~~CALCULATION~~As OFfiled ~~REGISTRATION~~with ~~FEE~~the ~~=================================================================================================================================~~Securities ~~PROPOSED~~and ~~MAXIMUM~~Exchange ~~TITLE~~Commission OFon ~~EACH~~January CLASS OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM OFFERING AGGREGATE OFFERING AMOUNT OF TO BE REGISTERED REGISTERED PRICE PER SHARE(1) PRICE(1) REGISTRATION FEE --------------------------------------------------------------------------------------------------------------------------------- Common stock14, par value $0.001 per 15,000,000 $0.17 $2,550,000.00 $234.60 share --------------------------------------------------------------------------------------------------------------------------------- Common stock, par value $0.001 per 1,400,000 $0.17 $238,000.00 $21.90 share, underlying warrants --------------------------------------------------------------------------------------------------------------------------------- TOTAL 16,400,000 $0.17 $2,788,000.00 $256.50 ---------------------------------------------------------------------------------------------------------------------------------2022

~~FOR~~Registration THE NINE MONTHS ENDED MARCH 31, FOR THE YEAR ENDED JUNE 30, --------------------------- ----------------------------------------------------- STATEMENT OF OPERATIONS DATA: 2002 2001 2001 2000 1999 1998 ---- ---- ---- ---- ---- ---- Sales $ 65,070 $ 5,000 $ 95,000 $ -- $ -- $ -- Cost of sales 50,070 -- 62,500 -- -- -- Gross profit 15,000 5,000 32,500 -- -- -- Total operating expenses 2,885,508 2,156,986 3,391,139 1,388,492 51,946 17,978 Other income (expense) 1,547 5,591 (207,793) 2,897 272 -- Interest expense (69,513) -- (6,126) -- -- -- Net loss from continuing operations (2,938,484) (2,146,395) (3,572,558) (1,385,595) (51,674) (17,832) Loss from discontinued operations -- (1,171,104) (3,846,963) (579,588) -- -- Loss from sale of discontinued operations -- (2,510,000) (2,446,562) -- -- -- Net loss (2,938,484) (5,827,499) (9,866,083) (1,965,183) (51,674) (17,832) Net loss per share-basic and diluted: From continuing operations (0No.~~08)~~ ~~(0.07) (0.11) (0.05)~~ 333-~~- (0.00) From discontinued operations -- (0.12) (0.20) (0.02) -- --~~

~~SUMMARY~~UNITED COMPENSATION TABLE ANNUAL COMPENSATION LONG-TERM COMPENSATION ------------------- ---------------------- AWARDS PAYOUTS ------ ------- RESTRICTED SECURITIES ALL OTHER STOCK UNDERLYING LTIP OTHER NAME AND PRINCIPAL SALARY BONUS COMPENSATION AWARDS OPTIONS/SAR'S PAYOUTS COMPENSATION FISCAL POSITION YEAR $ $ $ $ # $ $ --------------- ---- ------ ----- ------------ ---------- ------------- ------- ------------ (A) (B) (C) (D) (E) (F) (G) (H) (I) --------------- ---- ------ ----- ------------ ---------- ------------- ------- ------------ Jeffrey D. Wilson, 2001 180,000 -- 12,000 -- 600,000(2) -- -- Former Chairman of 2000 155,000(3) 30,000(4) 2,670(5) 700,000(6) -- -- -- the Board of 1999 25,000(3) -- -- 300,000 -- -- -- Directors and Chief Executive Officer(1) Richard A. Papworth, 2001 120,000 -- 2,000 -- 448,475(8) -- -- Chief Financial 2000 10,000(7) -- -- 50,000(9) -- -- -- Officer 1999 -- -- -- -- -- -- -- Erik W. Black, 2001 100,000 -- 6,000 -- 50,000(10) -- -- Former Executive 2000 4,167(12) -- 4,500(13) -- -- -- -- Vice-President - 1999 -- -- -- -- -- -- -- Business Development(11)STATES

~~AGGREGATED~~SECURITIES ~~OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR~~ AND ~~FISCAL~~EXCHANGE YEAR END OPTIONS/SAR VALUES(1) NUMBER OF SECURITIES VALUE OF UNEXERCISED SHARES UNDERLYING UNEXERCISED IN-THE-MONEY ACQUIRED ON VALUE OPTIONS/SAR'S AT OPTIONS/SAR'S AT NAME EXERCISE REALIZED ($) FISCAL YEAR END(1) FISCAL YEAR END(2) ---- -------- ------------ ------------------ ------------------ Jeffrey D. Wilson -0- -0- Exercisable: 375,000(4) $0 Former Chairman of the Board Unexercisable: 225,000(4) $0 of Directors and Chief Executive Officer(3) Richard A. Papworth -0- -0- Exercisable: 448,475 $0 Chief Financial Officer Unexercisable: 0 $0 Erik W. Black -0- -0- Exercisable: 50,000 $0 Former Executive Vice-President Unexercisable: 0 $0 Business Development(5)COMMISSION

~~OPTION/SAR~~Washington, GRANTS TABLE % TOTAL NO. OF SECURITIES OPTIONS/SAR'S UNDERLYING GRANTED TO OPTIONS/SAR'S EMPLOYEES IN EXERCISE OR BASE PRICE NAME GRANTED (#) FISCAL YEAR (%) ($ PER SHARE) EXPIRATION DATE ---- ----------- --------------- ------------- --------------- Jeffrey D. ~~Wilson 50,000 4~~C.6% $0.885 April 9, 2006 Former Chairman of the Board 350,000(2) 31.9% $0.885 April 9, 2011 of Directors and 200,000 1.8% $0.710 May 3, 2011 Chief Executive Officer(1) Richard A. Papworth 50,000 4.6% $0.885 April 9, 2006 Chief Financial Officer 398,475 36.3% $0.885 April 9, 2011 Erik W. Black 50,000 4.6% $0.885 April 9, 2006 Former Executive Vice-President Business Development(3)20549

~~PERCENTAGE~~FORM OUTSTANDING PROCEEDS FROM THE SALE OF ASSUMED AVERAGE NUMBER OF SHARES TO BE AFTER GIVING EFFECT TO THE SHARES TO FUSION CAPITAL UNDER THE PURCHASE PRICE ISSUED IF FULL PURCHASE ISSUANCE TO FUSION CAPITAL(S-1) COMMON STOCK PURCHASE AGREEMENT $0.15 15,000,000 25.9% $2,250,000 $0.25 15,000,000 25.9% $3,750,000 $0.50 12,000,000 21.0% $6,000,000 $0.75 8,000,000 15.1% $6,000,000 $1.00 6,000,000 11.7% $6,000,000 $1.50 4,000,000 8.1% $6,000,000 $2.00 3,000,000 6.2% $6,000,000 $3.00 2,000,000 4.2% $6,000,000 $4.00 1,500,000 3.2% $6,000,000

~~PERCENTAGE~~REGISTRATION OFSTATEMENT ~~PERCENTAGE~~UNDER ~~OF OUTSTANDING OUTSTANDING SHARES SHARES SHARES BENEFICIALLY BENEFICIALLY SHARES TO BE BENEFICIALLY SELLING OWNED BEFORE OWNED BEFORE SOLD IN~~ THE ~~OWNED~~SECURITIES ~~AFTER~~ACT ~~STOCKHOLDER~~OF OFFERING OFFERING(1) OFFERING OFFERING(2) ----------- -------- ----------- -------- ----------- Fusion Capital Fund II, LLC(3) 1,000,000(4) 2.2%(4) 15,000,000 0.0% The Eagle Rock Group, LLC(5) 1,400,000(6) 3.1% 1,400,000 0.0%1933

~~INDEX~~Kronos TOAdvanced ~~FINANCIAL STATEMENTS Page ---- TSET~~Technologies, ~~INC~~Inc. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AT MARCH 31, 2002 (UNAUDITED) Consolidated Balance Sheets as of March 31, 2002 (Unaudited) and June 30, 2001......................... F-2 Consolidated Statements of Operations for the three months and nine months ended March 31, 2002 and 2001 (Unaudited)................................................................................... F-3 Consolidated Statements of Cash Flows for the nine months ended March 31, 2002 and 2001 (Unaudited).... F-4 Consolidated Statement of Changes of Shareholders' Equity for the nine months ended March 31, 2002 (Unaudited)........................................................................................ F-5 Notes to Consolidated Financial Statements............................................................. F-6 CONSOLIDATED FINANCIAL STATEMENTS AT JUNE 30, 2001 Report of Independent Certified Public Accountants..................................................... F-13 Report of Randy Simpson, C.P.A., P.C................................................................... F-14 Consolidated Balance Sheets as of June 30, 2001 and 2000............................................... F-15 Consolidated Statements of Operations for the years ended June 30, 2001, 2000 and 1999................. F-16 Consolidated Statements of Cash Flows for the years ended June 30, 2001, 2000 and 1999................. F-17 Consolidated Statement of Changes of Shareholders' Equity for the years ended June 30, 2001, 2000 and 1999............................................................................................... F-18 Notes to Consolidated Financial Statements............................................................. F-20

~~TSET, INC. CONSOLIDATED BALANCE SHEETS MARCH 31, JUNE 30, 2002 2001~~ (~~Unaudited)~~Exact ~~-----------------~~name --------------- ASSETS CURRENT ASSETS Cash $ 9,721 $ 32,619 Prepaids and other current assets 178,829 37,679 ----------------- --------------- TOTAL CURRENT ASSETS 188,550 70,298 ----------------- --------------- PROPERTY AND EQUIPMENT 62,723 62,723 Less Accumulated Depreciation (29,514) (18,016) ----------------- --------------- NET PROPERTY AND EQUIPMENT 33,209 44,707 ------------------ --------------- OTHER ASSETS Intangibles 2,280,047 2,431,524 Deferred financing fees 556,152 520,800 ------------------ --------------- TOTAL OTHER ASSETS 2,836,199 2,952,324 ------------------ --------------- TOTAL ASSETS $ 3,057,958 $ 3,067,329 ================== =============== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 1,275,817 $ 323,045 Accrued expenses 877,642 1,284,268 Notes payable, current portion 343,900 313,900 ------------------- --------------- TOTAL CURRENT LIABILITIES 2,497,359 1,921,213 ------------------- --------------- LONG TERM LIABILITIES Notes payable 250,000 ------------------- TOTAL LONG TERM LIABILITIES 250,000 ------------------- --------------- Net lilabilities of ~~discontinued~~registrant ~~operations~~as ~~747,550~~specified 667,550 ------------------- --------------- TOTAL LIABILITIES ------------------ --------------- 3,494,909 2,588,763 ------------------ --------------- REDEEMABLE WARRANTS 686,000 - SHAREHOLDERS' EQUITY (DEFICIT) Common stock authorized 500,000,000 39,386 34,001 shares of $.001 par value Capital in ~~excess~~its ~~of par value 13,749,933 12,418,350 Retained earnings (Accumulated deficit~~charter) (14,912,271) (11,973,785) ------------------ --------------- TOTAL SHAREHOLDERS' EQUITY (DEFICIT) (1,122,952) 478,566 ------------------ --------------- TOTAL LIBILITIES AND SHAREHOLDERS' EQUITY $ 3,057,958 $ 3,067,329 ================== =============== The accompanying notes are an integral part of these financial statements.

TSET, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) FOR THE THREE MONTHS FOR THE NINE MONTHS ENDED MARCH 31, ENDED MARCH 31, -------------------------------------- ---------------------------------- 2002 2001 2002 2001 -------------- ------------------- ----------------- ------------- Sales $ - $ 5,000 $ 65,070 $ 5,000 Cost of Sales - - 50,070 - -------------- ------------------- ----------------- ------------- Gross Margin - 5,000 15,000 5,000 -------------- ------------------- ----------------- ------------- Selling General and Administrative expenses Compensation and benefits 141,261 230,771 401,115 898,717 Research and Development 58,682 16,038 197,516 127,905 Professional services 225,078 187,088 1,750,454 474,170 Depreciation and amortizaton 71,674 80,544 215,021 220,738 Other selling general & administrative expenses 126,256 165,576 321,401 435,456 -------------- ------------------- ----------------- ------------- Total Selling, General and Administrative expenses 622,952 680,017 $ 2,885,508 2,156,986 -------------- ------------------- ----------------- ------------- Net Operating Income (Loss) (622,952) (675,017) (2,870,508) (2,151,986) Other Income (expense) 50 1,050 1,537 5,591 Interest Expense (34,349) - (69,513) - Minority Interests - - -------------- ------------------- ----------------- ------------- Net Income (Loss) Before Taxes (657,251) (673,967) (2,938,484) (2,146,395) Provision for Taxes - - - - -------------- ------------------- ----------------- ------------- Net Income (Loss) from continuing operations (657,251) (673,967) (2,938,484) (2,146,395) Income (Loss) from discontinued operations, net of income tax of $0 (380,609) (1,171,104) Loss on disposal of discontinued operations, net of income tax of $0 (2,510,000) (2,510,000) -------------- ------------------- ----------------- ------------- Net Income (Loss) $ (657,251) $ (3,564,576) $ (2,938,484) (5,827,499) ============== =================== ================= ============= Basic Earnings (Loss) Per Share Income (loss) from continung operations (0.02) (0.02) (0.08) (0.07) Loss from discontinued operations - (0.09) - (0.12) -------------- ------------------- ----------------- ------------- Net Income (loss) $ (0.02) $ (0.11) $ (0.08) $ (0.19) ============== =================== ================= ============= Diluted Earnings (Loss) Per Share Income (loss) from continuing operaitons (0.02) (0.02) (0.08) (0.07) Loss from discontinued operations - (0.09) - (0.12) -------------- ------------------- ----------------- ------------- Net Income (Loss) $ (0.02) $ (0.11) $ (0.08) $ (0.19) ============== =================== ================= ============= The accompanying notes are an integral part of these financial statements.

Nevada

3564

87-0440410

State or Other Jurisdiction of

Incorporation or Organization)

(Primary Standard Industrial

Classification Number)

(IRS Employer

Identification Number)

~~TSET,~~2501 ~~INC.~~Garfield ~~CONSOLIDATED~~Avenue STATEMENTS OF CASH FLOWS (Unaudited) FOR THE NINE MONTHS ENDED MARCH 31, ------------------------------------------- 2002 2001 CASH FLOWS FROM OPERATING ACTIVITIES ------------------------------------------- NET LOSS FROM CONTINUING OPERATIONS $ (2,938,484) $ (2,146,395) Adjustments to reconcile net loss to net cash (used in) provided by operations Depreciation and amortization 215,021 220,738 Common stock issued for compensation/services 814,532 83,954 CHANGE IN Accounts receivable - 6,000 Prepaid expenses and other asets (176,502) (489) Accounts payable 952,772 193,782 Accrued expenses and other liabilities (56,626) 189,322 ------------------------------------------- NET CASH (USED IN) PROVIDED BY CONTINUING OPERATIONS (1,189,286) (1,453,088) CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment - (77,614) Investment in patent protection 15,795 - Cash used in discontinued operations (84,014) (177,594) ------------------------------------------- NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (68,219) (255,208) ------------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES Issuance of common stock 1,234,607 1,719,740 ------------------------------------------- NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES $ 1,234,607 1,719,740 ------------------------------------------- NET (DECREASE) INCREASE IN CASH (22,898) 11,444 CASH Beginning of period 32,619 102,949 ------------------------------------------- End of period $ 9,721 $ 114,393 =========================================== Supplemental schedule of non-cash investing and financing activities: Debt satisfied with stock $ 100,000 $ 419,143 Note payable issued in satisfaction of accrued liability $ 350,000 - The accompanying notes are an integral part of these financial statements.

~~TSET~~Parkersburg, ~~INC.~~WV ~~CONSOLIDATED~~61018 STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY COMMON STOCK ----------------------------- RETAINED CAPITAL IN EARNINGS TOTAL EXCESS OF PAR (ACCUMULATED SHAREHOLDERS' SHARES AMOUNT VALUE DEFICIT) EQUITY (DEFICIT) ------------------------------------------------------------------------ BALANCE at June 30, 2001 34,000,978 $ 34,001 $ 12,418,350 $ (11,973,785) $ 478,566 Shares issued on July 6, 2001 for cash 238,806 239 79,761 80,000 Shares issued on July 20, 2001 as compensation 250 113 113 Shares issued on October 1, 2001 for consulting services 360,000 360 100,440 100,800 Shares issued on October 1, 2001 as compensation 2,250 2 1,446 1,448 Shares issued on October 1, 2001 for cash 1,000,000 1,000 446,982 447,982 Shares issued on November 30, 2001 for cash 100,000 100 23,400 23,500 Shares issued on December 10, 2001 for cash 50,000 50 10,950 11,000 Shares issued on December 12, 2001 for cash 100,000 100 20,900 21,000 Shares issued on December 13, 2001 for cash 75,000 75 16,050 16,125 Shares issued on December 14, 2001 for cash 500,000 500 107,000 107,500 Shares issued in January 2002 to Fusion Capital for cash 925,000 925 194,700 195,625 Shares issued in February 2002 to Fusion Capital for cash 350,000 350 69,150 69,500 Shares issued in March 2002 to Fusion Capital for cash 1,683,333 1,684 260,691 262,375 Net loss for the period ended March 31, 2002 (2,938,484) (2,938,484) ------------------------------------------------------------------------ Balance at March 31, 2002 (Unaudited) 39,385,617 $ 39,386 $ 13,749,933 $ (14,912,269) $ (1,122,950) ======================================================================== The accompanying notes are an integral part of these financial statements.

~~MARCH 31, 2002~~ (~~UNAUDITED~~800) ~~JUNE 30, 2001~~ 723-~~----------~~3247 ------------- % OF % OF AMOUNT PRE-TAX LOSS AMOUNT PRE-TAX LOSS ------ ------------ ------ ------------ Benefit for income tax at federal statutory rate $ 999,086 34.0% $ 3,354,468 34.0% Non-deductible expenses (318,580) (10.8)% (1,803,355) (18.3%) Disposed subsidiary NOL - -% (578,370) (5.9%) Increase in valuation allowance (680,506) (23.2)% (972,743) (9.8%) ----------- ------- ------------ ------ $ - 0.0% $ - 0.0% =========== ======= ============ ======

OPERATING RESULTS OF DISCONTINUED OPERATIONS: OPERATING RESULTS OF DISCONTINUED OPERATIONS: --------------------------------------------- FOR THE NINE MONTHS ENDED MARCH 31, ----------------------------------- 2002 2001 ---- ---- APERION AUDIO ATOMIC APERION AUDIO TOTAL ------------- ------ ------------- ----- Sales $ 733,183 $ 714,464 $ 587,570 $ 1,302,034 Cost of sales (~~273~~Address,~~282)~~ ~~(512,282)~~including ~~(304,488)~~zip ~~(816~~code,~~770)~~ ~~Depreciation~~ and ~~amortization~~telephone (9number,~~927)~~ ~~(215,398)~~including ~~(198,111)~~area ~~(413~~code,~~509)~~ ~~General~~of ~~and~~registrant’s ~~administrative~~principal ~~(545,964)~~executive ~~(369,058~~offices) (927,871) (1,296,929) ---------- ---------- ---------- ------------ Operating income (loss) (95,990) (382,274) (842,900) (1,225,174) F-8 OPERATING RESULTS OF DISCONTINUED OPERATIONS: --------------------------------------------- FOR THE NINE MONTHS ENDED MARCH 31, ----------------------------------- 2002 2001 ---- ---- APERION AUDIO ATOMIC APERION AUDIO TOTAL ------------- ------ ------------- ----- Other income 22,217 735 (537) 198 Interest expense (25,584) (69,232) (8,279) (77,511) Provision for future operating losses 79,485 - - - Minority interest 19,871 - 131,383 131,383 ---------- ---------- ---------- ------------ Income (Loss) pre-tax 0 (450,771) (720,333) (1,171,104) Income taxes (benefits) - - - - ---------- ---------- ---------- ------------ Loss from discontinued operations $0 $ (450,771) $(720,333) $ (1,171,104) ========== ========== ========== ============

~~TSET,~~Incorp ~~INC. CONSOLIDATED BALANCE SHEETS JUNE 30~~Services, ----------------------------------------------------- 2001 2000 (RESTATED) ------------------ ------------------ ASSETS CURRENT ASSETS Cash $ 32,619 $ 102,949 Accounts receivable, net - 4,648 Prepaids 37,679 23,253 ------------------ ------------------ TOTAL CURRENT ASSETS 70,298 130,850 ------------------ ------------------ PROPERTY AND EQUIPMENT 62,723 25,216 Less: Accumulated Depreciation (18,016) (2,197) ------------------ ------------------ NET PROPERTY AND EQUIPMENT 44,707 23,019 ------------------ ------------------ OTHER ASSETS Intangibles 2,431,524 2,970,731 Net assets of discontinued operations - 4,502,888 Deferred financing fees 520,800 - ------------------ ------------------ TOTAL OTHER ASSETS 2,952,324 7,473,619 ------------------ ------------------ TOTAL ASSETS $ 3,067,329 $ 7,627,488 ================== ================== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 323,045 $ 22,213 Accrued expenses 1,284,268 301,400 Notes payable, current portion 313,900 65,183 ------------------ ------------------ TOTAL CURRENT LIABILITIES 1,921,213 388,796 ------------------ ------------------ NET LIABILITIES OF DISCONTINUED OPERATIONS 667,550 - ------------------ ------------------ TOTAL LIABILITIES 2,588,763 388,796 ------------------ ------------------ SHAREHOLDERS' EQUITY Common stock, authorized 500,000,000 34,001 29,652 shares of $Inc.001 par value Capital in excess of par value 12,418,350 9,316,743 Retained earnings (Accumulated deficit) (11,973,785) (2,107,703) ------------------ ------------------ TOTAL SHAREHOLDERS' EQUITY 478,566 7,238,692 ------------------ ------------------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,067,329 $ 7,627,488 ================== ================== The accompanying notes are an integral part of these financial statements.

