Duos Technologies Group, Inc S-1/A, filed May 28, 2021

Duos Technologies Group, Inc. (DUOT)

S-1/A 2021-05-28

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Florida	7373	65-0493217
(State or Other Jurisdiction of Incorporation)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)


Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer þ	Smaller reporting company þ
	Emerging growth company ¨


Title of Each Class of Securities to be Registered	Amount to be Registered			Proposed Maximum Offering Price Per Share⁽¹⁾		Proposed Maximum Aggregate Offering Price⁽¹⁾		Amount of Registration Fee ⁽⁵⁾
Common Stock, par value $0.001 per share⁽²⁾⁽³⁾		818,182	⁽⁴⁾	$	5.50	$	4,500,000	$	491


(1)	Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(g) under the Securities Act of 1933, as amended (the “Securities Act”).
(2)	Represents common stock issuable upon the conversion (at a price of $5.50 per share) of outstanding Series C Convertible Preferred Stock.
(3)	Pursuant to Rule 416 under the Securities Act, the securities being registered hereunder include such indeterminate number of additional shares of common stock as may become issuable after the date hereof as a result of stock splits, stock dividends, anti-dilution adjustments or similar transactions.
(4)	To be offered and sold by the selling stockholders identified in this registration statement upon the conversion of Series C Convertible Preferred Stock, based on a conversion price of $5.50.
(5)	Previously paid.


	PAGE

Prospectus Summary	1
Summary of Consolidated Financial Information	10
Risk Factors	17
Cautionary Note Regarding Forward-Looking Statements	23
Use of Proceeds	24
Selling Stockholders	25
Plan of Distribution	27
Market for Common Equity and Related Shareholder Matters	29
Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Business	44
Directors, Executive Officers and Key Employees	52
Security Ownership of Certain Beneficial Owners and Management	63
Certain Relationships and Related Party Transactions	66
Description of Capital Stock	67
Interests of Named Experts and Counsel	69
Where You Can Find More Information	69
Incorporation of Certain Information by Reference	69
Index to Consolidated Financial Statements	F-1


PRELIMINARY PROSPECTUS	SUBJECT TO COMPLETION	DATED MAY 28, 2021



Rail Inspection Portal rip® - Canadian Location	Operator Interface - centraco®


	·	The nature of the technology management platforms utilized by us is complex and highly integrated, and if we fail to successfully manage releases or integrate new solutions, it could harm our revenues, operating income, and reputation.

	·	Our products and services may fail to keep pace with rapidly changing technology and evolving industry standards.

	·	The market opportunity for our products and services may not develop in the ways that we anticipate.

	·	Our revenues are dependent on general economic conditions and the willingness of enterprises to invest in technology.

	·	Some of our competitors are larger and have greater financial and other resources than we do.

	·	We have a history of losses and our growth plans may lead to additional losses and negative operating cash flows in the future.

	·	We may be unable to protect our intellectual property, which could impair our competitive advantage, reduce our revenue, and increase our costs.

	·	We may be required to incur substantial expenses and divert management attention and resources in defending intellectual property litigation against us.

	·	We may incur substantial expenses and divert management resources in prosecuting others for their unauthorized use of our intellectual property rights.


Securities offered by the Selling Stockholders	818,182 shares of our Common Stock.

Offering Price Per Share	The Selling Stockholders may sell all or a portion of the shares being offered by this prospectus at fixed prices, at prevailing market prices at the time of sale, at varying prices or at negotiated prices. See “Plan of Distribution”.

Use of proceeds	We will not receive any proceeds from the sale of Common Stock by the Selling Stockholders. All of the net proceeds from the sale of our Common Stock will go to the Selling Stockholders as described below in the sections entitled “Selling Stockholders” and “Plan of Distribution”. We have agreed to bear the expenses relating to the registration of the Common Stock for the Selling Stockholders.

Risk factors	Investing in our securities is highly speculative and involves a high degree of risk. You should carefully consider the information set forth in the “Risk Factors” section beginning on page 17 before deciding to invest in our securities.

