UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

~~Form~~FORM 10-K

(Mark One)
☒	Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the fiscal year ended December 31, 2021
	For the fiscal year ended December 31, 2022
or
☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from __________ to __________________
	For the transition period from _______________ to _______________

Commission file number 000-53554

DAIS CORPORATION

(Exact Name of Registrant as Specified in its Charter)

New York

14-1760865

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

11552 Prosperous Drive

Odessa, Florida

33556

(Address of Principal Executive Offices)

(Zip Code)

(727) 375-8484

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Name of Each Exchange on Which Registered
None		None

Securities registered pursuant to Section 12(g) of the Act:

(Title of Class) Common Stock, par value $0.01 per share

Common Stock, par value $0.01 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that registrant was required to submit such files. Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒

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

Large, accelerated filer ☐ Accelerated filer ☐ Non-accelerated ~~Filer~~filer ☐ 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 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ .

The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant as of December 31, ~~2021~~2022 was $63675,~~350,330~~068 based on the closing price of $60.80098 per share of Dais Corporation common stock as quoted on the OTC Pink Marketplace and a public float of 96,~~316~~888,~~225~~445 on that date.

On ~~April~~May 1526, ~~2022~~2023, there were 920,~~415~~149,~~425~~365 shares of the registrant’s common stock outstanding.

TABLE OF CONTENTS

PART I
ITEM 1.	BUSINESS.	4
ITEM 1A.	RISK FACTORS.	108
ITEM 1B.	UNRESOLVED STAFF COMMENTS.	108
ITEM 2.	PROPERTIES.	108
ITEM 3.	LEGAL PROCEEDINGS.	119
ITEM 4.	MINE SAFETY DISCLOSURES	129
PART II
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES.	1310
ITEM 6.	SELECTED FINANCIAL DATA.	1411
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.	1411
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.	2220
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.	2220
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.	2220
ITEM 9A.	CONTROLS AND PROCEDURES.	2220
ITEM 9B.	OTHER INFORMATION.	2220
PART III
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.	2321
ITEM 11.	EXECUTIVE COMPENSATION.	2523
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.	2725
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS; AND DIRECTOR INDEPENDENCE.	2826
ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	3028
PART IV
ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.	3129

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Introductory Comments

Throughout this Annual Report on Form 10-K, the terms “we,” “us,” “our,” “the Company,” “our Company,” and “DLYT,” refer to Dais Corporation, a New York corporation (formerly known as ‘Dais Analytic Corporation’).

PART I

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In some cases, forward-looking statements are identified by terms such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential” and similar expressions intended to identify forward-looking statements. Such statements include, without limitation, statements regarding:

·● our need for, and our ability to raise, additional equity or debt financing on acceptable terms, if at all; ·● our ability to continue as a going concern; ·● our need to take ~~additional~~strong cost reduction measures, possibly cease operations on commercial or development programs, or sell our operating assets (each an option or a mix of all), if we are unable to obtain sufficient additional financing; ·● our belief that we will have sufficient liquidity to finance normal operations for the foreseeable future; ·● the options we may pursue considering our financial condition; ·● the amount of cash necessary to operate our business; ·● our plans and expectations with respect to our continued operations; ·● the expected development and success of new instrument and consumables product offerings; ·● the expected expenses of, and benefits and results from, our research and development efforts; ·● the expected benefits and results from our collaboration programs, strategic alliances, and joint ventures; ·● general economic conditions; ·● the anticipated future financial performance and business operations of our company; ·● our reasons for focusing our resources on the market for nano-structured polymer technology materials; ·● the price volatility of the common stock; ·● the historically low trading volume of the common stock; ·● our ability to attract and retain qualified personnel; ·● unanticipated litigation and the outcome of existing litigation; ·● our ability to do business in China and elsewhere overseas; ·● our ability to compete with current and future competitors; ·● the trustworthiness of our counterparties to fulfill their obligations; ·● our ability to commercialize our intellectual property; ·● Our ability to settle past debt in a satisfactory manner to the Company and its debt holders, I.e., senior secured note holder, convertible note holders, and overdue accounts payable holders. ● other factors discussed in our other filings made with the Commission.

