What changed in this filing

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Item 9A. Controls and Procedures

2024-04-01 compared with 2023-03-31 · 1632 added, 1516 removed, 1273 unchanged (71% of the section changed)

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of Disclosure Controls and Procedures

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

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

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

rules and forms.

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

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

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

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

Management recognizes that there are inherent limitations

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

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

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

management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-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

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

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

management, including its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate

to allow timely decisions regarding required disclosure.

Management recognizes that there are inherent limitations to the effectiveness

of any system of disclosure controls and procedures and any controls and procedures, no matter how well designed and operated, can only

provide reasonable assurance of achieving their control objectives.

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

evaluated the effectiveness of our disclosure controls and procedures.

Based upon the evaluation, our Principal Executive Officer and

Based upon the evaluation, our Principal Executive Officers and

Principal Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2023.

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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,

our Principal Executive Officers 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

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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

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

and Principal Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of December 31, 2023.

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OTHER INFORMATION

10b5-1 Trading Plans

the quarter ended December 31, 2023, none of the Company’s directors or executive officers adopted ,

modified or terminated

any contract, instruction or written plan for

the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange

Act or any “non-Rule 10b5-1 trading arrangement” (as defined in Item 408(c) of Regulation S-K).

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.

Company’s 2024 Annual Meeting of Stockholders is scheduled to be held on July 10 2024.

Stockholders of record as of May 15, 2024

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

Note Extensions

March 31, 2024, the Company entered into an amendment to three of its previously issued subordinated convertible balloon promissory notes

(the “promissory notes”) aggregating $575,000 with certain holders of such promissory notes.

The amendment extends the maturity

date of each respective promissory note to May 16, 2025, increases the interest rate to ten percent (10%) per year starting January 1,

2024 and adjusts the conversion price to $3.00 per share.

No other terms of the promissory notes were changed.

Each of Leonard J.

Co-Chief Executive Officer and a director of the Company, John P.

Campi, Co-Chief Executive Officer of the Company, and an investor entered

into an amendment to his or its respective promissory note.

The amendment is effective as of the original maturity date of the respective

The Company’s Board of Directors approved the amendment.

The issuance of the notes was deemed to be exempt from registration

pursuant to Section 4(a)(2) of the Securities Act, including Regulation D and Rule 506 promulgated thereunder, as transactions by the

Company not involving a public offering.

Notes Issued to Belami Sellers

March 29, 2024, the Company and the Sellers entered into a letter agreement modifying certain obligations under the Stock Purchase

Agreement, dated February 6, 2023, between the Company and the Sellers of Belami.

In connection with the letter agreement, the

Company issued convertible promissory notes to each of the Sellers (the “Seller Note(s)”) in substitution of an

aggregate of $3,117,408 in cash due to the Sellers on the first anniversary of the Closing, or April 28, 2024.

Each Seller received

a Seller Note in an amount of $1,039,303 on the same date.

In addition to other customary terms, the Seller Notes bear annual

interest at 10%, with interest and principal becoming due on May 16, 2025, and can be converted by the Sellers at any time at $3.00

per share of our common stock.

The Seller Notes include customary events of default accelerating maturity, including a breach of the

Company’s covenants, representations and warranties under the Stock Purchase Agreement and a change of control of Belami.

letter agreement further provides that the Company will perform all other obligations arising on the first anniversary of the

Closing, including issuance of shares of common stock due to Sellers, and that on such date the non-fundamental representations and

warranties expire, and the Company will release $750,000 held in escrow.

The issuance of the notes was deemed to be exempt from registration pursuant to Section 4(a)(2) of the Securities

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

Commission Termination Agreement

March 29, 2024, Mr.

Campi and Ms.

Barron each entered into a commission termination agreement with the Company, terminating the incentive

compensation-related provisions in their employment agreements and agreeing no amounts would be paid pursuant to such provisions for

prior periods.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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of March 21, 2024.

Executive Chairman

Chairman, Director

Executive Officer

Executive Officer, Director

Financial Officer

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that he brings with his advanced business strategies, he will continue to move us forward towards achieving our goals.

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

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

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

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

From December 2007 to December

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

worldwide purchasing and supplier quality activities.

Campi has served as our Co-Chief Executive Officer since September 2023.

He previously served as our Chief Executive Officer

from November 2014 to September 2023 and as our Chief Financial Officer through December 31, 2021.

Campi founded Genesis Management,

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

Campi has extensive experience in the field

of cost management, is recognized as a founder of the strategic cost-management discipline known as Activity-Based Cost Management and

has extensive experience in the field of supply chain management.

From December 2007 to December 2008, Mr.

Campi served as the Chief

Procurement Officer and an Executive Vice President for Chrysler, where he was responsible for all worldwide purchasing and supplier

quality activities.

From September 2003 to January 2007, Mr.

Campi served as the Senior Vice President

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

Inc.’s global supply chain.

Campi served as the Senior Vice President of Sourcing and Vendor Management

for The Home Depot, Inc., where he led the drive for standardization and optimization of The Home Depot, Inc.’s global supply chain.

From April 2002 to September 2003, Mr.

Campi served as the Chief Procurement Officer and Vice President

for DuPont Global Sourcing and Logistics.

Campi served as the Chief Procurement Officer and Vice President for DuPont Global Sourcing and

Prior to 2002, Mr.

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

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

Campi previously served on the board

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

Campi also has served as a member of the

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

of Management Accountants.

Campi received his MBA from Case Western Reserve University.

Campi has extensive executive and advisory

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

Campi led the Global Sourcing activities for GE Power Energy and held a variety of positions with Federal

Mogul, Parker-Hannifin Corporation and PricewaterhouseCoopers.

Campi previously served on the board of Trustees of Case Western Reserve

University and has been appointed an Emeriti Trustee.

Campi also has served as a member of the advisory board of directors for three

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

received his MBA from Case Western Reserve University.

Campi has extensive executive and advisory experience with established and

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

Sokolow has served as Co-Chief Executive Officer of the Company since September 2023 and as a director of the Company since

November 2015.

Sokolow previously served in various roles at Newbridge Financial, Inc.

and its subsidiaries, including as Chief Executive

Officer and President of Newbridge Financial, Inc.

from January 2015 through August 2023;

as Chief Executive Officer of Newbridge Financial

Inc.’s broker-dealer subsidiary, Newbridge Securities Corporation, and Chief Executive Officer of Newbridge Financial, Inc.’s

registered investment adviser subsidiary, Newbridge Financial Services Group, Inc., from July 2022 through August 2023;

and as Chairman

of Newbridge Securities Corporation from January 2015 through July 2022.

Sokolow previously served in a variety of roles at vFinance,

Inc., a publicly traded financial services company, including as Chairman of the board of directors from January 2007, a member of the

board of directors from November 1997 and Chief Executive Officer from January 2007 through July 2008, when it merged into National

Holdings Corporation, a publicly traded financial services company.

Sokolow also served as President of vFinance, Inc.

2001 through December 2006.

From July 2008 until July 2012, Mr.

Sokolow was President of National Holdings Corporation, and from July

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

From July 2012 until December

Sokolow was a consultant and partner at Caribou LLC, a strategic advisory services firm.

Sokolow was Founder, Chairman

and Chief Executive Officer of the Americas Growth Fund Inc., a closed-end management investment company, from 1994 to 1998.

until 1993, Mr.

Sokolow was an Executive Vice President and the General Counsel of Applica Inc., a publicly traded appliance marketing

and distribution company.

From 1982 until 1988, Mr.

Sokolow practiced corporate, securities and tax law and was one of the founding attorneys

and a partner of an international boutique law firm.

From 1980 until 1982, he worked as a Certified Public Accountant for Ernst &

Young and KPMG Peat Marwick.

Sokolow has served on the board of directors of Consolidated Water Co.

Ltd., a publicly traded 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., a publicly traded medical technology company focused on developing and commercializing innovative diagnostic

and treatment methods for patients suffering from breathing and sleep issues arising from certain dentofacial abnormalities, since June

2020, where he currently serves as Chairman of the Audit Committee and as a member of the Nominating and Corporate Governance Committee,

and on the board of directors of Agrify Corporation, a publicly traded provider of innovative cultivation and extraction solutions for

the cannabis industry, 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.

Alberta Oilsands Inc.), a then publicly traded 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 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.

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.

Boisseau is a partner of Boisseau, Felicione & Associates Inc., which provides 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.

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

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

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

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

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

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

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

Prior to joining

Office Depot, Inc., Mr.

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

previously served in a variety of roles at Office Depot, Inc., an office supply retailer, from July 2007 through May 2016, including

as Executive Vice President and President, International from November 2011 to May 2016, Executive Vice President, Corporate Strategy

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

November 2011.

Prior to joining Office Depot, Inc., Mr.

Schmidt spent 11 years with the ACNielsen Corporation, a marketing research firm,

most recently serving as President and Chief Executive Officer.

Prior to joining ACNielsen, Mr.

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

and Southeast Asian operations.

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

Schmidt spent eight years at the Pillsbury

Food Company, serving as President of its Canadian and Southeast Asian operations.

He has also held management positions at PepsiCo and

Procter & Gamble.

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., which 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.

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

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, a provider of ceramic,

porcelain, glass and natural stone tiles, most recently serving 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, 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.

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

Since June 2023, Mr.

Golden has served as the Chief Financial

Officer of Media Culture, a brand response media agency.

Golden was previously employed at vcfo, which offers fractional CFO and

human resources services to clients who require advisors they could trust to guide them through major changes, from April 2022 through

During 2021, Mr.

Golden served as interim Chief Financial Officer of ADB Companies, which provides strategy, design, execution

and program management services for the communication, utility, and technology industries.

Prior to that, during 2021, Mr.

Golden served

as a project manager and professional services contractor for MMC Group, Inc., which offers full-service workforce solutions, and as

interim controller at SportClips Haircuts.

During 2020, he served as a special project auditor for WebsterRogers LLP, a South Carolina-based

accounting and consulting firm that provides a broad spectrum of assurance, tax and advisory services.

From 2013 to 2019, Mr.

served as Chief Financial Officer at NBG Home, an affiliate of Nielsen & Bainbridge, LLC 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.

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 &

Our board believes Mr.

Golden’s qualifications to serve as a member of our board include his financial expertise, including

his status as an “audit committee financial expert,” and his experience in the home goods and lighting industry.

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

Greenstein Brayer currently serves as Co-Founder

and Chief Executive Officer of Merkavah Inc.

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

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

Greenstein Brayer previously served as a contract attorney with Holland & Knight LLP 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 LLP) from 1993

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

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

Our board believes Ms.

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 her experience with customer service and technology innovation.

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

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.

Ridge founded and has served at Ridge Global, LLC,

a global strategic consulting company and provider of insurance and risk transfer solutions, since July 2006, where he currently serves

as Chairman of the board and Chief Executive Officer 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 of Ridge

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

From January 2003 to January 2005, Mr.

Ridge served as the Secretary

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

Ridge served as the Special Assistant

to the President for Homeland Security.

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

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.

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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,

Company, a global confectionery leader, from November 2007 to May 2018, Advaxis, Inc., a then publicly traded clinical-stage biotechnology

company, from August 2015 to March 2018, and LifeLock, Inc., a then publicly traded 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.

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

1 unchanged sentence

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.

on other public and private company boards and his expertise in risk management and cybersecurity.

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

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

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

Sokolow has served as Chief Executive Officer and

President of Newbridge Financial, Inc.

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

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

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

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

Sokolow also served as President of vFinance, Inc.

from January 2001 through December 2006.

From July 2008 until July 2012, Mr.

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

National Holdings Corporation.

From July 2012 until December 2014, Mr.

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

advisory services firm.

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

management investment company, from 1994 to 1998.

From 1988 until 1993, Mr.

Sokolow was an Executive Vice President and the General Counsel

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

From 1982 until 1988, Mr.

Sokolow practiced corporate,

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

From 1980 until 1982,

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

Sokolow has served on the board of directors of 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.) (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 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.

