Supplemental cash flow information related to leases were as follows:

SCHEDULE OF CASH FLOW INFORMATION RELATED LEASES

On The table below present the remaining lease terms and discount rates for operating lease.

SCHEDULE OF REMAINING LEASE TERMS AND DISCOUNT RATES

Maturities of lease liabilities as of September 30, 2020,2022, were as follows:

SCHEDULE OF MATURITIES OF LEASE LIABILITIES

Note 6 - PREPAID EXPENSE – NONCURRENT PORTION

Effective July 13, 2022 the Company entered into a manufacturing contract with Montrade S.p.A., (“Montrade”) a company based in Bologna, Italy, for Montrade to manufacture and install the consumable manufacturing equipment. The Company made an Asset Purchase Agreement with Xten, pursuantinitial payment of $589,265 USD and is required to which it acquired a portfoliomake additional payments of 29 U.S. and international patents and patent applications in the areas of devices and technologies for aerosolizing certain remedies and pharmaceutical preparations, as well as the solutions and preparation for inhaled delivery. As considerationup to $1,086,465 USD for the acquisition,module as certain stages are completed. Montrade is an industry leading designer and manufacturer of machines for a wide range of products, including heated tobacco products. Additionally in August the Company issued Xtenincurred engineering service costs directly related to the Warrants, including (i)automation equipment from a Series A Common Stock Purchase Warrant exercisable for 7,000,000 sharesconsultant with an added cost of common stock commencing on$12,023 USD resulting in additions to prepaid expenses of $601,288 at September 30, 2023 and expiring on September 30, 2026, (ii) a Series B Common Stock Purchase Warrant exercisable for 7,000,000 shares of common stock commencing on September 30, 2026 and expiring on September 30, 2029, and (iii) a Series C Common Stock Purchase Warrant exercisable for 7,000,000 shares of common stock commencing on September 30, 2029 and expiring on September 30, 2032. The Company has the right to accelerate or extend the exercise period of each series of Warrants in its discretion. In addition, the exercise period of each series of Warrants automatically accelerates in the event of a “change of control” (as defined in the Warrants) prior to such series of Warrants becoming exercisable by its respective terms. The Asset Purchase Agreement contained customary indemnification provisions. The assets have been accounted for at a carrying value of $191,594. On September 30, 2020, the Company entered into another Assets Purchase Agreement with Xten, a common control entity, to purchase certain assets including multiple pieces of laboratory and workshop equipment; custom built plume and inhalation testing machine; computers, monitors and accessories; prepaid rent; and, laboratory/workshop supplies, for a purchase price of $268,358, The Other Asset Purchase Agreement also contained customary indemnification provisions. The purchase price was tendered to Xten in November 2020.2022.

NOTE 5Note 7 – SUBSEQUENT EVENTS

On October 18, 2021, we sold a total of 5,000 shares of our common stock for $50,000 to a non-U.S. Person in a private transaction. We did not pay a commission or finder’s fee and are using the proceeds for working capital.

On October 21, 2021, we granted 428,5742022, our Board of Directors (“Board”) awarded stock options to the management team valued39 individuals, representing up to a maximum of 595,000 shares of our common stock, exercisable at $4,282,71710.00. per share. The individuals include executive officers, William Bartkowski and Daniel Markes, one of our employees, certain professional advisors, and another 29 individuals who are considered related parties in that they are employed by or otherwise associated with entities owned or controlled by our chairman and chief executive officer, Alexander Chong. Substantially all of the related party individuals are also non U.S. persons. The grants were made in amounts and with exercise prices and vesting conditions consistent with our corporate development objectives, including but not limited to our plans to begin commercializing our technology internationally in mid-2023. All of the awards were made for work or services provided or to be provided to CQENS. The Board made the grants under the Company’s shareholder approved 2014 Equity Compensation Plan (the “Plan”) and pursuant to the terms and conditions of the Plan and subject to vesting conditions contained in the Plan and options granted thereunder.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion of our financial condition and results of operations for the nine months ended September 30, 2021,2022 and 20202021 should be read in conjunction with the unaudited financial statements and the notes to those statements that are included elsewhere in this report. Our discussion includes forward looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under “Cautionary Statements Regarding Forward-Looking Information” appearing earlier in this report, Part I. Item 1A. Risk Factors appearing in our 20202021 10-K, and our other filings with the Securities and Exchange Commission. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances are forward looking statements. Such statements are based on our current expectations and could be affected by the uncertainties and risk factors described throughout this report.