Trading symbol	Our common stock is currently quoted on the Nasdaq Capital Market under the trading symbol “DUOT”.


	For the Years Ended
	December 31,
	2020			2019

REVENUES:
Technology systems	$	4,956,130		$	11,963,438
Technical support		1,801,043			1,377,459
Consulting services		273,604			300,418
AI technologies		1,008,671			—

Total Revenues		8,039,448			13,641,315

COST OF REVENUES:
Technology systems		3,665,493			6,510,658
Technical support		1,109,741			528,966
Consulting services		117,004			120,253
AI technologies		360,817			—

Total Cost of Revenues		5,253,055			7,159,877

GROSS PROFIT		2,786,393			6,481,438

OPERATING EXPENSES:
Sales & marketing		717,809			950,962
Engineering		1,358,925			1,254,235
Research and development		1,022,188			1,479,334
Administration		5,011,913			3,987,941
AI technologies		1,309,986			1,215,488

Total Operating Expenses		9,420,821			8,887,960

LOSS FROM OPERATIONS		(6,634,428	)		(2,406,522	)

OTHER INCOME (EXPENSES):
Interest Expense		(150,137	)		(69,322	)
Other income, net		37,130			4,962

Total Other Income (Expenses)		(113,007	)		(64,360	)

NET LOSS	$	(6,747,435	)	$	(2,470,882	)

Basic & Diluted Net Loss Per Share	$	(2.03	)	$	(1.39	)

Weighted Average Shares-Basic & Diluted		3,320,193			1,781,704


	March 31,
	2021			2020

REVENUES:
Technology systems	$	1,490,298		$	513,674
Services and consulting		664,456			477,271

Total Revenues		2,154,754			990,945

COST OF REVENUES:
Technology systems		1,895,485			1,092,058
Services and consulting		331,384			293,954
Overhead		503,593			260,421

Total Cost of Revenues		2,730,462			1,646,433

GROSS MARGIN		(575,708	)		(655,488	)

OPERATING EXPENSES:
Sales & marketing		311,801			139,852
Research & development		61,033			40,639
Administration		873,758			1,251,936

Total Operating Expenses		1,246,592			1,432,427

LOSS FROM OPERATIONS		(1,822,300	)		(2,087,915	)

OTHER INCOME (EXPENSES):
Interest expense		(6,220	)		(68,932	)
Other income, net		1,422,497			9,798

Total Other Income (Expense)		1,416,277			(59,134	)

NET LOSS	$	(406,023	)	$	(2,147,049	)


Basic & Diluted Net Loss Per Share	$	(0.11	)	$	(0.80	)


Weighted Average Shares-Basic & Diluted		3,535,339			2,687,482


	·	Variations in our quarterly operating results
	·	Announcements that our revenue or income are below analysts’ expectations
	·	General economic downturns
	·	Sales of large blocks of our common stock
	·	Announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments.


	·	Period-to-period fluctuations in financial results
	·	Issues in manufacturing products
	·	Unanticipated potential product liability claims
	·	The introduction of technological innovations or new commercial products by competitors
	·	The entry into, or termination of, key agreements, including key strategic alliance agreements
	·	The initiation of litigation to enforce or defend any of our intellectual property rights
	·	Regulatory changes
	·	Failure of any of our products to achieve commercial success


	·	changes in the market acceptance of our products;
	·	increased levels of competition;
	·	changes in political, economic or regulatory conditions generally and in the markets in which we operate;
	·	our relationships with our key customers;
	·	our ability to retain and attract senior management and other key employees;
	·	our ability to quickly and effectively respond to new technological developments;
	·	our ability to protect our trade secrets or other proprietary rights, operate without infringing upon the proprietary rights of others and prevent others from infringing on the proprietary rights of the Company; and
	·	other risks, including those described in the “Risk Factors” discussion of this prospectus.