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.

From 2013 to 2019, Mr.

Golden served as Chief

Financial Officer at NBG Home, an affiliate of Nielsen & Bainbridge and one of the largest home decor manufacturing companies and

importers globally.

From 2008 to 2013, Mr.

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

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

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

counsel at Bank Hapoalim B.M.

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

1993 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.

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 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.

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.

Our Board believes Ms.

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

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Kohen, Leonard J.

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

Sokolow, and Nancy DiMattia.

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

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of the audit committee include:

● appointing,

approving the compensation of and assessing the independence of our independent registered

public accounting firm;

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 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);

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

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

our financial statements;

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

and related disclosures;

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

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

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

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

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

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

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

and overseeing all related person transactions for potential conflict of interest situations,

as well as annually reviewing the related party transactions policy;

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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Golden’s prior experience, business acumen and independence.

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

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

compensation committee consists of Ms.

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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

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 officers;

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

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

the executive compensation disclosures and, if and when required, preparing the compensation

committee report required by SEC rules to be included in our annual proxy statement or Form

10-K, as applicable;

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.

reviewing and overseeing the application of the Company’s policy for clawback, or recoupment, of incentive

compensation;

our strategies related to human capital management, including talent acquisition, development and retention, diversity and inclusion

and corporate culture;

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;

● 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;

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 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.

Each member of our nominating and governance committee is a non-employee director, as defined in Rule 16b-3 promulgated

under the Exchange Act.

of Business Conduct and Ethics

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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.

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, 2023, except as follows:

a Form 4 filed by Patricia Barron on August 9,

2023, reporting the August 4, 2023 grant of restricted stock units, and related withholding of shares for taxes, and grant of stock

a Form 4 filed by Dov Shiff on October 10, 2023, reporting the September 30, 2023 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;

and a Form 4 to

be filed by Thomas J.

Ridge reporting the conversion of preferred stock into common stock on May 1, 2023 and the June 30, 2023,

September 30, 2023 and December 31, 2023 issuances of restricted stock paid in lieu of the cash retainer payable for his service on

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

EXECUTIVE COMPENSATION

“named executive officers” for the year ended December 31, 2023 were:

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

Campi, Co-Chief Executive Officer (since September 12, 2023;

previously, Chief Executive Officer);

Sokolow, Co-Chief Executive Officer (since September 12, 2023;

previously a non-employe director of the Company)

Kohen, Executive Chairman;

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

Boisseau, Chief Financial Officer;

Schmidt, President;

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Compensation Program Components

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

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

Each of our named executive officers (other than Mr.

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respectively, during 2023.

Pursuant to the employment agreement that the Company entered into with Mr.

Sokolow at the time of his appointment

as Co-Chief Executive Officer on September 12, 2023, Mr.

Sokolow receives a base salary of $160,000 per year.

For his services on the

board of directors during the portion of 2023 prior to his appointment as Co-Chief Executive Officer, Mr.

Sokolow was paid pursuant to

the Company’s non-employee Director Compensation Program (defined below), which is described below under the heading “Director

Compensation.”

and Bonus Compensation

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

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

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

Sokolow will receive a minimum bonus every six months during the term of his employment agreement equal to $40,000 in

cash or stock, as elected by Mr.

Sokolow, and is eligible to receive a performance-based bonus, payable in equity and/or cash, subject

to the achievement of performance metrics and other criteria as determined by the Executive Chairman and approved by the compensation

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

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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.” Ms.

Barron is eligible to receive

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

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

Schmidt is eligible to receive a stock bonus

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We believe that equity awards, such as stock options,

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

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

addition to the equity incentive and supplemental bonus awards described above, 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.

restricted share units (“RSUs”) and non-vested restricted stock, encourage our named executive officers to focus on our long-term

success as reflected in increases to our stock prices over a period of several years, growth in our profitability and other elements.

to his employment agreement, on September 12, 2023, Mr.

Sokolow received (i) 450,000 RSUs, 120,000 of which vested on the date of grant,

300,000 of which will vest in six semi-annual installments of 50,000, beginning on March 12, 2024, and 30,000 of which will vest on March

and (ii) five-year stock options to purchase up to 450,000 shares of the Company’s common stock at an exercise price

of $1.58 per share, 120,000 of which vested on the date of grant, 300,000 of which will vest in six semi-annual installments of 50,000,

beginning on March 12, 2024, and 30,000 of which will vest on March 12, 2027, in each case subject to continuous employment through the

applicable vesting date.

2023, the compensation committee granted certain equity awards and a cash bonus award to Mr.

On April 5, 2023, Mr.

received 120,000 RSUs and five-year stock options to purchase up to 120,000 shares of the Company’s common stock at an exercise

price of $3.28 per share, in each case vesting in three equal annual installments beginning on the grant date, subject to continued employment

through the applicable vesting date.

In addition, on October 19, 2023, Mr.

Boisseau received 7,993 RSUs that vested in full on November

15, 2023, and 25,000 RSUs that vest in two equal installments on February 15, 2024 and May 15, 2024, subject to Mr.

continuous employment through the applicable vesting date.

In October 2023, the compensation committee also approved the payment of a

discretionary cash bonus of $50,000 to Mr.

Boisseau, of which $25,000 was immediately payable and $12,500 will be payable on each of

February 15, 2024 and May 15, 2024.

Boisseau additionally elected to receive certain equity awards in cash, resulting in an additional

$25,000 cash bonus payment to Mr.

Boisseau, which was paid in November 2023.

August 4, 2023, the compensation committee granted to Ms.

Barron 100,000 RSUs and five-year stock options to purchase up to 100,000 shares

of the Company’s common stock at an exercise price of $2.08 per share, in each case vesting in four equal annual installments beginning

on the grant date, subject to continued employment through the applicable vesting date.

addition to the equity incentive and supplemental bonus awards granted during fiscal 2023 as 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.

to his employment agreement, Mr.

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to attract or retain top executive-level talent.

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.

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 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 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.

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

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.

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

and Perquisites

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$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.

On occasion, 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 trade shows and

other events.

Compensation Table

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

and Principal Position (1)

Awards ($) (3)(4)

Incentive Plan Compensation ($) (5)

Non-Qualified

Deferred Compensation Earnings ($)

Other Compensation

Chief Executive Officer

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

Name and Principal Position

Co-Chief Executive Officer

Executive Chairman

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Chief Financial Officer

(since January 1, 2022)

Patricia Barron

Chief Operations Officer

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

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.

to his amended employment agreement Mr.

Schmidt received:

(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

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”).

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, 2023.

Boisseau received 152,993 RSUs and options to purchase 120,000 shares of common

stock at an exercise price of $3.28 per share;

Barron received 100,000 RSUs and

options to purchase 100,000 shares of common stock at an exercise price of $2.08 per share;

and (iii) Mr.

Sokolow received 450,000 RSUs and a stock option to purchase 450,000 shares

common stock at an exercise price of $1.58 per share, in addition to 26,615 shares of common

stock and stock options to purchase up to 17,500 shares of common stock at an exercise price

of $3.28 per share, granted pursuant to our Director Compensation Program for his service

as a non-employee director prior to his appointment as our Co-Chief Executive Officer, which

are also reported in this table.

For more information regarding equity awards granted to

our named executive officers during fiscal 2023 and 2022, see “Executive Compensation

Program Components—Other Equity Compensation and Awards” above.

(3) Non-Equity Incentive Plan Compensation reflects incentive compensation and commission payable pursuant to each individual’s respective employment agreement, typically as a percent of the Company’s net revenue or sales earned, and in each case as described below under “Agreements with Named Executive Officers.”

In March 2024, Mr.

Campi and Ms.

Barron each entered into a commission termination agreement, terminating the incentive

compensation-related provisions in their employment agreements and agreeing no amounts would be paid pursuant to such provisions for prior

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 Summary Compensation Table.

to the Schmidt Agreement (as defined below), Mr.

Schmidt’s receives equity compensation

for his services to the Company and is eligible to receive additional bonus compensation

as determined by the Company, as described below under “Agreements with Named Executive

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

of securities underlying unexercised options

incentive plan awards:

Option Awards

Number of securities underlying unexercised options (#) exercisable

of securities underlying unexercised options (#) Not exercisable

Equity incentive plan awards:

Number of securities underlying unexercised unearned options

exercise price

expiration date

of shares or units of stock that have not vested

value of shares or units of stock that have not vested

incentive plan awards:

Option exercise price ($)

Option expiration date

Number of shares or units of stock that have not vested (#)

Market value of shares or units of stock that have not vested ($)*

Equity incentive plan awards:

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

incentive plan awards:

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

have not vested

Equity incentive plan awards:

Market or payout value of unearned shares, units or other rights that have not vested

Leonard Sokolow

1,000,000 (4)

1,140,000 (4)

1,500,000 (4)(5)

500,000 (4)(5)

1,000,000 (4)(5)

460,000 (4)(6)

Marc-Andre Boisseau

Patricia Barron

Based on the closing stock price of our common stock of $1.60 on December 29, 2023, the last trading day of the 2023 fiscal year.

options were granted pursuant to the Director Compensation Program and vest in twelve equal monthly installments beginning on April

options and RSUs vest as follows:

300,000 will vest in six semi-annual installments of 50,000, beginning on March 12, 2024, and 30,000

will vest on March 12, 2027.

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 to the Company.

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 vest on the following schedule:

50,000 shares 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 10,084 were unvested as of December 31, 2023 and will vest on May 9, 2024.

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.

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

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

options become exercisable as follows:

Kohen also received supplemental bonus compensation such that, in

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

valuation, Mr.

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

options vest 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

an exercise price of $4.00 per share.

options vest in equal annual installments on each of April 5, 2024 and 2025.

these RSUs, 80,000 vest in in equal annual installments on each of April 5, 2024 and 2025 and 25,000 vest in equal installments on

February 15, 2024 and May 15, 2024.

options and RSUs vest in three equal annual installments on each of August 4, 2024, 2025 and 2026.

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.

options vest on June 1, 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 with the last installment vesting on June 1, 2024.

with Named Executive Officers

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

Campi (Co-Chief Executive

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

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

Campi’s previous employment agreement

effective September 1, 2016.

Effective September 2023, Mr.

Campi began serving under the Campi Agreement as Co-Chief Executive

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

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Campi and the Company.

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

Campi Agreement provides that Mr.

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;

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

of his duties.

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

the discretion of the board;

and (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;.

Campi was previously eligible to receive an

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.

In March 2024, Mr.

Campi entered into a commission

termination agreement, terminating the incentive compensation-related provisions in his employment agreements and agreeing no

amounts would be paid pursuant to such provisions for prior periods Mr.

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.

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All shares granted will vest immediately.

Sokolow (Co-Chief Executive Officer)

connection with his employment as Co-Chief Executive Officer, the Company and Mr.

Sokolow entered into an employment agreement, effective

as of September 12, 2023 (the “Sokolow Agreement”).

Pursuant to the Sokolow Agreement, Mr.

Sokolow will receive a base salary

of $160,000 per year, subject to annual review and adjustment by the compensation committee, and a minimum bonus every six months during

the term of the Sokolow Agreement equal to $40,000 in cash or stock, as elected by Mr.

In addition, Mr.

Sokolow will be eligible

to receive a performance-based bonus, payable in equity and/or cash, subject to the achievement of performance metrics and other criteria

as determined by the Executive Chairman and approved by the compensation committee.

Subject to the compensation committee’s approval,

the Company and Mr.

Sokolow may agree on an annual bonus structure (in addition to the minimum bonus described above) based on performance

metrics and other criteria, and such bonus payments could be a combination of stock, stock options, and cash.

to the Sokolow Agreement, on September 12, 2023, the compensation committee granted to Mr.

