What changed in this filing

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Item 9A. Controls and Procedures

2023-03-31 compared with 2022-03-08 · 1616 added, 1893 removed, 1173 unchanged (75% of the section changed)

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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.

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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.

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Principal Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2022.

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

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

Annual Report on Internal Control over Financial Reporting

management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f)

promulgated under the Exchange Act.

Internal control over financial reporting is a process designed by, or under the supervision of,

our Principal Executive Officer and Principal Financial Officer and effected by our Board of Directors, management and other personnel,

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

external purposes in accordance with GAAP.

Internal control over financial reporting includes policies and procedures that:

to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of an issuer’s

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in

accordance with GAAP, and that an issuer’s receipts and expenditures are being made only in accordance with authorizations of its

management and directors;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,

use or disposition of an issuer’s assets that could have a material effect on the consolidated financial statements.

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

possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely

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

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

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

required by Rule 13a-15(c) promulgated under the Exchange Act, our management, with the participation of our Principal Executive Officer

and Principal Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of December 31, 2022.

Management’s assessment was based on criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission

in Internal Control - Integrated Framework (2013 Framework) (the COSO Framework).

Based on management’s assessment, management

has concluded that our internal control over financial reporting was effective as of December 31, 2022.

Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal control over

financial reporting.

Management’s report was not subject to attestation by our independent registered public accounting firm pursuant

to the rules of the SEC that permit us to provide only management’s report in this Form 10-K.

in Internal Controls Over Financial Reporting

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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.

2023 Annual Meeting of Stockholders

The Company’s 2023 Annual Meeting of Stockholders

is scheduled to be held on June 28, 2023.

Stockholders of record as of May 9, 2023 will be entitled to receive notice of, and vote at,

the annual meeting.

Private Placement

On March 29, 2023 (the “Closing Date”),

the Company closed a private placement offering (the “March 2023 Private Placement”) pursuant to a securities purchase agreement

(the “Private Placement Agreement”) with certain existing Company investors, providing for the issuance and sale by the Company

to such investors of (i) subordinated secured convertible promissory notes in the aggregate principal amount of $2.25 million (the “Notes”)

and (ii) warrants to purchase an aggregate of up to 375,000 shares of the Company’s common stock (the “Warrants”).

proceeds will be used for the cash component of consideration for the Acquisition and to pay certain transaction expenses in connection

with the Acquisition and the March 2023 Private Placement.

Pursuant to the Private Placement Agreement, the proceeds cannot be used to

satisfy any portion of the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s business

and prior practices), for the redemption of any common stock or certain securities that may be converted or exercised into common stock

or for the settlement of any outstanding litigation.

The terms of the March 2023 Private Placement are

substantially the same as the private placement offering of convertible notes and warrants completed by the Company on February 6, 2023,

as described in the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on February 7, 2023.

The Private Placement Agreement contains customary

representations and warranties and provides the investors with certain registration rights.

The Notes mature on the fourth anniversary

of the Closing Date and contain customary acceleration events.

The principal amount of the Notes is convertible at any time after the

Closing Date, in whole or in part, at the option of the respective holder, into shares of common stock at an initial conversion price

of $3.00 per share, subject to adjustment and a minimum conversion price of $2.70 per share.

Interest on the Notes accrues at a rate of

10% per annum, all of which is payable quarterly in arrears in cash or in shares of the Company’s common stock at the Note conversion

price on the date the principal balance of the Note is paid in full or fully converted, at the holder’s election.

The Notes are

secured by substantially all of the Company’s accounts, instruments, and tangible and intangible property, which secured interest

is subordinated to interests held by other parties in such collateral as of the Closing Date and certain future debt.

The Company may

prepay the entire then-outstanding principal amount of a Note at any time, plus a prepayment premium;

if the Company exercises such right,

the Note holder may instead elect to convert the Note.

After the third anniversary of the Closing Date, holders may require the Company

to repay the outstanding principal balance and accrued interest on the Notes with 30 days’ prior written notice.

The Warrants are

exercisable for five years after the Closing Date and are exercisable immediately after their issuance, in whole or in part.

have an initial exercise price of $3.00 per share, subject to adjustment and a minimum exercise price of $2.70 per share.

Investors may

demand the Company repay their Notes in the event the Acquisition does not close by June 30, 2023, or earlier upon notice from the Company.

The Notes and the Warrants contain conversion limitations

providing that a holder thereof may not convert the Notes or exercise the Warrants to the extent that, if after giving effect to such

conversion or exercise, the holder or any of its affiliates would beneficially own in excess of 4.99% or 9.99%, as elected by the holder,

or such other percentage as the holder may select, of the number of shares of common stock outstanding immediately after giving effect

to such conversion or exercise.

A holder may increase or decrease its beneficial ownership limitation upon notice to the Company, provided

that in no event such limitation exceeds 9.99%, and that any increase shall not be effective until the 61st day after such notice.

no event will the aggregate number of shares of common stock that may be issued pursuant to the Acquisition and the Private Placements,

including the number of shares of common stock issued or issuable upon conversion of the Notes and exercise of the Warrants, plus the

number of shares of common stock issued or issuable in connection with the Acquisition, exceed 19.99% of the common stock outstanding

on the Closing Date prior to closing the February 2023 private placement, unless the Company obtains stockholder approval.

The issuance of the Notes and Warrants in the March

2023 Private Placement were deemed to be exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended,

including Regulation D and Rule 506 promulgated thereunder, as transactions by the Company not involving a public offering.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

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.

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

of March 20, 2023.

Executive Chairman

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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 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

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.

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

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.

Kohen’s leadership and qualifications, and 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

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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.

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

Boisseau has served 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 positions, Mr.

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 Accountant.

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

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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.

Barron was the President and

owner of LTG Services, Inc., which 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.

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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, LLC.

From 1994 to 2014, Mr.

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 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.

Ridge has served as 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 and previously served as President.

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.

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 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.

Ridge served two terms as Governor of the Commonwealth of Pennsylvania, from 1995 to 2001, and served as a member of the U.S.

Representatives from January 1983 until January 1995.

Ridge previously served as a member of the board of directors of The Hershey

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

(then Nasdaq:

ADXS), a clinical-stage

biotechnology company, from August 2015 to March 2018, and LifeLock, Inc.

LOCK), a 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

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.

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Our Board believes Mr.

Shiff’s qualifications to serve

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

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

Sokolow has served on the board of directors

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.

Sokolow has served on the board of directors 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.

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.) (then TSXV:

energy company.

Our Board believes Mr.

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.

Sokolow’s qualifications to serve as a member of our Board include his extensive

experience in the financial industry and in strategic planning, mergers, acquisitions, securities, and corporate development advisory services, 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.

Since April 2022, Mr.

Golden has been with vcfo, which

offers fractional CFO and HR services to clients who require advisors they could trust to guide them through major changes.

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.

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.

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.

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

Golden has 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 and began his career at Arthur Andersen & Inc.

Our Board believes

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.

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

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

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.

1993 through 1996, and as an associate at Haight, Gardner, Poor & Havens (later acquired by Holland & Knight) from 1988 through

Greenstein 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.

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, including in customer service and technology innovation.

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.

DiMattia has served as Chief Financial Officer of Island

Stone North America, a manufacturer and supplier of natural stone and man-made tiles, since October 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 continued

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

July 2019 until September 2019.

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.

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.

DiMattia’s qualifications to

serve as a member of our Board include her retail industry experience, including her experience overseeing retail-related information

technology measures and working with a customer base that includes architects and designers, and financial expertise, including managing

audits, internal controls and mergers and acquisitions.

Relationships

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

are no family relationships among any of our directors or executive officers.

of our Board of Directors

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

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

Each director is elected to a one-year term and holds 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.

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.

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

listing standards of Nasdaq.

Our board of directors may from time to time establish other committees;

for example, the board of directors

has established a business strategy and development committee, which consists of Rani R.

Kohen, Leonard J.

Sokolow, and, as of March 2023, Nancy DiMattia.

standing 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

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

at www.skyplug.com.

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of the audit committee include:

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

● appointing,

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);

audit and permissible non-audit services, and the terms of such services, to be provided

by our independent registered public accounting firm;

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;

● establishing

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

and concerns;

● recommending

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;

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;

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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.

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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;

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

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;

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.

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.

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The functions of the nominating and corporate governance committee include:

● identifying

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

● recommending

to the board of directors the persons to be nominated for election as directors and to each

of the board’s committees;

● considering,

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 annual proxy

statement or Form 10-K, as applicable;

our policies and practices regarding corporate social responsibility and ESG matters and

related risks;

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

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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

The full text of our Code of Business Conduct and Ethics is posted on the investor relations section of our website

at www.skyplug.com.

We intend to 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 Business Conduct and Ethics by posting such information on our website within four business days following

the date of the amendment or waiver.

in Certain Legal Proceedings

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of Regulation S-K in the past 10 years.