Name of Selling Stockholder	Number of shares of Common Stock Owned Prior to Offering (1)			% of shares of Common Stock Owned Prior to Offering			Maximum Number of Shares of Common Stock to be Sold Pursuant to this Prospectus(1)		Number of shares of Common Stock Owned After Offering		% of shares of Common Stock Owned After Offering

Brian and Diana Pessin		165,911	(2)		4.99%	(3)		90,909 (2)		75,002		4.99%	(3)
Sandra Pessin		587,729	(4)		4.99%	(3)		272,727 (4)		315,002		4.99%	(3)
21 April Fund, Ltd.		703,148	(5)		19.99%	(6)		325,454(5)		377,694		19.99%	(6)
21 April Fund L.P.		249,657	(7)		19.99%	(6)		129,091(5)		120,566		19.99%	(6)


	December 31,		December 31,
	2020		2019
ASSETS
CURRENT ASSETS:
Cash	$	3,969,100	$	56,249
Accounts receivable, net		1,244,876		2,611,608
Contract assets		102,458		1,375,920
Prepaid expenses and other current assets		486,626		716,598

Total Current Assets		5,803,060		4,760,375

Property and equipment, net		342,180		260,181
Operating lease right of use asset		196,144		430,146

OTHER ASSETS:
Software Development Costs, net		—		20,000
Patents and trademarks, net		64,415		61,598
Total Other Assets		64,415		81,598

TOTAL ASSETS	$	6,405,799	$	5,532,300


	December 31,			December 31,
	2020			2019
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

CURRENT LIABILITIES:
Accounts payable	$	599,317		$	2,641,437
Accounts payable - related parties		7,700			12,791
Notes payable - financing agreements		42,942			42,299
Notes payable - related parties, net of discounts		—			905,373
Line of credit		—			27,615
Payroll taxes payable		3,146			115,111
Accrued expenses		1,038,092			393,272
Current portion-equipment financing agreements		89,620			45,072
Current portion-operating lease obligations		202,797			239,688
Current portion-SBA loan		627,465			—
Contract liabilities		709,553			8,661
Deferred revenue		315,370			936,428

Total Current Liabilities		3,636,002			5,367,747

Equipment financing payable, less current portion		103,184			89,026
Operating lease obligations, less current portion		—			202,797
SBA loan, less current portion		782,805			—

Total Liabilities		4,521,991			5,659,570

Commitments and Contingencies (Note 11)

STOCKHOLDERS’ EQUITY (DEFICIT):
Preferred stock: $0.001 par value, 10,000,000 authorized, 9,485,000 shares available to be designated
Series A redeemable convertible preferred stock, $10 stated value per share, 500,000 shares designated; 0 issued and outstanding at December 31, 2020 and December 31, 2019, convertible into common stock at $6.30 per share		—			—
Series B convertible preferred stock, $1,000 stated value per share, 15,000 shares designated; 1,705 and 1,705 issued and outstanding at December 31, 2020 and December 31, 2019, convertible into common stock at $7 per share		1,705,000			1,705,000
Common stock: $0.001 par value; 500,000,000 shares authorized, 3,535,339 and 1,982,039 shares issued, 3,534,015 and 1,980,715 shares outstanding at December 31, 2020 and December 31, 2019, respectively		3,536			1,982
Additional paid-in capital		39,820,874			31,063,915
Total stock & paid-in-capital		41,529,410			32,770,897
Accumulated deficit		(39,488,150	)		(32,740,715	)
Sub-total		2,041,260			30,182
Less: Treasury stock (1,324 shares of common stock at December 31, 2020 and December 31, 2019)		(157,452	)		(157,452	)


	March 31,		December 31,
	2021		2020
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash	$	7,071,913	$	3,969,100
Accounts receivable, net		1,390,152		1,244,876
Contract assets		37,566		102,458
Prepaid expenses and other current assets		694,702		486,626
Total Current Assets		9,194,333		5,803,060

Property and equipment, net		321,143		342,180
Operating lease right of use asset		154,023		196,144

