What changed in this filing

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Item 9A. Controls and Procedures

2022-03-08 compared with 2018-04-02 · 2840 added, 2247 removed, 226 unchanged (96% of the section changed)

1 unchanged sentence

of Disclosure Controls and Procedures

of the end of the period covered by this report (the “Evaluation Date”), we carried out an evaluation, under the supervision

and with the participation of our management, including our Principal Executive Officer, who is also serving as our Principal

Financial Officer and Principal Accounting Officer, of the effectiveness of the design and operation of our disclosure controls

and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Based upon this evaluation, our Principal Executive Officer concluded that, as of the Evaluation Date, our disclosure controls

and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports that are

filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified by

the Securities and Exchange Commission’s rules and forms and that our disclosure controls and procedures are designed to

ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and

communicated to our management including our Principal Executive Officer as appropriate to allow timely decisions regarding required

of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that the Company’s

disclosure controls and procedures will detect or uncover every situation involving the failure of persons within the Company

to disclose material information otherwise required to be set forth in the Company’s periodic reports.

management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rules 13a-15(e)

or 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we

file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s

rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information

required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated

to the issuer’s management, including its principal executive officer and principal financial officer, or persons performing similar

functions, as appropriate to allow timely decisions regarding required disclosure.

Management recognizes that there are inherent limitations

to the effectiveness of any system of disclosure controls and procedures and any controls and procedures, no matter how well designed

and operated, can only provide reasonable assurance of achieving their control objectives.

of the end of the period covered by this report, management, including our Principal Executive Officer and Principal Financial Officer,

evaluated the effectiveness of our disclosure controls and procedures.

Based upon the evaluation, our Principal Executive Officer and

Principal Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2021.

Our management

concluded that the consolidated financial statements included in this report fairly present, in all material respects, our financial

position, results of operations and cash flows for the periods presented in accordance with GAAP.

Management’s

Annual Report on Internal Controls over Financial Reporting

Company’s management is also responsible for establishing and maintaining adequate internal control over financial reporting

to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for

external purposes in accordance with generally accepted accounting principles.

The Company’s internal control over financial

reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation

of financial statements for external purposes in accordance with U.S.

generally accepted accounting principles.

Internal control

over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable

detail, accurately and fairly reflect our transactions and dispositions of our assets;

(2) provide reasonable assurance that transactions

are recorded as necessary to permit preparation of the financial statements in accordance with U.S.

generally accepted accounting

principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition

of our assets that could have a material effect on the financial statements.

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

Also, projections

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

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

connection with the preparation of our annual financial statements, management has undertaken an assessment of the effectiveness

of our internal control over financial reporting as of December 31, 2017 based on the framework in Internal Control—Integrated

Framework (“1992 Framework”) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Management’s assessment included an evaluation of the design of our internal control over financial reporting and testing

of the operational effectiveness of those controls.

on this evaluation, under that framework, management has concluded that our internal control over financial reporting was not

effective as of December 31, 2017.

Our Principal Executive Officer, who is also serving as our Principal Financial Officer and

Principal Accounting Officer, concluded that we have material weaknesses in our internal control over financial reporting because

we do not have an adequate segregation of duties due to a limited number of employees among whom duties can be allocated.

lack of segregation of duties is due to the limited nature and resources of the Company.

January 1, 2017, we implemented ASC 606, Revenue from Contracts with Customers.

Although the new revenue standard is expected

to have an immaterial impact on our ongoing net income, we did implement

changes to our processes related to revenue recognition and the control activities within them.

These included the development

of new policies based on the five-step model provided in the new revenue standard, new training, ongoing contract review requirements,

and gathering of information provided for disclosures.

Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal

controls over financial reporting.

Management’s report was not subject to attestation by the Company’s registered

public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s

report in this Annual Report.

Form 10-K does not include a report of management’s assessment regarding internal control over financial reporting or an attestation

report of our independent registered public accounting firm due to a transition period established by rules of the SEC for newly public

in Internal Controls Over Financial Reporting:

changes were made in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange

Act) during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal

control over financial reporting.

were no changes in our internal control over financial reporting during the quarter ended December 31, 2021 that materially affected,

or are reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION

March 7, 2022, the Company changed its corporate headquarters and principal executive offices from 11030 Jones Bridge Road, Suite 206,

Johns Creek, Georgia 30022 to 2855 W.

McNab Road, Pompano Beach, Florida 33069.

The Company also updated the telephone number for its

principal executive offices to (855) 759-7584.

Company’s 2022 Annual Meeting of Stockholders is scheduled to be held on June 14, 2022.

Stockholders of record as of April 18,

2022 will be entitled to receive notice of, and vote at, the annual meeting.

Stockholder proposals intended to be considered for inclusion

in the Company’s proxy materials for the 2022 Annual Meeting of Stockholders are required to be submitted to the Company by March

18, 2022, which the Company has determined is a reasonable time before it begins printing and sending its proxy materials.

accordance with the Company’s Bylaws, stockholder nominations of director candidates and stockholder proposals to be presented

at the 2022 Annual Meeting of Stockholders, but not submitted for inclusion in the Company’s proxy materials, are required to be

delivered to the Secretary of the Company no later than March 18, 2022.

The Bylaws specify the information that is required to accompany

any such stockholder notices.

March 2022, the Compensation Committee recommended, and the Board approved, the following compensation program for the non-employee directors

of the Company:

cash retainer of $30,000, paid in quarterly installments (beginning as of February 14, 2022 and pro-rated as applicable), which directors

may elect to have paid in the form of shares of common stock;

grant of 5,000 shares of restricted stock, which will vest immediately upon the date of grant;

grant of options to purchase 5,000 shares of common stock with an exercise price equal to the closing price of the Company’s

common stock on Nasdaq on the date of grant, which will vest in twelve equal monthly installments and expire five years from the

date of grant;

service as a member of the Audit Committee, Compensation Committee and/or Nominating and Corporate Governance Committee:

(i) an annual

grant of 1,000 shares of restricted stock, which will vest immediately upon the date of grant, and (ii) an annual grant of options

to purchase 1,000 shares of common stock with an exercise price equal to the closing price of the Company’s common stock on

Nasdaq on the date of grant, which will vest in twelve equal monthly installments and expire five years from the date of grant;

service as the Chair of the Audit Committee, Compensation Committee and/or Nominating and Corporate Governance Committee:

additional annual grant of 1,000 shares of restricted stock, which will vest immediately upon the date of grant, and (ii) an additional

annual grant of options to purchase 1,000 shares of common stock with an exercise price equal to the closing price of the Company’s

common stock on Nasdaq on the date of grant, which will vest in twelve equal monthly installments and expire five years from the

date of grant;

non-employee members of the Business Development Committee of the Board:

(i) an annual grant of 12,500 shares of restricted stock,

which will vest immediately upon the date of grant, and (ii) an annual grant of options to purchase 12,500 shares of common stock

with an exercise price equal to the closing price of the Company’s common stock on Nasdaq on the date of grant, which will

vest in twelve equal monthly installments and expire five years from the date of grant.

directors will also receive reimbursement of reasonable out-of-pocket expenses for attending Board and committee meetings.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following is a list of our directors and

executive officers.

following table sets forth the name and position of each of our executive officers and directors, and each such person’s age as

of February 23, 2022.

All directors serve one-year terms or until each of their successors are duly qualified and elected.

are elected by our Board.

Director, Executive Chairman

Chief Executive Officer

Patricia Barron

Chief Operations Officer

Phillips Peter

Rani Kohen is the Company founder and

Executive Chairman of the Board.

Kohen is a businessman, entrepreneur and inventor of the Company’s technologies,

Kohen has over twenty-five years of experience in the lighting and advance home design industries, as well as in other related

business areas, including founding and running a large chain of retail lighting businesses.

Since founding SQL Technologies, Mr.

Kohen has succeeded in attracting and engaging accomplished and prestigious Board members, talented management and several leading

executives from various electronic industries, including the NFPA, UL, GE and others.

Our Board believes that with Mr.

Kohen’s

leadership and qualifications, his depth of knowledge of the Company’s product and his advanced business strategies, he will

continue to move the Company forward towards achieving its goals.

Campi has served as the Company’s Chief Executive Officer since November 2014.

Campi founded Genesis Management,

LLC in 2009, and retired in 2014 upon accepting the role of Chief Executive Officer.

Campi has extensive experience in the

field of cost management, is recognized as a Founder of the strategic cost-management discipline known as Activity-Based Cost

Management and is generally recognized as a national leader in the field of supply chain management.

Executive Chairman

Executive Officer

Financial Officer

Operations Officer

Greenstein Brayer

following information provides a brief description of the business experience of each executive officer and director.

Kohen has founded the Company and invented our technologies.

He has served as Executive Chairman of the board since 2016 and

as Chairman of our board of directors since November 2012.

Kohen also previously served as our Chief Executive Officer from 2004,

through 2012.

Kohen is a businessman, entrepreneur and inventor of our technologies.

He brings strategic acumen with over 20 years of experience in business, as well as in advanced smart home technologies, product

design, lighting, and other related businesses.

Since founding the Company, he has succeeded in attracting and engaging accomplished

board members, talented management and leading executives from various industries.

He has led every major milestone achieved by the Company

to date, including securing substantial financing to support the Company’s growth.

The board of directors believes that with Mr.

Kohen’s leadership and qualifications, the continuity that he brings with his advanced business strategies, he will continue to

move us forward towards achieving our goals.

Campi has served as our Chief Executive Officer since November 2014 and served as our Chief Financial Officer through December

Campi founded Genesis Management, LLC in 2009, and retired in 2014 upon accepting the role of our Chief Executive Officer.

Campi has extensive experience in the field of cost management, is recognized as a founder of the strategic cost-management discipline

known as Activity-Based Cost Management and has extensive experience in the field of supply chain management.

From December 2007 to December

Campi served as the Chief Procurement Officer and an Executive Vice President for Chrysler LLC, where he was responsible

for all worldwide purchasing and supplier quality activities.

Campi served as the Chief Procurement Officer and an Executive Vice President for Chrysler, where he was responsible for all

worldwide purchasing and supplier quality activities.

From September 2003 to January 2007, Mr.

Campi served as the Senior

Vice President of Sourcing and Vendor Management for The Home Depot, where he led the drive for standardization and optimization

of The Home Depot Global Supply Chain.

Campi served as the Senior Vice President

of Sourcing and Vendor Management for The Home Depot, Inc., where he led the drive for standardization and optimization of The Home Depot,

Inc.’s global supply chain.

From April 2002 to September 2003, Mr.

Campi served as the Chief Procurement Officer and

Vice President for Du Pont Global Sourcing and Logistics.

Campi served as the Chief Procurement Officer and Vice President

for DuPont Global Sourcing and Logistics.

Prior to 2002, Mr.

Campi led the Global Sourcing activities for GE Power

Energy, and held a variety of positions with Federal Mogul, Parker Hannifin Corporation and Price Waterhouse Coopers.

also serves as a Trustee of Case Western Reserve University, has served as a Member of the Advisory Board of Directors for three

startup companies, and has served as a Member of the Financial Executives Institute and the Institute of Management Accountants.

Campi led the Global Sourcing activities for GE Power Energy and held a

variety of positions with Federal Mogul, Parker-Hannifin Corporation and PricewaterhouseCoopers.

Campi previously served on the board

of Trustees of Case Western Reserve University and has been appointed an Emeriti Trustee.

Campi also has served as a member of the

advisory board of directors for three startup companies and has served as a Member of the Financial Executives Institute and the Institute

of Management Accountants.

Campi received his MBA from Case Western Reserve University.

Our Board believes Mr.

Campi’s qualifications to serve

as our Chief Executive Officer include his extensive executive and advisory experience with established and startup companies,

his expertise in cost-management, and his qualifications in the field of supply chain management.

Wells has served as the Company’s President since August 2016.

Wells has held various senior leadership positions

within the General Electric Company.

From December 2007 to June 2011, Mr.

Wells was the General Manager of Consumer Lighting.

From October 2005 to January 2007, Mr.

Wells was the President and Chief Executive Officer for GE Consumer & Industrial for

Greater China.

Following his MBA studies, from October 2002 to October 2005, Mr.

Wells served as Regional Manager for GE Consumer

& Industrial’s Southeast Region.

Since 2011, Mr.

Wells served as the Executive Vice President and General Manager of

Independence Medical and Home Healthcare Solutions, now a part of Cardinal Health.

Wells has over fourteen years of

experience in finance, sales and general management with GE.

Wells received his MBA from Case Western Reserve University.

Our Board believes Mr.

qualifications to serve as our President include his extensive industry experience, executive

and advisory experience and his expertise in strategic planning.

Barron has served as the Company’s Chief Operations Officer since June 2007.

From April 1989 to June 2007, Ms.

was the President and owner of LTG Services, Inc., a company focused on safety consulting services, specializing in the review

and compliance of electrical products requiring UL, CSA, and CE certifications.

Campi has extensive executive and advisory

experience with established and startup companies, as well as in cost-management and supply chain management.

Schmidt has served as our President since June 2021 and has served as a consultant to the Company since August 2019.

formed Schmidt Family Investments LLC, which invests in early stage companies, in May 2017, of which he is the sole principal.

previously served in a variety of roles at Office Depot, Inc.

from July 2007 through May 2016, including as Executive Vice President

and President, International from November 2011 to May 2016, Executive Vice President, Corporate Strategy and New Business Development

from July 2011 until November 2011 and President, North American Business Solutions from July 2007 until November 2011.

Prior to joining

Office Depot, Inc., Mr.

Schmidt spent 11 years with the ACNielsen Corporation, most recently serving as President and Chief Executive

Prior to joining ACNielsen, Mr.

Schmidt spent eight years at the Pillsbury Food Company, serving as President of its Canadian

and Southeast Asian operations.

He has also held management positions at PepsiCo and Procter & Gamble.

Boisseau serves as our Chief Financial Officer and as our principal financial officer and principal accounting officer since

January 1, 2022.

Boisseau is a partner of Boisseau, Felicione & Associates Inc., which provides assurance, advisory and tax services

for public and private companies in a variety of industries and which he founded in February 2002.

Among other things, Mr.

Boisseau served

at Citrix Systems, Inc., a publicly-traded software development company, as Corporate Controller from 1995 to December 1999 and as Principal

Accounting Officer from March 1997 to December 1999, and as a senior auditor at Ernst & Young.

Boisseau is a certified public

Barron has served as our Chief Operations Officer since June 2007.

Prior to joining the Company, Ms.

Barron was the President

and owner of LTG Services, Inc., a company focused on safety consulting services, specializing in the review and compliance of electrical

products requiring UL, CSA, and CE certifications, since 1989.

Prior to that, Ms.

Barron worked as a consultant

and engineer in the lighting, safety and approval industry and from June 1977 to August 1984, worked as an engineering assistant

for Underwriters Laboratories in the ceiling fan category.

Barron received her Master’s in Business Administration in

International Business from Georgia State University in 1989.

Our Board believes Ms.

Barron’s qualifications to serve as

our Chief Operation Officer include her extensive industry experience and qualifications, executive experience and her decade

of demonstrated commitment and leadership with the Company.

Ridge has served as a director since June 2013.

Ridge co-founded Ridge Schmidt Cyber, an executive

services firm addressing the increasing demands of cyber security.

In April 2010, Mr.

Ridge became a partner in Ridge Policy Group,

a bipartisan, full-service government affairs and issue management group.

Ridge has served as President and Chief Executive

Officer of Ridge Global, LLC, a global strategic consulting company, since July 2006.

From January 2003 to January 2005, Mr.

served as the Secretary of the United States Department of Homeland Security, and from 2001 through January 2003, Mr.

as the Special Assistant to the President for Homeland Security.

Ridge served two terms as Governor of the Commonwealth of

Pennsylvania from 1995 to 2001 and served as a member of the U.S.

House of Representatives from 1983 through 1995.

Ridge currently

serves as a member of the board of two public companies, The Hershey Company and Lifelock, and has previously served on the board

of five other public companies.

Ridge is Chairman of the Board of the National Organization on Disability, and serves as a

board member on the Board of Public Finance Management, the Institute for Defense Analysis, the Center for the Study of the Presidency,

and the Oak Ridge National Lab.

Our Board believes Mr.

Ridge’s qualifications to serve as a member of our Board include

his vast experience in both government and industry, his service on other public and private company boards, and his expertise

in retail, risk management, and cyber security.

Peter has served as a director since November 2012.

Barron worked as a consultant and engineer in the lighting,

safety and approval industry and, from June 1977 to August 1984, worked as an engineering assistant for Underwriters Laboratories, Inc.

(n/k/a UL) in the ceiling fan category.

Barron received her MBA from Georgia State University.

Barron has extensive industry

and executive experience.

Peter has served as a director of the Company since November 2012.

Since December 2014, Mr.

Peter has served as a Senior Vice President of

Ridge Global.

Peter has served as a Senior Vice

President of Ridge Global, LLC.

From 1994 to 2014, Mr.

Peter practiced law at Reed Smith LLP where he focused his practice on legislative and regulatory

matters before Congress, the executive branch of the federal government, and other administrative agencies.

Prior to this, Mr.

Peter was an officer at General Electric Company, where he held executive positions from 1973 to 1994.

He is also a veteran of

Peter practiced law at Reed Smith LLP, where he focused his practice on legislative

and regulatory matters before U.S.

Congress, the executive branch of the federal government, and other administrative agencies.

Peter was an officer at GE, where he held executive positions from 1973 to 1994.

He is also a veteran of the U.S.

Our board believes Mr.

Peter’s qualifications to serve as a member of our Board include his role as a past

advisor to the Company, his extensive experience in regulatory affairs, his past industry experience, and his demonstrated leadership

Shiff has served as a director since February 2014.

Shiff is presently President and Chief Executive Officer of the Shiff

Group of Companies.

Peter’s qualifications to serve as a member of our board include his extensive experience in regulatory

affairs, his past industry experience and his demonstrated leadership ability.

Ridge has served as a director of the Company since June 2013.

Ridge has served as President and Chief Executive

Officer of Ridge Global, LLC, a global strategic consulting company and provider of insurance and risk transfer solutions, since July

2006, where he also currently serves as Chairman of the board.

Ridge co-founded Ridge Schmidt Cyber, an executive services

firm addressing the increasing demands of cybersecurity.

In April 2010, Mr.

Ridge became a partner in Ridge Policy Group, a bipartisan,

full-service government affairs and issue management group.

From January 2003 to January 2005, Mr.

Ridge served as the Secretary of the

United States Department of Homeland Security, and from September 2001 through January 2003, Mr.

Ridge served as the Special Assistant

to the President for Homeland Security.

Ridge served two terms as Governor of the Commonwealth of Pennsylvania, from 1995 to 2001,

and served as a member of the U.S.

House of Representatives from January 1983 until January 1995.

Ridge previously served as a member

of the board of directors of The Hershey Company (NYSE:

HSY), a global confectionery leader, from November 2007 to May 2018, Advaxis,

ADXS), a clinical-stage biotechnology company, from August 2015 to March 2018, and LifeLock, Inc.

provider of identity theft protection, from March 2010 to February 2017, until its merger with a subsidiary of Symantec Corporation,

as well as several other public companies.

Ridge serves as Co-Chair of the Bipartisan Commission on Biodefense, as Chairman of the

board of the National Organization on Disability, and as a member of board of trustees of the Center for the Study of the Presidency,

among other private organizations.

Our board believes Mr.

Ridge’s qualifications to serve as a member of our board include his

vast experience in both government and industry, his service on other public and private company boards and his expertise in retail,

risk management and cybersecurity.

Shiff has served as a director of the Company since February 2014.

Shiff is presently President and Chief Executive Officer

of the Shiff Group of Companies.

The Shiff Group owns and operates hotels and other real estate in Israel, including Hayozem Resorts

3 unchanged sentences

Shiff’s qualifications to serve

as a member of our Board include his role as a past advisor to the Company and his history of success developing and operating

new businesses.

Sokolow has served as a director

since November 2015.

Sokolow currently serves as CEO & President of Newbridge Financial, Inc.

and Chairman of its broker

dealer subsidiary, Newbridge Securities Corporation.

Sokolow founded Finance, Inc.

in 1997, which merged with National Holdings

Corporation (NASDAQ CM:

NHLD), where he served as President and Vice Chairman of its Board of Directors.

Sokolow also founded

and served as Chairman and CEO of Americas Growth Fund, Inc., a closed-end investment management company (NASDAQ:

AGRO) until it

Prior to this, Mr.

Sokolow was an executive for Applica, Inc.

(formerly Windmere Corporation (NYSE:

APN)), where he served

as Executive Vice President and General Counsel.

Sokolow, is also a CPA and worked for Ernst Young and KPMG.

Sokolow earned

a Bachelor of Arts degree in Economics and a concentration in Accounting.

Sokolow also earned a Juris Doctorate degree from

the University of Florida School of Law and a Master of Law degree in Taxation from the New York University School of Law.

Sokolow is on the board of directors, Chairman of the Audit Committee and a member of the Nominations and Corporate Governance

Committees for Consolidated Water Company Ltd.

In addition, Mr.

as a member of our board include his experience in developing and operating new businesses.

Sokolow has served as a director of the Company since November 2015.

Sokolow has served as Chief Executive Officer and

President of Newbridge Financial, Inc.

and Chairman of its broker dealer subsidiary, Newbridge Securities Corporation, since January

Sokolow previously served in a variety of roles at vFinance, Inc., a publicly traded financial services company, including

as Chairman of the board of directors from January 2007, a member of the board of directors from November 1997 and Chief Executive Officer

from November 1999 through July 2008, when it merged into National Holdings Corporation, a publicly traded financial services company.

Sokolow also served as President of vFinance, Inc.

from January 2001 through December 2006.

From July 2008 until July 2012, Mr.

was President of National Holdings Corporation, and from July 2008 until July 2014, he was Vice Chairman of the board of directors of

National Holdings Corporation.

From July 2012 until December 2014, Mr.

Sokolow was a consultant and partner at Caribou LLC, a strategic

advisory services firm.

Sokolow was Founder, Chairman and Chief Executive Officer of the Americas Growth Fund Inc., a closed-end

management investment company, from 1994 to 1998.

From 1988 until 1993, Mr.

Sokolow was an Executive Vice President and the General Counsel

of Applica Inc., a publicly traded appliance marketing and distribution company.

From 1982 until 1988, Mr.

Sokolow practiced corporate,

securities and tax law and was one of the founding attorneys and a partner of an international boutique law firm.

From 1980 until 1982,

he worked as a Certified Public Accountant for Ernst & Young and KPMG Peat Marwick.

Sokolow has served on the board of directors

of, and Chairman of the Audit Committee for, Marquee Energy Ltd.

of Consolidated Water Co.

CWCO), a developer and operator of advanced water supply and treatment plants and water distribution

systems, since June 2006, where he currently serves as Chairman of the Audit Committee and as a member of the Nominations and Corporate

Governance Committee.

In addition, Mr.

Sokolow has served on the board of directors of Vivos Therapeutics, Inc.

VVOS), a medical

technology company focused on developing and commercializing innovative treatments for adult patients suffering from sleep-disordered

breathing, since June 2020, where he currently serves as Chair of the Audit Committee and as a member of the Nominating and Corporate

Governance Committee, and on the board of directors of Agrify Corporation (Nasdaq:

AGFY), a developer of precision hardware and software

grow solutions for the indoor agriculture marketplace, as well as providing associated consulting, engineering, and construction services,

since December 2021, where he currently serves as a member of the Audit Committee and the Compensation Committee.

Sokolow previously

served on the board of directors of, and as Chairman of the Audit Committee for, Marquee Energy Ltd.

(formerly Alberta Oilsands Inc.)

MQX), an energy company.

Our board believes Mr.

Sokolow’s qualifications

to serve as a member of our Board include his vast education and experience in the financial industry, his service on other public

company boards and his history of executive leadership in developing and operating businesses.

have chosen to separate the Chief Executive Officer and Board Chairman positions.

We believe that this Board leadership

structure is the most appropriate for the Company.

Our chairman, the founder of the Company, provides us with significant

experience in research and development.

Our Chief Executive Officer is responsible for day to day operations and brings significant

experience to the Company.

of the Board of Directors

January 5, 2016, we established a separately-designated standing audit committee (the “Audit Committee”), consisting

of two members, Leonard J.

Sokolow and Rani Kohen.

Sokolow is the Chairman of the Audit Committee and is deemed to be independent

and the Board has determined that he is an audit committee financial expert, as defined in Item 5(d)(5) of Regulation S-K.

Audit Committee reviews, acts on and reports to the Board with respect to various auditing and accounting matters, including the

recommendations and performance of independent auditors, the scope of the annual audits, fees to be paid to the independent auditors,

and internal accounting and financial control policies and procedures.

September 6, 2016, we established a Corporate Development Committee, consisting of two members, Rani Kohen and Leonard J.

Kohen is the Chairman of the Corporate Development Committee.

The purpose of the Corporate Development Committee is to oversee

the implementation of the strategic plan and related initiatives, identify and evaluate corporate development opportunities, develop

criteria for use in evaluating potential strategic investments, assist management to identify critical strategic issues facing

the Company and assess potential merger and acquisition opportunities.

presently do not have a nominating committee, compensation committee, or other committee or committees performing similar functions,

as our management believes that until this point it has been premature at the early stage of our management and business development

to form such committees.

Moving forward, at such time as the Board believes that such committees are necessary or desirable, or

that we are required to have such committees, we will take steps to form such committees and adopt charters as may be required

to comply with all applicable rules and regulations.

Company does not currently have a Code of Conduct and Ethics to apply to all of our directors, officers and employees.

near future, our Board intends to adopt a code which intended to promote ethical conduct and compliance with laws and regulations,

to provide guidance with respect to the handling of ethical issues, to implement mechanisms to report unethical conduct, to foster

a culture of honesty and accountability, to deter wrongdoing and to ensure fair and accurate financial reporting.

Upon approval

by the Board, a copy of the Code of Conduct and Ethics will be available at our website www.safetyquicklight.com.

we do not have a formal policy on diversity, our Board considers diversity to include the skill set, background, reputation, type

and length of business experience of our Board members as well as a particular nominee’s contributions to that mix.

Board believes that diversity brings a variety of ideas, judgments and considerations that benefit Safety Quick Lighting and our

shareholders.

Although there are many other factors, the Board seeks individuals with experience in business, financial and scientific

research and development.

Assessment of Risk

risk management function is overseen by our Board.

Our management keeps our Board apprised of material risks and provides our

directors access to all information necessary for them to understand and evaluate how these risks interrelate, how they affect

the Company, and how management addresses those risks.

John Campi, as our Chief Executive Officer works closely together with

the Board once material risks are identified on how to best address such risk.

If the identified risk poses an actual or potential

conflict with management, our independent directors may conduct the assessment.

Communications

we do not have a formal policy regarding communications with the Board, shareholders may communicate with the Board by writing

to us at 4400 North Point Parkway, Suite 265, Alpharetta, Georgia, 30022, Attention:

Shareholder Communication.

Shareholders who

would like their submission directed to a member of the Board may so specify, and the communication will be forwarded, as appropriate.

Section 16(A) Beneficial Ownership Reporting

Section 16(a) of the Securities Exchange Act

of 1934 requires that the Company’s executive officers, directors and persons who own beneficially more than 10% percent

of the Company’s outstanding Common Stock, file reports of ownership and changes in ownership and furnish the Company with

copies of all Section 16(a) reports so filed.

Based solely on a review of these reports filed with the SEC and certain written

representations furnished to the Company, the Company believes that its executive officers and directors complied with all applicable

Section 16(a) filing requirements during 2017, other than the following:

Shiff filed a Form 4 with the SEC on March

31, 2017, in connection with the August 15, 2016 conversion of his Convertible Note into shares of Series A Preferred Stock.

Wells filed a Form 3 with the SEC on March 29, 2017, in connection with his appointment as President on November 7, 2016, and filed

a Form 4 with the SEC on March 29, 2017, in connection with issued and unvested securities in the Wells Agreement dated August

Kohen filed a Form 4 with the SEC on March 31, 2017, in connection with unvested securities the Chairman’s

Agreement dated September 1, 2016.

Campi filed a Form 4 with the SEC on March 30, 2017, in connection with issued and unvested

securities the Campi Agreement dated September 1, 2016.

Barron filed a Form 3 with the SEC on April 27, 2017, in connection

with her employment agreement to serve as Chief Operations Officer effective September 1, 2016.

in Legal Proceedings

know of no pending proceedings to which any director, member of senior management, or affiliate is either a party adverse to us,

or our subsidiaries, or has a material interest adverse to us or our subsidiaries.

of our executive officers or directors have (i) been involved in any bankruptcy proceedings within the last five years, (ii) been

convicted in or has pending any criminal proceedings, (iii) been subject to any order, judgment or decree enjoining, barring,

suspending or otherwise limiting involvement in any type of business, securities or banking activity or (iv) been found to have

violated any federal, state or provincial securities or commodities law and such finding has not been reversed, suspended or vacated.

Sokolow’s qualifications to serve as a member of our board include

his extensive experience in the financial industry, his service on other public company boards and his history of executive leadership

in developing and operating businesses.

Golden has served as a director of the Company since February 2022.

Golden is currently with Tatum CFO Partners, a company

that provides interim executive resources across the C-suite.

During his time with Tatum CFO Partners, during 2021, Mr.

Golden served

as interim Chief Financial Officer of ADB Companies, which provides strategy, design, execution and program management services for the

communication, utility, and technology industries.

Prior to that, during 2021, Mr.

Golden served as a project manager and professional

services contractor for MMC Group, Inc., which offers full-service workforce solutions, and as interim controller at SportClips Haircuts.

During 2020, he served as a special project auditor for WebsterRogers LLP, a South Carolina-based accounting and consulting firm that

provides a broad spectrum of assurance, tax and advisory services.

From 2013 to 2019, Mr.

Golden served as Chief Financial Officer at

NBG Home, an affiliate of Nielsen & Bainbridge and one of the largest home decor manufacturing companies and importers globally.

From 2008 to 2013, Mr.

Golden served as Chief Financial Officer and Professional Services Contractor for MMC Group, Inc.

served in a variety of other financial and operational roles, including as Vice President, Controller of Kinko’s Inc., Senior Vice

President and Corporate Controller of Blockbuster, Inc., and in controller and internal audit roles at Fuqua Industries and Qualex, Inc.

Golden is a licensed Certified Public Accountant who began his career at Arthur Andersen & Company.

Our board believes Mr.

Golden’s

qualifications to serve as a member of our board include his financial expertise, including his status as an “audit committee financial

expert,”

and his experience in the home goods and lighting industry.

Greenstein Brayer has served as a director of the Company since February 2022.

Greenstein Brayer currently serves as Co-Founder

and Chief Executive Officer of Merkavah Inc.

(d/b/a Ezzree), which provides online emotional and spiritual support care services, and

has been principal attorney of the law office of Laura Greenstein since 2000, where she provides services as a corporate finance attorney.

Greenstein Brayer previously served as a contract attorney with Holland & Knight from 2006 through 2012, as associate counsel

at Bank Hapoalim B.M.

from 1996 through 2000, as an associate at Rogers & Wells (later acquired by Clifford Chance) from 1993-1996,

and as an associate at Haight, Gardner, Poor & Havens (later acquired by Holland & Knight) from 1988 through 1993.

Brayer has also served as an officer or director of several private companies.

Our board believes Ms.

Greenstein Brayer’s qualifications

to serve as a member of our board include her corporate law expertise and her experience founding and serving as Chief Executive Officer

of a private company.

DiMattia has served as a director of the Company since February 2022.

DiMattia previously served as Senior Vice President

and Chief Financial Officer of Tile Shop Holdings, Inc., a publicly-traded, specialty retailer of natural stone and man-made tiles, setting

and maintenance materials, and related accessories, from September 2019 until January 2022, where she continues to serve in an advisory

capacity through March 2022.

She also previously provided consulting services to Tile Shop Holdings, Inc.

from July 2019 until September

Before joining Tile Shop Holdings, Inc., Ms.

DiMattia gained over twenty-five years of experience in financial reporting and accounting

processes in positions of increasing responsibility at Virginia Tile Company.

She most recently served as the Corporate Controller from

2005 until March 2019.

During her tenure at Virginia Tile Company, she was responsible for establishing sound financial management, promoting

effective internal accounting controls, developing and leading highly competent accounting teams, and maintaining a documented system

of accounting policies and procedures.

Our board believes Ms.

DiMattia’s qualifications to serve as a member of our board include

her retail industry experience and financial expertise.

Relationships

are no family relationships among the directors and executive officers.

Relationships and Related Transactions

otherwise stated in this Annual Report, none of the following parties has, in our fiscal years ended 2015 and 2016, had any material

interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially

of our directors or officers;

person who beneficially owns, directly or indirectly, shares carrying more than 10% of

the voting rights attached to our outstanding shares of Common Stock;

member of the immediate family (including spouse, parents, children, siblings and in-

laws) of any of the above persons.

are currently party to the Chairman’s Agreement (as defined below) with Mr.

Rani Kohen, Executive Chairman and Chairman

of the Company’s Board, pursuant to which we are required to pay cash compensation in the amount of $250,000 per year.

2015 and through August 31, 2016, we were a party to the Kohen Consulting Agreement (as defined below) with Mr.

Kohen, pursuant

to which we paid cash compensation in the amount of $150,000 per year.

Both agreements are more fully described in Item 11 of

this report, in the subsection entitled “Narrative Disclosure to Summary Compensation and Option Tables”.

are no family relationships among any of our directors or executive officers or any person nominated to become a director or executive

of our Board of Directors

business and affairs are managed under the direction of our board of directors, which currently consists of eight directors.

of directors is determined by our board of directors or our stockholders, but will not be less than five persons, subject to the terms

of our articles of incorporation and our bylaws.

Each director will be elected to one-year terms and will hold office until his or her

successor is duly elected and qualified or until his or her earlier death, resignation or removal.

Vacancies and newly created directorships

on the board of directors may be filled at any time by the remaining directors.

of our directors are women, representing approximately 25% of our board of directors.

We believe that having a diverse board of directors

can offer a breadth and depth of perspectives that enhance our performance.

The nominating and corporate governance committee will, when

evaluating candidates for service on the board, consider the manner in which a candidate’s appointment to the board would impact

the overall composition of the board with regard to diversity of viewpoint, professional experience, education, skill, age, gender identity,

nationality, race, ethnicity and sexual orientation.

Leadership Structure and Board’s Role in Risk Oversight

have chosen to separate the Chief Executive Officer and Board Chairman positions, as our board of directors believes that having separate

positions is the appropriate leadership structure for us at this time and demonstrates our commitment to good corporate governance.

believe that separating the positions of Chief Executive Officer and chairperson of the board of directors allows our Chief Executive

Officer to focus on our day-to-day business, while allowing a chairperson of the board to lead the board of directors in its fundamental

role of providing advice to and independent oversight of management.

of the key functions of our board of directors is informed oversight of our risk management process.

In particular, our board of directors

is responsible for monitoring and assessing strategic risk exposure.

Our executive officers are responsible for the day-to-day management

of the material risks we face.

Our board of directors administers its oversight function directly as a whole.

Our board of directors

will also administer its oversight through various standing committees, which address risks inherent in their respective areas of oversight.

For example, our audit committee is responsible for overseeing the management of risks associated with financial reporting, accounting

and auditing matters;

our compensation committee oversees the management of risks associated with our compensation policies and programs;

and our nominating and corporate governance committee oversees the management of risks associated with director independence, conflicts

of interest, composition and organization of our board of directors and director succession planning.

board of directors has three standing committees:

an audit committee, a compensation committee and a nominating and corporate governance

Each member of each committee of our board of directors qualifies as an independent director in accordance with the listing

standards of Nasdaq.

committee operates pursuant to a charter adopted by our board of directors.

The full text of our audit committee charter, compensation

committee charter and nominating and corporate governance committee charter are posted on the investor relations portion of our website

at www.skyplug.com.

audit committee consists of Ms.

Greenstein Brayer, Ms.

DiMattia and Mr.

Golden, who is the chair of the audit committee.

