What changed in this filing

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Item 1A. Risk Factors

2024-03-28 compared with 2023-03-31 · 72 added, 80 removed, 642 unchanged (19% of the section changed)

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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.

Although we generated in net income in 2023, of approximately $3.6 million on revenues of approximately

$13.2 million, the revenue and net income resulted from one-time, paid-up licenses in consideration for the grant of certain intellectual

property rights for patented technologies owned or controlled by our operating subsidiaries as part of the settlement of patent infringement

lawsuits, and we cannot assure you that we will generate any significant revenue or net income in the future.

Our total assets were approximately

$7,274,000 at December 31, 2023, of which approximately $2,972,000 represented the book value of patents we acquired from Tower in March

At December 31, 2023, we had a working capital deficiency of approximately $8,335,000.

Our independent auditors have included a substantial

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

our business, including litigation to monetize our intellectual property.

Although we have 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.

our business, including litigation to monetize our intellectual property, and to pay our ongoing expenses, including compensation to our

chief executive officer, which is $660,000 for 2024, as well as professional expenses and other public company expenses.

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

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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;

rights that the Company intends to monetize, of which we have received $2,653,000 as of December 31, 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,

as of December 31, 2023, and (iii) $1,750,000 which was used to fund the cash payment portion of the restructure of our obligations to

Intelligent Partners.

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 $2,500,000 as of December 31, 2023, and (iii) $3,300,000 which was used to fund purchase of a patent portfolio from Tower.

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

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

Our business may be impaired by the effects

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

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

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

on our business.

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

of our intellectual property rights.

The work shutdown affected the court system 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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a very significant number of shares.

We may be subject to cybersecurity risks .

We will face significant and persistent cybersecurity risks due to the need to protect both our business generally, including our intellectual

property and our negotiations with respect to the the acquisition and monetization of intellectual property rights, as well as the need

to protect the confidentiality of information concerning our personnel and others with whom we conduct business.

We will face threats

from bad actors who seek to disrupt our business as well as others who are engaging in malicious activities for profit, to make a political

point or for no particular reason other than creating disruption.

Disclosure of certain information as a result of a cybersecurity breach

may result is a breach of privacy laws.

The substantial level of harm that could occur to us and those with whom we conduct business were

we to suffer impacts of a material cybersecurity incident requires us to maintain robust governance and oversight of these risks and to

implement mechanisms, controls, technologies, and processes designed to help us assess, identify, and manage these risks.

While we have not, as of the date of this annual

report, experienced a cybersecurity threat or incident, we cannot assure you that we will not experience such an incident in the future.

Any cybersecurity incidents, whether or not successful, could result in our incurring additional costs related to, for example, rebuilding

our internal systems, implementing additional threat protection measures, responding to regulatory inquiries or actions, paying damages

or making payments to obtain access to our computer systems, or taking other remedial steps with respect to third parties.

We cannot assure

you that the steps we are taking will not be successful in preventing a cybersecurity breach, that we will not suffer cybersecurity breaches

or that we will not incur significant expenses in seeking to deal with the consequences of any attempted or successful cybersecurity breaches

or that, if we suffer a material cybersecurity breach that we will be able to continue in business following such breach.

Risks Relating to Monetizing our Intellectual

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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.

Even if economic conditions improve, the uncertainty

of the economy could have a material adverse effect on the willingness of parties that we believe are infringing on our assets to enter

into settlements or other revenue generating agreements voluntarily.

If we are unable to adequately protect our

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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

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 per share.

There is a limited market for our common stock,

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

common stock has frequently traded for less than $0.02.

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

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

common stock has frequently traded for less than $0.02 per share.

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%, and, as of the

date of this annual report, our public float is less than 4,000,000 shares.

Accordingly, there can be no assurance as to the liquidity

of any market that may develop for our common stock, the ability of holders of our common stock to sell their shares of 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

Because our common stock is a penny stock,

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Further, some broker-dealers will not process

transactions in penny stocks.

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

transactions in penny stocks or stocks that are not listed on a stock exchange which will make it difficult for you to purchase or sell

our common stock.

Our lack of internal controls over financial

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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

we have one full time employee, who is both our chief executive officer and our 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.

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full-time chief financial officer.

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

as our chief financial officer.

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

condition improves significantly.

The lack of an experienced chief financial officer, together with our lack of internal controls, may

impair our ability to raise money through a debt or equity financing, the market for our common stock and our ability to enter into agreements

with owners of intellectual property rights.

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

chief financial officer.

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

improves significantly.

The lack of an experienced chief financial officer, together with our lack of internal controls, may impair our

ability to raise money through a debt or equity financing, the market for our common stock and our ability to enter into agreements with

owners of intellectual property rights.

Our stock price may be volatile and your investment

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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

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common stock in the foreseeable future.

We do not own or lease any real property.

LEGAL PROCEEDINGS

MINE SAFETY DISCLOSURES.

Not Applicable

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

What changed 10-K

Item 1A. Risk Factors