Sokolow (i) 450,000 RSUs, 120,000 of which

vested on the date of grant, 300,000 of which will vest in six semi-annual installments of 50,000, beginning on March 12, 2024, and 30,000

of which will vest on March 12, 2027;

and (ii) five-year stock options to purchase up to 450,000 shares of the Company’s common

stock at an exercise price of $1.58 per share, 120,000 of which vested on the date of grant, 300,000 of which will vest in six semi-annual

installments of 50,000, beginning on March 12, 2024, and 30,000 of which will vest on March 12, 2027, in each case subject to continuous

employment through the applicable vesting date.

The awards were granted pursuant to the terms and conditions of the 2021 Plan and applicable

equity award agreements.

Sokolow is also entitled to receive expense reimbursement for reasonable expenses, approved in writing by the Company, incurred in the

performance of his duties.

He is entitled up to four weeks of vacation per year and to participate in the Company’s benefit programs

for executive employees.

The Sokolow Agreement also contains non-competition and non-solicitation covenants and provides for severance

under certain circumstances as described in the Sokolow Agreement.

In particular, in the event the Company terminates Mr.

employment for any reason other than for Disability or Cause (as such terms are defined in the Sokolow Agreement), the Company gives

notice of nonrenewal of the Sokolow Agreement, or if Mr.

Sokolow terminates his employment for Good Reason (as defined in the Sokolow

Agreement), the Company will provide the following benefits:

(i) severance pay equal to six months of Mr.

Sokolow’s ending annual

base salary, minus withholdings, (ii) a gross amount equal to six months of the cost of Mr.

Sokolow’s monthly health insurance

premium for him and his eligible dependents (if any), conditioned on Mr.

Sokolow electing to continue health insurance coverage through

COBRA, and (iii) the portions of Mr.

Sokolow’s RSU and stock option awards that are due to vest during six months following his

termination date will vest on their respective vesting dates.

Sokolow Agreement has a three-year term, with automatic renewal annually following the initial three-year term for an additional one

year unless terminated by either party by providing at least 30-days’ written notice prior to the end of the then term.

Kohen (Executive Chairman)

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

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

(iii) a sign-on bonus stock

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

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

(iii) a sign-on bonus stock option

to purchase 120,000 shares of common stock at an exercise price of $12.00 per share, which vested in its entirety on January 1, 2023

and has a five-year term;

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

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

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

(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 have a five-year term;

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

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$2.5 billion and $3.0 billion.

As of December 31, 2021, the following

options have vested:

Of these, as of December 31, 2023, the

following 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

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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.

Ms Barron was previously eligible to receive cash incentive compensation equal to 0.25% of the Company’s net revenue, payable on an annual or quarterly basis.

In March 2024, Ms.

Barron entered into a commission termination agreement, terminating the incentive compensation-related

provisions in her employment agreements and agreeing no amounts would be paid pursuant to such provisions for prior periods.

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

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Incentive Plans

Stock Incentive Plan (as Amended and Restated)

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

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

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

However, all outstanding awards

will continue to be governed by their existing terms.

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

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

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

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

Options will be granted in accordance

with such determinations as evidenced by a written option agreement.

and Restricted Stock Awards

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

stock awards.

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

to Eligible Persons (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

as the board, or the committee, may determine.

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

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

The terms and conditions of each deferred

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

of separate deferred stock award agreements need not be identical.

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

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

Such awards shall be conferred

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

and period being set forth in the grant.

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

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

achievement level.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Income Tax Consequences

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

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

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

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

of restrictions on such common stock.

Stock Incentive Plan

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

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

Stock Incentive Plan

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

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

The 2021 Plan is the successor to the Company’s 2018 Stock Incentive Plan

(as amended and restated, the “2018 Plan”), and no further awards may be granted under the 2018 Plan after the Effective

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.

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

Administration

44 unchanged sentences

the 2021 Plan.

the 2021 Plan, the compensation committee may grant or sell restricted shares to participants ( i.e.

, shares that are subject to

a substantial risk of forfeiture based on continued service and/or the achievement of performance objectives and that are subject to

restrictions on transferability) under the 2021 Plan.

Except for these restrictions and any others imposed by the compensation committee,

upon the grant of restricted shares, the recipient generally will have rights of a stockholder with respect to the restricted shares,

including the right to vote the restricted stock and to receive dividends and other distributions paid or made with respect to the restricted

the 2021 Plan, the compensation committee may grant or sell restricted shares to participants (i.e., shares that are subject to a substantial

risk of forfeiture based on continued service and/or the achievement of performance objectives and that are subject to restrictions on

transferability) under the 2021 Plan.

Except for these restrictions and any others imposed by the compensation committee, upon the grant

of restricted shares, the recipient generally will have rights of a stockholder with respect to the restricted shares, including the

right to vote the restricted stock and to receive dividends and other distributions paid or made with respect to the restricted shares.

However, any dividends payable with respect to unvested restricted shares will be accumulated or reinvested in additional restricted

5 unchanged sentences

performance objectives, as the compensation committee may determine.

compensation committee may grant or sell restricted share units to participants under the 2021 Plan.

Restricted share units constitute

an agreement to deliver shares (or an equivalent value in cash) to the participant at the end of a specified restriction period and/or

upon the achievement of specified performance objectives, subject to such other terms and conditions as the compensation committee may

specify, consistent with the provisions of the 2021 Plan.

Restricted share units are not common shares and do not entitle the recipients

to any of the rights of a stockholder.

Restricted share units will be settled in cash, shares or a combination of cash and shares.

restricted share unit award will be evidenced by an award agreement that specifies the terms of the award and such additional limitations,

terms and conditions as the compensation committee may determine, which may include restrictions based upon the achievement of performance

compensation committee may grant or sell RSUs to participants under the 2021 Plan.

RSUs constitute an agreement to deliver shares (or

an equivalent value in cash) to the participant at the end of a specified restriction period and/or upon the achievement of specified

performance objectives, subject to such other terms and conditions as the compensation committee may specify, consistent with the provisions

of the 2021 Plan.

RSUs are not common shares and do not entitle the recipients to any of the rights of a stockholder.

RSUs will be settled

in cash, shares or a combination of cash and shares.

Each RSU award will be evidenced by an award agreement that specifies the terms

of the award and such additional limitations, terms and conditions as the compensation committee may determine, which may include restrictions

based upon the achievement of performance objectives.

Share-Based Awards

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the compensation committee may determine, consistent with the provisions of the 2021 Plan.

determined by the compensation committee in its discretion, restricted share units and other share-based awards may provide the participant

with a deferred and contingent right to receive dividend equivalents, either in cash or in additional shares.

Any such dividend equivalents

will be accumulated or deemed reinvested until such time as the underlying award becomes vested (including, where applicable, vesting

based on the achievement of performance objectives).

No dividend equivalents may be granted with respect to shares underlying any stock

option or SAR.

determined by the compensation committee in its discretion, RSUs and other share-based awards may provide the participant with a deferred

and contingent right to receive dividend equivalents, either in cash or in additional shares.

Any such dividend equivalents will be accumulated

or deemed reinvested until such time as the underlying award becomes vested (including, where applicable, vesting based on the achievement

of performance objectives).

No dividend equivalents may be granted with respect to shares underlying any stock option or SAR.

a participant is a party to an employment, retention, change in control, severance or similar agreement with the Company or a subsidiary

47 unchanged sentences

Recovery Policy

granted under the 2021 Plan shall be subject to forfeiture or recoupment pursuant to any compensation recovery policy that the Company

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

granted under the 2021 Plan are subject to forfeiture or recoupment pursuant to the Company’s Compensation Recovery Policy.

of the 2021 Plan;

5 unchanged sentences

stock exchange.

Stock Incentive Plan (as Amended and Restated)

board of directors initially approved 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.

Prior to the effectiveness of the 2021 Plan, the Company, acting through the

board, or the applicable committee, was authorized to grant stock options, restricted stock awards, deferred bonus awards, deferred stock

awards and performance share awards.

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

However, all outstanding awards under the 2018 Plan will continue to be governed by their existing terms.

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

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

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

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

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

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

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

Stock Incentive Plan

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

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

or Change in Control Benefits

11 unchanged sentences

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

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.

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.

Recovery Policy

2023, the board of directors adopted the Company’s Compensation Recovery Policy to comply with SEC and Nasdaq Stock Market rules

for the clawback of certain executive compensation in the event that we are required to prepare a restatement of our financial statements

due to material noncompliance with any financial reporting requirement under the securities laws.

In the event of such a restatement,

the Compensation Recovery Policy provides that the compensation committee will cause the Company to promptly recover any erroneously

awarded incentive-based compensation received by any covered executive officer during the three completed fiscal years immediately preceding

the date on which the Company is required to prepare the accounting restatement.

Covered executive officers include both current and

former executive officers, and incentive-based compensation includes any compensation that is granted, earned, or vested based wholly

or in part on the attainment of a financial reporting measure.

Financial reporting measures are those that are determined and presented

in accordance with the accounting principles used in preparing our financial statements, and any measures that are derived wholly or

in part from such measures.

The amount required to be recovered under the Compensation Recovery Policy in the event of an accounting

restatement generally will equal the amount of incentive-based compensation received by the covered executive officer that exceeds the

amount of such compensation that otherwise would have been received had it been determined based on the restated amounts, computed without

regard to any taxes paid.

The Compensation Recovery Policy is effective with respect to covered incentive-based compensation received

by a covered executive officer on or after October 2, 2023.

The full text of the Compensation Recovery Policy is attached to this Annual

Report as Exhibit 97.

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

March 2022, and the board of directors amended the Director Compensation Program in March 2023.

Under the Director Compensation

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

installments.

Directors may elect to have the cash retainer paid in the form of shares of common stock.,.

For 2023, shares were

granted on the last day of each quarter, with the number of shares granted determined based on the opening price per share of common

stock on Nasdaq on the last day of the quarter.

For 2024, all shares will be granted on December 31, 2024, with the number of shares

granted to be determined based on the opening price per share of common stock on Nasdaq on such date.

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 Date.

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

directors each receive an additional annual grant of (i) 3,000 shares of restricted stock, which vest immediately on the Program Grant

Date, and (ii) options to purchase up to 3,000 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) 2,000 shares of restricted stock, which vest immediately on the Program Grant

Date, and (ii) options to purchase up to 2,000 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 also receive reimbursement of reasonable out-of-pocket expenses for attending meetings and carrying out duties as board members.

Compensation Table

following table summarizes the compensation paid to each non-employee director who served during the fiscal year ended December 31, 2023.

All compensation earned by Mr.

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

All compensation earned by Messrs.

Kohen and Sokolow during 2023 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

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:

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 2023.

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 2023 fiscal year.

All stock options reported in the table above were granted with an exercise

price of $3.28 per share and vest in twelve equal monthly installments beginning on April 30, 2023.

were no unvested stock awards held by non-employee directors as of December 31, 2023.

The total number of unexercised option awards

(vested and unvested) held by our non-employee directors as of December 31, 2023 was as follows:

DiMattia, 34,500 options;

Golden, 28,000 options;

Greenstein Brayer,

9,000 options;

Peter, 426,250 options;

Greenstein Brayer, 25,000 options;

Ridge, 610,000 options;

Shiff, 110,000 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

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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.

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.

1 unchanged sentence

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 March 20, 2023.

or warrants, vesting of RSUs or conversion of convertible notes, within 60 days of March 21, 2024.

Except as noted by footnote, and

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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 83,119,862 shares of common stock issued and outstanding as of March 30, 2023.

The percentage of beneficial ownership is based on

96,870,902 shares of common stock issued and outstanding as of March 21, 2024.

Shares of our common stock that are subject to options

or warrants exercisable, RSUs vesting, or notes convertible within 60 days of March 21, 2024 are deemed to be outstanding for computing

the percentage ownership of the person holding such options, warrants, RSUs and/or notes and the percentage ownership of any group in

which the holder is a member, but are not deemed outstanding for computing the percentage of any other person.