The functions

of the audit committee include:

approving the compensation of and assessing the independence of our independent registered public accounting firm;

pre-approving

audit and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting

the overall audit plan with our independent registered public accounting firm and members of management responsible for preparing

our financial statements;

and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements

and related disclosures;

our disclosure controls and procedures, as well as reviewing disclosures regarding our internal control over financial reporting;

policies and procedures for the receipt, retention and treatment of accounting-related complaints and concerns;

to the board of directors, based upon the audit committee’s review and discussions with management and our independent registered

public accounting firm, whether our audited financial statements will be included in our annual reports on Form 10-K;

with management our policies with respect to risk assessment and risk management and our significant financial risk exposures, as

well as information security and technology risks (including cybersecurity);

the audit committee report required by SEC rules to be included in our annual proxy statement;

and overseeing all related person transactions for potential conflict of interest situations, as well as annually reviewing the related

party transactions policy;

compliance with, and annually reviewing, the code of business conduct and ethics;

quarterly earnings releases.

members of our audit committee meet the requirements for financial literacy under the applicable rules and regulations of the SEC and

Nasdaq listing rules.

Our board of directors has determined that Mr.

Golden qualifies as an “audit committee financial expert”

within the meaning of applicable SEC regulations and meets the financial sophistication requirements of Nasdaq listing standards.

making this determination, our board of directors considered Mr.

Golden’s prior experience, business acumen and independence.

our independent registered public accounting firm and management will periodically meet privately with our audit committee.

compensation committee consists of Ms.

Greenstein Brayer, Ms.

DiMattia, and Mr.

Golden, who is the chair of the compensation committee.

The functions of the compensation committee include:

reviewing our overall compensation policy as it applies to our employees generally, and the corporate goals and objectives relevant

to compensation of the Executive Chairman, Chief Executive Officer and our other executive officers;

and approving or recommending to the board of directors the compensation of our executive officers;

and approving or recommending to the board of directors our incentive compensation plans and equity-based plans;

and recommending to the board of directors the compensation of our non-management directors;

the executive compensation disclosures and, if and when required, preparing the compensation committee report required by SEC rules

to be included in our annual proxy statement or Form 10-K, as applicable;

risks relating to our compensation policies, practices and procedures;

our strategies related to human capital management;

and approving the retention, termination or compensation of any consulting firm or outside advisor to assist in the evaluation of

compensation matters.

member of our compensation committee is a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act.

and Corporate Governance Committee

nominating and corporate governance committee consists of Ms.

DiMattia, Mr.

Golden and Ms.

Greenstein Brayer, who is the chair of the

nominating and corporate governance committee.

The functions of the nominating and corporate governance committee include:

and evaluating individuals qualified to become members of the board of directors;

to the board of directors the persons to be nominated for election as directors and to each of the board’s committees;

developing and recommending to the board of directors policies and procedures with respect to the nomination of directors or other

corporate governance matters;

disclosures relating to our corporate governance practices to be included in our proxy statement or Form 10-K, as applicable;

our policies and practices regarding corporate social responsibility and environmental, social and governance matters and related

proposals submitted by stockholders for inclusion in our proxy materials;

the evaluation of our board of directors and board committees.

board of directors may from time to time establish other committees.

of Business Conduct and Ethics

board of directors has adopted a Code of Business Conduct and Ethics, which applies to all of our directors, employees, and officers

(including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing

similar functions).

The full text of our Code of Business Conduct and Ethics is posted on our website at www.skyplug.com.

satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of our Code of

Ethics and Business Conduct by posting such information on our website within four business days following the date of the amendment

in Certain Legal Proceedings

the best of our knowledge, none of our directors or executive officers were involved in any legal proceedings described in Item 401(f)

of Regulation S-K in the past 10 years.

EXECUTIVE COMPENSATION

a “smaller reporting company,”

we have elected to follow scaled disclosure requirements for smaller reporting companies.

Under the scaled disclosure obligations, we are not required to provide Compensation Discussion and Analysis and certain other

tabular and narrative disclosures relating to executive compensation.

Nor are we required to quantify payments due to the named

executives upon termination of employment.

Management believes that the scaled disclosure for the Company’s executive compensation

policy and practices is appropriate because we will are a small publicly-traded company, have a limited number of employees and

executives and have a relatively simple compensation policy and structure.

Executive Officers

“named executive officers”

for the 2017 fiscal year consisted of the following individuals:

Rani Kohen, Executive

Chief Executive Officer

Mark Wells, President

for the year ended December 31, 2021 were:

Campi, Chief Executive Officer and Chief Financial Officer through December 31, 2021;

Kohen, Executive Chairman;

Schmidt, President;

Barron, Chief Operations Officer.

executive compensation program reflects our continued growth and development-oriented focus.

We recognize that our ability to excel depends

on the knowledge, skill and teamwork of our employees.

To this end, we strive to create an environment of mutual respect, encouragement

and teamwork that rewards commitment and performance and is responsive to the needs of our employees.

The principles and objectives of

our compensation and benefits programs for our employees generally, and for our named executive officers specifically, include to align

our compensation program with our corporate strategies, financial objectives and the long-term interests of our stockholders;

and reward executives whose knowledge, skills and performance ensure our continued success;

and ensure that total compensation is fair,

reasonable and competitive.

The compensation received by our named executive officers is based primarily on their experience and knowledge

as well as their responsibilities and individual contributions to the Company.

we transition from a private company to a publicly traded company, the compensation committee of our board of directors will evaluate

our compensation values and philosophy and compensation plans and arrangements as circumstances require.

As part of this review process,

we expect the compensation committee to apply our values and philosophy, while considering the compensation levels needed to ensure our

executive compensation program remains competitive.

We will also review whether we are meeting our retention objectives and the potential

cost of replacing a key employee.

Compensation Program Components

officer base salaries are based on job responsibilities and individual contribution and are designed to attract and retain employees

Each of our named executive officers receives a base salary set forth in an employment agreement entered into with the Company,

and the board has the discretion to review and adjust each named executive officer’s base salary.

Barron received an annual base salary of $150,000, $250,000, and $150,000, respectively, during the year ended December 31, 2021.

Kohen’s annual base salary increased to $300,000, effective as of January 1, 2022.

Schmidt does not receive an annual base

In light of challenges of the COVID-19 pandemic and preparation for our initial public offering, our named executive officers

received decreased cash compensation in 2020 and 2021.

and Bonus Compensation

named executive officer’s employment agreement also provides for the receipt of incentive and/or bonus compensation, which may

be paid annually in cash and/or stock.

These incentive compensation and bonus awards are designed to focus our executive officers on

our business objectives of growing our business, including increasing our revenue and income.

Campi is eligible to receive annual incentive compensation consisting of both a cash component, based on our annual gross revenue and

annual net income, and an equity component, consisting of a number of options to purchase common stock determined based on our quarterly

Kohen is eligible to receive annual incentive compensation based on our annual gross revenue, which may be paid in cash,

stock and/or options, as well as supplemental bonus compensation of performance-based stock options to purchase up to 17,000,000 shares

of common stock at an exercise price ranging between $4.00 and $12.00 per share, determined based on the achievement of specified market

capitalizations of the Company, and the potential to receive further options based on the achievement of additional specific market capitalizations

of the Company, as described further below under “Agreements with Named Executive Officers.”

Barron is eligible to receive

annual incentive compensation consisting of a cash payment based on our net revenues.

Schmidt is eligible to receive a stock bonus

of 20,000 shares that will be payable upon achievement of certain sales program goals, and he may be eligible to receive additional bonus

compensation as determined by the Company.

actual incentive and/or bonus compensation earned by each of our named executive officers during our most recent fiscal year is set forth

in the “Summary Compensation Table”

Equity Compensation and Awards

executive officers may also receive equity awards under our 2021 Stock Incentive Plan (the “2021 Plan”).

We use equity awards

to align the interests of our named executive officers with those of our stockholders.

We believe that equity awards, such as stock options

and non-vested restricted stock, encourage our named executive officers to focus on our long-term success as reflected in increases to

our stock prices over a period of several years, growth in our profitability and other elements.

addition to the equity incentive and supplemental bonus awards described above, the Chairman Agreement (as defined below) with Mr.

provides for, effective January 1, 2022, the grant of five-year options to purchase 1,020,000 shares of common stock, which have an exercise

price of $12.00 per share, vest as to 340,000 shares on each of January 1, 2023, 2024 and 2025, and expire January 1, 2027.

Schmidt’s employment agreement provides for the following equity grants:

a five-year option to purchase 60,000 shares of common

stock at an exercise price of $0.10 per share, which will vest in three equal annual installments on each of October 1, 2020, 2021 and

a five-year option to purchase 60,000 shares of common stock at an exercise price of $6.00 per share, which will vest in three

equal annual installments on each of October 1, 2020, 2021 and 2022;

a five-year option to purchase 100,000 shares of common stock at

an exercise price of $12.00 per share, which vests in four equal annual installments on each of June 1, 2021, 2022, 2023 and 2024 (which

includes a signing bonus of options to purchase 25,000 shares);

and an annual grant of 25,000 shares of common stock on each of June

1, 2022, 2023 and 2024.

also grant equity-based sign-on bonuses when necessary and appropriate to advance our and our stockholders’

interests, including

to attract or retain top executive-level talent.

Campi’s, Mr.

Kohen’s and Ms.

Barron’s 2019 agreement provided

for a sign-on bonus of a stock option to purchase 120,000, 120,000 and 100,000 shares of common stock, respectively, at an exercise price

of $6.00 per share, which vested in full on December 31, 2020, January 1, 2020 and December 31, 2020, respectively.

Schmidt’s

agreement provided for a signing bonus of 25,000 shares of common stock and options to purchase 25,000 shares of common stock at an exercise

price of $12.00 per share, which vested in full on June 1, 2021.

Kohen’s Chairman Agreement provides for a sign-on bonus of

a stock option to purchase 120,000 shares of common stock at an exercise price of $12.00 per share, which was granted effective January

1, 2022 and will vest in full on January 1, 2023.

and Perquisites

provide health insurance to our full-time employees, including our named executive officers.

We generally do not provide perquisites

or personal benefits to our named executive officers, except in limited circumstances.

For instance, Mr.

Kohen is eligible to receive

a $1,000 per month vehicle allowance, pursuant to the Chairman Agreement, as further described in the summary compensation table.

Compensation Table

table below summarizes all compensation awarded to, earned by, or paid to our Chief Executive Officer and our two most highly

compensated executive officers (the “named executive officers”

listed above) at the end of our last fiscal year for

all services rendered in all capacities to us during the years during which they served as executive officers.

Where a named executive

officer is also a director, all compensation related to such individuals position as an officer.

Name and Principal Position

Stock Awards ($)

Option Awards ($)

Non-equity Incentive Plan Compensation ($) (1)

All Other Compensation

Rani Kohen (2)(3)

following table sets forth summary compensation information for the named executive officers and includes all compensation earned by

the named executive officers for the respective period, regardless of whether such amounts were actually paid during the period.

and Principal Position (1)

Awards ($) (2)(5)

Incentive Plan Compensation ($) (3)

Non-Qualified Deferred Compensation

Other Compensation

Chief Executive Officer and Chief Financial Officer (through December 31, 2021)

Executive Chairman

Chief Executive Officer

Mark Wells (7)

Non-equity Incentive

Plan Compensation reflects incentive compensation and commission payable pursuant to each individual’s respective employment

agreement, typically as a percent of the Company’s net revenue or sales earned, and in each case as described below.

Kohen was named

Executive Chairman on November 7, 2016, effective as of September 1, 2016.

Pursuant to the terms of the Chairman’s Agreement

(as defined below), Mr.

Kohen received or will receive (i) an annual salary of $250,000;

(ii) options to purchase up to 340,000

shares of Common Stock each year, will vest in its’

entirety January 1, 2019;

(iii) annual incentive compensation of

one half of one percent (0.50%) of the Company’s net revenue;

(iv) a ‘sign-on bonus’

of 120,000 shares of

Common Stock ,which will vest in its’

entirety on January 1, 2020;

(v) a supplemental bonus consisting of an option

to purchase up to 1,500,000 shares of Common Stock at $3.00 per share, accruing in increments of 500,000 shares, each upon

the achievement of the Company’s market capitalization reaching milestones of $300 million, $500 million and $750 million;

(vi) a supplemental bonus consisting of an option to purchase up to 1,500,000 shares of Common Stock at $4.00 per share, accruing

in increments of 500,000 shares, each upon the achievement of the Company’s market capitalization reaching milestones

of $1 billion, $1.5 billion and $2 billion;

and (vii) a supplemental bonus consisting of an option to purchase up to 1,000,000

shares of Common Stock at $5.00 per share, accruing in increments of 500,000 shares, each upon the achievement of the Company’s

market capitalization reaching milestones of $2.5 billion and $3 billion.

For the first eight

months of 2016, Mr.

Kohen was compensated pursuant to a Consulting Agreement, whereby he was paid an annual fee of $150,000,

a $1,000 per month automobile allowance, and annual incentive compensation equal to one half of one percent (0.50%) of the

Company’s net revenue .

All amounts included for 2016 represent the compensation as previously disclosed

regarding his role solely as Chairman of the Board, including the amount of “All Other Compensation”, which reflects

compensation paid pursuant to the Kohen Consulting Agreement.

The amounts included for 2016 include compensation paid to Mr.

Kohen in his capacity as Chairman as the Board through August 31, 2016, and as both Executive Chairman and Chairman of the

Board thereafter.

On November 15,

2015, the Board granted Mr.

Kohen (i) options to purchase up to 400,000 shares of Common Stock at $0.60, which vested November

(ii) options to purchase up to 300,000 shares of Common Stock at $0.60, which vested November 15, 2016;

options to purchase up to 300,000 shares of Common Stock at $0.60, which vested November 15, 2017.

The value of the option

award was calculated at $2.00 per share;

for assumptions made in the valuation of the option awards, see Note 2 to our Audited

Consolidated Financial Statements.

Pursuant to the

terms of the Campi Agreement (as defined below) , Mr.

Campi received or will

receive (i) an annual salary of $150,000;

(ii) options to purchase up to 120,000 shares of Common Stock as a

“sign-on bonus”, which vest on December 31, 2017 and was issued on March 23, 2018;

(iii) an incentive bonus of

one quarter of one percent (0.25%) of the Company’s net revenue;

(iv) 3% of adjusted net income;

and (v) options to

purchase a number of shares of Common Stock equal to one half of one percent (0.5%) of the

Company’s quarterly net income , at a strike price to be determined by the Board at the time of

Pursuant to Mr.

Campi’s previous employment agreement, Mr.

Campi received (i) a gross annual salary of $102,000 per year;

shares of Common Stock, 250,000 shares of which vested on May 20, 2015, and 500,000 shares of which vested on December 31,

and (iii) incentive compensation equal to one half of one percent (0.50%) of the Company’s net revenue.

of the stock award was $0.25 per share, based on the value of shares sold in connection with the Company’s most recent

sale of securities in a private placement as of the time of such agreement.

named President of the Company on November 7, 2016, effective as of August 17, 2016.

Pursuant to the terms of the Wells Agreement

(as defined below) , Mr.

Wells will receive (i) an annual salary of $250,000;

(ii) 1,025,000 shares of Common Stock

which will vest in its’

entirety on January 1, 2019;

(iii) incentive compensation equal to one quarter of one percent

(0.25%) of the Company’s net revenue;

and (iv) a “sign-on”

120,000 shares of Common Stock , which vested in its’

entirety on January 1, 2018 and was issued on March 23,

received 100,000 shares of Common Stock pursuant to a consulting agreement dated June 1, 2015, which vested on June 1, 2016;

the value of the stock award was $2.60 per share, based on the value of shares sold in connection with the Company’s

most recent sale of securities in a private placement as of the time of such vesting.

Patricia Barron

Chief Operations Officer

Schmidt has served as a consultant to the Company since August 2019 and has served as our President since June 2021.

value of stock awards and options in this table represents the fair value of such awards granted or modified during the fiscal year,

as computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“Topic 718”).

The assumptions used to determine the valuation of the awards are discussed in Note 2 and Note 10 to our consolidated financial statements

for the year ended December 31, 2021.

Incentive Plan Compensation reflects incentive compensation and commission payable pursuant to each individual’s respective

employment agreement, typically as a percent of the Company’s net revenue or sales earned, and in each case as described below

under “Agreements with Named Executive Officers.”

2020, represents vehicle allowance paid pursuant to the 2019 Chairman Agreement (as defined below).

During both 2021 and 2020, due

to circumstances resulting from the impact of the COVID-19 pandemic and preparation for our initial public offering, Mr.

Kohen received

only a portion of the allowance provided for in the 2019 Chairman Agreement in 2020 and no allowance in 2021.

The amount included

in this table only includes the portion of the allowance that Mr.

Kohen received.

to the new employment agreements entered into in September 2019, each of Mr.

Kohen and Ms.

Barron was granted an equity-based

“sign-on”

bonus of stock options with an exercise price of $6.00 per share.

In addition, Mr.

Kohen became eligible to

receive 1,020,000 shares of common stock as of January 1, 2019 and was also granted the following options during 2019:

to purchase 1.5 million shares at an exercise price of $3.00 per share, (ii) options to purchase 500,000 shares at an exercise price

of $4.00 per share;

and (iii) options to purchase 1.0 million shares at an exercise price of $6.00 per share.

Kohen also received

120,000 shares of common stock as of January 1, 2020.

Pursuant to his amended employment agreement, during 2021, Mr.

Schmidt received

25,000 shares of common stock and options to purchase 100,000 shares of common stock at an exercise price of $12.00 per share.

option and stock awards are further described below under “Agreements with Named Executive Officers”.

2021 and 2020, each of Mr.

Kohen and Ms.

Barron deferred a portion of their salary due to circumstances resulting from

the impact of the COVID-19 pandemic and preparation for our initial public offering, including $150,000 and $87,413, respectively,

deferred by Mr.

Campi, $67,500 and $140,833, respectively, deferred by Mr.

Kohen and $0 and $12,413, respectively, deferred by Ms.

These deferred amounts are included in this table.

Equity Awards at December 31, 2021 Fiscal Year End

of December 31, 2017, the following named executive officers had the following unexercised options, stock that has not vested,

and equity incentive plan awards

following table sets forth certain information regarding outstanding equity awards held by the named executive officers as of December

Option Awards

not exercisable

base price per share

Expiration Date

Units of Stock Not Vested

of Shares or Units Not Vested

Equity Incentive Plan Awards:

Number of Unearned Shares, Units or Other Rights Not Vested

Value of Unearned Shares, Units or Other Rights Not Vested

Disclosure to Summary Compensation and Option Tables

of securities underlying unexercised options

unexercisable

incentive plan awards:

Number of securities underlying unexercised unearned options

exercise price

Option expiration date

of shares or units of stock that have not vested

value of shares or units of stock that have not vested

incentive plan awards:

Number of unearned shares, units or other rights that have not vested

incentive plan awards:

Market or payout value of unearned shares, units or other rights that

have not vested

Patricia Barron

options were granted pursuant to executive chairman agreements entered into with Mr.

options become exercisable on September 1, 2022 and have an exercise price of $6.00 per share.

Kohen’s chairman agreement, Mr.

Kohen was granted the following supplemental bonus options as it was determined that

the applicable performance conditions had been satisfied:

(i) options to purchase 1,500,000 shares of common stock at an exercise

price of $3.00 per share;

(ii) options to purchase 500,000 shares of common stock at an exercise price of $4.00 per share;

options to purchase 1,000,000 shares of common stock at an exercise price of $6.00 per share.

These options were exercisable as of

the date of grant and expire November 21, 2024.

Pursuant to the Chairman Agreement, Mr.

Kohen has the following options as supplemental

bonus compensation, subject to the Company achieving the specified market capitalization:

(i) options to purchase 500,000 shares

of common stock at $4.00 per share, upon the Company achieving each of the following market capitalizations:

$1.5 billion and $2.0

(ii) options to purchase 500,000 shares of common stock at $5.00 per share, upon the Company achieving each of the following

market capitalizations:

$2.5 billion and $3.0 billion;

(iii) options to purchase 500,000 shares of common stock at an exercise price

of $6.00 per share, upon the Company achieving each of the following market capitalizations:

$1.5 billion and $2.0 billion;

options to purchase 500,000 shares of common stock at an exercise price of $7.00 per share, upon the Company achieving each of the

following market capitalizations:

$3.0 billion, $4.0 billion, $5.0 billion and $6.0 billion;

and (v) options to purchase 500,000

shares of common stock at an exercise price of $8.00 per share, upon the Company achieving each of the following market capitalizations:

$7.0 billion, $8.0 billion, $9.0 billion and $10.0 billion.

As of January 1, 2022, Mr.

Kohen has additional supplemental bonus options

to purchase shares of common stock, subject to the achievement of certain Company market valuation, as described below under “Agreements

with Named Executive Officers.”

the range of exercise prices –

options to purchase 200,000 shares have an exercise price of $0.60 per share, 150,000 have an

exercise price of $1.20 per share and 150,000 have an exercise price of $1.80 per share.

the range of exercise prices –

options to purchase 50,000 shares have an exercise price of $3.00 per share and 50,000 have

an exercise price of $4.00 per share.

options become exercisable on October 1, 2022.

Options to purchase 60,000 shares have an exercise price of $0.10 per share and 60,000

have an exercise price of $6.00 per share.

options become exercisable in three equal installments on each of June 1, 2022, 2023 and 2024 and have an exercise price of $12.00

Schmidt’s employment agreement provides for an annual grant of 25,000 shares of common stock on each of June 1, 2022, 2023

with Named Executive Officers

Campi (Chief Executive Officer)

November 2014, the Company entered into an employment agreement with John Campi, its Chief Executive Officer.

The agreement provided

Campi would receive a base salary of $102,000 per year;

(ii) included a sign-on bonus of 750,000 shares of Common Stock,

which has fully vested and all such shares have been issued;

and (iii) included incentive compensation equal to (a) one half of

one percent (0.50%) of the first $20,000,000 of the Company’s annual gross revenue plus one quarter of one percent (0.25%)

of the Company’s annual gross revenue above $20,000,000;

(b) three percent (3%) of the Company’s annual net income,

and (c) five-year options to purchase shares of Common Stock equal to one half of one percent (0.50%) of the Company’s quarterly

net income, with a strike price to be determined at the time such options are granted.

September 1, 2016, the Company entered into a new employment agreement with Mr.

Campi (the “Campi Agreement”).

Campi Agreement provides that Mr.

Campi will serve for an initial term of one year, which may be and was renewed by the mutual

agreement of Mr.

September 1, 2019, the Company entered into an Executive Employment Agreement with John Campi, its Chief Executive Officer and then-Chief

Financial Officer (the “Campi Agreement”), which superseded Mr.

Campi’s previous employment agreement effective September

The Campi Agreement provided for an initial term of one year, which expired August 31, 2020.

The term may be, and has been,

renewed by the mutual agreement of Mr.

Campi and the Company.

Subject to other customary terms and conditions of such agreements, the Campi Agreement

provides that Mr.

Campi will receive (i) a base salary of $150,000 per year;

(ii) a sign-on bonus of 120,000 shares of Common

Stock, which vested in its entirety on December 31, 2017;

(iii) incentive compensation equal to (a) one quarter of one percent

(0.25%) of the Company’s gross revenue and (b) three percent (3%) of the Company’s annual net income paid in cash

on an annual basis;

and (iv) five-year options to purchase shares of Common Stock in an amount equal to one half of one percent

(0.50%) of the Company’s quarterly net income, the exercise price of which will be determined at the time such options are

to the Campi Agreement, if terminated without cause during the initial term, the Company shall pay to Mr.

Campi (i) an amount

calculated by multiplying the monthly salary, at the time of such termination, times the number of months remaining in the initial

term, and (ii) all unpaid incentive compensation then in effect on a pro rata basis.

In addition, the sign-on shares of

Common Stock shall immediately vest.

For any other termination during the initial term, Mr.

Campi shall receive an amount calculated

by multiplying fifty percent of the monthly salary, in effect at the time of such termination, times the number of months remaining

in the initial, and shall not be entitled to incentive compensation payments then in effect, prorated or otherwise .

years ended December 31, 2017 and December 31, 2016 Mr.

Campi earned approximately $171,966 and $137,853, respectively, under this

and the agreement associated with performance pay as noted above.

On March 23, 2018, the Company issued the sign-on bonus of 120,000

shares of Common Stock, with vested in its entirety on December 31, 2017.

Wells (President)

August 17, 2016, the Company entered into an Executive Employment Agreement with Mr.

Wells (the “Wells Agreement”),

to serve as the Company’s President.

The Wells Agreement provides that Mr.

Wells will serve for an initial term of three

years, which may be renewed by the mutual agreement of Mr.

Wells and the Company.

Subject to other customary terms and conditions

of such agreements, the Wells Agreement provides that Mr.

Wells will receive (i) a base salary of $250,000 per year, which may

be adjusted each year at the discretion of the Board;

(ii) 1,025,000 shares of Common Stock, which shall vest on January 1, 2019

(the “Wells Compensation Shares”);

(iii) a sign-on bonus of 120,000 shares of Common Stock, with vested in its entirety

Wells on January 1, 2018;

and (iv) incentive compensation equal to one quarter of one percent (0.25%) of the Company’s

net revenue, paid in cash on an quarterly basis.

to the Wells Agreement, if terminated without cause during the initial term, the Company shall pay to Mr.

Wells (i) an amount

calculated by multiplying the monthly salary, at the time of such termination, times the number of months remaining in the Initial

Term, and (ii) all unpaid incentive compensation then in effect.

In addition, the sign-on bonus shares of Common Stock shall immediately

vest, and the Wells Compensation Shares shall vest on a pro rata basis based on the number of days served under the Wells

Agreement and the number of days in the vesting period.

For any other termination during the initial term, Mr.

Wells shall receive

payment of salary, at the then current rate, and all due but unpaid incentive compensation through the date termination is effective.

years ended December 31, 2017 and December 31, 2016 Mr.

Wells earned approximately $275,559 and $80,763, respectively, under this

and the agreement associated with performance pay as noted above.

On March 23, 2018, the Company issued the sign-on bonus of 120,000

shares of Common Stock, with vested in its entirety to Mr.

Wells on January 1, 2018.

Subject to other customary terms and conditions of such agreements, the

Campi Agreement provides that Mr.

Campi will receive:

(i) a base salary of $150,000 per year, which may be adjusted each year at the

discretion of the board;

(ii) a sign-on bonus of a stock option to purchase 120,000 shares of common stock at an exercise price of $6.00

per share, which vested in its entirety on December 31, 2020;

(iii) incentive compensation consisting of (a) a cash component, paid on

an annual basis, equal to (x) 0.25% of the Company’s annual gross revenue and (y) 3.0% of the Company’s annual net income,

and (b) a stock option component, consisting of five-year options to purchase shares of common stock in an amount equal to 0.5% of the

Company’s quarterly net income, the exercise price of which will be determined at the time such options are granted.

is also entitled to receive expense reimbursement for reasonable expenses, including travel and entertainment, incurred in the performance

of his duties.

to the Campi Agreement, Mr.

Campi may be terminated for “cause,”

which is defined as an act of fraud, embezzlement, theft

or neglect of or refusal to substantially perform the duties of his employment that is materially injurious to the financial condition

or business reputation of the Company;

a material violation of the Campi Agreement by Mr.

Campi that is not cured within 30 days of written

Campi’s death, disability or incapacity.

Following the expiration of the initial term, the Campi Agreement may

be terminated by the board of directors at its discretion, in which case Mr.

Campi will receive a payment equal to 50% of his then-applicable

annual base salary.

In addition, Mr.

Campi may terminate the Campi Agreement at his discretion by providing at least 30 days’

written notice to the Company.

the event the Company is acquired, is the non-surviving entity in a merger or sells all or substantially all of its assets, the Campi

Agreement will survive, and the Company will use its best efforts to ensure that the transferee or surviving company is bound by the

provisions of the Campi Agreement.

All shares granted will vest immediately.

Kohen (Executive Chairman)

November 25, 2013, we entered into a Consulting Agreement with our founder and the Chairman or our Board, Rani Kohen (the “Kohen

Consulting Agreement”).

The term of the Consulting Agreement was for three (3) years, beginning on December 1, 2013.

to the customary terms and conditions of such agreements, the Consulting Agreement provided that Mr.

Kohen would receive an annual

consulting fee of $150,000, incentive compensation in the form cash, stock and/or options (i) equal to one-half a one percent

(0.50%) of annual net revenue, paid in cash on a quarterly basis.;

and (ii) to be determined by our Board on a project-by-project

September 1, 2016, the Company entered into a Chairman Agreement with Mr.

Kohen (the “Chairman’s Agreement”),

to serve as the Company’s Executive Chairman

and Chairman of the Board, which superseded and replaced the Consulting Agreement.

Chairman’s Agreement provides that Mr.

Kohen will serve for an initial term of three years, which may be renewed by the

mutual agreement of Mr.

Kohen and the Company.

Subject to other customary terms and conditions of such agreements, the Chairman’s

September 1, 2019, the Company entered into an Executive Chairman Agreement with Rani R.

Kohen (as amended, the “2019 Chairman

Agreement”) to serve as the Company’s Executive Chairman and Chairman of the board of directors, which superseded Mr.

Kohen’s

previous chairman agreement effective September 1, 2016.

Effective as of January 1, 2022, the Company entered into a new Executive Chairman

Agreement with Mr.

Kohen (the “Chairman Agreement”), which superseded the 2019 Chairman Agreement and contains substantially

the same terms.

The Chairman Agreement provides that Mr.

Kohen will serve for an initial term of three years and that the Chairman Agreement

will automatically renew unless Mr.

Kohen or the board of directors decide otherwise.

to other customary terms and conditions of such agreements, the Chairman Agreement provides that Mr.

Kohen will receive:

(i) a base salary

of $300,000 per year commencing January 1, 2022 (an increase from $250,000 per year under the 2019 Chairman Agreement), which will be

increased by the Company in the event the Company has a significant cash raise;

(ii) annual equity compensation consisting of options

to purchase 1,020,000 shares of common stock at an exercise price of $12.00 per share, which vest in three equal annual installments

on each of January 1, 2023, 2024 and 2025 (subject to certain exceptions) and will have a five-year term;

(iii) a sign-on bonus stock

option to purchase 120,000 shares of common stock at an exercise price of $12.00 per share, which will vest in its entirety on January

1, 2023 and has a five-year term;

(iv) supplemental bonus compensation of stock options to purchase up to 6,000,000 shares of common

stock at an exercise price ranging between $6.00 and $8.00 per share, determined based on the achievement of specified market capitalizations

of the Company, as described further below, which will have a five-year term;

(v) supplemental bonus compensation such that, in the event

the Company achieves a $10.0 billion valuation, for each valuation increase of $1.0 billion up to $30.0 billion Company valuation, Mr.

Kohen will receive an option to purchase 500,000 shares at an exercise price of $12.00 per share;

(vi) supplemental bonus compensation

of stock options to purchase up to 4,000,000 shares of common stock at an exercise price ranging between $3.00 and $5.00 per share, determined

based on the achievement of specified market capitalizations of the Company, as provided by the previous chairman agreement and described

further below;

and (vii) incentive compensation equal to 0.5% of the Company’s gross revenue, which will be paid in cash, stock

and/or options on an annual basis.

In the event the Company exceeds a $30.0 billion valuation, the Company and Mr.

Kohen will negotiate

a mutually acceptable amendment to the Chairman Agreement.

Kohen is eligible for the following supplemental bonus compensation under the Chairman Agreement (in addition to the supplemental bonus

compensation described in clause (v) above):

(i) options to purchase 500,000 shares of common stock at an exercise price of $6.00 per

share, upon the Company achieving each of the following market capitalizations:

$500.0 million, $1.0 billion, $1.5 billion and $2.0 billion;

(ii) options to purchase 500,000 shares of common stock at an exercise price of $7.00 per share, upon the Company achieving each of the

following market capitalizations:

$3.0 billion, $4.0 billion, $5.0 billion and $6.0 billion;

and (iii) options to purchase 500,000 shares

of common stock at an exercise price of $8.00 per share, upon the Company achieving each of the following market capitalizations:

billion, $8.0 billion, $9.0 billion and $10.0 billion.

Kohen additionally remains eligible to receive the following supplemental

bonus compensation, pursuant to the prior chairman agreement:

(i) options to purchase 500,000 shares of common stock at $3.00 per share,

upon the Company achieving each of the following market capitalizations:

$300.0 million, $500.0 million and $750.0 million;

to purchase 500,000 shares of common stock at $4.00 per share, upon the Company achieving each of the following market capitalizations:

$1.0 billion, $1.5 billion and $2.0 billion;

and (iii) options to purchase 500,000 shares of common stock at $5.00 per share, upon the

Company achieving each of the following market capitalizations:

$2.5 billion and $3.0 billion.

As of December 31, 2021, the following

options have vested:

(i) options to purchase 1.5 million shares at an exercise price of $3.00 per share, (ii) options to purchase 500,000

shares at an exercise price of $4.00 per share;

and (iii) options to purchase 1.0 million shares at an exercise price of $6.00 per share.

Kohen is also entitled to receive a car allowance of $1,000 per month, reimbursement for cell phone costs and expense reimbursement for

reasonable expenses, including travel and entertainment, incurred in the performance of his duties.

In addition, in the event Mr.

invents additional new products and applications for the Company, including products based on the Company’s existing intellectual

property, Mr.

Kohen will be entitled to receive additional compensation, which will be determined by the board of directors.

to the Chairman Agreement, Mr.

Kohen may be terminated for “cause,”

which is defined as an act of fraud, embezzlement or

a material violation of the Chairman Agreement by Mr.

Kohen that is not cured within 60 days of written notice;

Kohen’s

death, disability or incapacity.

During the initial term of the Chairman Agreement, if Mr.

Kohen is terminated without cause, (i) the

Company will pay Mr.

Kohen an amount calculated by multiplying Mr.

Kohen’s monthly salary at the time of such termination by the

number of months remaining in the initial term;

Kohen’s annual equity compensation will vest on a pro rata basis;

Kohen will receive full payment of all unpaid incentive compensation.

Following the expiration of the initial term, the Chairman

Agreement may be terminated by the board of directors at its discretion, in which case Mr.

Kohen will receive full payment for all incentives

and will be entitled to compensation for his invented products.

Kohen may terminate the Chairman Agreement at his discretion by providing

at least 90 days’

prior written notice to the Company.

In the event Mr.

Kohen’s employment is terminated by reason of his

death, the Company will pay Mr.

Kohen’s beneficiaries 12 months of Mr.

Kohen’s base salary or Mr.

Kohen’s base salary

through the remainder of the year in which Mr.

Kohen’s death occurs, whichever is greater, and all annual stock compensation, incentive

compensation and supplemental bonus compensation due to Mr.

Kohen will be bequeathed to his beneficiaries.

the event the Company is acquired, is the non-surviving party in a merger or sells all or substantially all of its assets, the Chairman

Agreement will not be terminated, and the Company will ensure that the transferee or surviving company is bound by the provisions of

the Chairman Agreement.

All shares granted and any other compensation will vest and be paid immediately.

Barron (Chief Operations Officer)

September 1, 2019, the Company entered into an Executive Employment Agreement with Patricia Barron, its Chief Operations Officer (the

“Barron Agreement”), which superseded Ms.

Barron’s previous employment agreement effective July 1, 2016.

Agreement provided for an initial term of one year, which term may be, and has been, renewed by the mutual agreement of Ms.

Subject to other customary terms and conditions of such agreements, the Barron Agreement provides that Ms.

Barron will receive:

(i) a base salary of $150,000 per year, which may be adjusted each year at the discretion of the board;

(ii) a sign-on bonus of a stock

option to purchase 100,000 shares of common stock at an exercise price of $6.00 per share, which vested in its entirety on December 31,

and (iii) cash incentive compensation equal to 0.25% of the Company’s net revenue, payable on an annual or quarterly basis.

Barron is also entitled to receive expense reimbursement for reasonable expenses, including travel and entertainment, incurred in

the performance of her duties.

to the Barron Agreement, Ms.

Barron may be terminated for “cause,”

which is defined as an act of fraud, embezzlement, theft

or neglect of or refusal to substantially perform the duties of her employment that is materially injurious to the financial condition

or business reputation of the Company;

a material violation of the Barron Agreement by Ms.

Barron that is not cured within 30 days of

written notice;

Barron’s death, disability or incapacity.

Following the expiration of the initial term, the Barron Agreement

may be terminated by the board of directors at its discretion, in which case Ms.

Barron will receive one month of her then-applicable

annual base salary for every year of employment by the Company, as well as any unpaid incentive compensation.