~~TSET,~~3773 ~~INC.~~Howard ~~CONSOLIDATED~~Hughes ~~STATEMENTS OF OPERATIONS YEAR ENDED JUNE 30~~Parkway, ~~----------------------------------------------~~Suite ~~2001 2000 1999 (RESTATED) (RESTATED) ---------------------------------------------- Sales $ 95~~500S,~~000~~Las ~~$ - $ - Cost of sales 62~~Vegas,~~500~~ -NV -89169Phone: ---------------------------------------------- Gross Profit 32,500 - - ---------------------------------------------- Selling, General and Administrative expenses Compensation and benefits 1,201,048 413,414 43,150 Research and development 297,004 636,175 - Professional services 735,296 151,989 - Impairment of investment in CDI 272,945 - - Depreciation and amortization 323,164 98,543 - Other selling general & administrative expenses 561,682 88,371 8,796 ---------------------------------------------- Total Selling, General and Administrative expenses 3,391,139 1,388,492 51,946 ---------------------------------------------- Net Operating Income (~~Loss~~800) ~~(3,358,639) (1,388,492) (51,946) Other Income / (expense) (207,793) 2,897 272 Interest Expense (6,126)~~ 246- - ---------------------------------------------- Net Income (Loss) Before Taxes (3,572,558) (1,385,595) (51,674) Provision for Taxes - - - ---------------------------------------------- Net Income (Loss) from continuing operations (3,572,558) (1,385,595) (51,674) Income (Loss) from discontinued operations, net of (3,846,963) (579,588) - income tax of $0 Loss on disposal of discontinued operations, net of income tax of $0 (2,446,562) - - ---------------------------------------------- Net Income (Loss) $ (9,866,083) $ (1,965,183) $ (51,674) ============================================== Basic Earnings (Loss) Per Share Income (loss) from continuing operations (0.11) (0.06) - Loss from discontinued operations (0.20) (0.02) - --------------------------------------------- Net Income (loss) $ (0.31) $ (0.08) $ - ============================================== Diluted Earnings (Loss) Per Share Income (loss) from continuing operations (0.11) (0.06) - Loss from discontinued operations (0.20) (0.02) - --------------------------------------------- Net Income (loss) $ (0.31) $ (0.08) $ - ============================================== Weighted average shares outstanding 31,481,874 25,263,333 23,997,730 The accompanying notes are an integral part of these financial statements.2677

~~TSET INC. CONSOLIDATED STATEMENTS OF CASH FLOWS YEAR ENDED JUNE 30~~(Address, ~~----------------------------------------~~including ~~2001~~zip ~~2000 1999 CASH FLOWS FROM OPERATING ACTIVITIES (RESTATED) (RESTATED) ---------------------------------------- Net loss from continuing operations ($3~~code,~~572,558)~~ ~~($1,385,595) ($51,674) Adjustments to reconcile net loss to net cash (used in) provided by operations Depreciation~~ and ~~amortization~~telephone ~~332~~number,~~528~~ ~~98,542~~including ~~1,000~~area ~~In-process technology - 633~~code,~~229~~ ~~- Impairment~~ of ~~investment~~agent ~~in CDI 272,945 50,000 - Common stock issued~~ for ~~compensation/services 111,973 50,000 10,000 Cancellation of note payable (22,383~~service) CHANGE IN Accounts receivable 4,648 (4,648) - Prepaid expenses and other assets (14,426) (23,253) - Accounts Payable 300,832 22,213 - Accrued Expenses and other liabilities 982,868 271,250 30,150 ---------------------------------------- NET CASH (USED IN) PROVIDED BY CONTINUING OPERATIONS (1,613,573) (288,262) (10,524) CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (37,507) (22,712) - Investment in patent protection (79,697) - - Cash used in discontinued operations (435,823) (726,225) - ---------------------------------------- NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (553,027) (748,937) - ---------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES Issuance of common stock 2,056,270 1,124,125 - Proceeds from short-term borrowings 100,000 15,490 7,297 Deferred finance costs paid (60,000) - - ---------------------------------------- NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES 2,096,270 1,139,615 7,297 ---------------------------------------- NET (DECREASE) INCREASE IN CASH (70,330) 102,413 (3,227) CASH Beginning of period 102,949 536 3,763 ---------------------------------------- End of period $32,619 $102,949 $536 ======================================== Supplemental schedule of non-cash investing and financing activities: Supplemental disclosure of cash flow information: Interest paid in cash $ - $ - $ - Income taxes - - - Non-cash investing and financing activities: Deferred financing fees $ 460,800 $ - $ - Debt satisfied with stock 516,163 - - Issuance of notes payable 213,900 - - Acquisition of subsidiaries with stock - 8,106,555 - The accompanying notes are an integral part of these financial statements.

~~TSET~~Copies INC. STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY COMMON STOCK ------------------------ RETAINED CAPITAL IN EARNINGS TOTAL EXCESS OF PAR (ACCUMULATED SHAREHOLDERS' SHARES AMOUNT VALUE DEFICIT) EQUITY (DEFICIT) ----------------------------------------------------------------------- BALANCE at June 30, 1998 24,001,730 $ 24,001 $ 41,718 $ (90,847) $ (25,128) Shares certificate cancelled (4,000) (4) (4) Net loss for the year ended June 30, 1999 (51,673) (51,673) ----------------------------------------------------------------------- BALANCE at June 30, 1999 23,997,730 23,997 41,718 (142,520) (76,805) Shares reissued from prior year cancellation 4,000 4 4 Shares issued on August 31, 1999 to acquire the patents and technology of the utility meter 100,000 100 49,900 50,000 Shares issued on March 14, 2000 to acquire Atomic Soccer USA, Ltd 1,000,000 1,000 1,805,250 1,806,250 Shares issued on March 14, 2000 37,555 38 (38) - Shares issued on March 14, 2000 to acquire Kronos Air Technologies, Inc. 2,250,000 2,250 3,344,625 3,346,875 Shares issued on May 9, 2000 to acquire EdgeAudio.com, Inc. 1,298,701 1,299 2,548,701 2,550,000 Shares issued on May 9 to acquire Cancer Detection International Inc. 180,000 180 353,250 353,430 Shares issued on May 19, 2000 as compensation 14,815 15 49,985 50,000 Shares of restricted common stock issued on June 30, 2000 for cash 768,860 769 1,123,352 1,124,121 Net loss for the year ended June 30, 2000 (1,965,183) (1,965,183) ----------------------------------------------------------------------- BALANCE at June 30, 2000 29,651,661 29,652 9,316,743 (2,107,703) 7,238,692 Purchase price adjustment on Cancer Detection International, Inc. (20,000) (20) (39,230) (39,250) Shares issued on July 20, 2000 for cash 161,538 161 188,839 189,000 Shares issued on August 3, 2000 5,000 5 6,555 6,560 Shares issued to liquidate debt of Atomic Soccer USA, Ltd 362,259 362 375,981 376,343 Shares issued in September 2000 for cash 832,000 832 831,168 832,000 Shares issued in September to liquidate TSET, Inc. debt 42,800 43 42,757 42,800 F-18 COMMON STOCK ------------------------ RETAINED CAPITAL IN EARNINGS TOTAL EXCESS OF PAR (ACCUMULATED SHAREHOLDERS' SHARES AMOUNT VALUE DEFICIT) EQUITY (DEFICIT) --------------------------------------------------------------------- Shares issued on December 8, 2000 for cash 168,492 169 99,831 100,000 Shares issued on December 27, 2000 for cash 39,091 39 22,301 22,340 Shares issued on January 8, 2001 for cash 687,500 688 399,312 400,000 Shares issued on January 12, 2001 for cash 57,693 57 34,943 35,000 Shares issued on January 19, 2001 for cash 10,000 10 6,390 6,400 Shares issued on January 19, 2001 for services and compensation 44,915 45 56,098 56,143 Shares issued on March 23, 2001 for cash 186,302 186 134,814 135,000 Shares issued on April 9, 2001 as compensation 2,000 2 1,768 1,770 Shares issued on April 9, 2001 to liquidate debt of Atomic Soccer 97,020 97 96,923 97,020 Shares issued in April 2001 for cash 38,038 38 17,492 17,530 Shares issued on May 3, 2001 for cash 52,778 53 18,947 19,000 Shares issued on May 7, 2001 for cash 891,891 892 299,108 300,000 Shares issued on June 14, 2001 as compensation 50,000 50 47,450 47,500 Shares issued on June 29, 2001 as a financing fee 640,000 640 460,160 460,800 Net loss for the year ended June 30, 2001 (9,866,083) (9,866,083) --------------------------------------------------------------------- BALANCE at June 30, 2001 34,000,978 $ 34,001 $ 12,418,350 $(11,973,785) $ 478,566 ===================================================================== The accompanying notes are an integral part of these financial statements.:

~~NET~~Tad ASSETS (LIABILITIES) OF DISCONTINUED OPERATIONS 2001 2000 -------------------------------------------------------------------------------------------------- Atomic Soccer Edge Audio Total Atomic Soccer Edge Audio Total --------------- -------------- -------------- -------------- --------------- ----------------- Current Assets $ - $ 294Mailander,~~100~~ $ 294,100 $ 739,057 $ 24,192 $ 763,249 Net Property and Equip - 48,835 48,835 66,458 25,090 91,548 Goodwill - - - 2,617,826 2,554,052 5,171,878 Current Liabilities - (464,788) (464,788) (1,258,853) (88,592) (1,347,445) Notes payable - - - (176,342) - (176,342) Minority interest (545,697) (545,697) - - - --------------- -------------- -------------- -------------- --------------- ----------------- Net Assets (Liabilities) of discontinued operations $ - $ (667,550) $ (667,550) $1,988,146 $2,514,742 $4,502,888 =============== ============== ============== ============== =============== =================Esq.

~~OPERATING~~Mailander ~~RESULTS~~Law OF DISCONTINUED OPERATIONS 2001 2000 ----------------------------------------------------------------------------------------------------- Atomic Soccer Edge Audio Total Atomic Soccer Edge Audio Total -------------- -------------- ---------------- ------------- ---------------- ------------------ Sales $ 714Office,~~464~~ $ 757,100 $ 1,471,564 $ 292,889 $ 13,182 $ 306,071 Cost of sales (512,282) (381,341) (893,623) (248,773) (7,820) (256,593) Depn and amort (215,398) (270,071) (485,469) (98,138) (43,289) (141,427) General and Admin (369,058) (1,107,041) (1,476,099) (261,600) (184,255) (445,855) -------------- -------------- ---------------- ------------- ---------------- ------------------ Operating income (loss) (382,274) (1,001,353) (1,383,627) (315,622) (222,182) (537,804) Other Income 735 (239,858) (239,123) - - - Interest expense (69,232) (14,968) (84,200) (41,784) - (41,784) Provision for asset impairment - (2,294,316) (2,294,316) - - - Minority interest - 154,303 154,303 - - - -------------- -------------- ---------------- ------------- ---------------- ------------------ Income (Loss) pre-tax (450,771) (3,396,192) (3,846,963) (357,406) (222,182) (579,588) Income taxes (benefits) - - - - -------------- -------------- ---------------- ------------- ---------------- ------------------ Loss from disc'd ops $ (450,771) $(3,396,192) $ (3,846,963) $(357,406) $(222,182) $ (579,588) ============== ============== ================ ============= ================ ==================Inc.

~~Options~~4811 ~~Outstanding~~49th Options Exercisable --------------------------------------------- ------------------------------- Weighted Weighted Weighted Average Average Average Range of Remaining Life Exercise Exercise Exercise Prices Options (in years) Price Options Price --------------- ------- ---------- ----- ------- ----- $0.71 - $1.12 1,557 7.14 $ 0.89 1,557 $ 0.89Street

~~Net~~San ~~(Loss) from Fiscal Year Ended Gross continuing Net loss Per June 30~~Diego, ~~2000:~~CA Sales Profit operations common share ------------- ------------ ---------------- ------------- First Quarter $ 0 $ 0 $ (48,841) $ 0.00 Second Quarter 0 0 (48,679) 0.00 Third Quarter, as previously reported 0 0 (675,185) (0.03) Effect of Restatement 0 0 519,400 0.02 ---------------- ------------- Third Quarter Restated 0 0 (155,785) (0.01) Fourth Quarter, as previously reported 0 0 (1,505,366) (0.06) Effect of Restatement 0 0 373,076 0.01 ---------------- ------------- Fourth Quarter Restated 0 0 (1,132,290) (0.05) Fiscal Year Ended June 30, 2001: First Quarter $ 0 $ 0 $ (533,126) $ (0.02) Second Quarter 0 0 (939,302) (0.03) Third Quarter 5,000 5,000 (673,967) (0.02) Fourth Quarter 90,000 27,500 (1,426,163) (0.04)92115

EXHIBIT NO. DESCRIPTION LOCATION ----------- ----------- -------- 2.1 Articles of Merger for Technology Selection, Inc. with Incorporated by reference to Exhibit 2.1 to the the Nevada Secretary of State Registrant's Registration Statement on Form S-1 filed on August 7, 2001 (the "Registration Statement") 3.1 Articles of Incorporation Incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 filed on August 7, 2001 3.2 Bylaws Incorporated by reference to Exhibit 3.2 to the Registration Statement on Form S-1 filed on August 7, 2001 5.1 Opinion re: Legality Provided herewith 10.1 Employment Agreement, dated April 16, 1999, by and Incorporated by reference to Exhibit 10.1 to between TSET, Inc. and Jeffrey D. Wilson the Registration Statement on Form S-1 filed on August 7, 2001 10.2 Deal Outline, dated December 9, 1999, by and between Incorporated by reference to Exhibit 10.2 to TSET, Inc. and Atomic Soccer, USA, Ltd. the Registration Statement on Form S-1 filed on August 7, 2001 10.3 Letter of Intent, dated December 27, 1999, by and between Incorporated by reference to Exhibit 10.3 to TSET, Inc. and Electron Wind Technologies, Inc. the Registration Statement on Form S-1 filed on August 7, 2001 10.4 Agreement, dated February 5, 2000, by and between Incorporated by reference to Exhibit 10.4 to DiAural, LLC and EdgeAudio, LLC the Registration Statement on Form S-1 filed on August 7, 2001 10.5 Stock Purchase Agreement, dated March 6, 2000, by and Incorporated by reference to Exhibit 10.5 to among TSET, Inc., Atomic Soccer USA, Ltd., Todd P. the Registration Statement on Form S-1 filed on Ragsdale, James Eric Anderson, Jewel Anderson, Timothy August 7, 2001 Beglinger and Atomic Millennium Partners, LLC 10.6 Acquisition Agreement, dated March 13, 2000, by and among Incorporated by reference to Exhibit 10.6 to TSET, Inc., High Voltage Integrated, LLC, Ingrid the Registration Statement on Form S-1 filed on Fuhriman, Igor Krichtafovitch, Robert L. Fuhriman and August 7, 2001 Alan Thompson 10.7 Letter of Intent, dated April 18, 2000, by and between Incorporated by reference to Exhibit 10.7 to TSET, Inc. and EdgeAudio.com, Inc. the Registration Statement on Form S-1 filed on August 7, 2001 10.8 Lease Agreement, dated May 3, 2000, by and between Kronos Incorporated by reference to Exhibit 10.8 to Air Technologies, Inc. and TIAA Realty, Inc. the Registration Statement on Form S-1 filed on August 7, 2001 10.9 Agreement and Plan of Reorganization, dated May 4, 2000, Incorporated by reference to Exhibit 10.9 to by and among TSET, Inc., EdgeAudio.com, Inc., LYNK the Registration Statement on Form S-1 filed on Enterprises, Inc., Robert Lightman, J. David Hogan, Eric August 7, 2001 Alexander and Eterna Internacional, S.A. de C.V. II-6 EXHIBIT NO. DESCRIPTION LOCATION ----------- ----------- -------- 10.10 Letter Agreement, dated May 4, 2000, by and between TSET, Incorporated by reference to Exhibit 10.10 to Inc. and Cancer Detection International, LLC the Registration Statement on Form S-1 filed on August 7, 2001 10.11 Employment Agreement, dated May 19, 2000, by and between Incorporated by reference to Exhibit 10.11 to TSET, Inc. and Richard A. Papworth the Registration Statement on Form S-1 filed on August 7, 2001 10.12 Finders Agreement, dated August 21, 2000, by and among Incorporated by reference to Exhibit 10.12 to TSET, Inc., Richard F. Tusing and Daniel R. Dwight the Registration Statement on Form S-1 filed on August 7, 2001 10.13 Contract Services Agreement, dated June 27, 2000, by and Incorporated by reference to Exhibit 10.13 to between Chinook Technologies, Inc. and Kronos Air the Registration Statement on Form S-1 filed on Technologies, Inc. August 7, 2001 10.14 Letter of Intent, dated July 17, 2000, by and between Incorporated by reference to Exhibit 10.14 to Kronos Air Technologies, Inc. and Polus Technologies, Inc. the Registration Statement on Form S-1 filed on August 7, 2001 10.15 Consulting Agreement, dated August 1, 2000, by and among Incorporated by reference to Exhibit 10.15 to TSET, Inc., Richard F. Tusing and Daniel R. Dwight the Registration Statement on Form S-1 filed on August 7, 2001 10.16 Preferred Stock Purchase Agreement, dated September 12, Incorporated by reference to Exhibit 10.16 to 2000, by and between EdgeAudio.com, Inc. and Bryan the Registration Statement on Form S-1 filed on Holbrook August 7, 2001 10.17 Shareholders Agreement, dated September 12, 2000, by and Incorporated by reference to Exhibit 10.17 to among TSET, Inc., Bryan Holbrook and EdgeAudio.com, Inc. the Registration Statement on Form S-1 filed on August 7, 2001 10.18 Amendment to Agreement and Plan of Reorganization dated Incorporated by reference to Exhibit 10.18 to September 12, 2000, by and among TSET, Inc., the Registration Statement on Form S-1 filed on EdgeAudio.com, Inc., LYNK Enterprises, Inc., Robert August 7, 2001 Lightman, J. David Hogan, Eric Alexander and Eterna Internacional, S.A. de C.V. 10.19 Agreement Regarding Sale of Preferred Stock, dated Incorporated by reference to Exhibit 10.19 to November 1, 2000, by and between EdgeAudio.com, Inc. and the Registration Statement on Form S-1 filed on Bryan Holbrook August 7, 2001 10.20 Amendment to Subcontract, dated December 14, 2000, by and Incorporated by reference to Exhibit 10.20 to the between Bath Iron Works and High Voltage Integrated Registration Statement on Form S-1 filed on August 7, 2001 10.21 Consulting Agreement, dated January 1, 2001, by and Incorporated by reference to Exhibit 10.21 to between TSET, Inc. and Dwight, Tusing & Associates the Registration Statement on Form S-1 filed on August 7, 2001 10.22 Employment Agreement, dated March 18, 2001, by and Incorporated by reference to Exhibit 10.22 to between TSET, Inc. and Alex Chriss the Registration Statement on Form S-1 filed on August 7, 2001 10.23 Stock Option Agreement, dated April 9, 2001, by and Incorporated by reference to Exhibit 10.23 to between TSET, Inc. and Jeffrey D. Wilson the Registration Statement on Form S-1 filed on August 7, 2001 10.24 Stock Option Agreement, dated April 9, 2001, by and Incorporated by reference to Exhibit 10.24 to between TSET, Inc. and Jeffrey D. Wilson the Registration Statement on Form S-1 filed on August 7, 2001 II-7 EXHIBIT NO. DESCRIPTION LOCATION ----------- ----------- -------- 10.25 Stock Option Agreement, dated April 9, 2001, by and Incorporated by reference to Exhibit 10.25 to between TSET, Inc. and Daniel R. Dwight the Registration Statement on Form S-1 filed on August 7, 2001 10.26 Stock Option Agreement, dated April 9, 2001, by and Incorporated by reference to Exhibit 10.26 to between TSET, Inc. and Richard F. Tusing the Registration Statement on Form S-1 filed on August 7, 2001 10.27 Stock Option Agreement, dated April 9, 2001, by and Incorporated by reference to Exhibit 10.27 to between TSET, Inc. and Charles D. Strang the Registration Statement on Form S-1 filed on August 7, 2001 10.28 Stock Option Agreement, dated April 9, 2001, by and Incorporated by reference to Exhibit 10.28 to between TSET, Inc. and Richard A. Papworth the Registration Statement on Form S-1 filed on August 7, 2001 10.29 Stock Option Agreement, dated April 9, 2001, by and Incorporated by reference to Exhibit 10.29 to between TSET, Inc. and Richard A. Papworth the Registration Statement on Form S-1 filed on August 7, 2001 10.30 Stock Option Agreement, dated April 9, 2001, by and Incorporated by reference to Exhibit 10.30 to between TSET, Inc. and Erik W. Black the Registration Statement on Form S-1 filed on August 7, 2001 10.31 Stock Option Agreement, dated April 9, 2001, by and Incorporated by reference to Exhibit 10.31 to between TSET, Inc. and J. Alexander Chriss the Registration Statement on Form S-1 filed on August 7, 2001 10.32 Stock Option Agreement, dated April 9, 2001, by and Incorporated by reference to Exhibit 10.32 to between TSET, Inc. and Charles H. Wellington the Registration Statement on Form S-1 filed on August 7, 2001 10.33 Stock Option Agreement, dated April 9, 2001, by and Incorporated by reference to Exhibit 10.33 to between TSET, Inc. and Igor Krichtafovitch the Registration Statement on Form S-1 filed on August 7, 2001 10.34 Letter Agreement, dated April 10, 2001, by and between Incorporated by reference to Exhibit 10.34 to TSET, Inc. and Richard A. Papworth the Registration Statement on Form S-1 filed on August 7, 2001 10.35 Letter Agreement, dated April 12, 2001, by and between Incorporated by reference to Exhibit 10.35 to TSET, Inc. and Daniel R. Dwight and Richard F. Tusing the Registration Statement on Form S-1 filed on August 7, 2001 10.36 Finders Agreement, dated April 20, 2001, by and between Incorporated by reference to Exhibit 10.36 to TSET, Inc. and Bernard Aronson, d/b/a Bolivar the Registration Statement on Form S-1 filed on International Inc. August 7, 2001 10.37 Indemnification Agreement, dated May 1, 2001, by and Incorporated by reference to Exhibit 10.37 to between TSET, Inc. and Jeffrey D. Wilson the Registration Statement on Form S-1 filed on August 7, 2001 10.38 Indemnification Agreement, dated May 1, 2001, by and Incorporated by reference to Exhibit 10.38 to between TSET, Inc. and Daniel R. Dwight the Registration Statement on Form S-1 filed on August 7, 2001 10.39 Indemnification Agreement, dated May 1, 2001, by and Incorporated by reference to Exhibit 10.39 to between TSET, Inc. and Richard F. Tusing the Registration Statement on Form S-1 filed on August 7, 2001 10.40 Indemnification Agreement, dated May 1, 2001, by and Incorporated by reference to Exhibit 10.40 to between TSET, Inc. and Charles D. Strang the Registration Statement on Form S-1 filed on August 7, 2001 II-8 EXHIBIT NO. DESCRIPTION LOCATION ----------- ----------- -------- 10.41 Indemnification Agreement, dated May 1, 2001, by and Incorporated by reference to Exhibit 10.41 to between TSET, Inc. and Richard A. Papworth the Registration Statement on Form S-1 filed on August 7, 2001 10.42 Indemnification Agreement, dated May 1, 2001, by and Incorporated by reference to Exhibit 10.42 to between TSET, Inc. and Erik W. Black the Registration Statement on Form S-1 filed on August 7, 2001 10.43 Stock Option Agreement, dated May 3, 2001, by and between Incorporated by reference to Exhibit 10.43 to TSET, Inc. and Jeffrey D. Wilson the Registration Statement on Form S-1 filed on August 7, 2001 10.44 Common Stock Purchase Agreement, dated June 19, 2001, by Incorporated by reference to Exhibit 10.44 to and between TSET, Inc. and Fusion Capital Fund II, LLC the Registration Statement on Form S-1 filed on August 7, 2001 10.45 Registration Rights Agreement, dated June 19, 2001, by Incorporated by reference to Exhibit 10.45 to and between TSET, Inc. and Fusion Capital Fund II, LLC the Registration Statement on Form S-1 filed on August 7, 2001 10.46 Mutual Release and Settlement Agreement, dated July 7, Incorporated by reference to Exhibit 10.46 to 2001, by and between TSET, Inc. and Foster & Price Ltd. the Registration Statement on Form S-1 filed on August 7, 2001 10.47 Letter Agreement, dated July 9, 2001, by and between Incorporated by reference to Exhibit 10.47 to TSET, Inc. and The Eagle Rock Group, LLC the Registration Statement on Form S-1 filed on August 7, 2001 10.48 Finders Agreement, dated July 17, 2001, by and between Incorporated by reference to Exhibit 10.48 to TSET, Inc. and John S. Bowles the Registration Statement on Form S-1 filed on August 7, 2001 10.49 Warrant Agreement, dated July 16, 2001, by and between Incorporated by reference to Exhibit 10.49 to TSET, Inc. and The Eagle Rock Group, LLC the Registration Statement on Form S-1 filed on August 7, 2001 10.50 Agreement and Release, dated October 10, 2001, by and Incorporated by reference to Exhibit 10.50 to between TSET, Inc. and Jeffrey D. Wilson the Registrant's Form 10-K for the year ended June 30, 2001 filed on October 15, 2001 10.51 Promissory Note dated October 10, 2001 payable to Mr. Incorporated by reference to Exhibit 10.51 to Jeffrey D. Wilson the Registrant's Form 10-K for the year ended June 30, 2001 filed on October 15, 2001 10.52 Consulting Agreement, dated October 10, 2001, by and Incorporated by reference to Exhibit 10.52 to between TSET, Inc. and Jeffrey D. Wilson the Registrant's Form 10-K for the year ended June 30, 2001 filed on October 15, 2001 10.53 Employment Agreement, dated April 1, 2002, by and between Incorporated by reference to Exhibit 10.55 to TSET, Inc. and Daniel R. Dwight the Registrant's Form 10-Q for the quarterly period ended March 31, 2002 filed on May 15, 2002 10.54 Stock Option Agreement, dated April 1, 2002, by and Incorporated by reference to Exhibit 10.54 to between TSET, Inc. and Daniel R. Dwight the Registrant's Form 10-Q for the quarterly period ended March 31, 2002 filed on May 15, 2002 10.55 Agreement, dated March 1, 2002, by and between TSET, Inc. Incorporated by reference to Exhibit 10.55 to and The Eagle Rock Group, LLC the Registrant's Form 10-Q for the quarterly period ended March 31, 2002 filed on May 15, 2002 10.56 Agreement, dated November 13, 2001, by and between TSET, Inc. and Fusion Capital Fund II, LLC 10.57 Common Stock Purchase Agreement, dated August 12, 2002 by Provided herewith and between TSET, Inc. and Fusion Capital Fund II, LLC 10.58 Registration Rights Agreement, dated August 12, 2002 by Provided herewith and between TSET, Inc. and Fusion Capital Fund II, LLC 11.1 Statement re: Computation of Earnings Not applicable 12.1 Statement re: Computation of Ratios Not applicable 15.1 Letter re: Unaudited Interim Financial Information Not applicable 16.1 Letter re: Change in Certifying Accountant Not applicable II-9 EXHIBIT NO. DESCRIPTION LOCATION ----------- ----------- -------- 21.1 Subsidiaries of the Registrant Not applicable 23.1 Consent of Kirkpatrick & Lockhart LLP Provided herewith (contained in Exhibit 5.1) 23.2 Consent of Grant Thornton LLP Provided herewith 23.3 Consent of Randy Simpson, C.P.A., P.C. Provided herewith 24.1 Power of Attorney Included on signature page 27.1 Financial Data Schedule Not applicable