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

Common Stock Beneficially Owned

Name and Address of Beneficial Owner[

Number of Shares and Nature of Beneficial Ownership

Percentage of Total Common Stock

Greater than 5% Stockholders

Shiff, Director (1)

Dov Shiff, Director (1)

Kohen, Executive Chairman and Director (2)

7 SQL LLC (3)

Associates Limited Partnership (4)

Steven Siegelaub (5)

Directors and Named Executive

Officers (not otherwise included above)

Ridge, Director (6)

Sokolow, Director (7)

Golden, Director (8)

Greenstein Brayer, Director (9)

DiMattia, Director (10)

Campi, Chief Executive Officer (11)

Motek 7 SQL LLC (3)

Strul Associates Limited Partnership (4)

Directors and Named Executive Officers (not otherwise included above)

Campi, Co-Chief Executive Officer (5)

Sokolow, Co-Chief Executive Officer, Director (6)

Marc-Andre Boisseau (7)

Schmidt, President (8)

Barron, Chief Operations Officer (14)

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

Represents beneficial ownership

of less than one percent.

Patricia Barron, Chief Operations Officer (9)

Nancy DiMattia, Director (10)

Golden, Director (11)

Greenstein Brayer, Director (12)

Ridge, Director (136)

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

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,

Shiff on January 3, 2024 and October 10, 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.

Includes 13,274,618 shares of common stock held by DZDLUX s.a.r.l., of which

Shiff is a controlling person;

235,712 shares of common stock held by Shiff Group Assets

Ltd., of which Mr.

Shiff is a controlling person;

1,458,529 shares of common stock held directly

and 40,000 shares held by 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

entities and have voting and dispositive power over such shares.

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

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

Also includes 85,000 shares

of common stock underlying stock options that are exercisable within 60 days of March 21,

2024 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., of which Mr.

is the President and Chief Executive Officer.

As a result of his positions at DZDLUX s.a.r.l,

Shiff Group Assets Ltd.

and Shiff Group Investments Ltd., Mr.

Shiff may be deemed to be the

beneficial owner of the shares held by such entities and have voting and dispositive power

over such shares.

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

Kohen on June 13, 2022 and July 7, 2023, respectively.

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

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family member, as well 5,940,000 shares of common stock underlying stock options that are

currently exercisable.

exercisable within 60 days of March 21, 2024.

As manager of KRNB Holdings LLC, Mr.

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.

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.

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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

is 20320 Fairway Oaks Drive, #362, Boca Raton, Florida 33434.

on a Schedule 13G filed by Mr.

Siegelaub on February 16, 2022.

Includes the following shares

of common stock:

(i) 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 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.

Blvd., Deerfield Beach, Florida 33441.

Florida 33394.

4,855,015 shares of common stock, 125,000 shares of common stock issuable upon exercise of

an outstanding warrant, 1,018,519 shares of common stock underlying convertible promissory

notes that are exercisable within 60 days of March 21, 2024 held by Strul Associates Limited Partnership., and 25,000 shares of common stock underlying stock options that are

exercisable within 60 days of March 21, 2024 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 business address of Strul Associates

Limited Partnership is 20320 Fairway Oaks Drive, #362, Boca Raton, Florida 33434.

797,685 shares of common stock, 120,000 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.

are exercisable within 60 days of March 21, 2024 and 6,667 shares of common stock issuable

upon conversion of the principal amount of an outstanding convertible note held by Mr.

469,136 shares of common stock held by Mr.

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.

Sokolow, 10,084 shares of unvested restricted

stock, 955,000 shares of common stock underlying stock options held by Mr.

Sokolow that are

exercisable within 60 days of March 21, 2024, 16,667 shares of common stock issuable upon

conversion of the principal amount of an outstanding convertible note held by Mr.

and 24,290 shares of common stock issuable upon exercise of warrants held by Mr.

40,470 shares of common stock, 90,000 shares of common stock underlying stock options that

are exercisable within 60 days of March 21, 2024 and 52,500 RSUs that vest within 60 days

of March 21, 2024 held by Mr.

103,843 shares of common stock, including, and

195,000 shares of common stock underlying stock options that are exercisable within 60 days

of March 21, 2024 held by Mr.

112,841 shares of common stock and 725,000 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.

that are exercisable within 60 days of March 21, 2024 held by Ms.

(10) 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.

58,270 shares of common stock and 34,500 shares of common stock underlying stock options

that are exercisable within 60 days of March 21, 2024 held by Ms.

(11) Includes

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

are currently exercisable held by Mr.

28,000 shares of common stock and 28,000 shares of common stock underlying stock options

that are exercisable within 60 days of March 21, 2024 held by Mr.

(12) 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

25,000 shares of common stock and 25,000 shares of common stock underlying stock options

that are exercisable within 60 days of March 21, 2024 held by Ms.

Greenstein Brayer.

(13) Includes

1,013,770 shares of common stock and 585,000 shares of common stock underlying stock options

that are currently exercisable held by Ms.

that are exercisable within 60 days of March 21, 2024 held by Mr.

(14) 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.

26,917,844 shares of common stock,;

8,782,500 shares of common stock underlying stock options that are exercisable within 60

days of March 21, 2024;

62,584 shares of restricted stock that vest within 60 days of March 21, 2024;

24,290 shares

of common stock issuable upon the exercise of warrants;

and 63,334 shares of common stock

issuable upon the conversion of the principal amount of outstanding convertible notes.

are unaware of any contract, or other arrangement or provision, the operation of which may at any subsequent date result in a change

2 unchanged sentences

following table sets forth equity compensation plan information as of December 31, 2023:

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.

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.

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 (3)

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 (1)(2)

Equity compensation plans not approved by security holders

Includes 40,654,237 shares of common stock issuable upon exercise of stock options and RSUs 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 $6.45 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) 5,725,500 shares of common stock issuable upon exercise of stock

options granted under the 2018 Plan;

(d) 5,750,476 shares of common stock issuable upon exercise of stock options granted under the 2021 Plan;

(d) 4,482,261 shares of

common stock issuable upon vesting of RSUs granted under the 2021 Plan;

and (f) 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, 2023.

2015 Stock Incentive Plan and 2018 Plan were previously replaced and terminated by the 2018 Plan and the 2021 Plan, respectively, and,

as such, no securities remained available for issuance under such plans as of December 31, 2023 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 Plan.

the RSUs referred to in footnote 1 because they have no exercise price.

Includes 71,441 shares of common stock issuable vesting of shares of restricted stock granted by the Company’s board of directors

in connection with services agreements.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, and Director Independence

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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.

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

The 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, 2022, 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.

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.

Upon the occurrence of certain events of default and written notice from the holder, the note will become immediately due and payable

and, until paid in full, will bear interest at a rate of 12% per annum.

The 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 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.

During 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.

In March 2024, certain of these related parties entered into an amendment to the note, effective as of

the original maturity date of the respective note, which, among other things, extended the maturity date of the note to May 16,

Subject to other customary terms, the note accrues interest at a rate of 6% per annum, or, as amended, 10% per annum effective

as of January 1, 2024, 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, or, as amended, $3.00 per share.

Upon notice to the holder, the Company may prepay, in whole

or in part, the outstanding balance of the note at any time prior to the maturity date;

provided, that the holder has the right to

convert the note into shares of common stock in lieu of prepayment.

Upon the occurrence of certain events of default and written

notice from the holder, the note will become immediately due and payable and, until paid in full, will bear interest at a rate of

12% per annum.

The following table lists the related parties, the principal amount of the note purchased, and the maturity date of

The Company has not paid any of the principal on the notes, except for $125,000 in principal paid in December 2023 to Sky

Technology Partners, LLC .

Name of Related

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

Maturity Date

– Co-Chief Executive Officer and director of the Company

Sky Technology Partners, LLC

– Steven Siegelaub, a former 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.

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

November 3, 2023

Campi – Co-Chief

Executive Officer of the Company

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 of the Company, 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 notes is 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 adjusted 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.

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

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

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

The Company may prepay the entire then-outstanding principal amount of the notes at any time, plus a prepayment premium;

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

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 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 adjusted exercise price of $2.70 per share.

In addition, the 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

October 2018, the Company entered into an investment banking agreement with Newbridge Securities Corporation, pursuant to which Newbridge

Securities Corporation agreed to provide business development, consulting and advisory services, including capital raising and placement

agency services, to the Company.

This agreement was renewed periodically prior to its termination.

Sokolow, a member of the

Company’s board of directors, is the Chief Executive Officer and President of Newbridge Financial, Inc.

and Chairman of Newbridge

Securities Corporation, its broker dealer subsidiary.

In connection with entering into the agreement, the Company paid Newbridge Securities

Corporation a $25,000 fee and agreed to issue shares of common stock equal to $50,000, which were paid as of December 31, 2020.

to the agreement, the Company agreed to pay placement agent fees equal to 8.0% of the gross purchase price upon closing of sales of the

Company’s equity securities and 4.0% upon closing of any line of credit, secured or unsecured term loan or other non-convertible

debt facility arranged by Newbridge Securities Corporation for the Company.

Upon the closing of any such equity or debt transaction,

the Company agreed to issue to Newbridge Securities Corporation, or its permitted assigns, warrants to purchase:

(i) in an equity transaction,

10% of the sum of (A) the number of shares of common stock issued by the Company and (B) the number of shares of common stock issuable

by the Company upon the exercise or conversion of convertible securities issued;

and (ii) in a debt transaction, 10% of the facility

amount, divided by a per share price equal to the last equity, warrants or options issued by the Company at the time of closing.

agreement further provided, among other things, that such warrants would contain provisions providing for cashless exercise, price protection

and piggyback registration rights and would not be callable or redeemable by the Company.

agreement also provided for sales commission with respect to certain agreements, including territorial licenses, marketing agreements

and commercial contracts.

If the transaction were with an organization located, identified or introduced by Newbridge Securities Corporation,

the Company was required to pay Newbridge Securities Corporation a $75,000 fee at closing, plus 1% of the net revenues received by the

Company, payable quarterly during the contract’s term.

If the Company requested Newbridge Securities Corporation assist with closing

the transaction, the Company was required to pay Newbridge Securities Corporation a $50,000 fee at closing, plus 0.25% of the net revenues

received by the Company, payable quarterly for the lesser of five years or the contract’s term.

investors introduced by the Company, the compensation payable to Newbridge Securities Corporation was 50% of the then-applicable fees

for an investor introduced by Newbridge Securities Corporation.

For investors introduced by a third party, the fee payable to Newbridge

Securities Corporation was mutually agreed upon by the Company and Newbridge Securities Corporation.

to the agreement, as of December 31, 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.

Sokolow, respectively.

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

Sokolow, our Co-Chief Executive Officer and director, previously served in various executive roles at Newbridge Financial, Inc.

its subsidiaries, including Newbridge Securities Corporation, until September 2023.

January 2022, the Company and Newbridge Securities Corporation entered into a termination agreement, pursuant to which three investment

banking agreements previously entered into during October 2018, May 2021, and May 2021, respectively, were terminated, and the parties

agreed that there are no continuing rights or obligations under such agreements, and that Newbridge Securities Corporation is not entitled

to any fees or payments, in cash or otherwise, pursuant to such agreements.

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

6 unchanged sentences

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.

Pursuant to the Advisory Agreement, the Company issued to affiliates of Newbridge Securities Corporation an aggregate

of 200,000 restricted shares of the Company’s common stock, which 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.

2 unchanged sentences

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 August 31, 2021, pursuant to which Bridge Line Ventures purchased

16,667 shares of common stock at a purchase price per share of $12.00.

of the Bridge Line SPAs contains substantially the same terms.

Among other things, the Bridge Line SPAs contain anti-dilutive price protection

measures, which apply for 24 months following the date of closing of the Bridge Line SPAs, subject to certain exceptions, which anti-dilution

provisions were triggered by the Company’s initial public offering.

As such, on February 14, 2022, the Company issued 86,032 shares

of common stock to Bridge Line Ventures.

addition, on each of June 30, 2021 and August 31, 2021, pursuant to the Bridge Line SPAs, Bridge Line Ventures received a three-year

warrant to purchase up to 214,957 and 16,667 shares of the Company’s common stock, respectively, at an initial exercise price of

$12.00 per share (subject to adjustment, including in the event of certain subsequent equity sales by the Company) (the “Bridge

Line Ventures Warrants”).