These forward-looking statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements, expressed or implied, by such forward-looking statements. Also, these forward-looking statements represent our estimates and assumptions only as of the date of this Annual Report on Form 10-K. Except as otherwise required by law, we expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained in this Annual Report on Form 10-K to reflect any change in our expectations or any change in events, conditions or circumstances on which any of our forward-looking statements are based. Factors that could cause or contribute to differences in our future financial and other results include those discussed in the risk factors set forth in Part I, Item 1A of this Annual Report on Form 10-K as well as those discussed elsewhere in this Annual Report on Form 10-K. We qualify all of our forward-looking statements by these cautionary statements.

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ITEM 1. BUSINESS.

Throughout this document we may use the following terms: Aqualyte™, ConsERV™, NanoClear™, PolyCool™ and NanoAir™ , all of which are unregistered trademarks of the Company.

Overview

Dais Corporation (“Dais”, “us,” “we,”, the “Company”) is a proprietary, nanotechnology polymer materials company. Nanotechnology involves studying and working with matter on an ultra-small scale. Doing this is ~~how~~ where the Company built features and properties into its platform of nanomaterial sold under the brand name “Aqualtye™. Aqualyte™ is used to enable new product variants we believe are better than traditional products which use energy consuming and break-able components. Aqualyte™ itself, is marketed to OEMs to create differentiated products, while the second product is a fixed plate energy recovery ventilator called ConsERV, which we believe is useful in meeting building indoor fresh air requirements while saving energy and lowering emissions for most forms of heating, ventilation, and air conditioning (HVAC) equipment. We continue to develop other nano-structured polymer technology applications in HVAC/Refrigeration, energy, food services and wastewater treatment industries.

Corporate History

We were incorporated as a New York corporation on April 8, 1993, as The Dais Corporation. The Company was formed to develop new, cost-effective polymer materials for various applications, including providing a lower cost membrane material for Polymer Electrolyte Membrane fuel cells. We believe our research on materials science has yielded technological advances in the field of selective ion transport polymer materials. In December 1999, the Company purchased the assets of Analytic Power Corporation, in March 2002, the Company sold substantially all its fuel cell assets to Chevron, a large U.S. oil company for a combination of cash and the assumption by such company of certain of the Company’s obligations and began working to commercialize the attributes and features of the nanomaterials developed since formation. In November of 2018, the board of directors unanimously voted to change the name of the Company from Dais Analytic Corporation to Dais Corporation (the “Name Change”). The Name Change took effect with FINRA on February 27, 2019.

On November 2, 2018, the shareholders of the Company approved an increase in the authorized common shares of the company from 240,000,000 shares to 340,000,000 shares. On March 14, 2019, the shareholders approved an increase in authorized common shares from 340,000,000 shares to 1,100,000,000 shares. In July 2019, the shareholders of the Company approved a reverse stock split of the issued and outstanding shares of the Company’s common stock at the ratio ranging from one-for-500 to one-for-2,000. On October 31, 2019, the Company amended its Certificate of Incorporation to reflect a one-for-2,000 reverse stock split of the Company’s common stock. The reverse split was effective December 6, 2019. All share and per share data have been retroactively restated in this annual report and the accompanying financial statements and footnotes to reflect the effects of the reverse split.

See Subsequent Events for an addition to this section.

Our Technology

We use proprietary nanotechnology to reformulate thermoplastic polymers. Nanotechnology involves studying and working with matter on an ultra-small scale. Polymers are chain-like plastic molecules used in diverse products such as Dacron, Teflon, and polyurethane. AThermoplastic ~~thermoplastic~~ is a plastic (deformable) polymer material that melts to a liquid when heated and solidifies when cooled and is able to transition repeatedly between these states. Our reformulated polymers have properties that allow them to be used in unique ways, and we call the resulting material Aqualyte™.