Overview

We are a technology company; we design and develop innovative methods to heat plant-based and/or medicant-infused formulations to produce aerosols for the efficient and efficacious inhalation of the plant and medicant constituents contained therein. We have two ways of accomplishing this: 1) at high temperatures via induction without combustion or the constituents of combustion; and 2) at low temperatures, where we heat an inert carrier, producing an inhalable, medicant-infused aerosol while maintaining the integrity of the active ingredient(s).

Our high-temperature non-combusting technology is supported by 2122 U.S. and international patents and pending patents. Among the applications of our patented and patent-pending technology are those for Heat-not-Burn (“HnB”) devices. In one instance for example, our method of heating a tobacco formulation for inhalation is superior, less toxic and far more convenient than other methods of tobacco consumption, especially when compared to the inhalation of the smoke produced by combustible products, i.e., cigarettes, cigars and pipes. Independent tests of our system’s prototypes supported the benefits of rapid heating, confirmed non-combustion, even at high temperatures and produced better toxicology results, 98% better, when compared to products requiring combustion and compared to other non-combusting technologies currently on the market.

Our low-temperature, aerosolizing technology is supported by 30 U.S. and international patents and pending patents. This portfolio includes intellectual property (“IP”) around device designs and around formulations containing a wide variety of herbal and pharmaceutical preparations. This system features the ability to verify the user, validate the medicant or pharmaceutical preparation and measure, meter and monitor the proper, prescribed dosage.

We define our target market as the “international inhalation market,” a market that includes herbal, pharmaceutical, medical, recreational and lifestyle products and ingredients. Industry experts, like Nielsen, Grand View Research, Fior Markets, have published reports in the last half of 20202021 that we have consolidated; these consolidated estimates support that this as an $880a $950 billion USD annual market currently and it’s expected to grow to $1.1 trillion USD by 2025. The largest category within this market is the combustible tobacco market, comprising 92% of the total. Our near-term focus is on this segment, which represents the greatest opportunity for growth and the greatest opportunity to positively impact public health and wellness.

OurWe believe our HnB technologies are of great interest to the international tobacco industry and the growing hemp/CBD and cannabis industries. HnBs represent the latest in tobacco and inhalable technologies, and likely to supplant the electronic vapor system (EVS) technologies including e-cigarettes and electronic nicotine delivery systems. We believe HnBs, if properly designed, will avoid many of the issues that have proved troublesome for EVS’ including thermal decomposition, heating irregularities and the formation and presence of high levels of acrolein and formaldehyde. In late 2019 Philip Morris International introduced its HnB product to U.S. markets. This product, which was sold in more than 40 countries before entering U.S. markets, like other HnB technologies, is a device that heats a tobacco stick, rather than burning it, and testing supports claims that the product can potentially reduce the number of noxious chemicals found in cigarette smoke by 95%.

Since late 2019 we have focused our efforts on commercializing our HnB technology. This entry began with the December 31, 2019 transaction pursuant to which we acquired the following assets from Xten Capital Group, Inc., formerly known as Chong Corporation (“Xten”), a related party:

During 2020 and into 2021Through to the date of this report we have continued our efforts that we beganbegun in 2019, including:

Additionally, the MOU provides for CQENS to license its technology to The Barker Group under certain terms and conditions yet to be finalized and for The Barker Group to invest in CQENS with terms and conditions yet to be finalized. The foregoing initiatives, as well as other items contained in the non-binding MOU, are subject to the completion and execution of definitive agreements, all of which will be subject to customary closing conditions.