Section 16(a) Reports

16(a) of the Exchange Act requires all persons subject to such reporting requirements to file initial reports of ownership and reports

of changes in ownership of our common stock and other equity securities with the SEC.

To our knowledge, based solely on a review of these

reports filed with the SEC and certain written representations furnished to us that no other reports were required, we believe that all

Section 16 filing requirements applicable to our executive officers, directors and greater than 10% shareholders were complied with during

the fiscal year ended December 31, 2022, except as follows:

an inadvertently omitted holding of a subordinated convertible promissory

note on the initial Form 3 for Leonard J.

Sokolow filed February 9, 2022;

inadvertently omitted restricted shares on the initial Form

3 for Steven M.

Schmidt filed February 9, 2022;

a Form 4 filed by Thomas J.

Ridge on March 16, 2022, reporting the March 11, 2022 grant

of shares of restricted stock and options pursuant to the non-employee director compensation program;

Forms 4 filed by Mr.

Ridge on April

6, 2022 and July 6, 2022, reporting the March 31, 2022 and June 30, 2022, respectively, issuances of restricted stock paid in lieu of

the cash retainer payable for service on the Board, pursuant to the non-employee director compensation program;

and a Form 4 filed by

Dov Shiff on July 6, 2022, reporting the June 30, 2022 issuance of restricted stock paid in lieu of the cash retainer payable for service

on the Board, pursuant to the non-employee director compensation program.

EXECUTIVE COMPENSATION

“named executive officers”

for the year ended December 31, 2021 were:

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

“named executive officers” for the year ended December 31, 2022 were:

Campi, Chief Executive Officer (and former Chief Financial Officer through December 31,

Kohen, Executive Chairman;

Boisseau, Chief Financial Officer (since January 1, 2022);

Schmidt, President;

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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 committee of our board of directors evaluates our executive compensation values and philosophy and executive 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.

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.

Each of our named executive officers (other than Mr.

Schmidt) 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 applicable named executive officer’s

Barron and Mr.

Boisseau received an annual base salary of $150,000, $300,000, $150,000, and $144,000,

respectively, during 2022.

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.

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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.”

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

Barron is eligible to receive

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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”

Boisseau is 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.

The 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

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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

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

effective January 1, 2022, Mr.

Kohen was granted 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:

to his employment agreement, Mr.

Schmidt received 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

stock at an exercise price of $0.10 per share, which vested in three equal annual installments on each of October 1, 2020, 2021 and 2022;

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

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

and 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).

Schmidt’s employment agreement also provides for 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

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

Kohen’s Chairman Agreement provided 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.

1, 2022 and vested in full on January 1, 2023.

Boisseau’s agreement provided for a signing bonus consisting of (1) 10,000 shares

of restricted common stock, which vested in four equal installments as of the end of each quarter in 2022, and (2) a three-year stock

option to purchase 10,000 shares of common stock, which vested in four equal installments at the end of each quarter in 2022, and which

were both granted effective March 11, 2022.

The options have an exercise price of $12.34 per share.

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.

offer 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.

Kohen is eligible to receive a

$1,000 per month vehicle allowance, pursuant to the Chairman Agreement;

Kohen did not receive this allowance during 2021.

the Company pays travel expenses for family members and guests of named executive officers, to accompany named executive officers on trips for business purposes

such as road shows and other events.

Compensation Table

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Incentive Plan Compensation ($) (5)

Non-Qualified Deferred Compensation

Non-Qualified

Deferred Compensation Earnings ($)

Other Compensation

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

Chief Executive Officer

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

Executive Chairman

Marc-Andre Boisseau

Chief Financial Officer

(since January 1, 2022)

Patricia Barron

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

2021, each of Mr.

Campi and Mr.

Kohen 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 deferred by Mr.

Campi and $67,500 deferred by Mr.

These deferred amounts are included in this table.

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 12 to our consolidated financial statements

for the year ended December 31, 2022.

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.

to his amended employment agreement 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

(i) during 2021, 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, and (ii) during 2022, 25,000 shares of common stock.

to his employment agreement, during 2022, Mr.

Boisseau received 10,000 shares of common stock and options to purchase 10,000 shares

of common stock at an exercise price of $12.34 per share.

For more information regarding stock awards and option awards granted to

Kohen, Boisseau and Schmidt during fiscal 2022 and 2021, see “Agreements with Named Executive Officers” below.

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.”

occasion, the Company pays travel and lodging expenses for family members and guests of named executive officers, to accompany named

executive officers on trips for business purposes such as road shows and other events.

There was no incremental cost associated with

family member travel that required disclosure in the aforementioned compensation table

Equity Awards at Fiscal Year End

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

Option Awards

of securities underlying unexercised options

unexercisable

incentive plan awards:

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exercise price

Option expiration date

expiration date

of shares or units of stock that have not vested

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have not vested

Patricia Barron

1,140,000 (3)

Based on the closing stock price of our common stock of $2.52 on December 30, 2022, the last trading day of the 2022 fiscal year.

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

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$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

options become exercisable as follows:

460,000 vested on January 1, 2023 and 340,000 will vest on each of January 1, 2024 and 2025.

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

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

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

price of $6.00 per share.

options become exercisable in two equal installments on each of June 1, 2023 and 2024 and have an exercise price of $12.00 per share.

Schmidt’s employment agreement provides for an annual grant of 25,000 shares of common stock on each of June 1, 2023 and 2024.

with Named Executive Officers

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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

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.

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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 (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

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to the Campi Agreement, Mr.

Campi may be terminated for “cause,”

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

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

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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

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In addition, Mr.

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

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

written notice to the Company.

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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

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.

previous chairman agreement effective September 1, 2016.

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Agreement with Mr.

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

the same terms.

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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.

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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.

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to the Chairman Agreement, Mr.

Kohen may be terminated for “cause,”

which is defined as an act of fraud, embezzlement or

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.

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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.

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Kohen may terminate the Chairman Agreement at his discretion by providing

at least 90 days’

prior written notice to the Company.

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

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.

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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.

“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.

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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

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to the Barron Agreement, Ms.

Barron may be terminated for “cause,”

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

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

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written notice;

Barron’s death, disability or incapacity.

Following the expiration of the initial term, the Barron Agreement

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In addition, Ms.

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

prior written notice to the Company.

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

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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.

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.

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(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

option to purchase 60,000 shares of common stock at an exercise price of $0.10 per share, which vested 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;

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

(iii) a stock bonus of 20,000

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

shares, 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.

(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

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

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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;

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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.

and rights provided for in the 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.

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Boisseau agreed to

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

Subject to other customary terms and conditions

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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.

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.

(ii) receive a signing bonus consisting of (1) 10,000 shares of common stock, which vested in four equal

installments at the end of each quarter in 2022 and (2) a three-year stock option to purchase 10,000 shares of common stock, which vested

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.

The Boisseau Agreement provides that Mr.

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.

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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

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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.

to Eligible Persons (as defined in the 2018 Plan), 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

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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.

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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

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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.

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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.

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

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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.

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.

The 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

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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.

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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.

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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.

may adopt in the future, including a policy adopted to comply with applicable SEC and Nasdaq rules.

of the 2021 Plan;

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a change in control of our Company.

Our named executive officers’

employment agreements entitle them to certain benefits upon certain

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”

For additional discussion, see “Agreements with Named Executive

Officers” above.

of our named executive officers holds equity awards that were granted subject to the general terms and termination and change in control

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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.

For additional discussion, please see “2018 Stock Incentive Plan (as Amended and Restated)” and “2021

Stock Incentive Plan” above.

to March 2022, we did not pay cash compensation to our non-employee directors for service on our board.

Our non-employee directors were

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 received, effective December 31, 2021, 20,000 shares of

common stock and five-year options to purchase 25,000 shares of common stock, which vested 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 additionally received 4,000 shares of common stock and five-year options

to purchase 75,000 shares of common stock, which vested on the effective date of grant, have an exercise price of $12.00 and expire December

board of directors approved a program for non-employee director compensation (the “Director Compensation Program”) on March

For service on our board, non-employee directors receive an annual cash retainer of $30,000, paid in quarterly installments

(which began as of February 14, 2022 and is pro-rated as applicable).

Directors may elect to have the cash retainer paid in the form

of shares of common stock, determined based on the closing price per share of common stock on Nasdaq on the last day of the quarter.

addition, on the third trading day after the earlier of the date of the earnings release or the date the annual report is filed on

Form 10-K (the “Program Grant Date”), non-employee directors receive an annual grant of (i) 5,000 shares of restricted

stock, which vest immediately on the Program Grant Date, and (ii) options to purchase up to 5,000 shares of common stock with an

exercise price equal to the closing price of common stock on Nasdaq on Program Grant Date, which will vest in twelve equal monthly

installments beginning on the last day of the month in which the options were granted and expire five years from the Program Grant

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

non-employee directors each receive an annual grant of (i) 1,000 shares of restricted stock, which vest immediately on the Program

Grant Date, and (ii) options to purchase up to 1,000 shares of common stock with an exercise price equal to the closing price of

common stock on Nasdaq on the Program Grant Date, which will vest in twelve equal monthly installments beginning on the last day of

the month in which the options were granted and expire five years from the Program Grant Date.