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The Company believes the attributes of its Aqualyte™ platform of nanomaterial create a catalyst for change:

·● Consume less energy and release less CO2 into the atmosphere ·● Replace moving parts to increase operational lifetime ·● Provide strong pathogen protection (COVID) and lower allergy/asthma triggers ·● Reduce operating costs for increased ventilation rates shown in 3rd party testing to improve cognitive performance by 101% on average. ·● Extend ~~the~~ useable life of food and other organic materials ·● Clean most forms of contaminated wastewater to levels up to one-hundred times greater than noted in the Clean Water Act of 1970.

Our Products

The Company uses its knowledge of the Aqualyte nanomaterial to integrate it into traditional or new product form factors. It is management’s belief based on 3rd party industry or independent test results, the Company’s own testing, or data from customer use, that the ~~resulting product’s features and~~ benefits address the growing market needs resulting from, but not limited to, the drivers of climate change as well as those needs created by the pandemic.

Nanomaterial Platform - Aqualyte™

The Aqualyte Nanomaterial is made from commercially available polymer resin and industrial grade solvents which are mixed using a proprietary process with traditional industrial equipment. Our process creates a modified resin with key features and attributes that can be used to offer different properties to multiple products.

The Company sells Aqualyte to skilled OEMs using its features and properties to create new and/or improved products in a range of applications. The Company continues to develop next generation versions of its Aqualyte nanomaterial working to increase existing ~~feature~~ performance, add new features, and ~~improving~~improve ~~its~~ cost.

ConsERV™

We continue to expand sales channels to drive growth of revenues of our ConsERV product. ConsERV is an HVAC energy conservation product which should, according to various tests, save energy and operating costs on HVAC equipment, lower CO2 emissions and allow HVAC systems to be 20% - 67% smaller, reducing peak energy usage while simultaneously improving indoor air quality. This product makes most forms of HVAC systems operate more efficiently. ConsERV generally works in combination with existing HVAC systems, to provide improved ventilation air in ~~a building~~buildings. ConsERV uses a fixed-plate enthalpy exchanger (the “core”) constructed with our nanotechnology polymer. When compared to similar competitive products, we believe, based on tests conducted by the Air-conditioning, Heating and Refrigeration Institute (AHRI), a leading industry association, ConsERV maintains an industry leading position in the management of latent heat.

The Company began actively rolling out an updated ConsERV product line in 4Q, 2021. The updated line addresses market requested updates and features.

The sales channels for ConsERV continue to expand across North America and include private labeling efforts. The Company has and continues to negotiate arrangements with independent sales/engineering representatives in multiple regions across North America who in turn target ~~architect~~architects and specifying engineers, select OEMs, utility sponsored programs, and sophisticated users of HVAC equipment.

We believe the growth initiatives and what we perceive as changes in the ERV market will allow the company to address well over fifty percent of the addressable North American market for ConsERV.

We continue to have targeted discussions with identified companies in the European Union interested in buying and distributing both Aqualyte nanomaterial for use in their ERV cores as well as selling Dais produced ConsERV cores. To help us expand our capabilities in the reported high growth HVAC markets in Southeast Asia, Dais qualified a Chinese manufacturing company to produce ConsERV cores using Aqualyte membrane to meet the growing demand for ConsERV systems in the Region.

The Company expects this trend of growing ConsERV system, core, and Aqualyte nanomaterial revenues to continue into ~~2022~~2023 and beyond.

5Dais ~~Table~~continues ofto ~~Contents~~respond to market interests by developing additional products that use our nanotechnology to save energy, provide clean water, protect health, and generally promote a more sustainable future.

Dais continues to respond to market interest by developing additional products that use our nanotechnology to save energy, provide clean water, protect health, and generally promote a more sustainable future.

