What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-03-28 compared with 2023-03-31 · 339 added, 427 removed, 199 unchanged (79% of the section changed)

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in the forward-looking statements.

Our principal operations include the development,

acquisition, licensing and enforcement of intellectual property rights that are either owned or controlled by us or one of our wholly

owned subsidiaries.

We currently own, control or manage eighteen intellectual property portfolios, which principally consist of patent

As part of our intellectual property asset management activities and in the ordinary course of our business, it has been necessary

for either us or the intellectual property owner who we represent to initiate, and it is likely to continue to be necessary to initiate

patent infringement lawsuits and engage in patent infringement litigation.

We anticipate that our primary source of revenue will come

from the grant of licenses to use our intellectual property, including licenses granted as part of the settlement of patent infringement

Our business, like all businesses at the present

time, are affected by the COVID-19 pandemic and the steps taken by states to seek to reduce the spread of the virus.

Although we do not

manufacture or sell products, the COVID-19 pandemic and the work shutdown imposed in the United States and other countries to limit the

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

Our revenue is generated almost exclusively from license fees generated

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

The work shutdown has affected the court system,

with courts operating on a reduced schedule.

As a result, patent infringement actions are likely to be lower priority items in allocation

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

or offer a lower amount than they might otherwise accept.

These delays continue to have an effect on the court system as a result of the

backlog that developed as a result of court closures.

In addition, the effect of the COVID-19 and the public response may adversely affect

the financial condition and prospects of defendants and potential defendants, which would make it less likely that they would be willing

to settle our claim.

A number of defendants and potential defendants have filed to take advantage of the Bankruptcy Act or have announced

that they may consider such action.

If any defendant filed for protection under the Bankruptcy Act, the action would be stayed and we

may not be able to obtain a judgment or recover on any judgment.

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.

The possibility that a defendant may seek protection under the Bankruptcy Act

may make it less likely that a financing source would finance the litigation or that a law firm would work on a contingency or modified

contingency basis.

Further, as the population of the United States becomes vaccinated and restrictions that had been imposed to address

the pandemic are lifted, we cannot assure you that our revenue will increase as a result of the reduction of such restrictions, including

courts being open for longer hours and for in person hearings.

Our principal operations include the development, acquisition, licensing

and enforcement of intellectual property rights that are either owned or controlled by us or one of our wholly owned subsidiaries.

currently own, control or manage twenty-two intellectual property portfolios, of which we are currently seeking or may seek monetization

with respect to 12, which principally consist of patent rights.

As part of our intellectual property asset management activities and in

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

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

anticipate that our primary source of revenue will come from the grant of licenses to use our intellectual property, including licenses

granted as part of the settlement of patent infringement lawsuits.

Market and Economic Conditions

In recent years, the United States and other markets

have experienced cyclical or episodic downturns, and worldwide economic conditions remain uncertain, including, as a result of the COVID-19

pandemic, supply chain disruptions, the Russian invasion of Ukraine, recent attacks by Hamas on Israel from the Gaza Strip and the resultant

action by Israel against Hamas in the Gaza Strip and the potential for broader conflict in the Middle East, instability in the U.S.

global banking systems, rising fuel prices, increasing interest rates or foreign exchange rates and increased inflation and the possibility

of a recession.

We cannot predict the timing, strength, or duration of any future economic slowdown or any subsequent recovery generally,

or in any industry.

A significant downturn in economic conditions may adversely affect the intellectual property licensing market including

the financial condition of financing sources and the willingness of potential financing sources to provide funding for our litigation;

a law firms’ ability and willingness to provide us with legal services on acceptable contingent fee terms;

and the financial condition

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

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, if at all.

property rights see these and other macroeconomic factors, they may be reluctant to sell intellectual property to us on terms which are

acceptable to us, if at all.

We seek to generate revenue from patent licensing

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All of the revenue for the years ended December 31, 2023 and 2022

were from patent licensing fees pursuant to the settlement of patent infringement lawsuits, of which approximately 100% was paid to the

patent seller, funding sources and legal counsel pursuant to our agreements with patent sellers, funding sources and legal counsel.

was from patent licensing fees, of which approximately 100% was paid to the patent seller, funding sources and legal counsel pursuant

to our agreements with patent sellers, funding sources and legal counsel.

Because of the nature of our business transactions

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Although we intend to seek

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

to develop portfolios of intellectual property rights that provide us a continuing stream of revenue, to date we have not been successful

in doing so, and we do not anticipate that we will be able to generate any significant revenue from licenses that provide a continuing

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Thus, to the extent that we continue to generate cash from single payment licenses, our revenue can, and is likely

to, vary significantly from quarter to quarter and year to year.

Our gross profit from license fees reflects any royalties which we pay

in connection with our license.

to, vary significantly from quarter to quarter and year to year and the net income we generated in 2023 may prove to be an aberration.

Our gross profit from license fees reflects the payment of any royalties due in connection with our license.

It is generally necessary to commence litigation

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We do not have the resources to enable us to fund the cost of litigation.

To the extent that we cannot fund litigation ourselves,

we may enter into an agreement with a third-party funding source.