OTHER ASSETS:
Patents and trademarks, net		70,508		64,415
Total Other Assets		70,508		64,415

TOTAL ASSETS	$	9,740,007	$	6,405,799


	March 31,			December 31,
	2021			2020
	(Unaudited)
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	689,649		$	599,317
Accounts payable - related parties		7,700			7,700
Notes payable - financing agreements		237,390			42,942
Payroll taxes payable		3,146			3,146
Accrued expenses		984,174			1,038,092
Current portion - equipment financing agreements		92,224			89,620
Current portion-operating lease obligations		158,556			202,797
Current portion-SBA loan		—			627,465
Contract liabilities		166,033			709,553
Deferred revenue		1,267,921			315,370
Total Current Liabilities		3,606,793			3,636,002

Equipment financing payable, less current portion		79,128			103,184
SBA loan, less current portion		—			782,805
Total Liabilities		3,685,921			4,521,991

Commitments and Contingencies (Note 5)

STOCKHOLDERS' EQUITY:
Preferred stock: $0.001 par value, 10,000,000 authorized, 9,480,000 shares available to be designated
Series A redeemable convertible preferred stock, $10 stated value per share, 500,000 shares designated; 0 issued and outstanding at March 31, 2021 and December 31, 2020, convertible into common stock at $6.30 per share		—			—
Series B convertible preferred stock, $1,000 stated value per share, 15,000 shares designated; 1,705 and 1,705 issued and outstanding at March 31, 2021 and December 31, 2020, convertible into common stock at $7 per share		1,705,000			1,705,000
Series C convertible preferred stock, $1,000 stated value per share, 5,000 shares designated; 4,500 issued and outstanding at March 31, 2021 and 0 issued and outstanding at December 31, 2020, convertible into common stock at $5.50 per share		4,500,000			—
Common stock: $0.001 par value; 500,000,000 shares authorized, 3,535,339 shares issued, 3,534,015 shares outstanding at March 31, 2021 and December 31, 2020, respectively		3,536			3,536
Additional paid-in capital		39,897,175			39,820,874
Total stock & paid-in-capital		46,105,711			41,529,410
Accumulated deficit		(39,894,173	)		(39,488,150	)
Sub-total		6,211,538			2,041,260
Less: Treasury stock (1,324 shares of common stock at March 31, 2021 and December 31, 2020)		(157,452	)		(157,452	)
Total Stockholders' Equity		6,054,086			1,883,808