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

non-employee directors each receive an additional annual grant of (i) 1,000 shares of restricted stock, which vest immediately on

the Program Grant Date, and (ii) options to purchase up to 1,000 shares of common stock with an exercise price equal to the closing

price of common stock on Nasdaq on the Program Grant Date, which will vest in twelve equal monthly installments beginning on the

last day of the month in which the options were granted and expire five years from the Program Grant Date.

non-employee members of the Business Strategy and Development Committee of the Board, non-employee directors each receive an

additional annual grant of (i) 12,500 shares of restricted stock, which vest immediately on the Program Grant Date, and (ii) options

to purchase up to 12,500 shares of common stock with an exercise price equal to the closing price of common stock on Nasdaq on the

Program Grant Date, which will vest in twelve equal monthly installments beginning on the last day of the month in which the options

were granted and expire five years from the Program Grant Date.

directors will also receive reimbursement of reasonable out-of-pocket expenses for attending meetings and carrying out duties as board

compensation for service on our board during 2022, each non-employee director received, effective March 11, 2022, 5,000 shares of common

stock, which vested on the effective date of grant, and five-year options to purchase up to 5,000 shares of common stock, which vest

in twelve equal installments on the last day of each month following date of grant, have an exercise price of $12.34 per share and expire

March 11, 2027.

compensation for their service on our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, on

March 11, 2022, Ms.

Greenstein Brayer, Mr.

Golden and Ms.

DiMattia were each granted (i) 3,000 shares of common stock, which vested

on the effective date of grant, and (ii) five-year options to purchase up to 3,000 shares of common stock, which vest in twelve

equal installments on the last day of each month following date of grant, have an exercise price of $12.34 per share and expire

March 11, 2027.

compensation for his service as the Chair of our Audit Committee and Compensation Committee, on March 11, 2022, Mr.

Golden was granted

(i) 2,000 shares of common stock, which vested on the effective date of grant, and (ii) five-year options to purchase up to 2,000 shares

of common stock, which vest in twelve equal installments on the last day of each month following date of grant, have an exercise price

of $12.34 per share and expire March 11, 2027.

compensation for her service as the Chair of our Nominating and Corporate Governance Committee, on March 11, 2022, Ms.

Greenstein Brayer

was granted (i) 1,000 shares of common stock, which vested on the effective date of grant, and (ii) five-year options to purchase up

to 1,000 shares of common stock, which vest in twelve equal installments on the last day of each month following date of grant, have

an exercise price of $12.34 per share and expire March 11, 2027.

compensation for his service on our Business Strategy and Development Committee, on March 11, 2022, Mr.

Sokolow was granted (i)

12,500 shares of common stock, which vested on the effective date of grant, and (ii) five-year options to purchase up to 12,500

shares of common stock, which vest in twelve equal installments on the last day of each month following date of grant, have an

exercise price of $12.34 per share and expire March 11, 2027.

non-employee directors elected to receive their annual cash retainer in shares of common stock, of which four each received 285 shares

on March 31, 2022, 3,750 shares on June 30, 2022, 2,032 shares on September 30, 2022 and 2,976 shares on December 31, 2022.

One non-employee

director receiving shares of common stock instead of cash resigned on June 28, 2022, and therefore received 285 shares on March 31, 2022

and 3,668 shares on June 30, 2022.

compensation for service on our board during 2021, each non-employee director was entitled to receive, effective December 31, 2021, 20,000

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$12.00 and expire December 31, 2026.

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.”

2023 Director Compensation

In March 2023, the Compensation Committee recommended, and the Board of Directors approved, certain changes to the

Director Compensation Program, such that (i) the Chair of the Audit Committee, Compensation Committee and/or Nominating and Corporate

Governance Committee will each receive 2,000 shares of restricted common stock and options to purchase 2,000 shares and (ii) the members

of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee will each receive 3,000 shares

of restricted common stock and options to purchase 3,000 shares.

All other terms of the Director Compensation Program, including grant

dates and vesting terms, remain the same.

Compensation Table

following table summarizes the compensation paid to each non-employee director who served during the fiscal years ended December 31,

2021 and 2020.

following table summarizes the compensation paid to each non-employee director who served during the fiscal year ended December 31, 2022.

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

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.

Kohen during 2022 has been reported in the “Summary Compensation Table” above under “Executive

Compensation.”

earned or paid in cash

incentive plan compensation

deferred compensation earnings

other compensation

Nancy DiMattia

Greenstein Brayer

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 2022.

The assumptions used to

determine the valuation of the awards are discussed in Note 2 and Note 12 to our consolidated

financial statements for the applicable fiscal year.

There were no unvested stock awards held by non-employee directors as of December 31, 2022, other than

Sokolow, as described in footnote 3.

The total number of unexercised option awards (vested and unvested) held by our non-employee

directors as of December 31, 2022 was as follows:

DiMattia, 8,000 options;

Golden, 10,000 options;

Greenstein Brayer,

9,000 options;

Peter, 426,250 options;

Ridge, 630,000 options;

Shiff, 130,000 options;

Sokolow, 967,500 options.

Peter resigned from the board of directors effective June 28, 2022.

November 9, 2022, the Company entered into the Advisory Agreement (as defined below) with Newbridge Securities Corporation, pursuant

to which Newbridge Securities Corporation agreed to provide financial and general corporate advisory services.

Pursuant to the Advisory

Agreement, the Company agreed to issue to affiliates of Newbridge Securities Corporation an aggregate of 200,000 restricted shares

of the Company’s common stock, which will vest on the following schedule:

50,000 shares of common stock on November 9, 2022

and 50,000 shares on each of the six-, 12- and 18-month anniversaries of such date.

Sokolow received 40,333 of the restricted

shares, of which 30,250 were unvested as of December 31, 2022.

In the event the Advisory Agreement is terminated prior to its expiration,

any shares that have not vested as of such date will be forfeited.

For additional information, see “Item 13.

Certain Relationships

and Related Party Transactions, and Director Independence” of this Form 10-K.

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:

as of March 30, 2023 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.

of our directors;

of our executive officers and directors 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.

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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

or warrants or conversion of convertible notes or preferred stock, within 60 days of March 20, 2023.

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

percentage of beneficial ownership is based on 83,119,862 shares of common stock issued and outstanding as of March 30, 2023.

as otherwise indicated below, the address of each beneficial owner is c/o SKYX Platforms Corp., 2855 W.

McNab Road, Pompano Beach, Florida

Stock Beneficially Owned

and Address of Beneficial Owner

of Shares and Nature of Beneficial Ownership

of Total Common Stock

Greater than 5% Stockholders

Dov Shiff, Director (1)

Shiff, Director (1)

Kohen, Executive Chairman and Director (2)

Motek 7 SQL LLC (3)

Strul Associates Limited Partnership (4)

7 SQL LLC (3)

Associates Limited Partnership (4)

Steven Siegelaub (5)

Directors and Named Executive Officers (not otherwise included above)

Directors and Named Executive

Officers (not otherwise included above)

Ridge, Director (6)

Peter, Director (7)

Sokolow, Director (7)

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Greenstein Brayer, Director (9)

Nancy DiMattia, Director

Schmidt, President (9)

DiMattia, Director (10)

Campi, Chief Executive Officer (11)

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

Marc-Andre Boisseau (12)

Schmidt, President (13)

Barron, Chief Operations Officer (14)

directors and current executive officers as a group (11 persons) (15)

Represents beneficial ownership

of less than one percent.

on a Form 4 and Schedule 13D/A filed by Mr.

Shiff on January 4, 2023 and January 5, 2023,

respectively.

Includes 10,817,072 shares of common stock held by Shiff Group Investments

Ltd., 235,712 shares of common stock held by Shiff Group Assets Ltd., 3,896,348 shares of

common stock held directly by Mr.

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’s spouse,

as well as 105,000 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

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on a Form 4 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.

Kohen on June 13, 2022 and February 15, 2022, respectively.

Includes 16,001 shares of common stock held directly by Mr.

Kohen, 9,143,969 shares of common

stock held by KRNB Holdings LLC and 100,000 shares of common stock held by Mr.

family member, as well 5,600,000 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.

Kohen may be 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.

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.

The business address of

Motek 7 SQL LLC is c/o Mansfield Bronstein, PA, 500 Broward Blvd., Suite 1450, Fort Lauderdale,

5,514,991 shares of common stock, 125,000 shares of common stock issuable upon exercise of an outstanding

warrant, and 916,667 shares of common stock underlying convertible

promissory notes that are currently exercisable held by Strul Associates Limited Partnership.

As 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

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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.