The initial exercise price of $12.00 per share was automatically adjusted to $9.80 per share pursuant

to applicable anti-dilution provisions in connection with the completion of the Company’s initial public offering.

The Bridge Line

Ventures Warrants may be exercised, in whole or in part, at any time on or prior to June 30, 2024 or August 31, 2024, respectively.

other terms, the Bridge Line Ventures Warrants provide for cashless exercise of the Bridge Line Ventures Warrants if, after June 30,

2022 or August 31, 2022, respectively, there is no effective registration statement registering the shares of common stock issuable upon

exercise of the Bridge Line Ventures Warrants.

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

November 2021, Investment 2018, LLC purchased 41,667 shares and three-year warrants to purchase up to 41,667 shares of common stock at

an initial exercise price of $12.00 per share (subject to adjustment, including in the event of certain subsequent equity sales by the

Company), for an aggregate purchase price of $500,000.

In connection with the completion of the Company’s initial public offering,

applicable anti-dilution provisions were automatically triggered, and, accordingly, Investment 2018, LLC received 9,354 shares of common

stock on February 14, 2022 and the initial exercise price of the warrants of $12.00 per share was automatically adjusted to $9.80 per

As the managing member of Investment 2018 LLC, Mr.

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

December 2021, Mr.

Sokolow exercised an option to purchase 75,000 shares, dated January 1, 2017, with an exercise price of $2.60 per

share, and Mr.

Shiff exercised an option to purchase 25,000 shares, dated January 1, 2017, with an exercise price of $2.60 per share.

Sokolow, our Co-Chief Executive Officer and a member of our board of directors, previously served as Chief Executive

Officer and President, entered into stock purchase agreements during 2021, pursuant to which the Company issued an aggregate of 317,656

shares of common stock (including shares issued pursuant to anti-dilution provisions) and warrants to purchase 231,624 shares of common

stock to Bridge Line Ventures.

On 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.

Public Offering

18 unchanged sentences

All Other Fees

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.

For 2022, includes fees

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

fees represent amounts billed for professional services rendered for the audit and/or review of our consolidated financial statements.

For 2023, includes fees related to professional services rendered in connection with the issuance of consents related to Registration

Statements on Form S-3 and the audit of the financial statements of Belami, Inc.

For 2022, 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 and fees related to professional services rendered in connection with the issuance of a consent related

to a Registration Statement on Form S-8.

18 unchanged sentences

Exhibit Index

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.

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).

Amendment to Stock Purchase Agreement, dated April 28, 2023, by and among SKYX Platforms Corp.

and Mihran Berejikian, Nancy Berejikian,

and Michael Lack (incorporated herein by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K filed with the

SEC on May 1, 2023).

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.

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).

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).

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).

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).

of Amendment to Articles of Incorporation (effective May 2, 2023) (incorporated herein by reference to Exhibit 3.1 to the Company’s

Current Report on Form 8-K filed with the SEC on May 5, 2023).

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).

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).

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).

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).

Memorandum of Understanding, dated January 31, 2018, between Safety Quick Lighting & Fans Corp.

and Nielsen & Bainbridge, LLC (incorporated herein by reference to Exhibit 10.10 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Promissory Note, dated December 14, 2021, by the Company, in favor of Nielsen & Bainbridge, LLC (incorporated herein by reference to Exhibit 10.11 to the Company’s Registration Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Form of Securities Subscription Agreement and Warrant used in 2021 Private Placements (incorporated herein by reference to Exhibit 10.13 to Amendment No.

Specimen Common Stock Certificate (filed herewith).

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

2015 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.14 to the Company’s Registration Statement on Form S-1 (File No.

Stock Incentive Plan (incorporated herein by reference to Exhibit 10.14 to the Company’s Registration Statement on Form S-1

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.

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.

of Stock Award Agreement (2015 Plan) (incorporated herein by reference to Exhibit 10.16 to the Company’s Registration Statement

on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

2018 Stock Incentive Plan, as amended and restated (incorporated herein by reference to Exhibit 10.17 to the Company’s Registration Statement on Form S-1 (File No.

Stock Incentive Plan, as amended and restated (incorporated herein by reference to Exhibit 10.17 to the Company’s Registration

Statement on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

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

of Stock Option Agreement (2018 Plan) (incorporated herein by reference to Exhibit 10.18 to the Company’s Registration Statement

on Form S-1 (File No.

333-261829) filed with the SEC on December 22, 2021).

Form of Stock Award Agreement (2018 Plan) (incorporated herein by reference to Exhibit 10.19 to the Company’s Registration Statement on Form S-1 (File No.

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.

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.

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.

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,

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.

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 Placement Agent Warrant (incorporated herein by reference to Exhibit 10.29 to the Company’s Registration Statement on Form S-1 (File No.

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 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.

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 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.

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,

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.

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.

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

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.

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.

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.

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

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.

(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

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.

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 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.

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).

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).

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).

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).

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).

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).

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).

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).

of Nonqualified Stock Option Agreement (2021 Plan) (April 2023) (incorporated herein by reference to Exhibit 10.12 to the Company’s

Quarterly Report on Form 10-Q for the quarter ended March 31, 2023).

of Restricted Share Unit Award Agreement (three-year vesting) (2021 Plan) (April 2023) (incorporated herein by reference to Exhibit

10.13 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023).

of Restricted Share Unit Award Agreement (one year vesting) (2021 Plan) (April 2023) (incorporated herein by reference to Exhibit

10.14 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023).

of Restricted Shares Award Agreement (2021 Plan) (April 2023) (incorporated herein by reference to Exhibit 10.15 to the Company’s

Quarterly Report on Form 10-Q for the quarter ended March 31, 2023).

of Cash Retention Incentive Agreement (April 2023) (incorporated herein by reference to Exhibit 10.11 to the Company’s Quarterly

Report on Form 10-Q for the quarter ended March 31, 2023).

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.

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).

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).

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).

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).

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).

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).

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).

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).

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).

of Securities Purchase Agreement, dated March 29, 2023 (incorporated herein by reference to Exhibit 10.49 to the Company’s

Annual Report on Form 10-K for the year ended December 31, 2022).

of Subordinated Secured Convertible Promissory Note, dated March 29, 2023 (filed herewith) (incorporated herein by reference to Exhibit

10.50 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2022).

of Common Stock Purchase Warrant, dated March 29, 2023 (incorporated herein by reference to Exhibit 10.51 to the Company’s

Annual Report on Form 10-K for the year ended December 31, 2022).

Letter Agreement, effective as of April 27, 2023, between SKYX Platforms Corp.

and Nielsen & Bainbridge, LLC (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 28, 2023).

Form of Closing Promissory Note, dated April 26, 2023 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 1, 2023).

Form of Retained Earnings Promissory Note, dated April 26, 2023 (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on May 1, 2023).

Promissory Note and Business Loan Agreement, dated May 1, 2023, between SKYX Platforms Corp.

and First-Citizens Bank & Trust Company (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 5, 2023).

Sales Agreement by and between SKYX Platforms Corp.

and The Benchmark Company, LLC, dated May 26, 2023 (incorporated herein by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 26, 2023).

Executive Employment Agreement, dated September 12, 2023, by and between SKYX Platforms Corp.

and Leonard J.

Sokolow (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 13, 2023).

Line of Credit Promissory Note, Business Loan Agreement (Asset Based), and Commercial Security Agreement, signed September 18, 2023, by and between Belami, Inc., as borrower and grantor, and Farmers & Merchants Bank of Central California, as lender (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 22, 2023).

Term Loan Promissory Note and Business Loan Agreement, signed September 18, 2023, by and between Belami, Inc., as borrower, and Farmers & Merchants Bank of Central California, as lender (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on September 22, 2023).

Commercial Guaranty, signed September 18, 2023, by and among Belami, Inc., as borrower, SKYX Platforms Corp., as guarantor, and Farmers & Merchants Bank of Central California, as lender (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on September 22, 2023).

Licensing Master Services Agreement, signed December 4, 2023, between SKYX Platforms Corp.

and GE Technology Development, Inc., and Letter Agreement relating to Trademark License Agreement, between SQL Lighting & Fans, LLC and GE Trademark Licensing, Inc (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 8, 2023.

Commission Termination Agreement, dated March 29, 2024, by and between SKYX Platforms Corp and John Campi ( filed herewith)

Commission Termination Agreement, dated March 29, 2024, by and between SKYX Platforms Corp and Patricia Baron ( filed herewith)

Form of Amendment No.

1 to Subordinated Convertible Balloon Promissory Note, dated March 29, 2024 (filed herewith).

Letter Agreement to the Stock Purchase Agreement, as amended, dated March 29, 2024, by and among SKYX Platforms Corp., Mihran Berejikian, Nancy Berejikian and Michael Lack, and form of Convertible Promissory Note (filed herewith).

Preferability Letter from M&K CPAS, PLLC (incorporated herein by reference to Exhibit 18.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023).

SKYX Platforms Corp.

Insider Trading Policy (last revised March 2023) (filed herewith).

List of Subsidiaries (filed herewith).

1 unchanged sentence

Power of Attorney (included on signature page).

Certification by Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

Certification by Co-Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

Certification by Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

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

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

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

SKYX Platforms Corp.

Compensation Recovery Policy (adopted August 2023) (filed herewith).

following financial statements from the Annual Report on Form 10-K for the year ended December 31, 2023 are formatted in iXBRL (Inline

13 unchanged sentences

PLATFORMS CORP.

Campi, Chief Executive Officer

Campi, Co-Chief Executive Officer

Sokolow, Co-Chief Executive Officer and Director

individual whose signature appears below constitutes and appoints John P.

Campi, Chief Executive Officer, and Marc-Andre Boisseau, Chief

Financial Officer, and each of them singly, his or her true and lawful attorneys-in-fact and agents with full power of substitution,

for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report

on Form 10-K and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange

Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every

act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or

could do in person, hereby ratifying and confirming all the said attorneys-in-fact and agents or any of them or their or his substitute

or substitutes, may lawfully do or cause to be done by virtue hereof.

Campi, Co-Chief Executive Officer, Leonard J.

Sokolow, Co-Chief

Executive Officer, and Marc-Andre Boisseau, Chief Financial Officer, and each of them singly, his or her true and lawful attorneys-in-fact

and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign

any and all amendments to this Annual Report on Form 10-K and to file the same, with all exhibits thereto, and other documents in connection

therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power

and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to

all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all the said attorneys-in-fact and

agents or any of them or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the

2 unchanged sentences

Executive Officer)

Executive Officer and Director

Executive Officer)

Marc-Andre Boisseau

4 unchanged sentences

Greenstein Brayer

/s/ Dov Shiff

Greenstein Brayer

3 unchanged sentences

to Consolidated Financial Statements

of Independent Registered Public Accounting Firm (PCAOB ID:

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

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets – December 31, 2023 and 2022

Consolidated Statements of Operations and Comprehensive Loss – December 31, 2023 and 2022

Consolidated Statements of Stockholders’ Equity (Deficit) – December 31, 2023 and 2022

Consolidated Statements of Cash Flows – December 31, 2023 and 2022

Notes to Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

of SKYX Platforms Corp.

and Subsidiary

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.

the Board of Directors and Stockholders of SKYX Platforms Corp.

on the Financial Statements

have audited the accompanying consolidated balance sheets of SKYX Platforms Corp.

(the Company) as of December 31, 2023 and 2022, 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, 2023 and the related notes (collectively referred to as the “financial statements”).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position

of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the two-year

period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

in Note 1 to the consolidated financial statements, the Company has an accumulated deficit, negative cash flows from operations and

recurring net losses, which raises substantial doubt about its ability to continue as a going concern.

plans regarding those matters are also described in Note 1.

The consolidated financial statements do not include any adjustments that

might result from the outcome of this uncertainty.

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.

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.

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.

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.

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.

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

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 audits 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.