Because we cannot fund litigation ourselves, we need to

enter into an agreement with a third-party funding source.

Our agreements with the funding sources typically provide that the funding

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In view of our limited cash and our working capital deficiency, we are not able to institute any

monetization program that may require litigation unless we engage counsel on a fully contingent basis, or we obtain funding from third-party

funding sources.

In these cases, counsel may be afforded a greater participation in the recovery and the third-party that funds the litigation

would be entitled to participate in any recovery.

To the extent that we have agreements with counsel and/or litigation funding sources

pursuant to which payments made to them represent a portion of the gross recovery, and such payment is contingent upon a recovery, our

revenue from litigation reflects the gross recovery from litigation as licensing fees, and payments to counsel and/or litigation funding

sources are reflected as cost of 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, and 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 and no potential funding source would provide us with funding in

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

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

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

monetization program that may require litigation unless we engage counsel on a fully contingent basis or we obtain funding from third

party funding sources.

In these cases, counsel may be afforded a greater participation in the recovery and the third party that funds

the litigation would be entitled to participate in any recovery.

To the extent that we have agreements with counsel and/or litigation

funding sources pursuant to which payments made to them represent a portion of the gross recovery, and such payment is contingent upon

a recovery, our revenue from litigation reflects the gross recovery from litigation as licensing fees, and payments to counsel and/or

litigation funding sources are reflected as cost of revenue.

Agreements with QF3, QFL and Intelligent Partners

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

we intend to monetize;

(b) up to $4,000,000 for operating expenses, of which the we have requested and received $500,000 as of March 31,

and (iii) $3,300,000 to fund the cash payment portion of the purchase price of a patent portfolio acquired from Tower.

we transferred to QF3 a right to receive a portion of net proceeds generated from the monetization of those patents.

We used $3,300,000

proceeds from the QF3 financing as the cash payment portion of the purchase price of a portfolio acquired from Tower.

Our obligations

to QF3 are secured by the proceeds from the patents acquired with their funding, the patents and all general intangibles now or hereafter

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

Business – Agreements with

QPRC Finance III LLC (“QF3”) for a description of the agreements with QF3.

we intend to monetize, of which no amounts have been received as of December 31, 2023;

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

of which the we have requested and received $2,500,000 as of December 31, 2023;

and (iii) $3,300,000 to fund the cash payment portion

of the purchase price of a patent portfolio acquired from Tower.

In return we transferred to QF3 a right to receive a portion of net proceeds

generated from the monetization of those patents.

We used $3,300,000 proceeds from the QF3 financing as the cash payment portion of the

purchase price of a portfolio acquired from Tower.

Our obligations to QF3 are secured by the proceeds from the patents acquired with their

funding, the patents and all general intangibles now or hereafter arising from or related to the foregoing and the proceeds and products

of the foregoing.

Business – Agreements with QF3 for a description of the agreements with QF3.

On February 22, 2021, we entered into a funding

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

we intend to monetize, of which $2,653,000 has been advanced as of March 31, 2023;

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

the we have requested and received $2,000,000 as of March 31, 2023;

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.

We used $1,750,000 of proceeds from the QFL financing as the cash payment portion of the restructure

of our obligations to Intelligent Partners.

Our obligations to QFL are secured by the proceeds from the patents acquired with their funding,

the patents and all general intangibles now or hereafter arising from or related to the foregoing and the proceeds and products of the

We also granted QFL a ten-year warrant to purchase a total of up to 962,463 shares of our common stock, with an exercise price

of $0.54 per share which may be exercised through February 18, 2031 on a cash or cashless basis, subject to certain limitations on exercisability.

Business – Agreements with QFL for a description of the agreements with QFL

Contemporaneously with the execution of the agreement

we intend to monetize, of which $2,653,000 has been advanced as of December 31, 2023;

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

of which the we have requested and received $2,000,000 as of December 31, 2023;

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.

We used $1,750,000 of proceeds from the QFL financing as the cash payment portion of

the restructure of our obligations to Intelligent Partners.

Our obligations to QFL are secured by the proceeds from the patents acquired

with their funding, the patents and all general intangibles now or hereafter arising from or related to the foregoing and the proceeds

and products of the foregoing.

We also granted QFL a ten-year warrant to purchase a total of up to 962,463 shares of our common stock,

with an exercise price of $0.54 per share which may be exercised through February 18, 2031 on a cash or cashless basis, subject to certain

limitations on exercisability.

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

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

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

A portion of any gain from sale of the shares,

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

return due to QFL pursuant to the Purchase Agreement.

We also agreed to take all commercially reasonable steps necessary to regain compliance

with the OTCQB eligibility standards as soon as practicable, but in no event later than 12 months from the closing date, and regained

compliance on May 7, 2021 and we granted QFL registration rights with respect to the common stock issuable upon exercise of the warrants.

We also granted QFL certain board observation rights.

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

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

After QFL has received a negotiated rate of return,

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

Thereafter, we retain 100%

of all net proceeds.

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

non-recourse and shall be paid only if and after net proceeds from monetization of the patent rights owned or acquire by us are received,

or to be received.