Includes the following shares

of common stock:

(i) 1,667,316 shares held by Safety Investors 2014 LLC;

(ii) 1,189,971 shares

held by Investment 2013, LLC;

(iii) 184,622 shares held by 301 Office Ventures, LLC;

87,424 shares held by Enterprises 2013, LLC;

(v) 731,021 shares held by Investment 2018,

(vi) 42,857 shares held by DRS Real Estate Ventures LLC;

(vii) 83,333 shares held jointly

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.

and (viii) 68,814 shares held by Mr.

(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 by Mr.

Siegelaub and his spouse that

are currently exercisable;

and (iii) 41,667 shares issuable upon exercise of warrants held

by Investment 2018 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

Siegelaub and his affiliated entities is 361 E.

Blvd., Deerfield Beach, Florida 33441.

794,043 shares of common stock, 605,000 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.

356,543 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.

Sokolow, including 20,167 shares of unvested restricted

stock, and 3,600 shares of common stock held by Newbridge Securities Corporation.

(i) 867,500 shares of common stock underlying stock options held by Mr.

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.

the following shares of common stock issuable upon exercise of outstanding warrants:

shares issuable upon exercise of Newbridge Warrants (as defined below) held by Mr.

and 21,865 shares issuable upon exercise of Newbridge Warrants held by Newbridge Securities

Sokolow is the Chief Executive Officer and President of Newbridge Financial,

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.

10,000 shares of common stock and 10,000 shares of common stock underlying stock options

that are currently exercisable held by Mr.

9,000 shares of common stock and 9,000 shares of common stock underlying stock options that

are currently exercisable held by Ms.

Greenstein Brayer.

(10) Includes

17,043 shares of common stock and 8,000 shares of common stock underlying stock options that

are currently exercisable held by Ms.

(11) Includes

1,197,685 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.

(12) Includes

6,223 shares of common stock and 10,000 shares of common stock underlying stock options that

are currently exercisable held by Mr.

(13) Includes

137,755 shares of common stock, including 50,000 shares of unvested restricted stock, and

170,000 shares of common stock underlying stock options that are currently exercisable held

(14) Includes

100,000 shares of common stock and 700,000 shares of common stock underlying stock options

that are currently exercisable held by Ms.

(15) Includes

26,901,161 shares of common stock, including 70,167 shares of unvested restricted stock, as

well as 8,204,500 shares of common stock underlying stock options that are currently exercisable,

50,624 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

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following table sets forth equity compensation plan information as of December 31, 2022:

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

of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted-average

exercise price of outstanding options, warrants and rights

of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))

Equity compensation

plans approved by security holders (1)(2)

Equity compensation plans not approved

by security holders

35,113,190 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 $7.31

per share, which includes:

(a) 4,330,000 shares of common stock issuable upon exercise of stock

options granted under the 2015 Stock Incentive Plan;

(b) 6,760,500 shares of common stock issuable

upon exercise of stock options granted under the 2018 Stock Incentive Plan;

of common stock issuable upon exercise of stock options granted under the 2021 Stock Incentive

and (d) 20,000,000 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, 2022.

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.

2015 Stock Incentive Plan and 2018 Stock Incentive Plan were previously replaced and terminated

by the 2018 Stock Incentive Plan and the 2021 Stock Incentive Plan, respectively, and, as

such, no securities remained available for issuance under such plans as of December 31, 2022

and no further awards will be granted under such plans.

However, all outstanding awards will

continue to be governed by their existing terms.

All shares available for future issuance

are under the 2021 Stock Incentive Plan.

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.

required under Nasdaq rules and regulations, a majority of the members of a listed company’s board of directors must qualify as

“independent,” as affirmatively determined by the board of directors.

Based upon information requested from and provided

by each director concerning his or her background, employment, and affiliations, including family relationships, our 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.

Sokolow, are “independent”

as that term is defined under applicable SEC rules and regulations and Nasdaq listing requirements and rules.

In addition, Phillips S.

Peter, who served as a director during 2022, was independent under such criteria.

In making such independence determinations, 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 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, 2021, 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;

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.

2020, certain related parties entered into securities purchase agreements with the Company, pursuant to which each agreed to purchase

a three-year subordinated convertible promissory note.

Subject to other customary terms, the note 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

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.

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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.

The following table lists the related parties, the principal

amount of the note purchased, and the maturity date of the note.

The Company has not paid any of the principal on the notes.

of Related Party

Amount Purchased

Sokolow – director

of the Company

Sky Technology Partners, LLC – Steven

Siegelaub, a greater than 5% holder with his affiliates, is the managing member

Shiff Group Investments Ltd.

Shiff, a director and greater than 5% holder, is the President and Chief Executive Officer

Campi – Chief Executive Officer

of the Company

On each of February 6, 2023 and March 29, 2023, the Company closed the

Private Placements, pursuant to which the Company issued and sold subordinated secured convertible promissory notes and warrants to purchase

shares of the Company’s common stock to certain investors.

Strul Associates Limited Partnership, a greater than 5% holder, purchased

notes in the principal amount of $2.0 million and $750,000, respectively, and was issued warrants to purchase 125,000 shares of common

stock, dated March 29, 2023.

The investors in the private placement have certain registration rights.

The notes mature on the fourth anniversary

of the closing date and contain customary acceleration events.

The principal amount of the note are convertible at any time after the

closing date, in whole or in part, at the option of the holder, into shares of common stock at an initial conversion price of $3.00 per

share, subject to adjustment and a minimum conversion price of $2.70 per share.

Interest on the notes accrues at a rate of 10% per annum,

For the February 2023 note, 7% of the interest is payable quarterly in arrears in cash and 3% is payable quarterly in arrears

in cash or in shares of the Company’s common stock at the note conversion price on the date the principal balance of the note is

paid in full or fully converted, at the holder’s election.

For the March 2023 note, all of the interest is payable quarterly in

arrears in cash or in shares of the Company’s common stock at the note conversion price on the date the principal balance of the

note is paid in full or fully converted, at the holder’s election.

The notes are secured by substantially all of the Company’s

accounts, instruments, and tangible and intangible property, which secured interest is subordinated to interests held by other parties

in such collateral as of the closing date and certain future debt.

The Company may prepay the entire then-outstanding principal amount

of the notes at any time, plus a prepayment premium;

if the Company exercises such right, the note holder may instead elect to convert

After the third anniversary of the closing date, the holder may require the Company to repay the outstanding principal balance

and accrued interest on the notes with 30 days’ prior written notice.

The holder may demand the Company repay the notes in the event

the Acquisition does not close by June 30, 2023, or earlier upon notice from the Company.

The warrants are exercisable for five years

after the closing date and are exercisable immediately after their issuance, in whole or in part.

The warrants have an initial exercise

price of $3.00 per share, subject to adjustment and a minimum exercise price of $2.70 per share.

In addition, the note notes and warrants

contain conversion limitations providing that a holder thereof may not convert the note or exercise the warrant to the extent that, if

after giving effect to such conversion or exercise, the holder or any of its affiliates would beneficially own in excess of 9.99%, as

elected by the holder.

The holder may increase or decrease its beneficial ownership limitation upon notice to the Company, provided that

in no event such limitation exceeds 9.99%, and that any increase shall not be effective until the 61st day after such notice.

Securities Corporation

4 unchanged sentences

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

3 unchanged sentences

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.

12 unchanged sentences

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

2 unchanged sentences

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

to the agreement, as of December 31, 2022, 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 and Mr.

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.

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

In addition, during 2021, the Company issued 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.

Sokolow, 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

Sokolow, respectively (collectively, the “2021 Newbridge Warrants” and, together with the 2020 Newbridge Warrants,

the “Newbridge Warrants”).

The initial exercise price of $12.00 per share of the 2021 Newbridge Warrants was 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 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 applicable 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.

Company entered into two investment banking engagement agreements with Newbridge Securities Corporation in May 2021, pursuant to which

Newbridge Securities Corporation agreed to provide certain corporate advisory services and merger and acquisition services, respectively.

In 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.

agreements, and that Newbridge Securities Corporation is not entitled to any fees or payments, in cash or otherwise, pursuant to such

November 9, 2022, the Company entered into a corporate advisory engagement agreement (the “Advisory Agreement”) with Newbridge

Securities Corporation, pursuant to which Newbridge Securities Corporation agreed to provide financial and general corporate advisory

services to the Company in connection with certain investment banking matters, such as assisting with investor presentations and investor

conferences, providing advice related to capital structures, capital market opportunities and asset allocation or exit strategies, and

assisting with the preparation of a due diligence package for use in potential merger and acquisition, joint venture and capital raising

transactions.

The Advisory Agreement has a 24-month term and may be terminated by either party, at any time, upon 15 days’ prior

written notice.

Pursuant to the Advisory Agreement, the Company agreed to issue to affiliates of Newbridge Securities Corporation an

aggregate of 200,000 restricted shares of the Company’s common stock, which will vest on the following schedule:

50,000 shares

of common stock on November 9, 2022 and 50,000 shares on each of the six-, 12- and 18-month anniversaries of such date.