Tel (619) 239-9034

Approximate date of proposed sale to the public: As soon as practicable and from time to time after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box, and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check One):

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☒
(Do not check if a smaller reporting company)

Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered		Amount to be Registered⁽¹⁾				Proposed Maximum Offering Price Per Share ⁽²⁾				Proposed Maximum Aggregate Offering Price				Amount of Registration Fee ⁽³⁾
Common stock to be offered for resale by selling stockholder			80,526,056			$	0.026			$	2,093,677			$	194.08

(1) Includes of up to 80,526,056 shares of common stock to be sold to Dutchess Capital Growth Fund, LP, under a Common Stock Common Stock Purchase Agreement dated September 24, 2021.

(2) Estimated solely for the purpose of calculating the amount of the registration fee in accordance with Rule 457(c) under the Securities Act of 1933.

(3) Based on the closing price per share of $0.026 for Kronos Advanced Technologies, Inc.’s common stock on January 10, 2022, as reported by the OTC Markets Group.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

The information in this preliminary Prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the U.S. Securities and Exchange Commission (“SEC”) is effective. This preliminary Prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS

SUBJECT TO COMPLETION, DATED JANUARY 14, 2022

KRONOS ADVANCED TECHNOLOGIES, INC.

80,526,056 Shares of Common Stock

This Prospectus relates to the offer and resale, from time to time, by the selling stockholders identified herein of up to an aggregate of 80,526,056 shares our Common Stock par value $0.001 per share (the “Shares”) to be issued to Dutchess Capital Growth Fund, LP (“Dutchess”), a selling stockholder pursuant to a “Drawdown Notice” under an executed and binding Common Stock Purchase Agreement (the “Common Stock Purchase Agreement”), dated September 24, 2021. The Common Stock Purchase Agreement permits us to issue Drawdown Notices to Dutchess for an aggregate of ten million dollars ($10,000,000) in shares of our common stock until (i) the date Dutchess may sell all of the Shares without restriction pursuant to Rule 144 promulgated under the Securities Act, or (ii) the date on which Dutchess shall have sold all the Shares covered thereby, and no available amount remains under the Common Stock Purchase Agreement, or until $10,000,000 of such shares have been subject to a Drawdown Notice.

Pursuant to the Common Stock Purchase Agreement, after the effectiveness of this Registration Statement, we have the option, but not the obligation, to issue Dutchess a Drawdown Notice to purchase our registered shares. The number of shares subject to any Drawdown Notice shall not exceed the lesser of; (i) $250,000 or (ii) 200% of the Average Daily Traded Value of the Stock during the five (5) days immediately preceding the Drawdown Notice date or (iii) the Beneficial Ownership Limitation of 4.99% of the number of shares of the Common Stock outstanding immediately prior to the issuance of shares of Common Stock issuable pursuant to a Drawdown Notice. The sale price of the Shares sold to Dutchess pursuant to any Drawdown Notice is ninety-two percent (92%) of the lowest traded price of the Common Stock the five (5) Business Day prior to the Closing Date of each Drawdown Notice.

Dutchess may sell all or a portion of the shares being offered pursuant to this Prospectus at fixed prices, at prevailing market prices at the time of sale, at varying prices, or negotiated prices.

Dutchess is an underwriter within the meaning of the Securities Act of 1933, and any broker-dealers or agents that are involved in selling the shares may be deemed to be “underwriters” within the meaning of the Securities Act of 1933 in connection with such sales. In such event, any commissions received by such broker-dealers or agents, and any profit on the resale of the shares purchased by them, may be deemed to be underwriting commissions or discounts under the Securities Act of 1933.

The OTC Markets Group Pink tier quotes our common stock under the symbol “KNOS.” On January 10, 2022, the closing price of our common stock was $0.026 per share.

We will not receive any proceeds from the sale of shares of our common stock by Dutchess. However, we will receive proceeds from the sale of shares of our common stock pursuant to our exercise of the Drawdown Notice right offered by Dutchess. We will pay for expenses of this offering, except that Dutchess will pay any broker discounts or commissions or equivalent expenses and expenses of its legal counsel applicable to the sale of its shares.

INVESTING IN OUR SECURITIES INVOLVES RISKS. YOU SHOULD REVIEW CAREFULLY THE RISKS AND UNCERTAINTIES DESCRIBED UNDER THE HEADING “RISK FACTORS” CONTAINED ON PAGE 12 HEREIN. YOU SHOULD READ THE ENTIRE PROSPECTUS CAREFULLY BEFORE YOU MAKE YOUR INVESTMENT DECISION.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

This Prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

The date of this Prospectus is January 14, 2022

TABLE OF CONTENTS

ABOUT THIS PROSPECTUS	1
WHERE YOU CAN FIND MORE INFORMATION	2
GENERAL MATTERS	2
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS	3
PROSPECTUS SUMMARY	4
RISK FACTORS	12
USE OF PROCEEDS	24
DETERMINATION OF OFFERING PRICE	25
DILUTION	25
THE PRIVATE PLACEMENT TRANSACTION	25
SELLING STOCKHOLDERS	26
PLAN OF DISTRIBUTION	27
DESCRIPTION OF SECURITIES	29
EXPERTS AND COUNSEL	29
INTERESTS OF NAMED EXPERTS AND COUNSEL	29
INFORMATION WITH RESPECT TO OUR COMPANY	30
DESCRIPTION OF PROPERTY	36
LEGAL PROCEEDINGS	36
MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS	36
DIVIDEND POLICY	37
FINANCIAL STATEMENTS	F-1
MANAGEMENT'S DISCUSSION AND ANALYSIS	41
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	47
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	49
EXPERTS	50
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES	50

Please read this Prospectus carefully. It describes our business, our financial condition, and the results of operations. We have prepared this Prospectus to have the information necessary to make an informed investment decision.

ABOUT THIS PROSPECTUS

You should rely only on the information we have provided or incorporated by reference into this Prospectus, any applicable Prospectus supplement. We have not authorized anyone to provide you with information different from that contained in this Prospectus, any applicable Prospectus supplement. No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this Prospectus, any applicable Prospectus supplement. You must not rely on any unauthorized information or representation. This Prospectus is an offer to sell only the Shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. You should assume that the information in this Prospectus, any applicable Prospectus supplement is accurate only as of the date on the front of the document and that any information we have incorporated by reference is accurate only as of the date of the document incorporated by reference, regardless of the time of delivery of this Prospectus or any sale of a security.

Dutchess is offering the Shares only in jurisdictions where such issuances are permitted. The distribution of this Prospectus and the issuance of the Shares in certain jurisdictions may be restricted by law. Persons outside the United States who come into possession of this Prospectus must inform themselves about, and observe any restrictions relating to, the issuance of the Shares and the distribution of this Prospectus outside the United States. This Prospectus does not constitute, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy, the Shares offered by this Prospectus by any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation.

This Prospectus is part of a registration statement on Form S-1 that we filed with the U.S. Securities and Exchange Commission (the “Commission”), under which Dutchess may offer from time to time up to an aggregate of 80,526,056 Shares in one or more offerings. If required, each time Dutchess offers Shares, we will provide you with, in addition to this Prospectus, a Prospectus Supplement that will contain specific information about the terms of that offering. We may also use a Prospectus Supplement to add, update or change any of the information contained in this Prospectus. This Prospectus, together with any applicable Prospectus supplements, includes all material information relating to this offering. To the extent that any statement that we make in a Prospectus Supplement is inconsistent with statements made in this Prospectus, the statements made in this Prospectus will be deemed modified or superseded by those made in a Prospectus Supplement. Please carefully read both this Prospectus and any Prospectus Supplement together with the additional information described below under the section entitled “Incorporation of Certain Information by Reference” before buying any of the securities offered.

This Prospectus contains summaries of certain provisions contained in some of the documents described herein, but reference is made to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have been filed, will be filed, or will be incorporated by reference as exhibits to the registration statement of which this Prospectus is a part, and you may obtain copies of those documents as described below under the section entitled “Where You Can Find More Information.”

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Commission a registration statement on Form S-1 under the Securities Act of 1933, as amended (the “Securities Act”), with respect to the Shares being offered by Dutchess under this Prospectus. For further information with respect to us and the Shares offered by Dutchess, we refer you to the registration statement and its exhibits. Statements contained in this Prospectus as to the contents of any contract or any other document referred to are not necessarily complete, and in each instance, we refer you to the copy of the contract or other document filed as an exhibit to the registration statement. Each of these statements is qualified in all respects by this reference.

We are not currently subject to the disclosure requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). However, after this registration becomes effective, and, in accordance with the Exchange Act, we will file Form 8a-12g registering our common stock and thereafter file annual, quarterly, and special reports, proxy statements and other information with the Commission. The Commission maintains an internet website at http://www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically with the Commission. The periodic reports, proxy statements and other information we expect to file with the Commission will be available for inspection on the Commission’s website free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the Commission. We maintain a website at https://kronosati.co where you will also be able to access these materials free of charge after our annual, quarterly, and special reports, proxy statements or other information is filed with the Commission. Our website address will include an inactive textual reference only and the information contained in, and that can be accessed through, our website is not incorporated into and is not part of this Prospectus.

GENERAL MATTERS

Unless otherwise noted or the context indicates otherwise “we,” “us,” “our,” “Company” or “KNOS” refers to Kronos Advanced Technologies, Inc.

References to “Management” in this Prospectus mean the senior officers of the Company. See “Directors and Executive Officers.” Any statements in this Prospectus made by or on behalf of Management are made in such persons’ capacities as officers of the Company and not in their personal capacities.

Prospective purchasers should rely only on the information contained in this Prospectus. We have not authorized any other person to provide prospective purchasers with additional or different information. If anyone provides prospective purchasers with additional or different or inconsistent information, including information or statements in media articles about us, prospective purchasers should not rely on it. Prospective purchasers should assume that the information appearing in this Prospectus is accurate only as at its date, regardless of its time of delivery or of any distribution of the Offered Shares. Our business, financial conditions, results of operations and prospects may have changed since that date.

We present our Financial Statements (as defined below) in United States dollars. Unless otherwise indicated, all references to dollar amounts in this Prospectus are to United States dollars. Reference to “United States” or “U.S.” are references to the United States of America.

CAUTIONARY NOTE AND FORWARD-LOOKING STATEMENTS TO INVESTORS

In March 2020, the World Health Organization declared a novel coronavirus (COVID-19) outbreak as a pandemic worldwide. Many countries, including China and the United States, have implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and the movement of people, and other material limitations on business. These measures have resulted in worldwide work stoppages, absenteeism in the labor workforce, and other disruptions. China started as the center of the COVID-19 epidemic, which is where our product parts and supplies are sourced, and our products are assembled and shipped. The pandemic resulted in an increase in the lead time for the manufacturing and delivery of our products. The extent to which the coronavirus and its variants impacts our continuing operations will depend on future developments. These developments are highly uncertain. We cannot predict them with confidence, including the duration and severity of the outbreak, the spread and effects of coronavirus variants, and the actions required to contain the coronavirus, its variants, or treat its impact. In particular, the continued spread of the coronavirus and its variants globally could adversely impact our operations and workforce, including our marketing and sales activities and ability to raise additional capital, which could harm our business, financial condition, and operation results.

This Prospectus may contain certain “forward-looking” statements as such term is defined by the Securities Exchange Commission in its rules, regulations, and releases, which represent our expectations or beliefs, including but not limited to, statements concerning our operations, economic performance, financial condition, growth and acquisition strategies, investments, and future operational plans. For this purpose, any statements contained herein that are not historical fact statements may be deemed forward-looking statements. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intent,” “could,” “estimate,” “might,” “plan,” “predict” or “continue” or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, certain of which are beyond our control, and actual results may differ materially depending on a variety of important factors, including uncertainty related to acquisitions, governmental regulation, managing and maintaining growth, the operations of the Company, volatility of stock price, federal enforcement, and state enforcement, and any other factors discussed in this Prospectus.

The risks and uncertainties and other factors include but are not limited to those set forth under “Risk Factors” of this Prospectus. Given these risks and uncertainties, readers are cautioned not to place undue reliance on our forward-looking statements. All subsequent written and oral forward-looking statements attributable to persons acting on our behalf or to us are expressly qualified in their entirety by these cautionary statements. Except as otherwise required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statements or the risk factors described in this Prospectus or in the documents we incorporate by reference, whether as a result of new information, future events, changed circumstances or any other reason after the date of this Prospectus.

Actual events or results may differ materially from those discussed in forward-looking statements due to various factors, including, without limitation, the risks outlined under “Risk Factors” and matters described in Prospectus generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this Prospectus will occur. We caution you not to place undue reliance on these forward-looking statements. In addition to the information expressly required to be included in this Prospectus, we will provide such further material information, if any, as may be necessary to make the required statements, in light of the circumstances under which they are made not misleading.

Except as required by federal securities laws, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

See sections entitled “Risk Factors.”

PROSPECTUS SUMMARY

The following summary highlights material information contained in this Prospectus. This summary does not include all of the information you should consider before investing in securities. Before making an investment decision, you should read the entire Prospectus carefully, including the risk factors section, the financial statements, and the notes to the financial statements. You should also review the other available information referred to in the section entitled “Where You Can Find More Information” in this Prospectus and any amendment or supplement hereto.

The Prospectus Offering

This Prospectus relates to the resale of up to 80,526,056 shares of our Common Stock issuable to Dutchess pursuant to a “Drawdown Notice Right” under an executed and binding Common Stock Purchase Agreement.

Common Stock Offered by the Selling Security Holders		Eighty million, five hundred twenty-six thousand, fifty-six (80,526,056) shares of common stock subject to our election to issue a Drawdown Notice to Dutchess.

Common Stock Outstanding Before the Offering		749,323,911 shares of common stock as of January 10, 2022.

Common Stock Outstanding After the Offering		829,579,967 shares of common stock. ⁽¹⁾

Terms of the Offering		Dutchess will determine when and how to sell the common stock offered in this Prospectus.

Termination of the Offering		Thirty-six (36) months immediately following the initial date of effectiveness of the S-1 Registration Statement Agreement.

Use of Proceeds		We are not selling any shares of common stock in this offering and, as a result, will not receive any proceeds from this offering. See “Use of Proceeds.”

Risk Factors		The common stock offered hereby involves a high degree of risk and should not be purchased by investors who cannot afford the loss of their entire investment. See “Risk Factors” beginning on page 12.

OTC Markets Symbol		KNOS

⁽¹⁾Assumes our sale, and Dutchess’ purchase, of all 80,526,056 shares pursuant to the Common Stock Purchase Agreement dated September 24, 2021.

About the Company

Kronos Advanced Technologies, Inc. (“Kronos” or the “Company”) was originally incorporated under the laws of the State of Utah on September 17, 1980, as Penguin Petroleum, Inc. Penguin Petroleum Inc.'s stockholders approved a name change on October 6, 1982, to Petroleum Corporation of America, Inc. On December 29, 1996, stockholders approved a reorganization whereby they exchanged their stock on a one-for-one basis with Technology Selection, Inc., a Nevada corporation. Technology Selection, Inc.'s shares began trading on the Over-the-Counter Bulletin Board on August 28, 1996, under the symbol "TSET”. On November 19, 1998, Technology Selection, Inc. changed its name to TSET, Inc. Effective January 12, 2001, we began doing business as Kronos Advanced Technologies, Inc.; and, as of January 18, 2002, we changed our ticker symbol to “KNOS”.

Emerging Growth Company

We are an emerging growth company under the JOBS Act. We shall continue to be deemed an emerging growth company until the earliest of:

(a)the last day of the fiscal year of the issuer during which it had total annual gross revenues of $1.07 billion (as such amount is indexed for inflation every five years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, setting the threshold to the nearest 1,000,000) or more;

(b)the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the issuer pursuant to an effective IPO registration statement;

(c)the date on which such issuer has, during the previous three-year period, issued more than $1.0 billion in nonconvertible debt; or

(d)the date on which such issuer is deemed to be a ‘large accelerated filer’, as defined in section 240.12b-2 of title 17, Code of Federal Regulations, or any successor thereto.’

The Section 107 of the JOBS Act provides that we may elect to utilize the extended transition period for complying with new or revised accounting standards and such election is irrevocable if made. As such, we have made the election to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act. Please refer to a discussion under “Risk Factors” of the effect on our financial statements of such election.

As an emerging growth company, we are exempt from Section 404(b) of Sarbanes Oxley. Section 404(a) requires Issuers to publish information in their annual reports concerning the scope and adequacy of the internal control structure and procedures for financial reporting. This statement shall also assess the effectiveness of such internal controls and procedures. Section 404(b) requires that the registered accounting firm shall, in the same report, attest to and report on the assessment on the effectiveness of the internal control structure and procedures for financial reporting. As an emerging growth company, we are also exempt from Section 14A (a) and (b) of the Securities Exchange Act of 1934 which require the shareholder approval of executive compensation and golden parachutes.