In addition, Ms.

may terminate the Barron Agreement at her discretion by providing at least 30 days’

prior written notice to the Company.

the event the Company is acquired, is the non-surviving entity in a merger or sells all or substantially all of its assets, the Barron

Agreement will survive, and the Company will use its best efforts to ensure that the transferee or surviving company is bound by the

provisions of the Barron Agreement.

All shares granted will vest immediately.

Schmidt (President)

Company initially entered into a consultant agreement with Steven M.

Schmidt on August 20, 2019, as amended June 1, 2021 (as amended,

the “Schmidt Agreement”), pursuant to which amendment Mr.

Schmidt agreed to serve as the Company’s President.

Agreement provides for a three-year term, which may be renewed upon the signed written consent of the Company and Mr.

to other customary terms and conditions of such agreement, the Schmidt Agreement provides that Mr.

Schmidt will receive:

(i) a five-year

option to purchase 60,000 shares of common stock at an exercise price of $0.10 per share, which will vest in three equal annual installments

on each of October 1, 2020, 2021 and 2022;

(ii) a five-year option to purchase 60,000 shares of common stock at an exercise price of

$6.00 per share, which will vest in three equal annual installments on each of October 1, 2020, 2021 and 2022;

(iii) a stock bonus of

20,000 shares that will be payable upon achievement of certain sales program goals;

(iv) a signing bonus of 25,000 shares of common stock;

(v) a five-year option to purchase 100,000 shares of common stock at an exercise price of $12.00 per share, which vests in four equal

annual installments on each of June 1, 2021, 2022, 2023 and 2024 (which includes a signing bonus of options to purchase 25,000 shares);

and (vi) an annual grant of 25,000 shares of common stock on each of June 1, 2022, 2023 and 2024.

Schmidt may be eligible to receive

additional bonus compensation as determined by the Company.

to the Schmidt Agreement, Mr.

Schmidt may be terminated for “cause,”

which is defined as an act of fraud, embezzlement, theft

or neglect of or refusal to substantially perform his duties that is materially injurious to the financial condition or business reputation

of the Company;

a material violation of the Schmidt Agreement by Mr.

Schmidt that is not cured within 30 days of written notice;

Schmidt’s death, disability or incapacity;

willful misconduct that damages the Company, its reputation, products, services or customers;

and being charged with a felony or misdemeanor involving moral turpitude.

The Company may terminate the Schmidt Agreement at any time,

in which case Mr.

Schmidt will immediately receive all shares of common stock provided for under the Schmidt Agreement and all options

provided for will immediately vest.

Schmidt may terminate the Schmidt Agreement at his discretion by providing at least 30 days’

prior written notice to the Company.

the event the Company is acquired, is the non-surviving entity in a merger or sells all or substantially all of its assets, the provisions

and rights provided for in Schmidt Agreement will survive, and the Company will use its best efforts to ensure that the transferee or

surviving company is bound by the provisions of the Schmidt Agreement.

All shares granted will vest immediately.

Boisseau (Chief Financial Officer)

January 1, 2022, the Company entered into an employment agreement with Marc-Andre Boisseau, pursuant to which Mr.

Boisseau agreed to

serve as the Company’s Chief Financial Officer (the “Boisseau Agreement”).

Subject to other customary terms and conditions

of such agreement, the Boisseau Agreement provides that Mr.

Boisseau will:

(i) receive a base salary of $144,000 per year, subject to

annual review and adjustment;

(ii) receive a signing bonus consisting of (1) 10,000 shares of common stock, to be issued in four equal

installments within 15 days following the end of each quarter in 2022 and (2) a three-year stock option to purchase 10,000 shares of

common stock at an exercise price of $12.00 per share, which will vest in four equal installments at the end of each quarter in 2022;

and (iii) be eligible to receive performance-based compensation in the form of a bonus, payable in equity and/or cash, as determined

by the compensation committee, subject to the achievement of performance metrics and other criteria as determined by the Executive Chairman

and approved by the compensation committee.

Boisseau is also entitled to receive expense reimbursement for reasonable expenses, approved

in writing by the Executive Chairman and Chief Executive Officer, incurred in the performance of his duties.

The Boisseau Agreement also

contains customary non-competition and non-solicitation covenants and does not provide for any specified severance benefits.

Agreement provides that Mr.

Kohen will receive (i) a base salary of $250,000 per year, which may be adjusted each year at the

discretion of the Board;

(ii) stock compensation equal to 340,000 shares of Common Stock each year, which shall vest in its entirety

on January 1, 2019, and each year served thereafter (the “Chairman Compensation Shares”);

(iii) a sign-on bonus of

120,000 shares of Common Stock, with shall vest in its entirety on January 1, 2020;

(iv) supplemental bonus compensation of stock

options to purchase up to 4,000,000 shares of Common Stock at an exercise price ranging between $3.00 and $5.00 per share, determined

based on the achievement of specified market capitalizations of the Company;

and (v) incentive compensation equal to one half

of one percent (0.50%) of the Company’s gross revenue paid in cash, stock or options on an annual basis.

to the Chairman’s Agreement, if terminated without cause during the initial term, the Company shall pay to Mr.

an amount calculated by multiplying the monthly salary, at the time of such termination, times the number of months remaining

in the initial term, and (ii) all unpaid incentive compensation then in effect.

In addition, the sign-on shares of Common Stock

shall immediately vest, and the Chairman Compensation Shares shall vest on a pro rata basis based on the number of days served

under the Chairman’s Agreement and the number of days from the beginning of the initial term through the end of the Chairman’s

For any other termination during the initial term, Mr.

Kohen shall receive payment, at the then current rate, through

the date termination is effective.

the years ended December 31, 2017 and December 31, 2016 Mr.

Kohen earned approximately $315.989 and $220.257, respectively, under

this and the agreement associated with performance pay as noted above.

do not pay cash compensation to our directors for service on our Board.

Directors are reimbursed for reasonable expenses

incurred in attending meetings and carrying out duties as board members, and in accordance with our Director Compensation Policy.

Boisseau’s employment is “at will,”

and either party may terminate his employment at any

time and for any reason, without cause, upon 90 days’

advance written notice.

Incentive Plans

Stock Incentive Plan (as Amended and Restated)

board of directors initially approved the 2018 Stock Incentive Plan (as amended and restated, the “2018 Plan”) on April 26,

2018, and in each of August 2019 and November 2021, the board of directors approved the amendment and restatement of the 2018 Plan.

connection with the effectiveness of our 2021 Plan, no further awards will be granted under the 2018 Plan.

However, all outstanding awards

will continue to be governed by their existing terms.

the 2018 Plan, the board has the sole authority to implement, interpret and administer the 2018 Plan, unless the board delegates (i)

all or any portion of its authority to implement, interpret and/or administer the 2018 Plan to a committee of the board, or (ii) the

authority to grant and administer awards, subject to certain conditions, under the 2018 Plan to an officer of the Company.

The 2018 Plan

relates to the issuance of up to 10,000,000 shares of common stock, subject to adjustment, and will terminate on April 26, 2028, unless

earlier terminated.

No single participant under the 2018 Plan may receive more than 25% of all options awarded in a single year.

employee of the Company or an affiliate, a director or a consultant to the Company or an affiliate may be an “Eligible Person”

under the 2018 Plan.

The 2018 Plan provides Eligible Persons the opportunity to participate in the enhancement of stockholder value by

the award of options and common stock, granted as stock bonus awards, restricted stock awards, deferred share awards and performance-based

awards, under the 2018 Plan.

The Company may make payment of bonuses and/or consulting fees to certain Eligible Persons in options and

common stock, or any combination thereof.

board, or the appropriate committee, may, among other things, prescribe the form, and terms and conditions, of the agreement governing

awards granted under the 2018 Plan and adopt, amend and rescind policies and procedures pertaining to the administration of the 2018

board, or the appointed committee, shall have sole and absolute discretionary authority (i) to determine, authorize and designate those

persons pursuant to the 2018 Plan who are to receive options under the 2018 Plan, (ii) to determine the number of shares of common stock

to be covered by such options and the terms thereof, (iii) to determine the type of option granted, and (iv) to determine other such

details concerning the vesting, termination, exercise, transferability and payment of such options.

Options will be granted in accordance

with such determinations as evidenced by a written option agreement.

and Restricted Stock Awards

board, or the applicable committee, may, in its sole discretion, grant awards of common stock in the form of bonus awards and restricted

stock awards.

The terms and conditions of each stock award agreement may change from time to time and need not be uniform with respect

to Eligible Persons, and the terms and conditions of separate stock award agreements need not be identical.

board, or the committee, may authorize grants of shares of common stock to be received at a future date upon such terms and conditions

as the board, or the committee, may determine.

Such awards will be conferred upon the Eligible Person as consideration for the performance

of services and subject to the fulfillment of specified conditions during the deferral period.

The terms and conditions of each deferred

stock award agreement may change from time to time and need not be uniform with respect to Eligible Persons, and the terms and conditions

of separate deferred stock award agreements need not be identical.

board, or the committee, may authorize grants of shares of common stock, which will become payable upon the achievement of specified

performance objectives, upon such terms and conditions as the board, or the committee, may determine.

Such awards shall be conferred

upon the Eligible Person upon the achievement of specified performance objectives during a specified performance period, such objectives

and period being set forth in the grant.

Such grants may include a minimum acceptable level of achievement and/or a formula for measuring

and determining the number of performance shares to be issued if performance exceeds the threshold level but does not meet a maximum

achievement level.

The terms and conditions of each performance share award may change from time to time and need not be uniform with

respect to Eligible Persons, and the terms and conditions of separate performance share award agreements need not be identical.

the Company effects a subdivision or consolidation of its shares or other capital readjustment, the payment of a stock dividend or other

increase or reduction of the number of shares of common stock outstanding, without receiving consideration therefore in money, services

or property, then (i) the number, class and per share price of shares of common stock subject to outstanding options and other awards

under the 2018 Plan and (ii) the number of and class of shares then reserved for issuance under the 2018 Plan and the maximum number

of shares for which awards may be granted to an Eligible Person during a specified time period will be appropriately and proportionately

The board, or a committee, will make such adjustments, and its determinations will be final, binding and conclusive.

the Company is merged or consolidated with another entity or sells or otherwise disposes of substantially all of its assets to another

company while options or stock awards remain outstanding under the 2018 Plan, unless provisions are made in connection with such transaction

for the continuance of the 2018 Plan and/or the assumption or substitution of such options or stock awards with new options or stock

awards covering the stock of the successor company, or parent or subsidiary thereof, with appropriate adjustments as to the number and

kind of shares and prices, then all outstanding options and stock awards that have not been continued or assumed, or for which a substituted

award has not been granted, will, whether or not vested or then exercisable, unless otherwise specified in the stock option or stock

award agreement, terminate immediately as of the effective date of any such merger, consolidation or sale.

Income Tax Consequences

to other customary terms, the Company may, prior to certificating any common stock, deduct or withhold from any payment pursuant to a

stock option or stock award agreement an amount that is necessary to satisfy any withholding requirement of the Company that the Company

believes, in good faith, is necessary in connection with U.S.

federal, state or local taxes as a consequence of the issuance or lapse

of restrictions on such common stock.

Stock Incentive Plan

Company previously granted equity awards under the 2015 Plan, which contained substantially the same terms as the 2018 Plan, described

The Company no longer grants awards under the 2015 Plan as it was replaced by the 2018 Plan.

Stock Incentive Plan

2021 Plan was adopted by our board of directors in December 2021 and approved by our stockholders in February 2022 and became effective

February 9, 2022 (the “Effective Date”).

The following provides a summary of the 2021 Plan.

and Types of Awards

2021 Plan authorizes the grant of equity-based compensation awards to those employees of, and consultants to, the Company and its subsidiaries

who are selected by the compensation committee, and the 2021 Plan also authorizes the compensation committee to grant awards to non-employee

directors of the Company.

Awards under the 2021 Plan may be granted in the form of stock options, stock appreciation rights (sometimes

referred to as “SARs”), restricted shares, restricted share units, and other share-based awards.

Administration

compensation committee, which is comprised of non-employee directors, will administer awards granted under the 2021 Plan.

To the extent

permitted by applicable law, the compensation committee may delegate its authority to one or more officers or directors of the Company.

Further, the board of directors may reserve to itself any of the compensation committee’s authority and may act as the administrator

of the 2021 Plan.

to adjustments as described below, the total number of shares that may be delivered under the 2021 Plan will not exceed 20,000,000 shares

(all of which potentially may be issued pursuant to awards of incentive stock options).

Shares tendered or withheld to pay the exercise

price of a stock option or to cover tax withholding, and shares repurchased by the Company with stock option proceeds, will not be added

back to the number of shares available under the 2021 Plan.

Upon exercise of any stock appreciation right that may be settled in shares,

the full number of shares subject to that award will be counted against the number of shares available under the 2021 Plan, regardless

of the number of shares used to settle the stock appreciation right upon exercise.

To the extent that any award under the 2021 Plan or

any award granted under the 2018 Plan prior to the effectiveness of the 2021 Plan is forfeited, canceled, surrendered, or terminated

without the issuance of shares or an award is settled only in cash, the shares subject to such awards granted but not delivered will

be added to the number of shares available for awards under the 2021 Plan.

Shares available for awards under the 2021 Plan may consist

of authorized and unissued shares, treasury shares (including shares purchased by the Company in the open market) or a combination of

the foregoing.

to the terms and provisions of the 2021 Plan, options to purchase shares may be granted to eligible individuals at any time and from

time to time as determined by the compensation committee.

Options may be granted as incentive stock options (to employees only) or as

nonqualified stock options.

The compensation committee will determine the number of options granted to each recipient.

Each option grant

will be evidenced by an award agreement that specifies whether the options are intended to be incentive stock options or nonqualified

stock options and such additional limitations, terms and conditions as the compensation committee may determine, consistent with the

provisions of the 2021 Plan.

exercise price for each stock option may not be less than 100% of the fair market value of a share of common stock on the date of grant,

and each stock option shall have a term no longer than 10 years.

Stock options granted under the 2021 Plan may be exercised by such methods

and procedures as determined by the compensation committee from time to time.

Appreciation Rights

compensation committee in its discretion may grant SARs under the 2021 Plan.

A SAR entitles the holder to receive from the Company upon

exercise an amount equal to the excess, if any, of the aggregate fair market value of a specified number of shares that are the subject

of such SAR over the aggregate exercise price for the underlying shares.

The exercise price for each SAR may not be less than 100% of

the fair market value of a share on the date of grant, and each SAR shall have a term no longer than 10 years.

Company may make payment in settlement of the exercise of a SAR by delivering shares, cash or a combination of shares and cash as set

forth in the applicable award agreement.

Each SAR will be evidenced by an award agreement that specifies the date and terms of the award

and such additional limitations, terms and conditions as the compensation committee may determine, consistent with the provisions of

the 2021 Plan.

the 2021 Plan, the compensation committee may grant or sell restricted shares to participants ( i.e.

, shares that are subject to

a substantial risk of forfeiture based on continued service and/or the achievement of performance objectives and that are subject to

restrictions on transferability) under the 2021 Plan.

Except for these restrictions and any others imposed by the compensation committee,

upon the grant of restricted shares, the recipient generally will have rights of a stockholder with respect to the restricted shares,

including the right to vote the restricted stock and to receive dividends and other distributions paid or made with respect to the restricted

However, any dividends payable with respect to unvested restricted shares will be accumulated or reinvested in additional restricted

shares until the vesting of the award.

During the applicable restriction period, the recipient may not sell, transfer, pledge, exchange

or otherwise encumber the restricted shares.

Each award of restricted shares will be evidenced by an award agreement that specifies the

terms of the award and such additional limitations, terms and conditions, which may include restrictions based upon the achievement of

performance objectives, as the compensation committee may determine.

compensation committee may grant or sell restricted share units to participants under the 2021 Plan.

Restricted share units constitute

an agreement to deliver shares (or an equivalent value in cash) to the participant at the end of a specified restriction period and/or

upon the achievement of specified performance objectives, subject to such other terms and conditions as the compensation committee may

specify, consistent with the provisions of the 2021 Plan.

Restricted share units are not common shares and do not entitle the recipients

to any of the rights of a stockholder.

Restricted share units will be settled in cash, shares or a combination of cash and shares.

restricted share unit award will be evidenced by an award agreement that specifies the terms of the award and such additional limitations,

terms and conditions as the compensation committee may determine, which may include restrictions based upon the achievement of performance

Share-Based Awards

compensation committee may grant other share-based awards to participants under the 2021 Plan.

Other share-based awards are awards that

are valued in whole or in part by reference to shares of common stock, or are otherwise based on the value of the common stock, such

as unrestricted shares or time-based or performance-based units that are settled in shares and/or cash.

Each other share-based award

will be evidenced by an award agreement that specifies the terms of the award and such additional limitations, terms and conditions as

the compensation committee may determine, consistent with the provisions of the 2021 Plan.

determined by the compensation committee in its discretion, restricted share units and other share-based awards may provide the participant

with a deferred and contingent right to receive dividend equivalents, either in cash or in additional shares.

Any such dividend equivalents

will be accumulated or deemed reinvested until such time as the underlying award becomes vested (including, where applicable, vesting

based on the achievement of performance objectives).

No dividend equivalents may be granted with respect to shares underlying any stock

option or SAR.

a participant is a party to an employment, retention, change in control, severance or similar agreement with the Company or a subsidiary

that addresses the effect of a change in control on the participant’s awards, then that agreement will control the treatment of

the participant’s awards under the 2021 Plan in the event of a change in control.

In all other cases, the compensation committee

retains the discretion to determine the treatment of awards granted under the 2021 Plan in the event of a change in control.

the compensation committee may determine (without the consent of any participant) to accelerate the vesting of any award (in whole or

in part), to make cash payments in cancellation of vested awards, or to cancel any stock options or SARs without consideration if the

price per share in the change of control transaction does not exceed the exercise price per share of the applicable award.

2021 Plan generally defines a change in control to include the acquisition of more than 50% of the Company’s then- outstanding

common stock, other than acquisitions directly from, or by, the Company or by any employee benefit plan sponsored or maintained by the

Company, and the consummation of a reorganization, merger, consolidation, sale or other disposition of all or substantially all of the

Company’s assets, unless, following such transaction, the Company’s stockholders own more than 50% of the common stock of

the resulting entity in substantially the same proportions as their ownership of the Company’s common stock prior to the transaction,

no stockholder beneficially owns, directly or indirectly, 50% or more of the outstanding common stock of the entity resulting from such

transaction (except to the extent that such ownership existed prior to the transaction), and at least a majority of the members of the

board of directors of the resulting entity were members of the Company’s board of directors at the time of the transaction.

2021 Plan contains the complete, detailed definition of change in control.

the event of any equity restructuring, such as a stock dividend, stock split, spin-off, rights offering or recapitalization through a

large, nonrecurring cash dividend, the compensation committee will adjust the number and kind of shares that may be delivered under the

2021 Plan, the number and kind of shares subject to outstanding awards and the exercise price or other price of shares subject to outstanding

awards, to prevent dilution or enlargement of rights.

In the event of any other change in corporate capitalization, or in the event of

a merger, consolidation, liquidation or similar transaction, the compensation committee may, in its discretion, make such an equitable

adjustment, to prevent dilution or enlargement of rights.

However, unless otherwise determined by the compensation committee, the number

of shares subject to any award will always be rounded down to a whole number.

Moreover, in the event of any such transaction or event,

the compensation committee, in its discretion, may provide in substitution for any or all outstanding awards such alternative consideration

(including cash) as it, in good faith, may determine to be equitable in the circumstances and may require in connection therewith the

surrender of all awards so replaced.

compensation committee, in its sole discretion, may also provide at any time for the exercisability of outstanding stock options and

SARs, the lapse of time-based vesting restrictions and the satisfaction of performance objectives applicable to outstanding awards, or

the waiver of any other limitation or requirement under any awards.

Transferability

as the compensation committee otherwise determines, awards granted under the 2021 Plan will not be transferable by a participant other

than by will or the laws of descent and distribution.

Except as otherwise determined by the compensation committee, stock options and

SARs will be exercisable during a participant’s lifetime only by him or her or, in the event of the participant’s incapacity,

by his or her guardian or legal representative.

Any award made under the 2021 Plan may provide that any shares issued as a result of

the award will be subject to further restrictions on transfer.

Repricing of Stock Options or Stock Appreciation Rights

in connection with an adjustment involving a change in capitalization or other corporate transaction or event as provided for in the

2021 Plan, the compensation committee may not authorize the amendment of any outstanding stock option or stock appreciation right to

reduce the exercise price, and no outstanding stock option or stock appreciation right may be cancelled in exchange for stock options

or stock appreciation rights having a lower exercise price, or for another award or for cash, without the approval of the Company’s

stockholders.

Recovery Policy

granted under the 2021 Plan shall be subject to forfeiture or recoupment pursuant to any compensation recovery policy that the Company

may adopt in the future.

of the 2021 Plan;

Amendment and Termination

awards may be granted under the 2021 Plan after the date that is 10 years from the Effective Date, or such earlier date as the 2021 Plan

may be terminated by the board of directors.

The board of directors may, without stockholder approval, amend or terminate the 2021 Plan,

except in any respect as to which stockholder approval is required by the 2021 Plan, by law, regulation or the rules of an applicable

stock exchange.

or Change in Control Benefits

named executive officers may become entitled to certain benefits or enhanced benefits in connection with a qualifying termination and/or

a change in control of our Company.

Our named executive officers’

employment agreements entitle them to certain benefits upon certain

terminations or in connection with a change in control of the Company.

For additional discussion, see “Agreements with Named Executive

Officers”

of our named executive officers holds equity awards that were granted subject to the general terms and termination and change in control

provisions of our stock incentive plans.

The forms of agreements governing outstanding awards granted under the plans contain additional

such provisions.

For additional discussion, please see “2018 Stock Incentive Plan (as Amended and Restated)”

and “2021

Stock Incentive Plan”

do not pay cash compensation to our non-employee directors for service on our board.

Our non-employee directors are reimbursed for reasonable

expenses incurred in attending meetings and carrying out duties as board members.

Directors who are employed by us do not receive compensation

for service on our board of directors.

compensation for service on our board during 2021, each non-employee director was entitled to receive, effective December 31, 2021, 20,000

shares of common stock and five-year options to purchase 25,000 shares of common stock, which vest on the effective date of grant, have

an exercise price of $12.00 per share and expire December 31, 2026.

As compensation for his former role as chairman of the audit committee

and for his service on the corporate development committee, Mr.

Sokolow was additionally eligible to receive 4,000 shares of common stock

and five-year options to purchase 75,000 shares of common stock, which vest on the effective date of grant, have an exercise price of

$12.00 and expire December 31, 2026.

compensation for service on our board during 2020, each non-employee director was entitled to receive, effective December 31, 2020, 15,000

shares of common stock and five-year options to purchase 25,000 shares of common stock, which vest on the effective date of grant, have

an exercise price of $12.00 per share and expire December 31, 2025.

As compensation for his former role as chairman of the audit committee

and for his service on the corporate development committee, Mr.

Sokolow was additionally eligible to receive 4,000 shares of common stock

and five-year options to purchase 75,000 shares of common stock, which vest on the effective date of grant, have an exercise price of

$12.00 and expire December 31, 2025.

December 2021, Mr.

Sokolow exercised an option to purchase 75,000 shares, dated January 1, 2017, with an exercise price of $2.60 per

share, and Mr.

Shiff exercised an option to purchase 25,000 shares, dated January 1, 2017, with an exercise price of $2.60 per share.

For information regarding the non-employee director compensation program adopted in March

2022, see “Item 9B.

Other Information.”

Compensation Table

following table shows for the fiscal years ended December 31, 2017, certain information with respect to the compensation of all

non-employee directors of the Company:

following table summarizes the compensation paid to each non-employee director who served during the fiscal years ended December 31,

2021 and 2020.

All compensation earned by Mr.

Kohen during 2021 and 2020 has been reported in the “Summary Compensation Table”

above under “Executive Compensation.”

Fees earned or paid in cash

Rani Kohen (1)

Phillips Peter (2)(3)

Thomas Ridge (2)(4)

Dov Shiff (2)

Leonard Sokolow (2)(5)

Kohen has served as a Chairman of the Board since November 2012.

Fees earned in 2017 in

connection with his role as Executive Chairman and as Chairman of the Board have been reported as Executive Compensation.

Ridge, Peter, Shiff and Sokolow have each served as a member of our Board since June

2013, November 2012, February 2014, and November 2015, respectively.

On April 19, 2017, our Board authorized, pursuant to the April 2017 Grants, the Company to

issue options to Mr.

Peter to purchase up to 100,000 shares of Common Stock, with 50,000 of such options having vested on

December 31, 2017 with an exercise price of $3.00 per share and 50,000 of such options vesting on December 31, 2018 with an

exercise price of $4.00 per share.

As of March 30, 2018, all such options have not been issued by the Company to

On April 19, 2017, our Board authorized, pursuant to the April 2017 Grants, the Company to

issue options to Mr.

Ridge to purchase up to 500,000 shares of Common Stock, with 166,667 of such options having vested on

December 31, 2017 with an exercise price of $3.00 per share, 166,667 of such options vesting on December 31, 2018 with an

exercise price of $4.00 per share, and 166,666 of such options vesting on December 31, 2019 with an exercise price of $5.00

As of March 30, 2018, all such options have not been issued by the Company to Mr.

On April 19, 2017, our Board authorized, pursuant to the April 2017 Grants, the Company to

issue options to Mr.

Sokolow to purchase up to 300,000 shares of Common Stock, with 150,000 of such options having vested

on June 30, 2017 with an exercise price of $3.00 per share and 150,000 of such options having vested on December 31, 2017

with an exercise price of $4.00 per share.

As of March 30, 2018, all such options have not been issued by the Company

Compensation Policy

November 15, 2015, our Board approved the Company’s Director Compensation Policy (the “Director Compensation Policy”)

applicable to members of the Board who are not employees of the Company (each, an “Eligible Director”).

Director Compensation, upon election to the Board, a new Eligible Director shall be entitled to a grant of 50,000 shares of Common

Stock and an option to purchase up to 150,000 shares of Common Stock, vested monthly and fully vested after one year, at a price

per share determined as of the date of grant, based on (i) the prior days’

closing price if there is a public market for

Common Stock, or (ii) if there is no public market for Common Stock, the price per share in our most recently completed private

placement of Common Stock or convertible securities (“Director Options”).

The number of shares and Director Options

shall be prorated based on the date of a new Eligible Director’s appointment relative to the term remaining, if applicable.

Directors will also receive Director Options to purchase either (i) 10,000 shares of Common Stock for each Board meeting in which

such Eligible Director attends in person, or (ii) 5,000 shares of Common Stock for each Board meeting in which such Eligible Director

attends telephonically.

Eligible Directors will also receive Director Options to purchase 25,000 shares of Common Stock following

each year in which he or she has served on the Board.

Director Options will vest monthly over the course of the year following

the date such Director Options are granted and must be exercised within five years of the grant date.

addition, the Director Compensation Policy provides that (i) the chairperson of the Board will receive Director Options to purchase

100,000 shares of Common Stock as an annual retainer, payable quarterly, unless otherwise provided by an independent compensation

(ii) the chairperson of the Corporate Governance and Nominating Committee of the Board, if applicable, will receive

Director Options to purchase 25,000 shares of Common Stock as an annual retainer, payable quarterly;

(iii) the chairperson of

the Audit Committee of the Board, if applicable, will receive a number of shares of Common Stock equal to $12,000, based on the

same price per share method applied to Director Options, and Director Options to purchase 50,000 shares of Common Stock, both

as an annual retainer, payable quarterly;

(iv) the chairperson of the Compensation Committee of the Board, if applicable, will

receive Director Options to purchase 30,000 shares of Common Stock as an annual retainer, payable quarterly;

(v) other members

of the Audit Committee of the Board, if applicable, will receive Director Options to purchase 15,000 shares of Common Stock as

an annual retainer, payable quarterly;

and (vi) other members of the Corporate Governance Committee and Nominating and Compensation

Committee of the Board, if applicable, will receive Director Options to purchase 10,000 shares of Common Stock as an annual retainer,

payable quarterly.

Disclosure to Summary Compensation and Option Tables

The Company did not issue any Director Options

in 2017, and as of March 30, 2018, the Company has not issued any Director Options in connection with services performed during

fiscal year 2017.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL

OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth certain information

with respect to the beneficial ownership of Common Stock by:

(i) each director, (ii) each of the executive officers of the Company,

(iii) all current directors and executive officers as a group, and (iv) each stockholder known to the Company to be the beneficial

owner of more than 5% of the outstanding shares of Common Stock.

Unless otherwise indicated in the footnotes

to the table, all information set forth in the table is as of March 30, 2018, and the address for each director and executive officer

of the Company is:

c/o 4400 North Point Parkway, Suite 265, Alpharetta, GA 30022.

Directors and Named Executive Officers

Name and Address

of Beneficial Owner

Amount and Nature of Beneficial Ownership (1)

Percent of Class (1)

KRNB Holdings LLC (2)

Phillips Peter (3)

Thomas Ridge (4)

Dov Shiff (5)

Leonard Sokolow (6)

Patricia Barron (9)

All Directors and Officers as a Group (8 persons)

Stockholders with 5% Beneficial Ownership

Name and Address

of Beneficial Owner

Amount and Nature of Beneficial Ownership (1)

Percent of Class (1)

Option awards

Non-equity incentive plan compensation

Nonqualified deferred compensation earnings

All other compensation

table reflects the grant date fair value, as computed in accordance with Topic 718, of the restricted share awards and options granted

to directors in fiscal year 2021 and 2020.

The value of the options granted during 2021 was $0, as the exercise price of such options

was higher than the market value of our common stock.

The assumptions used to determine the valuation of the awards are discussed

in Note 2 and Note 10 to our consolidated financial statements for the year ended December 31, 2021.

were no unvested stock or option awards held by non-employee directors as of December 31, 2021 or 2020.

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

following table sets forth certain information known to us regarding beneficial ownership of our issued and outstanding common stock

as of February 23, 2022 for:

of our named executive officers;

of our directors and director nominees;

of our executive officers and directors and director nominees as a group;

person or group of affiliated persons known by us to be the beneficial owner of more than 5% of our common stock.

ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.

Under those rules, beneficial ownership includes any shares as to which the individual or entity has sole or shared voting power or investment

power, and includes securities that the individual or entity has the right to acquire, such as through the exercise of issued stock options

or warrants or conversion of convertible notes or preferred stock, within 60 days of February 23, 2022.

Except as noted by footnote,

and subject to community property laws where applicable, we believe, based on the information provided to us, that the persons and entities

named in the table below have sole voting and investment power with respect to all common stock shown as beneficially owned by them.

percentage of beneficial ownership is based on 77,092,905 shares of common stock issued and outstanding as of February 23, 2022.

as otherwise indicated below, the address of each beneficial owner is c/o SQL Technologies Corp., 2855 W.

McNab Road, Pompano Beach,

Florida 33069.

Common Stock Beneficially Owned

Name and Address of Beneficial Owner

Number of Shares and Nature of Beneficial Ownership

Percentage of Total Common Stock

Greater than 5% Stockholders

Dov Shiff, Director (1)

Kohen, Executive Chairman and Director (2)

Motek 7 SQL LLC (3)

19101 Mystic Pointe Drive

Aventura, FL 33180

Nagelberg 2003 Revocable Trust DTD

99 Coast Boulevard, Unit 21 DE

LaJolla, CA 92037

Pitch Energy Corporation (12)

Ruidoso, NM 88355

Strul Associates Limited Partnership (4)

Steven Siegelaub (5)

University Dr.

Coral Springs, FL 33065

* Less than 1%

Applicable percentages are based on 53,414,901 shares outstanding, adjusted as required by rules of the SEC.

Beneficial ownership is determined under the rules of the SEC and generally includes voting or investment power with respect to securities.

Shares of Common Stock subject to options, warrants and convertible notes currently exercisable or convertible, or exercisable or convertible within 60 days are deemed outstanding for computing the percentage of the person holding such securities but are not deemed outstanding for computing the percentage of any other person.

Unless otherwise indicated in the footnotes to this table, the Company believes that each of the shareholders named in the table has sole voting and investment power with respect to the shares of Common Stock indicated as beneficially owned by them.

Shares of Series A Preferred Stock are convertible, at any time at the holder’s election, into an equal number of shares of Common Stock.

Rani Kohen beneficially owns these 9,003,969 shares of Common Stock as Manager of KRNB Holdings LLC, which includes (i) 8,003,969 shares of Common Stock held by KRNB Holdings LLC and (ii) 1,000,000 shares of Common Stock issuable upon exercise of options issued under the Incentive Plan and held by KRNB Holdings LLC.

Phillips Peter beneficially owns 500,000 shares of Common Stock, including (i) 200,000 shares of Common Stock, and (ii) 300,000 shares of Common Stock issuable upon exercise of options held by Mr.

Thomas Ridge beneficially owns 1,025,000 shares of Common Stock, including (i) 675,000 shares of Common Stock, (ii) 100,000 shares of Common Stock issuable upon exercise of options held by Mr.

Thomas Ridge, (iii) 50,000 shares of Common Stock issuable upon exercise of warrants issued pursuant to the Notes Offering and (iv) 200,000 shares of Common Stock issuable upon conversion of Series A Preferred Stock.

Dov Shiff beneficially owns 14,964,618 shares of Common Stock, including (i) 10,674,618 shares of Common Stock, (ii) 1,690,000 shares of Common Stock issuable upon exercise of warrants issued pursuant to the Notes Offering, and (iii) 2,600,000 shares of Common Stock issuable upon conversion of Series A Preferred Stock.

Sokolow beneficially owns 262,000 shares of Common Stock, including (i) 62,000 shares of Common Stock, (ii) 50,000 shares of Common Stock obtained pursuant to the Second 2015 Stock Offering, and (iii) 150,000 shares of Common Stock issuable upon the exercise of Director Options.

Campi beneficially owns 1,170,000 shares of Common Stock, including (i) 870,000 shares of Common Stock issued pursuant to the Campi Agreement, (ii) 250,000 shares of Common Stock obtained pursuant to the First 2015 Stock Offering, and (iii) 50,000 shares of Common Stock obtained pursuant to the Second 2015 Stock Offering.

Wells beneficially owns 1,120,000 shares of Common Stock, including (i) 100,000 shares of Common Stock obtained pursuant to that certain consultant agreement between Mr.

Wells and the Company, dated June 1, 2015, (ii) 270,000 shares of Common Stock purchased by Mr.

Wells pursuant to the Wells Agreement, and (iii) 750,000 shares of Common Stock issuable upon exercise of warrants issued pursuant to the Wells Agreement.

Patricia Barron beneficially owns 700,000 shares of Common Stock, including (i) 100,000 shares of Common Stock, (ii) 600,000 shares of Common Stock issuable upon the exercise of options issued under the Incentive Plan.

Hillel Bronstein beneficially owns these shares of Common Stock as Manager of Motek 7 SQL LLC.

Nagelberg 2003 Revocable Trust DTD 7/2/03 beneficially owns 3,718,365 shares of Common Stock, including (i) 1,518,365 shares of Common Stock, (ii) 200,000 shares of Common Stock issuable upon exercise of 2017 Exchange Warrants, and (iii) 2,000,000 shares of Common Stock issuable upon conversion of Series A Preferred Stock.

Johnny Gray and Mr.

T L Chandler, as Trustees of the J C Gray Trust and T L Chandler Trust, respectively, have joint voting and dispositive control over these shares of Common Stock, as such trusts are equal 50% shareholders of Pitch Energy Corporation.