Contemporaneously with the execution of the agreements

with QFL, we entered into a restructure agreement with Intelligent Partners to eliminate any obligations we had with respect to the outstanding

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Intelligent Partners for a description of the agreements with Intellectual Partners.

Inventor Royalties, Contingent Litigation Funding

Fees and Contingent Legal Expenses

In connection with the investment in certain patents

and patent rights, certain of our operating subsidiaries executed agreements which grant to the former owners of the respective patents

or patent rights, the right to receive inventor royalties based on future net revenues (as defined in the respective agreements) generated

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

Our operating subsidiaries may engage third-party

funding sources to provide funding for patent licensing and enforcement.

The agreements with the third-party funding sources may provide

that the funding source receives a portion of any negotiated fees, settlements or judgments.

In certain instances, these third-party funding

sources are entitled to receive a significant percentage of any proceeds realized until the third-party funder has recouped agreed upon

amounts based on formulas set forth in the underlying funding agreement, which may reduce or delay and proceeds due to us.

Our 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 by the funding source on a scaled percentage of any negotiated fees, settlements or judgments awarded based

on how and when the fees, settlements or judgments are obtained.

Depending on the amount of any recovery, it is possible that all the

proceeds from a specific settlement may be paid to the funding source and legal counsel.

The economic terms of the inventor agreements,

funding agreements and contingent legal fee arrangements associated with the patent portfolios owned or controlled by our operating subsidiaries,

if any, including royalty rates, proceeds sharing rates, contingent fee rates and other terms, vary across the patent portfolios owned

or controlled by the operating subsidiaries.

Inventor royalties, payments to non-controlling interests, payments to third-party funding

providers and contingent legal fees expenses fluctuate period to period, based on the amount of revenues recognized each period, the terms

and conditions of revenue agreements executed each period and the mix of specific patent portfolios with varying economic terms and obligations

generating revenues each period.

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

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

In December 2018, we entered into a funding agreement

whereby a third-party agreed to provide funds to us to enable us to support our structured licensing programs for the CMOS and M-RED portfolios.

Under the funding agreement, the third-party receives an interest in the proceeds from the programs, and we have no other obligation to

the third-party.

As of December 31, 2021, the third-party funding source advanced $150,000 for costs and expenses, and has no further

obligation to provide additional funds.

Under the terms of the funding agreement, the third-party funder is entitled to a priority return

of funds advanced from net proceeds recovered.

There are no pending actions.

In connection with any litigation seeking to enforce

our intellectual property rights, it is possible that a defendant may request and/or a court may rule that an operating subsidiary has

violated statutory authority, regulatory authority, federal rules, local court rules, or governing standards relating to the substantive

or procedural aspects of such enforcement actions.

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

or award attorney’s fees and/or expenses to a defendant(s), which could be material, and if required to be paid by us or its operating

subsidiaries, could materially harm our operating results and financial position.

Since the operating subsidiaries do not have any assets

other than the patents, and the Company does not have any available financial resources to pay any judgment which a defendant may obtain

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

At present, we are pursuing litigation with respect

to several of our intellectual property portfolios.

The actions are described in Item 1.

We cannot estimate when or whether

we will receive any revenue from these litigations, or whether, in the event we do not prevail, the defendant will not obtain an award

of legal fees against our plaintiff subsidiary which could result in the bankruptcy of the subsidiary and a default under our agreements

with QFL and Intelligent Partners.

Restricted Stock Grants and Options

In February 2021, we issued restricted stock grants

to consultants (300,000 shares) and to our officers and directors (740,000 shares) all of which vested immediately.

The value of the shares

is be reflected as non-cash compensation in 2021.

Also in February 2021, we granted restricted stock options to consultants (900,000 shares)

and to our chief executive officer (600,000 shares).

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

become cumulatively exercisable as follows:

1/3rd at an exercise price of $1.00 per share, becoming exercisable upon the commencement

of trading of the Common Stock on the OTCQB;

1/3rd at an exercise price of $3.00 per share becoming exercisable on the first day on which

we file with the SEC a Form 10-K or Form 10-Q with stockholders’ equity of at least $5,000,000;

and 1/3rd at an exercise price of

$5.00 per share on the date on which the Common Stock is listed for trading on the Nasdaq Stock Market or the New York Stock Exchange.

We will incur non-cash compensation with respect to the value of the options, based of Black-Scholes valuation, as the options become

Effects of Possible Delisting of Common Stock

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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.

met the Standards for Continued Eligibility under the OTC listing standards and, if this deficiency was not cured 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

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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 per share.

The OTC Markets Group confirmed to us that the deficiency has been cured.

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.

In August 2021, STX brought a patent infringement

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District for the

Eastern District of Texas against FUJIFILM Holdings Corporation et al As of December 31, 2022 the matter against FUJIFILM Holdings Corporation

et al has been stayed pending settlement.

The matters against Yamaha Corporation, Steinberg Media Technologies GMBH, Parrot SA, Drone

Volt, SA, Delair SAS and Flyability SA have been resolved, and revenue for the year ended December 31, 2022 includes revenue from

any related settlement.

