been dealing for many years over

what business methods are patentable.

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

decisions dealing with patents, will be interpreted by courts.

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

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

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

represent us on a contingency basis.

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

and monetize those which we do obtain.

CLS Bank, struck down patents

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

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

The courts have been dealing for many years over what business

methods are patentable.

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

patents, will be interpreted by courts.

To the extent that the Supreme Court decision in Alice gives businesses reason to believe that

business model and software patents are not enforceable, it may become more difficult for us to monetize patents which are held to be

within the ambit of the patents before the Supreme Court in Alice and for us to obtain counsel willing to represent us on a contingency

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

Legislation, regulations or rules related to

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

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

Due to the nature of

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

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

Due to the nature

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

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

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

Kraft Foods Groups Brands , held that

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

and established place of business.

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

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

may become increasingly crowded.

Kraft Foods Groups Brands, held that a corporate

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

place of business.

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

popular for business incorporation, such as the Federal District Court for the District of Delaware, such courts may become increasingly

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

cases always take priority over patent enforcement actions.

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

complete any enforcement action.

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

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

future unless this trend changes.

Criminal cases always take

priority over patent enforcement actions.

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

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

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

Any reductions in the funding of the United

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

We believe that

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

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

As a result, we may

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

property or pay damages for lost royalties.

We believe that the

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

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

As a result, we may need to increase

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

damages for lost royalties.

Weak global economic conditions may cause potential

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

and supply line issues.

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

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

This response could have a material adverse effect on the willingness

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

and supply chain line issues.

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

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

This response could have a material adverse effect

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

If we are unable to adequately protect our

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

Our ability to compete depends in part upon the strength

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

and our ability to protect such intellectual property rights.

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

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

The efforts we take to protect our patents, intellectual

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

and other proprietary rights.

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

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

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

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

If we are unable to protect our patent assets and intellectual

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

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

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

In addition, protecting our intellectual

property and intellectual property rights is expensive and diverts our critical and limited managerial resources.

If any of the foregoing

were to occur, or if we are otherwise unable to protect our intellectual property and proprietary rights, our business and financial results

could be impaired.

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

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

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

We will enter into confidentiality and invention

agreements with our employees and consultants.

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

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

Moreover, others may independently develop substantially equivalent proprietary

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

intellectual property, we may not be able to monetize our intellectual property effectively .

Our ability to monetize our intellectual

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

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

We rely on a combination

of patent and intellectual property laws and agreements to establish and protect our patent, intellectual property and other proprietary

The efforts we take to protect our patents, intellectual property and other proprietary rights may not be sufficient or effective

at stopping unauthorized use of our patents, intellectual property and other proprietary rights.

In addition, effective trademark, patent,

There may be instances

where we are not able to protect or utilize our patent and other intellectual property in a manner that maximizes competitive advantage.

If we are unable to protect our patent assets and intellectual property and other proprietary rights from unauthorized use, the value

of those assets may be reduced, which could negatively impact our business.

Our inability to obtain appropriate protections for our intellectual

property may also allow competitors to enter our markets and produce or sell the same or similar products as those covered by our intellectual

property rights.

In addition, protecting our intellectual property and intellectual property rights is expensive and diverts our critical

and limited managerial resources.

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

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

Commencing legal proceedings to enforce our intellectual

property rights is burdensome and expensive.

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

or cannot afford to pursue, those proceedings.

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

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

Nevertheless, these agreements

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

Moreover, others may

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

Risks Concerning our Common Stock

If our stock price falls below $0.01 per share,

our common stock may be delisted from OTCQB .

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

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

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

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

Our registration rights agreement with QFL provides

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

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

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

of the following dates:

(i) the initial day of a maintenance failure;

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

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

In July 2022, we amended our

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

We subsequently received advice from OTC Markets

Group that the deficiency had been cured.

We had previously received a similar notice, and our common stock was taken off the OTCQB effective

August 31, 2020, and it traded on the OTC Pink Market until May 7, 2021 when trading resumed on the OTCQB.