Since signing the MOU, we have been engaged in discussions and negotiations designed to identify an initial target market in the U.S. and the EU, to develop a product for that market and agree to a definitive agreement to launch the product.

On August 17, 2021, CQENSJuly 13, 2022, we announced that we completed R&D stages for the module for the automated manufacture of consumables for its proprietary, patented and patent pending Heat-not-Burn system. The system heats plant-based and/or medicant-infused formulations to produce aerosols for the inhalation of the plant and medicant constituents without combustion or the constituents of combustion, although there are no assurances its products can be commercialized. Contemporaneous with the completion of these R&D stages, effective July 13, 2022 the Company entered into a Joint Venture Agreement (the “JV Agreement”manufacturing contract with Montrade S.p.A., (“Montrade”) with Firebird Manufacturing, LLC (“Firebird”). Undera company based in Bologna, Italy, for Montrade to manufacture and install the termsmodule. The Company made an initial payment of the JV Agreement the parties have agreed$589,265 USD and is required to organize, negotiate, and establish a limited liability company joint venture entity (the “Joint Venture Entity”)make additional payments of up to $1,086,465 USD for the purposesmodule as certain stages are completed. Montrade is an industry leading designer and manufacturer of developing, manufacturing, and distributing Heat- not-Burn (“HnB”) hemp/CBDmachines for a wide range of products, in the United States for an initial term of four years, subject to an automatic renewal for successive one-year terms provided certain conditions are met. The Joint Venture Entity will be owned equally by the Company and Firebird. The Company will license its intellectual property to the Joint Venture Entity, receiving a 10% royalty on direct consumable sales and will be responsible for designing and coordinating the manufacture of an HnB device exclusively conformed to heat but not combust hemp/CBD. Firebird will be responsible for manufacturing the hemp/CBD consumable and distributing both the device and consumables to the retail locations where the product can be lawfully sold.including heated tobacco products.

Pursuant to the JV Agreement,On August 1, 2022 the Company and Firebird will each receive on a monthly basis a distribution out of the Joint Venture profits, if any, equal to 30% after payment of expenses. The remaining profits, if any, will be distributed annually. The JV Agreement also provideswas informed that the parties will be prohibited from marketing a competing product for two years following the terminationPatent Office of the Joint Venture Entity, subject to penalty in the amount of $5 million. The JV Agreement also sets forth in general terms the respective contributions of the parties, including equipment, manufacturing facilities, intellectual property, and expertise. Under the terms of the JV Agreement, there will be five managers of the Joint Venture Entity, three of whom will be designated bySingapore issued the Company Singapore Patent No. 11202006324T for our innovative Heat-not-Burn (“HnB”) system on January 21, 2022. We were further informed that the US Patent and two of whom will be designated by Firebird. InTrademark Office issued the event the parties formalize and enter into a Joint Venture Entity Operating Agreement, Jay Barker, an affiliate of Firebird, may be appointed to the Company’s board of directors. The JV Agreement contains customary representations and warranties.Company US Patent No. 11,272,741 also for our HnB system on March 15.2022.

The parties have also agreed to indemnify each other andOn August 2, 2022 we were informed that the JV against any losses arising frompatent office of Japan issued the Company a breach by the other of certain representations and warranties. The execution of the Joint Venture Entity Operating Agreement is subject to formalizing the definitive Joint Venture Operating Agreement and the execution of additional agreements, including a license agreementPatent, registration number 7093919, for the use of intellectual property, certain product development agreements, supply agreements and such other agreements as may be necessary to further the purpose of the JV Agreement.our HnB system on June 23, 2022. As of the date of this filing, we now have a total of four HnB related Patents and another 21 pending US and international patents for the filing of this report no other agreements have been entered into by the parties and there are no assurances that the parties will complete and formalize such agreements.system.