We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the JOBS Act, that allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

Business Overview

Indoor air contains pollutants can affect the quality of life. Some of these pollutants come from outdoors, and others come from indoor sources and activities, such as cooking, cleaning, secondhand smoke, building materials, consumer products, and home furnishings. These indoor air pollutants can be particles or gases, including volatile organic compounds. Common contaminants that can be found indoors include both fine and coarse particulate matter, formaldehyde, mold, and pollen. Indoor air quality will vary from home to home and over the course of a day within a home. Since most people spend about 90% of their time indoors, mostly in their homes, much of their exposures to airborne pollutants will happen in the home.

Our business focus is on the consumer air cleaning market. We do not design, market, or sell our air cleaning products as medical devices. We do not claim our products mitigate, treat, cure, or prevent disease. Our business develops and sells consumer products and new technologies that significantly change the way air is moved, filtered, and cleansed. Our product technology, uses state-of-the-art, high voltage processes, thereby eliminating the need for traditional porous HEPA filters. We believe our products move air silently, have superior filtering capabilities, and in general, cleans ambient air while offering dramatically reduced energy consumption. Our products have unique, variable, and superior filtering capabilities in both shape and size. They are available in a smaller footprint to provide air cleaning in cars. Larger units are available for consumer home use, for business use, or even in extreme industrial applications requiring the destruction of certain hazardous gases. The Company also sells bio-aerosol sensors and wearable sensors which are designed to identify aerosol contaminants in the air.

Our Products

Our technology is currently offered in the form of multiple stand-alone portable products designed to move, filter, and clean the air for businesses, homes, and vehicles. On a broader basis, the additional markets that could immediately be impacted using standalone, embedded Kronos® devices include schools, universities, manufacturing clean-rooms, personal automobiles, buses, taxis, and commercial aircraft cabins. Our products are marketed under the Airdog® and KRONOS® brand names.

We market and sell our products directly through our web site: https://1800safeair.com/, and also through independent sales representatives and select retail outlets.

Kronos also owns and operates special vanity phone number 1-800-SAFE-AIR that spells out words that correspond to what our business does, we believe that this is a very effective marketing tool. It positions our company as one of the experts in the field, and most certainly a toll-free number with two words that are self-explanatory looks be very memorable in any form of advertising, TV, radio, print and online.

A combination of the domain name (www.1800SafeAir.com) and telephone number 1-800-SAFE-AIR also helps prospective customers and shareholders remember our business and what it does. A customer or shareholder is more likely to call a number that they can recall easily, and it will always be easier to memorize a word than a string of random numbers. In addition, 1-800-SAFE-AIR phone number makes our business immediately memorable to new customers and returning customers needing help with our products.

Mountain Marketing Group conducts surveys and research to rate the success of various types of advertising and marketing. In their latest study, they found:

90% of Americans have used toll-free numbers to contact a company after watching an advertisement.

Of these 90%, a productive ad using an 800-vanity number generated a response rate of 30% or more.

As much as 84 percent of these prospects were able to recall the phone number because of visual aids and the use of letters rather than numbers.

Industry Trends

The global portable air cleaner market is experiencing rapid traction. This growth is primarily led by the rising adoption of portable air cleaners for residential and commercial purposes. In pre-COVID 19 periods, people had a general notion that clean air, based on proper ventilation alone, would provide a more healthful environment free of airborne particulate that may include allergens including excessive dust, plant pollen, animal dander, hair, and the like.

The onset of the novel coronavirus pandemic and its variants increased interest in the proper methods to achieve clean air. As a result, the use of air cleaners in both residential and commercial settings have increased drastically over the past year. Although undoubtedly recognized as a global disaster, the coronavirus pandemic and the spread of coronavirus variants impacted the portable air cleaner industry in a positive manner. After the onset of the pandemic, the public interest was focused on air purity, general hygiene, and the overall efforts needed to improve each individual’s health generally, and especially to invisible, airborne contaminants. Life-threatening epidemics like H1N1 Swine flu, H5N1 Avian influenza, and now the COVID 19 pandemic and variants have served to focus the general public’s attention, resulting in the increased use of air cleaners in residential and commercial locations. However, we do not market or sell our air cleansing products as medical devices. We do not claim our products mitigate, treat, cure, or prevent disease or eliminate viruses from the air.

Market Opportunity

We expect that the growth of the portable air cleaner market is projected to occur in both commercial and residential markets in the future. Helping to drive this expected domestic growth is a well-educated consumer base with rising awareness of airborne contaminants; becoming accustomed to adapting to preventative measures; and, having both an expendable income and the willingness to invest in products perceived to promote a healthy environment. Other “external” factors contributing to the growth of the domestic air purifier market include global warming, including increases in national disasters, such as seasonal large forest fires and hurricanes, as well as prolonged sweltering heat zones. Such events and conditions are projected to remain and perhaps even increase for the foreseeable future.

The commercial segment can best be identified as business applications embodying offices, academic centers, stores, hotels, conference rooms, service automobiles/busing, and small indoor public gathering sites. In contrast, the residential segment consists of single-family homes, condos, and apartments. Of particular note is a recent study indicating that “satisfied customers” having single-family homes often resort to secondary purchases resulting in multiple air purifiers located in separate rooms throughout their homes. This is particularly true in families having children or aging parents living at home.

We expect trends will continue to accelerate the growth of the global portable air purifier market. In fact, with improved tools and techniques, scientists and health organizations are just beginning to fully understand and accurately quantify the impact of airborne pollutants and contaminants in today’s world.

We plan to expand to a larger, more diverse product platform in the near future, offering Clean Air, Clean Water, and Clean Food solutions for the consumer. Similar to the projected exponential market growth for the portable air purifier market, independent Market Research also indicates dramatic forecasted growth for the water purifier market. As of the date of this Prospectus, we do not offer or have any timetable for the introduction to market of any Clean Air, Clean Water, and Clean Food solutions for the consumer.

Government Regulation of Air Purifiers

Federal Regulation

Under the Federal Food, Drug, and Cosmetic Act (FDCA), the U.S. Food and Drug Administration (FDA) regulates devices that include an “instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including any component, part, or accessory” that is intended to cure, mitigate, treat, or prevent disease or is intended to affect the structure of any function of the body. The FDA regulates air purifiers intended for medical purposes that are used to destroy bacteria in the air by exposure to UV radiation or remove particles from the air through filtration or electrostatic precipitation. Our products use a high voltage electrostatic method of destroying airborne contaminants, and do not use UV radiation methods. We do not market or sell our air cleansing products as an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including any component, part, or accessory that is intended to cure, mitigate, treat, or prevent disease. We do not claim our products mitigate, treat, cure, or prevent disease or eliminate viruses from the air. Our products are not medical devices and not subject to FDA regulation.

The U.S. Environmental Protection Agency does not regulate, certify, or register air cleaning devices or manufacturers. The Agency does provide consumer information on air cleansing devices on its web site: https://www.epa.gov/indoor-air-quality-iaq/does-epa-certifyregister-or-provide-lists-acceptable-air-cleaners-or-1, and references to industry sources including the Association of Home Appliance Manufacturers, so that consumers may learn about air cleansing devices.

Pursuant to the Energy Policy and Conservation Act (“EPCA”), The U.S. Department of Energy is authorized to regulate the energy efficiency of a number of consumer products and certain industrial equipment. The EPCA established the “Energy Conservation Program for Consumer Products Other Than Automobiles,” which sets forth a variety of provisions designed to improve energy efficiency for certain consumer products, referred to generally as “covered products.” In addition to specifying a list of consumer products that are covered products, EPCA contains provisions enable the Secretary of Energy to classify additional types of consumer products as covered products The U.S. Department of Energy has tentatively determined that air cleaners qualify as a covered product under Part A of Title III of the EPCA, as amended. The Department of Energy has tentatively determined that coverage of air cleaners is necessary and appropriate to carry out the purposes of EPCA, and that the average U.S. household energy use for air cleaners is likely to exceed 100 kilowatt-hours per year. The Department of Energy is currently engaged in soliciting public comments for proposed rules governing air cleaners. The public comment period concluded November 15, 2021.

As of the date of this filing, the Department of Energy has not published an abstract of the proposed regulations or conducted a rulemaking for air cleaners. If, after public comment, the Department of Energy issues a final determination of coverage for air cleaners, it may prescribe both test procedures and energy conservation standards for these products. DOE will publish a final decision on coverage as a separate notice, an action that will be completed prior to the initiation of any test procedure or energy conservation standards rulemaking. If the Department of Energy determines that coverage is warranted, it will proceed with its typical rulemaking process for both test procedures and standards. As of the date of this filing, the Department of Energy is not proposing test procedures or energy conservation standards as part of this proposed determination. If the Department of Energy proceeds with a rulemaking to establish energy conservation standards, it would determine if air cleaners satisfy the provisions of 42 U.S.C. 6295(l)(1) (which prescribe energy conservation standards) during the course of that rulemaking.

State Regulation

On June 3, 2019, the California Air Resources Board (CARB) adopted the indoor air cleaner regulation pursuant to California Assembly Bill 2276 in response to emerging concerns about indoor ozone emissions. While several states and the U.S. Environmental Protection Agency only warn against using ozone generators in occupied indoor spaces, and the Food and Drug Administration limits ozone emissions from medical air cleaner devices, California’s program is unique in that it is the first state to promulgate regulations of air cleaners, and in its breadth and coverage.

The regulation generally imposes certification, ozone testing, electrical safety testing, labeling, notification, and recordkeeping requirements on covered devices intended for use in occupied spaces in California. The ozone emissions concentration limit is 0.050 parts per million (ppm). Personal air cleaners, air cleaners used in motor vehicles, stand-alone air cleaners, and products with a primary purpose other than air cleaning but that include an air cleaner are all examples of covered devices.

Certain exemptions are provided in the current regulation for industrial-use devices. In addition, due to the lack of available test methods and sales data at the time of adoption, the regulation exempts “in-duct” air cleaners that are physically integrated into HVAC systems.

In the years since the regulation was finalized, CARB has observed a significant increase in the use of air cleaners in the state, including in-duct air cleaners, in response to recent large fires, floods, and indoor marijuana use. CARB believes that this market data along with other new sources of information, including revisions to test methods and the availability of a test method for in-duct devices, warrant regulatory changes.

On October 1, 2020, the regulation was amended with several significant changes. These changes include the immediate elimination of the ozone test requirement for portable air cleaners that use UVGI lamp(s), with or without mechanical filtration, as long as they meet other requirements that are outlined in section 94804(b) of the regulation. The exemption from the regulation of electronic in-duct air cleaning devices has also been eliminated, meaning this type of air cleaner must be CARB certified prior to sale to California residents or businesses. There is a 24-month phase-in period for meeting this new requirement, which will end on October 1, 2022. CARB is not certifying mechanical in-duct air cleaning devices that use only HEPA filtration. The text required on labels of certified air cleaners has also been changed and should now read: “Meets California ozone emissions limits. CARB certified.” The label must still meet the same size requirements. There are also changes to the industrial use exemptions, including the added requirement that ozone-producing air cleaning devices can only be used when no people are present. There are also changes made to the advisory that is required to be placed on an uncertified ozone-producing air cleaner and additional information to be included in owners, operations, and installation manuals for the device. The notification requirement has been eliminated for manufacturers of certified air cleaners, although manufacturers of uncertified ozone-producing air cleaning devices are still required to carry-out the notification requirement as described in section 94807 of the regulation.

As of the date of this filing, our products comply with all CARB regulations related to air cleaners for sale in California, and the Company’s manufacturer is registered with the State of California CARB.

Competitive Strengths

oOur Products are efficacious air cleaners with patented technologies, that provide superior filtering capabilities and the ability to remove airborne contaminants up to 20 times smaller than HEPA filters, while operating at levels much quieter than HEPA based air purifiers. Our products contain automatic laser sensors that operate continually to sense the amount of airborne contaminants in the air, and automatically adjust the performance of our products to filter and cleanse the air. Our Auto-Mode also adjusts noise levels ranging from 22dB (sleep mode) to 57dB (turbo mode) and averages at 34dB. This volume is half the noise level of traditional air cleaner systems while being far more effective. In fact, this noise level is as quiet as a soft hum, which, when in Auto Mode, only increases slightly when detecting and purifying the ambient air of more significant pollutants. The laser sensors in our products also alert users when to remove and clean our collector plates.

oHEPA filters are designed to trap pollutants such as pollen and dust. Unfortunately, based on this very design, over time, the "collection process" creates a clogged filter, and as such, HEPA air purifiers will stop working if the filter isn't changed regularly. This clogging action can also result in pollutants that were once trapped and collected migrating through the filter elements and escaping back into the air. Furthermore, when the air temperature is warm and contains high humidity, mold and bacteria can grow on the HEPA filter, causing foul odors and potentially hazardous waste to be emitted back into the room. Kronos's ultra-efficient air cleansing module, with its removable washable collector plates, solves this problem by offering to the consumer an easy-clean system that is both safe and effective by handwashing or placing the cleansing module in a dishwasher. The removable collector plates eliminate the need to replace otherwise expensive HEPA filters and is a significant competitive advantage to the Company’s products.

oSince mold and bacteria like to grow on HEPA filters, they must be replaced every six months; and most likely, more frequently if filtering heavy contaminates. Spending money on HEPA filters can easily cost $500 per year, and the better quality HEPA filters cost even more. Kronos's Air Purifier technology eliminates having to purchase replacement filters and saves the user a significant amount of unneeded yearly expenses, making Kronos an economical option.

oAir cleaners using HEPA filters are made of dangerous fiberglass materials that are not bio-degradable, making the disposed of HEPA filters a long-lasting, damaging component to our environment. Kronos's Filterless technology creates no recurring waste stream of contaminated HEPA filters.

Competitive Strategies

oRecently published Market Reports are forecasting significant growth in both the Global and the North American portable air purifier market over the next seven-year period. This growth is projected across the entire spectrum of Room Sized Units, Portable Automotive Units, and also Wearable Devices. The filtering or air cleansing process itself generally falls into four categories: HEPA Filters; Activated Carbon Filters; Ion Generator based Filters; and Electrostatic Precipitator based Filters. Currently, products using HEPA filters are the consumers' primary choice, controlling approximately 40% of the residential air purifier market. The other three processes all share similar market share sizes of 18% - 22%. During the forecasted period of 2019 – 2027, each filtering technique is projected to realize substantial growth.

oWe intend to leverage our Filterless technology to emphasize the benefits of collecting common contaminants that are not trapped "within" a filter, but instead are neutralized, the remaining airborne contaminates are ionized and then gathered onto the "collector plates" surface. The airflow rate itself remains unaffected during this neutralization and collection process. Thus, the unit itself experiences no degradation in performance and generates no unnecessary noises.

oOur products incorporate many intelligent, self-monitoring and reporting technologies, including:

ØCHILD LOCK: Prevents children from changing the settings; in addition, the unit Powers-Off Immediately if the rear panel is opened.

ØONE BUTTON OPERATION: The unit operates with the push of a single button. This allows the user to cycle through different airflow settings quickly and easily or simply pick the Auto Mode setting.

ØAUTO MODE - SMART CONTROL: By selecting Auto Mode, the unit automatically adjusts the fan speed according to the contaminate levels that the internal AQI (Air Quality Index) module is reading in real-time. This feature not only provides a hands-free automated process of monitoring the room's air quality, but it also serves to help the homeowner better manage their power bills.

ØSMART APP WITH REAL-TIME AQI: Based on World Health Organization established Air Quality Standards, Kronos' air purifiers display an Air Quality Index reading (AQI) on a scale ranging from 0-500. With a quick glance, the homeowner can easily verify that their immediate environment offers the highest air quality. In addition, each user can install on their mobile phone a Smart App that will display the measure AQI reading. Even from a remote location, the homeowner can not only monitor a specific room's air quality, but they can also reset the fan speed or even turn the unit off if desired. Therefore, this Smart App serves as a remote control.

ØNIGHT MODE: This feature allows the user, if desired, to run the air purifier without the operating lights.

ØDETACHABLE AIR QUALITY LASER DETECTOR: The homeowner can use the detachable detector to measure the air quality in "other rooms" throughout the house. Such readings can then be compared to the AQI levels in the room being "cleansed" by the Kronos air purifier. This information can be vital in helping the homeowner decide whether or not to add additional air purifiers to the strategic locations within their living space.

ØGREEN FRIENDLY: The need to replace HEPA filters on a periodic basis, as used in our competitor's room-sized products, creates a secondary problem: “Non-Degradable Waste.” This seems to be an even greater issue than other non-degradable waste since HEPA filters are "collecting and storing" contaminates by their very nature. In fact, depending on the severity of the environment, used HEPA filters may be considered toxic waste. All Kronos room-sized air purifiers using the Kronos Filterless technology offer a “Green Friendly” alternative.

Financial Summary

The following information represents selected audited financial information for our Company for the years ended June 30, 2021, and 2020 and selected unaudited financial information for our Company for the period ended September 30, 2021.

The Company has prepared consolidated financial statements on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the ordinary business course. The Company earned $503,742 in revenues for the year ended June 30, 2021 and $41,215 for the year ended June 30, 2020. At June 30, 2021, and June 30, 2020, the accumulated deficit was $40,581,040 and $38,207,641, respectively. On June 30, 2021, and June 30, 2020, the working capital deficits were $267,309 and $2,103,302. Our cash balance is $19,320 as of June 30, 2021. We do not believe that our cash balance is sufficient to fund our operations. During the year ended June 30, 2021, and 2020, the Company incurred a net loss of $1,373,647 and $493,443.

The summarized financial information presented below is derived from and should be read in conjunction with our audited and unaudited financial statements, as applicable, including the notes to those financial statements which are included elsewhere in this Prospectus along with the section entitled Management’s Discussion and Analysis of Financial Condition and Results of Operations beginning on page 41 of this Prospectus.

Statements of Operations Data	Year Ended June 30, 2021			Year Ended June 30, 2020
Revenues	$	503,472		$	41,215
Cost of Sales	$	276,083		$	6,756
Gross Profit	$	227,658		$	34,459
Total operating expenses	$	2,145,883		$	171,344
Total other expenses	$	(544,578	)	$	356,568
Net Income (Loss)	$	(1,373,647	)	$	(493,443	)
Net income (loss) per common share, basic and diluted	$	(0.01	)	$	(0.00	)

Balance Sheets Data	June 30, 2021		June 30, 2020
Cash and Cash Equivalents	$	19,320	$	19,381
Total Current Assets	$	289,482	$	154,264
Total Current Liabilities	$	556,791	$	2,257,566
Working Capital (deficit)	$	(267,309)	$	(2,103,302	)
Total Stockholders’ Equity (deficit)	$	3,159,453	$	($859,052)
Accumulated Deficit	$	($40,581,040)	$	(38,207,641	)

Since October 1, 2019, the Company has raised an aggregate of $487,500 issuing convertible promissory notes.

On October 1, 2019, the Company issued a convertible promissory note in the amount of $250,000. The note is due on October 1, 2024 and bears interest at 5% per annum. The loan and any accrued interest may be converted into shares of the Company’s common stock at a rate of 80% multiplied by the average of the three lowest trading prices during the previous ten (10) day trading period ending on the latest complete trading day prior to the conversion date. Pursuant to current accounting guidelines, the Company recorded a note discount of $250,000 to account for the note’s derivative liability. In addition, the Company recorded an amount of discount in excess of the note principal of $62,500 that was expensed as a financing cost.

In April 2020, the Company issued four convertible promissory notes with investors totaling $137,500. These convertible notes payable is due one year from issuance, with interest at 5% per annum and are convertible at 80% multiplied by the Market Price (representing a discount rate of 20%). Market Price is defined as the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period ending one trading day prior to the date the conversion. Pursuant to current accounting guidelines, the Company recorded a note discount of $137,500 to account for the note’s derivative liability. In addition, the Company
recorded an amount of discount in excess of the note principal of $48,177 that was expensed as a financing cost.

On July 21, 2020, the Company issued a convertible promissory note in the amount of $100,000. The note is due on July 21, 2021 and bears interest at 5% per annum. The loan and any accrued interest may be converted into shares of the Company’s common stock at a rate of 80% multiplied by the average of the three lowest trading prices during the previous three (3) day trading period ending on the latest complete trading day prior to the conversion date.

On June 17th, 2021, West Virginia Economic Development and Authority (WVEDA) approved in a meeting of its board of directors to grant Kronos two loan offers with the aggregate principal amount not to exceed $2,610,000. The loans are for the Company’s acquisition of the manufacturing facility in West Virginia and for fixed equipment. The loans contain repayment terms of 15 years and 10 years respectively. Interest rates for the two notes are as follows:

Loan (1) $1,845,000: This loan shall bear interest fixed as of the third business day prior to closing equal to the rate of the 20 Year US Treasury Note rate plus 0.75%. This loan has a floor (minimum) interest rate of 2. 75% and shall be adjustable every five years. The loan will be secured by a first lien deed of trust on the project land, improvements, and appurtenances in the amount of $1,845,000, and will be cross collateralized with Loan (2), discussed below.

Loan (2) $765,000: This loan shall bear interest fixed as of the third business day prior to closing equal to the rate of the Wall Street Journal Prime rate multiplied by 0.75%. This loan has a floor (minimum) interest rate of 2.75%. The loan will be secured by a UCC-1 security filing on all assets of the Company and will be cross collateralized with Loan (1).

Unless otherwise extended, the loan offers expire on June 30, 2022. The closing of each loan is contingent upon our completing initial renovations to the physical buildings on our property, and the purchase of fixed equipment, including our providing proofs of hazard and flood insurance, title insurance and liability insurance. As of the date of this filing, all equipment is installed, and renovations are in progress but not completed at our facility. After we complete renovations, we will provide evidence of completion of the initial renovations, or we will provide notice that the initial renovations have been reduced and therefor our loan amount shall be reduced to reflect the actual amount spent on renovations. Therefore, our access to the loans offered by WVEDA are only contingent upon satisfactory completion of our desired initial renovations, which can be adjusted at our discretion as long as we do not exceed the original estimated renovation cost. In the event we elect not to close on the WVEDA loan offers by June 30, 2022, we will have to apply for an extension of the loan offers, which may not be granted, resulting in material negative impacts on our business plans

We are an “emerging growth company” within the meaning of the federal securities laws. For as long as we are an emerging growth company, we will not be required to comply with the requirements that are applicable to other public companies that are not “emerging growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, the reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and the exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We intend to take advantage of these reporting exemptions until we are no longer an emerging growth company.