Sokolow received

40,333 of the restricted shares.

In the event the Advisory Agreement is terminated prior to its expiration, any shares that have not

vested as of such date will be forfeited.

The common stock is subject to a six-month lock up restriction from the date the shares vest.

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

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 our board of directors, is Chief Executive Officer and President, entered into the following

stock purchase agreements with the Company (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 April 30, 2021, as amended June 30, 2021 and August 31, 2021, pursuant to which Bridge Line Ventures purchased

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.

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.

1 unchanged sentence

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”).

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

3 unchanged sentences

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.

September 12, 2022, Bridge Line Ventures distributed its shares of common stock and warrants to purchase common stock to its investors,

pursuant to a pro rata distribution for no consideration.

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

1 unchanged sentence

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

1 unchanged sentence

As the managing member of Investment 2018 LLC, Mr.

Siegelaub may be deemed to the beneficial owner of the shares held by such

Siegelaub may be deemed to be the beneficial owner of the shares held by such

December 2021, Mr.

3 unchanged sentences

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.

the initial public offering completed in February 2022, 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.

board of directors has adopted a written related party transactions policy, 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 at 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

4 unchanged sentences

All Other Fees

fees represent amounts billed for professional services rendered for the audit of our annual financial statements.

In addition, 2021

also included audit fees for professional services rendered in relation to the review of our registration statement and other documents

fees represent amounts billed for professional services rendered for the audit and/or review

of our consolidated financial statements.

For 2022 and 2021, includes 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).

For 2022, includes fees

related to professional services rendered in connection with the issuance of a consent related

to a Registration Statement on Form S-8.

to the Audit Committee Charter, the audit committee is required to pre-approve the audit and non-audit services performed by our independent

Notwithstanding the foregoing, separate audit committee pre-approval is not required (a) if the engagement for services is

entered into pursuant to pre-approval policies and procedures established by the audit committee regarding our engagement of the independent

auditor (the “Pre-Approval Policy”) as to matters within the scope of the Pre-Approval Policy or (b) for de minimis non-audit

services that are approved in accordance with applicable SEC rules.

For fiscal year 2022, all services performed by our independent auditors

were pre-approved by the audit committee.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

2 unchanged sentences

Audited Consolidated Balance Sheets as of December 31, 2022 and December 31, 2021

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 Operations and Comprehensive Loss for the Years ended December 31, 2022 and 2021

Audited Consolidated Statements of Stockholders’ Equity (Deficit) for the Years Ended December 31, 2022 and 2021

Audited Consolidated Statements of Cash Flows for the Years ended December 31, 2022 and 2021

4 unchanged sentences

Exhibit Index

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.

Stock Purchase Agreement, dated February 6, 2023, by and among the Company and Mihran Berejikian, Nancy Berejikian, and Michael Lack (incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 7, 2023).

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.

Articles of Amendment to Articles of Incorporation (effective June 14, 2022) (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 14, 2022).

Second Amended and Restated Bylaws of the Company (effective June 14, 2022) (incorporated herein by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on June 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.

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).

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.

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).

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.

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).

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.

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 Option Agreement (2018 Plan) (incorporated herein by reference to Exhibit 10.18 to the Company’s Registration Statement on Form S-1 (File No.

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).

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.

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).

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.

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).

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.

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 Employment Agreement, dated September 1, 2019, between the Company and John P.

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.

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).

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.

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).

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.

Form of Stock Purchase Agreement between the Company 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.

Form of Common Stock Purchase Warrant issued by the Company 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).

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).

Form of Nonqualified Stock Option Agreement (2021 Plan) (August 2022) (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 5, 2022).

Form of Incentive Stock Option Agreement (2021 Plan) (August 2022) (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on August 5, 2022).

Form of Restricted Shares Award Agreement (2021 Plan) (August 2022) (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on August 5, 2022).

Form of Restricted Share Unit Award Agreement (2021 Plan) (August 2022) (incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on August 5, 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).

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).

Sublease Agreement, executed as of April 28, 2022, by and between the Company and Sicart Associates LLC (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 4, 2022).

Lease Agreement, by and between 400 Biscayne Commercial Owner, L.P., as Landlord and the Company, as Tenant (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 29, 2022).

Corporate Advisory Engagement Agreement, dated November 9, 2022, between the Company and Newbridge Securities Corporation (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 10, 2022).

Form of Securities Purchase Agreement, dated February 6, 2023 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 7, 2023).

Form of Subordinated Secured Convertible Promissory Note, dated February 6, 2023 (incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 7, 2023).

Form of Common Stock Purchase Warrant, dated February 6, 2023 (incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the SEC on February 7, 2023).

Form of Securities Purchase Agreement, dated March 29, 2023 (filed herewith).

Form of Subordinated Secured Convertible Promissory Note, dated March 29, 2023 (filed herewith).

Form of Common Stock Purchase Warrant, dated March 29, 2023 (filed herewith).

List of Subsidiaries (filed herewith).

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Certification by Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

following financial statements from the Annual Report on Form 10-K for the year ended December 31, 2022 are formatted in iXBRL (Inline

eXtensible Business Reporting Language):

(i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive

Loss, (iii) Consolidated Statements of Stockholders’ Equity (Deficit), (iv) Consolidated Statements of Cash Flows, and (v)

the Notes to Consolidated Financial Statements (filed herewith).

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

Indicates management contract or any compensatory plan, contract or arrangement.

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on its behalf by the undersigned, thereunto duly authorized.

TECHNOLOGIES CORP.

PLATFORMS CORP.

Campi, Chief Executive Officer

18 unchanged sentences

Greenstein Brayer

/s/ Dov Shiff

Greenstein Brayer

TECHNOLOGIES CORP.

PLATFORMS CORP.

FINANCIAL STATEMENTS

2 unchanged sentences

of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets –

December 31, 2021 and 2020

Consolidated Statements of Operations –

December 31, 2021 and 2020

Consolidated Statements of Stockholders’

Deficit –

December 31, 2021 and 2020

Consolidated Statements of Cash Flows –

December 31, 2021 and 2020

Notes to Consolidated Financial Statements

Balance Sheets – December 31, 2022 and 2021

Statements of Operations and Comprehensive Loss – December 31, 2022 and 2021

Statements of Stockholders’ Equity (Deficit) – December 31, 2022 and 2021

Statements of Cash Flows – December 31, 2022 and 2021

to Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and Stockholders of SQL Technologies Corp.

To the Board of Directors and Stockholders

of SKYX Platforms 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, 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.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance

sheets of SKYX Platforms Corp.

and Subsidiary (the Company) as of December 31, 2022 and 2021, and the related consolidated statements

of operations and comprehensive loss, stockholders’ equity (deficit), and cash flows for each of the years in the two-year period

ended December 31, 2022, and the related notes (collectively referred to as the consolidated financial statements).

In our opinion, the

consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022

and 2021, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2022, in

conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated 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 .

We 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 consolidated

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

The Company is not required to have, nor were we

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

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

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.

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.

Our audits included performing procedures to assess

the risks of material misstatement of the consolidated 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

consolidated 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 consolidated 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

Critical Audit Matters

The critical audit matter communicated below is a

matter arising from the current period audit of the consolidated 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 consolidated 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 consolidated 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.

Stock based compensation

As discussed in Note 2 and Note 12 to the financial

statements, the Company issues equity-based awards in accordance with ASC 718, Compensation.

Auditing management’s calculation of

the fair value of equity-based awards can be a significant judgment given the fact that the Company uses management estimates on various

inputs to the calculation.

Other less complex equity awards are based upon the closing market price.

To evaluate the appropriateness of the fair value

determined by management, we examined and evaluated the inputs management used in calculating the fair value of the equity-based awards

and management’s disclosures on equity-based awards.

M&K CPAS, PLLC

have served as the Company’s auditor since 2018

Technologies Corp.

and Subsidiary

have served as the Company’s auditor since 2018

Platforms Corp.

Balance Sheets (Audited)

December 31, 2021

December 31, 2020

Current assets:

Cash and cash equivalents

Accounts receivable, net

Prepaid expenses

Total current assets

Other assets:

Furniture and equipment, net

Total other assets

Liabilities and Stockholders’

cash equivalents

Investments, available-for-sale

expenses and other assets

current assets

Long-term assets:

Furniture and equipment,

Restricted cash

Right of use assets

Intangibles, definite

long-term assets

and Stockholders’ Equity (Deficit)

Current liabilities:

Accounts payable

Notes payable, current

Accounts payable and

accrued expenses

GE royalty obligation

Total current liabilities

Accrued expenses, related

Notes payable, current

Operating lease liabilities,

Royalty obligations,

Convertible notes, current

related parties

notes, current

current liabilities

Long term liabilities:

Notes payable

Operating lease liabilities

Convertible notes

GE royalty obligation

Total long-term liabilities

Total liabilities

Commitments and Contingent Liabilities:

Convertible notes- related

long-term liabilities

Commitments and Contingent

Redeemable preferred stock - subject to redemption:

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20,000,000 shares authorized;

13,256,936 and 13,456,936 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively

Stockholders’

Common stock:

880,400 and 13,256,936 shares issued and outstanding at December 31, 2022 and December

31, 2021, respectively

Stockholders’ Equity

Common stock and additional

paid-in capital:

$ 0 par value, 500,000,000 shares authorized;

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

82,907,541 and 66,295,288 shares issued and outstanding at December

31, 2022 and December 31, 2021, respectively

Accumulated deficit

1 unchanged sentence

( 74,269,898 )

Total stockholders’

other comprehensive loss

stockholders’ equity (deficit)

( 3,389,512 )

Non-controlling interest

Total deficit

Non-controlling

equity (deficit)

( 3,424,954 )

Total Liabilities and Stockholders’

Liabilities and Stockholders’ Equity (Deficit)

accompanying notes are an integral part of the consolidated financial statements.