Eastern District of Texas against FUJIFILM Holdings Corporation et al.

The actions against Yamaha Corporation, Steinberg Media Technologies

GMBH, Parrot SA, Drone Volt, SA, Delair SAS and Flyability SA have been resolved, and revenue for the year ended December 31, 2022 includes

revenue from the related settlements.

As of December 31, 2023, the matter against FUJIFILM Holdings Corporation et al has been resolved

and revenue for the year ended December 31, 2023 includes revenue from the settlement.

In September 2021, M-RED Inc.

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suits in the U.S.

District for the Eastern District of Texas against Biostar Microtech International Corp.

and Giga-Byte Technology Co.,

As of December 31, 2022, those matters have been resolved, and revenue for the year ended December 31, 2022 includes revenue

from any related settlements.

District for the Eastern District of Texas against Xiaomi Corporation et.

al., OnePlus Technology (Shenzhen) Co., Ltd.,

Biostar Microtech International Corp.

and Giga-Byte Technology Co., Ltd.

All matters were resolved in 2022 and our revenue for the year

ended December 31, 2022 includes revenue from the related settlements.

We did not generate revenue from the M-RED Portfolio in 2023 and

do not anticipate allocating further resources to monetization of the M-RED Portfolio.

In October 2021, AMI brought patent infringement

suits in the U.S.

District for the Eastern District of Texas against ZTE Corporation, Guangdong OPPO Mobile Telecommunications Corp.,

and Beijing Xiaomi Software Co., Ltd.

Those actions were resolved in 2022, and our revenue for the year ended December 31, 2022 includes

revenue from related settlements.

We did not generate revenue from the Audio Messaging Portfolio in 2023.

In November 2021, TLL brought patent infringement

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et.al., and Musarubra US, LLC.

As of December 31, 2023, the action against

Fortinet, Inc.

has been stayed pending settlement.

The actions against Trend Micro Incorporated, Checkpoint Software Technologies Ltd,

Palo Alto Networks, Inc.

and Crowdstrike, Inc.

were resolved in 2023 and our revenue for the year ended December 31, 2023 includes revenue

from the related settlements.

In November 2021, MML brought patent infringement

suits in the U.S.

District for the Eastern District of Texas against ZTE Corporation and Guangdong OPPO Mobile Telecommunications Corp.,

In November 2022, MML brought patent infringement suits in the U.S.

District for the Eastern District of Texas against Samsung Electronics

et al and TCL Technology Group Corporation et al.

In June 2022, MML and AI agreed to amend the Purchase Agreement to add two

additional patent families for an additional $92,000.

We requested and received a capital advance from QFL in the amount of $92,000, which

we used to make payment to AI in August 2022 pursuant to the amendment to the Purchase Agreement.

The actions against ZTE Corporation

and Guangdong OPPO Mobile Telecommunications Corp., Ltd.

were resolved in 2023 and revenue for the year ended December 31, 2023 includes

revenue from the related settlements.

In January 2022, the we 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.

We requested and received a

capital advance in the amount of the $1,060,000 purchase price from the facility with QFL.

The patents were assigned to our wholly owned

subsidiaries Tyche Licensing LLC and Deepwell IP LLC.

In March 2022, LSC brought patent infringement

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In November 2022, Google LLC filed a petition before the patent trial and appeal board for inter partes review of US Patent

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.

The patents were assigned to

our wholly owned subsidiaries Tyche Licensing LLC and Deepwell IP LLC.

In May 2022, Tyche brought patent infringement suits in the U.S.

District for the Eastern District of Texas against MediaTek Inc., Realtek Semiconductor Corporation, Texas Instruments Incorporated, Infineon

Technologies AG and STMicroelectronics NV et.

In May 2022, Tyche voluntarily dismissed, without prejudice, the action against STMicroelectronics

In May 2022, STMicroelectronics, Inc.

filed an action for declaratory judgement of non-infringement in the U.S.

the Northern District of Texas, the action was dismissed without prejudice in July 2022.

In September 2022, the action against Texas Instruments

Incorporated was dismissed with prejudice.

As of December 31, 2022 the actions against MediaTek Inc.

and Infineon Technologies AG

have been stayed pending settlement discussions, which are pending.

In June 2022, MML and AI agreed to amend the Purchase

Agreement to add two additional patent families for an additional $92,000.

We requested and received a capital advance from QFL in the

amount of $92,000, which we used to make payment to AI in August 2022 pursuant to the amendment to the Purchase Agreement.

In July 2022, EDI acquired, via assignment from

Ioli Trust, all right title and interest to a portfolio of five United States patents relating to a system and method for controlling

vehicles and for providing assistance to operated vehicles (“EDI Portfolio”) for a purchase price consisting of 50% of the

net proceeds resulting from monetization of the EDI Portfolio.

In March 2023 Cisco Systems, Inc, Microsoft Corporation and Google LLC filed petitions before the patent trial and appeal

board for inter partes review of LSC Portfolio patents.

As of December 31, 2023, all actions had been resolved.

In May 2022, Tyche brought patent infringement

suits in the U.S.