Total Liabilities and Stockholders' Equity	$	9,740,007		$	6,405,799


(1)	The actual number of shares of Common Stock offered hereby and included in the registration statement of which this prospectus is a part includes, in accordance with Rule 416 under the Securities Act, such indeterminate number of additional shares of our Common Stock as may become issuable in connection with any proportionate adjustment for any stock splits, stock combinations, stock dividends, recapitalizations, anti-dilution adjustments or similar events with respect to our Common Stock.
(2)	Includes 75,002 shares of Common Stock owned by Mr. Pessin and 90,909 shares of Common Stock into which 500 shares of Series C Preferred Stock owned by Mr. and Mrs. Pessin are convertible. Until the Company receives the Stockholder Approval, however, such shares of Series C Preferred Stock are convertible into a maximum of 78,513 shares of Common Stock.
(3)	Represents the aggregate combined percentage of shares beneficially owned by Brian and Diana Pessin and Sandra Pessin. The conversion of the Series B Preferred Stock and Series C Preferred Stock held by them are subject to ownership blockers of 4.99%.
(4)	Includes: (i) 71,430 shares of Common Stock; (ii) 243,572 shares of Common Stock underlying 1,705 shares of Series B Preferred Stock, that are not currently convertible due to a 4.99% beneficial ownership limitation with respect to Common Stock owned by Ms. Pessin, her affiliates or a member of a group with Ms. Pessin; and (iii) 272,727 shares of Common Stock underlying 1,500 shares of Series C Preferred Stock, that are not currently convertible due to a 4.99% beneficial ownership limitation with respect to Common Stock owned by Ms. Pessin, her affiliates or a member of a group with Ms. Pessin. Until the Company receives the Stockholder Approval, however, such shares of Series C Preferred Stock are convertible into a maximum of 235,540 shares of Common Stock.
(5)	Includes: (i) 344,970 shares of Common Stock; (ii) 32,724 shares of Common Stock issuable upon exercise of warrants, which are not currently exercisable due to a 9.99% beneficial ownership limitation; and (iii) 325,454 shares of Common Stock issuable upon conversion of 1,790 shares of Series C Preferred Stock, which is subject to a 19.99% beneficial ownership limitation. Until the Company receives the Stockholder Approval, however, such shares of Series C Preferred Stock are convertible into a maximum of 281,077 shares of Common Stock.
(6)	Represents the aggregate combined percentage of shares beneficially owned by 21 April Fund, Ltd. and 21 April Fund L.P. The shares of Series C Preferred Stock held by them are subject to ownership blockers of 19.99%. Bleichroeder LP (“Bleichroeder”) is an investment advisor registered under the Investment Advisers Act of 1940. Bleichroeder acts as investment advisor to 21 April Fund, Ltd. and 21 April Fund, L.P. Bleichroeder may be deemed to beneficially own the shares held by such entities, though such entities have the right to receive and the ultimate power to direct the receipt of dividends from, or the proceeds of the sale of, such shares.
(7)	Includes (i) 108,646 shares of Common Stock; (ii) 11,920 shares of Common Stock issuable upon exercise of warrants, which are not currently exercisable due to a 9.99% beneficial ownership limitation; and (iii) 129,091 shares of Common Stock issuable upon conversion of 710 shares of Series C Preferred Stock, which is subject to a 19.99% beneficial ownership limitation. Until the Company receives the Stockholder Approval, however, such shares of Series C Preferred Stock are convertible into a maximum of 111,489 shares of Common Stock.


	·	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
	·	block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;
	·	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
	·	an exchange distribution in accordance with the rules of the applicable exchange;
	·	privately negotiated transactions;
	·	through one or more underwritten offerings on a firm commitment or best efforts basis;
	·	settlement of short sales that are not in violation of Regulation SHO;
	·	in transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such securities at a stipulated price per security;
	·	through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
	·	through the distribution of securities by any Selling Stockholder to its parents, members or security holders;
	·	a combination of any such methods of sale; or
	·	any other method permitted pursuant to applicable law.


	For the Three Months Ended
	March 31,
	2021			2020

Revenues	$	2,154,754		$	990,945
Cost of revenues		2,730,462			1,646,433
Gross margin		(575,708)			(655,488)
Operating expenses		1,246,592			1,432,427
Loss from operations		(1,822,300	)		(2,087,915	)
Other income (expense)		1,416,277			(59,134	)
Net loss	$	(406,023	)	$	(2,147,049	)


	March 31, 2021			March 31, 2020
Net cash used in operating activities	$	(1,296,424	)	$	(1,657,013	)
Net cash used in investing activities		(58,105	)		(36,245	)
Net cash provided by financing activities		4,457,342			8,189,897
Net increase in cash	$	3,102,813		$	6,496,639


	(1)	Revenues for professional services, which are of short-term duration, are recognized when services are completed;
	(2)	For all periods reflected in this prospectus, software license sales have been one-time sales of a perpetual license to use our software product and the customer also has the option to purchase third party manufactured handheld devices from us if they purchase our software license. Accordingly, the revenue is recognized upon delivery of the software and delivery of the hardware, as applicable, to the customer;
	(3)	Training sales are one-time upfront short-term training sessions and are recognized after the service has been performed; and
	(4)	Maintenance/support is an optional product sold to our software license customers under one-year contracts. Accordingly, maintenance payments received upfront are deferred and recognized over the contract term.