The Risk Factors are an explanation of the qualifications and other requirements applicable to such emerging growth companies. It describes certain elections that we have made due to our status as an emerging growth company.

RISK FACTORS

This investment has a high degree of risk. Before you invest, you should carefully consider the risks and uncertainties described below and the other information in this Prospectus. If any of the following risks occur, it will harm our operating results and financial condition, and the value of our stock could go down. This means you could lose all or a part of your investment.

The novel coronavirus (COVID-19) pandemic may have an expected effect on our business, financial condition, and results of operations.

In March 2020, the World Health Organization declared a novel coronavirus (COVID-19) outbreak as a pandemic worldwide. Many countries, including China and the United States, from time to time, implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and the movement of people, and other material limitations on business generally. These measures have resulted in worldwide work stoppages, absenteeism in the labor workforce, and other disruptions. China started as the center of the COVID-19 epidemic, which is where our product supplies are sourced, and our products are assembled and shipped. The pandemic resulted in an increase in the lead time for the manufacturing and delivery of our products. The extent to which the coronavirus and its variants impacts our continuing operations will depend on future developments. These developments are highly uncertain. We cannot predict them with confidence, including the duration and severity of the outbreak, the spread and effects of coronavirus variants, and the actions required to contain the coronavirus, its variants, or treat its impact. In particular, the continued spread of the coronavirus and its variants globally could adversely impact our operations and workforce, including our marketing and sales activities and ability to raise additional capital, which could harm our business, financial condition, and operation results.

RISKS RELATED TO THE COMPANY

We may need to obtain additional financing, which may not be available.

We need the proceeds from this offering to implement our business plan and expand our operations as described in the “Plan of Operation” section of this Prospectus. As of the year ended June 30, 2021, we had $19,320 cash on hand and total current liabilities of $556,791. The Company earned $503,742 in revenues for the fiscal year ended June 30, 2021. Our net loss for the year ended June 30, 2021 is $1,373,647. The proceeds of this offering may not be sufficient for us to achieve future profitable operations. We need additional funds to achieve a sustainable sales level to fund ongoing operations out of revenues. There is no assurance that any additional financing will be available or, if available, on terms that will be acceptable to us.

Our operating history may not serve as a complete or adequate basis to judge our future prospects and results of operations.

Although we have operated in the air cleaning business since 2002, our historical operating results may not provide a meaningful basis for evaluating our business, financial performance, and prospects. Even though we have generated revenues, we are also involved in organizational activities, research, and development, and developing our new technologies. Accordingly, you should not rely on our results of operations for any prior periods as an indication of our future performance. At June 30, 2021, and June 30, 2020, our accumulated deficit was $40,581,040 and $38,207,641, respectively. There is a substantial risk that we will not be successful in our development and sales activities, or if initially successful, in thereafter generating significant operating revenues or in achieving profitable operations. Our operations will be subject to all the risks inherent in the establishment of a developing enterprise and the uncertainties arising from the limitations of a significant operating history. If our business plan is not successful, and we are not able to operate profitably, investors may lose some or all of their investment in our company.

We cannot accurately predict future revenues or profitability in the emerging market for air cleaners.

The market for air cleaners is rapidly evolving. As is typical for a rapidly evolving industry, demand, and market acceptance for recently introduced products are subject to a high level of uncertainty. Moreover, since the market for our products is evolving, it is difficult to predict the future growth rate, if any, and size of this market. Because of our limited operating history and the emerging nature of the markets in which we compete, we are unable to accurately forecast our revenues or our profitability. The market for our products and the long-term acceptance of our products are uncertain, and our ability to attract and retain qualified personnel with industry expertise, particularly sales and marketing personnel, is uncertain. To the extent we are unsuccessful in increasing revenues, we may be required to appropriately adjust spending to compensate for any unexpected revenue shortfall, or to reduce our operating expenses, causing us to forego potential revenue generating activities, either of which could have a material adverse effect on our business, results of operations and financial condition.

We currently depend on Chinese suppliers for the sourcing of parts and the manufacturing and shipping of our products.

We are, and will continue to be for the foreseeable future, substantially dependent on our Chinese suppliers to deliver parts and manufacturing for our products. Although we plan on moving our supply chain and manufacturing to our West Virginia facility, this is not complete as of the date of this filing, and we continue to rely upon our Chinese parts suppliers and manufacturing services. The time and cost associated with relocating our supply chain and manufacturing facilities are uncertain. Although we have established contracts with our Chinese supply chain and manufacturers, we can make no assurance that we will be able to maintain these third-party relationships or establish additional relationships as necessary to support growth and profitability of our business on economically viable terms until we can complete the relocation of our parts and manufacturing business to the United States. As independent companies, our Chinese suppliers make their own business decisions. The suppliers may choose not to do business with us for a variety of reasons, including competition, brand identity, product standards and concerns regarding our economic viability. In addition, their financial condition could also be adversely affected by conditions beyond our control and our business could concurrently suffer. In addition, we will face risks associated with any supplier’s failure to adhere to quality control and service guidelines or failure to ensure an adequate and timely supply of product to our potential and future customers. Any of these factors could negatively affect our business and financial performance. As noted, the coronavirus has affected our lead times for the manufacturing and delivery of our products from China. If we are unable to obtain and maintain a source of supply for our products, our business will be materially and adversely affected.

Price competition could negatively affect our gross margins.

Price competition could negatively affect our operating results. To respond to competitive pricing pressures, we will have to offer our products at lower prices in order to retain or gain market share and customers. If our competitors offer discounts on products in the future, we may need to lower prices to match the competition, which could adversely affect our gross margins and operating results.

If we are unable to build and maintain our brand image and corporate reputation, our business may suffer.

Regardless of our development history, we are nonetheless a relatively new company, having conducted new research and development in the last few years in the air cleaner space. Therefore, our success depends on our ability to build and maintain the brand image for our air cleaner products and effectively build the brand image for any new products. We cannot assure you that any additional expenditure on advertising and marketing will have the desired impact on our products’ brand image and on consumer preferences. Actual or perceived product quality issues or allegations of product flaws, even if false or unfounded, could tarnish the image of our brand and may cause consumers to choose other products. Allegations of product defects, even if untrue, may require us from time to time to recall a product from all of the markets in which the affected product was distributed. Product recalls would negatively affect our profitability and brand image.

If we are unable to complete and implement our plan to manufacture, market and sell our Air Cleaner products in our West Virginia facility, our growth, sales, and profitability operations may suffer.

We have not yet fully implemented our business plans to manufacture, market and sell our air cleaners and we have initial revenues from the sale of our air cleaners. The success of our business will depend on the completion of our plan to relocate our supply chain and manufacturing to the United States in our West Virginia facility, our access to the loans approved by the West Virginia Economic Development and Authority, and the acceptance of our air cleaner products by the general public. Achieving such milestones will require significant investments of time and money. Our sales of air cleaner products may not be accepted by consumers at sufficient levels to support our operations and build our business. If our Air cleaner products are not accepted at sufficient levels, our growth, sales, and profitability may suffer.

The loans offered by the West Virginia Economic Development Authority are not available to us until we complete upgrades to our current facility located in West Virginia, which are currently incomplete and ultimately subject to inspection and approval by the West Virginia Economic Development Authority.

On June 17th, 2021, West Virginia Economic Development Authority (WVEDA) approved in a meeting of its board of directors to grant Kronos two loan offers with the aggregate principal amount not to exceed $2,610,000. The loans are for the Company’s acquisition of the manufacturing facility in West Virginia and for fixed equipment. The loans contain repayment terms of 15 years and 10 years respectively. Interest rates for the two notes are as follows:

Unless otherwise extended, the loan offers expire on June 30, 2022. As of the date of this filing, the loans offered by the WVEDA have not been consummated and are contingent upon the Company completing renovations to the physical buildings on the property, and the purchase of fixed equipment, including our providing proofs of hazard and flood insurance, title insurance and liability insurance. As of the date of this filing, the Company has purchased all fixed equipment, and completed renovations to air conditioning, roofing, and fire sprinklers. The Company expects to complete flooring and security renovations by January, 2022. Once we provide certification to WVEDA of the completion of the renovations, we may proceed to close the loans. However, as of the date of this filing, we have not certified to WVEDA that the renovations are completed, and have not closed the loans, and completion of renovations, while expected by the end of January, 2022, is not certain, and our failure to complete renovations would potentially limit our access to the loans, which would have a materially negative impact on our business and business plans.

Changes in economic conditions that impact consumer spending could harm our business.

Our financial performance is sensitive to changes in overall economic conditions that impact consumer spending. Future economic conditions affecting consumer income such as employment levels, business conditions, interest rates, and tax rates could reduce consumer spending or cause consumers to shift their spending to other products. A general reduction in the level of consumer spending or shifts in consumer spending to other products could have a material adverse effect on our growth, sales, and profitability.

New federal and expanded state regulations may result in increased costs which could affect our business.

The Department of Energy has tentatively determined that coverage of air cleaners is necessary and appropriate to carry out the purposes of EPCA, and that the average U.S. household energy use for air cleaners is likely to exceed 100 kilowatt-hours per year. The Department of Energy is currently engaged in soliciting public comments for proposed rules governing air cleaners. The public comment period concluded November 15, 2021. As of the date of this filing, the Department of Energy has not published an abstract of the proposed regulations or conducted a rulemaking for air cleaners. If, after public comment, the Department of Energy issues a final determination of coverage for air cleaners, it may prescribe both test procedures and energy conservation standards for these products.

Potential federal rulemaking and possible expanding state regulations concerning air cleaners may result in increased costs complying with new and existing law, and this could impact our growth, sales, and profitability.

We have incurred losses in prior periods and may incur losses in the future.

We incurred net losses of $1,373,647 and $493,443 for our fiscal year ended June 30, 2021 and 2020 respectively. As of June 30, 2021, we had an accumulated deficit of $40,581,040. We have not achieved profitability in any period, and we expect to continue to incur net losses for the foreseeable future. Should we continue to incur net losses in future periods, we may not be able to increase the number of employees or our investment in capital equipment, sales and marketing programs and research and development in accordance with present plans. Continuation of net losses may also require us to secure additional financing sooner than expected. Such financing may not be available in sufficient amounts, or on terms acceptable to us and may dilute existing shareholders.

We will require additional capital in the future in order to maintain and expand our operations. Failure to obtain required capital would adversely affect our business.

Until such time as we become profitable, we will be required to obtain additional financing or capital investments in order to maintain and expand our operations and take advantage of future business opportunities. Obtaining additional financing will be subject to, among other factors, market conditions, industry trends, investor sentiment and investor acceptance of our business plan and management. These factors may make the timing, amount, terms, and conditions of additional financing unattractive or unavailable to us. There are no assurances that we will be able to raise cash from equity or debt financing efforts or that, even if raised, such cash would be sufficient to satisfy our anticipated capital requirements. Further, there is no assurance concerning the terms on which such capital might be available. Failure to obtain financing sufficient to meet our anticipated capital requirements could have a material adverse effect on our business, operating results, and financial condition.

The markets in which we operate are very competitive, and many of our competitors and potential competitors are larger, more established, and better capitalized than we are.

Although air cleaner technology is a rapidly emerging technology, the market for these products is highly competitive and we expect that competition will continue to intensify. Our products compete broadly with other current companies offering air cleaner technology, including companies that offer air cleansing technology, such as 3M Corporation, Honeywell, Whirlpool, Sharp and Phillips. These products compete directly with the products offered by us.

Many competitors have longer operating histories, larger customer bases, and greater financial, research and development, technical, marketing and sales, and personnel resources than we have. Given their capital resources, the larger companies with whom we compete or may compete in the future, are in a better position to substantially increase their manufacturing capacity, research, and development efforts or to withstand any significant reduction in orders by customers in our markets. Such larger companies typically have broader and more diverse product lines and market focus and thus are not as susceptible to downturns in a particular market. In addition, some of our competitors have been in operation much longer than we have been and therefore may have more longstanding and established relationships with current and potential customers.

Because we are small and do not have much capital, we must limit our activities. Our relative lack of capital and resources will adversely affect our ability to compete with large entities that market air purifier products. We compete against other air purifier manufacturers and retailers, some of which sell their products globally, and some of these providers have considerably greater resources and abilities than we have. These competitors may have greater marketing and sales capacity, established sales and distribution networks, significant goodwill, and global name recognition. Furthermore, it may become necessary for us to reduce our prices in response to competition. A reduction in prices of our products could adversely affect our revenues and profitability.

In addition, other entities not currently offering products similar to us may enter the market. Any delays in the general market acceptance of our products may harm our competitive position. Any such delay would allow our competitors additional time to improve their service or product offerings and provide time for new competitors to develop. Increased competition may result in pricing pressures, reduced operating margins and loss of market share, which could have an adverse effect on our business, operating results, and financial condition.

We operate in an industry that is competitive and subject to technological change.

The air cleansing industry is characterized by competition and technological change, where we compete on a variety of factors, including price, product features and services. Potential competitors include large air cleaner manufacturers and other companies, some of which have significantly greater financial and marketing resources than we do, and firms that are more specialized than we are with respect to particular markets. Our competitors may be able spend more money on marketing campaigns, respond quicker to new technological changes, or be better adept at attracting customers, employees, and partners. If our competition is better able to develop and market products or services that are cheaper, safer, more effective, or otherwise more appealing to consumers, we may be unable to effectively compete.

Our business model may not be sufficient to ensure our success in our intended market.

Our survival is currently dependent upon our planned development efforts to gain market acceptance of our products in the global market, including but limited to North America, Europe, and Asia. Should our existing and developing target markets not be as responsive to our products as we anticipate, we may not have in place alternate products that we can offer to ensure our survival.

We may receive a significant number of warranty claims or our air cleansing products that may require significant amounts of service after sale.

Sales of our air cleansing products will include a warranty to cover issues other than for normal wear and tear. As the possible number and complexity of the features and functionalities of our products increase, we may experience a higher level of warranty claims. If product returns or warranty claims are significant or exceed our expectations, we could incur unanticipated expenditures for parts and services, which could have a material adverse effect on our operating results.

Product and software defects could harm our business.

Manufacturing or design defects, unanticipated use of our products, or inadequate disclosure of risks relating to the use of our products, can lead to injury or other adverse events, including recalls or safety alerts relating to our products. These recalls could lead to significant costs or the removal of our air cleansing products from the market. Further, even though we rely on third-party manufacturers, their liability is limited contractually; therefore, we could bear the burden of the costs for manufacturing defects. In addition, any defects could subject us to product liability claims, reputational damage, and negative publicity, all of which would negatively impact our business.

We could be subject to litigation.

Product liability claims are common. Even though we have not been subject to such claims in the past, we could be a named defendant in a lawsuit alleging product liability claims including, but not limited to, defects in the design, manufacture or labeling of our air cleansing products. Any litigation, regardless of its merit or eventual outcome, could result in significant legal costs and high damage awards or settlements. Although we currently maintain product liability insurance, the coverage is subject to deductibles and limitations, and may not be adequate to cover future claims. Additionally, we may be unable to maintain our existing product liability insurance in the future at satisfactory rates or at adequate amounts.

If product liability lawsuits are brought against us, our business may be harmed, and we may be required to pay damages.

Our business exposes us to potential product liability claims that are inherent in the testing, manufacture, and sale of air cleansing devices and equipment. We could become the subject of product liability lawsuits alleging that component failures, malfunctions, manufacturing flaws, design defects or inadequate disclosure of product-related risks or product-related information resulted in an unsafe condition or injury to patients.

Regardless of the merit or eventual outcome, product liability claims may result in:

•

decreased demand for our air cleansing products;

•

injury to our reputation;

•

significant litigation costs;

•

substantial monetary awards to or costly settlements with patients;

•

product recalls;

•

material defense costs;

•

loss of revenues;

•

the inability to commercialize new products or product candidates; and diversion of management attention from pursuing our business strategy

Our business may suffer if we are unable to attract or retain talented personnel.

Our success will depend in large measure on the abilities, expertise, judgment, discretion, integrity, and good faith of management, as well as other personnel. We have a small management team, and the loss of a key individual or our inability to attract suitably qualified replacements or additional staff could adversely affect our business. Our success also depends on the ability of management to form and maintain key commercial relationships within the marketplace. No assurance can be given that key personnel will continue their association or employment with us or that replacement personnel with comparable skills will be found. If we are unable to attract and retain key personnel and additional employees, our business may be adversely affected. We do not maintain key-man life insurance on any of our executive employees, and do not have directors’ and officers’ insurance coverage as of the date this Prospectus is filed.

The lack of available and cost-effective directors and officer’s insurance coverage in our industry may cause us to be unable to attract and retain qualified executives, and this may result in our inability to further develop our business.

Our business depends on attracting independent directors, executives, and senior management to advance our business plans. We currently do not have directors and officer’s insurance to protect directors and the Company against the possible third-party claims. This is due to the significant lack of availability of funds and the offer of such policies at reasonably competitive prices. As a result, the Company and our executive directors and officers are susceptible to liability claims arising by third parties, and as a result, we may be unable to attract and retain qualified independent directors and executive management causing the development of our business plans to be impeded as a result.

The loss of one or more of our key personnel, or our failure to attract and retain other highly qualified personnel in the future, could harm our business.

Our future performance is dependent on the ability to retain key personnel. The Company’s performance is substantially dependent on the performance of Senior Management. The loss of the services of any of its executive officers or other key employees could have a material adverse effect on the Company’s business, results of operations, and financial condition. If we do not succeed in retaining and motivating our existing personnel, we may be unable to grow effectively.

Management of growth will be necessary for us to be competitive

Successful expansion of our business will depend on our ability to effectively attract and manage staff, strategic business relationships, and shareholders. Specifically, we will need to hire skilled management and technical personnel and manage partnerships to navigate shifts in the general economic environment. The expansion can place significant strains on financial, management, and operational resources, yet failure to expand will inhibit our profitability goals.

Because we are small and do not have much capital, our marketing campaign may not attract enough customers to operate profitably. If we do not make a profit, our financial conditions will be adversely affected.

Since we are small and do not have much capital, we must limit our marketing activities and may not be able to make our products known to potential customers. Because we will be initially limiting our marketing activities to online sales, independent sales representatives and select retail outlets, we may not be able to attract enough immediate customers to operate profitably. If we cannot operate profitably, our financial conditions will be negatively affected and limit our ability to raise additional funding to increase our sales and marketing efforts.

We are pursuing a variety of possible strategies to grow our business, including:

	•	collaborations, licensing arrangements, joint ventures, strategic alliances, or partnerships;
	•	pursuing sales in international markets; and
	•	acquisitions of complementary products or technologies.

In addition to stretching our financial and management resources, each of these strategies has its own inherent risks. For instance, arranging collaborations, licensing arrangements, joint ventures, strategic alliances, partnerships, and acquisitions can be a lengthy and complex process and we may not enter into such arrangements in a timely manner, on a cost-effective basis, on acceptable terms or at all. Even if we do enter into such arrangements, they may not result in achieving and developing new products and revenue streams. Expansion of international development could result in additional costs and risks, including those related to development of new distribution channels, increased shipping and distribution costs, compliance with foreign laws and regulations, as well as U.S. law controlling international business practices of U.S. companies, currency fluctuations as well as subjecting us to geopolitical and trade risks. Failure to implement growth strategies could severely impair our business.

If our products do not achieve greater market acceptance, or if alternative brands are developed and gain market traction, our business would be adversely affected.

Our success is dependent upon the successful development and marketing of our products. Our future success depends on increased market acceptance of our air purifier product lines. The air cleansing community may not embrace our product line. Acceptance of our products will depend on several factors, including cost, product effectiveness, convenience, strategic partnerships, and reliability. We also cannot be sure that our business model will gain wide acceptance among retailers or the air cleanser community. If the market fails to continue to develop, or develops more slowly than we expect, our business, results of operations and financial condition will be adversely affected. Moreover, if new air purifier brands are developed, our prospective products and current technologies could become less competitive or obsolete. Any of these factors could have a material and adverse impact on our growth and profitability.

Inability of our officers and directors to manage the growth of the business may limit our success.

We expect to grow as we execute our business strategy. Rapid growth would place a significant strain on our management and operational resources. In addition, we expect the demands on our infrastructure and technical support resources to grow along with our customer base, and if we are successful in implementing our marketing strategy, it could experience difficulties responding to demand for our products and technical support in a timely manner and in accordance with market expectations. These demands may require the addition of new management personnel or the development of additional expertise by existing management personnel. There can be no assurance that our networks, procedures, or controls will be adequate to support our operations or that management will be able to keep pace with such growth. Failure to manage growth effectively could have a material adverse effect on our business, operating results, and financial condition.

As we expand, management will be faced with new challenges due to increases in operating expenses and risks related to expansion.

As our business grows and expands, we will spend substantial financial and other resources on developing and introducing new products and expanding our sales and marketing organization, strategic relationships, and operating infrastructure. If our business and revenues grow, we expect that our cost of revenues, sales and marketing expenses, general and administrative expenses, operations, and customer support expenses will increase.

If we fail to capitalize and integrate potential acquisitions with our operations, our business could suffer.

In the future we may acquire more air cleansing technologies, businesses, or assets. The integration of acquired businesses, technologies or assets requires significant effort and entails risks. We may find it difficult to integrate operations of acquired businesses as personnel may leave and licensees, distributors or suppliers may terminate their arrangements or demand amended terms to these arrangements. Additionally, our management may have their attention diverted while trying to integrate businesses or assets that may be acquired. If we are not able to successfully integrate any businesses or assets that we acquire, we may not realize the anticipated benefits of these acquisitions.

Our success depends on our ability to capitalize on our strategic relationships and partnerships with suppliers, distributors, purchasers, and users of our products.

We will rely on strategic relationships with third parties to expand our manufacturing and distribution channels and to undertake product development and marketing efforts. Our ability to increase sales depends on marketing our products through new and existing strategic relationships. We intend to partner with established existing suppliers and distributors in order to reach target markets such as the medical, healthcare, hospitality, food service and lodging markets. The termination of one or more of our strategic relationships may have a material adverse effect on our business, operating results, and financial condition.

Our newly filed provisional patents may not result in issued patents, and this could materially affect our current and future business plans, operations, and future profitability.