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 matter below, providing separate opinion on the critical audit matter or on the accounts

or disclosures to which they relate.

discussed in Note 2 to the consolidated financial statements, the Company recognizes revenue upon the transfer of control of promised

goods to the customer upon delivery in an amount that reflects the consideration the Company expects to receive in exchange for the products.

management’s evaluation of agreements with customers involves significant judgement, given the fact that some agreements require

managements evaluation and allocation of the transaction price and transfer of goods to the customer.

evaluate the appropriateness and accuracy of the assessment by management, we evaluated management’s assessment in relationship

to the relevant agreements and management’s disclosure in the consolidated financial statements.

have served as the Company’s auditor since 2018

Woodlands, TX

Platforms Corp.

Balance Sheets (Audited)

Balance Sheets

December 31, 2023

December 31, 2022

Current assets:

cash equivalents

Cash and cash equivalents

Restricted cash

Account receivable, net

Investments, available-for-sale

expenses and other assets

current assets

Deferred cost of revenues

Prepaid expenses and other assets

Total current assets

Long-term assets:

Furniture and equipment,

Furniture and equipment, net

Restricted cash

Right of use assets

Intangibles, definite

long-term assets

and Stockholders’ Equity (Deficit)

Intangibles, definite life

Total long-term assets

Liabilities and Stockholders’ Equity (Deficit)

Current liabilities:

Accounts payable and

accrued expenses

Accrued expenses, related

Accounts payable and accrued expenses

Notes payable, current

Operating lease liabilities,

Royalty obligations,

Operating lease liabilities, current

Royalty obligations, current

Consideration payable

Deferred revenues

Convertible notes, current related parties

Convertible notes, current

related parties

notes, current

current liabilities

Convertible notes

Total current liabilities

Long term liabilities:

Long term accrued expenses

Notes payable

Consideration payable

Operating lease liabilities

Convertible notes

Convertible notes- related

long-term liabilities

Commitments and Contingent

Royalty obligations

Total long-term liabilities

Total liabilities

Commitments and Contingent Liabilities:

Redeemable preferred stock - subject to redemption:

$ 0 par value;

0 and 20,000,000

shares authorized;

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 and 880,400

and 12,376,536

shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively

Stockholders’ Equity (Deficit):

Common stock and additional paid-in capital:

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

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

31, 2022 and December 31, 2021, respectively

93,473,433 and 82,907,541 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively

Accumulated deficit

1 unchanged sentence

( 106,070,358 )

other comprehensive loss

stockholders’ equity (deficit)

( 3,389,512 )

Non-controlling

equity (deficit)

( 3,424,954 )

Liabilities and Stockholders’ Equity (Deficit)

Accumulated other comprehensive loss

Total stockholders’ equity (deficit)

Non-controlling interest

Total equity (deficit)

Total Liabilities and Stockholders’ Equity (Deficit)

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

1 unchanged sentence

Statements of Operations and Comprehensive Loss

ended December 31,

Year ended December 31,

Cost of revenues

profit (loss)

Gross profit (loss)

Selling and marketing expenses

General and administrative expenses-related party

General and administrative expenses

from operations

Total expenses, net

Loss from operations

( 37,825,206 )

2 unchanged sentences

Interest expense, net

Other income - loan

other expense, net

( 3,109,307 )

Gain on extinguishment of debt

Total other expense, net

( 1,907,450 )

Common stock issued

pursuant to antidilutive provisions

( 39,732,656 )

( 27,035,941 )

Common stock issued pursuant to antidilutive provisions

Non-controlling interest

loss attributed to common stockholders

Preferred dividends

Net loss attributed to common stockholders

$ ( 39,732,656 )

1 unchanged sentence

Other comprehensive loss:

Unrealized loss on debt

comprehensive loss attributed to common stockholders

Unrealized loss on debt securities

Net comprehensive loss attributed to common stockholders

$ ( 39,670,509 )

$ ( 31,862,607 )

loss per share - basic and diluted

Weighted average number of common shares outstanding

– basic and diluted

Net 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.

1 unchanged sentence

Statements of Stockholders’ Equity (Deficit)

the year ended December 31,

For the year ended December 31,

Shares of common stock

Balance, beginning of year

Common stock issued pursuant to offerings

$ 114,039,638

Balance, beginning of year

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

Common stock issued pursuant to conversion of preferred stock

Common stock issued pursuant to exercise of options and warrants

Common stock issued pursuant to acquisition

Common stock issued pursuant to extinguishment of debt

Common stock issued pursuant to antidilutive provisions

Balance, end of year

Common stock and paid-in

$ 162,025,024

$ 114,039,638

Balance, end of year

Common stock and paid-in capital

Balance, beginning of year

$ 114,039,638

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

Common stock issued pursuant to services

Common stock issued pursuant to conversion of preferred stock

Debt discount

Common stock issued pursuant to acquisition

Common stock issued pursuant to extinguishment of debt

Common stock issued pursuant to exercise of options and warrants

Common stock issued pursuant to antidilutive provisions

Balance, end of year

$ 162,025,024

$ 114,039,638

Accumulated deficit

5 unchanged sentences

Non-controlling interest

Common stock issued pursuant to antidilutive

Common stock issued pursuant to antidilutive provisions

( 4,691,022 )

3 unchanged sentences

$ ( 106,070,358 )

Accumulated other comprehensive

Balance, beginning of year

Accumulated other comprehensive loss

Balance, beginning of year

Other comprehensive

Other comprehensive loss

Balance, end of period

Ending balance

Total Stockholders’ Equity (Deficit)

( 3,389,512 )

( 39,732,656 )

( 27,035,941 )

Total Stockholders’ Equity (Deficit)

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

1 unchanged sentence

Statements of Cash Flows

the year ended December 31,

Cash flows from operating

For the twelve months ended December 31,

Cash flows from operating activities:

$ ( 39,732,656 )

$ ( 27,035,941 )

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

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

Depreciation and amortization

Gain on forgiveness

Amortization of debt discount

Gain on forgiveness of debt

( 1,201,857 )

Share-based payments

in operating assets and liabilities:

Change in operating assets and liabilities:

( 1,004,889 )

Prepaid expenses and

Accounts receivable

Prepaid expenses and other assets

Deferred charges

Deferred revenues

Operating lease liabilities

Accretion operating

lease liabilities

Accretion operating lease liabilities

Royalty obligation

( 1,200,000 )

payable and accrued expenses

cash used in operating activities

Consideration payable

Accounts payable and accrued expenses

Net cash used in operating activities

( 12,998,073 )

( 13,838,446 )

Cash flows from investing

Investments, available-for-sale

Cash flows from investing activities:

Purchase of debt securities

( 7,436,103 )

Purchase of property

and equipment

of patent costs

cash used in investing activities

Proceeds from disposition of debt securities

Acquisition, net of cash acquired

( 4,206,200 )

Cash flows from financing

Proceeds from common

stock issuance

Purchase of property and equipment

Payment of patent costs and other intangibles

Net cash provided by (used in) investing activities

( 8,056,417 )

Cash flows from financing activities:

Proceeds from issuance of common stock- offerings

Placement cost

( 2,548,000 )

Proceeds from exercise

of options and warrants

Proceeds from SBA -

PPP notes payable

Proceeds from issuance

of convertible notes

Proceeds from exercise of options and warrants

Proceeds from line of credit

Proceeds from issuance of convertible notes

Dividends paid

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:

Principal repayments of notes payable

( 3,413,225 )

Net cash provided by financing activities

Change in cash and cash equivalents, and restricted cash

Cash, cash equivalents and restricted cash at beginning of year

Cash, cash equivalents and restricted cash at end of year

Supplementary disclosure of non-cash financing activities:

Preferred stock conversion to common

Common stock issued pursuant to antidilutive

Business acquisition:

Assets acquiring excluding identifiable intangible assets and goodwill and cash

Liabilities assumed and consideration payable

Identifiable intangible assets and goodwill

Debt discount

Common stock issued pursuant to antidilutive provisions

Fair value of shares issued pursuant to acquisition

Common stock pursuant to extinguishment of debt

Right-of-use assets and operating lease liabilities

Cash paid during the year

Cash paid during period for:

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

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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 maintains offices in Sacramento, California, 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.

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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.

has expanded the capabilities of its power-plug product, to include its second generation 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 third-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.

Since April 2023, the Company also markets home lighting, ceiling fans and other home furnishings from third parties.

Company’s liquidity’s sources include $ 22.4 million in cash and cash equivalents, including restricted cash of $ 5.6 million, and $ 3.1 million of working capital.

However, the Company has a history of recurring operating losses and its net cash used in operating activities amounted to $ 13.0 million

and $ 13.8 million during 2023 and 2022, respectively.

The Company has also generated net cash provided by financing activities

of $ 22.7 million and $ 20.9 million during 2023 and 2022, respectively.

Accordingly, the Company’s management cannot ascertain

that there is no substantial doubt that it will be able to meet its obligations as they become due within one year after the date that

its financial statements are issued.

intends to mitigate such conditions by continuing to support its continued growth by decreasing its cash used in operating activities

through increased revenues and increased margins fr om products sold to large retailers and

its internet portals, and to the extent necessary, generate cash provided by financing activities through it’s at the market offering

or other equity or debt financing means.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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GAAP) under the accrual basis of accounting.

of Consolidation

consolidated financial statements include the accounts of SQL Technologies Corp.

(f/k/a Safety Quick Lighting & Fans Corp.) and its

subsidiary, SQL Lighting & Fans LLC.

All intercompany accounts and transactions have been eliminated in consolidation.

Non-controlling

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Reclassifications

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.

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

expenses previously included in cost of revenues and reclassified as general, and administrative expenses in 2022 and sales and marketing

expenses which were previously included in selling, general, and administrative expenses in 2022.

of Consolidation

The consolidated financial statements include the results of the Company and one of its subsidiaries, SQL Lighting and Fans LLC

from January 1, 2022 and the results from its remaining subsidiaries, Belami, Inc., BEC, CA 1, Inc., BEC CA 2, LLC, Luna BEC, Inc., and

Confero Group LLC from April 28 to December 31, 2023.

All intercompany balances and transactions have been eliminated in consolidation.

Company accounts for its business acquisitions under the acquisition method of accounting.

This method requires recording of acquired

assets and assumed liabilities at their acquisition date fair values.

The excess of the purchase price over the fair value of the assets

acquired and liabilities assumed is recorded as goodwill.

Results of operations related to the business combination are included prospectively

beginning with the date of acquisition and transaction costs and transaction costs related to business combinations are recorded within

selling, general, and administrative expenses.

Company acquired the outstanding units of Belami, Inc (“Belami”) and its subsidiaries on April 28, 2023.

Belami is an online

retailer and e-commerce provider specializing in home lighting, ceiling fans, and other home furnishings.

The initial allocation of purchase

price is subject to adjustment through April 2024.

The allocation of purchase price may vary based on the number and fair value of the

shares to be issued in April 2024.

The initial allocation of the purchase price is as follows:

OF INITIAL ALLOCATION OF PURCHASE PRICE

Assets acquired excluding identifiable intangible assets and goodwill

Customer relationships

E-commerce technology platforms

Assumed liabilities

( 10,943,450 )

Total Assets Acquired

Consideration:

Cash outlay, net of cash acquired

Consideration payable

Shares of common stock

Total purchase price

Consideration

payable primarily consists of the fair value of cash and amounting to $ 3.1 million payable in April 2024 and $ 750,000 cash, held in escrow,

payable in July 2024.

The consideration payable is discounted using an effective rate of 6 %.

goodwill recognized, none of which is deductible for income tax purposes, is attributable to the assembled workforce of Belami and to

expected synergies and other benefits that the Company believes will result from combining its operations with Belami’s.

The intangible

assets recognized are primarily attributable to expected increased margins that the Company believes will result from Belami’s

existing customer relationships and increased margins from the e-commerce technology platforms Belami has developed over the years.

Cash Equivalents, and restricted cash.