Technologies Corp.

and Subsidiary

Statements of Operations

For the Year Ended December 31,

Platforms Corp.

Statements of Operations and Comprehensive Loss

ended December 31,

Cost of revenues

Selling, general and administrative expenses

Loss from operations

profit (loss)

general and administrative expenses- related party

general and administrative expenses

from operations

( 26,625,182 )

( 5,188,083 )

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

Interest expense, net

Other income - loan

other expense, net

( 27,035,941 )

( 5,730,414 )

Net loss per share - basic and diluted

Weighted average number of common shares outstanding during the year –

Common stock issued

pursuant to antidilutive provisions

Non-controlling interest

loss attributed to common stockholders

$ ( 31,800,460 )

$ ( 5,859,870 )

Other comprehensive loss:

Unrealized loss on debt

comprehensive loss attributed to common stockholders

$ ( 31,862,607 )

$ ( 5,859,870 )

loss per share - basic and diluted

Weighted average number of common shares outstanding

– basic and diluted

accompanying notes are an integral part of the consolidated financial statements.

Technologies Corp.

and Subsidiary

Statements of Stockholders’

Stock, $0 Par Value

(To Be Issued)

Noncontrolling

Stockholders’

Balance, December 31, 2020

Platforms Corp.

Statements of Stockholders’ Equity (Deficit)

the year ended December 31,

Shares of common stock

Balance, beginning of year

Common stock issued pursuant to offerings

Common stock issued pursuant to offerings –

Bridge Line Ventures

Common stock issued pursuant to services

Common stock issued pursuant to conversion

of preferred stock

Common stock issued pursuant to exercise of

options and warrants

Common stock interest expense

Common stock issued

pursuant to antidilutive provisions

Balance, end of year

Common stock and paid-in

Balance, beginning of year

Common stock issued pursuant to offerings

Share-based payments

Common stock issued pursuant to conversion

of preferred stock

Common stock issued pursuant to exercise of

options and warrants

Common stock issued

pursuant to antidilutive provisions

Balance, end of year

$ 114,039,638

Accumulated deficit

Balance, beginning of year

$ ( 74,269,898 )

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

$ ( 68,410,028 )

( 27,035,941 )

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

( 5,730,414 )

Non-controlling interest

Common stock issued pursuant to antidilutive

( 4,691,022 )

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

Preferred dividends

Balance, end of year

$ ( 106,070,358 )

$ ( 74,269,898 )

Accumulated other comprehensive

Balance, beginning of year

Other comprehensive

Balance, end of period

Ending balance

Total Stockholders’ Equity (Deficit)

$ ( 3,389,512 )

accompanying notes are an integral part of the consolidated financial statements.

Technologies Corp.

and Subsidiary

Platforms Corp.

Statements of Cash Flows

For the year ended December 31,

Cash flows from operating activities:

Net loss attributable to SQL Technologies

the year ended December 31,

Cash flows from operating

$ ( 27,035,941 )

$ ( 5,730,414 )

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation expense

Amortization of patent

(Other income), loan forgiveness

Non-cash equity-based compensation expense

Non-cash equity-based compensation expense, related party

Change in operating assets and liabilities:

Accounts receivable

Prepaid expenses

Right-to-use assets

to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Gain on forgiveness

Share-based payments

in operating assets and liabilities:

( 1,004,889 )

Prepaid expenses and

Operating lease liabilities

Accretion operating

lease liabilities

Royalty obligation

Lease, current

Accounts payable

Accrued expenses

Net cash used in operating activities

Cash flows from investing activities:

Purchase of property and equipment

Payment of patent costs

Net cash used in investing activities

Cash flows from financing activities:

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

( 1,200,000 )

payable and accrued expenses

cash used in operating activities

( 13,838,445 )

( 4,627,755 )

Cash flows from investing

Investments, available-for-sale

( 7,436,103 )

Purchase of property

and equipment

of patent costs

cash used in investing activities

( 8,056,417 )

Cash flows from financing

Proceeds from common

stock issuance

Placement cost

( 2,548,000 )

Proceeds from exercise

of options and warrants

Proceeds from SBA -

PPP notes payable

Proceeds from issuance

of convertible notes

Dividends paid

Principal repayments of SBA –

PPP note payable

Principal repayments on note

Net cash provided by financing activities

Increase (decrease) cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Supplementary disclosure of non-cash financing activities:

Issuance of common stock listed as “to be issued”

in prior year

Reclassed of accrued interest to note

Stock issuance, placement fees

repayments of notes payable

cash provided by financing activities

Change in cash and cash equivalents, and restricted

Cash and cash equivalents

at beginning of year

Cash and cash equivalents

and restricted cash at end of year

Supplementary disclosure

of non-cash financing activities:

Preferred stock conversion to common

Stock issuance, cashless exercise of warrants

Cash paid during the year for:

Common stock issued pursuant to antidilutive

Right-of-use assets and operating lease liabilities

Cash paid during the year

accompanying notes are an integral part of the consolidated financial statements.

Technologies Corp.

and Subsidiary

Platforms Corp.

to Consolidated Financial Statements

1 ORGANIZATION AND NATURE OF OPERATIONS

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.”

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.

Platforms Corp., a corporation (the “Company”), was incorporated in Florida in May 2004.

Company maintains offices in Johns Creek, Georgia, Miami and Pompano Beach, Florida, New York City, 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.

The Company’s first-generation technologies enable light fixtures,

ceiling fans and other electrically wired products to be installed safely and plugged-in to 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

following is a summary of the Company’s significant accounting policies:

of Presentation

11 unchanged sentences

2022 and 2021 .

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.

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Reclassifications

comparability, reclassifications of certain prior-year balances were made in order to confirm with current-year presentations.

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 has experienced, and in the future, expects to continue to experience, variability in its sales and earnings.

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

and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions,

and all highly liquid investments with an original maturity of three months or less.

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 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 at December 31, 2021 and December 31, 2020:

December 31, 2021

December 31, 2020

Accounts receivable

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.

comparability, reclassifications of certain prior-year balances were made in order to conform with current-year presentations, such as

grouping of common stock and additional paid-in capital and certain expenses initially included in cost of revenues were reclassified

to sales and general and administrative expenses.

Cash Equivalents, and Restricted Cash

Company considers all highly liquid securities with original maturities of three months or less when acquired, to be cash equivalents.

At December 31, 2022 and December 31, 2021, the Company’s cash composition was follows:

SCHEDULE OF CASH EQUIVALENTS AND RESTRICTED CASH

Cash and cash equivalents

Restricted cash

cash, cash equivalents and restricted cash

Company issued a letter of credit of $ 2.7 million in September 2022 to use as collateral for certain obligations to one of its lessors.

The letter of credit was issued by a financial institution and is secured by cash of the same amount.

Such cash is reflected on our balance

sheet as restricted cash.

are stated at the lower of cost, determined on the first-in, first-out (FIFO) method.

3 unchanged sentences

potentially obsolete items and evaluates the impact of any anticipated changes in future demand.

December 31, 2021

December 31, 2020

SCHEDULE OF INVENTORY

Inventory, component parts

11 unchanged sentences

or loss is reflected in the statements of operations.

Company leases certain office space and equipment under various leases.

In addition to rent, the leases require the Company to pay for

taxes, insurance, maintenance and other operating expenses.

The Company determines if an arrangement is a lease at inception.

leases are included in operating lease right-of-use assets, and operating lease liabilities in the Company’s consolidated balance

(“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent

its obligation to make lease payments arising from the lease.

Operating lease ROU assets and liabilities are recognized at commencement

The lease liability is based on the present value of lease payments over the lease term (or the remaining term in the case of existing

leases at time the Company adopted ASC 842).

The Company uses the implicit rate when readily determinable.

As most of the Company’s

leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement

date in determining the present value of lease payments.

The operating lease ROU asset is based on the lease liability, subject to adjustment,

such as for initial direct costs, and excludes lease incentives.

The Company’s lease terms include options to extend or terminate

the lease when it is reasonably certain that it will exercise that option.