Going concern

For the first nine months of 2021ended September 30, 2022, we reported a net loss of $3,332,909 and net cash used in operations of $2,741,967 compared to a net loss of $3,208,938 and net cash used in operations of $1,023,543 compared to a net loss of $1,046,031 and net cash used in operations of $703,143 for the first nine months of 2020.ended September 30, 2021. At September 30, 2021,2022, we had cash on hand of $4,026,095$933,622 and an accumulated deficit of $8,052,520.$16,642,403. The report of our independent registered public accounting firm on our consolidated financial statements for the year ended December 31, 2020,2021 contains an explanatory paragraph regarding our ability to continue as a going concern based upon our minimallimited cash and no source of revenues which may not be sufficient to cover our operating costs. These factors, among others, and despite the cash and cash equivalent amount on hand at the end of this quarter, raise substantial doubt about our ability to continue as a going concern and pay our obligations as they become due over the next year. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty. There are no assurances we will be successful in our efforts to raise additional capital, develop a source of revenues, report profitable operations or to continue as a going concern, in which event investors would lose their entire investment in our company.

Results of operations

We did not generate any revenues from our operations in the first nine months of 20212022 or 2020.2021. Our total operating expenses for the third quarter of 20212022 increased 28.5%57.3% over those reported in the third quarter of 20202021 while the first nine-monthsnine months of 20212022 increased 208%3.9% over those reported in the first nine months of 2020.2021. General and administrative expenses increased 732%decreased 7.0% in the first nine months of 20212022 compared to the same period in 20202021 due mainly to the reduction of non-cash stock option expense of $1,854,459$1,526,561- relating to the options granted in 2021 to two contractedconsulting engineers involved in research and development activities.activities during the first nine months of 2022 compared to the same period in 2021. This reduction in cost was offset with additional non-cash options granted to three consultants of $799,042, increased compensation paid to employees of $413,470 and the recruitment costs of $37,623 for our employee engineer involved in research and development in the first nine months of 2022 compared to the same period in 2021.

Research and development expenses in the third quarter of 2021 decreased 8.9%2022 increased 49.3% over this same period in 20202021 while the first nine months show a slight decreasean increase of 0.3%25.3% over the first nine months of 2020.2021 which reflects the cost of building and testing product prototypes and consumables. Professional fees decreased 14.3%increased 132.0% in the third quarter of 20212022 compared to the third quarter of 2020 and increased 68%2021 with an overall increase of 30.9% in the first nine months of 20212022 when compared to this same period in 2020 which2021. The increase is attributable primarily to an increase in consulting services and legaltheir associated fees. Professional fees in 2022 includes an agreement entered into in January 2022 with an unrelated third party whereby the consultant will provide introductions to manufacturers and advice and counsel regarding potential manufacturers for the products of the Company in the Peoples Republic of China and/or other territories of Asia and general business plan and strategy in the region as required by the Company. Further the consultant will identify and introduce high net worth capital sources (qualified non-U.S. investors) to the Company. In exchange the Company paid a consulting fee of $333,000.

We expect that our operating expenses will increase as we continue to develop our business and we devote additional resources towards promoting that growth, most notably reflected in anticipated increases in research and development, general overhead, salaries for personnel and technical resources, as well as increased costs associated with our SEC reporting obligations. However, as set forth elsewhere in this report, our ability to continue to develop our business and achieve our operational goals is dependent upon our ability to raise significant additional working capital. As the availability of this capital is unknown, we are unable to currently quantify at this time the expected increases in operating expenses in future periods.