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At December 31, 2023 and December 31, 2022, the Company’s cash composition was follows:

SCHEDULE OF CASH EQUIVALENTS AND RESTRICTED CASH

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.

Cost principally consists of the purchase price

(adjusted for lower of cost or market), customs, duties, and freight.

The Company periodically reviews historical sales activity to determine

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

SCHEDULE OF INVENTORY

Inventory, component parts

Company will maintain an allowance based on specific inventory items that have shown no activity over a 24-month period.

tracks inventory as it is disposed, scrapped or sold at below cost to determine whether additional items on hand should be reduced in

value through an allowance method.

As of December 31, 2022, and December 31, 2021, the Company has determined that no allowance is required.

Total cash, cash equivalents and restricted cash

Company issued a letter of credit of $ 2.8

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 was secured by cash of $ 2.8

million as of December 31, 2023 and 2022.

Additionally, pursuant to the Company’s acquisition of Belami, Inc., the Company placed

$ 750,000 in an escrow

Furthermore, the Company secured a line of credit of $ 2.0

million with cash of the equivalent amount.

Contracts Balances

receivables are recorded in the period when the right to receive payment or other consideration becomes unconditional.

Accounts receivables

are recorded at the invoiced amount and are not interest bearing.

The Company maintains an allowance for doubtful accounts based upon

an estimate of probable credit losses in existing accounts receivable.

The majority of the Company’s accounts receivable are from

third-party payers and are paid within a few days from the order date.

The Company determines the allowance based upon individual accounts

when information indicates the customers may have an inability to meet their financial obligations, historical experience, and currently

available evidence.

As of December 31, 2023, and December 31, 2022, the Company’s allowance for doubtful accounts was $ 54,987 and

$ 0 , respectively.

The Company determines an allowance for sales returns based upon historical experience.

As of December 31, 2023, and

December 31, 2022, the Company’s allowance for sales returns was $ 182,584 and $ 0 , respectively and is recorded as an accrued expenses

in the accompanying consolidated financial statements.

Company defers the revenue related to undelivered customer orders for which it was paid or has a right to be paid at each measurement

Such amounts are recognized as deferred revenues in the accompanying balance sheet.

As of December 31, 2023, the deferred

revenues amounted to $ 1,475,519 .

There were no deferred revenues as of December 31, 2022.

costs associated with such deferred revenues are recognized as deferred charges in the accompanying balance sheet.

Such charges include

the carrying value of related inventory, freight, and sales charges.

The deferred charges amounted to $ 224,445 as of December 31, 2023.

There were no deferred charges as of December 31, 2022.

and Equipment

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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.

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

Cost principally consists of the purchase price

(adjusted for lower of cost or market), customs, duties, and freight.

The Company periodically reviews historical sales activity to determine

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

Inventory, component parts

Inventory, finished goods

Inventory- total

Company will maintain an allowance based on specific inventory items that are obsolete.

The Company tracks inventory as it is

repurposed ,disposed, scrapped, or sold at below cost to determine whether additional items on hand should be reduced in value

through an allowance method.

Losses from subsequent measurement of inventory amounted to $ 1.3 million and $ 0 as of December 31, 2023 and 2022,

respectively.

As of December 31, 2023, and 2022, the Company has determined that no additional allowance is required.

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

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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

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

governmental agencies.

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I and Level II of the fair value hierarchy.

Management does not believe that its investment in debt securities were impaired as of December

Intangible assets were recorded in connection with the acquisition of Belami.

Intangible assets with finite lives,

which consist of customer relationships and e-commerce technology platforms, are being amortized over their estimated useful lives on

a straight-line basis.

Such intangible assets are tested for recoverability whenever events or changes in circumstances indicate that

the carrying amount may not be recoverable.

The Company assesses the recoverability of its intangible assets by determining whether the

unamortized balance can be recovered over the assets’ remaining estimated useful life through undiscounted estimated future cash

If undiscounted estimated future cash flows indicate that the unamortized amounts will not be recovered, an adjustment will be

made to reduce such amounts to fair value based on estimated future cash flows discounted at a rate commensurate with the risk associated

with achieving such cash flows.

Estimated future cash flows are based on trends of historical performance and the Company’s estimate

of future performance, considering existing and anticipated competitive and economic conditions.

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

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of litigation could result in a material impairment charge up to the carrying value of these assets.

Management has determined that there was no impairment of the Company’s intangible assets during 2023 and 2022.

which was recorded in connection with the acquisition of Belami, is not subject to amortization and is tested for impairment annually,

or more frequently if events or changes in circumstances indicate that the asset may be impaired.

Goodwill represents the excess of the

purchase price of Belami over the fair value of its identifiable net assets acquired.

Goodwill is tested for impairment at the reporting

Fair value is typically based upon estimated future cash flows discounted at a rate commensurate with the risk involved or

market-based comparables.

If the carrying amount of the reporting unit’s net assets exceeds its fair value, then an analysis will

be performed to compare the implied fair value of goodwill with the carrying amount of goodwill.

An impairment loss will be recognized

in an amount equal to the excess of the carrying amount over its implied fair value.

After an impairment loss is recognized, the adjusted

carrying amount of goodwill is its new accounting basis.

Accounting guidance on the testing of goodwill for impairment allows entities

testing goodwill for impairment the option of performing a qualitative assessment to determine the likelihood of goodwill impairment

and whether it is necessary to perform such two-step impairment test.

initial carrying value of goodwill associated with the Belami acquisition may vary during the first year of initial purchase (through

April 2024) if the carrying value of the assets acquired or assumed liabilities or the fair value of the shares issuable in April 2024

varies from the initial allocation of assets previously performed or based on the number of shares the Company has to issue in April

Management has determined that there was no impairment

of the Company’s goodwill 2023 and 2022.

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.

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.

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 Global Licensing and Master Service Agreement dated December 4, 2023, which replaced a prior agreement

under similar terms.

The agreement expires on December 4, 2028 and includes automatic renewal provisions.

Pursuant to such agreement,

GE’s licensing team has the rights to exclusively license certain of Sky’s Standard and Smart plug-and-play products set forth

in a statement of work 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” 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.

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.

letter agreement dated November 28, 2023.

The agreement expires on December 15, 2027 and includes a Repayment Plan Under U.S.

Trademark Agreement dated June 15, 2011 (as later amended), which expired November 30, 2023, between SQL Lighting & Fans, LLC and

GE Trademark Licensing, Inc.

Under this new payment arrangement, SQL’s revised royalty payment obligation is $ 2.7

million in the aggregate (the “Royalty Payment”)

payable in quarterly installments beginning on December 15, 2023 and ending on December 15, 2026 and $ 1.4

million payable in 2027.

Value of Financial Instruments

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

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.

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

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,

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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

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or credits to income.

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.

of December 31, 2023, the Company had a sufficient number of authorized shares of common stock to accommodate the conversion

features on warrants, options, estricted stock units, and convertible notes.

These shares have been reserved for issuance by the

Company’s stock transfer agent, and accordingly, no derivative liability has been calculated on these shares.

Extinguishments

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the liabilities are derecognized and the gain or loss on the sale is recognized.

Company periodically issues common stock and stock options to officers, directors, employees and consultants for services rendered.

Company periodically issues common stock, RSUs and stock options to officers, directors, employees and consultants for services rendered.

Company accounts for stock incentive awards issued to employees and non-employees in accordance with FASB ASC 718, Stock Compensation.

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expense resulting from share-based payments is recorded in operating expenses in the statements of operations.

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:

Identify the contract with a customer

Identify the performance obligations in the contract.

Determine the transaction price.

Allocate the transaction price to the performance obligations in the contract.

Recognize revenue when (or as) the Company satisfies a performance obligation.

allowances and a provision for estimated returns and other allowances are recorded at the time sales are made, considering historical

and anticipated trends.

majority of our sales revenue is recognized when products are shipped from our manufacturing facilities and from our third-party logistics

Company currently generates revenues substantially from home lighting, ceiling fans, and smart products through its family of internet

sites and marketplaces.

A substantial portion of the Company’s customers’ orders are made and paid contemporaneously by credit

card and shipped through third-party delivery providers.

The Company recognizes revenues once it concludes that the control of the product

is transferred to the customer, which is upon delivery.

Company records reductions to revenue for estimated customer sales returns and replacements, net of sales tax.

The Company receives rebate

and cooperative allowances based on a percentage of periodic purchases from certain vendors.

These vendor considerations are reflected

as a reduction of costs of revenues.

The vendor considerations, the rights of returns and replacements are based upon estimates that

are determined by historical experience, contractual terms, and current market conditions.

The primary factors affecting the Company’s

accrual for estimated customer rights of returns include estimated customer return rates as well as the number of units shipped that

have a right of return that have not expired as of the measurement date.

of revenues represents costs directly related to produce, acquire and source inventory for sale, and provisions for inventory shrinkage

and obsolescence.

These costs include costs of purchased products, inbound freight, and custom duties.

These costs include the costs of purchased products, inbound freight, and custom duties.

General and Administrative Expenses

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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

varies from estimates, additional allowances or reversals of reserves may be necessary.

In the management’s opinion, adequate provisions for income taxes have been made for all years.

If actual taxable income by tax

jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.

Tax Positions

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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.

For the years ended December 31, 2023, and 2022, 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, a 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, 2023 and 2022:

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Preferred stock

Anti-dilutive common stock equivalents at December

31, 2023 excludes shares issuable in April 2024 pursuant to the business combination of Belami which range between 1,390,065 and 1,853,421

shares of common stock.

Issued Accounting Pronouncements

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on its consolidated financial statements.

in Accounting Principles

Historically,

the Company recognized its revenues of products shipped by third-party providers upon shipment.

During the second quarter of 2023,

the Company changed its revenue recognition policy as it believes that it is preferable to recognize the revenues of products

shipped by such third-party providers upon delivery.

This revenue recognition method is consistent with the method used by Belami.

The change in accounting principle does not significantly impact on the revenues historically recorded by the Company.

3 DEBT SECURITIES

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SCHEDULE OF COMPONENTS OF INVESTMENTS

Fair value level

Unrealized loss

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Accrued interest

Company disposed of its portfolio of debt securities during 2023.

4 FURNITURE AND EQUIPMENT

and equipment consisted of the following:

SCHEDULE OF FURNITURE AND EQUIPMENT

OF FURNITURE AND EQUIPMENT

Machinery and equipment

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Tooling and production

Software development costs

Leasehold improvements

accumulated depreciation

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

5 INTANGIBLE ASSETS

expenses amounted to $ 93,693 and $ 70,767 for the years ended December 2023 and 2022, respectively.

5 INTANGIBLE ASSETS AND GOODWILL

assets consisted of the following:

SCHEDULE OF INTANGIBLE ASSETS

OF INTANGIBLE ASSETS

Patents and trademarks (useful life 15 years)

Customer relationships (useful life 7 years)

E-commerce technology platforms (useful life 4 years)

accumulated amortization

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

( 1,299,895 )

expense on intangible assets was $ 1,092,876 and $ 51,634 during 2023 and 2022, respectively.

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

SCHEDULE OF INTANGIBLE ASSETS AMORTIZATION EXPENSE FOR FUTURE

Twelve months ended December 31, 2024

Goodwill increased by $ 16.2 million during 2023 resulting

from the business combination with Belami in April 2023

following table presents the details of the principal outstanding:

SCHEDULE OF DEBT TABLE

at December 31,

OF DEBT TABLE

December 31, 2023

December 31, 2022

APR at December 31, 2023

Notes payable

Substantially

all Company assets

Satisfied prior to maturity

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

6.00 – 10.00 %

September 2023-March 2026

Substantially all company assets

Notes payable to financial institutions a)

August 2024-August 2026

Inventory, accounts receivable, cash

,Notes payable to Belami sellers

SBA-related loans (c)

April 2025-November 2052

Substantially all Company assets

Unamortized debt discount

( 4,591,222 )

Debt, net of Unamortized debt Discount

OF INTEREST EXPENSE

For the year period ended

Interest expense, net

expense is recognized as net of interest income which amounted to $ 451,703 and $ 188,132 during 2023 and 2022, respectively.

of December 31, 2023, the expected future principal payments for the Company’s debt are due as follows:

SCHEDULE OF FUTURE PRINCIPAL PAYMENTS

OF FUTURE PRINCIPAL PAYMENTS

2028 and thereafter

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.

unpaid principal bears annual interest at the Wall Street Journal prime rate.

in Convertible Notes are loans provided to the Company from one director, two officers and two investors.