Name	Age	Position
Charles P. Ferry	55	Chief Executive Officer, Director
Adrian G. Goldfarb	63	Chief Financial Officer
Connie L. Weeks	63	Chief Accounting Officer
Kenneth Ehrman⁽¹⁾	50	Chairman
Blair M. Fonda⁽²⁾	55	Director
Edmond L. Harris⁽³⁾	71	Director
Ned Mavrommatis⁽⁴⁾	50	Director


(1)	Chairman of the Board, member of the Compensation Committee and Corporate Governance and Nominating Committee
(2)	Chairman of the Audit Committee, member of the Compensation Committee
(3)	Chairman of the Corporate Governance and Nominating Committee, member of the Audit Committee
(4)	Chairman of the Compensation Committee, member of the Audit Committee and Corporate Governance and Nominating Committee.


·	appointing, approving the compensation of, and assessing the independence of our independent registered public accounting firm;
·	overseeing the work of our independent registered public accounting firm, including through the receipt and consideration of reports from such firm;
·	reviewing and discussing with management and the independent registered public accounting firm our annual and quarterly financial statements and related disclosures;
·	monitoring our internal control over financial reporting, disclosure controls and procedures and code of business conduct and ethics;
·	discussing our risk management policies;
·	establishing policies regarding hiring employees from the independent registered public accounting firm and procedures for the receipt and retention of accounting related complaints and concerns;
·	meeting independently with our independent registered public accounting firm and management;
·	reviewing and approving or ratifying any related person transactions; and
·	preparing the audit committee report required by SEC rules.


	·	reviewing and approving on an annual basis the corporate goals and objectives with respect to compensation for our Chief Executive Officer;
	·	reviewing, approving and recommending to our board of directors on an annual basis the evaluation process and compensation structure for our other executive officers;
	·	determining the need for and the appropriateness of employment agreements and change in control agreements for each of our executive officers and any other officers recommended by the Chief Executive Officer or board of directors;
	·	providing oversight of management’s decisions concerning the performance and compensation of other Company officers, employees, consultants and advisors;
	·	reviewing our incentive compensation and other equity-based plans and recommending changes in such plans to our board of directors as needed, and exercising all the authority of our board of directors with respect to the administration of such plans;
	·	reviewing and recommending to our board of directors the compensation of independent directors, including incentive and equity-based compensation; and
	·	selecting, retaining and terminating such compensation consultants, outside counsel or other advisors as it deems necessary or appropriate.


	·	recommending to the board of directors nominees for election as directors at any meeting of stockholders and nominees to fill vacancies on the board;
	·	considering candidates proposed by stockholders in accordance with the requirements in the Committee charter;
	·	overseeing the administration of the Company’s Code of Ethics;
	·	reviewing with the entire board of directors, on an annual basis, the requisite skills and criteria for board candidates and the composition of the board as a whole;
	·	having the authority to retain search firms to assist in identifying board candidates, approve the terms of the search firm’s engagement, and cause the Company to pay the engaged search firm’s engagement fee;
	·	recommending to the board of directors on an annual basis the directors to be appointed to each committee of the board of directors;
	·	overseeing an annual self-evaluation of the board of directors and its committees to determine whether it and its committees are functioning effectively; and
	·	developing and recommending to the board a set of corporate governance guidelines applicable to the Company.


	·	been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
	·	had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;
	·	been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;
	·	been found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;
	·	been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
	·	been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.