We applied for two new provisional patents that are relevant to our current and future operations, product development and business. Under United States patent law, a provisional application is a legal document filed in the United States Patent and Trademark Office, that establishes an early filing date, but does not mature into an issued patent unless the applicant files a regular non-provisional patent application within one year. As of the date of this filing, we have not filed non-provisional patent applications concerning our two provisional patent filings, and there is no guarantee that we will file such non-provisional patent applications or, if filed, that the U.S. Patent and Trademark Office will issue us patents, which will affect our profitability.

Our profitability may depend in part on our ability to effectively protect our proprietary rights, including obtaining patent protection for our proprietary designs, utilities, and methods of manufacturing our air cleansing products, maintaining the secrecy of our internal workings, and preserving our trade secrets, as well as our ability to operate without inadvertently infringing on the proprietary rights of others. There can be no assurance that we will be able to obtain future patents or defend our current and future patents. Further, policing and protecting our intellectual property against unauthorized use by third parties is time-consuming and expensive, and certain countries may not even recognize our intellectual property rights. There can also be no assurance that a third party will not assert patent infringement claims with respect to our products or technologies. Any litigation relating to either protecting our intellectually property or defending our use of certain technologies could have material adverse effect on our business, operating results, and financial condition, regardless of the outcome of such litigation.

The Company’s products are new, and its industry is evolving.

You should consider the Company’s prospects considering the risks, uncertainties, and difficulties frequently encountered by companies in their early stage of development, especially companies in the rapidly evolving air cleansing industry. To be successful in this industry, the Company must, among other things:

·develop and introduce functional and attractive air cleansing products;

·attract and maintain a large base of consumers;

·increase awareness of the Company brand and develop consumer loyalty;

·establish and maintain strategic relationships with distribution partners and service providers;

·respond to competitive and technological developments;

·build an operations structure to support the Company business; and

·attract, retain, and motivate qualified personnel.

The Company cannot guarantee that it will succeed in achieving these goals. Its failure to do so would have a material adverse effect on its business, prospects, financial condition, and operating results.

Some of the Company’s products are new and are only in the early stages of commercialization. The Company is not certain that these products will function as anticipated or be desirable to its intended market. Also, some of the Company’s products and services may have limited functionalities, limiting their appeal to consumers and putting the Company at a competitive disadvantage. The Company could lose customers or be subject to claims if our current or future products and services fail to function correctly or if the Company does not achieve or sustain market acceptance. The failure of our product could have a material adverse effect on the Company’s business, financial condition, and operating results.

As is typical in a new and rapidly evolving industry, demand, and market acceptance for recently introduced products are subject to a high level of uncertainty and risk. Because the company’s market is new and evolving, it is difficult to predict with any certainty the size of this market and its growth rate, if any. The Company cannot guarantee that a market for the Company will develop or that demand for Company services will emerge or be sustainable. If the market fails to materialize, develops more slowly than expected, or becomes saturated with competitors, the Company’s business, financial condition, and operating results would be materially adversely affected.

As a growing company, we have to develop reliable accounting resources and internal controls. Failure to achieve and maintain effective controls could prevent us from producing reliable financial reports.

Effective internal controls and accounting resources are necessary for us to provide reliable financial reports. We have not implemented a system of internal controls. Failure to implement and maintain an effective internal accounting and control environment could cause us to face regulatory action, and also cause investors to lose confidence in our reported financial information, either of which could have an adverse effect on our business and financial results.

Our Certificate of Incorporation and bylaws provide for indemnification of officers and directors at our expense and limit their liability, resulting in a high cost to us and hurting our shareholders’ interests. The Company may spend corporate resources for the benefit of officers and directors.

Our Certificate of Incorporation and Bylaws include provisions that eliminate the personal liability of our directors for monetary damages to the fullest extent possible under the laws of the State of Nevada or other applicable law. These provisions eliminate the liability of our directors and our shareholders for monetary damages arising out of any violation of a director of his fiduciary duty of due care. Under Nevada law, however, such provisions do not eliminate the personal liability of a director for (i) breach of the director’s duty of loyalty, (ii) acts or omissions not in good faith or involving intentional misconduct or knowing violation of law, (iii) payment of dividends or repurchases of stock other than from lawfully available funds, or (iv) any transaction from which the director derived an improper benefit. These provisions do not affect a director’s liabilities under the federal securities laws or the recovery of damages by third parties.

If we fail to establish and maintain an effective internal control system, we may be unable to report our financial results accurately or prevent fraud. Any ability to report and file our financial results accurately and timely could harm our reputation and adversely impact the future trading price of our common stock.

Effective internal control is necessary for us to provide reliable financial reports and prevent fraud. If we cannot provide reliable financial reports or prevent fraud, we may not be able to manage our business as effectively. As a result, it may harm our business and reputation. Our small size and any current internal control deficiencies may adversely affect our financial condition, operation results, and access to capital.

Because of the Company’s limited resources, there are limited controls over information processing. There is inadequate segregation of duties consistent with control objectives. Our Company’s Management is composed of a small number of individuals, resulting in limitations on segregation of duties. To remedy this situation, we would need to hire additional staff. Currently, the Company cannot hire other staff to facilitate greater segregation of duties but will reassess its capabilities after completing the Offering.

We may need and may be unable to obtain additional funding on satisfactory terms, which could dilute our stockholders or impose burdensome financial restrictions on our business.

We have relied upon cash from financing activities, and in the future, we intend to rely on revenues generated from operations to fund all the cash requirements of our activities. There is no assurance that we will generate any significant cash from our operating activities in the future. Any debt financing or financing of involving our common stock will likely include financial and other covenants that will restrict our flexibility. At a minimum, these covenants may include restrictions that may impact the number of authorized shares we are required to maintain in order obtain such financing, or our ability to conduct other forms of financing at different terms. Any failure to comply with these covenants would have a material adverse effect on our business, prospects, financial condition, and results of operations because we could lose our existing sources of funding and impair our ability to secure new sources of financing.

As an “emerging growth company” under the jobs act permits us to rely on exemptions from certain disclosure requirements.

We qualify as an “emerging growth company” under the JOBS Act. As a result, we are permitted to and intend to rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:

	●	have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;

	●	provide an auditor attestation concerning Management’s report on the effectiveness of our internal controls over financial reporting;

	●	comply with any requirement that the Public Company Accounting Oversight Board may adopt regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

	●	submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay” and “say-on-frequency;” and

	●	disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive’s compensation to median employee compensation.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Therefore, our financial statements may not be comparable to those of companies that comply with such new or revised accounting standards.

We will remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues is $1.07 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that are held by non-affiliates is $700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.

Until such time, however, we cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive, there may be a less active trading market for our common stock, and our stock price may be more volatile.

RISKS RELATING TO OUR COMMON STOCK AND THIS OFFERING

There is limited liquidity for our common stock, and we may not be successful in obtaining a quotation on a recognized quotation service. In such an event, it may be difficult to sell your shares.

Our common stock is currently quoted for public trading on the OTC Markets Pink Tier. The trading price of our common stock has been subject to wide fluctuations. Trading prices of our common stock may fluctuate in response to many factors, many of which will be beyond our control. The stock market has generally experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies with no current business operation. There can be no assurance that trading prices and price-earnings ratios previously experienced by our common stock will be matched or maintained. These broad market and industry factors may adversely affect the market price of our common stock, regardless of our operating performance. In the past, following periods of volatility in the market price of a company’s securities, securities class-action litigation has often been instituted. Such litigation, if instituted, could result in substantial costs for us and a diversion of Management’s attention and resources.

Our common stock will be subject to the “penny stock” rules of the Securities and Exchange Commission. The trading market in our securities may be limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock.

Under U.S. federal securities legislation, our common stock will constitute “penny stock.” Penny stock is any equity security with a market price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require that a broker or dealer approve a potential investor’s account for transactions in penny stocks. The broker or dealer receives a written agreement to the transaction from the investor, setting forth the identity and quantity of the penny stock to be purchased. To approve an investor’s account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience objectives of the person and make a reasonable determination that the transactions in penny stocks are suitable for that person. The person has sufficient knowledge and experience in financial matters to evaluate the risks of penny-stock transactions. Before any transaction in a penny stock, the broker or dealer must also deliver a disclosure schedule prepared by the Commission relating to the penny stock market, which, in highlight form, sets forth the basis on which the broker or dealer made the suitability determination. Brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock. The disclosure also must be made about the risks of investing in penny stocks in both public offerings and secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities, and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, the Financial Industry Regulatory Authority (known as “FINRA”) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Before recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives, and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common shares, which may limit your ability to buy and sell our stock and harm the market for our shares.

Since our shares of Common Stock have low or thin liquidity, it is more susceptible to extreme rises or declines in price, and you may not be able to sell your shares at or above the price paid.

Since our shares of Common Stock have low or thin liquidity, its trading price is likely to be highly volatile. It could be subject to extreme fluctuations in response to various factors, many of which are beyond our control, including (but not necessarily limited to): the trading volume of our shares, the number of analysts, market-makers, and brokers following our shares of Common Stock, new products or services introduced or announced by our competitors or us, actual or anticipated variations in quarterly operating results, conditions or trends in our business industries, additions or departures of key personnel, sales of our shares of Common Stock and general stock market price and volume fluctuations of publicly traded, and particularly microcap, companies.

Investors may have difficulty reselling shares of our Common Stock, either at or above the price they paid for our stock or even at fair market value. The stock markets often experience significant price and volume changes that are not related to the operating performance of individual companies, and because our shares of Common Stock have low or tin liquidity, it is particularly susceptible to such changes. These broad market changes may cause the market price of our shares of Common Stock to decline regardless of how well we perform as a company. In addition, there is a history of securities class action litigation following periods of volatility in the market price of a company’s securities. Although there is no such litigation currently pending or threatened against us, such a suit against us could result in the incursion of substantial legal fees, potential liabilities, and the diversion of Management’s attention and resources from our business. Moreover, as noted below, our shares are currently traded on the OTC Markets Pink Tier and are subject to the penny stock regulations. Price fluctuations in such shares are particularly volatile and subject to potential manipulation by market-makers, short-sellers, and options traders.

We may, in the future, issue additional common shares, which would reduce investors’ percent of ownership and may dilute our share value.

Our Articles of Incorporation authorize the issuance of 2,000,000,000 shares of common stock. As of January 10, 2022, the Company had 749,323,911 shares of common stock outstanding. Accordingly, we may issue and sell up to an additional 80,526,056 shares of common stock pursuant to the Common Stock Purchase Agreement. The future issuance of common stock may result in substantial dilution in the percentage of our common stock held by our then existing shareholders. We may value any common stock in the future on an arbitrary basis. The issuance of common stock for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by our investors and might harm any trading market for our common stock.

The sale of our stock could encourage short sales by third parties, contributing to the future decline of our stock price.

In many circumstances, the provision of financing based on the distribution of equity for companies traded on the OTC Markets can cause significant downward pressure on the common stock price. It is especially the case if the shares being placed into the market exceed the market’s ability to take up the increased stock or if we have not performed in such a manner to show that the equity funds raised will be used to grow our business. Such an event could place further downward pressure on the price of our common stock. Regardless of our activities, the opportunity exists for short sellers and others to contribute to the future decline of our stock price. If there are significant short sales of our common stock, the price decline from this activity will cause the share price to decline more, which may cause other stockholders of the stock to sell their shares, thereby contributing to sales of common stock in the market. If there are many more shares of our common stock on the market for sale than the market will absorb, the price of our common shares will likely decline.

We are not likely to issue dividends for the foreseeable future.

We cannot assure you that our proposed operations will result in adequate revenues to enable profitable operations or to generate positive cash flow. For the foreseeable future, we anticipate that we will use any funds available to finance the growth of the Company and that we will not pay cash dividends to stockholders. Unless we pay cash dividends, our stockholders will not receive a return on their shares unless they sell them. There is no assurance that stockholders will be able to sell shares when desired.

Dutchess will pay less than the then-prevailing market price for our common stock.

Upon our decision to issue a Drawdown Notice to Dutchess, which is at our sole discretion, Dutchess’ purchase of our common stock will be ninety-two percent (92%) of the lowest traded price of the Common Stock the five (5) Business Day prior to the Closing Date of each Drawdown Notice per the Common Stock Purchase Agreement dated September 24, 2021. Dutchess has a financial incentive to immediately sell our common stock upon receiving the shares to realize the profit equal to the difference between the discounted and market prices. If Dutchess sells the shares, the price of our common stock could decrease. If our stock price decreases, Dutchess may have a further incentive to sell the shares of our common stock that it holds. These sales may have an additional impact on our stock price.

Your ownership interest may be diluted, and the value of our common stock may decline by our exercising the Drawdown Notice right according to the Common Stock Purchase Agreement with Dutchess.

Pursuant to the Common Stock Purchase Agreement with Dutchess, when we deem it necessary, we may raise capital through the private sale of our common stock to Dutchess at a discounted price. Because the Drawdown Notice price is lower than the prevailing market price of our common stock, to the extent Dutchess exercises the right in the Drawdown Notice, the ownership interest of shareholders may get diluted.

We my not have access to the total amount available under the Common Stock Purchase Agreement with Dutchess.

Our ability to draw down funds and sell shares under the Common Stock Purchase Agreement with Dutchess requires that the registration statement of which this Prospectus forms a part be declared effective and continue to be effective. The registration statement of which this Prospectus includes the resale of 80,526,056 shares issuable under the Common Stock Purchase Agreement with Dutchess, and our ability to sell any remaining shares issuable under the Common Stock Purchase Agreement with Dutchess is subject to our ability to prepare and file one or more additional registration statements registering the resale of these shares. These registration statements may be subject to review and comment by the Securities and Exchange Commission staff. They will require the consent of our independent registered public accounting firm. Therefore, we cannot assure the timing of the effectiveness of the registration statements. The effectiveness of these registration statements is a condition precedent to our exercising discretion to issue Drawdown Notices and sell shares of our common stock to Dutchess under the Common Stock Purchase Agreement. Even if we are successful in causing one or more registration statements to be effective by the Securities and Exchange Commission on time, resulting in the registering some or all of the shares issuable under the Common Stock Purchase Agreement with Dutchess, we may not be able to sell the shares unless certain other conditions are met, such as having an adequate number of authorized shares to issue. Any increase in our authorized shares would board and stockholder approval. Accordingly, because our ability to draw down any amounts under the Common Stock Purchase Agreement with Dutchess are subject to many conditions outside of the Investor’s control there is no guarantee that we will draw down any portion or all of the proceeds of $10,000,000 under the investment with Dutchess.

Certain restrictions on the extent of puts and the delivery of advance notices may have little, if any, effect on the adverse impact of our issuance of shares in connection with the Common Stock Purchase Agreement with Dutchess. As such, Dutchess may sell many shares, resulting in substantial dilution to the value of shares held by existing stockholders.

Dutchess has agreed, subject to certain exceptions listed in the Common Stock Purchase Agreement, to refrain from holding shares, resulting in Dutchess or its affiliates owning more than 4.99% of the then-outstanding shares of our common stock at any one time. These restrictions, however, do not prevent Dutchess from selling shares of our common stock received in connection with a Drawdown Notice and then acquiring additional shares of our common stock in connection with a subsequent Drawdown Notice. In this way, Dutchess could sell more than 4.99% of the outstanding common stock in a relatively short time frame while never holding more than 4.99% at one time.

USE OF PROCEEDS

We will not receive any proceeds from the sale of shares of our common stock by Dutchess. However, we will receive proceeds from the sale of shares of our common stock according to our decision to exercise Drawdown Notices offered by Dutchess. We will use these proceeds for general corporate and working capital purposes and acquisitions or assets, software development, businesses, or operations, or for other purposes that our board of directors, in its good faith, deems to be in the Company’s best interest.

	One-third of investment commitment		Two-third of investment commitment		One Hundred percent (100%) of investment commitment
Net proceeds from the offering ^{(1) (2)}	$	3,333,333.00	$	6,666,666.00	$	10,000,000.00
Product Development, Sales & Marketing		1,450,767.00		2,005,265.00		3,648,000.00
Corporate Development		403,061.00		1,816,358.00		1,321,675.00
Fixed Assets		400,000.00		1,400,000.00		2,870,325.00
Working Capital		1,079,505.00	$	1,445,043.00	$	2,160,000.00
Total	$	3,333,333.00	$	6,666,666.00	$	10,000,000.00

⁽¹⁾Expenditures for the 12 months following the completion of this offering. We have categorized the expenditures by significant area of activity. Please see a detailed description of the use of proceeds in the “Plan of Operations” section of this Prospectus.

⁽²⁾Excludes estimated offering expenses of $21,194.08.

The Company may change the use of proceeds if it feels it is in the best interest of the shareholders to use the proceeds to discharge indebtedness relevant to the Company’s business. We will pay for expenses of this offering, except that the selling stockholder will pay any broker discounts or commissions or equivalent costs and costs of its legal counsel applicable to the sale of its shares.

DETERMINATION OF OFFERING PRICE

The prices at which the shares covered by this Prospectus may actually be sold by Dutchess will be determined by the prevailing public market price for shares of our common stock, or as otherwise described in the “Plan of Distribution.”

DILUTION

The sale of our common stock to Dutchess following the Common Stock Purchase Agreement dated September 24, 2021, will negatively impact our stockholders. As a result, our net loss per share could increase in future periods, and the market price of our common stock could decline. In addition, the lower our stock price is when we exercise our Drawdown Notice, the more shares of our common stock we will have to issue to Dutchess to drawdown according to the Common Stock Purchase Agreement. If our stock price decreases during the pricing period, then our existing stockholders would experience more significant dilution.

Dilution represents the difference between the offering price and the net tangible book value per share immediately after completion of this offering. Net tangible book value is the amount that results from subtracting total liabilities and intangible assets from total assets. Dilution arises mainly because of our arbitrary determination of the offering price of the shares being offered. Dilution of the value of the shares you purchase is also a result of our existing stockholders’ lower book value.

THE OFFERING

THE PRIVATE PLACEMENT TRANSACTION

On September 24, 2021, we entered into a binding Common Stock Purchase Agreement with Dutchess, a Delaware limited partnership. Pursuant to the Common Stock Purchase Agreement terms, Dutchess committed to purchasing up to $10,000,000 of our common stock until September 24, 2024. From time to time, after the effectiveness of the registration statement, we may elect, in our sole discretion, to deliver a Drawdown Notice to Dutchess. The number of shares subject to any Drawdown Notice shall not exceed the lesser of; (i) $250,000 or (ii) 200% of the Average Daily Traded Value of the Stock during the five (5) days immediately preceding the Drawdown Notice date or (iii) the Beneficial Ownership Limitation of 4.99% of the number of shares of the Common Stock outstanding immediately prior to the issuance of shares of Common Stock issuable pursuant to a Drawdown Notice. The sale price of the Shares sold to Dutchess pursuant to any Drawdown Notice is ninety-two percent (92%) of the lowest traded price of the Common Stock the five (5) Business Day prior to the Closing Date of each Drawdown Notice.

In connection with the Common Stock Purchase Agreement with Dutchess, we also entered into a registration rights agreement with Dutchess, pursuant to which we agreed to use our best efforts to, within 60 business days of September 24, 2021, file with the Securities and Exchange Commission a registration statement, covering the resale of 80,526,056 shares of our common stock underlying the Common Stock Purchase Agreement with Dutchess. The 80,526,056 shares being offered pursuant to the Common Stock Purchase Agreement with Dutchess represents 12.53% of the shares issued and outstanding, assuming that the selling stockholders will sell all of the shares offered for sale. The 80,526,056 shares being offered pursuant to this Prospectus represent 34.98% of the shares issued and outstanding held by non-affiliates of our company. The Common Stock Purchase Agreement with Dutchess is not transferable, and any benefits attached thereto may not be assigned.

At an assumed purchase price under the Common Stock Purchase Agreement of $0.024 (equal to 92% of the closing price of our common stock of $0.026 on January 10, 2022, we will be able to receive up to $1,932,625 in gross proceeds, assuming we elect to sell the entire 80,526,056 Drawdown Notice Shares being registered hereunder to Dutchess pursuant to the Common Stock Purchase Agreement. At an assumed purchase price of $0.024 under the Common Stock Purchase Agreement, we would be required to register 366,140,610 additional shares to obtain the balance of $8,787,375 under the Common Stock Purchase Agreement. Due to the floating offering price, we are unable to determine the exact number of shares that we will issue under the Common Stock Purchase Agreement.

There are substantial risks to investors due to the issuance of shares of our common stock under the Common Stock Purchase Agreement with Dutchess. These risks include dilution of stockholders’ percentage ownership, a significant decline in our stock price, and our inability to draw sufficient funds when needed. We intend to sell Dutchess periodically our common stock under the Common Stock Purchase Agreement, and Dutchess will, in turn, sell such shares to investors in the market at the market price. This may cause our stock price to decline, which will require us to issue increasing numbers of common shares to Dutchess to raise the same amount of funds as our stock price declines.

The aggregate investment amount of $10,000,000 was determined based on numerous factors, including the following: The proceeds received from any Drawdown Notices tendered to Dutchess under the Common Stock Purchase Agreement will be used for general corporate, product development, sales and marketing, working capital purposes and acquisitions or assets, businesses or operations or for other purposes that our board of directors, in its good faith deem to be in the best interest of the Company. The Company may change the use of proceeds if it feels it is in the best interest of the shareholders to use the proceeds to carry out its strategic business plans.

We may have to increase our authorized shares to issue the shares to Dutchess if we reach our current authorized shares of common stock. Increasing the number of our authorized shares will require board and stockholder approval. There is no guarantee that we will be able to draw down any portion or all of the proceeds of $10,000,000 under the Common Stock Purchase Agreement with Dutchess because our ability to draw down any amounts under the Common Stock Purchase Agreement with Dutchess is subject to many conditions.

SELLING STOCKHOLDERS

This Prospectus relates to the resale of 80,526,056 shares of our common stock, par value $0.001 per share, which are issuable to Dutchess Capital Growth Fund, LP (“Dutchess”).