The notes each have the

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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

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 ranging from $ 15 per share.

convertible notes are convertible at a price ranging between $ 2.70 and $ 15 per share.

2023, the Company issued convertible promissory notes for $ 10.4 million.

As an inducement to enter the financing transactions, the

Company issued 1,391,667 warrants to the noteholders at an adjusted exercise price of $ 2.70 per warrant.

The Company recorded a debt

discount aggregating $ 5.6 million which was recognized as debt discount and additional paid-in capital in the accompanying balance

The Company recognized $ 700,000 as amortized debt discount during 2023, and it is reflected as interest expense in the accompanying

unaudited consolidated statement of operations.

Only the convertible promissory notes issued during fiscal 2023 are secured by substantially

all of the assets of the Company.

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

recognized as other income.

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leases as of December 31, 2023:

SCHEDULE OF LEASE COST OPERATING LEASE

OF LEASE COST OPERATING LEASE

Cash paid for operating lease liabilities

Right-of-use assets obtained in exchange for

new operating lease obligations

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:

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Weighted-average remaining lease term (in months)

SCHEDULE OF MINIMUM LEASE OBLIGATION

OF MINIMUM LEASE OBLIGATION

Minimum Lease obligation

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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

$ 50,000,001 to $ 100,000,000

$ 100,000,000 +

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

9 ACCRUED EXPENSES

expenses consisted of the following:

SCHEDULE OF ACCRUED EXPENSES

Company had a license agreement with General Electric (“GE”) which provided, 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 expired in

Company owes $ 2.5

million to GE pursuant to the license agreement.

The payments associated with this debt are payable in quarterly tranches aggregating $ 0.8

million during 2024 and 2025 and $ 0.9 million

Additionally, the Company owes an additional $ 1.4

million pursuant to its agreements with GE which

is payable in 2027 which is recorded as an accounts payable in the accompanying balance sheet as of December 31, 2023.

9 ACCOUNTS PAYABLE AND ACCRUED EXPENSES

payable and accrued expenses consisted of the following:

OF ACCRUED EXPENSES

Accrued interest, convertible notes

1 unchanged sentence

Accrued compensation

accrued expenses

10 INCOME TAXES

2 unchanged sentences

or deductible when the assets or liabilities are recovered or settled.

December 31, 2022, the Company had a net operating loss carryforward of approximately $ 67,706,349 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.

December 31, 2023, the Company had a net operating loss carryforward of approximately $ 37,502,020

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

December 31, 2022, the Company had a net operating loss carryforward of approximately $ 27,035,941

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

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

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income tax asset balances to warrant the application of a full valuation allowance as of December 31, 2023, and 2022.

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

effects of temporary differences that gave rise to significant portions of deferred tax assets at December 31, 2023 and December 31,

2022 were approximately as follows:

OF DEFERRED TAX ASSETS

3 unchanged sentences

( 6,135,853 )

( 5,886,344 )

Operating lease liabilities

2 unchanged sentences

( 19,901,690 )

Deferred Tax Assets – Net

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

Total Deferred Tax Assets – Net

Company’s tax expense differs from the statutory tax expense for the years ended December 31, 2023 and December 31, 2022 and the

reconciliation is as follows.

OF INCOME TAX RATE RECONCILIATION

Computed statutory tax benefit

Computed statutory tax benefit – Federal

$ ( 10,885,333 )

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( 1,775,915 )

Change in valuation

( 1,292,961 )

Permanent difference

( 1,321,512 )

Change in valuation allowance

11 RELATED PARTY TRANSACTIONS

Notes Due to Related Parties

notes due to related parties represent amounts provided to the Company from two directors and the Chief Executive Officer of the Company.

notes due to related parties represent amounts provided to the Company from a director and the Company’s Co-Chief Executive Officers.

The outstanding principal on the convertible promissory notes, associated with related parties was $ 825,000 as of December 31, 2023,

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

and $ 1,300,000 December 31, 2022 and accrued interest of $ 151,081 and $ 104,735 , respectively.

Public Offering

5 unchanged sentences

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)

12 STOCKHOLDERS’ EQUITY

Company issued the following common stock during 2023, and 2022:

SCHEDULE OF COMMON STOCK

OF COMMON STOCK

Transaction Type

Shares Issued

Range of Value

2023 Equity Transactions

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

Common stock issued pursuant to acquisition

Common stock issued, pursuant to services provided

Conversion of preferred stock

Issuance of common stock pursuant to offering, net

Common stock issued pursuant to extinguishment of debt

Transaction Type

Shares Issued

Valuation $(Issued)

Range of Value Per Share

2022 Equity Transactions

Common stock issued per PPM, Bridge

Line Ventures

Common Stock interest expense

Common stock issued, exercise of warrants and options,

Common stock issued per exercise of options and warrants

$ 0.10 – 14.0

Common stock issued per exercise of warrants, cashless

Common stock issued, pursuant to services provided

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.

Conversion of preferred stock

Issuance of common stock pursuant to offering, net

Issuance of common stock, pursuant to anti-dilutive provisions

Company issued 335,073 shares of its common stock to certain stockholders during 2022.

The issuance of such shares was triggered based

on the Company’s effective price of its initial public offering.

The shares were recorded as an increase in common stock and additional

paid-in capital and accumulated deficit during the period, using the fair value of the shares at the date of issuance.

Company satisfied its obligations under a note payable, initially maturing in September 2026, amounting to $ 6.2 million during April

The Company paid $ 2 million and issued 574,713 shares of its common stock to satisfy such obligations, which generated a gain on

extinguishment of debt of $ 1,201,857 .

of the common stock issued pursuant to acquisition includes the carrying value of shares issuable in April 2024.

The Company anticipates

that the number of shares of its common stock issuable in April 2024 will range between 1,390,066 and 1,853,421 with a carrying value

of $ 5,560,262 .

Preferred Stock

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

following is a summary of the Company’s Preferred Stock activity during the years 2023 and 2022:

OF PREFERRED STOCK ACTIVITY

Transaction Type

Carrying Value

Value per Share

Preferred Stock Balance at December 31, 2022

Preferred Stock conversions

Preferred Stock Balance at December 31, 2023

Transaction Type

Carrying Value

Value per Share

Preferred Stock Balance at December 31, 2021

2022 Preferred Stock conversions

( 12,376,536 )

( 3,094,133 )

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.

Preferred Stock Balance at December 31, 2022

Series A Preferred Stock was convertible at the holder’s option.

The Company could repurchase shares of the Preferred Stock 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.

of preferred stock converted 880,400 shares and 12,376,536 shares of preferred stock in the shares of common stock during 2023 and 2022,

respectively.

There were no shares of Series A Preferred Stock outstanding at December 31, 2023 and the Company terminated its designation

of the Series A Preferred Stock.

The Company has not designated any other preferred stock as of December 31, 2023.

Stock Options

1 unchanged sentence

SCHEDULE OF STOCK OPTION ACTIVITY

January 1, 2022

( 1,834,792 )

Exercise Price

Outstanding, January 1, 2023

Outstanding, December 31, 2023

Exercisable, December 31, 2023

Exercise Price

Outstanding, January 1, 2022

( 1,834,792 )

Outstanding, December 31, 2022

2 unchanged sentences

SCHEDULE OF BLACK SCHOLES PRICING MODEL

life (in years)

interest rate

Exercise price

Expected life (in years)

1.5 – 5.8 yrs

Risk-fee interest rate

Dividend yield

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

2 unchanged sentences

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.

Unamortized future option expense was $ 13.0 million (excluding certain market-based options which management

cannot ascertain to have a probable outcome amounting to $ 61 million) at December 31, 2023 and it is expected to be recognized over

a weighted-average period of 1.4 years.

Warrants Issued

following is a summary of the Company’s warrant activity during 2023 and 2022:

SCHEDULE OF WARRANT ACTIVITY

January 1, 2022

OF WARRANT ACTIVITY

Weighted Average

Exercise Price

Balance, January 1, 2023

Balance, December 31, 2023

Average Exercise Price

January 1, 2021

Number of Warrants

Weighted Average Exercise Price

Balance, January 1, 2022

Forfeited/Cancelled

Balance, December 31, 2022

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.

During 2023, the Company issued convertible promissory notes for $ 10.4 million.

As an inducement to enter the financing transactions, the Company issued 1,391,667 3 - year warrants to the noteholders at an adjusted exercise price of $ 2.70 per warrant.

The Company recorded a debt discount aggregating $ 5.6 million which was recognized as debt discount and additional paid-in capital in the accompanying balance sheet.

During 2022, the Company issued 608,961 3 -year warrants at exercise prices ranging between $ 9.80 and $ 18.2 in connection with the issuance of common shares.

Restricted stock units

2 unchanged sentences

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

Non-vested restricted stock units, January 1, 2023

( 3,168,053 )

Non-Vested restricted stock units, December 31, 2023

Non-vested restricted stock units, January 1, 2022

Non-vested restricted stock units December 31, 2022

The weighted-average remaining contractual life of the restricted units

as of December 31, 2023 is 1.85 years.

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

5 unchanged sentences

the vesting period.

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

the years ended December 31, 2023, and 2022, the Company recognized compensation expense of $ 18.0

million, and $ 14.0

million , respectively, related to RSUs, RSAs

and stock options

13 CONCENTRATIONS OF RISKS

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.

Customers and Accounts Receivable

Company had no customers whose revenue individually represented 10% or more of the Company’s total revenue.

The Company had one

third-party payor accounts receivable balance representing 24 % of the Company’s total accounts receivable at December 31, 2023

and none at December 31, 2022.

Company’s cash and cash equivalents are held primarily with two financial institutions.

1 unchanged sentence

amount insured by the FDIC.

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

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 deposits.

and Geographic Markets

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

Company generates its income primarily from lighting and heating products sold primarily in the United States.

14 PROFORMA FINANCIAL STATEMENTS (unaudited)

following pro forma consolidated results of operations have been prepared as if the acquisition occurred on January 1, 2022:

OF PROFORMA CONSOLIDATED RESULTS OF OPERATION

Twelve-month period ended

$ ( 39,495,552 )

$ ( 27,001,995 )

Basic and diluted loss per share

Weighted average number of shares outstanding- basic and diluted

pro forma amounts have been calculated after applying the Company’s accounting policies and adjusting the results to reflect, among

other things, 1) additional amortization that would have been charged assuming the fair value adjustments to amortizable intangible assets

had been applied, 2) the shares issued and issuable by the Company to acquire Belami, 3) fair value of the initial grant and options

to Belami employees, and 4) the increase in interest expense related to the issuance of convertible notes payable, including amortization

of debt discount.

Furthermore, it excludes transaction costs related to the Belami acquisition.

These pro forma results of operations

have been prepared for comparative purposes only, and they do not purport to be indicative of the results of operations that would have

resulted had the acquisition occurred on the date indicated or that may result in the future.

15 SUBSEQUENT EVENTS

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

has evaluated subsequent events through April 1, 2024, which is the date the consolidated financial statements were available to be

There were no significant subsequent events that required adjustment to or disclosure in the consolidated financial

statements with the exception of the following:

The Company generated proceeds of $ 3.6 million in

consideration for the issuance of 2,733,361 shares of common stock pursuant to its at-the market offering,

The selling shareholders of Belami agreed to extend the payment of the Company’s consideration payable of $ 3.1

million from April 2024 to May 2025, under convertible promissory notes.

The notes bear annual interest at

10 % and are convertible at $ 3 per share.

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

What changed 10-K

Item 9A. Controls and Procedures