For most operating leases, expense for lease payments is recognized

on a straight-line basis over the lease term.

Leases with an initial term of 12 months or less are not recorded on the balance sheet;

the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

securities are classified as available-for-sale when they might be sold before maturity.

Securities available for sale are carried at

fair value, with unrealized holding gains and losses included in accumulated other comprehensive income.

Available-for-sale

debt securities are recorded at fair value with the net unrealized gains and losses (that are not deemed to be other-than—temporary)

reported as a component of other comprehensive income (loss).

Realized gains and losses and charges for other-than-temporary impairments

are included in determining net income, with related purchase costs based on the first-in, first-out method.

The Company evaluates its

available-for-sale-investments for possible other-than-temporary impairments by reviewing factors such as the extent to which, and length

of time, an investment’s fair value has been below the Company’s cost basis, the issuer’s financial condition, and

the Company’s ability and intent to hold the investment for sufficient time for its market value to recover.

For impairments that

are other-than-temporary, an impairment loss is recognized in earnings equal to the difference between the investment’s cost and

its fair value at the balance sheet date of the reporting period for which the assessment is made.

The fair value of the investment then

becomes the new amortized cost basis of the investment, and it is not adjusted for subsequent recoveries in fair value.

Management does

not believe that its investment in debt securities are impaired as of December 31, 2022.

and state and local government debt securities consist of debt from relatively large corporate organizations and certain state and local

governmental agencies.

The Company reviews trading activity and pricing for each of the debt securities in its portfolio as of the measurement

date and determines if pricing data of sufficient frequency and volume in an active market exists to support Level I classification of

these securities.

When sufficient quoted pricing for identical securities is not available, the Company obtains market pricing and other

observable market inputs at dates other than the measurement dates.

As a result, the Company classifies its debt securities as Level

I and Level II of the fair value hierarchy.

Company developed various patents for an installation device used in light fixtures and ceiling fans.

9 unchanged sentences

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

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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.

and Global Trademark Agreement dated June 15, 2011 (as later amended),

which expires November 30, 2023 and is generally renewed for five-year periods.

to such agreement, the Company may use the GE brand logo on certain products, including plug

and play smart and standard ceiling fans and the Company’s standard and smart plug and

play devices.

The Company 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 the Company’s 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,

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.

The agreement expires on June 14, 2024 and includes automatic renewal provisions.

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.

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” guidelines.

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

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following are the hierarchical levels of inputs to measure fair value:

Observable inputs that reflect quoted market prices in active markets for identical 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.

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 and cash equivalents, accounts receivable, inventory,

prepaid expenses, other current assets, accounts payable, accrued interest payable, certain notes payable and notes payable –

1 – Observable inputs that reflect quoted market prices in active markets for identical

assets or liabilities.

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; or

inputs that are derived principally from or corroborated by observable market data by correlation

or other means.

3 – Unobservable inputs reflecting the Company’s assumptions incorporated in

valuation techniques used to determine fair value.

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 and cash equivalents, accounts receivable, inventory,

prepaid expenses, other current assets, accounts payable, accrued interest payable, certain notes payable and notes payable – related

party, and GE royalty obligation, approximate their fair values because of the short maturity of these instruments.

Company’s cash, cash equivalents and restricted cash are classified as level 1 financial instruments.

The Company’s investment

securities are classified as Level 1 and 2, depending on liquidity of the markets in which they are trading.

Conversion Features

Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging”

Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine

whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value

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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.

is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion features.

Financial Instruments

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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

of December 31, 2022, the Company had a sufficient number of authorized shares of common stock to accommodate the 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.

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of Liabilities

Company accounts for extinguishments of liabilities in accordance with ASC 405-20 (formerly SFAS 140) “Accounting for Transfers

and Servicing of Financial Assets and Extinguishment of Liabilities”.

Company accounts for extinguishments of liabilities in accordance with ASC 405-20 (formerly SFAS 140) “Accounting for Transfers

and Servicing of Financial Assets and Extinguishment of Liabilities”.

When the conditions are met for extinguishment accounting,

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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

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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”).

505-50 – Equity-Based Payments to Non-Employees (“ASU 505-50”).

ASU 505-50 measures stock-based compensation at either

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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.

2022 and 2021, 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:

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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, 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

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

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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.

If actual taxable income by tax jurisdiction

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of Section 740-10-25 for the reporting periods ended December 31, 2022, and 2021.

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.

consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements,

expense allowances, and other similar items in the ordinary course of business.

However, disclosure of transactions that are eliminated

in the preparation of consolidated or combined financial statements is not required in those statements.

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

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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

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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.

Comprehensive

Income or loss

principles generally require that recognized revenue, expenses, gains and losses be included in net income.

Certain changes in assets

and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the stockholders’

equity section of the statements of financial condition.

Such items along with net income are components of comprehensive income.

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 2022 and 2021, 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, 2022 and 2021

SCHEDULE OF EARNING (LOSS) PER SHARE

Stock warrants

Stock options

Convertible notes

Preferred stock

Issued Accounting Pronouncements

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on its consolidated financial statements.

3 DEBT SECURITIES

components of investments as of December 31, 2022 were as follows:

SCHEDULE OF COMPONENTS OF INVESTMENTS

Unrealized loss

Carrying value

Corporate debt securities

State and local government debt securities

Accrued Interest

4 FURNITURE AND EQUIPMENT

and equipment consisted of the following:

December 31, 2021

December 31, 2020

SCHEDULE OF FURNITURE AND EQUIPMENT

Machinery and equipment

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accumulated depreciation

expense amounted to $42,025 and $74,277 for the years ended December 31, 2021 and 2020, respectively.

expense amounted to $ 70,767 and $ 42,025 during 2022 and 2021, respectively.

5 INTANGIBLE ASSETS

assets (patents and trademarks) consisted of the following:

December 31, 2021

December 31, 2020

assets consisted of the following:

SCHEDULE OF INTANGIBLE ASSETS

accumulated amortization

expense on intangible assets was $ 51,634 and $ 42,262 for the years ended December 31, 2022 and 2021, respectively.

following table sets forth the estimated amortization expense for future periods :

Year Ending December 31

2027 and thereafter

following table sets forth the estimated amortization expense for the next five years:

SCHEDULE OF INTANGIBLE ASSETS AMORTIZATION EXPENSE FOR FUTURE

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,

SCHEDULE OF DEBT TABLE

at December 31,

Notes payable

Substantially

all Company assets

Convertible Notes (b)

2023-January 2024

PPP Loans (c)

Economic Impact Disaster

Substantially

all Company assets

SCHEDULE OF INTEREST EXPENSE

the year ended December 31,

Interest expense

of December 31, 2022, the expected future principal payments for the Company’s debt are due as follows:

SCHEDULE OF FUTURE PRINCIPAL PAYMENTS

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

unpaid principal bears annual interest at the Wall Street Journal prime rate plus 1.75 % per year.

in Convertible Notes are loans provided to the Company from two directors, an officer and two investors.

The notes each have the following

The notes each have the

following terms:

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

Subject to other customary terms,

the Convertible Notes mature between September 2023 and January 2024 and bear interest at an annual rate of 6 %, 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 per share.

Small Business Administration forgave approximately $ 178,000 of PPP loans during the year period ended December 31, 2022, which was

recognized as other income.

7 OPERATING LEASE LIABILITIES

April 2022, the Company entered into a 58-month lease related to certain office and showroom space pursuant to a sublease that expires

in February 2027.

The Company recognized a right-of-use asset and a liability of $ 1,428,764 pursuant to this lease.

September 2022, the Company entered in a 124-month lease related to its future headquarters offices and showrooms space.

recognized a right-of-use asset and a liability of $ 22,192,503 pursuant to such lease.

In connection with the execution of lease, the

Company was required to provide the landlord with a letter of credit in the amount of $ 2.7 million, which is secured by the same amount

following table outlines the total lease cost for the Company’s operating leases as well as weighted average information for these

leases as of December 31, 2022:

SCHEDULE OF LEASE COST OPERATING LEASE

Cash paid for operating lease liabilities

Right-of-use assets obtained in exchange for

new operating lease obligations

Fixed rent payment

Lease – Depreciation expense

the year ended December 31, 2022

Other information:

Weighted-average discount rate

Weighted-average remaining lease term (in months)

SCHEDULE OF MINIMUM LEASE OBLIGATION

Minimum Lease obligation

2027 and thereafter

8 ROYALTY OBLIGATIONS

Company has a license agreement with General Electric (“GE”) which provides, among other things, for rights to market certain

of the Company’s products displaying the GE brand in consideration of royalty payments to GE.

The agreement cannot be assigned

or sublicensed.

The agreement imposes certain manufacturing and quality control conditions to continue to use the GE brand.

The agreement

expires in November 2023.

the event the Company receives significant funding rounds of at least $ 50 million, the Company is required to use a portion of such funding

to pay certain amounts to GE.