District for the Eastern District of Texas against MediaTek Inc., Realtek Semiconductor Corporation, Texas Instruments

Incorporated, Infineon Technologies AG and STMicroelectronics NV et.

As of December 31, 2023, all actions have been resolved

and revenue for the year ended December 31, 2023 includes revenue from the settlements.

In July 2022, we entered into a purchase agreement

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to the terms of the purchase agreement.

The HPE Portfolio was subsequently assigned to our wholly owned subsidiary, Flash Uplink LLC.

In July 2022, EDI acquired, via assignment from

Ioli Trust, all right title and interest to a portfolio of five United States patents relating to a system and method for controlling

vehicles and for providing assistance to operated vehicles (“EDI Portfolio”) for a purchase price consisting of 50% of the

net proceeds resulting from monetization of the EDI Portfolio.

In March 2023, we entered into a purchase agreement

with Tower for the purchase of seven United States Patents for a purchase price of $3,300,000.

We requested and received a capital advance

from QF3 in the amount of $3,300,000 to fund the cash payment portion of the purchase price.

Pursuant to the purchase agreement, after

recovery of the purchase price and a negotiated return, Tower is entitled to a portion of net proceeds, if any, as defined in the purchase

In August 2023, we entered into a purchase agreement

with Koji Yoden for the purchase of two United States Patents for a purchase price of $30,000.

Pursuant to the purchase agreement, after

recovery of the purchase price Mr.

Yoden is entitled to a portion of net proceeds, if any, as defined in the purchase agreement.

In September 2023, Deepwell brought a patent infringement

suit in the U.S.

District for the Eastern District of Texas against MediaTek Inc.

Results of Operations

The years ended December 31, 2023 and 2022:

Year Ended December 31,

Revenues (patent licensing fees)

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Selling, general and administrative expenses

Loss from operations

Income (loss) from operations

Other income (expense)

Gain on forgiveness of debt

Gain on settlement of accounts payable

Warrant expense

Change in fair market value of warrant liability

Loss on conversion of debt

Loss on debt extinguishment

Loss on impairment of assets

Interest expense

Total other income (expense)

Loss before income tax

Income (loss) before income tax

Income tax benefit (expense)

$ (4,154,799 )

We generated revenues of approximately $451,000

for the year ended December 31, 2022 as compared to $2,050,000 for the year ended December 31, 2021.

Net income (loss)

We generated revenues of approximately $13,153,000 for the year ended

December 31, 2023 as compared to approximately $451,000 for the year ended December 31, 2022.

Our revenue for the year ended December 31,

2022 was generated from licenses pursuant to the settlement of patent infringement lawsuits in the M-RED, AMI and STX portfolios.

for the year ended December 31, 2021 resulted from the licenses granted pursuant to the settlement of patent infringement lawsuits in

the CXT Portfolio, the M-RED Portfolio, the Peregrin Portfolio and the Soundstreak Portfolio litigations.

Cost of revenue for the years

ended December 31, 2022 and 2021 was approximately $304,000 and $1,315,000, respectively.

The timing and amount of our revenue is dependent

upon the results of litigation seeking to enforce our intellectual property rights, and we cannot predict when or whether we will have

a recovery and how much of the recovery will be received by us after payments to legal counsel, to our funding sources, to inventors/former

patent owners and to Intelligent Partners who have an interest in our share of the recovery from certain patent portfolios after deducting

payments due to counsel and the litigation funding source.

2023 was generated from licenses pursuant to the settlement of patent infringement lawsuits in the Tyche, STX, MML and TLL portfolios.

Revenue for the year ended December 31, 2022 was generated from licenses pursuant to the settlement of patent infringement lawsuits in

the M-RED, AMI and STX portfolios.

Cost of revenue for the years ended December 31, 2023 and 2022 was approximately $5,535,000 and $304,000,

respectively.

The increase in cost of revenues is primarily due to increased litigation and licensing expenses associated with contingent

fees incurred in generating revenues.

The timing and amount of our revenue is dependent upon the results of litigation seeking to enforce

our intellectual property rights, and we cannot predict when or whether we will have a recovery and how much of the recovery will be received

by us after payments to legal counsel, to our funding sources, to inventors/former patent owners and to Intelligent Partners who have

an interest in our share of the recovery from certain patent portfolios after deducting payments due to counsel and the litigation funding

Selling, general, and administrative expenses

for the year ended December 31, 2022 decreased by approximately $1,869,000, or approximately 49%, compared to the year ended December,

Our principal expenses for the year ended December 31, 2022 was amortization of intangible assets of approximately $910,000 and

professional fees of $513,000.

Our compensation expense includes stock-based compensation of approximately $117,000 and $1,916,000 for

the years ended December 31, 2022 and 2021, respectively.

for the year ended December 31, 2023 increased by approximately $761,000, or approximately 38%, compared to the year ended December 31,

The increase is primarily due to an increase in compensation expense to the chief executive officer of $660,000.

Our principal operating

expenses for the year ended December 31, 2023 were compensation expenses of approximately $960,000, amortization of intangible assets

of approximately $787,000 and professional fees of approximately $696,000.