We cannot assure you that we

will continue to meet the requirements for continued listing on the OTCQB, including the maintenance of a bid price of at least $0.01

There is a limited market for our common stock,

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

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

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

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

Further, because of the thin float,

the reported bid and asked prices may have little relationship to the price you would pay if you wanted to buy shares or the price you

would receive if you wanted to sell shares.

and traded on the OTC Pink because our stock price fell below $0.01 per share for more than 30 consecutive trading days and on May 23,

2022, we received notice from the OTC Markets Group that our bid price was less than $0.01 for more than 30 consecutive trading days.

As a result of the one-for-100 reverse split, which enabled our common stock to remain listed on the OTCQB, the number of shares in our

public float declined by approximately 99%.

Accordingly, there can be no assurance as to the liquidity of any markets that may develop

for our common stock, the ability of holders of our common stock to sell our common stock, or the prices at which holders may be able

to sell our common stock.

Further, because of the thin float, the reported bid and asked prices may have little relationship to the price

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

Because our common stock is a penny stock,

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transactions in penny stocks.

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

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

Our lack of internal controls over financial

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Our disclosure controls and our internal controls over financial

reporting are not effective.

Since we became engaged in the intellectual property management business in 2008, we have not had the financial

resources or personnel to develop or implement systems that would provide us with the necessary information on a timely basis so as to

be able to implement financial controls.

Our continued poor financial condition together with the fact that we have one full time employee,

who is both our chief executive officer and chief financial officer, makes it difficult for us to implement a system of internal controls

over financial reporting, and we cannot assure you that we will be able to develop and implement the necessary controls.

The absence of

internal controls over financial reporting may inhibit investors from purchasing our shares and may make it more difficult for us to raise

debt or equity financing.

reporting are not effective because of material weaknesses.

Since we became engaged in the intellectual property management business in

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

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

Our continued poor financial condition together with the fact that

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

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

the necessary controls.

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

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

Our lack of a full-time chief financial officer

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described above and general market and economic conditions:

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

the stock price;

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

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

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

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

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

market’s perception that a defendant may obtain a judgement against a subsidiary and foreclose on the intellectual property of

the subsidiary, which may result in a default under our agreement with QFL and, even if a default is not claimed, QFL may not provide

financing for us;

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

results or anticipated results of litigation by or against us;

anticipated or actual results of our operations;

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

in market valuations of other intellectual property marketing companies;

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

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

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

matters not within our control.

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

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

● the effect of the COVID-19 pandemic and the response to the

pandemic on the market both generally and on penny stocks;

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

positive cash flow or earnings from our intellectual property portfolios;

● changes in our or securities analysts’ estimate of

our financial performance;

● our ability or perceived ability to obtain necessary financing

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

● the market’s perception of the effects of legislation

or court decisions on our business;

● the market’s perception that a defendant may obtain

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

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

● the effects or perceived effects of the potential convertibility

of convertible notes issued by us;

● the results or anticipated results of litigation by or against

● the anticipated or actual results of our operations;

● events or conditions relating to the enforcement of intellectual

property rights generally;

● changes in market valuations of other intellectual property

marketing companies;

● any discrepancy between anticipated or projected results

and actual results of our operations;

● the market’s perception or our ability to continue

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

● actions by third parties to either sell or purchase stock

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

● other matters not within our control.

Raising funds by issuing equity or convertible

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

Our failure to have filed reports with the

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

We did not file reports with the

SEC from 2003 until December 2014.

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

our Form 10-K for

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

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

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

of investors to purchase our stock.

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

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

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

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

seeking enforcement action for our filing delinquencies.

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

and price of our common stock.

Because we have a classified board of directors,

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

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

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

will vote for only one-third of the board.

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

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

seeking to obtain control over us.

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

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

stockholder will vote for only one-third of the board.

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

gain control of us which may affect the opportunity of our stockholders to receive any potential benefit which could be available from

a third-party seeking to obtain control over us.

We do not intend to pay any cash dividends

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

What changed 10-K

Item 1A. Risk Factors