Strategic Partnerships

InCurrently the ~~quarter~~Company ~~ending~~is ~~September~~engaged ~~30,~~with ~~2018,~~a ~~Dais~~multi-national ~~entered~~conglomerate ~~into~~developing a ~~strategic~~line ~~development~~of ~~and~~products ~~licensing~~within ~~agreement with~~ the ~~Haier Group, located in Qingdao, China. This innovative work is based around the~~ Company’s ~~Aqualyte~~defined ~~nanomaterial~~and ~~potentially~~proven ~~enhancing~~uses ~~the performance~~ of ~~several~~its ~~Haier~~nano ~~products. The efforts are set to run through the end of 2022 and have been heavily affected by the Pandemic. If Haier was to integrate the technology into their product(~~polymer's) ~~and~~capabilities, ~~associated~~We ~~sales channels~~expect, ~~management~~if ~~feels~~all ~~such~~continues awell, ~~move~~an ~~could~~uptick ~~have~~in arevenues ~~significant~~from ~~revenue~~this ~~impact~~effort ~~for~~no ~~Dais.~~later Wethan ~~believe~~ the ~~potential~~end ~~revenue~~of ~~impact can be better assessed during~~ the ~~1st~~2nd quarter of ~~2023~~2024.

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Our Patents

Dais has owned 25 granted patents over its corporate history, some of which have reached the end of their enforceable term. As of December 31, ~~2021~~2022, Dais owns the active, enforceable rights to eleven U.S. patents, ~~four~~five Chinese patents, two Hong Kong patents, and three Patent Cooperation Treaty (“PCT”) applications that are still being examined. These patents relate to, or are applications of, our nano-structured polymer materials that perform functions such as ion exchange and modification of surface properties.

The company also owns multiple utility patents that cover inventions that are new, improvements and useful processes including the design and fabrication of devices or approaches that use properties of the polymers described above for HVAC, energy, food preservation, and water treatment applications. Dais owns the rights to a new US Patent issued in ~~2021~~2022:

1.	U1.S. Patent No. 10,907,867 – Evaporative chilling systems and methods using a selective transfer membrane. This patent was issued February 2, 2021 and the patent term ends on or about November 18, 2036.	U.S. Patent No. 11,331,628 – Vapor condenser enhanced by membrane evaporation. This patent was issued May 17, 2022 and the patent term ends on or about August 29, 2038.
2.	~~C.N. Patent No. 108,430,606B – Evaporative chilling systems and methods using a selective transfer membrane. This patent was issued November~~ 2~~, 2021 and the patent term ends on or about October 7, 2036~~.	C.N. Patent No. 108,430,606B – Evaporative chilling systems and methods using a selective transfer membrane. This patent was issued November 2, 2021, and the patent term ends on or about October 7, 2036.

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Dais has been notified that the following Application will be granted full US patent status in 2022:

US20200330923A1–Vapor condenser enhanced by membrane evaporation

Additional patent applications are being examined that are not yet publicly visible in the patent system and will be revealed at the appropriate time. Patents may or may not be granted on any of the above applications. We also seek to protect our proprietary intellectual property, including intellectual property that may not be patented or patentable, in part by entering into confidentiality agreements with our current and prospective strategic partners and employees.

Manufacturing

The Company currently uses a mix of in-house and outsourced assembles for its nanomaterial and product (ConsERV) needs.

For future expansion and high-volume scale-up, the Company is actively looking at the costs and merits of organically scaling v. moving to a ‘near 100% outsourced’ model at the most optimum way to grow. Nonetheless, the Company continues to strengthen its existing supply chain with strategic partners having existing multiple channel access to the ERV or OEM Aqualyte markets – or with qualified outsourced firms.

The Company has continued to establish a robust supply chain with strategic partners having existing multiple channel access to markets – or with qualified outsourced firms. We do not have long-term contractual relationships with any of our manufacturers or vendors. There are no subassemblies or components that could not be purchased from alternative suppliers. Purchases to date of raw materials and related services have been on a purchase order basis using non-disclosure agreements.