Liquidity and capital resources

Liquidity is the ability of a company to generate sufficient cash to satisfy its needs for cash. As of September 30, 2021,2022, we had $4,026,095$933,622 in cash and cash equivalents and a working capital surplus of $3,983,571$930,611 as compared to $589,153$3,588,377 in cash and cash equivalents and a working capital surplus of $312,132$3,532,821 at December 31, 2020.2021. Our current liabilities decreased $239,529 or 71.2%increased $111,983 from December 31, 2020, primarily due to2021, reflecting a $32,735 increase in accounts payable, a $27,710 increase in accrued expenses and the repaymentaddition of $51,538 in the related party loan.current portion of our lease liability. Our source of operating capital in the first nine months of 2021ended September 30, 2022, came from the sale of 35,000 shares of our common stock that raised $350,000 and from the cash we had on hand compared to the nine months ended September 30, 2021, where we sold 545,288 shares of our common stock raising $4,810,000 compared to the same period in 2020 where our source of operating capital came from the sale of 496,898 shares of our common stock raising $2,400,000.that raised $4,810,000.

The ability of the Company to continue as a going concern is dependent upon the Company obtaining adequate capital to fund operating losses until it becomes profitable. As the company is not generating revenues, continued activities and expenditures to bring product(s) to market as soon as we are able is important. Management believes the currently available funding will be insufficient to finance the Company’s operations for a year from the date of these financial statements and to satisfy our obligations as they become due.

We will need to raise an additional $3,000,000 to $5,000,000 in additional capital during the next 12 months. As we do not have any firm commitments for all or any portion of this necessary capital, there are no assurances we will have sufficient funds to fund our operating expenses and continued development of our products and to satisfy our obligations as they become due over the next 12 months. In that event, our ability to continue as a going concern is in jeopardy.

Summary of Cash Flowscash flows

Our cash used in operating activities increased 45.6%167.9% in the first nine months of 2021ended September 30, 2022, when compared to the first nine months of 2020.ended September 30, 2021. During these time periods we primarily used the cash to primarily fund our net losses.

In the first nine months of 20212022 there was $93,971$262,788 net cash used in investing activities from capitalization of IP related legal fees, for additions to furniture and equipment and leasehold improvements compared to $152,372net cash used in investing activities of $93,971 for the capitalization of IP related legal fees in the same period of 2020.in 2021.

NetIn the first nine months of 2022 we had $350,000 net cash provided by financing activities forfrom the first nine monthssale of 35,000 shares of our common stock. In the same period in 2021 our net cash provided by financing activities consisted of $4,810,000 raised from the sale of 545,288 shares of our common stock and $255,544 in debt repayment to Xten compared to $2,400,000 raised from the sale of 496,898 share of our common stock, repayment, and satisfaction in full of the convertible note of $40,000, additional borrowing of $2,500 from Xten and $250,000 repayment of related party debt to Xten, a common control entity, in the first nine months of 2020.$255,544.

Critical accounting policies

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses during the reported periods. The more critical accounting estimates include estimates related to revenue recognition, accounts receivable allowances and impairment of long-lived assets. We also have other key accounting policies, which involve the use of estimates, judgments and assumptions that are significant to understanding our results, which are described in Note 2 to our audited consolidatedunaudited financial statements for 20202021 appearing in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission on April 15, 2021.14, 2022.

Off balance sheet arrangements

As of the date of this report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term “off-balance sheet arrangement” generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with us is a party, under which we have any obligation arising under a guarantee contract, derivative instrument or variable interest or a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable for a smaller reporting company.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures.

We maintain “disclosure controls and procedures” as such term is defined in Rules 13a-15(e) under the Securities Exchange Act of 1934. In designing and evaluating our disclosure controls and procedures, our management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Based on their evaluation as of the end of the period covered by this report, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures were not effective to ensure that the information relating to our company required to be disclosed in our Securities and Exchange Commission reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive Officer, to allow timely decisions regarding required disclosure due to the presence of continuing material weakness in our internal control over financial reporting as reported in our Annual Report on Form 10-K for the year ended December 31, 2020.2021. These material weaknesses in our internal control over financial reporting result from limited segregation of duties and limited multiple level of review in the financial close process.