Name and Principal Position	Year	Salary ($)			Bonus ($)			Stock ($)		Options ($)			Other Comp. ($)			Total ($)

Gianni B. Arcaini,	2020		913,961	⁽¹⁾		114,423	⁽²⁾		—		157,070	⁽³⁾		16,921	⁽⁴⁾		1,202,375
Former Chairman of the Board, Chief Executive Officer, President, Director (PEO)	2019		249,260			143,411	⁽²⁾		—		—			25,382	⁽⁴⁾		418,053

Charles P. Ferry, Chief Executive Officer (PEO)	2020		83,333			50,217	⁽⁵⁾		—		36,293	⁽⁶⁾		—			169,843

Adrian G. Goldfarb,	2020		197,750			849			—		45,632	⁽⁷⁾		7,500	⁽⁸⁾		251,731
Chief Financial Officer, Former Director (PFO)	2019		180,250			—			—		—			7,500	⁽⁸⁾		187,750

Connie L. Weeks,	2020		150,000			6,667	⁽⁹⁾		—		45,632	⁽¹⁰⁾		—			202,299
Chief Accounting Officer	2019		150,000			—			—		—			—			150,000


	For the Years Ended December 31,
	2020	2019
Risk free interest rate	0.18% - 0.26%	1.40% - 2.44%
Expected term in years	2.50 – 3.50	2.76 – 3.25
Dividend yield	—	—
Volatility of common stock	68.00% - 86.24%	117.18% - 151.43%
Estimated annual forfeitures	—	—


(4)	Comprised of $12,000 and $18,000 car allowance, and $4,921 and $7,382 in Company paid membership dues and subscriptions, respectively.
(5)	Represents $50,000 objectives bonus and $217 additional cash bonus.
(6)	Option compensation is the fair market value of 100,000 stock, 5-year options with a strike price of $4.18 and two-year vesting granted to Mr. Ferry as an incentive to join the Company. See note 3 above for valuation methodology.
(7)	Represents the full expense for option grants to Mr. Goldfarb during 2020. During the second quarter of 2020, 160,152 incentive stock options previously issued to staff and Directors under the 2016 Equity Incentive plan were cancelled. 310,290 new 5-year options were issued replacing those cancelled and the balance as new grants. The reissued options have a $6.00 strike price and the new options have a strike price of $4.74. Mr. Goldfarb was awarded both 18,929 re-issued options and 18,929 additional new options. Option compensation is the fair market value of 18,929 options re-issued to Mr. Goldfarb which were fully vested and the fair market value of the additional 18,929 options that were granted. See note 3 above for valuation methodology
(8)	Comprised of $7,500 annual car allowance in 2020 and $7,500 annual car allowance in 2019.
(9)	Represents bonus award for long service to the Company.
(10)	Represents the full expense for option grants to Ms. Weeks during 2020. During the second quarter of 2020, 160,152 incentive stock options previously issued to staff and Directors under the 2016 Equity Incentive plan were cancelled. 310,290 new 5-year options were issued replacing those cancelled and the balance as new grants. The reissued options have a $6.00 strike price and the new options have a strike price of $4.74. Ms. Weeks was awarded both 18,929 re-issued options and 18,929 additional new options. Option compensation is the fair market value of 18,929 options re-issued to Ms. Weeks which were fully vested and the fair market value of the additional 18,929 options that were granted. See note 3 above for valuation methodology.


Name	Number of shares underlying unexercised options exercisable		Number of shares underlying unexercised options unexercisable		Equity Incentive Plan Awards; Number of shares underlying unexercised unearned options		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		Equity Incentive Plan Awards: Market or payout value of unearned shares, units or other rights that have not vested $
Charles P. Ferry		—		—		100,000	$	4.18		08/31/2025		—		—		—		—
Adrian G. Goldfarb		18,929		—		—	$	6.00		03/31/2025		—		—		—		—
Adrian G. Goldfarb		9,465		—		9,465	$	4.74		03/31/2025		—		—		—		—
Connie L. Weeks		18,929		—		—	$	6.00		03/31/2025		—		—		—		—
Connie L. Weeks		9,465		—		9,465	$	4.74		03/31/2025		—		—		—		—
Gianni B. Arcaini		50,358		—		—	$	6.00		03/31/2025		—		—		—		—
Gianni B. Arcaini		50,358		—		—	$	4.74		03/31/2025		—		—		—		—