OEM Customers, and Suppliers

Using the properties and features of its Aqualyte nanomaterial the Company has proven results in a variety of cross -industry markets. We look to provide Original Equipment Manufacturers (OEMs) with Aqualyte membrane. Then sharing how to use the options and features found in Aqualyte, tofor ~~find~~ the OEM ~~able~~ to offer better or even new products in consumer, commercial, and industrial applications having what we believe to be better lifetimes, and efficiencies.

We are dependent on third parties to manufacture the key components needed for our nano-structured based materials and ~~for~~ of the value-added products made with these materials.

We require our suppliers to provide components in a timely manner, and to meet the Company’s quality, quantity and cost requirements or technical specifications with acceptable terms. Certain of the components or the processes of the Company’s suppliers are proprietary. If the Company were ever required to replace any of its suppliers, it should be able to obtain comparable components from alternative suppliers at comparable costs, but this would create delays in production.

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Research and Development

Sales and Marketing Strategies

We have secured and continue to discuss relationships with leading industry HVAC manufacturers, HVAC product distributors, energy service companies, and ERV manufacturers outside of North and South America. In addition, we are discussing relationships for use of our ConsERV products in other applications outside of energy recovery ventilation world-wide.

The Company is focused on creating alliances with companies having strong, existing channel presence or expertise in the target industries, notably for ConsERV and Aqualyte OEM uses. We are using the data and experience of past sales in a variety of markets, adding newer features and functions, working to increase revenues. We intend to bring industry seasoned talent into the Company at the appropriate time to further drive market development, revenue growth and guide future product feature improvement needs.

Competition and Barriers to Entry

We believe the efficacy of our value-added products and technology can ~~decrease~~capture ~~sales~~increased ofmarket ~~competing products~~share, thus taking business away from more established firms using older technology. We believe ~~that~~ our ConsERV product may become a functional component of newer, more efficient OEM products. A key challenge is to educate decision makers of the benefits derived from products using our materials and processes, and to have qualified people and certified products which out-perform other products, diminishing the value proposition of competitive products in the various sales channels. As we continue to grow the base of operational and third-party data this education process will become routine.

There are several companies located in the U.S., Canada, Europe, and Asia that have been developing and selling technologies and products in the energy recovery industry as listed below. We will experience significant competition regarding our products because certain competing companies possess greater financial and ~~personal~~personnel resources. Future product competitors include, but are not limited to:

Products		Current and Future Competitors
ConsERV		Semco, Greenheck, Venmar, Bry-Air, Fuwei, Ltd, CORE Energy Recovery Solutions, Renewaire, Holtop, Hoval, Klingenberg, Solar Palau, Kraton, Daikin and AirXchange.

We believe the combination of our ~~nano-material~~nanomaterial ~~platform’s~~ characteristics and growing patent ~~position~~positions ~~forms~~form competitive advantages, which may allow us time to execute our business plan. Many of our competitors may experience barriers to entry in these markets primarily related to the lack of similarly performing proprietary materials and processes.

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Government Regulation

We do not believe the sale, installation or use of our current nano-structured products will be subject to any government regulation, other than perhaps adherence to building codes and water safety regulations. We do not believe that the cost of complying with such codes and regulations, to the extent applicable to our products, will be prohibitive.

We do not know the extent to which any existing or new regulations may affect our ability to distribute, install and service any of our products. Once our other products reach the commercialization stage and we begin distributing them to our target markets, federal, state, or local governmental entities may seek to impose regulations.