The existence of the continuing material weaknesses in our internal control over financial reporting increases the risk that a future restatement of our financials is possible. In order to remediate these material weaknesses, we will need to expand our accounting resources. We will continue to monitor and evaluate the effectiveness of our disclosure controls and procedures and our internal control over financial reporting on an ongoing basis, however, we do not expect that the deficiencies in our disclosure controls will be remediated until such time as we have remediated the material weaknesses in our internal control over financial reporting. In orderSubject to do so,the availability of sufficient capital, we will need additional capital to permit us to hire employees and put the requisite controls in place. We had expectedexpect to expand our accounting resources during 2022, in 2019, which was subsequently delayed into 2020 and has now been delayed into 2021. Given the uncertainties with our ability to raise working capital as discussed earlier in this report, there are no assurances we will be ablean effort to remediate the material weaknesses in our internal control over financial reporting during 2021.reporting.

Changes in Internal Control over Financial Reporting.

There have been no changes in our internal control over financial reporting during our last fiscal quarter that has materially affected or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors.

In addition to the other information set forth in this report you should carefully consider the risk factors in Part I, Item 1A in our 20202021 10-K and our subsequent filings with the Securities and Exchange Commission, which could materially affect our business, financial condition or future results. These cautionary statements are to be used as a reference in connection with any forward-looking statements, written or oral, which may be made or otherwise addressed in connection with a forward-looking statement or contained in any of our subsequent filings with the Securities and Exchange Commission.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

During the period covered by this report, the Company issued the unregistered equity securities disclosed below.

On September 28, 2021,July 11, 2022 we sold a total of 296,00035,000 shares of our common stock for $350,000 to elevenan investor in a private transaction. The investor was a non-U.S. Persons for a total of $2,960,000. The shares issued contain a legend restricting their transferability absent registration of applicable exemption. The recipients were non-U.S. Persons,Person, and the issuance was exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”) in reliance on an exemption provided by Regulation S promulgated thereunder.thereunder and the shares issued contain a legend restricting their transferability absent registration of applicable exemption. We did not pay a commission or finder’s fee and are using proceeds for working capital.

On September 28, 2021,July 11, 2022 we sold 5,000issued 10,000 shares of our common stock to an investora consultant for $50,000the consultant’s guidance in a private transaction.identifying business opportunities, partners and other skilled consultants in both Asia and North America. The recipient was an accredited investor and the shares issued contain a legend restricting their transferability absent registration of applicable exemption. The issuance was exempt from registration under the Securities Act in reliance on an exemption provided by Section 4(a)(2). We did not pay a commission or finder’s fee and are using the proceeds for working capital.

[On September 30, 2021, we sold 30,000October 21, 2022 the Company issued stock option awards to 39 individuals, such option awards exercisable for up to an aggregate of 595,000 shares of our common stock, exercisable at $10.00 per share. The individuals include executive officers, William Bartkowski and Daniel Markes, one of our employees, certain professional advisors, and another 29 individuals who are considered related parties in that they are employed by or otherwise associated with entities owned or controlled by our chairman and chief executive officer, Alexander Chong. Substantially all of the related party individuals are also non U.S. persons. The awards were granted under the Company’s shareholder approved 2014 Equity Compensation Plan (the “Plan”) and pursuant to an investor for $300,000the terms and conditions of the Plan and subject to vesting conditions contained in a private transaction.the Plan and options granted thereunder. The recipient was an accredited investor andawards were granted pursuant to the shares issued contain a legend restricting their transferability absent registration of applicable exemption. The issuance was exemptexemption from registration under the Securities Act in reliance on an exemption provided by Section 4(a)(2). We did not pay of the Securities Act of 1933, as amended, and/or Regulation S promulgated thereunder. The option awards contain a commissionrestriction restricting their transferability subject to registration or finder’s feeapplicable exemption and are usingfurther subject to additional transfer restrictions under the proceeds for working capital.Plan.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable to our company’s operations.

Item 5. Other Events.Information.

None.

Item 6. Exhibits.