Pursuant to the Common Stock Purchase Agreement, and after the effectiveness of this Registration Statement, we have the option, but not the obligation, to issue Dutchess a Drawdown Notice to purchase our registered shares. The number of shares subject to any Drawdown Notice shall not exceed the lesser of; (i) $250,000 or (ii) 200% of the Average Daily Traded Value of the Stock during the five (5) days immediately preceding the Drawdown Notice date or (iii) the Beneficial Ownership Limitation of 4.99% of the number of shares of the Common Stock outstanding immediately prior to the issuance of shares of Common Stock issuable pursuant to a Drawdown Notice. The sale price of the Shares sold to Dutchess pursuant to any Drawdown Notice is ninety-two percent (92%) of the lowest traded price of the Common Stock the five (5) Business Day prior to the Closing Date of each Drawdown Notice.

The Common Stock Purchase Agreement permits us to issue Drawdown Notices to Dutchess for an aggregate of ten million dollars ($10,000,000) in shares of our common stock until (i) the date Dutchess may sell all of the Shares without restriction pursuant to Rule 144 promulgated under the Securities Act, or (ii) the date on which Dutchess shall have sold all the Shares covered thereby, and no available amount remains under the Common Stock Purchase Agreement, or until $10,000,000 of such shares have been subject to a Drawdown Notice.

Dutchess may offer and sell, from time to time, any or all of the shares of our common stock to be sold to Dutchess under the Common Stock Purchase Agreement dated September 24, 2021.

The following table sets forth certain information regarding the beneficial ownership of shares of common stock by the selling stockholder as of January 10, 2022, and the number of shares of our common stock being offered according to this Prospectus. We believe that the selling stockholder has sole voting and investment powers over its shares. Because Dutchess may offer and sell all or only some portion of the 80,526,056 shares of our common stock being offered pursuant to this Prospectus, the numbers in the table below representing the amount and percentage of these shares of our common stock that Dutchess will hold upon the termination of the offering are only estimates based on the assumption that Dutchess will sell all of its shares of our common stock being offered in the offering.

The selling stockholders have not had any position or office, or other material relationship with us or any of our affiliates over the past three years. To our knowledge, the selling stockholders are not a broker-dealer or an affiliate of a broker-dealer. We may require the selling stockholders to suspend the sales of the shares of our common stock being offered pursuant to this Prospectus upon the occurrence of any event that makes any statement in this Prospectus, or the related registration statement untrue in any material respect or that requires the changing of statements in those documents to make statements in those documents not misleading.

Shares

Owned by the

Selling

Stockholder

Total

Shares

Number of Shares to Be

Owned by Selling

Stockholder After the

Offering and Percent of

Total Issued and

Outstanding Shares⁽¹⁾

Name of the Selling Stockholder

before the

Offering⁽¹⁾

Offered in

the Offering

# of

Shares⁽²⁾

% of

Class^{(2), (3)}

Dutchess Capital Growth Fund, LP⁽⁴⁾

80,526,056

10.74

⁽¹⁾Beneficial ownership is determined in accordance with Securities and Exchange Commission rules and generally includes voting or investment power with respect to shares of common stock. Shares of common stock subject to options and warrants currently exercisable, or exercisable within 60 days, are counted as outstanding for computing the percentage of the person holding such options or warrants but are not counted as outstanding for computing the percentage of any other person.

⁽²⁾We have assumed for the purposes of this tabular disclosure that the selling stockholder will sell all of the shares being offered in offering represented in this Prospectus.

⁽³⁾Based on 749,323,911 shares of our common stock issued and outstanding as of January 10, 2022, including the total number shares being offered pursuant to this Prospectus, which are counted as outstanding for computing the percentage of the selling stockholder.

⁽⁴⁾Michael Novielli has the voting and dispositive power over the shares owned by Dutchess.

PLAN OF DISTRIBUTION

Pursuant to the Common Stock Purchase Agreement with Dutchess, and after the effectiveness of this Registration Statement, we have the option, but not the obligation, to issue Dutchess a Drawdown Notice to purchase our registered shares. The number of shares subject to any Drawdown Notice shall not exceed the lesser of; (i) $250,000 or (ii) 200% of the Average Daily Traded Value of the Stock during the five (5) days immediately preceding the Drawdown Notice date or (iii) the Beneficial Ownership Limitation of 4.99% of the number of shares of the Common Stock outstanding immediately prior to the issuance of shares of Common Stock issuable pursuant to a Drawdown Notice. The sale price of the Shares sold to Dutchess pursuant to any Drawdown Notice is ninety-two percent (92%) of the lowest traded price of the Common Stock the five (5) Business Day prior to the Closing Date of each Drawdown Notice.

The Common Stock Purchase Agreement with Dutchess is not transferable.

From time to time, Dutchess may sell any or all of the shares of our common stock covered hereby on the OTC Markets or any other stock exchange, market, or trading facility on which the shares are traded or in private transactions. Dutchess may sell all or a portion of the shares being offered pursuant to this Prospectus at fixed prices, at prevailing market prices at the time of sale, at varying prices, or at negotiated prices. Dutchess may use any one or more of the following methods when selling securities:

	●	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

	●	block trades in which the broker-dealer will attempt to sell the shares as an 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 following the rules of the applicable exchange;

	●	privately negotiated transactions;

	●	in transactions through broker-dealers that agree with the selling stockholder 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;

	●	a combination of any such methods of sale; or

	●	any other method permitted pursuant to applicable law.

If available, Dutchess may also sell securities under Rule 144 under the Securities Act of 1933, rather than under this Prospectus.

Broker-dealers engaged by Dutchess may arrange for other broker-dealers to participate in sales. Broker-dealers may receive commissions or discounts from Dutchess (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be negotiated, but except as outlined in a supplement to this Prospectus, in the case of an agency transaction not over a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with FINRA IM-2440.

In connection with the sale of the securities or interests therein, Dutchess may enter into hedging transactions with broker-dealers or other financial institutions, which may, in turn, engage in short sales of the securities in the course of hedging the positions they assume. Dutchess may also sell securities short and deliver these securities to close out its short positions or loan or pledge the securities to broker-dealers that in turn may sell these securities. Dutchess may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of securities offered by this Prospectus, which securities such as broker-dealer or other financial institution may resell pursuant to this Prospectus (as supplemented or amended to reflect such transaction).

Any broker-dealers or agents involved in selling the shares may be deemed to be “underwriters” within the meaning of the Securities Act of 1933 in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act of 1933. We are required to pay certain fees and expenses incurred by us incident to the registration of the securities. The selling stockholder will be subject to the Prospectus delivery requirements of the Securities Act of 1933, including Rule 172 thereunder.

Dutchess will sell the resale securities only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with applicable laws.

Under applicable rules and regulations under the Securities Exchange Act of 1934, any person engaged in distributing the resale securities may not simultaneously engage in market-making activities concerning the common stock for the applicable restricted period, as defined in Regulation M, before the commencement of the distribution. In addition, the selling stockholder will be subject to applicable provisions of the Securities Exchange Act of 1934 and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of securities of the common stock by the selling stockholder or any other person. We will make copies of this Prospectus available to the selling stockholders. We will inform them of the need to deliver a copy of this Prospectus to each purchaser at or before the time of the sale (including by compliance with Rule 172 under the Securities Act of 1933).

DESCRIPTION OF SECURITIES TO BE REGISTERED

General

The Company is authorized to issue one class of shares of stock. The total number of shares which the Company is authorized to issue is two billion (2,000,000,000) shares of common stock, $.001 par value. As of January 10, 2022, there were 749,323,911 shares of our common stock issued and outstanding. As of January 10, 2022, we had 400 shareholders of record.

Common Stock

The following is a summary of the material rights and restrictions associated with our common stock. This description does not purport to be a complete description of all the rights of our stockholders and is subject to, and qualified in its entirety by, the provisions of our most current Articles of Incorporation and Bylaws, which are included as exhibits to this Registration Statement.

The holders of our common stock currently have (i) equal ratable rights to dividends from funds legally available, therefore, when, as and if declared by the Board of Director of the Company; (ii) are entitled to share ratably in all of the assets of the Company available for distribution to holders of common stock upon liquidation, dissolution or winding up of the affairs of the Company (iii) do not have pre-emptive, subscription or conversion rights and there are no redemption or sinking fund provisions or rights applicable thereto; and (iv) are entitled to one non-cumulative vote per share on all matters on which stockholders may vote.

Our Bylaws provide that at all meetings of the stockholders for the election of directors, a plurality of the votes cast shall be sufficient to elect. On all other matters, except as otherwise required by Nevada law or the Articles of Incorporation, a majority of the votes cast at a meeting of the stockholders shall be necessary to authorize any corporate action to be taken by vote of the stockholders. A “plurality” means the excess of the votes cast for one candidate over any other. When there are more than two competitors for the same office, the person who receives the greatest number of votes has a plurality.

EXPERTS AND COUNSEL

The financial statements of our company included in this Prospectus for the fiscal years ended June 30, 2021 and June 30, 2020, have been audited by Weinstein International CPA, and are included in reliance upon such report given upon the authority of said firm as experts in auditing and accounting.

Mailander Law Office, Inc. will render a legal opinion as to the validity of the shares of the Common Stock to be registered hereby.

INTERESTS OF NAMED EXPERTS AND COUNSEL

No expert named in the registration statement of which this Prospectus forms a part as having prepared or certified any part thereof (or is named as having prepared or certified a report or valuation for use in connection with such registration statement) or counsel named in this Prospectus as having given an opinion upon the validity of the securities being offered pursuant to this Prospectus, or upon other legal matters in connection with the registration or offering such securities was employed for such purpose on a contingency basis. Also, at the time of such preparation, certification, or opinion or at any time thereafter, through the date of effectiveness of such registration statement or that part of such registration statement to which such preparation, certification or opinion relates, no such person had, or is to receive, in connection with the offering, a substantial interest, as defined in Item 509 of Regulation SK, in our company or any of its parents or subsidiaries. Nor was any such person connected with our company or any of its parents or subsidiaries as a promoter, managing or principal underwriter or voting trustee.

INFORMATION WITH RESPECT TO OUR COMPANY

DESCRIPTION OF BUSINESS

General Development of the Business

Kronos Advanced Technologies, Inc. (Kronos) was initially founded in 2002 with the primary business focus of designing and developing air movers. Over time Kronos migrated its business to focus on the consumer air cleaner business. Kronos began this stage of operations as a product development company whose designs introduced new technologies that significantly changed the way air was moved, filtered, and cleansed. Our current air cleaner products use collection plates, located internally which are easily cleaned and long-lasting, unlike some of our competitors' designs, which require the replacement of less efficient and costly HEPA filters multiple times a year.

Business Overview

HEPA filters used in most consumer air cleaners are designed to trap pollutants such as pollen and dust. Unfortunately, based on this very design, over time, the "collection process" creates a clogged filter, and as such, HEPA air purifiers will stop working if the filter isn't changed regularly. This clogging action can also result in pollutants that were once trapped and collected migrating through the filter elements and escaping back into the air. Further, when the air temperature is warm and contains high humidity, mold and bacteria can grow on a HEPA filter, causing foul odors and potentially hazardous waste to be emitted back into the room. Kronos's ultra-efficient air cleansing module, with its washable collector plates, solves this problem by offering to the consumer an easy-clean system that is both safe and effective, allowing the collector plates to be cleansed by a simple handwash with detergent and warm water, or simply put it in the dishwasher to clean.

Our products feature a five-stage air cleansing process which starts at the bottom of the unit, where air is taken into the device and a pre-filter screen designed to collect large particulates, such as hair, pollen, and pet dander. The second stage forces air to pass through an array of electric emitter wires that kills bacteria and germs. The third stage forces the air through an ionic field consisting of negative ions that latch on to particles in the air, giving them an electrical charge. The electrical charge causes particles to clump together and become heavy. As the particulates move to the fourth stage, they are collected onto a plate. At the last stage – the Catalyst Stage – the purified air is freshened to remove any odors. The following diagram illustrates our process:

Today, Kronos’ product research and development produce products that move the air silently, have excellent filtering and cleansing capabilities, and in general, cleans ambient room air while offering reduced energy consumption. They are available in a smaller footprint to provide unequaled air cleaning in cars. Larger units are available for consumer home use, for business use, or even in extreme industrial applications requiring the destruction of certain hazardous gases. Our technology has the ability to remove contaminants and allergens down to 14.6 nanometers which is 20 times smaller than HEPA filters – a marked advantage.

Plan of Operations

Unless otherwise extended, the loan offers expire on June 30, 2022. We acquired the property in a transaction on June 30, 2021 in an exchange transaction with GX7 Limited, a West Virginia limited partnership, 50% of which is owned by current Chief Operating Officer, Joseph Florence. The property includes a 62,400 square foot manufacturing facility, a 7,500 square foot warehouse facility, and an auxiliary building containing 15,900 square feet. The total purchase price of the property is $5,800,000. The Company and GX7 agreed to payment terms as follows: the issuance of 91 million shares of common stock to GX7, and the payment of $2,610,000 in cash. The Company intends to pay GX7 from the proceeds of the loans offered by the West Virginia Economic Development Authority (“WVEDA”). As of the date of this filing, the loans offered by the WVEDA have not been consummated and are contingent upon the Company completing renovations to the physical buildings on the property, and the purchase of fixed equipment, including our providing proofs of hazard and flood insurance, title insurance and liability insurance. As of the date of this filing, the Company has purchased all fixed equipment, and completed renovations to air conditioning, roofing, and fire sprinklers. The Company expects to complete flooring and security renovations by January, 2022. Once we provide certification to WVEDA of the completion of the renovations, the Company may proceed and close the loans and the customary loan agreements, deeds of trust, security agreements, corporate resolutions and other documents will be finalized. We will be responsible for all closing costs associated with the loans (See Risk Factors).

While we currently source parts and manufacturing from China, we recently decided to eliminate our Company's current dependence on the Chinese supply chain and transition Kronos to be a company committed to manufacturing "Made in the USA Products" using our West Virginia facility and a predominantly U.S. based supply chain. As of the date of this filing, we are in transitioning and preparing our West Virginia facility with a projected opening in the first quarter of 2022.

We believe our transition to United States suppliers and manufacturing at our West Virginia facility will provide benefits to our business. China is geographically distant from major US consumer markets. Our parts suppliers and manufacturers in China have experienced supply chain difficulties during the pandemic resulting in greater lead times to produce and ship our products.

Additionally, in January 2021, tariffs and customs duties on our products increased to 25%. As such, additional tariffs now apply to almost all goods imported from China. All companies importing to the US are affected by the new tariffs, including non-US companies importing as a foreign importer of record. For many product categories, it’s still not an option to simply shift orders to suppliers in other Asian countries, as for most categories there simply are no factories outside of China. As a result of shifting our supply and manufacturing operations to the United States, we can avoid these tariffs.

Our Products

Our technology is currently offered in the form of multiple products designed to move, sterilize, filter, and cleanse the air for businesses, homes, vehicles, and even individuals themselves. On a broader basis, the additional markets that could immediately be impacted using standalone, embedded Kronos devices include schools, universities, manufacturing clean-rooms, retail shops, hospitality, personal automobiles, buses, taxis, and commercial aircraft cabins.

Our air cleaner products are targeted to the size of the space sought to be cleansed. Our current product Kronos® Air 5G®, Models 3, 5 and 8 product line includes our devices that cleanse spaces consisting of 300, 400, and 1,000 square feet respectively. We also developed the FitAir™, a personal air cleaner device that cleans personal air space in a small room consisting of 25 square feet or less, perfect for a small office. Our personal air cleaner products also include the Kronos Car Air Cleaner™ designed to sit securely on the dashboard of cars, and the Kronosati Mini™, a wearable air purifier that is worn on a lanyard and provides the wearer with purified air around a personal breathing space.

Our air cleaners are used in homes, schools, laboratories, and retail spaces to remove allergens, airborne contaminants, and odor from the air and maintain indoor air quality for people as well as employees working in these facilities. Our product line consists of the following:

Kronos Air 5G®

The Kronos Air 5G® models 3, 5 and 8 are all stand-alone air cleaners used in residential and business spaces and all feature our five-stage air cleaning process. The Model 3 cleans approximately 200 square feet of space; the Model 5G® cleans 400 square feet of space; and the Model 8 cleans 1,000 square feet of space.

Kronos Car Air

Using the same Kronos air cleansing technologies used in our Kronos Air Model 5G®, this unit is designed to sit securely on a car dashboard and is powered through a DC 12V Car Charger.

Fit-Air Bundle™

This device is designed to be used in conjunction with a Kronos® designed face mask to provide the user with personal air filtration and cleansing within 2.5 cubic feet of personal space. The mask is not a surgical mask nor one designed to provide antimicrobial or antiviral protection. The product has not been FDA cleared or approved and we do not claim that the Fit-Air Bundle™ mitigates, treats, cures, or prevents disease.

Market and Competition

Kronos expects growth in both the Global and the North American portable air purifier market over the next seven-year period. This growth is projected across the entire spectrum of room sized units, portable automotive units, and also wearable devices. The market is expected to be driven by rising airborne contaminants and increasing pollution levels in urban areas. Moreover, growing health consciousness, improving standards of living, and rising disposable income are expected to fuel the market growth. The rising adoption of air pollution control equipment, especially in developing regions across the globe, is anticipated to drive the market in the future. The rising awareness regarding a healthy lifestyle, especially among the urban youth, is expected to significantly contribute to the market growth. The filtering or air cleansing process itself generally falls into four categories: HEPA Filters; Activated Carbon Filters; Ion Generator based Filters; and Electrostatic Precipitator based Filters. Currently, products using HEPA filters are the consumers' primary choice, controlling approximately 40% of the residential air purifier market. The other three processes all share similar market share sizes of 18% - 22%.

The primary competitors in the air cleansing market are well established name brands using HEPA filters:

NAME	TECHNOLOGY
3M	HEPA
Carrier	HEPA
Honeywell	HEPA
LG	HEPA
Phillips	HEPA
Sharp	HEPA
Whirlpool	HEPA

Each of these listed companies (and others) provides portable air purifiers to the North American market. Of particular significance is that even with the summation of such a diverse listing of manufacturers and suppliers participating in the portable air purifier market, no single entity, nor even a combined segment representing the sales of the top 5 companies, have a dominant market position. This market, through various market studies, is quantified and recognized as a fragmented market. The fact that such exponential growth is projected over the seven-year forecasted period in such a highly fragmented market further supports Kronos' business decision to introduce its advanced product platform on a national scale, having superior air cleansing technologies for use in both commercial and consumer settings.

Today, the most significant sales and distribution channels for portable air purifiers are the large box stores. This fact is attributed to the variety of manufacturers and products being offered "firsthand" to a customer base just beginning to understand the product offerings. A recent Market Report for the forecasted period of 2019-2027 predicts a significantly growing market that will continue to see gains in this well-established (big box) distribution channel; however, per this report, the largest growth of portable air purifiers will be attributed to online store sales. In fact, on a global basis, online stores are expected to witness the fastest growth, registering a CAGR of 13.22% during the forecast period (2020-2027).

The global air purifier market size was valued at USD 10.67 billion in 2020 and is expected to expand at a compound annual growth rate of 10.0% from 2021 to 2028.

Sales and Marketing

We sell our products directly through our web site: https://1800safeair.com/, through independent sales representative and through select retail outlets. While we currently source components for our products in an international supply chain, we recently decided to move eliminate our Company's current dependence on today's Chinese Supply Chain and instead transition Kronos to be a company committed to manufacturing "Made in the USA Products" using our West Virginia facility and a predominantly U.S. based supply chain. We expect that our physical plant in West Virginia will be completed in the first quarter of 2022 and expect that our parts sourcing and manufacturing will develop apace after opening as we transition from our Chinese supply chain to the United States.

Research and Development

We are continuing our research and development into specific product applications across two distinct product application platforms: standalone devices and embedded applications. Standalone products are self-contained and only require the user to plug the Kronos device into a wall outlet to obtain air movement and filtration for their home, office, or hotel room. Embedded applications of the Kronos technology require the technology be added into another system, such as abuilding ventilation system for more efficient air movement and filtration or into an electrical device such as computer or medical equipment to replace the cooling fan or heat sink.

We are also exploring the development of our products for usage in healthcare settings. We are also researching the development of a series of small multifunctional devices that can be used as space heaters, vaporizers, disinfectors, deodorizers and/or fans.

Intellectual Property

Our current patent portfolio consists of patents issued from 2003 to 2008, as follows:

i.December, 2003; #664741; Method and Apparatus for Electrostatic Fluid Acceleration Control of a Fluid Flow;
Expires 2022;

ii.April, 2004; #6,727,657; Electrostatic Fluid Accelerator for and a Method for Controlling Fluid; Expires 2022;

iii.May, 2005; #6,888,314; Electrostatic Fluid Accelerator – Electrode design Geometries; Expires 2022;

iv.August 2005; #6,937,455; Spark Management Method & Device; Expires 2022;

v.November 2005; #6,963,479; Electrostatic Fluid Accelerator – Electrode design Geometries; Expires 2023;

vi.May 2006; #7,053,565; Electrostatic Fluid Accelerator – Power Management; Expires 2024;

vii.July 2006; #7,150,780; Electrostatic Air Cleaning Device; Expires 2024;

viii.October 2006; #7,122,070; Method of and Apparatus for Electrostatic Fluid Acceleration; Expires 2025;

ix.July, 2007; #7,248,003; Electric Field Management; Expires 2025;

x.August 2007; #7,262,564; Alternative Geometries and Voltage Supply Management; Expires 2024; and,

xi.August 2008; #7,410,531; Method of Controlling Fluid Control; Expires 2025.

xii.January 7, 2003; #6,504,308; Electrostatic Fluid Accelerator; Expires 2023.

xiii.July 19, 2005; #6,919,698; Electrostatic Fluid Accelerator and for Method of Controlling Fluid Flow; Expires 2025.

xiv.January 2, 2007; #7,157,704; Corona Discharge Electrode and Method for Operating Same; Expires 2027.

xv.January 7, 2003; #6,504,308; Electrostatic Fluid Accelerator; Expires 2023.

xvi.May 3, 2005; # 6,888,314; Electrostatic Fluid Accelerator; Expires 2025.

Employees

As of August 25, 2021, we have five (5) employees, all of whom are U.S based. None of our U.S employees are represented by a labor union.