	Fees Earned or Paid in Cash ($)		Stock Awards ($)⁽⁵⁾		Option Awards ($)⁽⁶⁾		Non-Equity Incentive Plan Compensation ($)		Non-Qualified Deferred Compensation Earnings ($)		All Other Compensation ($)⁽⁷⁾		Total ($)
Blair M. Fonda ⁽¹⁾		12,500		7,500		20,662		—		—		10,000		50,662
Edmond L. Harris ⁽²⁾		2,500		—		—		—		—		—		2,500
Kenneth Ehrman ⁽³⁾		12,500		7,500		20,662		—		—		10,000		50,662
Ned Mavrommatis ⁽⁴⁾		12,500		7,500		20,662		—		—		10,000		50,662


(1)	Blair Fonda was appointed to the board on May 3, 2017. Through November 19, 2020, he served as Co-Chairman of the Audit Committee and since then he has been the Chairman of the Audit Committee.
(2)	Edmond Harris was appointed to the board on November 19, 2020 and since then has served as Chairman of the Corporate Governance and Nominating Committee.
(3)	Kenneth Ehrman was appointed to the board in January 2019. Through November 19, 2020, he served as Chairman of the Compensation Committee and as of that date he was named Chairman of the Board.
(4)	Ned Mavrommatis was appointed to the board on August 13, 2019. Through November 19, 2020, he served as Co-Chairman of the Audit Committee and since then he has been the Chairman of the Compensation Committee.
(5)	Reflects the aggregate grant date fair value of stock awards computed in accordance with FASB ASC Topic 718. In determining the grant date fair value of stock awards, the Company used the closing price of the Company’s common stock on the grant date.


(6)	The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing formula. This fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. The Company’s determination of fair value using an option-pricing model is affected by the stock price as well as assumptions regarding the number of highly subjective variables. The Company estimates volatility based upon the historical stock price of the Company and estimates the expected term for stock options using the simplified method for employees and directors and the contractual term for non-employees. The risk-free rate is determined based upon the prevailing rate of United States Treasury securities with similar maturities.
(7)	Messrs. Ehrman, Fonda and Mavrommatis each were awarded $10,000 in restricted common stock as an additional payment compensating for significant time spent on the CEO and Chairman transition which took place between July 2020 and November 2020.


Name and Address of Beneficial Owner⁽¹⁾	Common Stock		Percentage of Ownership of Common Stock⁽³⁾
5% Beneficial Shareholders⁽²⁾
Bleichroeder LP 1345 Avenue of the Americas, 47^th Floor New York, NY 10105⁽⁴⁾		765,293		19.99	%
Justin W. Keener 3960 Howard Hughes Parkway Las Vegas, NV 89169⁽⁵⁾		353,048		9.99	%
Bard Associates, Inc. 135 S. Lasalle Street, Suite 3700 Chicago IL 60603⁽⁶⁾		242,570		6.90	%
Laurence W. Lytton 467 Central Park West New York, NY 10025		215,700		6.10	%
Pessin Family Holdings 500 Fifth Avenue, Suite 2240 New York, NY 10110⁽⁷⁾		249,404		7.06	%
5% Beneficial Shareholders as a Group		1,826,015		43.49	%
Executive Officers and Directors
Charles P. Ferry⁽⁸⁾		—		*	%
Adrian G. Goldfarb⁽⁹⁾		48,650		1.36	%
Kenneth Ehrman⁽¹⁰⁾		19,955		*	%
Blair M. Fonda⁽¹¹⁾		20,375		*	%
Edmond L. Harris		—		*	%
Ned Mavrommatis⁽¹²⁾		12,838		*	%
Connie L. Weeks⁽¹³⁾		28,394		*	%
Executive Officers and Directors as a Group (7 persons)		130,212		3.60	%


(1)	Beneficial ownership is determined in accordance with Rule 13D-3(a) of the Exchange Act and generally includes voting or investment power with respect to securities.
(2)	The information set forth in the table regarding the 5% Beneficial Shareholders is based on Schedule 13D and Schedule 13G filings made by the individual investors.