Steven Siegelaub, in his personal capacity and as the Managing Member of 301 Office Ventures, LLC, Enterprise 2013, LLC, Investment 2013, LLC, and Safety Investors 2014, LLC beneficially owns 4,577,875 shares of Common Stock, including (i) 83,333 shares of Common Stock held by him and his wife personally;

(ii) 875,000 shares of Common Stock owned by 301 Office Ventures, LLC;

(iii) 762,254 shares of Common Stock beneficially owned by Enterprise 2013, LLC, consisting of (a) 577,046 shares of Common Stock and (b) 185,208 shares of Common Stock issuable upon exercise of warrants owned by Enterprise 2013, LLC;

(iv) 1,189,972 shares of Common Stock beneficially owned by Investment 2013, LLC, consisting of (a) 219,303 shares of Common Stock, (b) 194,134 shares of Common Stock issuable upon exercise of warrants issued pursuant to the Notes Offering, and (c) 776,535 shares of Common Stock issuable upon conversion of Series A Preferred Stock;

(v) 1,667,316 shares of Common Stock beneficially owned by Safety Investors 2014, LLC, consisting of (a) 17,316 shares of Common Stock, (b) 650,000 shares of Common Stock issuable upon exercise of Warrants issued pursuant to the Notes Offering, and (c) 1,000,000 shares of Common Stock issuable upon conversion of Series A Preferred Stock;

and (vi) 100,000 shares of Common Stock issuable upon the exercise of options issued under the Incentive Plan and held by Mr.

are unaware of any contract, or other arrangement or provision, the operation of which may at any subsequent date result in a

change in control of our Company.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

as described herein, none of the following parties (each a “Related Party”) has, in our fiscal years ended December

31, 2017 and December 31, 2016, had any material interest, direct or indirect, in any transaction with us or in any presently

proposed transaction that has or will materially affect us, any of our directors or officers, any person who beneficially owns,

directly or indirectly, shares carrying more than 10% of the voting rights attached to our outstanding shares of Common Stock

or any member of the immediate family (including spouse, parents, children, siblings and in-laws) of any of the above persons.

are currently party to the Chairman’s Agreement with Mr.

Rani Kohen, Executive Chairman and Chairman of the Company’s

Board, pursuant to which we are required to pay cash compensation in the amount of $250,000 plus incentives, per year.

2017 and 2016 we were a party to the Kohen Consulting Agreement with Mr.

Kohen, pursuant to which we paid cash compensation in

the amount of $315,989 and $220,257, respectively.

The agreement(s) are more fully described in Item 11 of this report, in the

subsection entitled “Narrative Disclosure to Summary Compensation and Option Tables”.

February 2016, Mr.

Dov Shiff, a member of our Board, loaned $500,000 to the Company pursuant to an unsecured promissory note.

Subject to other customary terms, the note is payable on demand and accrues interest at a rate or 12% per annum.

As of December

31, 2017, the outstanding balance under the note was $200,000.

are not currently subject to any listing standards of any national exchange.

However, were we to apply the standards of the New

York Stock Exchange, Messrs.

Kohen and Shiff would not be considered “independent”

under such standards.

Directors and Named Executive Officers (not otherwise included above)

Ridge, Director (6)

Peter, Director (7)

Sokolow, Director (8)

Golden, Director

Greenstein Brayer, Director

Nancy DiMattia, Director

Schmidt, President (9)

Campi, Chief Executive Officer (10)

Patricia Barron, Chief Operations Officer (11)

All directors and current executive officers as a group (12 persons) (12)

beneficial ownership of less than one percent.

on a Form 4 and Schedule 13D filed by Mr.

Shiff on February 16, 2022.

Includes 10,779,618 shares of common stock held by Shiff Group

Investments Ltd., 235,712 shares of common stock held by Shiff Group Assets Ltd., 3,855,000 shares of common stock held directly

Shiff and 40,000 shares held by Mr.

Shiff’s spouse, as well as 125,000 shares of common stock underlying stock options

that are currently exercisable and 40,000 shares of common stock issuable upon conversion of the principal amount of an outstanding

convertible note held by Shiff Group Investments Ltd.

As the President and Chief Executive Officer of Shiff Group Investments Ltd.

and a controlling person of Shiff Group Assets Ltd., Mr.

Shiff may be deemed to be the beneficial owner of the shares held by such

entities and have voting and dispositive power over such shares.

on a Form 3 and Schedule 13D filed by Mr.

Kohen on February 9, 2022 and February 15, 2022, respectively.

Includes 9,143,970 shares

of common stock held by KRNB Holdings LLC and 100,000 shares of common stock held by Mr.

Kohen’s family member, as well 4,800,000

shares of common stock underlying stock options that are currently exercisable.

As manager of KRNB Holdings LLC, Mr.

deemed to be the beneficial owner of the shares held by KRNB Holdings LLC and have voting and dispositive power over such shares.

on a Schedule 13G filed by Motek 7 SQL LLC on February 16, 2022.

As manager of Motek 7 SQL LLC, Hillel Bronstein may be deemed to

be the beneficial owner of the shares held by Motek 7 SQL LLC and have voting and dispositive power over such shares.

address of Motek 7 SQL LLC is c/o Mansfield Bronstein, PA, 500 Broward Blvd., Suite 1450, Fort Lauderdale, FL 33394.

President of Strul Associates Limited Partnership, Aubrey Strul may be deemed to be the beneficial owner of the shares held by Strul

Associates Limited Partnership and have voting and dispositive power over such shares.

The address for Strul Associates Limited Partnership

is 20320 Fairway Oaks Drive, #362, Boca Raton, Florida 33434.

on a Schedule 13G filed by Mr.

Siegelaub on February 16, 2022.

Includes the following shares of common stock:

(i) 667,316 shares

held by Safety Investors 2014 LLC;

(ii) 413,435 shares held by Investment 2013, LLC;

(iii) 184,622 shares held by 301 Office Ventures,

(iv) 87,424 shares held by Enterprises 2013, LLC;

(v) 731,021 shares held by Investment 2018, LLC;

(vi) 42,857 shares held by

DRS Real Estate Ventures LLC;

(vii) 83,333 shares held jointly by Mr.

Siegelaub and his spouse;

and (viii) 68,814 shares held by

This also includes:

(i) 20,000 shares of common stock issuable upon conversion of the principal amount of an outstanding

convertible note held by Sky Technology Partners, LLC;

(ii) 200,000 shares of common stock underlying stock options held jointly

Siegelaub and his spouse that are currently exercisable;

(iii) 41,667 shares issuable upon exercise of warrants held by Investment

and (iv) the following shares of common stock issuable upon conversion of Series A Preferred Stock:

1,000,000 shares held

by Safety Investors 2014 LLC and 776,536 shares held by Investment 2013 LLC.

As the managing member of each of 301 Office Ventures,

LLC, Enterprises 2013, LLC, Investment 2013 LLC, Safety Investors 2014 LLC, Investment 2018 LLC, DRS Real Estate Ventures LLC and

Sky Technology Partners, LLC, Mr.

Siegelaub may be deemed to the beneficial owner of the shares held by such entities and have voting

and dispositive power over such shares.

The address for Mr.

Siegelaub and his affiliated entities is 361 E Hillsboro Blvd., Deerfield

Beach, FL 33441.

780,000 shares of common stock, 625,000 shares of common stock underlying stock options that are currently exercisable and 200,000

shares of common stock issuable upon conversion of Series A Preferred Stock held by Mr.

305,000 shares of common stock and 425,000 shares of common stock underlying stock options that are currently exercisable held by

309,667 shares of common stock held by Mr.

Sokolow, 3,600 shares of common stock held by Newbridge Securities Corporation and 317,656

shares of common stock held by Bridge Line Ventures.

This also includes:

(i) 950,000 shares of common stock underlying stock options

Sokolow that are currently exercisable;

(ii) 16,667 shares of common stock issuable upon conversion of the principal

amount of an outstanding convertible note held by Mr.

and (iii) the following shares of common stock issuable upon exercise

of outstanding warrants:

28,759 shares issuable upon exercise of Newbridge Warrants held by Mr.

Sokolow, 21,865 shares issuable upon

exercise of Newbridge Warrants held by Newbridge Securities Corporation and 231,624 shares issuable upon exercise of the Bridge Line

Ventures Warrants.

Sokolow is the Chief Executive Officer and President of Newbridge Financial, Inc.

and Chairman of Newbridge

Securities Corporation, its broker dealer subsidiary, and, accordingly, may be deemed to be the beneficial owner of the shares held

by Newbridge Securities Corporation and have voting and dispositive power over such shares.

Sokolow is Chief Executive Officer

and President of Bridge Line Advisors, LLC, the manager of Bridge Line Ventures, and, accordingly, may be deemed to be the beneficial

owner of the shares held by Newbridge Securities Corporation and have voting and dispositive power over such shares.

66,667 shares of common stock and 105,000 shares of common stock underlying stock options that are currently exercisable held by

1,184,285 shares of common stock, 120,000 shares of common stock underlying stock options that are currently exercisable and 6,667

shares of common stock issuable upon conversion of the principal amount of an outstanding convertible note held by Mr.

100,000 shares of common stock and 700,000 shares of common stock underlying stock options that are currently exercisable held by

27,221,175 shares of common stock, as well as 7,850,000 shares of common stock underlying stock options that are currently exercisable,

282,248 shares of common stock issuable upon the exercise of warrants, 63,334 shares of common stock issuable upon the conversion

of the principal amount of outstanding convertible notes and 200,000 shares of common stock issuable upon conversion of Series A

Preferred Stock.

are unaware of any contract, or other arrangement or provision, the operation of which may at any subsequent date result in a change

in control of our Company.

Incentive Plan Information

following table sets forth equity compensation plan information as of December 31, 2021:

Plan category

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

Weighted-average exercise price of outstanding options, warrants and rights

Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)

Equity compensation plans approved by security holders:

2015 Stock Incentive Plan, 2018 Stock Incentive Plan and Executive Chairman options (1)(2)

Equity compensation plans not approved by security holders

Includes 20,537,182 shares of common stock issuable

upon exercise of stock options granted pursuant to our stock incentive plans and to our Executive Chairman under his employment agreement,

all of which were approved by our security holders, at a weighted average exercise price of $4.76 per share, which includes:

(a) 4,910,000

shares of common stock issuable upon exercise of stock options granted under the 2015 Stock Incentive Plan;

(b) 5,627,182 shares of common

stock issuable upon exercise of stock options granted under the 2018 Stock Incentive Plan;

and (c) 10,000,000 shares of common stock

issuable to our Executive Chairman upon vesting and exercise of performance-based stock options granted to our Executive Chairman pursuant

to his employment agreement, of which 3,000,000 had vested as of December 31, 2021.

The Executive Chairman was granted an additional

10,000,000 performance-based options effective January 1, 2022, and an additional 1,140,000 options under the 2018 Stock Incentive Plan,

all of which have not vested and which are not included in this table.

2015 Stock Incentive Plan was previously replaced and terminated by the 2018 Plan and, as such, no securities remained available

for issuance under such plan as of December 31, 2021.

The 2018 Plan was replaced and terminated by the 2021 Plan, which became effective

February 9, 2022 and pursuant to which 20,000,000 shares are authorized for issuance.

In connection with the effectiveness of our

2021 Plan, no further awards will be granted under the 2018 Plan.

However, all outstanding awards will continue to be governed by

their existing terms.

The 2018 Plan and the awards granted to the Executive Chairman were approved by stockholders in February 2022.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, and Director Independence

board of directors has determined that all members of the board of directors, except Rani R.

Kohen, Dov Shiff and Leonard J.

are independent directors, including for purposes of the rules of Nasdaq and the SEC.

In making such independence determination, our

board of directors considered the relationships that each non-employee director has with us and all other facts and circumstances that

our board of directors deemed relevant in determining their independence, including the transactions described below under “Certain

Relationships and Related Party Transactions”

and beneficial ownership of our capital stock by each non-employee director.

composition and functioning of our board of directors and each of our committees complies with all applicable requirements of Nasdaq

and the rules and regulations of the SEC.

Relationships and Related Party Transactions

following is a description of transactions or series of transactions since January 1, 2020, to which we were or will be a party, in which:

amount involved in the transaction exceeds the lesser of (i) $120,000 or (ii) 1% of the average of our total assets at year end for

the last two completed fiscal years;

which any of our executive officers, directors, director nominees or holders of 5% or more of any class of our voting capital stock,

or any immediate family member of any of the foregoing, had or will have a direct or indirect material interest.

and Director Compensation

arrangements for our named executive officers and our directors are described in this Form 10-K under Item 11.

“Executive Compensation.”

September 2020, Leonard J.

Sokolow, a member of the Company’s board of directors, entered into a securities purchase agreement

with the Company, pursuant to which Mr.

Sokolow agreed to purchase a three-year subordinated convertible promissory note in the principal

face amount of $250,000.

Subject to other customary terms, the note matures on September 22, 2023 and accrues interest at a rate of 6%

per annum, which is payable annually in cash or common stock, at the holder’s discretion.

At any time after issuance and prior

to or on the maturity date, the note is convertible at the option of the holder into shares of common stock at a conversion price of

$15.00 per share.

Upon notice to the holder, the Company may prepay, in whole or in part, the outstanding balance of the note at any

time prior to the maturity date;

provided, that the holder has the right to convert the note into shares of common stock in lieu of prepayment.

Upon the occurrence of certain events of default and written notice from the holder, the note will become immediately due and payable

and, until paid in full, will bear interest at a rate of 12% per annum.

The outstanding balance under the note was $250,000 as of both

December 31, 2021 and 2020.

October 2020, Sky Technology Partners, LLC, the managing member of which is Steven Siegelaub, who, with his affiliates, is a greater

than 5% holder of the Company’s common stock, entered into a securities purchase agreement with the Company, pursuant to which

Sky Technology Partners, LLC agreed to purchase a three-year subordinated convertible promissory note in the principal face amount of

The note matures on October 30, 2023, and the terms of this note are substantially the same as the September 2020 note purchased

The outstanding balance under the note was $300,000 as of both December 31, 2021 and 2020.

November 2020, Shiff Group Investments Ltd., of which Mr.

Shiff is the President and Chief Executive Officer, entered into a securities

purchase agreement with the Company, pursuant to which Mr.

Shiff agreed to purchase a three-year subordinated convertible promissory

note in the principal face amount of $600,000.

The note matures on November 3, 2023, and the terms of this note are substantially the

same as the September 2020 note purchased by Mr.

The outstanding balance under the note was $600,000 as of both December 31,

2021 and 2020.

November 2020, John Campi, our Chief Executive Officer, entered into a securities purchase agreement with the Company, pursuant to which

Campi agreed to purchase a three-year subordinated convertible promissory note in the principal face amount of $100,000.

matures on November 10, 2023, and the terms of this note are substantially the same as the September 2020 note purchased by Mr.

The outstanding balance under the note was $100,000 as of both December 31, 2021 and 2020.

Securities Corporation

October 2018, the Company entered into an investment banking agreement with Newbridge Securities Corporation, pursuant to which Newbridge

Securities Corporation agreed to provide business development, consulting and advisory services, including capital raising and placement

agency services, to the Company.

This agreement was renewed periodically prior to its termination.

Sokolow, a member of the

Company’s board of directors, is the Chief Executive Officer and President of Newbridge Financial, Inc.

and Chairman of Newbridge

Securities Corporation, its broker dealer subsidiary.

In connection with entering into the agreement, the Company paid Newbridge Securities

Corporation a $25,000 fee and agreed to issue shares of common stock equal to $50,000, which were paid as of December 31, 2020.

to the agreement, the Company agreed to pay placement agent fees equal to 8.0% of the gross purchase price upon closing of sales of the

Company’s equity securities and 4.0% upon closing of any line of credit, secured or unsecured term loan or other non-convertible

debt facility arranged by Newbridge Securities Corporation for the Company.

Upon the closing of any such equity or debt transaction,

the Company agreed to issue to Newbridge Securities Corporation, or its permitted assigns, warrants to purchase:

(i) in an equity transaction,

10% of the sum of (A) the number of shares of common stock issued by the Company and (B) the number of shares of common stock issuable

by the Company upon the exercise or conversion of convertible securities issued;

and (ii) in a debt transaction, 10% of the facility

amount, divided by a per share price equal to the last equity, warrants or options issued by the Company at the time of closing.

agreement further provided, among other things, that such warrants would contain provisions providing for cashless exercise, price protection

and piggyback registration rights and would not be callable or redeemable by the Company.

agreement also provided for sales commission with respect to certain agreements, including territorial licenses, marketing agreements

and commercial contracts.

If the transaction were with an organization located, identified or introduced by Newbridge Securities Corporation,

the Company was required to pay Newbridge Securities Corporation a $75,000 fee at closing, plus 1% of the net revenues received by the

Company, payable quarterly during the contract’s term.

If the Company requested Newbridge Securities Corporation assist with closing

the transaction, the Company was required to pay Newbridge Securities Corporation a $50,000 fee at closing, plus 0.25% of the net revenues

received by the Company, payable quarterly for the lesser of five years or the contract’s term.

investors introduced by the Company, the compensation payable to Newbridge Securities Corporation was 50% of the then-applicable fees

for an investor introduced by Newbridge Securities Corporation.

For investors introduced by a third party, the fee payable to Newbridge

Securities Corporation was mutually agreed upon by the Company and Newbridge Securities Corporation.

to the agreement, as of December 31, 2021, the Company had paid Newbridge Securities Corporation an aggregate of $609,472 in placement

agent fees (not including expenses).

In March 2021, effective as of December 31, 2020, the Company issued 10,000 shares to Newbridge

Securities Corporation and its affiliates pursuant to the agreement, of which Newbridge Securities Corporation received 3,600 shares

Sokolow received 4,500 shares.

In addition, on December 31, 2020, the Company issued three-year warrants to purchase an aggregate

of up to 14,375 shares of common stock at an exercise price of $12.00 per share (subject to adjustment, including in the event of certain

subsequent equity sales by the Company) (the “2020 Newbridge Warrants”), including warrants to purchase up to 5,674 shares

and 4,469 shares issued to Newbridge Securities Corporation and Mr.

Sokolow, respectively.

In addition, during 2021, the Company issued

2021 Newbridge Warrants, consisting of the following three-year warrants with an exercise price of $12.00 per share (subject to adjustment,

including in the event of certain subsequent equity sales by the Company):

(i) warrants dated October 26, 2021 to purchase an aggregate

of up to 3,750 shares of common stock, including warrants to purchase up to 725 shares and 1,088 shares issued to Newbridge Securities

Corporation and Mr.

Sokolow, respectively, (ii) warrants dated November 29, 2021 to purchase an aggregate of up to 12,501 shares of common

stock, including warrants to purchase up to 2,250 shares and 3,375 shares issued to Newbridge Securities Corporation and Mr.

respectively, and (iii) warrants dated December 22, 2021 to purchase an aggregate of up to 73,434 shares, including warrants to purchase

up to 13,216 shares and 19,827 shares issued to Newbridge Securities Corporation and Mr.

Sokolow, respectively (together with the 2020

Newbridge Warrants, the “Newbridge Warrants”).

The Newbridge Warrants may be exercised, in whole or in part, at any time

on or prior to the third anniversary of the effective date of the warrant.

Among other terms, the Newbridge Warrants provide for cashless

exercise if, one year following the effective date of the warrant, there is no effective registration statement registering the shares

of common stock issuable upon exercise of the Newbridge Warrants, as well as certain anti-dilution rights.

The Newbridge Warrants also

provide for certain piggyback registration rights, subject to certain exceptions, including, for the 2021 Newbridge Warrants, if the

registration statement is for an initial public offering, such that, if the Company registers any of its securities either for its own

account or for the account of other security holders, the holders of the Newbridge Warrants are entitled to include their shares in the

registration.

Subject to certain exceptions, if the offering is being underwritten, the Company and the underwriters may limit the number

of shares included in the underwritten offering if the underwriters believe that including such shares would adversely affect the offering.

Company entered into an investment banking engagement agreement with Newbridge Securities Corporation in May 2021, pursuant to which

Newbridge Securities Corporation agreed to provide certain corporate advisory services.

The agreement had a 12 month term, during which

the Company agreed to pay Newbridge Securities Corporation’s pre-approved expenses.

The Company agreed to pay a $500,000 corporate

advisory fee, in the form of restricted common stock, upon successful listing of the Company’s common stock on a U.S.

securities exchange.

The number of shares issued was to be determined based on the initial offering price in the offering, and such shares

would have been subject to a six-month lock-up provision.

The Company would have been required to pay such fee if it successfully listed

on an exchange during the term of the agreement or within nine months following expiration of the term.

Company entered into a separate investment banking engagement agreement in May 2021 with Newbridge Securities Corporation relating to

merger and acquisition services.

The agreement had a 12 month term, which would have been automatically extended on a month-to-month

basis if negotiations or discussions were ongoing at the end of the term.

The Company agreed to pay Newbridge Securities Corporation’s

pre-approved reasonable expenses during the term.

Upon closing of a merger or acquisition transaction facilitated by Newbridge Securities

Corporation, the Company agreed to pay, in equity, a transaction fee equal to 2.0% of the aggregate consideration (as defined in the

agreement) of such transaction.

The equity received would have been subject to a six-month leak-out provision.

The Company would have

been required to pay the transaction fee after expiration of the agreement or if the Company terminated the agreement without cause (as

defined in the agreement), if the Company (i) completed a merger or acquisition transaction with a party identified by Newbridge Securities

Corporation within 12 months of such termination or (ii) entered into an agreement contemplating a merger or acquisition with a party

identified by Newbridge Securities Corporation during the term of the agreement or the following 12 months, which agreement was ultimately

January 2022, the Company and Newbridge Securities Corporation entered into a termination agreement, pursuant to which the three investment

banking agreements described above were terminated, and the parties agreed that there are no continuing rights or obligations under such

agreements, and that Newbridge is not entitled to any fees or payments, in cash or otherwise, pursuant to such agreements.

Line Ventures

Company and Bridge Line Ventures,the manager of which is Bridge Line Advisors, LLC, of which Leonard J.

Sokolow, a member of our board

of directors, is Chief Executive Officer and President, entered into the following stock purchase agreements (collectively, the “Bridge

Line SPAs”):

Purchase Agreement, dated February 26, 2021, as amended March 30, 2021, June 30, 2021 and August 31, 2021, pursuant to which Bridge

Line Ventures purchased 25,373 shares of common stock at a purchase price per share of $12.00.

Purchase Agreement, dated March 30, 2021, as amended April 30, 2021, June 30, 2021 and August 31, 2021, pursuant to which Bridge

Line Ventures purchased 37,500 shares of common stock at a purchase price per share of $12.00.

Purchase Agreement, dated April 30, 2021, as amended June 30, 2021 and August 31, 2021, pursuant to which Bridge Line Ventures purchased

2,084 shares of common stock at a purchase price per share of $12.00.

Purchase Agreement, dated June 30, 2021, as amended August 31, 2021, pursuant to which Bridge Line Ventures purchased 150,000 shares

of common stock at a purchase price per share of $12.00.

Purchase Agreement, dated August 31, 2021, pursuant to which Bridge Line Ventures purchased 16,667 shares of common stock at a purchase

price per share of $12.00.

of the Bridge Line SPAs contains substantially the same terms.

Among other things, the Bridge Line SPAs contain anti-dilutive price protection

measures, which apply for 24 months following the date of closing of the Bridge Line SPAs, subject to certain exceptions, which anti-dilution

provisions were triggered by the Company’s initial public offering.

As such, on February 14, 2022, the Company issued 86,032 shares

of common stock to Bridge Line Ventures.

The Bridge Line SPAs also provide for certain piggyback registration rights, such that, subject

to certain exceptions, including if the registration statement is for an initial public offering, if the Company registers any of its

securities either for its own account or for the account of other security holders, Bridge Line Ventures is entitled to include its shares

in the registration.

Subject to certain exceptions, if the offering is being underwritten, the Company and the underwriters may limit

the number of shares included in the underwritten offering if the underwriters believe that including such shares would adversely affect

the offering.

In addition, the Company may require Bridge Line Ventures agree to a six month lock-up of its shares following the effective

date of the applicable registration statement.

Bridge Line SPAs also contain a standstill provision pursuant to which Bridge Line Ventures agreed to certain restrictions related to

the Company for three years following the effective date of each of the Bridge Line SPAs, including, among other things, prohibitions

on, either alone or together with any other person, acquiring additional shares of the Company’s common stock or any of its assets,

soliciting proxies or seeking representation on our board of directors, unless the Company agrees to such actions in writing.

For additional

information, see “Description of Capital Stock.”

addition, on each of June 30, 2021 and August 31, 2021, pursuant to the Bridge Line SPAs, Bridge Line Ventures received a three-year

warrant to purchase up to 214,957 and 16,667 shares of the Company’s common stock, respectively, at an initial exercise price of

$12.00 per share (subject to adjustment, including in the event of certain subsequent equity sales by the Company) (the “Bridge

Line Ventures Warrants”).

The initial exercise price of $12.00 per share was automatically adjusted to $9.80 per share pursuant

to applicable anti-dilution provisions in connection with the completion of the Company’s initial public offering.

The Bridge Line

Ventures Warrants may be exercised, in whole or in part, at any time on or prior to June 30, 2024 or August 31, 2024, respectively.

other terms, the Bridge Line Ventures Warrants provide for cashless exercise of the Bridge Line Ventures Warrants if, after June 30,

2022 or August 31, 2022, respectively, there is no effective registration statement registering the shares of common stock issuable upon

exercise of the Bridge Line Ventures Warrants.

In addition, the Bridge Line Ventures Warrants contain certain piggyback registration

rights, which are substantially the same as those provided in by the Bridge Line SPAs.

Options and Warrants

June 2020, the Company issued a three-year volume warrant to purchase up to 1,125,000 shares of common stock to Strul Associates Limited

Partnership, pursuant to a May 2016 private placement.

The exercise price was $3.00 if exercised prior to June 1, 2021, $3.25 if exercised

on or after June 1, 2021 and prior to June 1, 2022 and $3.50 if exercised on or after June 1, 2022 through June 1, 2023 (in each case,

subject to adjustment, including in the event of certain subsequent equity sales by the Company).

The warrant was exercisable in whole

or in part at any time prior to or on June 1, 2023.

In December 2020, Strul Associates Limited Partnership exercised the warrant in full

and acquired an aggregate of 1,012,500 shares of common stock, including 675,000 shares of common stock for an aggregate purchase price

of $2,025,000 and a net total of 337,500 shares of common stock pursuant to a cashless exercise of the remainder of the warrant.

November 2021, Investment 2018, LLC purchased 41,667 shares and three-year warrants to purchase up to 41,667 shares of common stock at

an initial exercise price of $12.00 per share (subject to adjustment, including in the event of certain subsequent equity sales by the

Company), for an aggregate purchase price of $500,000.

In connection with the completion of the Company’s initial public offering,

applicable anti-dilution provisions were automatically triggered, and, accordingly, Investment 2018, LLC received 9,354 shares of common

stock on February 14, 2022 and the initial exercise price of the warrants of $12.00 per share was automatically adjusted to $9.80 per

As the managing member of Investment 2018 LLC, Mr.

Siegelaub may be deemed to the beneficial owner of the shares held by such

December 2021, Mr.

Sokolow exercised an option to purchase 75,000 shares, dated January 1, 2017, with an exercise price of $2.60 per

share, and Mr.

Shiff exercised an option to purchase 25,000 shares, dated January 1, 2017, with an exercise price of $2.60 per share.

Public Offering

the initial public offering, 455,353 shares were purchased by our directors, officers and greater than 5% stockholders at the public

offering price.

and Procedures for Related Party Transactions

board of directors has adopted a written related party transactions policy, effective as of February 9, 2022, which sets forth the policies

and procedures for the review and approval or ratification of related person transactions.

Pursuant to this policy, the audit committee

has the primary responsibility for reviewing and approving or disapproving “related party transactions,”

which are transactions,

arrangements or relationships between us and related persons in which the aggregate amount involved in any fiscal year exceeds or may

be expected to exceed the lesser of $120,000 or 1% of the average of our total assets as year-end for the last two completed fiscal years

and in which a related person has or will have a direct or indirect material interest.

For purposes of this policy, a related person

is defined as an executive officer, director, nominee for director or greater than 5% beneficial owner of our common stock, in each case

since the beginning of the most recently completed fiscal year, and their immediate family members.

PRINCIPAL ACCOUNTING FEES AND SERVICES

following table sets forth the aggregate fees billed to us for the years ended December 31, 2017 and December 31, 2016 by our

independent auditors, L&L CPAS, PA, f/k/a Bongiovanni& Associates, PA:

following table sets forth the aggregate fees billed to us for the years ended December 31, 2021 and December 31, 2020 by our independent

auditors, M&K CPAs, PLLC:

Audit Fees (1)

Audit-Related Fees

All Other Fees

fees represent amounts billed for professional services rendered for the audit of our annual financial statements.

Audit-Related

Fees include amounts billed for professional services rendered in connection with our SEC filings and discussions with the SEC

that occurred during fiscal 2014 for us to remain a fully reporting public company.

Our Board is of the opinion that the Audit-Related

Fees charged by L&L CPAS, PA were consistent with companies of our size maintaining its independence from us.

audit committee of the Company approves all auditing services and the terms thereof and non-audit services (other than non-audit

services published under Section 10A(g) of the Exchange Act or the applicable rules of the SEC or the Pubic Company Accounting

Oversight Board) to be provided to us by the independent auditor;

provided, however, the pre-approval requirement is waived with

respect to the provisions of non-audit services for us if the “de minimis”

provisions of Section 10A(i)(1)(B) of the

Exchange Act are satisfied.

In addition, 2021

also included audit fees for professional services rendered in relation to the review of our registration statement and other documents

filed with the SEC in connection with our initial public offering.

current audit committee was formed in connection with our initial public offering, at which time the audit committee also adopted a new

Since the formation of our current audit committee, and on a going-forward basis, the audit committee has and will pre-approve

all auditing services and permitted non-audit services to be performed for us by our independent registered public accounting firm, including

the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved

by the audit committee prior to the completion of the audit).

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Financial Statements

of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2017 and December 31, 2016

Consolidated Statements of Operations for the Years ended December 31, 2017 and 2016

Consolidated Statements of Stockholders’

Equity (Deficit) for the Years Ended December 31, 2017, and 2016

Consolidated Statements of Cash Flows for the Years ended December 31, 2017 and 2016

to Audited Financial Statements

Report of Independent Registered Public Accounting Firm

Audited Consolidated Balance Sheets as of December 31, 2021 and December 31, 2020

Audited Consolidated Statements of Operations for the Years ended December 31, 2021 and 2020

Audited Consolidated Statements of Stockholders’

Deficit for the Years Ended December 31, 2021 and 2020

Audited Consolidated Statements of Cash Flows for the Years ended December 31, 2021 and 2020

Notes to Audited Financial Statements

Financial Statement Schedules

have been omitted because the information required to be set forth therein is not applicable or is shown in the financial statements

or notes thereto.

Exhibit Index

Articles of Incorporation of Registrant, as amended.

Certificate Of Designation of Rights, Preferences and Privileges of Series A Convertible Preferred Stock.

Bylaws of Registrant.

Form of Common Stock Certificate.

GE Trademark License Agreement, dated as of June 15, 2011, by and between GE Trademark Licensing, Inc.

and SQL Lighting & Fans, LLC, as amended.

Office Lease dated October 24, 2014 between the Company and Highwoods DLF 98/29, LLC.

Forms of Security Purchase Agreement, Registration Rights Agreement, Note Subscription Agreement, Common Stock Purchase Warrant and Secured Convertible Promissory Note for the Notes Offering closed November 26, 2013.

Form of Amendment No.

1, dated August 15, 2016, to Secured Convertible Promissory Note.

Form of Securities Subscription Agreements for U.S.

Persons and Non-US Persons used in the First 2015 Stock Offering.

Form of Securities Subscription Agreements for U.S.

Persons and Non-US Persons used in the Second 2015 Stock Offering.

Form of Registration Rights Agreement used in the First and Second 2015 Stock Offerings.

Form of Securities Subscription Agreement and Common Stock Purchase Warrant used in the First 2016 Stock Sale.

Form of Securities Subscription Agreement, including the terms to issue Volume Warrants, and form of Common Stock Purchase Warrant used in the Second 2016 Stock Sale.

Form of Securities Subscription Agreement, including the terms to issue Volume Warrants, Form of Option Agreement, and form of Common Stock Purchase Warrant used in the Third 2016 Stock Sale.

The 2015 Stock Incentive Plan.*

Director Compensation Policy.

Executive Employment Agreement, dated July 1, 2016, between the Company and Patricia Barron.*

Executive Employment Agreement, dated August 17, 2016 between the Company and Mark J.

Underwriting Agreement, dated February 9, 2022, between the Company and The Benchmark Company, LLC, as Representative of the Underwriter (incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 14, 2022).

Articles of Incorporation of the Company (incorporated herein by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Articles of Amendment to Articles of Incorporation, including the Certificate of Designation of Rights, Preferences and Privileges of Series A Convertible Preferred Stock (effective August 12, 2016) (incorporated herein by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Articles of Amendment to Articles of Incorporation (effective February 7, 2022) (incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K filed with the SEC on February 14, 2022).

First Amended and Restated Bylaws of the Company (effective February 9, 2022) (incorporated by reference to Exhibit 3.4 to the Company’s Current Report on Form 8-K filed with the SEC on February 14, 2022).

Description of the Company’s Registered Securities (filed herewith).

Specimen Common Stock Certificate (incorporated herein by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Representative’s Warrant, dated February 9, 2022 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 14, 2022).

GE Trademark License Agreement, dated as of June 15, 2011, by and between SQL Lighting & Fans, LLC and GE Trademark Licensing, Inc.

(incorporated herein by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

First Amendment to Trademark License Agreement, dated April 17, 2013, by and between SQL Lighting & Fans, LLC and GE Trademark Licensing, Inc (incorporated herein by reference to Exhibit 10.2 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Second Amendment to Trademark License Agreement, dated August 13, 2014, by and between SQL Lighting & Fans, LLC and GE Trademark Licensing, Inc (incorporated herein by reference to Exhibit 10.3 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Third Amendment to Trademark License Agreement, dated September 25, 2018, by and between SQL Lighting & Fans, LLC and GE Trademark Licensing, Inc (incorporated herein by reference to Exhibit 10.4 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Fourth Amendment to Trademark License Agreement, dated May 2019, by and between SQL Lighting & Fans, LLC and GE Trademark Licensing, Inc (incorporated herein by reference to Exhibit 10.5 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Letter Agreement relating to Trademark License Agreement, dated December 1, 2020, between SQL Lighting & Fans, LLC and GE Trademark Licensing, Inc (incorporated herein by reference to Exhibit 10.6 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

10.7&dagger;+

Master Services Agreement, dated June 14, 2019, between GE Technology Development, Inc.

and SKY Technology, LLC (incorporated herein by reference to Exhibit 10.7 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Promissory Note, dated April 13, 2016, by Safety Quick Lighting & Fans Corp., in favor of Nielsen & Bainbridge, LLC (incorporated herein by reference to Exhibit 10.8 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Pledge and Security Agreement, dated April 13, 2016, by Safety Quick Lighting & Fans Corp., in favor of Nielsen & Bainbridge, LLC (incorporated herein by reference to Exhibit 10.9 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

10.10&dagger;

Memorandum of Understanding, dated January 31, 2018, between Safety Quick Lighting & Fans Corp.

and Nielsen & Bainbridge, LLC (incorporated herein by reference to Exhibit 10.10 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Promissory Note, dated December 14, 2021, by the Company, in favor of Nielsen & Bainbridge, LLC (incorporated herein by reference to Exhibit 10.11 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Form of Securities Subscription Agreement used in 2020 Private Placements (incorporated herein by reference to Exhibit 10.12 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Form of Securities Subscription Agreement and Warrant used in 2021 Private Placements (incorporated herein by reference to Exhibit 10.13 to Amendment No.

1 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on January 10, 2022).

2015 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.14 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Form of Stock Option Agreement (2015 Plan) (incorporated herein by reference to Exhibit 10.15 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Form of Stock Award Agreement (2015 Plan) (incorporated herein by reference to Exhibit 10.16 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

2018 Stock Incentive Plan, as amended and restated (incorporated herein by reference to Exhibit 10.17 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Form of Stock Option Agreement (2018 Plan) (incorporated herein by reference to Exhibit 10.18 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Form of Stock Award Agreement (2018 Plan) (incorporated herein by reference to Exhibit 10.19 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Executive Chairman Agreement, dated September 1, 2019, between the Company and Rani R.

Kohen (incorporated herein by reference to Exhibit 10.20 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Amendment to Executive Chairman Agreement, effective September 1, 2019, between the Company and Rani R.

Kohen (incorporated herein by reference to Exhibit 10.21 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Executive Employment Agreement, dated September 1, 2019, between the Company and John P.

Chairman’s Agreement, dated September 1, 2016 between the Company and Rani Kohen.*

Form of Stock Option Agreement used in connection with the stock subscriptions dated February 21, 2017, March 24, 2017 and April 11, 2017.