Our principal operating expenses for the year ended December

31, 2022 were compensation expenses of approximately $300,000, amortization of intangible assets of approximately $910,000 and professional

fees of approximately $513,000.

We had stock-based compensation costs of approximately $49,000 and $117,000 for the years ended December

31, 2023 and 2022, respectively.

Other income and expense for the year ended December

31, 2022 included a gain on change in fair value of warrant liability of approximately $1,491,000.

We realized a loss on change in fair

31, 2023 included a loss on change in fair value of warrant liability of approximately $136,000.

We realized a gain on change in fair

value of warrant liability of approximately $1,491,000 for the year ended December 31, 2022.

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The increase in interest

expense reflects the accrued interest payable on the principal amount of QFL facility.

During the year ended December 31, 2021, we realized

a gain on settlement of accounts payable of approximately $1,726,000 and a gain on forgiveness of debt of approximately $1,850,000.

expense during year ended December 31, 2021 also included an approximately $730,000 loss on extinguishment of debt, an approximately $306,000

loss on conversion of debt, an approximately $1,652,000 loss on impairment of assets, and warrant expense of approximately $1,155,000.

expense reflects the accrued interest payable on the principal amount of QFL and QF3 facilities.

We incurred income tax benefit (expense) of approximately

$(30,000) and $1,000 for the years ended December 31, 2023 and 2022, respectively.

As a result of the foregoing, we realized a net

loss of approximately $754,000, or $0.14 per share (basic and diluted), for the year ended December 31, 2022, compared to net loss of

approximately $4,155,000, or $0.81 per share (basic and diluted), for the year ended December 31, 2021.

As a result of the foregoing, we realized net

income of approximately $3,650,000, or $0.68 per share (basic and diluted), for the year ended December 31, 2023, compared to net loss

of approximately $754,000, or $0.14 per share (basic and diluted), for the year ended December 31, 2022.

Liquidity and Capital Resources

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of approximately $3,600,000, and current liabilities of approximately $11,935,000.

Our current liabilities include funding liabilities of

approximately $5,453,000 payable to QFL, a non-interest bearing total monetization proceeds obligation (the “TMPO”) to Intelligent

Partners in the amount of approximately $2,797,000 under the Restructure Agreement, both of which are only payable from money generated

from the monetization of intellectual property, loans payable of approximately $138,000, accounts payable and accrued liabilities of approximately

$149,000, warrant liability of approximately $145,000, and accrued interest of approximately $905,000.

As of December 31, 2022, we have

an accumulated deficit of approximately $26,189,000 and a negative working capital of approximately $9,490,000.

Other than salary and

pension benefits to our chief executive officer, we do not contemplate any other material operating expense requiring cash in the near

future other than normal general and administrative expenses, including expenses relating to our status as a public company filing reports

with the SEC.

Our current liabilities include funding liabilities

of approximately $7,326,000 payable to QFL and QF3, a non-interest bearing total monetization proceeds obligation (the “TMPO”)

to Intelligent Partners in the amount of approximately $2,797,000 under the Restructure Agreement, both of which are only payable from

money generated from the monetization of intellectual property, loans payable of approximately $138,000, accounts payable and accrued

liabilities of approximately $297,000, warrant liability of approximately $282,000, and accrued interest of approximately $1,097,000.

As of December 31, 2023, we have an accumulated deficit of approximately $22,540,000 and a negative working capital of approximately $8,335,000.

Other than salary and pension benefits to our chief executive officer, we do not contemplate any other material operating expense requiring

cash in the near future other than normal general and administrative expenses and legal fees, including expenses relating to our status

as a public company filing reports with the SEC.

The following table shows the summary cash flows

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For the Year Ended

Cash flows used in operating activities

Cash flows provided by (used in) operating activities

Cash flows used in investing activities

Cash flows from financing activities

Net (decrease) increase in cash

Net increase (decrease) in cash

Cash at beginning of year

Cash at end of year

For the year ended December 31, 2023, cash

flows provided by operating activities was approximately $1,931,000 compared to cash flows used in operating activities of approximately

$914,000 during the year ended December 31, 2022.

The increase in cash flows provided by operations of approximately $2,845,000 is

primarily attributable to net income during the year ended December 31, 2023 of approximately $3,650,000, a change in fair market

value of the warrant liability of approximately $136,000 and an increase in accounts receivable of approximately $3,008,000.

The outstanding

account receivable of $3,008,250 at December 31, 2023 has been paid in full during the first quarter of 2024.

During the years ended December 31, 2023 and 2022,

cash flows used in investing activities consisted of $3,330,000 and $1,502,000, respectively for the purchase of patents from third parties.

The increase in cash used in investing activities of $1,828,000 is attributable to additional patents purchased during the year ended

December 31, 2023.

Cash flows from financing activities for the year

ended December 31, 2023 was approximately $1,872,000 compared to cash flows from financing activities for the year ended December 31,

2022 of approximately $2,242,000.