DESCRIPTION OF PROPERTY

Our corporate headquarters are located at 2501 Garfield Avenue, Parkersburg, WV 26101. We acquired the property in a transaction on June 30, 2021 in an exchange transaction with GX7 Limited, a West Virginia limited partnership, 50% of which is owned by current Chief Operating Officer, Joseph Florence. The property includes a 62,400 square foot manufacturing facility, a 15,900 square foot warehouse, and a 7,500 square foot auxiliary building respectively. A 10-acre paved parking lot is also included. The total purchase price of the property is $5,800,000. The Company and GX7 agreed to payment terms as follows: the issuance of 91 million shares of common stock to GX7, and the payment of $2,610,000 in cash. The Company intends to pay GX7 from the proceeds of the loans offered by the West Virginia Economic Development Authority (“WVEDA”). As of the date of this filing, the loans offered by the WVEDA have not been consummated and are contingent upon the Company completing renovations to the physical buildings on the property, and the purchase of fixed equipment, including our providing proofs of hazard and flood insurance, title insurance and liability insurance. As of the date of this filing, the Company has purchased all fixed equipment, and completed renovations to air conditioning, roofing, and fire sprinklers. The Company expects to complete flooring and security renovations by January, 2022. Once we provide certification to WVEDA of the completion of the renovations, the Company may proceed and close the loans and the customary loan agreements, deeds of trust, security agreements, corporate resolutions and other documents will be finalized. We will be responsible for all closing costs associated with the loans (See Risk Factors).

The 91,000,000 shares issued to GX7 amount represents approximately 12.14% of the issued and outstanding common stock of the Company as of January 10, 2022.

LEGAL PROCEEDINGS

The Company discloses a loss contingency if at least a reasonable possibility that a material loss has been incurred. The Company records its best estimate of loss related to pending legal proceedings when the loss is considered probable, and the amount can be reasonably estimated. The Company records the minimum estimated liability where it can reasonably estimate a range of loss with no best estimate. As additional information becomes available, the Company assesses the potential liability related to pending legal proceedings, revises its estimates, and updates its disclosures accordingly. The Company’s legal costs associated with defending itself are recorded to expenses as incurred. The Company currently is not involved in any litigation.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

Shares of Common Stock trades under the symbol “KNOS” on the OTC Markets Quotation System.

The OTC Markets Quotation System is quotation service that display real-time quotes, last-sale prices, and volume information in over-the-counter equity securities. The market is limited for our stock and any prices quoted may not be a reliable indication of the value of our shares of Common Stock. The following Table 1sets forth the high and low bid prices per share of our shares of Common Stock by both the OTC Bulletin Board and OTC Markets for the periods indicated.

For the Period Ending	High		Low
First Quarter, September 30, 2020	$	0.38	$	0.06
Second Quarter, December 31, 2020	$	0.06	$	0.04
Third Quarter, March 31, 2021	$	0.14	$	0.08
Fourth Quarter, June 30, 2021	$	0.07	$	0.04
First Quarter, September 30, 2021	$	0.08	$	0.03

Holders of Record

As of January 10, 2022, we have 749,323,911 shares of our Common Stock issued and outstanding immediately prior to this offering held by approximately 400 shareholders of record.

DIVIDEND POLICY

We have never declared nor paid any cash dividends on our common stock, and currently intend to retain all of our cash and any earnings for use in our business and, therefore, do not anticipate paying any cash dividends in the foreseeable future. Any future determination to pay cash dividends on our common stock will be at the discretion of the Board of Directors and will be dependent upon our consolidated financial condition, results of operations, capital requirements and such other factors as the Board of Directors deems relevant.

RELATED STOCKHOLDER MATTERS

During the period ended June 30, 2021, the Company amortized $21,875 of debt discount, and as of June 30, 2021, the balance of the unamortized debt discount was $175,000.

In April 2020 the Company issued four convertible promissory notes with investors totaling $137,500. These convertible notes payable are due one year from issuance, with interest at 5% per annum and are convertible at 80% multiplied by the Market Price (representing a discount rate of 20%). Market Price is defined as the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period ending one trading day prior to the date the conversion. Pursuant to current accounting guidelines, the Company recorded a note discount of $137,500 to account for the note’s derivative liability. In addition, the Company recorded an amount of discount in excess of the note principal of $48,177 that was expensed as a financing cost.

Loan Offers From West Virginia Economic Development Authority

Unless otherwise extended, the loan offers expire on June 30, 2022. The closing of each loan is contingent upon our completing renovations to the physical buildings on our property, and the installation of fixed equipment, including our providing proofs of hazard and flood insurance, title insurance and liability insurance. We acquired the property in a transaction on June 30, 2021 in an exchange transaction with GX7 Limited, a West Virginia limited partnership, 50% of which is owned by current Chief Operating Officer, Joseph Florence. The property includes a 62,400 square foot manufacturing facility, a 15,900 square foot warehouse, and a 7,500 square foot auxiliary building respectively. The total purchase price of the property is $5,800,000. The Company and GX7 agreed to payment terms as follows: the issuance of 91 million shares of common stock to GX7, and the payment of $2,610,000 in cash. The Company intends to pay GX7 from the proceeds of the loans offered by the West Virginia Economic Development Authority (“WVEDA”). As of the date of this filing, the loans offered by the WVEDA have not been consummated and are contingent upon the Company completing renovations to the physical buildings on the property, and the purchase of fixed equipment, including our providing proofs of hazard and flood insurance, title insurance and liability insurance. As of the date of this filing, the Company has purchased all fixed equipment, and completed renovations to air conditioning, roofing, and fire sprinklers. The Company expects to complete flooring and security renovations by January, 2022. Once we provide certification to WVEDA of the completion of the renovations, the Company may proceed and close the loans and the customary loan agreements, deeds of trust, security agreements, corporate resolutions and other documents will be finalized. We will be responsible for all closing costs associated with the loans (See Risk Factors).

KRONOS ADVANCED TECHNOLOGIES, INC.

INDEX TO FINANCIAL STATEMENTS

		Page
Report of Independent Registered Public Accountants		F-2
Balance sheets as of June 30, 2020 and 2019 (audited)		F-3
Statements of Operations for the years ended June 30, 2020 and 2019 (audited)		F-4
Statement of Stockholders’ Deficit for the years ended June 30, 2020 and 2019 (audited)		F-5
Statements of Cash Flows for the years ended June, 2020 and 2019 (audited)		F-6
Notes to Financial Statements		F-7

		Page
Report of Independent Registered Public Accountants		F-19
Balance sheets as of June 30, 2021 and 2020 (audited)		F-20
Statements of Operations for the years ended June 30, 2021 and 2020 (audited)		F-21
Statement of Stockholders’ Deficit for the years ended June 30, 2021 and 2020 (audited)		F-22
Statements of Cash Flows for the years ended June, 2021 and 2020 (audited)		F-23
Notes to Financial Statements		F-24

		Page
Balance Sheets for the three months ended September 30, 2021 (unaudited)		F-39
Statements of Operations for the three months ended September 30, 2021 (unaudited)		F-40
Statements of Stockholders’ Equity for the three months ended September 30, 2021 (unaudited)		F-41
Statements of Cash Flows, for the three months ended September 30, 2021 (unaudited)		F-42
Notes to Unaudited Financial Statements		F-43

F-1

F-2

Kronos Advanced Technologies, Inc.

Consolidated Balance Sheets

for the Fiscal Year Ended June 30, 2020

(Audited)

	June 30, 2020			June 30, 2019
ASSETS
Current assets
Cash and cash equivalents	$	19,381		$	5,698
Prepaid expenses		123,382
Accounts receivable		7,721			—
Loans to officer		3,780			3,748
Total current assets		154,264			9,446
Property and equipment, net		234,250			—
Intangible assets		1,010,000			1,010,000
Total Assets	$	1,398,514		$	1,019,446

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable	$	9,601		$	9,555
Accrued expenses		182,216			25,000
Operating loan		31,650			23,500
Derivative liability		1,679,276			1,250,000
Convertible notes payable, net of discount		354,823			100,000
Total current liabilities		2,257,566			1,408,055

Commitment and Contingencies		—			—

Stockholder Deficit:
Common stock, par value $0.001, 2,000,000,000 shares authorized 499,689,291 and 487,689,291 shares issued and outstanding as of June 30, 2020 and June 30, 2019, respectively		499,689			487,689
Additional paid in capital		36,848,900			36,837,900
Accumulated deficit		(38,207,641	)		(37,714,198	)
Total Stockholders’ Deficit		(859,052	)		(388,609	)

Total Liabilities and Stockholder’s Deficit	$	1,398,514		$	1,019,446

The accompanying notes are an integral part of these consolidated financial statements.

F-3

Kronos Advanced Technologies, Inc.
Consolidated Statements of Operations

For the Fiscal Year Ended June 30, 2020

(Audited)

	June 30, 2020			June 30, 2019
Revenue	$	41,215		$	616
Cost of goods sold		6,756			183
Gross Profit		34,459			433
Operating Expenses:
General and administrative		171,334			14,542
Total operating expenses		171,334			14,542
Loss from operations		(136,875	)		(14,109	)
Other (Income) Expense
Interest expense		59,969			25,000
Change in value of derivative liability		(68,901	)		—
Financing cost		110,677			250,000
Amortization of debt discount		254,823			100,000
Total Other (Income) Expense		356,568			375,000
Net Income (Loss)	$	(493,443	)	$	(389,109	)
Net income (loss) -Basic and diluted	$	(0.01	)	$	(0.01	)
Weighted average common shares outstanding - Basic and diluted		489,189,291			487,689,291

The accompanying notes are an integral part of these consolidated financial statements.

F-4

Kronos Advanced Technologies, Inc.

Consolidated Statement of Stockholders' Equity

For the Fiscal Year Ended June 30, 2020

(Audited)

	Common Shares $0.001 Par Value				Additional
	Shares Issued		Amount		Paid in Capital		Accumulated Deficit			Equity (Deficit)
Year Ended June 30, 2020
Balance, June 30, 2019		487,689,291	$	487,689	$	36,837,900		(37,714,198	)	$	(388,609	)
Issuance of common stock upon conversion of accrued interest		12,000,000		12,000		11,000					23,000
Net loss								(493,443	)	$	(493,443	)
Balance, June 30, 2020		499,689,291	$	499,689	$	36,848,900		$(38,207,641)		$	(859,052)
Year Ended June 30, 2019
Balance, June 30, 2018		487,626,691	$	487,627	$	36,837,962	$	(37,625,089	)	$	500
Net loss								(389,109)		$	(389,109)
Balance, June 30, 2019		487,626,691	$	487,627	$	36,837,962	$	(37,714,198)		$	(388,609)

The accompanying notes are an integral part of these consolidated financial statements.

F-5

Kronos Advanced Technologies, Inc.
Consolidated Statements of Cash Flows

For the Fiscal Year Ended June 30, 2020

(Audited)

	For the Year Ended
	June 30, 2020			June 30, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(493,443	)	$	(389,109	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation		15,750			—
Change in value of derivative liability Financing cost		110,677			250,000
Amortization of debt discount		254,823			100,000
Changes in operating liabilities Accounts receivable		(7,721	)		—
Prepaid expenses		(123,382	)		—
Accounts payable and accrued expenses		111,361			25,055
Net Cash Used in Operating Activities		(131,935	)		(14,054	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible notes payable		137,500			—
Operating loan		8,150			23,500
Loans to officer		(32	)		(3,748	)
Net Cash Provided by Financing Activities		145,618			19,752
Net Increase in Cash		13,683			5,698
Cash at Beginning of Period		5,698			—
Cash at End of Period	$	19,381		$	5,698
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest	$	—		$	—
Income taxes paid	$	—		$	—
Fair value of common stock upon conversion of accrued interest	$	23,000		$	—

The accompanying notes are an integral part of these consolidated financial statements.

F-6

KRONOS ADVANCED TECHNOLOGIES, INC.

NOTES TO AUDITED FINANCIAL STATEMENTS

For the Year Ended June 31, 2020, and 2019

NOTE 1 - ORGANIZATION AND NATURE OF OPERATIONS

Kronos Advanced Technologies, Inc. ("Kronos") is a Nevada corporation (the "Company"). The Company's shares began trading on the over-the-counter bulletin board exchange on August 28, 1996, under the symbol "TSET." Effective January 12, 2002, the Company began doing business as Kronos Advanced Technologies, Inc. and, as of January 18, 2002, it changed the Company ticker symbol to "KNOS” and was trading on the Pink Sheets.

GENERAL

Kronos Advanced Technologies, Inc. is a product development and Production Company that develops and patents technology that among other things fundamentally changes the way air is moved, filtered and sterilized. Historically, Kronos has focused on developing, marketing, and selling the Company's proprietary air movement and purification technology. Serving the Indoor Air Quality (IAQ) market, Kronos technology uses state-of-the-art high voltage processes without the use of traditional HEPA filters. Kronos-based products move air silently, filter and purify the air, and dramatically reduce energy consumption to half of a 60-watt light bulb. Kronos devices can be variable in shape or size, and, therefore, have the potential to be scaled down for air purification in cars or scaled up in size for industrial and hazardous gas destruction. The technology is currently being implemented in standalone products to move and filter air replacing HEPA and other filtration systems. There are broad ranges of additional markets for standalone and embedded Kronos CORE technology-based devices. Examples of immediately addressable markets include health care facilities, operating rooms, manufacturing clean rooms, and cabins of automobiles and commercial aircraft.

Currently, the Company is planning to file additional patents to improve its existing technology as well as enter into new market segments but will continue to market air purifiers and other consumer products. Recently the Company became the exclusive distributor and licensee of the latest generation of air purifiers based on the Company's CORE technologies.

Fourteen of the Company's U.S. patent applications and three international patent applications have been allowed for issuance. To date, our ability to execute our strategy has been restricted by our limited amount of capital.

The Kronos technology has numerous valuable characteristics for applications in the indoor air quality market, including moving air and gases at high velocities while filtering odors, smoke and particulates and sterilizing air from bacteria and virus contamination. In the past - a number of the scientific claims of the Kronos technology have been tested by the U. S. and foreign governments, multi-national companies and independent testing facilities (see “Independent Testing – Product Claims Platform”).

Technology Description and Benefits

The proprietary Kronos technology involves the management of corona discharge by applying high voltage management across paired electrical grids to create an ion exchange. Applications for efficient high voltage management, efficient corona discharge and ion exchange include but are not limited to:

F-7

·	air movement, including dielectric fluid movement and propulsion;
·	air purification, including particulate removal, bacterial and viral removal, biohazard destruction, and odor removal;
·	temperature and environmental management, including space heating and cooling;
·	microchip, MEMS and other electronics devices and components cooling;
·	air management, including sorting and separation of air streams by particle content;
·	sound generation, including high fidelity sound recreation and active noise cancellation;
·	high voltage management, including development of high voltage power supplies and control of energy surges and electrical discharges;
·	control of water and moisture content in air streams, including dehumidification and humidification; and
·	water treatment, including water purification, ionization and water desalination.

Independent Testing - Product Claims Platform

A number of the scientific claims of the Kronos technology have been tested by the U. S. and foreign governments, multi-national companies and independent testing facilities. To date, independent laboratory testing has verified the filtration and sterilization capability of the Kronos technology. Summary results from select independent testing facilities are provided below. The tests were conducted in the U.S. unless otherwise indicated.

Filtration Testing Results:

·	Environmental Health and Engineering - reduced particle matter by up to 47% compared to days when the Kronos air purifiers were not operating in the waiting room of a pediatric office while patients were present.
·	Aerosol and Air Quality Research Laboratory - up to 99.8% filtration of 0.02 to 0.20-micron (20 to 200 nanometers) size particles;
·	LMS Industries - removal of over 99.97% of 0.10 micron (100 nanometers) and above size particles using HVAC industry's ASHRAE 52.2 testing standard for filtration;
·	MicroTest Laboratories - HEPA Clean Room Class 1000 quality particulate reduction; and
·	Intertek - tobacco smoke elimination tests in accordance with ANSI/AHAM AC-1-1988 standard entitled "American National Standard Method for Measuring Performance of Portable Household Electric Cord- Connected Room Air Cleaners," which demonstrated a Clean Air Delivery Rate ("CADR") for the Kronos air purifier of over 300 for the larger size Kronos air purifier and 80 for the smaller size using consumer filtration testing standards for the Association of Home Appliance Manufacturers ("AHAM").

F-8

Sterilization Testing Results:

·	Environmental Health and Engineering (viral analysis by the University of Wisconsin Department of Pediatrics and Medicine):
	-	collection and removal of a wide range of respiratory viruses, including influenza A, influenza B, human rhinoviruses, human coronavirus, respiratory syncytial virus, adenovirus, and bocavirus, from the waiting room of a pediatric office while patients were present.
·	Scientific Institution of Health Care, Central Clinical Hospital #2 in Moscow (clinical trial):
-		100% decontamination of bacteria (Staphylococcus aureus) in under one hour and 80% decontamination of general bacteria in under 24 hours from a 48m (3) hospital room while people were present.
·	Pulmonary Department of Municipal Hospital #2 in Moscow (clinical trial):
	-	100% decontamination of bacteria (Staphylococcus aureus) in under five hours from a 66m (3) hospital room while four patients were present; and
	-	100% decontamination of mildew fungi in under two hours from a 113.2m(3) hospital room.
·	Disinfection Research Institute Sterilization Laboratory in Moscow:
	-	disinfected a room completely contaminated with Bacteriophage
	-	a microorganism which lives in the E. Coli bacteria. (Bacteriophage is widely used in virus testing because the microorganism's biological structure and size share many functional similarities with a wide range of viruses); and
	-	100% decontamination of room infected with bacteria (Staphylococcus aureus strain 906 (S. aureus) and Bacillus cereus strain 96 (B. cereus)
	-	S. aureus is a known cause of hospital-acquired infections, including skin lesions such as boils and furunculosis and more serious infections such as pneumonia and meningitis.
·	Institute for Veterinary Medicine in the Ukraine - destroy and sterilize air which had been inseminated with Anthrax and E. coli spores;
·	New Hampshire Materials Laboratory - up to 95% reduction of hazardous gases, including numerous carcinogens found in cigarette smoke;
·	Battelle PNNL - 95% destruction of Bg (anthrax simulant); and
·	Dr. Sergey Stoylar, a bacteriologist from the American Bacteriological Society - 100% destruction of Bacillus subtilis 168 (bacteria simulant).

F-9

Medical Product Approval

In September 2006, the Russian Research Institute of Medical Equipment approved EOL's Kronos-based Tree air purification device for use in hospitals and other healthcare facilities. The device received Category I approval, which means the product has met the strictest regulations required for a device to be used in operating rooms and other areas that require a sterile environment. In November 2006, following the Russian Research Institute approval, the Ministry of Health Care and Social Development of the Russian Federation issued a Registration Certificate that designates the Kronos-based Tree air purification device for medical use.

Market Segmentation

Kronos had an initial business development strategy to attempt to develop and produce products based on the Kronos technology to six distinct air quality market segments: (1) air movement and purification (residential, health care, hospitality, and commercial facilities); (2) embedded cooling and cleaning (electronic devices and medical equipment); (3) air purification for unique spaces (clean rooms, airplanes, automotive, and cruise ships); (4) specialized military (naval vessels, closed vehicles and mobile facilities); (5) industrial scrubbing (produce storage and diesel and other emissions); and (6) hazardous gas destruction (incineration and chemical facilities).

Technology Application and Product Development

To best serve Kronos' targeted market segments, the Company is developing specific product applications across two distinct product application platforms. A Kronos device can be either used as a standalone product or can be embedded. Standalone products are self-contained and only require the user to plug the Kronos device into a wall outlet to obtain air movement and filtration for their home, office or hotel room. Embedded applications of the Kronos technology require the technology be added into another system, such as a building ventilation system for more efficient air movement and filtration or into an electrical device such as computer or medical equipment to replace the cooling fan or heat sink.

Standalone Platform

Residential Products. The Company had developed a residential product SilentNight Air Purifier and in the past sold it through independent sales reps.

Medical Products. The Company is planning to engage in development of Healthcare related products based on our technology.

Commercial and Other Standalone Products. Utilizing our expanded product development resources, in the past Kronos completed the initial design, development and production of a series of small multifunctional devices that can be used as space heaters, vaporizers, disinfectors, deodorizers and/or fans.

Embedded Platform

In addition, Kronos has developed an air filtration and purification mechanism capable of performing to HEPA quality standards, while eliminating bacteria and viruses. The Company believes that Kronos devices could replace current HEPA filters with a permanent, easily cleaned, low-cost solution. Among the technical advantages of the Kronos technology over HEPA filters is the ability of the Kronos-based devices to eliminate the energy burden on air handling systems, which must generate high levels of backpressure necessary to move air through HEPA-based systems. Kronos-based devices enhance the air flow, while providing better than HEPA level filtration and purification. Kronos is seeking one or more strategic partners to commercialize, market and distribute Kronos based commercial embedded air filtration and purification devices; however, due to a lack of funding, the Company is no longer working on this project.

Market Segmentation

Kronos' initial business development strategy was to develop and produce products based on the Kronos technology to six distinct air quality market segments: (1) air movement and purification (residential, health care, hospitality, and commercial facilities); (2) embedded cooling and cleaning (electronic devices and medical equipment); (3) air purification for unique spaces (clean rooms, airplanes, automotive, and cruise ships); (4) specialized military (naval vessels, closed vehicles and mobile facilities); (5) industrial scrubbing (produce storage and diesel and other emissions); and (6) hazardous gas destruction (incineration and chemical facilities).

F-10

Patents and Intellectual Property

Kronos has received notification that fifteen of its patent applications have been allowed for issuance by the United States Patent and Trademark Office and six of its international patent applications have been allowed for issuance by the Canadian Intellectual Property Office, the Commonwealth of Australia Patent Office and the Mexican Institute of Industrial Property. These patents are considered utility patents which describe fundamental innovations in the generation, management and control of electrostatic fluids, including air movement, filtration and purification. Each of the patents contain multiple part claims for both general principles as well as specific designs for incorporating the Kronos technology into air movement, filtration and purification products. The patents provide protection for both specific product implementations of the Kronos technology, as well as more general processes for applying the unique attributes and performance characteristics of the technology.

U.S. Patents

i.December, 2003; #664741; Method and Apparatus for Electrostatic Fluid Acceleration Control of a Fluid Flow;

Expires 2022;

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