Form of New Warrant utilized in the Warrant Exercise Exchange.

Form of Lock-Up Agreement utilized in the Warrant Exercise Exchange.

Form of Waiver of Registration Rights utilized in the Warrant Exercise Exchange.

List of Subsidiaries.

C ertification of Principal Executive Officer as required by Rule 13a-14 or 15d-14 of the Exchange Act, as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Accounting Officer as required by Rule 13a-14 or 15d-14 of the Exchange Act, as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

C ertification of Principal Executive Officer Pursuant to 18 U.S.C.

1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Accounting Officer Pursuant to 18 U.S.C.

1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

The following

materials from the Company’s Annual Report on Form 10-K for the years ended December 31, 2016 are formatted in XBRL

(eXtensible Business Reporting Language):

(i) the Audited Balance Sheets, (ii) the Audited Statements of Operations,

(iii) the Audited Statements of Stockholders’

Equity (Deficit), (iv) the Audited Statements of Cash Flows, and

(iv) the Notes to the Audited Financial Statements.

management contract or compensatory plan or arrangement.

Filed herewith.

Incorporated by reference from the Company’s Registration Statement on Form S-1 filed with the SEC on August 1, 2014 and declared effective on October 22, 2014.

Incorporated by reference from the Company’s Post-Effective Amendment No.

1 to Registration Statement filed with the SEC on May 28, 2015.

Incorporated by reference from the Company’s Registration Statement on Form S-1 filed with the SEC on January 11, 2016 and declared effective on January 20, 2016.

Incorporated by reference from the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2016.

Incorporated by reference from the Company’s Current Report on Form 8-K filed with the SEC on April 7, 2016.

Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 16, 2016.

Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 15, 2016.

Incorporated by reference from the Company’s Current Report on Form 8-K filed with the SEC on November 8, 2016.

Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 14, 2016.

Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 15, 2017.

Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 14, 2017.

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

behalf by the undersigned thereunto duly authorized.

Campi (incorporated herein by reference to Exhibit 10.22 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Consultant Agreement, dated August 20, 2019, between the Company and Steven M.

Schmidt (incorporated herein by reference to Exhibit 10.23 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

First Amendment to Consulting Agreement, dated June 1, 2021, between the Company and Steven M.

Schmidt (incorporated herein by reference to Exhibit 10.24 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Executive Employment Agreement, dated September 1, 2019, between the Company and Patricia Barron (incorporated herein by reference to Exhibit 10.25 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Form of Stock Option Agreement used in connection with the stock subscriptions dated February 21, 2017, March 24, 2017 and April 11, 2017 (incorporated herein by reference to Exhibit 10.26 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Form of 2017 Warrant (incorporated herein by reference to Exhibit 10.27 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Investment Banking Agreement, dated September 28, 2018 and executed October 3, 2018, between Newbridge Securities Corporation and SQL Technologies Corp., as amended (incorporated herein by reference to Exhibit 10.28 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Form of Placement Agent Warrant (incorporated herein by reference to Exhibit 10.29 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Investment Banking Agreement, dated May 20, 2021, between the Company and Newbridge Securities Corporation (relating to corporate advisory services) (incorporated herein by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Investment Banking Agreement, dated May 20, 2021, between the Company and Newbridge Securities Corporation (relating to merger and acquisition services) (incorporated herein by reference to Exhibit 10.31 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Form of Stock Purchase Agreement between SQL Technologies Corp.

and Bridge Line Ventures, LLC Series ST-1 (incorporated herein by reference to Exhibit 10.32 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Form of Common Stock Purchase Warrant issued by SQL Technologies Corp.

to Bridge Line Ventures, LLC Series ST-1 (incorporated herein by reference to Exhibit 10.33 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Form of Securities Purchase Agreement related to Purchase of Subordinated Convertible Balloon Promissory Note, including form of Subordinated Convertible Balloon Promissory Note (incorporated herein by reference to Exhibit 10.34 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Paycheck Protection Program Term Note, entered into by the Company, as Borrower, for the benefit of PNC Bank, National Association, as Lender, as of April 13, 2020 (incorporated herein by reference to Exhibit 10.35 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Amendment to the Paycheck Protection Term Note, effective June 5, 2020 (incorporated herein by reference to Exhibit 10.36 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Second Draw Paycheck Protection Program Term Note, entered into by the Company, as Borrower, for the benefit of PNC Bank, National Association, as Lender, as of February 3, 2021 (incorporated herein by reference to Exhibit 10.37 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Loan Authorization and Agreement (Economic Injury Disaster Loan), dated June 24, 2020, between the U.S.

Small Business Administration and the Company (incorporated herein by reference to Exhibit 10.38 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Note (Secured Disaster Loans), entered into by the Company, as Borrower, for the benefit of the U.S.

Small Business Administration, as of June 24, 2020 (incorporated herein by reference to Exhibit 10.39 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Security Agreement, dated June 24, 2020, between the U.S.

Small Business Administration and the Company (incorporated herein by reference to Exhibit 10.40 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

2021 Stock Incentive Plan (effective February 9, 2022) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 14, 2022).

Form of Nonqualified Stock Option Agreement (2021 Plan) (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on February 14, 2022).

Form of Incentive Stock Option Agreement (2021 Plan) (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on February 14, 2022).

Form of Restricted Shares Award Agreement (2021 Plan) (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on February 14, 2022).

Executive Chairman Agreement, effective as of January 1, 2022, between the Company and Rani R.

Kohen (incorporated herein by reference to Exhibit 10.45 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Chief Financial Officer Agreement, effective as of January 1, 2022, between the Company and Marc-Andre Boisseau (incorporated herein by reference to Exhibit 10.46 to Amendment No.

1 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on January 10, 2022).

Termination Agreement, dated January 7, 2022, between the Company and Newbridge Securities Corporation (incorporated herein by reference to Exhibit 10.47 to Amendment No.

1 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on January 10, 2022).

List of Subsidiaries (filed herewith).

Consent of Independent Registered Public Accounting Firm (filed herewith).

Power of Attorney (included on signature page).

Certification by Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

Certification by Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

Certification by Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

Certification by Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

Indicates management contract or any compensatory plan, contract or arrangement.

Certain of the exhibits and schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5).

agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.

Portions of this exhibit (indicated by bracketed asterisks) are omitted in accordance with the rules of the SEC because they are both

not material and the Company customarily and actually treats such information as private or confidential.

FORM 10-K SUMMARY

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed

on its behalf by the undersigned, thereunto duly authorized.

TECHNOLOGIES CORP.

Campi, Chief Executive Officer

individual whose signature appears below constitutes and appoints John P.

Campi, Chief Executive Officer, and Marc-Andre Boisseau, Chief

Financial Officer, and each of them singly, his or her true and lawful attorneys-in-fact and agents with full power of substitution,

for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report

on Form 10-K and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange

Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every

act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or

could do in person, hereby ratifying and confirming all the said attorneys-in-fact and agents or any of them or their or his substitute

or substitutes, may lawfully do or cause to be done by virtue hereof.

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

registrant and in the capacities and on the dates indicated.

Executive Officer

Executive Officer)

Accounting Officer)

Chief Executive

Executive Chairman,

April 2, 2018

Phillips Peter

April 2, 2018

Leonard Sokolow

April 2, 2018

QUICK LIGHTING & FANS CORP AND SUBSIDIARY

Marc-Andre Boisseau

Financial Officer

Financial and Accounting Officer)

Executive Chairman of the Board

Nancy DiMattia

Greenstein Brayer

TECHNOLOGIES CORP.

FINANCIAL STATEMENTS

1 unchanged sentence

to Consolidated Financial Statements

of Independent Registered Public Accounting Firm

Consolidated Balance

Sheets –

of Independent Registered Public Accounting Firm (PCAOB ID:2738)

Consolidated Balance Sheets –

December 31, 2021 and 2020

Consolidated Statements

of Operations –

Consolidated Statements of Operations –

December 31, 2021 and 2020

Consolidated Statement

of Stockholders’

Consolidated Statements of Stockholders’

Deficit –

December 31, 2021 and 2020

Consolidated Statements

of Cash Flows –

Consolidated Statements of Cash Flows –

December 31, 2021 and 2020

Notes to Consolidated

Financial Statements

19720 Jetton Road, 3rd Floor

Cornelius, NC 28031

Notes to Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and Shareholders

Technologies Corp.

the Board of Directors and Stockholders of SQL Technologies Corp.

and Subsidiary

on the Financial Statements

have audited the accompanying consolidated balance sheets of SQL Technologies Corp.

and Subsidiary (“the Company”)

as of December 31, 2017 and 2016 and the related consolidated statements of operations, stockholders’

deficit, and consolidated

cash flows for the years ended December 31, 2017 and 2016.

These consolidated financial statements are the responsibility of the

Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our

conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).

Those standards

require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material

misstatement.

The Company is not required to have, nor were we engaged to perform, an audit of their internal control over financial

Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures

that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

and Subsidiary (the Company) as of December 31, 2021

and 2020, and the related consolidated statements of operations, stockholders’

deficit, and cash flows for each of the years in

the two-year period ended December 31, 2021, and the related notes (collectively referred to as the financial statements).

In our opinion,

the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and

2020, and the results of its consolidated operations and its cash flows for each of the years in the two-year period ended December 31,

2021, in conformity with accounting principles generally accepted in the United States of America.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities

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

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits,

we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

An audit includes examining, on a test basis,

evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant

estimates made by the management, as well as evaluating the overall financial statement presentation.

We believe that our audit

provides a reasonable basis for our opinion.

our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated

financial position of the Company as of December 31, 2017 and 2016, and the results of its operations, changes in stockholders’

deficit and cash flows for the years ended December 31, 2017 and 2016 in conformity with accounting principles generally accepted

in the United States of America.

Public Accountants

North Carolina

United States of America

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and the significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe our audits provide

a reasonable basis for our opinion.

Audit Matters

critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated

or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matters below, providing separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

to the net loss and negative cash flows from operations for the year, the Company evaluated the need for a going concern.

management’s evaluation of a going concern can be a significant judgment given the fact that the Company uses management estimates

on future revenues and expenses which are not able to be easily substantiated.

evaluate the appropriateness of the lack of going concern paragraph in our audit opinion, we examined and evaluated the financial information

that was the initial cause for this consideration along with management’s plans to mitigate the going concern.

M&K CPAS, PLLC

have served as the Company’s auditor since 2018

Technologies Corp.

and Subsidiary

Balance Sheets

Balance Sheets (Audited)

December 31, 2021

December 31, 2020

Current assets:

and Equipment - net

trademark license –

and Stockholders (Deficit)

payable & accrued expenses

debt net of debt discount $-0- and

at December 31, 2017 and December 31, 2016 respectively

debt - related parties - net of debt discount $-0- and

at December 31, 2017 and December 31, 2016 respectively

payable - current portion

payable - related party

royalty obligation

current liabilities

Cash and cash equivalents

Accounts receivable, net

Prepaid expenses

Total current assets

Other assets:

Furniture and equipment, net

Total other assets

Liabilities and Stockholders’

Current liabilities:

term liabilities:

royalty obligation

Accounts payable

Notes payable, current

Accrued expenses

GE royalty obligation

Total current liabilities

Long term liabilities:

Notes payable

Convertible notes

GE royalty obligation

Total long-term liabilities

Total liabilities

Commitments and Contingent Liabilities:

2 unchanged sentences

20,000,000 shares authorized;

13,456,936 and 13,056,932 shares issued

and outstanding at December 31, 2017 and December 31, 2016

Stockholders' deficit:

13,256,936 and 13,456,936 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively

Stockholders’

Common stock:

$0 par value, 500,000,000 shares authorized;

and 53,174,901 shares issued and outstanding

at December 31, 2017 and December 31, 2016 respectively

66,295,288 and 64,515,231 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively

Common stock to be issued

Additional paid-in capital

Subscription receivable

Accumulated deficit

Total Stockholders' deficit

Noncontrolling interest

Total Deficit

Total liabilities, redeemable preferred stock, and stockholders' deficit

accompanying notes are an integral part of these condensed consolidated financial statements.

Technologies Corp.

and Subsidiary

Statements of Operations

Ended December 31,

general and administrative expenses

and amortization

on impairment

operating expenses

from operations

income (expense)

in fair value of embedded derivative liabilities

(74,269,898 )

(68,410,028 )

on debt extinguishment

(41,129,336 )

on Debt Extinguishment

other income (expense) –

(19,816,195 )

(92,460,086 )

loss including noncontrolling interest

Total stockholders’

(12,212,071 )

Non-controlling interest

Total deficit

(12,247,513 )

net loss attributable to noncontrolling interest

loss attributable to Safety Quick Lighting & Fans Corp.

Total Liabilities and Stockholders’

accompanying notes are an integral part of the consolidated financial statements.

Technologies Corp.

and Subsidiary

Statements of Operations

For the Year Ended December 31,

Cost of revenues

Selling, general and administrative expenses

Loss from operations

Other income / (expense)

Interest expense

Other income, loan forgiveness

Gain on exchange

Interest income

Total other expense, net

Net loss including noncontrolling interest

net loss attributable to non-controlling interest

Preferred dividends

Net loss attributed to common shareholders

$ (5,859,870 )

$ (9,372,311 )

loss per share - basic and diluted

average number of common shares outstanding during the year-basic and diluted

accompanying notes are an integral part of these condensed consolidated financial statements.

Net loss per share - basic and diluted

Weighted average number of common shares outstanding during the year –

basic and diluted

accompanying notes are an integral part of the consolidated financial statements.

Technologies Corp.

and Subsidiary

Statement of Stockholders' Deficit

Ended December 31, 2017 and December 31, 2016

Common Stock, $0 Par Value

Statements of Stockholders’

Stock, $0 Par Value

(To Be Issued)

Noncontrolling

Stockholders'

Stockholders’

Balance, December 31, 2020

1 unchanged sentence

$ (12,247,513 )

Common stock issued in exchange for interest due ($0.25/share)

Common stock issued per mutual release and waiver

Reclassification of derivative liability related to penalty and Interest

Common stock issued ($0.60/share), net of issuance cost

Common stock issued ($1.00/share), net of issuance cost

(26,890,210 )

Issuance of prior year unissued stock

Common stock issued per PPM

Common stock issued per PPM, Bridge Line Ventures

Common stock issued, exercise of options

Common stock issued, exercise of warrants

Common stock issued, pursuant to services provided

Common stock issued pursuant to director compensation policy

Common stock issued pursuant to chairman agreement

Conversion of preferred stock

Common stock issued for the cashless exercise of warrants

Common stock issued for the cashless exercise of options

Stock issued to joint venture partner, interest expense

Placement fees paid, pursuant to issuance of common stock per PPM 2019

Dividends paid

Balance, December 31, 2021

1 unchanged sentence

$ (3,424,954 )

Common stock issued in exchange for interest due

Common stock issued, net of issuance cost

Common stock issued for services rendered

Common stock issued pursuant to stock award

Pursuant Director Compensation Policy, appointment to Board and

Chair of Audit Committee

Common stock issued in exchange for principal and interest due

Conversion of convertible notes to common stock

Reclassification of derivative liability related to convertible

Reclassification of derivative liability related to interest payable

Reclassification of derivative liability related to options

Dividends Paid

accompanying notes are an integral part of the consolidated financial statements.

Technologies Corp.

and Subsidiary

Statements of Stockholders’

Deficit (continued)

Stock, $0 Par Value

(To Be Issued)

Noncontrolling

Stockholders’

December 31, 2019

$ (59,037,717 )

$ (10,068,639 )

Balance, December 31, 2016

Common stock issued per PPM

Common stock issued per exercise of warrants

Common stock issued pursuant

to director compensation policy

Common stock issued per employee

Common stock issued per consulting

Common stock issued to joint

venture partner

Option expense, pursuant to

director compensation policy

Dividends paid

December 31, 2020

$ (68,410,028 )

$ (12,247,513 )

Common stock issued for the cashless exercise of warrants

Funds received for stock subscription

Common stock issued, net of issuance cost

Common stock issued for the exercise of warrants

Reclassification of derivative liability related to warrants

Warrants expense

Common stock issued for the exercise of options

Reclassification of derivative liability related to options

Options expense

Dividends Paid

Balance, December 31, 2017

accompanying notes are an integral part of these condensed consolidated financial statements.

accompanying notes are an integral part of the consolidated financial statements.

Technologies Corp.

1 unchanged sentence

Statements of Cash Flows

Ended December 31,

For the year ended December 31,

Cash flows from operating activities:

Net loss attributable to SQL Technologies Corp.

Net loss attributable to noncontrolling interest

Net loss attributable to SQL Technologies

$ (5,730,414 )

$ (9,242,105 )

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation expense

Amortization of debt issue costs

Amortization of debt discount

Amortization of patent

Amortization of GE trademark license

Loss on impairment

Change in fair value of derivative liabilities

Derivative expense

Loss on debt extinguishment

Warrants expenses

Options expenses

Loss (Gain) on debt forgiveness

Stock options issued for services - related parties

(Other income), loan forgiveness

Non-cash equity-based compensation expense

Non-cash equity-based compensation expense, related party

Change in operating assets and liabilities:

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Prepaid expenses

Deferred royalty

Royalty payable

Deferred rent

Accounts payable & accrued expenses

Right-to-use assets

Royalty obligation

Lease, current

Accounts payable

Accrued expenses

Net cash used in operating activities

Cash flows from investing activities:

Purchase of property & equipment

Purchase of property and equipment

Payment of patent costs

1 unchanged sentence

Cash flows from financing activities:

Repayments of convertible notes

Reduction of Notes converted to Preferred Stock

Proceeds from note payable

Proceeds from note payable - related party

Stock issued in exchange for interest

Stock issued in exchange for principal

Proceeds from common stock issuance

Proceeds from exercise of warrants

Proceeds from exercise of options

Proceeds from SBA - PPP notes payable

Proceeds from SBA - EIDL notes payable

Proceeds from issuance of convertible notes

Dividends paid

Repayments of note payable

Repayments of note payable - related party

Proceeds from issuance of stock

Principal repayments of SBA –

PPP note payable

Principal repayments on note

Net cash provided by financing activities

(Decrease) cash and cash equivalents

Increase (decrease) cash and cash equivalents

Cash and cash equivalents at beginning of period

1 unchanged sentence

Supplementary disclosure of non-cash financing activities:

Reclassification of derivative liability to additional paid-in-capital

Gain on debt extinguishment

Supplementary disclosure of cash flow information

Cash paid during the period for:

accompanying notes are an integral part of these condensed consolidated financial statements.

Issuance of common stock listed as “to be issued”

in prior year

Reclassed of accrued interest to note

Stock issuance, placement fees

Preferred stock conversion to common

Stock issuance, cashless exercise of warrants

Cash paid during the year for:

accompanying notes are an integral part of the consolidated financial statements.

Technologies Corp.

and Subsidiary

to Condensed Financial Statements

to Consolidated Financial Statements

1 ORGANIZATION AND NATURE OF OPERATIONS

Technologies Corp.

(f/k/a Safety Quick Lighting & Fans Corp.), a Florida corporation (the “Company”), was originally

organized in May 2004 as a limited liability company under the name of Safety Quick Light, LLC.

The Company was converted to corporation

on November 6, 2012.

Effective August 12, 2016, the Company changed its name from “Safety Quick Lighting & Fans Corp.”

Technologies Corp., a Florida corporation (the “Company”), was originally organized in May 2004 as a limited liability company

under the name of Safety Quick Light, LLC.

The Company was converted to corporation on November 6, 2012.

Effective August 12, 2016, the

Company changed its name from “Safety Quick Lighting & Fans Corp.”

to “SQL Technologies Corp.”

The Company holds a number of worldwide patents and has received a variety of final electrical

code approvals, including UL Listing and CSA approval (for the United States and Canadian Markets), the CE Marking (for the European

market) and, in December 2016, was approved by the National Fire Protection Association for inclusion in the NFPA 70:

Electrical Code (NEC).

The Company maintains offices in Georgia, Florida and in Foshan, Peoples Republic of China.

Company is engaged in the business of developing proprietary technology that enables a quick and safe installation of electrical

fixtures, such as ceiling fans and light fixtures, using a power plug installed in ceiling and wall electrical junction boxes.

The Company’s base technology consists of a weight bearing, fixable socket and a revolving plug for conducting electric

power and supporting an electrical appliance attached to a wall or ceiling.

The socket is comprised of an electric power supply

that is connected to the electrical junction box.

The plug, which is incorporated in an electrical appliance, attaches to the

socket via a male post and is capable of feeding electric power to the appliance.

The plug includes a second structural element

allowing it to revolve and a releasable latching that provides a retention force between the socket and the plug to prevent unintentional

disengagement.

The socket and plug can be detached by releasing the latch, thereby disengaging the electric power from the plug.

The socket is designed to replace the support bar incorporated in electric junction boxes, and the plug can be installed in light

fixtures, ceiling fans and wall sconce fixtures.

The use of the Company’s technology enables the installation and replacement

of ceiling fans and lights and wall sconces in a fraction of the time of similar, conventional appliances.

The Company currently markets consumer friendly,

energy saving “plugin”

ceiling fans and light fixtures under the General Electric Company (“GE”

or “General

Electric”) brand as well as “conventional”

ceiling lights and fans carrying the GE brand.

The Company also owns

98.8% of SQL Lighting& Fans LLC (the “Subsidiary”).

The Subsidiary was formed in Florida on April 27, 2011 and

is in the business of manufacturing the patented device that the Company owns.

The Subsidiary had no activity during the periods

Company’s fiscal year end is December 31.

holds over 60 U.S.

and global patents and patent applications and has received a variety of final electrical code approvals, including

UL, United Laboratories of Canada (cUL) and Conformité

Européenne (CE), inclusion in the 2017 and 2020 NEC Code Book.

Company maintains offices in Johns Creek, Georgia, Pompano Beach, Florida, and Guangdong Province, China.

Company has a series of advanced-safe smart platform technologies.

The Company’s first-generation technologies enable light fixtures,

ceiling fans and other electrically wired products to be installed safely and plugged-in into a ceiling’s electrical outlet box

within seconds, and without the need to touch hazardous wires.

The plug and play technology method is a universal power-plug device that

has a matching receptacle that is simply connected to the electrical outlet box on the ceiling, enabling a safe and quick plug and play

installation of light fixtures and ceiling fans in just seconds.

The plug and play power-plug technology, eliminates the need of touching

hazardous electrical wires while installing light fixtures, ceiling fans and other hard wired electrical products.

In recent years the

Company has expanded the capabilities of its power-plug product, to include advanced safe and quick universal installation methods, as

well as advanced smart capabilities.

The smart features include control of light fixtures and ceiling fans by the SkyHome App, through

WIFI, Bluetooth Low Energy and voice control.

It allows scheduling, energy savings eco mode, dimming, back-up emergency light, night

light, light color changing and much more.

The Company’s second-generation technology is an all-in-one safe and smart advanced

platform that is designed to enhance all-around safety and lifestyle of homes and other buildings.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1 unchanged sentence

of Presentation

accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally

accepted in the United States of America (U.S.

accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted

in the United States of America (U.S.

GAAP) under the accrual basis of accounting.

1 unchanged sentence

consolidated financial statements include the accounts of SQL Technologies Corp.

(f/k/a Safety Quick Lighting and Fans Corp.)

and the Subsidiary, SQL Lighting & Fans LLC.

(f/k/a Safety Quick Lighting & Fans Corp.) and its

subsidiary, SQL Lighting & Fans LLC.

All intercompany accounts and transactions have been eliminated in consolidation.

Non-controlling

May 2012, in connection with the sale of the Company’s membership units in the Subsidiary, the Company’s ownership

percentage in the Subsidiary decreased from 98.8% to 94.35%.

The Company then reacquired these membership units in September 2013,

increasing the ownership percentage from 94.35% back to 98.8%.

During year ended 2017 and 2016, there was no activity in the Subsidiary.

Company owns 98.8% of SQL Lighting & Fans LLC, which was formed in Florida on April 27, 2011.

The subsidiary had no activity during

2021 and 2020 .

Company’s warranty policy provides repair or replacement of products returned for defects within ninety days of purchase.

The Company’s

warranties are of an assurance-type and come standard with all Company products to cover repair or replacement should product not perform

Provisions for estimated expenses related to product warranties are made at the time products are sold.

These estimates

are established using historical information about the nature, frequency and average cost of warranty claim settlements as well as product

manufacturing and recovery from suppliers.

Management actively studies trends of warranty claims and takes action to improve product

quality and minimize warranty costs.

The Company estimates the actual historical warranty claims coupled with an analysis of unfulfilled

claims to record a liability for specific warranty purposes.

As of December 31, 2021 and 2020, products returned for repair or replacement

have been immaterial.

Accordingly, a warranty liability has not been deemed necessary.

preparation of financial statements in conformity with U.S.

generally accepted accounting principles requires management to make

estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.

generally accepted accounting principles requires management to make estimates

and assumptions that affect the amounts reported in the financial statements and accompanying notes.

estimates and assumptions impact both assets and liabilities, including but not limited to:

net realizable value of accounts receivable

and inventory, estimated useful lives and potential impairment of property and equipment, the valuation of intangible assets,

estimate of fair value of share based payments and derivative liabilities, estimates of fair value of warrants issued and recorded

as debt discount, estimates of tax liabilities and estimates of the probability and potential magnitude of contingent liabilities.

and inventory, estimated useful lives and potential impairment of property and equipment, the valuation of intangible assets, estimate

of fair value of share based payments and derivative liabilities, estimates of fair value of warrants issued and recorded as debt discount,

estimates of tax liabilities and estimates of the probability and potential magnitude of contingent liabilities.

estimates requires management to exercise significant judgment.

It is at least reasonably possible that the estimate of the effect

of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered

in formulating its estimate could change in the near term due to one or more future nonconforming events.

Accordingly, actual

results could differ significantly from estimates.

It is at least reasonably possible that the estimate of the effect of

a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating

its estimate could change in the near term due to one or more future nonconforming events.

Accordingly, actual results could differ significantly

from estimates.

Reclassifications

1 unchanged sentence

and Uncertainties

Company’s operations are subject to risk and uncertainties including financial, operational, regulatory and other risks

including the potential risk of business failure.

Company’s operations are subject to risk and uncertainties including financial, operational, regulatory and other risks including

the potential risk of business failure.

Company has experienced, and in the future, expects to continue to experience, variability in its sales and earnings.

expected to contribute to this variability include, among others, (i) the uncertainty associated with the commercialization and

ultimate success of the product, (ii) competition inherent at large national retail chains where product is expected to be sold

(iii) general economic conditions and (iv) the related volatility of prices pertaining to the cost of sales.

The factors expected

to contribute to this variability include, among others, (i) the uncertainty associated with the commercialization and ultimate success

of the product, (ii) competition inherent at large national retail chains where product is expected to be sold, (iii) general economic

conditions and (iv) the related volatility of prices pertaining to the cost of sales.

and Cash Equivalents

1 unchanged sentence

and all highly liquid investments with an original maturity of three months or less.

The Company had $4,877,720 and $4,125,888

in money market as of December 31, 2017, and December 31, 2016, respectively.

The Company has deposits in financial institutions

which exceeds the amount insured by the FDIC.

The amount of uninsured deposits was $4,377,720 at December 31, 2017.

The Company had $10,426,249 and $2,308,871 in cash

and cash equivalents as of December 31, 2021 and December 31, 2020, respectively.

Receivable and Allowance for Doubtful Accounts

receivable are recorded at the invoiced amount and do not bear interest.

The Company extends unsecured credit to its customers

in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due

The Company extends unsecured credit to its customers in the

ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts.

Company recognizes an allowance for losses on accounts receivable in an amount equal to the estimated probable losses net of recoveries.

The allowance is based on an analysis of historical bad debt experience, current receivables aging, and expected future bad debts,

as well as an assessment of specific identifiable customer accounts considered at risk or uncollectible.

Company’s net balance of accounts receivable for years ended December 31, 2017 and 2016:

The allowance is based on an analysis of historical bad debt experience, current receivables aging, and expected future bad debts, as

well as an assessment of specific identifiable customer accounts considered at risk or uncollectible.

Company’s net balance of accounts receivable at December 31, 2021 and December 31, 2020:

December 31, 2021

December 31, 2020

Accounts receivable

Allowance for Doubtful

amounts are deemed collectible at December 31, 2017 and December 31, 2016 and accordingly, the Company has not incurred any bad

debt expense at December 31, 2017 and December 31, 2016.

Inventories are stated at the lower of cost,

determined on the first-in, first-out (FIFO) method.

Cost principally consists of the purchase price (adjusted for lower of cost

or market), customs, duties, and freight.

The Company periodically reviews historical sales activity to determine potentially obsolete

items and evaluates the impact of any anticipated changes in future demand.

At December 31, 2017 and December 31, 2016,

the Company had $2,352,573 and $2,401,048 in inventory, respectively.

The inventory at December 31, 2017 consisted of $ 1,891,934

of Finished Goods and $465,539 in Component Parts.

The December 31, 2016 inventory consisted entirely of Finished Goods.

will maintain an allowance based on specific inventory items that have shown no activity over a 24-month period.

The Company tracks

inventory as it is disposed, scrapped or sold at below cost to determine whether additional items on hand should be reduced in

amounts were deemed collectible at December 31, 2021 and December 31, 2020 and accordingly, the Company had not incurred any bad debt

expense at December 31, 2021 and December 31, 2020.

are stated at the lower of cost, determined on the first-in, first-out (FIFO) method.

Cost principally consists of the purchase price

(adjusted for lower of cost or market), customs, duties, and freight.

The Company periodically reviews historical sales activity to determine

potentially obsolete items and evaluates the impact of any anticipated changes in future demand.

December 31, 2021

December 31, 2020

Inventory, component parts

Company will maintain an allowance based on specific inventory items that have shown no activity over a 24-month period.

tracks inventory as it is disposed, scrapped or sold at below cost to determine whether additional items on hand should be reduced in

value through an allowance method.

As of December 31, 2017, and December 31, 2016, the Company has determined that no allowance

Valuation of Long-lived Assets and Identifiable

Intangible Assets

The Company reviews for impairment of long-lived

assets and certain identifiable intangible assets whenever events or changes in circumstances indicate that the carrying amount

of any asset may not be recoverable.

In the event of impairment, the asset is written down to its fair market value.

determined an impairment adjustment of $600,000 was necessary for the year ended 2017.

As of December 31, 2021, and December 31, 2020, the Company has determined that no allowance is required.

and Equipment

1 unchanged sentence

indicate that the carrying amount of an asset may not be recoverable.

of property and equipment is provided utilizing the straight-line method over the estimated useful lives, ranging from 5 to 7

years of the respective assets.

of property and equipment is provided utilizing the straight-line method over the estimated useful lives, ranging from 3 to 7 years of

the respective assets.

Expenditures for maintenance and repairs are charged to expense as incurred.

sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and

any gain or loss is reflected in the statements of operations.

Company developed a patent for an installation device used in light fixtures and ceiling fans.

sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain

or loss is reflected in the statements of operations.

Company developed various patents for an installation device used in light fixtures and ceiling fans.

Costs incurred for submitting the

applications to the United States Patent and Trademark Office for these patents have been capitalized.

Patent costs are being

amortized using the straight-line method over the related 15-year lives.

The Company begins amortizing patent costs once a filing

receipt is received stating the patent serial number and filing date from the Patent Office.

Patent costs are amortized using

the straight-line method over the related 15-year lives.

The Company begins amortizing patent costs once a filing receipt is received

stating the patent serial number and filing date from the Patent Office.

Company incurs certain legal and related costs in connection with patent applications.

The Company capitalizes such costs to be

amortized over the expected life of the patent to the extent that an economic benefit is anticipated from the resulting patent

or alternative future use is available to the Company.

The Company also capitalizes legal costs incurred in the defense of the

Company’s patents when it is believed that the future economic benefit of the patent will be maintained or increased, and

a successful defense is probable.

Capitalized patent defense costs are amortized over the remaining expected life of the related

The Company’s assessment of future economic benefit or a successful defense of its patents involves considerable

management judgment, and an unfavorable outcome of litigation could result in a material impairment charge up to the carrying

value of these assets.

Trademark Licensing Agreement

The Company entered into a Trademark License

Agreement with General Electric on June 15, 2011 (the “License Agreement”) allowing the Company to utilize the “GE

trademark”

on products which meet the stringent manufacturing and quality requirements of General Electric (the “GE

Trademark License”).

As described further in Note 5 to these financial statements, the Company and General Electric amended

the License Agreement in August 2014.

As a result of that amendment, the Company is required to pay a minimum trademark licensing

fee (the “Royalty Obligation”) to General Electric of $12,000,000.

The repayment schedule is based on a percent of

sales, with any unpaid balance due in November 2018.

Under SFAS 142 “Accounting for Certain Intangible Assets”

Company has recorded the value of the Licensing Agreement and will amortize it over the life of the License Agreement, which is

The Company determined an impairment adjustment of $600,000 was necessary for the year ended 2017.

The Company capitalizes such costs to be amortized

over the expected life of the patent to the extent that an economic benefit is anticipated from the resulting patent or alternative future

use is available to the Company.

The Company also capitalizes legal costs incurred in the defense of the Company’s patents when

it is believed that the future economic benefit of the patent will be maintained or increased, and a successful defense is probable.

Capitalized patent defense costs are amortized over the remaining expected life of the related patent.

The Company’s assessment

of future economic benefit or a successful defense of its patents involves considerable management judgment, and an unfavorable outcome

of litigation could result in a material impairment charge up to the carrying value of these assets.

Company has two U.S.

and global agreements with General Electric (“GE”) related to the Company’s products.

first agreement is a U.S.

and Global Trademark Agreement dated June 15, 2011 (as later amended), which expires November 30, 2023

and is generally renewed for five-year periods.

Pursuant to such agreement, the Company may use the GE brand logo on certain products,

including plug and play smart and standard ceiling fans and Sky’s SQL standard and smart plug and play devices.

has exclusive U.S.

and global rights, including Canada, Asia, Europe, China, Australia, New Zealand and India, subject to a mutually

agreed to commercialization plan, to market plug and play smart and standard ceiling fans and Sky’s SQL standard and smart

plug and play devices under the GE brand.

GE will assist the Company with manufacturing standards, audit of factories, audit of materials,

and quality control under “Six Sigma”

guidelines, as well as with public relations for products and other.

second agreement is a U.S.

and Global Licensing and Master Service Agreement dated June 14, 2019.

The agreement expires on June 14,

2024 and includes automatic renewal provisions.

Pursuant to such agreement, GE’s licensing team has the rights to exclusively

license Sky’s Standard and Smart plug-and-play products in the U.S.

and worldwide.

Pursuant to the agreement, the Company expects

that GE’s licensing team will seek and arrange licensee partners for our products in the U.S.

and globally, including negotiating

agreement terms, managing contracts, collecting payments, auditing partners, assisting with patent strategy and protection, and assisting

in auditing product quality control under the “Six Sigma”

For products licensed to third parties, the Company

and GE will each receive a specified percentage of the earned revenue realized from such licensing, unless otherwise provided in

the applicable statement of work.

Value of Financial Instruments

Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance

on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability,

as the case may be, in an orderly transaction between market participants.

As such, fair value may be based on assumptions that

market participants would use in pricing an asset or liability.

The authoritative guidance on fair value measurements establishes

a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation

techniques, are assigned a hierarchical level.

Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair

value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the

case may be, in an orderly transaction between market participants.

As such, fair value may be based on assumptions that market participants

would use in pricing an asset or liability.

The authoritative guidance on fair value measurements establishes a consistent framework

for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical

following are the hierarchical levels of inputs to measure fair value:

Level 1 –

Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities.

Level 2 Inputs reflect

quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or

liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities;

Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for

similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities;

or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 –

Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair

These assumptions are required to be consistent with market participant assumptions that are reasonably available.

carrying amounts of the Company’s financial assets and liabilities, such as cash, prepaid expenses, other current assets,

accounts payable & accrued expenses, certain notes payable and notes payable –

related party, approximate their fair

values because of the short maturity of these instruments.

Company accounts for its derivative liabilities, at fair value, on a recurring basis under Level 3.

carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalents, accounts receivable, inventory,

prepaid expenses, other current assets, accounts payable, accrued interest payable, certain notes payable and notes payable –

party, and GE royalty obligation, approximate their fair values because of the short maturity of these instruments.