The cash flows from financing activities during the year ended December 31, 2023 includes proceeds

from the funding liability of approximately $6,000,000 offset by the payment of the funding liability of approximately $4,128,000.

cash flows from financing activities during the year ended December 31, 2022 includes proceeds from the funding liability of approximately

$2,303,000 offset by the payment of the funding liability of approximately $53,000 as well as the payment on related party loans of approximately

We cannot assure you that we will be successful

in generating future revenues, in obtaining additional debt or equity financing or that such additional debt or equity financing will

be available on terms acceptable to us, if at all, or that we will be able to obtain any third-party funding the

value of anything received from the monetization of the intellectual property rights covered by the Security Agreement;

in connection

with any of our intellectual property portfolios or that we will receive any of the proceeds of any litigation settlements after making

all required payments to counsel and funding sources and payments to Intelligent Partners.

be available on terms acceptable to us, if at all, or that we will be able to obtain any third-party funding in connection with any of

our intellectual property portfolios or that we will receive any of the proceeds of any litigation settlements after making all required

payments to counsel and funding sources and payments to Intelligent Partners.

We have no credit facilities.

agreements provide for QFL or QF3 to provide us with funding to acquire intellectual property rights, subject to QFL’s or QF3’s

approval, it does not provide for financing the litigation necessary for the monetization of the intellectual property rights.

have any credit facilities or any arrangements for us to finance the litigation necessary to monetize our intellectual property rights

other than contingent fee arrangements with counsel with respect to our pending litigation.

If we do not secure contingent representation

or obtain litigation financing, we may be unable to monetize our intellectual property.

Although our agreement provides

for QFL and QF3 to provide us with funding to acquire intellectual property rights, subject to QFL’s and QF3’s approval, it

does not provide for financing the litigation necessary for the monetization of the intellectual property rights.

We do not have any credit

facilities or any arrangements for us to finance the litigation necessary to monetize our intellectual property rights other than contingent

fee arrangements with counsel with respect to our pending litigation.

If we do not secure contingent representation or obtain litigation

financing, we may be unable to monetize our intellectual property.

We cannot predict the success of any pending or

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our ability to continue as a going concern.

Critical Accounting Policies

Critical Accounting Estimates

The discussion and analysis of our financial condition

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affect the reported amounts of assets and liabilities.

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

accounts, income taxes and contingencies.

We base our estimates on historical experience and on other assumptions that we believe to be

reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities

that are not readily apparent from other sources.

Actual results may differ from these estimates under different assumptions or conditions.

On an on-going basis, we evaluate our estimates.

We base our estimates on historical

experience and on other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for

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

Actual results

may differ from these estimates under different assumptions or conditions.

Management believes the following critical accounting

policies affect the significant judgments and estimates used in the preparation of the financial statements.

Principles of Consolidation

The consolidated financial statements are prepared

in accordance with US GAAP and Rule 8-03 of Regulation S-X of the SEC, and present the financial statements of the Company and our wholly-owned

and majority-owned subsidiaries.

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

Use of Estimates and Assumptions

The preparation of financial statements in conformity

with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that

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

statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

policies affect the significant judgments and estimates used in the preparation of our financial statements.

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 impact 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.

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

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

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Patent acquisition

costs are amortized utilizing the straight-line method over their remaining economic useful lives, ranging from one to ten years.

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.

costs are allocated equally across the patents in force at the time of acquisition.

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.

Warrant Liability

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The amount 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 included under other income (expense).

Fair Value of Financial Instruments

We adopted Financial Accounting Standards Board

(“FASB”) ASC 820, “Fair Value Measurements and Disclosures”, for assets and liabilities measured at fair value

on a recurring basis.

ASC 820 establishes a common definition for fair value to be applied to existing US GAAP that require the use of

fair value measurements which establishes a framework for measuring fair value and expands disclosure about such fair value measurements.

ASC 820 defines fair value as the price that would

be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement

Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of

unobservable inputs.

These inputs are prioritized below:

Observable inputs such as quoted

market prices in active markets for identical assets or liabilities

Observable market-based inputs

or unobservable inputs that are corroborated by market data

Unobservable inputs for

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

In addition, FASB ASC 825-10-25 “Fair Value

Option” was effective for January 1, 2008.

ASC 825-10-25 expands opportunities to use fair value measurements in financial reporting

and permits entities to choose to measure many financial instruments and certain other items at fair value.

liability is determined at the end of each fiscal period by using a Black-Scholes option pricing model to estimate the fair value.

period to period change in the amount of warrant liability is reflected as a gain or loss in warrant liability and is included under other

income (expense).

Stock-Based Compensation

We account for stock-based compensation pursuant

to ASC 718, “Compensation — Stock Compensation,” which prescribes accounting and reporting standards for all stock-based

payment transactions in which employee 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 is required to provide services

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

Long-Lived Assets

We review for impairment whenever events or circumstances

indicate that the carrying amount of assets may not be recoverable, pursuant to guidance established in ASC 360-10-35-15, “Impairment

or Disposal of Long-Lived Assets”.

We recognize an impairment loss when the sum of expected undiscounted future cash flows is less

than the carrying amount of the asset.

The amount of impairment is measured as the difference between the asset’s estimated fair

value and its book value.