The Company must make certain fixed and variable royalty payments through the terms of the agreement.

royalty payments are due quarterly, using a December 1 – November 30 contract year and based upon the prior quarter’s sales.

Royalty payments will be paid from sales of GE branded product subject to the following repayment schedule:

SCHEDULE OF ROYALTY OBLIGATIONS

in Contract Year

Year Net Sales

$ 0 to $ 50,000,000

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$ 100,000,000 +

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

of December 31, 2022 and 2021, the outstanding balance of the aggregate minimum payment was $2,638, and $ 3,838,000 , respectively.

fixed future payment obligations are approximately as follows:

SCHEDULE OF ROYALTY OBLIGATION MINIMUM FUTURE MINIMUM PAYMENT

Total principal payments

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expenses consisted of the following:

SCHEDULE OF ACCRUED EXPENSES

Accrued interest, convertible notes

Accrued wages

Trade payables

Accrued compensation

accrued expenses

10 INCOME TAXES

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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.

assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all the

deferred income tax assets will not be realized.

The ultimate realization of deferred income tax assets is dependent upon the generation

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income tax asset balances to warrant the application of a full valuation allowance as of December 31, 2022 and 2021.

effects of temporary differences that gave rise to significant portions of deferred tax assets at December 31, 2021 and December 31,

2020 were approximately as follows:

effects of temporary differences that gave rise to significant portions of deferred tax assets at December 31, 2022 and 2021 were approximately

OF DEFERRED TAX ASSETS

Net operating loss carryforward

Gross Deferred Tax Assets

Stock-based compensation

Rights of use assets

( 5,886,344 )

Operating lease liabilities

Less Valuation Allowance

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( 12,200,298 )

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 –

Deferred Tax Assets – Net

Company’s tax expense differs from the statutory tax expense for 2022 and 2021 and the reconciliation is as follows.

OF INCOME TAX RATE RECONCILIATION

Computed statutory tax benefit

$ ( 5,977,363 )

$ ( 1,171,879 )

Computed statutory tax benefit –

Change in valuation allowance

Computed statutory tax benefit – State

( 1,292,961 )

Change in valuation

11 RELATED PARTY TRANSACTIONS

1 unchanged sentence

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

The outstanding principal on the convertible promissory notes, associated with related parties was $ 950,000,000 as of December 31, 2022,

and 2021 and accrued interest of $ 104,375 and $ 68,679 , respectively.

Public Offering

Company issued 455,353 shares of its common stock to certain directors, officers and greater than 5% stockholders which generated gross

proceeds of $ 6,374,942 during 2022.

Company issued 95,386 shares of its common stock to affiliates of certain directors and greater than 5% stockholders pursuant to certain

anti-dilutive provisions during 2022.

The issuance of such shares was triggered based on the Company’s effective price of its initial

public offering in February 2022.

Company issued 200,000 shares of its common stock to a related party by means of common management in which one of our directors is also

an executive of the related party, in consideration of the provision of services.

The fair value of the shares, based on the closing

price at the date of grant amounted to $ 307,786 , of which $ 248,214 was expensed during 2022.

12 STOCKHOLDERS’ EQUITY (DEFICIT)

Company issued the following common stock during 2022, and 2021:

SCHEDULE OF COMMON STOCK

Equity Transactions

Common stock issued per PPM

Common stock issued per 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

stock issued per exercise of options and warrants

stock issued per exercise of warrants, cashless

stock issued, pursuant to services provided

of preferred stock

of common stock pursuant to offering, net

of common stock, pursuant to anti-dilutive provisions

2021 Equity Transactions

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 per PPM, Bridge

Line Ventures

Common Stock interest expense

Common stock issued, exercise of warrants and options,

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 –

Issuance of common stock pursuant to offering,

Conversion of preferred

Company issued 335,073 shares of its common stock to certain stockholders.

who participated in private placements during 2019 through

2021, pursuant to certain anti-dilutive provisions, during 2022.

The issuance of such shares was triggered based on the Company’s

effective price of its initial public offering in February 2022.

The fair value of the shares at the date of issuance were recorded as

an increase in common stock and additional paid-in capital and accumulated deficit during the period and an increase in the denominator

of the computation of the loss per share.

The anti-dilutive provisions expire 24 months from the date of the private placements, which

will lapse by December 31, 2023.

Preferred Stock

following is a summary of the Company’s Preferred Stock activity:

Transaction Type

Value per Share

Preferred Stock Balance at December 31, 2020

following is a summary of the Company’s Preferred Stock activity during 2022, and 2021:

SCHEDULE OF PREFERRED STOCK

Stock Balance at December 31, 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 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:

$0 par value;

20,000,000 shares authorized;

13,256,936 and 13,456,936 at December 31, 2021 and

2020, respectively.

( 12,376,536 )

( 3,094,134 )

Stock Balance at December 31, 2022

Stock Balance at December 31, 2020

2021 Preferred Stock

Stock Balance at December 31, 2021

Preferred Stock is convertible at the holder’s option.

Shares of the Preferred Stock may be repurchased by the Company upon 30

days’ prior written notice, for $ 3.50 per share.

Holders also have a put option, allowing them to sell their shares of Preferred

Stock back to the Company at $ 0.25 per share, and therefore the stock is classified as Mezzanine equity rather

than permanent equity.

The Company paid dividends in the amount of $ 38,055 and $ 129,456 , respectively, to the Preferred Stock shareholders

during 2022 and 2021, respectively.

The Preferred Shares are contingently redeemable.

Stock Options

following is a summary of the Company’s stock option activity:

Weighted Average Exercise Price

Weighted Average Remaining Contractual Life (In Years)

Aggregate Intrinsic Value

Balance, January 1, 2020

Balance, December 31, 2020

Balance, December 31, 2021

following is a summary of the Company’s stock option activity during 2022 and 2021:

SCHEDULE OF STOCK OPTION ACTIVITY

January 1, 2022

( 1,834,792 )

Outstanding, December

Exercisable, December

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

Outstanding, January 1, 2021

Outstanding, December

Exercisable, December

following table summarizes the range of the Black Scholes pricing model assumptions used by the Company during 2022 and 2021:

SCHEDULE OF BLACK SCHOLES PRICING MODEL

life (in years)

interest rate

Company cannot use its historical volatility as expected volatility because there is not enough liquidity in trades of common stock during

a term comparable to the expected term of stock option issued.

The Company relies on the expected volatility of comparable publicly traded

companies within its industry sector, which is deemed more relevant, to compute its expected volatility.

future option expense was $ 13.5 million (excluding certain market-based options which management cannot ascertain to have a probable

outcome amounting to $ 61 million) at December 31, 2022 and it is expected to be recognized over a weighted-average period of 4.00 years.

Warrants Issued

following is a summary of the Company’s warrant activity:

Number of Warrants

Weighted Average Exercise Price

Balance, December 31, 2019

following is a summary of the Company’s warrant activity during 2022 and 2021:

SCHEDULE OF WARRANT ACTIVITY

January 1, 2022

Balance, December 31,

Average Exercise Price

January 1, 2021

Forfeited/Cancelled

Balance, December 31,

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 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) 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.

warrants issued during 2022 and 2021 were issued to underwriters and private placement agents, as well as certain investors, pursuant

to the issuance of shares of common stock.

Restricted stock units

summary of the Company’s non-vested restricted stock units during 2022 and 2021 are as follows:

SCHEDULE OF NON-VESTED RESTRICTED STOCK

Weighted Average Grant Due Fair Value

Non-vested restricted stock units on January 1, 2021

Non-Vested restricted stock units on December 31, 2021

Non-vested restricted stock units on December 31, 2022

RSU and RSA gives the right to one share of the Company’s common stock.

RSU and RSAs that vest based on service and performance

are measured based on the fair values of the underlying stock on the date of grant.

The Company used a Lattice model to determine the

fair value of the RSU with a market condition.

Compensation with respect to RSU and RSA awards is expensed on a straight-line basis over

the vesting period.

2022, and 2021, the Company recognized share based expense of $ 13,959,796 .

13 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.

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:

customers accounted for more than 10 % of revenues during 2022 and one customer accounted for 83 % of revenues during 2021.

Company had two major vendors that accounted for 100 % of cost of sales during 2022 and 2021.

The Company expects to maintain its 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.

The uninsured deposits amounted to $ 9,461,597 at December 31, 2022.

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

and Geographic Markets

Company generates its income primarily from its proprietary-based technology and related products sold in the United States.

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.

has evaluated subsequent events through March 31, 2023, which is the date the consolidated financial statements were available to be

There were no subsequent events that required adjustment to or disclosure in the consolidated financial statements with the following

February 2023, the Company agreed to acquire the operations of Belami, Inc.

and certain subsidiaries, subject to certain closing

The Company agreed to pay up to $ 12

million and issue up shares of its common to the shareholders of Belami, Inc.

and certain of its

Contemporaneously, in February and March 2023, we issued convertible notes payable for $ 9.6

The conversion price of such notes is $ 3

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