Conversion Features

Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging”

determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative

at fair value with changes in fair value recorded in earnings.

If the conversion feature does not require derivative treatment

under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options”

for consideration

of any beneficial conversion features.

whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value

with changes in fair value recorded in earnings.

If the conversion feature does not require derivative treatment under ASC 815, the instrument

is evaluated under ASC 470-20 “Debt with Conversion and Other Options”

for consideration of any beneficial conversion features.

Financial Instruments

The Company does not use derivative instruments to hedge exposures

to cash flow, market, or foreign currency risks.

The Company evaluates all of it financial instruments, including stock purchase

warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives.

For derivative

financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value

and is then revalued at each reporting date, with changes in the fair value reported as charges or credits to income.

The Company changed its method to estimate

the valuation of valuation for fair market values of derivatives in 2017 to a lattice-binomial option-pricing model (“lattice-binomial

model”) from the Black-Scholes option-pricing model (“Black-Scholes model”) which was previously used under SFAS

123 and are reflected on our condensed consolidated statement of operations as other (income) expense at each reporting period.

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

is reassessed at the end of each reporting period.

However, such new and/or complex instruments may have immature or limited markets.

As a result, the pricing models used for valuation of derivatives often incorporate significant estimates and assumptions, which

may impact the level of precision in the financial statements.

Furthermore, depending on the terms of a derivative or embedded

derivative, the valuation of derivatives may be removed from the financial statements upon conversion of the underlying instrument

into some other security.

The change in valuation methodology for accounting estimates had no material impact on the Company’s

previous calculations.

The classification of derivative instruments,

including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting

The Company has reserved for issuance 26,751,860

shares of Common stock associated with conversion features on Series A Preferred Stock, warrants and options.

These shares have

been reserved for issuance by the Company’s stock transfer agent, and accordingly, no derivative liability has been calculated

on these shares.

Conversion Feature

conventional convertible debt where the rate of conversion is below market value, the Company records a “beneficial conversion

feature”

(“BCF”) and related debt discount.

the Company records a BCF, the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective

debt instrument (offset to additional paid in capital) and amortized to interest expense over the life of the debt.

Issue Costs and Debt Discount

Company may record debt issue costs and/or debt discounts in connection with raising funds through the issuance of debt.

costs may be paid in the form of cash, or equity (such as warrants).

These costs are amortized to interest expense over the life

If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.

Issue Discount

certain convertible debt issued, the Company may provide the debt holder with an original issue discount.

The original issue discount

would be recorded to debt discount, reducing the face amount of the note and is amortized to interest expense over the life of

Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks.

The Company evaluates

all of its financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain features

that qualify as embedded derivatives.

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

is initially recorded at its fair value and is then revalued at each reporting date, with changes in the fair value reported as charges

or credits to income.

of December 31, 2021, the Company had reserved for issuance 29,323,681 shares of common stock associated with conversion features on

Series A Preferred Stock, warrants, options, and convertible notes.

These shares have been reserved for issuance by the Company’s

stock transfer agent, and accordingly, no derivative liability has been calculated on these shares.

Extinguishments

4 unchanged sentences

the liabilities are derecognized and the gain or loss on the sale is recognized.

Based Compensation –

Company accounts for its stock-based compensation in which the Company obtains employee services in share-based payment transactions

under the recognition and measurement principles of the fair value recognition provisions of section 718-10-30 of the FASB Accounting

Standards Codification.

Pursuant to paragraph 718-10-30-6 of the FASB Accounting Standards Codification, all transactions in which

goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value

of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance

is complete or the date on which it is probable that performance will occur.

the Company is a newly formed corporation or shares of the Company are thinly traded, the use of share prices established in the

Company’s most recent private placement memorandum (based on sales to third parties), or weekly or monthly price observations

would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due

to a larger spread between the bid and asked quotes and lack of consistent trading in the market.

The fair value of share options and similar

instruments is estimated on the date of grant using a lattice-binomial option pricing valuation model.

The ranges of assumptions

for inputs are as follows:

Expected term of

share options and similar instruments:

The expected life of options and similar instruments represents the period of time

the option and/or warrant are expected to be outstanding.

Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting

Standards Codification the expected term of share options and similar instruments represents the period of time the options

and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments

and employees expected exercise and post vesting employment termination behavior into the fair value (or calculated value)

of the instruments.

Pursuant to paragraph 718-10-S99-1, it may be appropriate to use the simplified method, i.e., expected

term = ((vesting term + original contractual term) / 2), if (i) A company does not have sufficient historical exercise data

to provide a reasonable basis upon which to estimate expected term due to the limited period of time its equity shares have

been publicly traded; (ii) A company significantly changes the terms of its share option grants or the types of employees

that receive share option grants such that its historical exercise data may no longer provide a reasonable basis upon which

to estimate expected term; or (iii) A company has or expects to have significant structural changes in its business such

that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected term.

uses the simplified method to calculate expected term of share options and similar instruments as the Company does not have

sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term.

Expected volatility

of the entity’s shares and the method used to estimate it.

Pursuant to ASC Paragraph 718-10-50-2(f) (2)(ii) a thinly

traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for

the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected,

the reasons for selecting that particular index, and how it has calculated historical volatility using that index.

uses the average historical volatility of the comparable companies over the expected contractual life of the share options

or similar instruments as its expected volatility.

If shares of a company are thinly traded the use of weekly or monthly price

observations would generally be more appropriate than the use of daily price observations as the volatility calculation using

daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes

and lack of consistent trading in the market

Risk-free rate(s).

An entity that uses a method that employs different risk-free rates shall disclose the range of risk free rates used.

risk-free interest rate is based on the U.S.

Treasury yield curve in effect at the time of grant for periods within the expected

term of the share options and similar instruments.

all forms of share-based payments, including stock option grants, warrants and restricted stock grants and stock appreciation

rights are measured at their fair value on the awards’

grant date, based on estimated number of awards that are ultimately

expected to vest.

expense resulting from share-based payments is recorded in general and administrative expense in the statements of operations.

Based Compensation –

Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services

Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance

of Subtopic 505-50 of the FASB Accounting Standards Codification (“Subtopic 505-50”).

to ASC Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of equity

instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument

issued, whichever is more reliably measurable.

The measurement date used to determine the fair value of the equity instrument

issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will

If the Company is a newly formed corporation or shares of the Company are thinly traded the use of share prices established

in the Company’s most recent private placement memorandum, or weekly or monthly price observations would generally be more

appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between

the bid and asked quotes and lack of consistent trading in the market.

fair value of share options and similar instruments is estimated on the date of grant using a Black-Scholes option pricing valuation

The ranges of assumptions for inputs are as follows:

Expected term of

share options and similar instruments:

Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification

the expected term of share options and similar instruments represents the period of time the options and similar instruments

are expected to be outstanding taking into consideration of the contractual term of the instruments and holder’s expected

exercise behavior into the fair value (or calculated value) of the instruments.

The Company uses historical data to estimate

holder’s expected exercise behavior.

If the Company is a newly formed corporation or shares of the Company are thinly

traded the contractual term of the share options and similar instruments is used as the expected term of share options and

similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which

to estimate expected term.

Expected volatility

of the entity’s shares and the method used to estimate it.

Pursuant to ASC Paragraph 718-10-50-2(f) (2)(ii) a thinly

traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for

the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected,

the reasons for selecting that particular index, and how it has calculated historical volatility using that index.

uses the average historical volatility of the comparable companies over the expected contractual life of the share options

or similar instruments as its expected volatility.

If shares of a company are thinly traded the use of weekly or monthly price

observations would generally be more appropriate than the use of daily price observations as the volatility calculation using

daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes

and lack of consistent trading in the market.

Expected annual

rate of quarterly dividends.

An entity that uses a method that employs different dividend rates during the contractual term

shall disclose the range of expected dividends used and the weighted average expected dividends.

The expected dividend yield

is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within

the expected term of the share options and similar instruments.

Risk-free rate(s).

An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used.

risk-free interest rate is based on the U.S.

Treasury yield curve in effect at the time of grant for periods within the expected

term of the share options and similar instruments.

to ASC paragraph 505-50-257, if fully vested, no forfeitable equity instruments are issued at the date the grantor and grantee

enter into an agreement for goods or services (no specific performance is required by the grantee to retain those equity instruments),

then, because of the elimination of any obligation on the part of the counterparty to earn the equity instruments, a measurement

date has been reached.

A grantor shall recognize the equity instruments when they are issued (in most cases, when the agreement

is entered into).

Whether the corresponding cost is an immediate expense or a prepaid asset (or whether the debit should be characterized

as contra equity under the requirements of paragraph 505-50-45-1) depends on the specific facts and circumstances.

ASC paragraph 505-50-45-1, a grantor may conclude that an asset (other than a note or a receivable) has been received in return

for fully vested, non-forfeitable equity instruments that are issued at the date the grantor and grantee enter into an agreement

for goods or services (and no specific performance is required by the grantee in order to retain those equity instruments).

an asset shall not be displayed as contra equity by the grantor of the equity instruments.

transferability (or lack thereof) of the equity instruments shall not affect the balance sheet display of the asset.

This guidance

is limited to transactions in which equity instruments are transferred to other than employees in exchange for goods or services.

Section 505-50-30 provides guidance on the determination of the measurement date for transactions that are within the scope of

this Subtopic.

to Paragraphs 505-50-25-8 and 505-50-25-9, an entity may grant fully vested, non-forfeitable equity instruments that are exercisable

by the grantee only after a specified period of time if the terms of the agreement provide for earlier exercisability if the grantee

achieves specified performance conditions.

Any measured cost of the transaction shall be recognized in the same period(s) and

in the same manner as if the entity had paid cash for the goods or services or used cash rebates as a sales discount instead of

paying with, or using, the equity instruments.

A recognized asset, expense, or sales discount shall not be reversed if a share

option and similar instrument that the counterparty has the right to exercise expires unexercised.

to ASC paragraph 505-50-30-S99-1, if the Company receives a right to receive future services in exchange for unvested, forfeitable

equity instruments, those equity instruments are treated as unissued for accounting purposes until the future services are received

(that is, the instruments are not considered issued until they vest).

Consequently, there would be no recognition at the measurement

date and no entry should be recorded.

Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services

Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance

of Sub-topic 505-50 of the FASB Accounting Standards Codification (“Sub-topic 505-50”).

to ASC Section 505-50-30, all transactions in which goods or services are the consideration received for the issuance of equity

instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument

issued, whichever is more reliably measurable.

The measurement date used to determine the fair value of the equity instrument

issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will

If the Company is a newly formed corporation or shares of the Company are thinly traded the use of share prices established

in the Company’s most recent private placement memorandum (“PPM”), or weekly or monthly price observations would

generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a

larger spread between the bid and asked quotes and lack of consistent trading in the market.

The fair value of share options and similar

instruments is estimated on the date of grant using a lattice-binomial option-pricing valuation model.

The ranges of assumptions

for inputs are as follows:

term of share options and similar instruments:

Pursuant to Paragraph 718-10-50-2(f)(2)(i)

of the FASB Accounting Standards Codification the expected term of share options and

similar instruments represents the period of time the options and similar instruments

are expected to be outstanding taking into consideration of the contractual term of the

instruments and holder’s expected exercise behavior into the fair value (or calculated

value) of the instruments.

The Company uses historical data to estimate holder’s

expected exercise behavior.

If the Company is a newly formed corporation or shares of

the Company are thinly traded the contractual term of the share options and similar instruments

is used as the expected term of share options and similar instruments as the Company

does not have sufficient historical exercise data to provide a reasonable basis upon

which to estimate expected term.

volatility of the entity’s shares and the method used to estimate it.

to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded or nonpublic entity that uses

the calculated value method shall disclose the reasons why it is not practicable for

the Company to estimate the expected volatility of its share price, the appropriate industry

sector index that it has selected, the reasons for selecting that particular index, and

how it has calculated historical volatility using that index.

The Company uses the average

historical volatility of the comparable companies over the expected contractual life

of the share options or similar instruments as its expected volatility.

a company are thinly traded the use of weekly or monthly price observations would generally

be more appropriate than the use of daily price observations as the volatility calculation

using daily observations for such shares could be artificially inflated due to a larger

spread between the bid and asked quotes and lack of consistent trading in the market.

annual rate of quarterly dividends.

An entity that uses a method that employs different

dividend rates during the contractual term shall disclose the range of expected dividends

used and the weighted-average expected dividends.

The expected dividend yield is based

on the Company’s current dividend yield as the best estimate of projected dividend

yield for periods within the expected term of the share options and similar instruments.

An entity that uses a method that employs different risk-free rates shall disclose

the range of risk-free rates used.

The risk-free interest rate is based on the U.S.

yield curve in effect at the time of grant for periods within the expected term of the

share options and similar instruments.

to ASC paragraph 505-50-25-7, if fully vested, non-forfeitable equity instruments are issued at the date the grantor and grantee

enter into an agreement for goods or services (no specific performance is required by the grantee to retain those equity instruments),

then, because of the elimination of any obligation on the part of the counterparty to earn the equity instruments, a measurement

date has been reached.

A grantor shall recognize the equity instruments when they are issued (in most cases, when the agreement

is entered into).

Whether the corresponding cost is an immediate expense or a prepaid asset (or whether the debit should be characterized

as contra-equity under the requirements of paragraph 505-50-45-1) depends on the specific facts and circumstances.

ASC paragraph 505-50-45-1, a grantor may conclude that an asset (other than a note or a receivable) has been received in return

for fully vested, non-forfeitable equity instruments that are issued at the date the grantor and grantee enter into an agreement

for goods or services (and no specific performance is required by the grantee in order to retain those equity instruments).

an asset shall not be displayed as contra-equity by the grantor of the equity instruments.

The transferability (or lack thereof) of the

equity instruments shall not affect the balance sheet display of the asset.

This guidance is limited to transactions in which equity

instruments are transferred to other than employees in exchange for goods or services.

Section 505-50-30 provides guidance on the

determination of the measurement date for transactions that are within the scope of this Subtopic.

Company derives revenues from the sale of GE branded fans and lighting fixtures to large retailers through retail and online sales.

Sales are recognized at the time title transfers

to the customer, generally upon shipment and when all the following have occurred:

(1) persuasive evidence of an arrangement exists,

(2) asset is transferred to the customer without further obligation, (3) the sales price to the customer is fixed or determinable,

and (4) collectability is reasonably assured.

Company periodically issues common stock and stock options to officers, directors, employees and consultants for services rendered.

Company accounts for stock incentive awards issued to employees and non-employees in accordance with FASB ASC 718, Stock Compensation.

Accordingly, stock-based compensation is measured at the grant date, based on the fair value of the award.

Stock-based awards to employees

are recognized as an expense over the requisite service period, or upon the occurrence of certain vesting events.

Additionally, stock-based

awards to non-employees are expensed over the period in which the related services are rendered.

June 2018, the FASB issued ASU 2018-07—Compensation—Stock Compensation (Topic 718):

Improvements to Nonemployee Share-Based

Payment Accounting, which simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based

payments to employees subject to certain exceptions.

The Company adopted ASU 2018-07 with respect to grants of shares of common stock

of the Company made in January 2019.

The adoption of ASU 2018-07 did not have a material impact on the consolidated financial statements.

to the adoption of ASU 2018-07 in January 2019, stock-based awards granted to non-employees were accounted for in accordance with ASU

505-50 –

Equity-Based Payments to Non-Employees (“ASU 505-50”).

ASU 505-50 measures stock-based compensation at either

the fair value of the consideration received, or the fair value of the equity instruments issued, whichever is more reliably measurable.

If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as

of the earlier of (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or

(2) the date at which the counterparty’s performance is completed.

expense resulting from share-based payments is recorded in operating expenses in the statements of operations.

the years ended December 31, 2021 and 2020, the Company derived revenues from the sale of GE branded fans and lighting fixtures to large

retailers through retail and online sales.

Company determines the correct revenue recognition using the following steps:

Identify the contract with a customer

Identify the performance obligations in the contract

Determine the transaction price

Allocate the transaction price to the performance obligations in the contract

Recognize revenue when (or as) the Company satisfies a performance obligation

allowances and a provision for estimated returns and other allowances are recorded at the time sales are made, considering historical

and anticipated trends.

January 1, 2017, we adopted the new accounting standard ASC 606, Revenue from Contracts with Customers and all the related amendments

(“new revenue standard”) to all contracts using the modified retrospective method, while prior period amounts are

not adjusted and continue to be reported in accordance with our historic accounting under Topic 605.

The adoption has had an immaterial

impact to our comparative net income and as such comparative information has not been restated and continues to be reported under

the accounting standards in effect for those periods.

We expect the impact of the adoption of the new standard to be immaterial

to our net income on an ongoing basis.

majority of our sales revenue continues to be recognized when products are shipped from our manufacturing facilities and from

our third-party logistics facility.

of sales represents costs directly related to produce, acquire and source inventory for sale, and provisions for inventory shrinkage

majority of our sales revenue is recognized when products are shipped from our manufacturing facilities and from our third-party logistics

of revenues represents costs directly related to produce, acquire and source inventory for sale, and provisions for inventory shrinkage

and obsolescence.

These costs include costs of purchased products, inbound freight, custom duties.

These costs include costs of purchased products, inbound freight, and custom duties.

General and Administrative Expenses

Selling expenses

include costs incurred in the selling of merchandise.

General and administrative expenses include costs incurred in the administration

or general operations of the business.

Selling, general and administrative expenses include employee and related costs, marketing,

professional fees, distribution , warehouse costs,

and other related selling costs.

(Loss) Per Share

net earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common

stock outstanding during each period.

Diluted earnings (loss) per share is computed by dividing net income (loss) for the period

by the weighted average number of common stock, common stock equivalents and potentially dilutive securities outstanding during

and handling costs incurred by the Company to deliver finished goods are expensed and recorded in selling, general and administrative

Additionally,

selling, general and administrative expenses include marketing, professional fees, distribution, warehouse costs, and other related selling

Selling expenses include costs incurred in the selling of merchandise.

General and administrative expenses include costs incurred

in the administration or general operations of the business.

compensation expense consists of non-cash charges resulting from the issuance of stock units and stock options that are disclosed in

the selling, general and administrative expenses and included as operating expenses.

net earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common stock

outstanding during each period.

Diluted earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted

average number of common stock, common stock equivalents and potentially dilutive securities outstanding during each period.

Company uses the “treasury stock”

method to determine whether there is a dilutive effect of outstanding convertible

debt, option and warrant contracts.

For the years ended December 31, 2017 and 2016, the Company reflected net loss and a dilutive

net loss, and the effect of considering any common stock equivalents would have been antidilutive for the period.

Therefore, separate

computation of diluted earnings (loss) per share is not presented for the periods presented.

Company has the following common stock equivalents at December 31, 2017 and December 31, 2016:

method to determine whether there is a dilutive effect of outstanding convertible debt,

option and warrant contracts.

For the years ended December 31, 2021 and 2020, the Company recognized net loss and a dilutive net loss,

and the effect of considering any common stock equivalents would have been antidilutive for the period.

Therefore, separate computation

of diluted earnings (loss) per share is not presented for the periods presented.

Company had the following anti-dilutive common stock equivalents at December 31, 2021 and December 31, 2020:

December 31, 2021

December 31, 2020

Convertible Debt (Exercise price - $0.25/share)

Stock Warrants (Exercise price - $0.375 - $3.00/share)

Stock Options (Exercise price $0.375 - $4.00/share)

Stock Warrants

Stock Options

Convertible Notes

December 31, 2020, the Company recorded but did not issue 2,614,156 shares of common stock, valued at approximately $8,088,474.

shares are reflected in the accompanying balance sheet and stockholders’

deficit statement.

Tax Provision

the inception of the Company and through November 6, 2012, the Company was taxed as a pass-through entity (a limited liability

company) under the Internal Revenue Code and was not subject to federal and state income taxes;

accordingly, no provision had

financial statements reflect the Company’s transactions without adjustment, if any, required for income tax purposes for

the period from November 7, 2012 to December 31, 2012.

The net loss generated by the Company for the period January 1, 2012 to

November 6, 2012 has been excluded from the computation of income taxes.

Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition

of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial

statements or tax returns.

Under this method, deferred tax assets and liabilities are based on the differences between the financial

statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are

expected to reverse.

Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely

than not that the assets will not be realized.

Deferred tax assets and liabilities are measured using enacted tax rates expected

to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

on deferred tax assets and liabilities of a change in tax rates is recognized in the Consolidated Statements of Operations in

the period that includes the enactment date.

Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of

deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements

or tax returns.

Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and

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

Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets

will not be realized.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in

the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities

of a change in tax rates is recognized in the Consolidated Statements of Operations in the period that includes the enactment date.

Company adopted section 740-10-25 of the FASB Accounting Standards Codification (Section 740-10-25).

Section 740-10-25 addresses

the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial

Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more

likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits

of the position.

The tax benefits recognized in the financial statements from such a position should be measured based on the

largest benefit that has a greater than fifty (50) percent likelihood of being realized upon ultimate settlement.

Section 740-10-25

also provides guidance on derecognition, classification, interest and penalties on income taxes, accounting in interim periods

and requires increased disclosures.

Section 740-10-25 addresses the

determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements.

Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not

that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.

tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater

than fifty (50) percent likelihood of being realized upon ultimate settlement.

Section 740-10-25 also provides guidance on derecognition,

classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.

estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying

2 unchanged sentences

of deferred tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary.

makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous

estimates of tax liability.

In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in

these jurisdictions.

makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates

of tax liability.

In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions.

In management’s opinion, adequate provisions for income taxes have been made for all years.

taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.

Company’s tax returns are subject to examination by the federal and state tax authorities.

If actual taxable income by tax jurisdiction

varies from estimates, additional allowances or reversals of reserves may be necessary.

Tax Positions

Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to

the provisions of Section 740-10-25 for the reporting periods ended December 31, 2017 and 2016

Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the provisions

of Section 740-10-25 for the reporting periods ended December 31, 2021 and 2020.

Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure

of related party transactions.

to Section 850-10-20 the related parties include (a) Affiliates of the Company; (b) Entities for which investments in their

equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section

825–10–15, to be accounted for by the equity method by the investing entity; (c) Trusts for the benefit of employees,

such as pension and profit sharing trusts that are managed by or under the trusteeship of management; (d) Principal owners

of the Company; (e) Management of the Company; (f) Other parties with which the Company may deal if one party controls

or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties

might be prevented from fully pursuing its own separate interests; and (g) Other parties that can significantly influence

the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties

and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully

pursuing its own separate interests.

to Section 850-10-20 the related parties include (a) Affiliates of the Company; (b) Entities for which investments in their equity

securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15,

to be accounted for by the equity method by the investing entity; (c) Trusts for the benefit of employees, such as pension and profit-sharing

trusts that are managed by or under the trusteeship of management; (d) Principal owners of the Company; (e) Management of the

Company; (f) Other parties with which the Company may deal if one party controls or can significantly influence the management or

operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate

interests; and (g) Other parties that can significantly influence the management or operating policies of the transacting parties

or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one

or more of the transacting parties might be prevented from fully pursuing its own separate interests.

consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements,

2 unchanged sentences

in the preparation of consolidated or combined financial statements is not required in those statements.

The disclosures shall

the nature of the relationship(s) involved; (b).

a description of the transactions, including transactions

to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such

other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c).

the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change

in the method of establishing the terms from that used in the preceding period; and (d).

amounts due from or to related parties

as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

The disclosures shall include:

(a) the nature of the relationship(s) involved; (b) a description of the transactions, including transactions to which no amounts

or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed

necessary to an understanding of the effects of the transactions on the financial statements; (c) the dollar amounts of transactions

for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms

from that used in the preceding period; and (d) amounts due from or to related parties as of the date of each balance sheet presented

and, if not otherwise apparent, the terms and manner of settlement.

Contingencies

Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies.

conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company

but which will only be resolved when one or more future events occur or fail to occur.

The Company assesses such contingent liabilities,

and such assessment inherently involves an exercise of judgment.

In assessing loss contingencies related to legal proceedings

that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived

merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected

to be sought therein.

Certain conditions

may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will

only be resolved when one or more future events occur or fail to occur.

The Company assesses such contingent liabilities, and such assessment

inherently involves an exercise of judgment.

In assessing loss contingencies related to legal proceedings that are pending against the

Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings

or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability

can be estimated, then the estimated liability would be accrued in the Company’s financial statements.

If the assessment

indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be

estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material,

would be disclosed.

contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would

be disclosed.

However, there is no assurance that such matters will not materially and adversely affect the Company’s business,

consolidated financial position, and consolidated results of operations or consolidated cash flows.

Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent

The Company will evaluate subsequent events through the date when the financial statements are issued.

to ASU 201009 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued

when they are widely distributed to users, such as through filing them on EDGAR.

If the assessment indicates

that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then

the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

However, there is no assurance that such matters will not materially and adversely affect the Company’s business, consolidated

financial position, and consolidated results of operations or consolidated cash flows.

Issued Accounting Pronouncements

May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),”

on revenue recognition.

This guidance provides that an entity should recognize revenue to depict the transfer of promised goods or services to customers

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

This guidance also requires more detailed disclosures to enable users of financial statements to understand the nature, amount,

timing, and uncertainty of revenue and cash flows arising from contracts with customers.

The original effective date of this guidance

was for interim and annual reporting periods beginning after December 15, 2016, early adoption is not permitted, and the

guidance must be applied retrospectively or modified retrospectively.

In July 2015, the FASB approved an optional one-year deferral

of the effective date.

January 1, 2017 We adopted the new accounting standard ASC 606, Revenue from Contracts with Customers and all the related amendments

(“new revenue standard”) to all contracts using the modified retrospective method, while prior period amounts are

not adjusted and continue to be reported in accordance with our historic accounting under Topic 605.

We expect the impact of the

adoption of the new standard to be immaterial to our net income on an ongoing basis.

March 2016, the FASB issued ASU 2016-09, Stock Compensation, which is intended to simplify the accounting for share-based payment

award transactions.

The new standard will modify several aspects of the accounting and reporting for employee share-based payments

and related tax accounting impacts, including the presentation in the statements of operations and cash flows of certain tax benefits

or deficiencies and employee tax withholdings, as well as the accounting for award forfeitures over the vesting period.

is effective for fiscal years beginning after December 15, 2016, including interim periods within that year, and will be adopted

by the Company in the first quarter of fiscal 2017.

The Company anticipates the new standard will result in an increase in the

number of shares used in the calculation of diluted earnings per share and will add volatility to the Company’s effective

tax rate and income tax expense.

The magnitude of such impacts will depend in part on whether significant employee stock option

exercises occur.

April 2015, the FASB issued Accounting Standards Update No.

2015-03, Interest—Imputation of Interest (Topic 83530):

the Presentation of Debt Issuance Costs (“ASU 2015-03”).

ASU 2015-03 requires that debt issuance costs related to

a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability,

consistent with debt discounts.

The recognition and measurement guidance for debt issuance costs is not affected by ASU 2015-03.

ASU 2015-03 is effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods

within those fiscal years.

The Company has reclassified debt issuance costs from prepaid expenses and other current assets and

other assets as a reduction to debt in the condensed consolidated balance sheets.

May 2015, the FASB issued ASU 2015-07, "Fair Value Measurement (Topic 820):

Disclosures for Investments in Certain Entities

That Calculate Net Asset Value per Share (or Its Equivalent),"

which removes the requirement to categorize within the fair

value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient.

the amendments remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair

value using the net asset value per share practical expedient.

This ASU is effective for annual periods, including interim periods

within those annual periods, beginning after December 15, 2015, and early adoption is permitted.

The new guidance should be applied

on a retrospective basis to all periods presented.

We adopted this guidance on January 1, 2016.

The adoption of this guidance

did not have a material impact on our financial position, results of operations or cash flows.

September 2015, the FASB issued ASU 2015-16, “Simplifying the Accounting for Measurement –Period Adjustments.”

Changes to the accounting for measurement-period adjustments relate to business combinations.

Currently, an acquiring entity is

required to retrospectively adjust the balance sheet amounts of the acquired business recognized at the acquisition date with

a corresponding adjustment to goodwill as a result of changes made to the balance sheet amounts of the acquired business.

measurement period is the period after the acquisition date during which the acquirer may adjust the balance sheet amounts recognized

for a business combination (generally up to one year from the date of acquisition).

The changes eliminate the requirement to make

such retrospective adjustments, and, instead require the acquiring entity to record these adjustments in the reporting period

they are determined.

The new standard is effective for both public and private companies for periods beginning after December 15,

We adopted this guidance in the first quarter 2016.

The adoption of this guidance did not have a material impact on our

financial position, results of operations or cash flows.

July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No.

2015-11, Inventory

Simplifying the Measurement of Inventory (“ASU 2015-11”), which applies guidance on the subsequent measurement

of inventory.

ASU 2015-11 states that an entity should measure inventory at the lower of cost and net realizable value.

Net realizable

value is the estimated selling price in the ordinary course of business, less reasonable predictable costs of completion, disposal

and transportation.

The guidance excludes inventory measured using last in, first out or the retail inventory method.

is effective for interim and annual reporting periods beginning after December 15, 2016.

Early adoption is permitted.

is not planning to early adopt ASU 2015-11 and is currently evaluating ASU 2015-11 to determine the potential impact to its condensed

consolidated financial statements and related disclosures.

February 2015, the FASB issued ASU 2015-02, "Consolidation (Topic 810):

Amendments to the Consolidation Analysis,"

makes changes to both the variable interest model and voting interest model and eliminates the indefinite deferral of FASB Statement

167, included in ASU 2010-10, for certain investment funds.

All reporting entities that hold a variable interest in other

legal entities will need to re-evaluate their consolidation conclusions as well as disclosure requirements.

This ASU is effective

for annual periods beginning after December 15, 2015, and early adoption is permitted, including any interim period.

this guidance on January 1, 2016.

The adoption of this guidance did not have a material impact on our financial position,

results of operations or cash flows.

January 2015, the FASB issued ASU 2015-01, "Income Statement –

Extraordinary and Unusual Items (Subtopic 225-20),"

effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015.

This update eliminates

from GAAP the concept of extraordinary items.

We adopted this guidance on January 1, 2016.

The adoption of this guidance

did not have a material impact on our financial position, results of operations or cash flows.

November 2014, the FASB issued ASU 2014-16, "Derivatives and Hedging (Topic 815)."

Entities commonly raise capital by

issuing different classes of shares, including preferred stock, that entitle the holders to certain preferences and rights over

the other shareholders.

The specific terms of those shares may include conversion rights, redemption rights, voting rights, and

liquidation and dividend payment preferences, among other features.

One or more of those features may meet the definition of a

derivative under GAAP.

Shares that include such embedded derivative features are referred to as hybrid financial instruments.

The objective of this update is to eliminate the use of different methods in practice and thereby reduce existing diversity under

GAAP in the accounting for hybrid financial instruments issued in the form of a share.

The amendments are effective for fiscal

years, and interim periods within those fiscal years, beginning after December 15, 2015.

We adopted this guidance on January 1,

The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows.

August 2014, the FASB issued ASU 2014-15, "Presentation of Financial Statements –

Going Concern (Subtopic 205-40),

effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter.

Early application

is permitted.

This standard provides guidance about management’s responsibility to evaluate whether there is substantial

doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures.

is effective for annual reporting periods ending after December 15, 2016, and early adoption is permitted.

We adopted this

guidance on January 1, 2016.

The adoption of this guidance did not have a material impact on our financial position, results

of operations or cash flows.

March 2016, the FASB issued an accounting standard update which simplifies the accounting for share-based payment transactions,

inclusive of income tax accounting and disclosure considerations.

This guidance is effective for fiscal and interim periods beginning

after December 15, 2016 and is required to be applied retrospectively to all impacted share-based payment arrangements.

this guidance on January 1, 2017.

The adoption of this guidance did not have a material impact on our financial position,

results of operations or cash flows.

January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2016-01,

which amends the guidance in U.S.

GAAP on the classification and measurement of financial instruments.

Changes to the current

guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation

and disclosure requirements for financial instruments.

In addition, the ASU clarifies guidance related to the valuation allowance

assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities.

standard is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should

apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period

in which the guidance is effective.

Early adoption is not permitted except for the provision to record fair value changes for

financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income.

We are currently evaluating the impact of adopting this guidance.

February 2016, the FASB issued an accounting standard update which modifies the accounting for leasing arrangements, particularly

those arrangements classified as operating leases.

This update will require entities to recognize the assets and liabilities arising

from operating leases on the balance sheet.

This guidance is effective for fiscal and interim periods beginning after December

15, 2018 and is required to be applied retrospectively to all leasing arrangements.

We are currently assessing the effects this

guidance may have on our financial statements.

January 2017, the FASB issued Accounting Standards Update No.

2017-01, Clarifying the Definition of a Business ("ASU 2017-01").

The standard clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should

be accounted for as acquisitions of assets or businesses.

ASU 2017-01 is effective for fiscal years beginning after December 15,

2017, and interim periods within those fiscal years.

Under ASU 2017-01, to be considered a business, the assets in the transaction

need to include an input and a substantive process that together significantly contribute to the ability to create outputs.

to the adoption of the new guidance, an acquisition or disposition would be considered a business if there were inputs, as well

as processes that when applied to those inputs had the ability to create outputs.

Early adoption is permitted for certain transactions.

Adoption of ASU 2017-01 may have a material impact on our consolidated financial statements if we enter into future business combinations.

January 2017, the FASB issued Accounting Standards Update No.

2017-04, Simplifying the Test for Goodwill Impairment ("ASU

2017-04").

ASU 2017-04 simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test,

which requires a hypothetical purchase price allocation.

ASU 2017-04 is effective for annual or interim goodwill impairment tests

in fiscal years beginning after December 15, 2019 and should be applied on a prospective basis.

Early adoption is permitted for

interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.

We do not anticipate the adoption

of ASU 2017-04 will have a material impact on our consolidated financial statements.

pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not

applicable or are not expected to be significant to the Company’s financial position, results of operations or cash flows.

does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect

on its consolidated financial statements.

3 FURNITURE AND EQUIPMENT

Property and equipment consisted of the following:

and equipment consisted of the following:

December 31, 2021

December 31, 2020

Machinery and equipment

4 unchanged sentences

accumulated depreciation

Property and Equipment net

Depreciation expense amounted to $50,915 and

$26,483 for the years ended December 31, 2017 and 2016, respectively.

expense amounted to $42,025 and $74,277 for the years ended December 31, 2021 and 2020, respectively.

4 INTANGIBLE ASSETS

assets (patents) consisted of the following:

Accumulated Amortization

expense on intangible assets was $11,395 and $7,958 for the years ended December 31, 2017 and 2016, respectively.

December 31, 2017, the estimated amortization of intangible assets for the next five years and thereafter was as follows:

Ending December 31

and Thereafter

amortization expense in future periods could differ from these estimates as a result of future acquisitions, divestitures, impairments

and other factors.

5 GE Trademark License Agreement

The Company entered into an amended License

Agreement with General Electric regarding the GE Trademark License.

The License Agreement is amortized through its expiration in

November 2018.

assets (patents and trademarks) consisted of the following:

December 31, 2021

December 31, 2020

GE Trademark License

Impairment Charges

accumulated amortization

GE trademark license –

Amortization expense associated with the GE

Trademark License amounted to $2,435,117 and $2,448,161 for the years ended December 31, 2017 and 2016, respectively.

determined an impairment adjustment of $600,000 was necessary for the year ended 2017.

At December 31, 2017, future amortization of

intangible assets is as follows for the remaining:

expense on intangible assets was $42,262 and $32,032 for the years ended December 31, 2021 and 2020, respectively.

following table sets forth the estimated amortization expense for future periods :

Year Ending December 31

Note 6 Deferred Lease Credits

Cash or rent abatements received upon entering

certain office leases are recognized on a straight-line basis as a reduction to rent expense over the lease term.

The unamortized

portion is included in Deferred Lease Credits, which are included in other current liabilities.

As of December 31, 2017, and December

31, 2016 the deferred credits were $42,332 and $13,034 respectively.

Deferred Rent amortization was $ 29,297 and $(11,987) for

the years ended December 31, 2017 and 2016, respectively.