We account for stock-based compensation for employees

and non-employees pursuant to ASC 718, “Compensation — Stock Compensation,” which prescribes accounting and reporting

standards for all stock-based payment transactions.

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

options and other equity instruments.

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 estimated using a Black-Scholes option pricing model.

expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the

requisite service period (usually the vesting period).

Revenue Recognition

We recognize revenue in accordance with ASC Topic

606, “Revenue from Contracts with Customers”.

Revenue is recognized when control of the promised goods or services is transferred

to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or

Under Topic 606, revenue is recognized when there is a contract which has commercial substance which is approved by both parties

and identifies the rights of the parties and the payment terms.

We adopted Topic 606 as of January 1, 2018 using the modified retrospective

transition method, with no impact on the consolidated financial position or results of operations.

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.

The Company recognizes revenue in accordance with

ASC Topic 606, “Revenue from Contracts with Customers”.

Revenue is recognized when control of the promised goods or services

is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for

those goods or services.

Under Topic 606, revenue is recognized when there is a contract which has commercial substance which is approved

by both parties and identifies the rights of the parties and the payment terms.

For the periods presented, revenue contracts executed

by us 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 our operating subsidiaries.

Intellectual property

rights granted included the following, as applicable:

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

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

and (iv) the dismissal of any pending litigation.

The intellectual property rights granted were perpetual in nature, extending until the

legal expiration date of the related patents.

The individual intellectual property rights are not accounted for as separate performance

obligations, as (a) the nature of the promise, within the context of the contract, is to transfer combined items to which the promised

intellectual property rights are inputs and (b) our 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.

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

as part of the settlement of litigation commenced by the Company’s subsidiaries.

Intellectual property rights granted included the

following, as applicable:

(i) the grant of a non-exclusive, retroactive and future license to manufacture and/or sell products covered

by patented technologies, (ii) a covenant-not-to-sue, (iii) the release of the licensee from certain claims, and (iv) the dismissal of

any pending litigation.

The intellectual property rights granted were perpetual in nature, extending until the legal expiration date of

the related patents.

The individual intellectual property rights are not accounted for as separate performance obligations, as (a) the

nature of the promise, within the context of the contract, is to transfer combined items to which the promised intellectual property rights

are inputs and (b) the Company’s promise to transfer each individual intellectual property right described above to the customer

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

Since the promised intellectual property rights

are not individually distinct, we 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.

Our subsequent activities do not substantively

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

Our 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.

As such, the earnings process is complete and revenue is recognized

upon the execution of the contract, when collectability is probable and all other revenue recognition criteria have been met.

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.

Cost of Revenue

Cost of revenues mainly includes expenses incurred

in connection with our patent enforcement activities, such as legal fees, consulting costs, patent maintenance, royalty fees for acquired

patents and other related expenses.

Cost of revenue does not include expenses related to patent amortization, integration or support,

as these are included in general and administrative expenses.

Commitments and Contingencies

In connection with the investment in certain patents

and patent rights, certain of our 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.

Our 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.

Our 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 our 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 and are included in cost of revenues as litigation and licensing expenses.

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.

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.

As such, the earnings

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

recognition criteria have been met.

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

of the contract.

Contractual payments made by licensees are generally non-refundable.

The Company does 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.

The Company’s revenue for the year ended December 31, 2023 was

generated from licenses pursuant to the settlement of patent infringement lawsuits in the Tyche, STX, MML and TLL portfolios.

for the year ended December 31, 2022 was generated from licenses pursuant to the settlement of patent infringement lawsuits in the M-RED,

AMI and STX portfolios.

Recent Accounting Pronouncements

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$22,540,000 and negative working capital of approximately $8,335,000 as of December 31, 2023.

Because of our continuing losses, our

working capital deficiency, the uncertainty of future revenue, our obligations to QF3, QFL, Intelligent Partners, our low stock price

and the absence of a trading market in our common stock, our ability 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 our business as well as any adverse consequences which would result from our failure to remain listed on the OTCQB,

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

Our revenue is generated almost exclusively from license fees

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

Although we may seek to raise funds and

to obtain third-party funding for litigation to enforce its intellectual property rights, the availability of such funds is uncertain.

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

Although we generated net income in

2023, because of our history of losses, our working capital deficiency, the uncertainty of future revenue, our obligations to Intelligent

Partners, QF3, and QFL, our low stock price and the absence of an active trading market in our common stock, our ability to raise funds

in the equity market or from lenders is severely impaired.

These conditions, as well as any adverse consequences which would result if

we fail to meet the continued listing requirements of the OTCQB, raise substantial doubt as to our ability to continue as a going concern.

Our revenue is generated exclusively from license fees generated from litigation seeking damages for infringement of our intellectual

property rights.

Although we may seek to raise funds and to obtain third-party funding for litigation to enforce its intellectual property

rights, the availability of such funds is uncertain.

The financial statements do not include any adjustments that might result from the

outcome of this uncertainty.

Off-Balance Sheet Arrangements

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

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements start on Page F-1.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING

AND FINANCIAL DISCLOSURE

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 7. Management’s Discussion and Analysis