7 Notes Payable

At December 31, 2017 and December 31, 2016,

the Company had a note payable to a bank in the amount of $70,222 and $186,823, respectively.

The note bears interest at prime

plus 1.5%, which was 6% as of December 31, 2017, and matures on August 28, 2018.

The note is secured by the assets of the Company

and personal guarantees by a shareholder and an officer of the Company.

On April 13, 2016, the Company entered into

a Line of Credit Promissory Note with a third party (the “Line of Credit”), as amended and extended, in the principal

sum of up to ten million U.S.

Dollars (US $10,000,000) to support purchase orders, inventory and general working capital needs.

The Company may draw and/or repay this Line of Credit from time to time until the maturity hereof.

The Note provides for monthly

payments of interest at nine percent (9%) per annum on outstanding principal and matures on January 10, 2019, at which time the

full principal amount and accrued but unpaid interest become due.

The Line of Credit note is secured by the assets

of the Company.

As of December 31, 2017, and December 31, 2016, the outstanding balance on this note was $3,456,732 and $3,112,737,

respectively.

The Company received a $500,000 loan from a

related party in January 2016.

The note is on demand and carries interest of 12%.

As of December 31, 2017, the outstanding balance

Principal payments due under the terms of the

notes described above are as follows:

Principal Due in Next 12 months

8 Convertible Debt Net

Company has recorded derivative liabilities associated with convertible debt instruments, as more fully discussed at Note 8.

Related Party

Balance December 31, 2015

Amortization of Debt Discount

Less Repayments/Conversions

Balance December 31, 2016

Amortization of Debt Discount

Less Repayments/Conversions

Balance December 31, 2017

November 26, 2013, May 8, 2014 and September 25, 2014 the Company completed closings in connection with its offering (the “Notes

Offering”) of its 12% Secured Convertible Promissory Notes (the “12% Notes”) in the aggregate principal amount

of $4,240,100 and/or its 15% Secured Convertible Promissory Notes in the aggregate principal amount of $30,000 (the “15%

Notes”, and together with the 12% Notes, each a “Note”

and collectively, the “Notes”), as applicable,

with certain “accredited investors”

(the “Investors”), as defined under Regulation D, Rule 501 of the

Securities Act.

Pursuant to the Notes Offering, the Company received $1,752,803, $1,400,000 and $800,500 in net proceeds on November

26, 2013, May 8, 2014 and September 25, 2014, respectively.

addition to the terms customarily included in such instruments, the Notes began accruing interest on the date that each Investor

submitted the principal balance of such Investor’s Note, with the interest thereon becoming due and payable on the one-year

anniversary, and quarterly thereafter.

Upon a default of the Notes, the interest rate will increase by 2% for each 30-day period

The principal balance of each Note and all unpaid interest became payable twenty-four (24) months after the date

The principal and outstanding interest under the Notes are convertible into shares of the Company’s common

stock at $0.25 per share and are secured by a first priority lien (subject only to an existing note with Signature Bank of Georgia

on the Company’s intellectual property and all substitutes, replacements and proceeds of such intellectual property) pursuant

to the terms of a Security Purchase Agreement, dated as of November 26, 2013, May 8, 2014 and September 25, 2014, as applicable,

by and between the Company and each Investor.

Pursuant to the Notes Offering, each Investor

also received five (5) year common stock warrants to purchase the Company’s common stock at $0.375 per share (each a “Warrant”

and collectively, the “Warrants”).

Investors of the 12% Notes received Warrants with 25% coverage based on a predetermined

valuation of the Company.

Investors of the 15% Notes received Warrants with 15% coverage based on the predetermined valuation of

Investors with a principal investment amount equal to or greater than $250,000 received Warrants with a bonus 40%

coverage (“Bonus Coverage”) ; however, if an Investor previously invested $250,000 or more in the Notes Offering,

such Investor received Bonus Coverage if such Investor subsequently invested $100,000 or more in the Notes Offering.

to the terms customarily included in such instruments, the Warrants may be exercised by the Investors by providing to the Company

a notice of exercise, payment and surrender of the Warrant.

Notes and Warrants were treated as derivative liabilities.

connection with the Notes Offering, the Company entered into Registration Rights Agreements, each dated as of November 26, 2013,

May 8, 2014 and September 25, 2014, and each by and between the Company and each of the Investors (collectively, the “Registration

Rights Agreements”), whereby the Company agreed to prepare and file a registration statement with the SEC within sixty (60)

days after execution of the applicable Registration Rights Agreement and to have the registration statement declared effective

by the SEC within ninety (90) days thereafter.

the Company was unable to file a registration statement pursuant to the terms of each Registration Rights Agreements dated as

of November 26, 2013 or May 8, 2014, the Company was in default under such Registration Rights Agreements (the “Filing Default

Damages”), and because the Company was unable to have a registration statement declared effective pursuant to the terms

of the Registration Rights Agreements dated as of November 26, 2013, the Company was in default under such Registration Rights

agreements (the “Effectiveness Default Damages”).

The Filing Default Damages stopped accruing on the date such registration

statement was filed, and the Effectiveness Default Damages stopped accruing on the date it was declared effective.

Company invited the Investors holding Notes dated November 26, 2013 to extend the first interest payment that was scheduled to

be paid pursuant to the Notes dated November 26, 2013 (the “Interest Due”) to February 24, 2015 and in exchange offered

to capitalize the Interest Due at a rate of 12% through payment (the “Additional Interest”), all of which was convertible

into the Company’s common stock at a price of $0.25 per share (the “Agreement and Waiver and Agreement to Convert”).

Through December 31, 2016, the Company has issued in total 2,343,191 shares of its common stock representing $585,798 in Additional

Interest, Interest Due, Filing Default Damages and Effectiveness Default Damages.

As of December 31, 2016, all Additional Interest,

Interest Due, Filing Default Damages and Effectiveness Default Damages was repaid by the Company.

2015, five Investors requested that the Company withhold payments of interest due under their Notes at no cost to the Company,

to allow the Company to address working capital needs.

Such interest due has been or will be paid to the five Investors in cash

or simple non-interest bearing promissory notes, and none of such amounts have been or will be paid in shares of the Company’s

capital stock.

November 2015, the Company invited the holders of Notes dated November 26, 2013, with respect to outstanding principal and interest

due under their respective Notes, to (i) receive payment in cash, (ii) convert their Notes into shares of the Company’s

common stock, or (iii) forbear an election for three (3) months, or until February 26, 2016, pursuant to a forbearance agreement,

during such time interest under their respective Notes would continue to accrue.

In February 2016, the Company invited the same

holders to extend their forbearance period to make an election to convert or redeem their Notes for an additional three months,

or until May 26, 2016, under the same terms as the first forbearance agreements.

May 2016, the Company invited the holders of all Notes, where such holders had not already made an election to redeem or convert

their Notes, to forbear or extend their forbearance period to make an election to convert or redeem their Notes until July 31,

2016, which the Company thereafter extended to August 15, 2016 (the “August 2016 Election”).

This also provided a

third option to all noteholders, whereby such holders could convert their respective Note(s) into shares of Series A Convertible

Preferred Stock (“Preferred Stock”).

(See Note 8(B)).

to the August 2016 Election, several Investors had previously elected to receive payment in cash or convert their Notes into shares

of the Company’s common stock, but most Notes remained outstanding.

December 31, 2017, one Investor redeemed $50,000 in principal balance of one Note and one Investor was issued 200,000 shares of

Preferred Stock in connection with its August 2016 Election.

Pursuant to the August 2016 Elections received and effective as of

August 15, 2016, through September 30, 2017 the Company redeemed or issued shares of the Company’s common stock or Preferred

Stock, as applicable, in exchange for the principal balance of the Notes, as follows:

(i) the payment of, in the aggregate, $50,000

in principal balance of one Note; (ii) the issuance of 240,000 shares of the Company’s common stock, representing $60,000

in outstanding Note principal balance; and (iii) the issuance of 13,456,936 shares of Preferred Stock, representing $3,364,234

in outstanding Note principal balance.

December 31, 2017, all Notes have either been re-paid in cash, separate debt obligation or by conversion, and all such Notes have

been terminated.

All issuances of capital stock in the August 2016 Election were made only for principal balances due under the

Notes, and all interest was paid directly to the Investors.

Terms of Debt

debt carries interest between 12% and 15%, and was due in November 2015, May 2016 and September 2016, as extended to July 31,

2016 pursuant to certain forbearance agreements.

Notes and Warrants issued in connection with the Notes Offering are convertible at $0.25 and $0.375 per share, respectively, subject

to the existence of a “ratchet feature”, which allows for a lower offering price if the Company offers shares to the

public at a lower price.

Offer to Convert Debt to Preferred Shares

letter to each holder of the Notes, dated July 22, 2016, the Company requested that each holder indicate its election to (i) redeem

its Note, (ii) convert its Note into the Company’s common stock or (iii) elect to convert its Note into shares of Preferred

Stock (the “Preferred Option”), in each case by August 15, 2016.

those holders electing the Preferred Option, each holder has received shares of the Preferred Stock on a 1 to 1 ratio to the number

of shares of the Company’s common stock which are then convertible under such holder’s respective Note.

to interest on junior securities, dividends, distributions or liquidation preference, shares of Preferred Stock will rank senior

to shares of the Company’s common stock or other junior securities.

Along with other terms customary for a class of convertible

preferred stock, the Preferred Stock will be convertible into shares of the Company’s common stock at the same conversion

price as the Notes (i.e., USD $0.25 per share), and will pay interest quarterly at a rate of six percent (6%).

The Preferred Stock

will be convertible upon the election of the holder thereof.

Shares of the Preferred Stock may be repurchased by the Company upon

30 days’

prior written notice, in whole or in part, for USD $3.50 per share, provided that during such notice period the

holder will continue to have the option and right to convert its shares of Preferred Stock into shares of the Company’s

common stock.

Holders will also have a put option, allowing them to sell their shares of Preferred Stock back to the Company at

USD $0.25 per share, the Note conversion price.

holder electing the Preferred Option was required to enter into an amendment to its Note, providing that the Note will be convertible

into the Preferred Stock rather than the Company’s common stock, and to thereafter elect to convert their Note, as amended,

into Preferred Stock.

In addition, each holder entered into a lockup agreement, whereby the holder agreed not to offer, sell,

contract to sell, pledge, give, donate, transfer or otherwise dispose of (i) the shares of the Company’s common stock it

then holds, (ii) the shares of Preferred Stock obtained upon conversion of its Note, and (iii) the shares of the Company’s

common stock underlying the Preferred Stock, for a period of twelve (12) months following the date of such agreement.

amendments, conversion to Preferred Stock and lockup agreement have been entered into on August 15, 2016.

The Note amendments

were approved by a majority of the holders of the then outstanding Notes.

See above for more details related to the results of

that offering.

9 Derivative Liabilities

The fair value at the commitment and re-measurement

dates for the Company’s derivative liabilities were based upon the following management assumptions as:

December 31, 2017

December 31, 2016

Balance Beginning of period

Reclassification of derivative liabilities to additional paid in capital related to warrants exercised that ceased being a derivative liability

Extinguishment of Derivative Liability - Conversion of Interest to Shares

Fair value mark to market adjustment - stock options

Fair value at the commitment date for options granted

Fair value mark to market adjustment - convertible debt

Fair value mark to market adjustment –

Fair value at commitment date for warrants issued

Debt settlement on the derivative liability associated with interest

Reclassification of derivative liability to Additional Paid in Capital due to share reservation

Gain on debt settlement

Balance at end of period

The Company reclassified $13,229,681 to additional

paid in capital.

The reclassification is mainly due to the share reservation in transfer agent for options, warrants and conversion

of convertible notes.

The Company recorded a change in the value of embedded derivative liabilities income/(expense) $(14,413,192)

and $(43,634,482) for the years ended December 31, 2017 and 2016, respectively.

Commitment Date

Expected dividends

Expected volatility

Expected term

Risk Free Interest Rate

For the year ended December 31, 2017, the Company

and the third-party investors agreed to convert their warrants to the Company's common shares in cashless basis.

The Company recognizes

the warrant expense of $1,869,358.

The fair value of stock warrant is estimated using the Binomial valuation method and based on

the information as of the conversion date:

exercise price of $3.30, volatility of 150.0%, steps of 20.29 and risk-free rate of

For the year ended December 31, 2017, the Company

recognizes the option expense of $2,003,593.

The fair value of stock option is estimated using the Binomial valuation method and

based on the price of the date granted:

exercise price of $4.00, volatility of 150.0%, steps of 37.78 and risk-free rate of 2.40%.

10 Debt Discount

The Company recorded the debt discount to the

extent of the gross proceeds raised and expensed immediately the remaining fair value of the derivative liability, as it exceeded

the gross proceeds of the note.

Accumulated amortization of debt discount amounted

to -0- as of December 31, 2017 and $4,402,773 for the year ended December 31, 2016.

The Company recorded a change in the value

of embedded derivative liabilities income/(expense) of ($14,413,192) and ($43,634,482) for the years ended December 31, 2017 and

2016, respectively.

The Company recorded derivative expense of

($0) and ($9,678,390) for the years ended December 31, 2017 and 2016, respectively.

The Company recorded loss on disposition of

debt as a result of conversion to Common Stock and Preferred Stock of ($1,260,000) for the year ended 2017.

The loss was a result

of the conversion value of the shares received exceeded the face value of the note.

11 Debt Issue Costs

Debt Issuance Costs

Accumulated Amortization

Debt Issuance Costs

Company recorded amortization expense of $-0- and $14,605 for the years ended December 31, 2017 and 2016, respectively.

12 GE Royalty Obligation

2011, the Company executed a Trademark Licensing Agreement with General Electric, which allows the Company the right to market

certain ceiling light and fan fixtures displaying the GE brand.

The License Agreement imposes certain manufacturing and quality

control conditions that the Company must maintain in order to continue to use the GE brand.

License Agreement is nontransferable and cannot be sublicensed.

Various termination clauses are applicable;

however, none were

applicable as of December 31, 2017, and December 31, 2016.

August 2014, the Company entered into a second amendment to the License Agreement pertaining to its royalty obligations.

the terms of the amendment, the Company agreed to pay a total of $12,000,000 by November 2018 for the rights assigned in the original

In case the Company does not pay GE a total of at least $12,000,000 in cumulative royalties over the term of the License

Agreement, the difference between $12,000,000 and the amount of royalties actually paid to GE is owed in December 2018.

are due quarterly based upon the prior quarters’

The Company made payments of $541,858 and $489,108 for the years

ended December 31, 2017 and 2016, respectively.

License Agreement obligation will be paid from sales of GE branded product subject to the following repayment schedule:

Sales in Contract Year

of Contract Year Net Sales owed to GE

$0 $50,000,000

$50,000,001 $100,000,000

2027 and thereafter

following table presents the details of the principal outstanding:

d) Note payable

e) Convertible Notes

Notes payable, current portion

Non-current term notes payable

payments on all Notes referred to above (inclusive of the note payable, the Convertible Notes, and CARES Act Loans) are due as follows:

Year ending December 31,

2027 and thereafter

March 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted.

Among other things, the CARES

Act established the Paycheck Protection Program (“PPP”), which funded eligible businesses through federally guaranteed loans.

Under the PPP, companies are eligible for forgiveness of principal and accrued interest if the proceeds are used for eligible costs,

which include, but are not limited to, payroll, benefits, mortgage, lease, and utility expenses.

Paycheck Protection Program Loan - On April 13, 2020, the Company was granted a loan (the “PPP1 Loan”) under the Paycheck

Protection Program in the aggregate amount of $269,500.

PPP1 Loan matures on April 13, 2025 and bears interest at a rate of 1.0% per annum, which is payable monthly following the deferral period,

described below.

The note may be prepaid at any time prior to maturity with no prepayment penalties.

June 2020, certain provisions of the PPP1 Loan were amended.

The amendment modified the original payment deferment period from six months

to either (i) the date that the U.S.

Small Business Administration (the “SBA”) remits the Company’s loan forgiveness

to the bank or (ii) the date that a final determination is made that no portion of the PPP Loan is forgiven, subject to the Company requesting

forgiveness of the PPP Loan within a specified time period..

During 2021, the Company requested forgiveness of the PPP1 Loan in accordance

with the application requirements and received notice that $257,468 note payable balance had been forgiven.

The Company recognized the

forgiveness amount of $257,468 as Other Income during the year ended December 31, 2020.

of December 31, 2021 and 2020, the loan balance was $11,193 and $22,032, respectively.

Monthly principal and interest payments of $289

started in October 2021 with a maturity of April 13, 2025.

Second Paycheck Protection Program Loan - On February 3, 2021, the Company was granted a loan (the “PPP2 Loan”) under the

Paycheck Protection Program Second Draw program in the aggregate amount of $178,235, pursuant to the Paycheck Protection Program under

the CARES Act.

PPP2 Loan matures on February 3, 2026 and bears interest at a rate of 1.0% per annum, which will be payable monthly upon expiration of

the payment deferral period.

The payment deferral period will expire on either (i) the date that the SBA remits the Company’s loan

forgiveness to the bank or (ii) the date that a final determination is made that no portion of the PPP2 Loan is forgiven, subject to

the Company requesting forgiveness of the PPP2 Loan within a specified time period.

The note may be prepaid at any time prior to maturity

with no prepayment penalties.

The Company recorded the principal amount of $178,235 due on the PPP2 Loan in non-current notes payable

in the consolidated balance sheet as of December 31, 2021.

the terms of the PPP2 Loan, certain amounts of the PPP2 Loan may be forgiven if they are used for qualifying expenses as described in

the CARES Act.

The Company believes it used the entire PPP2 Loan amount for qualifying expenses and, during 2021, the Company requested

forgiveness in accordance with the application requirements.

As of the date of this filing, the Company has not received a reply to its

request and there can be no assurance that such PPP2 Loan will be forgiven, in whole or in part.

EIDL Loan - On June 24, 2020, the Company received a loan (the “EIDL Loan”) from the SBA under its Economic Injury Disaster

Loan (“EIDL”) assistance program in light of the impact of the COVID-19 pandemic on the Company’s business, pursuant

to which the Company entered into a promissory note and security agreement with the SBA.

The principal amount of the EIDL Loan is $150,000,

with proceeds to be used for working capital purposes.

Interest on the EIDL Loan accrues at the rate of 3.75% per annum and installment

payments, including principal and interest, are due monthly beginning twenty-four months from the date of the EIDL Loan.

of principal and interest is due and payable 30 years from the date of the promissory note.

The EIDL Loan may be prepaid in part or in

full, at any time, without penalty.

Additionally, the EIDL Loan is collateralized by certain of the Company’s property as specified

within the security agreement.

The EIDL Loan contains certain customary events of default and, in the event an event of default occurs,

the SBA may require immediate repayment of all amounts due.

part of the EIDL Loan, the Company also received an advance of $10,000 from the SBA, which is construed as a grant.

Accordingly, this

advance has been recognized as Other Income during 2021.

Note payable (“NBG”)

December 14, 2021, the Company entered into a new secured promissory note with Nielsen & Bainbridge, LLC (“NBG”), in

the amount of approximately $5.9 million, which amended and replaced the April 2016 promissory note.

The unpaid principal bears annual

interest at the Wall Street Journal prime rate plus 1.75% per year (as compared to an interest rate of 9% per annum prior to the amendment

and restatement of the April 2016 note).

The amended note matures in December 2026.

The note is secured by a first priority security

interest in substantially all of the Company’s assets.

regard to the NBG note payable, the Company will make the following principal payments plus an amount equal to all accrued and unpaid

interest as follows:

Year ending December 31,

Company may prepay the amounts due under the amended note at any time and from time to time.

The note contains customary events of default

and, in the event that an event of default occurs, the amended note and all accrued interest will become immediately due and payable.

conjunction with the original note with NBG, and the ongoing consultation on product sales and distribution, in each of March 2019, August

2020 and November 2021, the Company issued 333,333 shares, 333,333 shares, and 33,334 shares of its common stock, respectively,

to NBG, for an aggregate issuance of 1,000,000 shares, including additional shares issued during 2018.

of December 31, 2021, the Company paid $343,000 of principal plus accrued interest of $473,152 on the NBG note.

As of December 31, 2021,

and December 31, 2020, the outstanding balance on this note was $5,557,792 and $5,458,642, respectively.

At December 31, 2021 and 2020,

accrued interest was $0 and $120,650, respectively.

Convertible Notes

Convertible Notes, dated 9/23/2020

Convertible Notes, dated 11/10/2020

Convertible Notes, dated 10/30/2020

Convertible Notes, dated 11/3/2020

Convertible Notes, dated 01/13/2021

in Convertible Notes are loans provided to the Company from two directors, an officer and two investors.

The notes each have the following

three-year subordinated convertible promissory note of principal face amounts.

Subject to other customary terms, the note matures

in three years and accrues interest at a rate of 6% per annum, which is payable annually in cash or common stock, at the holder’s

At any time after issuance and prior to or on the maturity date, the note is convertible at the option of the holder into

shares of common stock at a conversion price of $15.00 per share.

Upon notice to the holder, the Company may prepay, in whole or in part,

the outstanding balance of the note at any time prior to the maturity date;

the holder has the right to convert the note into shares

of common stock in lieu of prepayment.

Upon the occurrence of certain events of default, and upon written notice from the holder, the

note will become immediately due and payable and, until paid in full, will bear interest at a rate of 12% per annum.

interest on Convertible Notes was $92,919 and $13,621 as of December 31, 2021 and 2020, respectively.

6 GE ROYALTY OBLIGATIONS

June 15, 2011, we entered into the License Agreement with GE, pursuant to which we have the right to market certain ceiling light and

fan fixtures displaying the GE brand.

The Company and GE subsequently amended the License Agreement, including on April 17, 2013, August

13, 2014, September 25, 2018, May 2019 and December 1, 2020.

The License Agreement imposes certain manufacturing and quality control

conditions that we must maintain in order to continue to use the GE brand.

The License Agreement is nontransferable and cannot be sublicensed.

Various termination clauses are applicable to the License Agreement;

however, none were applicable as of December 31, 2021 and December

August 13, 2014, we entered into a second amendment to the License Agreement pertaining to our royalty obligations.

Under the initial

terms of the amendment, we agreed to pay to GE a minimum trademark license fee of $12.0 million by November 30, 2018 (the “Initial

Royalty Obligation”) for the rights assigned in the original contract.

The amendment provided that, if we did not pay to GE royalties

equal to the Initial Royalty Obligation over the term of the License Agreement, we would owe the difference to GE in December 2018.

are expanding our relationship with GE to collaborate on mutual capabilities, and in December 2020, we entered into the current amendment

to the License Agreement.

The amendments following the second amendment expanded our product range, including smart, and added additional

global territory rights.

The License Agreement has been extended for an additional five years and expires on November 30, 2023.

to the third amendment, entered into September 2018, the approximate remaining $10.0 million Initial Royalty Obligation that was due

on November 30, 2018 was waived, and we agreed to pay GE an aggregate amount of $6.0 million, consisting of three annual installments

of $2.0 million to be paid to GE in each of December 2018, 2019 and 2020.

In December 2020, we entered into the current amendment, which

restructured the royalty payment obligations due of approximately $4.4 million, plus $0.7 million in interest.

We agreed to pay a total

of $5.1 million to GE in quarterly installments through December 2023, including $100,000 due December 2020, an aggregate of $500,000

due in four equal installments in 2021, an aggregate of $1.2 million due in four equal installments in 2022 and an aggregate of $3.3

million due in four equal installments in 2023 (the “Minimum Payments”).

In the event the Company receives significant funding

rounds of at least $50.0 million in funding, it is required to use a portion of such funding to pay certain amounts to GE.

Payments will be in addition to the royalty payments made to GE during the respective year, as set forth below.

payments are due quarterly, using a December 1 –

November 30 contract year and based upon the prior quarter’s sales.

payments will be paid from sales of GE branded product subject to the following repayment schedule:

Net Sales in Contract Year

Percentage of Contract Year Net Sales owed to GE

$0 to $50,000,000

$50,000,001 to $100,000,000

$100,000,000+

of December 31, 2017, and December 31, 2016 the outstanding balance was $10,760.566 and $11,302,423, respectively.

Company made principal payments of $500,000 plus royalty payments of $5,727 for the year ended December 31, 2021.

The Company made principal

payments of $100,000 plus royalty payments of $12,493 for the year ended December 31, 2020As of December 31, 2021 and 2020, the outstanding

balance of the aggregate Minimum Payment was $3,838,000 and $4,338,000, respectively.

future payment obligations are approximately as follows:

Minimum Obligation

Total principal payments

7 ACCRUED EXPENSES

expenses consisted of the following:

Accrued interest, convertible notes

Accrued wages

8 INCOME TAXES

taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due.

Deferred taxes relate to differences between the basis of assets and liabilities for financial and income tax reporting which

will be either taxable or deductible when the assets or liabilities are recovered or settled.

December 31, 2017, the Company has a net operating loss carryforward of approximately $22,281,117 available to offset future taxable

taxes relate to differences between the basis of assets and liabilities for financial and income tax reporting which will be either taxable

or deductible when the assets or liabilities are recovered or settled.

December 31, 2021, the Company had a net operating loss carryforward of approximately $65,468,815 available to offset future taxable

income indefinitely.

Utilization of future net operating losses may be limited due to potential ownership changes under Section

382 of the Internal Revenue Code.

assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or

all of the deferred income tax assets will not be realized.

The ultimate realization of deferred income tax assets is dependent

upon the generation of future taxable income during the periods in which those temporary differences become deductible.

considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies

in making this assessment.

Based on consideration of these items, management has determined that enough uncertainty exists relative

to the realization of the deferred income tax asset balances to warrant the application of a full valuation allowance as of December

31, 2017, and 2016.

Utilization of future net operating losses may be limited due to potential ownership changes under Section 382 of

the Internal Revenue Code.

December 31, 2020, the Company had a net operating loss carryforward of approximately $59,833,233 available to offset future taxable

income indefinitely.

Utilization of future net operating losses may be limited due to potential ownership changes under Section 382 of

the Internal Revenue Code.

assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of

the deferred income tax assets will not be realized.

The ultimate realization of deferred income tax assets is dependent upon the generation

of future taxable income during the periods in which those temporary differences become deductible.

Management considers the scheduled

reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.

Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred

income tax asset balances to warrant the application of a full valuation allowance as of December 31, 2021 and 2020.

effects of temporary differences that gave rise to significant portions of deferred tax assets at December 31, 2021 and December 31,

31, 2016 are approximately as follows:

operating loss carryforward

Gross Deferred

Valuation Allowance

Deferred Tax Assets –

was no income tax expense for the years ended December 31, 2017 and 2016 due to the Company’s net losses

Company’s tax expense differs from the “expected”

tax expense for the years ended December 31, 2017 and December

31, 2016 (computed by applying the Federal Corporate tax rate of 35% to loss before taxes and 5.5% for Florida State Corporate

Taxes, are approximately as follows:

"expected"

tax expense (benefit) –

Computed "expected"

tax expense (benefit) - State

Change in Fair Value

of Embedded Derivative

Loss/(Gain) on Debt

Extinguishment

in valuation allowance

14 Stockholders Deficit

years ended December 31, 2017 and years ended December 31, 2016, the Company issued the following common stock:

Equity Transactions

Common Stock issued Board

of Directors Compensation

Common stock issued per Agreement and Waiver

and Agreement to Convert

Common Stock Offering

Common Stock Award

Common Stock Issued for Services

Common Stock Issued for Conversion of Debt

2016 Equity Transactions

2020 were approximately as follows:

Net operating loss carryforward

Gross Deferred Tax Assets

Less Valuation Allowance

(16,667,051 )

(15,232,344 )

Total Deferred Tax Assets –

Company’s tax expense differs from the statutory tax expense for the years ended December 31, 2021 and December 31, 2020 and the

reconciliation is as follows.

Computed statutory tax benefit –

$ (1,171,879 )

$ (1,880,444 )

Computed statutory tax benefit –

Change in valuation allowance

9 RELATED PARTY TRANSACTIONS

Notes Due to Related Parties

Notes due to Related Parties represent amounts provided to the Company from two directors and the Chief Executive Officer of the Company,

as well as a greater than 5% investor.

See Note 5 “e) Convertible Notes”

for additional information regarding the convertible

As of December 31, 2021 and 2020, the outstanding balance on the Convertible Promissory Notes, associated with Related Party transactions

was $1,250,000 and $1,250,000, respectively;

plus accrued interest of $90,002 and $13,621, respectively.

Securities Corporation

October 2018, the Company entered into an investment banking agreement with Newbridge Securities Corporation, pursuant to which Newbridge

Securities Corporation agreed to provide business development, consulting and advisory services, including capital raising and placement

agency services, to the Company.

This agreement is renewed periodically and remained in effect as of December 31, 2021;

agreement was terminated in January 2022.

Sokolow, a member of the Company’s board of directors, is the Chief Executive

Officer and President of Newbridge Financial, Inc.

and Chairman of Newbridge Securities Corporation, its broker dealer subsidiary.

connection with entering into the agreement, the Company paid Newbridge Securities Corporation a $25,000 fee and agreed to issue shares

of common stock equal to $50,000, which were paid as of December 31, 2020.

to the agreement, the Company agreed to pay placement agent fees equal to 8.0% of the gross purchase price upon closing of sales of the

Company’s equity securities and 4.0% upon closing of any line of credit, secured or unsecured term loan or other non-convertible

debt facility arranged by Newbridge Securities Corporation for the Company.

Upon the closing of any such equity or debt transaction,

the Company agreed to issue to Newbridge Securities Corporation, or its permitted assigns, warrants to purchase:

(i) in an equity transaction,

10% of the sum of (A) the number of shares of common stock issued by the Company and (B) the number of shares of common stock issuable

by the Company upon the exercise or conversion of convertible securities issued;

and (ii) in a debt transaction, 10% of the facility

amount, divided by a per share price equal to the last equity, warrants or options issued by the Company at the time of closing.

agreement further provides, among other things, that such warrants will contain provisions providing for cashless exercise, price protection

and piggyback registration rights and will not be callable or redeemable by the Company.

agreement also provides for sales commission with respect to certain agreements, including territorial licenses, marketing agreements

and commercial contracts.

If the transaction is with an organization located, identified or introduced by Newbridge Securities Corporation,

the Company is required to pay Newbridge Securities Corporation a $75,000 fee at closing, plus 1% of the net revenues received by the

Company, payable quarterly during the contract’s term.

If the Company requested Newbridge Securities Corporation assist with closing

the transaction, the Company is required to pay Newbridge Securities Corporation a $50,000 fee at closing, plus 0.25% of the net revenues

received by the Company, payable quarterly for the lesser of five years or the contract’s term.

to the agreement, as of December 31, 2021, the Company has paid Newbridge Securities Corporation an aggregate of $609,472 in placement

agent fees (not including expenses).

In March 2021, effective as of December 31, 2020, the Company issued 10,000 shares to Newbridge

Securities Corporation and its affiliates pursuant to the agreement, of which Newbridge Securities Corporation received 3,600 shares

Sokolow received 4,500 shares.

In addition, on December 31, 2020, the Company issued three-year warrants to purchase an aggregate

of up to 14,375 shares of common stock at an exercise price of $12.00 per share (subject to adjustment, including in the event of certain

subsequent equity sales by the Company) (the “Newbridge Warrants”), including warrants to purchase up 5,674 shares and 4,469

shares issued to Newbridge Securities Corporation and Mr.

Sokolow, respectively.

The Newbridge Warrants may be exercised, in whole or

in part, at any time on or prior to December 31, 2023.

Among other terms, the Newbridge Warrants provide for cashless exercise of the

Newbridge Warrants if, after December 31, 2021, there is no effective registration statement registering the shares of common stock issuable

upon exercise of the Newbridge Warrants.

In addition, the Newbridge Warrants contain certain piggyback registration rights, such that,

if the Company registers any of its securities either for its own account or for the account of other security holders, the holders of

the Newbridge Warrants are entitled to include their shares in the registration.

Subject to certain exceptions, if the offering is being

underwritten, the Company and the underwriters may limit the number of shares included in the underwritten offering if the underwriters

believe that including such shares would adversely affect the offering.

Company entered into an investment banking engagement agreement with Newbridge Securities Corporation in May 2021, pursuant to which

Newbridge Securities Corporation agreed to provide certain corporate advisory services.

The agreement had a 12 month term, during which

the Company agreed to pay Newbridge Securities Corporation’s pre-approved expenses.

The Company agreed to pay a $500,000 corporate

advisory fee, in the form of restricted common stock, upon successful listing of the Company’s common stock on a U.S.

securities exchange.

The number of shares issued was to be determined based on the initial offering price in the offering, and such shares

would have been subject to a six-month lock-up provision.

The Company would have been required to pay such fee if it successfully listed

on an exchange during the term of the agreement or within nine months following expiration of the term.

Company entered into a separate investment banking engagement agreement in May 2021 with Newbridge Securities Corporation relating to

merger and acquisition services.

The agreement has a 12 month term, which will be automatically extended on a month-to-month basis if

negotiations or discussions are ongoing at the end of the term.

The Company will pay Newbridge Securities Corporation’s pre-approved

reasonable expenses during the term.

Upon closing of a merger or acquisition transaction facilitated by Newbridge Securities Corporation,

the Company will pay, in equity, a transaction fee equal to 2.0% of the aggregate consideration (as defined in the agreement) of such

The equity received will be subject to a six-month leak-out provision.

The Company will be required to pay the transaction

fee after expiration of the agreement or if the Company terminates the agreement without cause (as defined in the agreement), if the

Company (i) completes a merger or acquisition transaction with a party identified by Newbridge Securities Corporation within 12 months

of such termination or (ii) enters into an agreement contemplating a merger or acquisition with a party identified by Newbridge Securities

Corporation during the term of the agreement or the following 12 months, which agreement is ultimately consummated.

Line Ventures

Company and Bridge Line Ventures, LLC Series ST-1 (“Bridge Line Ventures”), the manager of which is Bridge Line Advisors,

LLC, of which Leonard J.

Sokolow, a member of the Company’s board of directors, is Chief Executive Officer and President, entered

into the following stock purchase agreements during 2021(collectively, the “Bridge Line SPAs”):

Purchase Agreement, dated February 26, 2021, as amended March 30, 2021, June 30, 2021 and August 31, 2021, pursuant to which Bridge

Line Ventures purchased 25,373 shares of common stock at a purchase price per share of $12.00.

Purchase Agreement, dated March 30, 2021, as amended April 30, 2021, June 30, 2021 and August 31, 2021, pursuant to which Bridge

Line Ventures purchased 37,500 shares of common stock at a purchase price per share of $12.00.

Purchase Agreement, dated April 30, 2021, as amended June 30, 2021 and August 31, 2021, pursuant to which Bridge Line Ventures purchased

2,084 shares of common stock at a purchase price per share of $12.00.

Purchase Agreement, dated June 30, 2021, as amended August 31, 2021, pursuant to which Bridge Line Ventures purchased 150,000 shares

of common stock at a purchase price per share of $12.00.

Purchase Agreement, dated August 31, 2021, pursuant to which Bridge Line Ventures purchased 16,667 shares of common stock at a purchase

price per share of $12.00.

proceeds from Bridge Line Ventures amounted to $2,779,464 during 2021.

of the Bridge Line SPAs contains substantially the same terms.

Among other things, the Bridge Line SPAs contain anti-dilutive price protection

measures, which apply for 24 months following the date of closing of the Bridge Line SPAs, subject to certain exceptions, and provide

for certain piggyback registration rights, such that, subject to certain exceptions, including if the registration statement is for an

initial public offering, if the Company registers any of its securities either for its own account or for the account of other security

holders, Bridge Line Ventures is entitled to include its shares in the registration.

Subject to certain exceptions, if the offering is

being underwritten, the Company and the underwriters may limit the number of shares included in the underwritten offering if the underwriters

believe that including such shares would adversely affect the offering.

In addition, the Company may require Bridge Line Ventures agree

to a six month lock-up of its shares following the effective date of the applicable registration statement.

Bridge Line SPAs also contain a standstill provision pursuant to which Bridge Line Ventures agreed to certain restrictions related to

the Company for three years following the effective date of each of the Bridge Line SPAs, including, among other things, prohibitions

on, either alone or together with any other person, acquiring additional shares of the Company’s common stock or any of its assets,

soliciting proxies or seeking representation on our board of directors, unless the Company agrees to such actions in writing.

addition, on each of June 30, 2021 and August 31, 2021, pursuant to the Bridge Line SPAs, Bridge Line Ventures received a three-year

warrant to purchase up to 214,957 and 16,667 shares of the Company’s common stock, respectively, at an exercise price of $12.00

per share (subject to adjustment, including in the event of certain subsequent equity sales by the Company) (the “Bridge Line Ventures

Warrants”).

The Bridge Line Ventures Warrants may be exercised, in whole or in part, at any time on or prior to June 30, 2024 or

August 31, 2024, respectively.

Among other terms, the Bridge Line Ventures Warrants provide for cashless exercise of the Bridge Line

Ventures Warrants if, after June 30, 2022 or August 31, 2022, respectively, there is no effective registration statement registering

the shares of common stock issuable upon exercise of the Bridge Line Ventures Warrants.

In addition, the Bridge Line Ventures Warrants

contain certain piggyback registration rights, which are substantially the same as those provided in by the Bridge Line SPAs.

Options and Warrants

June 2020, the Company issued a three-year volume warrant to purchase up to 1,125,000 shares of common stock to Strul Associates Limited

Partnership, pursuant to a May 2016 private placement.

The exercise price was $3.00 if exercised prior to June 1, 2021, $3.25 if exercised

on or after June 1, 2021 and prior to June 1, 2022 and $3.50 if exercised on or after June 1, 2022 through June 1, 2023 (in each case,

subject to adjustment, including in the event of certain subsequent equity sales by the Company).

The warrant was exercisable in whole

or in part at any time prior to or on June 1, 2023.

In December 2020, Strul Associates Limited Partnership exercised the warrant in full

and acquired an aggregate of 1,012,500 shares of common stock, including 675,000 shares of common stock for an aggregate purchase price

of $2,025,000 and a net total of 337,500 shares of common stock pursuant to a cashless exercise of the remainder of the warrant.

December 2021, Mr.

Sokolow exercised an option to purchase 75,000 shares, dated January 1, 2017, with an exercise price of $2.60 per

share, and Mr.

Shiff exercised an option to purchase 25,000 shares, dated January 1, 2017, with an exercise price of $2.60 per share .

10 STOCKHOLDERS’

the years ended December 31, 2021 and 2020, the Company issued the following common stock:

Transaction Type

Qty Shares Issued

Qty Shares to be Issued

Valuation $ (Issued)

(To be Issued)

Range of Value Per Share

2020 Equity Transactions

Common Stock Offering

Common stock issued per PPM

Common stock issued per exercise of warrants

Common Stock Issued per Exercise of Options

Common Stock Issued

for the cashless exercise of warrants

Common stock issued pursuant to director compensation policy

Common stock issued pursuant to chairman agreement

Common stock issued per employee agreement

Common stock issued per consulting agreement

Common stock issued to joint venture partner

Common stock issued per placement agreement, Newbridge

Common stock issued per placement agreement, contractors

Total 2020 Equity Transactions

$ 2.00 –

Transaction Type

Qty Shares Issued

Qty Shares to be Issued

Valuation $ (Issued)

Valuation $ (To be Issued)

Range of Value Per Share

2021 Equity Transactions

following is a more detailed description of the Company’s stock issuance from the table above:

Shares Issued to Board of Directors

The Company appointed

a new director in November 2015.

Pursuant to the Company’s Director Compensation Policy (the “Director Compensation

Policy ”), the Company issued the director

50,000 shares of the its common stock valued at $0.60 per share in connection with the director’s appointment.

award was granted on November 15, 2015, but the shares were not issued by the Company until February 2016.

In January 2016, this

director agreed to serve as the Company’s Audit Committee Chair, and the Company issued the director 12,000 shares of the

its common stock valued at $1.00 per share as compensation for the additional responsibilities, pursuant to the Director Compensation

Shares Issued in Connection with the Notes or Agreements to Convert

In connection

with the Agreement and Waiver and Agreement to Convert, as of the twelve-months ended December 31, 2016, the Company issued an

additional 2,343,191 shares of its common stock as payment for Additional Interest, Interest Due, Filing Default Damages and Effectiveness

Default Damages , representing payment to Investors

of $1,210,798.

Of this amount, $625,000 represents prior year stock awards/grants that were not issued until 2016.

Shares Issued in Connection with Offering

February 19, 2016, the Company completed a second closing of its offering of shares of its common stock, which first closed on

December 24, 2015, representing aggregate gross proceeds to the Company of $300,000, and thereafter issued 300,000 shares of its

common stock.

April 2016, the Company completed an offering of 2,000,000 shares of its common stock at an offering price of $2.50 per share,

and 1,666,667 in warrants having a conversion price of $3.00 per share.

May 2016, the Company completed an offering of 675,000 shares of its common stock at an offering price of $2.60 per share, and

1,350,000 of warrants having conversion price between $3.00 and $3.50 over the next three anniversary dates.

July 2016, the Company completed an offering of 30,000 shares of its common stock at an offering price of $2.60 per share, and

an additional 150,000 shares of its common stock at $2.70 per share in two separate offerings.

Shares Issued Pursuant to Stock Awards.

September 2016, the Company issued 25,000 shares of its common stock in stock awards granted on November 15, 2015, at $0.60 per

Shares Issued for Services

September 2016, the Company issued 300,000 shares of its common stock representing $136,250 in services received in 2015.

share conversions were in a range of valuations between $0.25 and $1.00 per share, based on the dates of the agreements and when

the services were rendered.

Shares Issued in Conjunction with Retirement

accordance with the Notes, the Company issued 443,156 shares of its common stock for the retirement of debt during the year-ended

December 31, 2016.

Shares Issued for Common Stock

the nine-months ended September 30, 2017, the Company received gross proceeds of $209,000 from the issuance of 69,667 shares of

its common stock to three individuals at $3.00 per share.

In connection therewith, the Company issued five-year options to purchase

up to 315,000 shares of its common stock at an exercise price of $3.00 per share.

Shares Issued Pursuant to Warrants Exercised

March 2017, the Company issued 1,666,667 shares of its common stock upon exercise in full of a warrant having an exercise price

of $3.00 per share, and the Company received gross proceeds of $5,000,000.

Shares Issued Pursuant to Options Exercised

April 2017, the Company issued 30,000 shares of its common stock upon exercise in full of an option having an exercise price of

$2.60 per share, and the Company received gross proceeds of $78,000.

Common Stock Issued for the cashless Exercise

November 2017, the Company issued 4,132,068 shares of its common stock upon exercise of warrants, and it was cashless exercise.

Common stock issued per PPM

Common stock issued per PPM, Bridge Line Ventures

Common stock issued, exercise of options

Common stock issued, exercise of warrants

Common stock issued, pursuant to services provided

Common stock issued pursuant to director compensation policy

Conversion of preferred stock

Common stock issued for the cashless exercise of options

Stock issued to joint venture partner, interest expense

Total 2021 Equity Transactions

$ 0.01 –

Preferred Stock

following is a summary of the Company’s Preferred Stock activity:

Preferred Stock Transactions

Stock Issued per August 2016 Election

2016 Preferred Stock Transactions

Preferred Stock Transactions

Stock Issued per August 2016 Election

2017 Preferred Stock Transactions

accordance with the August 2016 Elections (see Note 8(B)), the Company has issued 13,456,932 shares of 6% Preferred Stock in exchange

for Notes having a principal balance of $3,364,234.

Transaction Type

Value per Share

Preferred Stock Balance at December 31, 2020

2021 Preferred Stock redemptions

Preferred Stock Balance at December 31, 2021

accordance with the August 2016 Elections, the Company has issued 13,456,936 shares of 6% Preferred Stock in exchange for Notes having

a principal balance of $3,364,233.

The Preferred Stock will be convertible upon the election of the holder thereof.

Shares of the Preferred Stock may be repurchased by the Company upon 30 days’

prior written notice, in whole or in part,

for USD $3.50 per share, provided that during such notice period the holder will continue to have the option and right to convert

its shares of Preferred Stock into shares of the Company’s common stock.

Holders also have a put option, allowing them to

sell their shares of Preferred Stock back to the Company at USD $0.25 per share, the Note conversion price, and therefore the

stock is classified as Mezzanine equity rather than permanent equity.

The stock was valued based upon the value of shares of the

Company’s common stock publicly traded nearest the conversion date.

During the year ended December 31, 2017 the Company

paid dividends in the amount of $149,737 to the Preferred Stock shareholders.

Shares of the Preferred

Stock may be repurchased by the Company upon 30 days’

prior written notice, in whole or in part, for USD $3.50 per share, provided

that during such notice period the holder will continue to have the option and right to convert its shares of Preferred Stock into shares

of Common Stock.

Holders also have a put option, allowing them to sell their shares of Preferred Stock back to the Company at $0.25 per

share, the Note conversion price, and therefore the stock is classified as Mezzanine equity rather than permanent equity.

For the years

ended December 31, 2021 and 2020, the Company paid dividends in the amount of $129,456 and $130,206, respectively, to the Preferred Stock

shareholders.

preferred stock subject to redemption:

1 unchanged sentence

20,000,000 shares authorized;

13,456,932 and 13,056,932 shares issued and

outstanding at December 31, 2017 and December 31, 2016, respectively

13,256,936 and 13,456,936 at December 31, 2021 and

2020, respectively.

Stock Options

following is a summary of the Company’s stock option activity:

Contractual Life

Balance, December 31, 2015

Forfeited/Cancelled

Weighted Average Exercise Price

Weighted Average Remaining Contractual Life (In Years)

Aggregate Intrinsic Value

Balance, January 1, 2020

Balance, December 31, 2020

Forfeited/Cancelled

Balance, December 31, 2021

The Company has issued options, some of which have vested,

to purchase shares of common stock through our Incentive Plan.

The Company has issued options to purchase, in the aggregate, up

to 4,875,000 shares of common stock options, in conjunction with our Incentive Plan, agreements or otherwise.

The Company has reserved

4,140,000 shares with the transfer agent for the future issuance for shares associated with common stock options issued.

735,000 shares have not been reserved and are included in the calculation of derivative liability (See Note 9).

During the year ended December 31, 2017, options to purchase

up to 2,710,000 shares of our common stock were issued in lieu of services to non-employees, in connection with our Incentive

These options are for ten years, have an average vesting period between zero and three years, and have strike prices

ranging between $0.60 and $4.00.

These options were issued in connection with grants that were made on November 15, 2015

and April 19, 2017.

For the year ended December 31, 2017, the Company recognized an option expense of $2,003,591 (See

Exercisable, December 31, 2021

Company has issued, or the Company’s Board of Directors has authorized grants of, options, some of which have vested, to purchase

shares of Common Stock through its 2015 Plan and/or 2018 Plan.

fair value of share options and similar instruments is estimated on the date of grant using a Black-Scholes.

The range of inputs used

by the Company are as follows:

2021, the Black-Scholes model calculations included stock price on the date of measurement ranging from $3.00 - $3.00, exercise price

with a range of $3.00 - $12.00, a term ranging from 1.3 years to 1.3 years, computed volatility with a range of 34% to 34%, and a discount

rate ranging from .09% to 2.49%.

2020, the Black-Scholes model calculations included stock price on the date of measurement ranging from $3.00 - $3.00, exercise price

with a range of $3.00 - $12.00, a term ranging from 1.3 years to 7.5 years, computed volatility with a range of 34% to 82%, and a discount

rate ranging from .09% to 2.49%.

Company recognized the following compensation expense related to the vesting of options during 2021 and 2020:

Compensation expense related to vesting options

Options expense pursuant to chairman agreement

Options expense pursuant to director compensation policy

Option expense pursuant to executive compensation agreement

Option expense pursuant to employee and consulting agreement

Warrants Issued

following is a summary of the Company’s stock option activity:

Average Exercise

Average Remaining Contractual Life (in Years)

following is a summary of the Company’s warrant activity:

Number of Warrants

Weighted Average Exercise Price

Balance, December 31, 2019

Cancelled/Forfeited

December 31, 2016

Cancelled/Forfeited

December 31, 2017

The Company identified conversion features

embedded within warrants attached to stock purchases in 2016.

The Company has determined that the features associated with the

embedded conversion option, in the form a ratchet provision, should be accounted for at fair value, as a derivative liability,

as the Company cannot determine if a sufficient number of shares would be available to settle all potential future conversion transactions.

See Footnote 8 for further details.

During 2017, the Company issued warrants to

twenty-four (24) different groups totaling 898,040.

These warrants had lives ranging from three to five years at strike prices

between $3.30 and $3.50 per share.

For the year ended December 31, 2017, the Company recognized warrant expense of $1,869,358 (See

In March 2017, 1,666,667 warrants were exercised

at $3.00 per share.

60,000 warrants were issued at price between $3.00 and $3.50 per share contingent on the date of exercise .

In October 2017, 4,367,100 warrants were cashless

In October 2017, 838,040 warrants were issued

at $3.30 per share contingent on the date of exercise.

2015 Stock Incentive Plan

April 27, 2015, the Board approved the Company’s 2015 Stock Incentive Plan (the “Incentive Plan”).

Incentive Plan, the Board has the sole authority to implement, interpret, and/or administer the Incentive Plan unless the Board

delegates all or any portion of its authority to implement, interpret, and/or administer the Incentive Plan to a committee of

the Board, or (ii) the authority to grant and administer awards under the Incentive Plan to an officer of the Company.

The Incentive

Plan relates to the issuance of up to 5,000,000 shares of the Company’s common stock, subject to adjustment, and shall be

effective for ten (10) years, unless earlier terminated.

Certain options to be granted to employees under the Incentive Plan are

intended to qualify as Incentive Stock Options (“ISOs”) pursuant to Section 422 of the Internal Revenue Code of 1986,

as amended, while other options granted under the Incentive Plan will be nonqualified options not intended to qualify as Incentive

Stock Options ISOs (“Nonqualified Options”), either or both as provided in the agreements evidencing the options described.

Incentive Plan further provides that awards granted under the Incentive Plan cannot be exercised until a majority of the Company’s

shareholders have approved the Incentive Plan.

The Incentive Plan which became effective July 31, 2016.

Balance, December 31, 2020

Balance, December 31, 2021

2015 Stock Plan

April 27, 2015, the Board approved the Company’s 2015 Stock Incentive Plan (the “2015 Plan”), and effective July 31,

2016, a majority of the Company’s shareholders approved the 2015 Plan.

Under the 2015 Plan, the Board has the sole authority to

implement, interpret, and/or administer the 2015 Plan unless the Board delegates all or any portion of its authority to implement, interpret,

and/or administer the 2015 Plan to a committee of the Board, or (ii) the authority to grant and administer awards under the 2015 Plan

to an officer of the Company.

The 2015 Plan relates to the issuance of up to 5,000,000 shares of Common Stock, subject to adjustment,

and shall be effective for ten (10) years, unless earlier terminated.

Certain options to be granted to employees under the 2015 Plan

are intended to qualify as Incentive Stock Options (“ISOs”) pursuant to Section 422 of the Internal Revenue Code of 1986,

as amended, while other options granted under the 2015 Plan will be nonqualified options not intended to qualify as Incentive Stock Options

ISOs (“Nonqualified Options”), either or both as provided in the agreements evidencing the options described.

The 2015 Plan

was replaced by the 2018 Plan (as defined below).

2018 Stock Plan

April 26, 2018, the Board approved the Company’s 2018 Stock Incentive Plan, which was amended and restated on each of August 30,

2019 and November 12, 2021 (the “2018 Plan”).

Under the 2018 Plan, the Board has the sole authority to implement, interpret,

and/or administer the 2018 Plan unless the Board delegates all or any portion of its authority to implement, interpret, and/or administer

the 2018 Plan to a committee of the Board, or (ii) the authority to grant and administer awards under the 2018 Plan to an officer of

The 2018 Plan relates to the issuance of up to 10,000,000 shares of Common Stock, subject to adjustment, and shall be effective

for ten (10) years, unless earlier terminated.

As of December 31, 2021, 4,172,818 shares of Common Stock were available for issuance

(not granted) under the 2018 Plan.

The November 2021 amendment and restatement increased the shares available for issuance under the

2018 Plan to 10,000,000.

11 COMMITMENTS

Operating Lease

September 20, 2017, the Company entered into an operating lease for its Georgia location.

The new lease commenced on July 1, 2017

and expires on September 30, 2020.

We recognize rent expense under such arrangements on a straight-line basis.

September 27, 2017 the Company entered into two separate residential leases near the Florida office for two of its employees.

The term for each lease is 12 months and, each lease carries a rent of $2,000 per month.

The collective rent payment are $4,000

per months and will reduce travel costs for the Company.

minimum rent obligations are approximately as follows:

Employment Agreement –

Chief Executive

2014, the Company entered into an employment agreement with John Campi, its Chief Executive Officer.

In addition to salary, the

agreement provided for the issuance of 750,000 restricted shares of the Company’s common stock to him, which vested and were

issued as follows:

250,000 shares after the first 6 months of employment and 500,000 additional shares at December 31, 2015.

terms of the agreement the executive would receive additional compensation in the form of stock options to purchase shares of Company

stock equal to 0.5% of quarterly net

The strike price of the options will be established at the time of the grant.

The options will vest in twelve months and

expire after sixty months.

In addition to the stock options compensation, the executive will receive cash compensation equal to

0.5% of annual sales up to $20 million and 0.25% for annual sales $20 million and 3% of annual net income.

The 750,000 shares were

issued in 2016 and valued at $0.625 per share.

1, 2016, the Company entered into a new employment agreement with its Chief Executive Officer (the “Campi Agreement”).

The Campi Agreement provides for a base salary of $150,000; 120,000 shares of The Company’s common stock in a “Sign

on Bonus”

which will vest December 31, 2017; 0.25% of annual net sales, paid in cash on an quarterly basis, and 3% of

annual adjusted gross income in cash compensation and 0.50% of quarterly net income in options, the strike price to be determined

at the time of grant.

Such options will expire 5 years after issuance.

to the Campi Agreement, if terminated without cause during the initial term, the Company shall pay to Mr.

Campi (i) an amount calculated

by multiplying the monthly salary, at the time of such termination, times the number of months remaining in the initial term, and

(ii) all unpaid incentive compensation then in effect on a pro rata basis.

In addition, the sign-on shares of Common Stock

shall immediately vest.

For any other termination during the initial term, Mr.

Campi shall receive an amount calculated by multiplying

fifty percent of the monthly salary, in effect at the time of such termination, times the number of months remaining in the initial,

and shall not be entitled to incentive compensation payments then in effect, prorated or otherwise.

years ended December 31, 2017 and December 31, 2016 Mr.

Campi earned approximately $171,966 and $137,853, respectively, under the

Campi Agreement associated with performance pay, as noted above.

Chairman Agreement

November 25, 2013, we entered into a Consulting Agreement with our founder and the Chairman or our Board, Rani Kohen (the “Kohen

Consulting Agreement”).

The term of the Consulting Agreement was for three (3) years, beginning on December 1, 2013.

to the customary terms and conditions of such agreements, the Consulting Agreement provided that Mr.

Kohen would receive an annual

consulting fee of $150,000, incentive compensation in the form cash, stock and/or options (i) equal to one-half a one percent

(0.50%) of annual net revenue, paid in cash on a quarterly basis.;

and (ii) to be determined by our Board on a project-by-project

September 1, 2016, the Company entered into a Chairman Agreement with Mr.

Kohen (the “Chairman’s Agreement”),

to serve as the Company’s Executive Chairman

and Chairman of the Board, which supersedes and replaced the Consulting Agreement.

Chairman’s Agreement provides that Mr.

Kohen will serve for an initial term of three years, which may be renewed by the

mutual agreement of Mr.

Kohen and the Company.

Subject to other customary terms and conditions of such agreements, the Chairman’s

Agreement provides that Mr.

Kohen will receive (i) a base salary of $250,000 per year, which may be adjusted each year at the

September 2020, the Company entered into a 12-month real property lease for office space at $2,175 per month.

The Company expenses such

payment as rent expense in the period incurred.

In September 2021, the Company renewed its lease for another twelve months at $2,240

future rent obligations are approximately as follows:

Minimum Obligation

Executive Employment Agreements

Campi (Chief Executive Officer)

September 1, 2019, the Company entered into an Executive Employment Agreement with John Campi, its Chief Executive Officer and then-Chief

Financial Officer (the “Campi Agreement”), which superseded Mr.

Campi’s previous employment agreement effective September

The Campi Agreement provided for an initial term of one year, which expired August 31, 2020.

The term may be, and has been,

renewed by the mutual agreement of Mr.

Campi and the Company.

Subject to other customary terms and conditions of such agreements, the

Campi Agreement provides that Mr.

Campi will receive:

(i) a base salary of $150,000 per year, which may be adjusted each year at the

discretion of the board;

(ii) stock compensation equal to 340,000 shares of Common Stock per year, which shall vest on January

1 of the following year (the “Chairman Compensation Shares”);

(iii) a sign-on bonus of 120,000 shares of Common Stock,

with shall vest in its entirety on January 1, 2020;

(iv) supplemental bonus compensation of stock options to purchase up to 4,000,000

shares of Common Stock at an exercise price ranging between $3.00 and $5.00 per share, determined based on the achievement of

specified market capitalizations of the Company;

and (v) incentive compensation equal to one half of one percent (0.50%) of the

Company’s gross revenue paid in cash, stock or options on an annual basis.

to the Chairman’s Agreement, if terminated without cause during the initial term, the Company shall pay to Mr.

an amount calculated by multiplying the monthly salary, at the time of such termination, times the number of months remaining

in the initial term, and (ii) all unpaid incentive compensation then in effect.

In addition, the sign-on shares of Common Stock

shall immediately vest, and the Chairman Compensation Shares shall vest on a pro rata basis based on the number of days served

under the Chairman’s Agreement and the number of days from the beginning of the initial term through August 31, 2019.

any other termination during the initial term, Mr.

Kohen shall receive payment, at the then current rate, through the date termination

is effective.

years ended December 31, 2017 and December 31, 2016 Mr.

Kohen earned approximately $315,989 and $220,257, respectively, under this

and the agreement associated with performance pay as noted above.

Employee Agreement - President

August 17, 2016, the Company entered into an Executive Employment Agreement with Mr.

Wells (the “Wells Agreement”),

to serve as the Company’s President.

The Wells Agreement provides that Mr.

Wells will serve for an initial term of three

years, which may be renewed by the mutual agreement of Mr.

Wells and the Company.

Subject to other customary terms and conditions

of such agreements, the Wells Agreement provides that Mr.

Wells will receive (i) a base salary of $250,000 per year, which may

be adjusted each year at the discretion of the Board;

(ii) 1,025,000 shares of Common Stock, which shall vest on January 1, 2019

(the “Wells Compensation Shares”);

(iii) a sign-on bonus of 120,000 shares of Common Stock, with shall vest in its

entirety to Mr.

Wells on January 1, 2018;

and (iv) incentive compensation equal to one quarter of one percent (0.25%) of the Company’s

net revenue, paid in cash on an quarterly basis.

to the Wells Agreement, if terminated without cause during the initial term, the Company shall pay to Mr.

Wells (i) an amount

calculated by multiplying the monthly salary, at the time of such termination, times the number of months remaining in the Initial

Term, and (ii) all unpaid incentive compensation then in effect.

In addition, the sign-on bonus shares of Common Stock shall immediately

vest, and the Wells Compensation Shares shall vest on a pro rata basis based on the number of days served under the Wells

Agreement and the number of days in the vesting period.

For any other termination during the initial term, Mr.

Wells shall receive

payment of salary, at the then current rate, and all due but unpaid incentive compensation through the date termination is effective.

years ended December 31, 2017 and December 31, 2016 Mr.

Wells earned approximately $275,559 and $80,763, respectively, under this

and the agreement associated with performance pay as noted above.

Employment Agreement –

Chief Operating

Barron entered into a three-year Executive Employment Agreement, effective as of September 1, 2016 (the “Barron Agreement”).

Under the terms of the Barron Agreement, Ms.

Barron will receive (i) an annual salary of $120,000, and (ii) incentive compensation

equal to one-quarter of one percent (0.25%) of net revenue, paid

in cash on a quarterly basis.

In addition, The Board granted Ms.

Barron (a) options to purchase up to 200,000 shares of

Common Stock at $0.60 per share, which vested on November 15, 2015;

(b) options to purchase up to 150,000 shares of Common Stock

at $1.20, which vested on November 15, 2016;

and (c) options to purchase up to 150,000 shares of Common Stock at $1.80, which

will vest on November 15, 2017.

the years ended December 31, 2017 and December 31, 2016 Ms.

Barron’s earned approximately $142,927 and $141,018, respectively,

under this and the agreement associated with performance pay as noted above.

Note 15 Subsequent Events

On January 31, 2018, the Company entered into

an agreement to extend the Line of Credit through January 10, 2019.

On March 23, 2018, the Company issued 120,000

shares of Common Stock to Mr.

Campi, which vested on December 31, 2017, pursuant to the Campi Agreement

On March 23, 2018, the Company issued 120,000

shares of Common Stock to Mr.

Wells, which vested on January 1, 2018, pursuant to the Wells Agreement.

(ii) a sign-on bonus of a stock option to purchase 120,000 shares of common stock at an exercise price of $6.00

per share, which vested in its entirety on December 31, 2020;

(iii) incentive compensation consisting of (a) a cash component, paid on

an annual basis, equal to (x) 0.25% of the Company’s annual gross revenue and (y) 3.0% of the Company’s annual net income,

and (b) a stock option component, consisting of five-year options to purchase shares of common stock in an amount equal to 0.5% of the

Company’s quarterly net income, the exercise price of which will be determined at the time such options are granted.

Campi is also entitled to receive expense reimbursement for reasonable expenses, including travel and entertainment, incurred in the

performance of his duties.

to the Campi Agreement, Mr.

Campi may be terminated for “cause,”

which is defined as an act of fraud, embezzlement, theft

or neglect of or refusal to substantially perform the duties of his employment that is materially injurious to the financial condition

or business reputation of the Company;

a material violation of the Campi Agreement by Mr.

Campi that is not cured within 30 days of written

Campi’s death, disability or incapacity.

Following the expiration of the initial term, the Campi Agreement may

be terminated by the board of directors at its discretion, in which case Mr.

Campi will receive a payment equal to 50% of his then-applicable

annual base salary.

In addition, Mr.

Campi may terminate the Campi Agreement at his discretion by providing at least 30 days’

written notice to the Company.

the event the Company is acquired, is the non-surviving entity in a merger or sells all or substantially all of its assets, the Campi

Agreement will survive, and the Company will use its best efforts to ensure that the transferee or surviving company is bound by the

provisions of the Campi Agreement.

All shares granted will vest immediately.

Kohen (Executive Chairman)

September 1, 2019, the Company entered into an Executive Chairman Agreement with Rani R.

Kohen (as amended, the “Chairman Agreement”)

to serve as the Company’s Executive Chairman and

Chairman of the board of directors, which superseded Mr.

Kohen’s previous chairman agreement

effective September 1, 2016 .

The Chairman Agreement provides that Mr.

Kohen will serve for an initial term of three years and

that the Chairman Agreement will automatically renew unless Mr.

Kohen or the board of directors decide otherwise.

to other customary terms and conditions of such agreements, the Chairman Agreement provides that Mr.

Kohen will receive:

(i) a base salary

of $250,000 per year, which will be increased by the Company in the event the Company has a significant cash raise;

(ii) annual equity

compensation consisting of an option to purchase 340,000 shares of common stock at an exercise price of $6.00 per share, which will vest

one year following the date of grant (subject to certain exceptions) and will have a five-year term;

(iii) a sign-on bonus stock option

to purchase 120,000 shares of common stock at an exercise price of $6.00 per share, which vested in its entirety on January 1, 2020 and

has a five-year term;

(iv) supplemental bonus compensation of stock options to purchase up to 6,000,000 shares of common stock at an

exercise price ranging between $6.00 and $8.00 per share, determined based on the achievement of specified market capitalizations of

the Company, as described further below, which will have a five-year term;

(v) supplemental bonus compensation of stock options to purchase

up to 4,000,000 shares of common stock at an exercise price ranging between $3.00 and $5.00 per share, determined based on the achievement

of specified market capitalizations of the Company, as provided by the previous chairman agreement and described further below;

incentive compensation equal to 0.5% of the Company’s gross revenue, which will be paid in cash, stock and/or options on an annual

Kohen is eligible for the following supplemental bonus compensation under the Chairman Agreement:

(i) options to purchase 500,000 shares

of common stock at an exercise price of $6.00 per share, upon the Company achieving each of the following market capitalizations:

million, $1.0 billion, $1.5 billion and $2.0 billion;

(ii) options to purchase 500,000 shares of common stock at an exercise price of

$7.00 per share, upon the Company achieving each of the following market capitalizations:

$3.0 billion, $4.0 billion, $5.0 billion and

$6.0 billion;

and (iii) options to purchase 500,000 shares of common stock at an exercise price of $8.00 per share, upon the Company

achieving each of the following market capitalizations:

$7.0 billion, $8.0 billion, $9.0 billion and $10.0 billion.

Kohen additionally

remains eligible to receive the following supplemental bonus compensation, pursuant to the prior chairman agreement:

(i) options to purchase

500,000 shares of common stock at $3.00 per share, upon the Company achieving each of the following market capitalizations:

$300.0 million,

$500.0 million and $750.0 million;

(ii) options to purchase 500,000 shares of common stock at $4.00 per share, upon the Company achieving

each of the following market capitalizations:

$1.0 billion, $1.5 billion and $2.0 billion;

and (iii) options to purchase 500,000 shares

of common stock at $5.00 per share, upon the Company achieving each of the following market capitalizations:

$2.5 billion and $3.0 billion.

As of December 31, 2021, the following options have vested:

(i) options to purchase 1.5 million shares at an exercise price of $3.00

per share, (ii) options to purchase 500,000 shares at an exercise price of $4.00 per share;

and (iii) options to purchase 1.0 million

shares at an exercise price of $6.00 per share.

Kohen is also entitled to receive a car allowance of $1,000 per month, reimbursement for cell phone costs and expense reimbursement for

reasonable expenses, including travel and entertainment, incurred in the performance of his duties.

In addition, in the event Mr.

invents additional new products and applications for the Company, including products based on the Company’s existing intellectual

property, Mr.

Kohen will be entitled to receive additional compensation, which will be determined by the board of directors.

to the Chairman Agreement, Mr.

Kohen may be terminated for “cause,”

which is defined as an act of fraud, embezzlement or

a material violation of the Chairman Agreement by Mr.

Kohen that is not cured within 60 days of written notice;

Kohen’s

death, disability or incapacity.

During the initial term of the Chairman Agreement, if Mr.

Kohen is terminated without cause, (i) the

Company will pay Mr.

Kohen an amount calculated by multiplying Mr.

Kohen’s monthly salary at the time of such termination by the

number of months remaining in the initial term;

Kohen’s annual equity compensation will vest on a pro rata basis;

Kohen will receive full payment of all unpaid incentive compensation.

Following the expiration of the initial term, the Chairman

Agreement may be terminated by the board of directors at its discretion, in which case Mr.

Kohen will receive full payment for all incentives

and will be entitled to compensation for his invented products.

Kohen may terminate the Chairman Agreement at his discretion by providing

at least 90 days’

prior written notice to the Company.

In the event Mr.

Kohen’s employment is terminated by reason of his

death, the Company will pay Mr.

Kohen’s beneficiaries 12 months of Mr.

Kohen’s base salary or Mr.

Kohen’s base salary

through the remainder of the year in which Mr.

Kohen’s death occurs, whichever is greater, and all annual stock compensation, incentive

compensation and supplemental bonus compensation due to Mr.

Kohen will be bequeathed to his beneficiaries.

the event the Company is acquired, is the non-surviving party in a merger or sells all or substantially all of its assets, the Chairman

Agreement will not be terminated, and the Company will ensure that the transferee or surviving company is bound by the provisions of

the Chairman Agreement.

All shares granted and any other compensation will vest and be paid immediately.

Barron (Chief Operations Officer)

September 1, 2019, the Company entered into an Executive Employment Agreement with Patricia Barron, its Chief Operations Officer (the

“Barron Agreement”), which superseded Ms.

Barron’s previous employment agreement effective July 1, 2016.

Agreement provided for an initial term of one year, which term may be, and has been, renewed by the mutual agreement of Ms.

Subject to other customary terms and conditions of such agreements, the Barron Agreement provides that Ms.

Barron will receive:

(i) a base salary of $150,000 per year, which may be adjusted each year at the discretion of the board;

(ii) a sign-on bonus of a stock

option to purchase 100,000 shares of common stock at an exercise price of $6.00 per share, which vested in its entirety on December 31,

and (iii) cash incentive compensation equal to 0.25% of the Company’s net revenue, payable on an annual or quarterly basis.

Barron is also entitled to receive expense reimbursement

for reasonable expenses, including travel and entertainment, incurred in the performance of her duties.

to the Barron Agreement, Ms.

Barron may be terminated for “cause,”

which is defined as an act of fraud, embezzlement, theft

or neglect of or refusal to substantially perform the duties of her employment that is materially injurious to the financial condition

or business reputation of the Company;

a material violation of the Barron Agreement by Ms.

Barron that is not cured within 30 days of

written notice;

Barron’s death, disability or incapacity.

Following the expiration of the initial term, the Barron Agreement

may be terminated by the board of directors at its discretion, in which case Ms.

Barron will receive one month of her then-applicable

annual base salary for every year of employment by the Company, as well as any unpaid incentive compensation.

In addition, Ms.

may terminate the Barron Agreement at her discretion by providing at least 30 days’

prior written notice to the Company.

the event the Company is acquired, is the non-surviving entity in a merger or sells all or substantially all of its assets, the Barron

Agreement will survive, and the Company will use its best efforts to ensure that the transferee or surviving company is bound by the

provisions of the Barron Agreement.

All shares granted will vest immediately.

12 CONCENTRATIONS OF RISKS

Customers and Accounts Receivable

Company had certain customers whose revenue individually represented 10% or more of the Company’s total revenue, or whose accounts

receivable balances individually represented 10% or more of the Company’s total accounts receivable, as follows:

the years ended December 31, 2021 and December 2020, two customers accounted for 100% and 88% of revenue, respectively.

December 31, 2021 and 2020, one customer accounted for 100% of accounts receivable.

Although the Company is directly affected by the

financial condition of its customers, management does not believe significant credit risks existed at December 31, 2021.

Generally, the

Company does not require collateral or other securities to support its accounts receivable.

All amounts were deemed collectible at December

31, 2021 and December 31, 2020 and accordingly, the Company had not incurred any bad debt expense at December 31, 2021 and December 31,

Company had two major vendors that accounted for approximately 95% of cost of sales, or $149,286 and $503,033, respectively, of cost

of sales for the years ended December 31, 2021 and 2020.

The Company expects to maintain this relationship with the vendors.

Company’s cash and cash equivalents are held primarily with two financial institutions.

The Company has deposits which exceed the

amount insured by the FDIC.

The amount of uninsured deposits was $9,926,249 at December 31, 2021.

To reduce the risk associated with

the failure of such counterparties, the Company periodically evaluates the credit quality of the financial institutions in which it holds

Company generates its income primarily from its proprietary-based technology and related products.

13 LEGAL PROCEEDINGS

time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our

We are not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our

business, prospects, financial condition, or results of operations.

14 SUBSEQUENT EVENTS

Company generated net proceeds of approximately $20.5 million pursuant to the issuance of 1,650,000 shares of its common stock during

February 2022 in connection with its initial public offering.

Additionally, the Company granted to the underwriter a 30-day over-allotment

option to purchase up to 247,500 shares of common stock and a warrant to purchase up to 132,000 shares of common stock at an exercise

price of $18.20 per share.

The warrant is exercisable after August 8, 2022 and expires in February 2027.

connection with the initial public offering, holders of 8,200,000 shares of the Company’s Preferred Stock elected to convert their

shares of Preferred Stock into common stock on a one-for-one basis.

The Company issued 8,200,000 shares of common stock in exchange for

the Preferred Stock in February 2022.

addition, the initial public offering triggered anti-dilution provisions contained in certain securities purchase agreements and warrants

entered into or issued by the Company.

The Company issued an aggregate of 287,367 shares of common stock to investors in 2021 private

placements and the exercise price of warrants held by such investors was adjusted to $9.80 per share, as compared to the initial exercise

price of $12.00 per share.

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

What changed 10-K

Item 9A. Controls and Procedures