We are also subject to various international, federal, state, and local laws and regulations relating to, among other things, land use, safe working conditions, and environmental regulations regarding handling and disposal of hazardous and potentially hazardous substances and emissions of pollutants into the atmosphere. The process of manufacturing the solutions which are used to produce Aqualyte may expose us to the risk of harmful substances escaping into the environment, resulting in potential injury or loss of life, damage to property and natural resources. Depending on the nature of any claim, our current insurance policies may not adequately reimburse us for costs incurred in settling environmental damage claims and, in some instances, we may not be reimbursed at all. To date, we are not aware of any claims or liabilities under these existing laws and regulations that would materially affect ~~the~~ our results of operations or financial condition. The completed products which use the Aqualyte material may have regulatory requirements relating to a variety of local or federal regulatory agencies, however, this type of exposure would be minimal.

Employees

As of December 31, ~~2021~~2022, we employed 1221 full-time employees and one independent contractor. None of the employees are subject to a collective bargaining agreement. We consider our relations with our employees to be good. As of the date of filing the number of employees of the Company has ~~not~~increased ~~changed~~to 23.

Principal Offices

Our principal office is located at 11552 Prosperous Drive, Odessa, FL 33556.

ITEM 1A. RISK FACTORS.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and are not required to provide the information under this item.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

Not Applicable.

ITEM 2. PROPERTIES.

We currently lease 7,200 square feet of combined office and production space located at 11552 Prosperous Drive, Odessa, FL 33556. We lease the site from Ethos Business Ventures, LLC, a limited liability company in which our Chief Executive Officer, Tim Tangredi, has a controlling financial interest (see Item 13, Certain Relationships and Related Transactions and Director Independence).

The lease for our corporate headquarters began on March 18, 2005. The lease term will terminate upon 30 days’ written notice from landlord or 90 days written termination from us. The current monthly rent is $4,066 and includes sales tax. We also pay all taxes and utilities as well as most repairs relating to the building. Most of our functions are performed at this site including corporate, marketing, administration, on-going product and nano-structured polymer development and product assembly and shipping. Key polymer synthesis and casting is outsourced and not done at this facility.

We do not anticipate investing in real estate or interests in real estate, real estate mortgages, or securities of or interests in persons primarily engaged in real estate activities. We currently have no formal investment policy and do not intend to undertake investments in real estate as a part of our normal operations.

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ITEM 3. LEGAL PROCEEDINGS.

From time to time, claims are made against us in the ordinary course of our business, which could result in litigation. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, such as monetary damages, fines, penalties, or injunctions prohibiting us from selling one or more products or engaging in other activities. The occurrence of an unfavorable outcome in any specific period could have a material adverse effect on our results of operations for that period or future periods. There are two items to disclose:

SOEX

On April 24, 2014, the Company entered into a Distribution Agreement (the “Soex Distribution Agreement”) with ~~SoEX~~SOEX (Hong Kong) Industry & Investment Co., Ltd., a Hong Kong corporation (“~~Soex~~SOEX”). In 2015 the Company commenced an action (the “Soex Litigation) for the cancellation of the 37,500,000 shares issued to Soex (the “Soex Shares”) in connection with the Soex Securities Purchase Agreement, and for the cancellation of the 3,750,000 shares (the “Zan Shares”) issued to Zan Investment Advisory Limited (“Zan”), an affiliate of Soex through Aifan Liu, who was appointed as a Company board observer by Soex and her husband, Xinghong Hua. Sharon Han, General Manager and Chairwoman of Soex, served on the Board pursuant to the provisions of the Soex Securities Purchase Agreement. Ms. Han resigned from the Board effective February 1, 2016, for failure to perform under the Agreement. In June of 2017 the Litigation was moved to the U.S. District Court for the Middle District of Florida where ~~Soex~~SOEX ~~has~~ instituted a counterclaim (Civil Docket Case #: 8:15-CV-02362-MSS-EAJ). OnThe ~~September~~jury ~~19, 2018, a pre-trial conference was held~~ in ~~Tampa finding a trial date set for October 22, 2018. The trial for~~ the ~~original case was held between~~ October 22of ~~and 24,~~ 2018. ~~The jury at the conclusion of the~~ trial did not award monetary damages to either party for claims or counterclaims. On October 24, 2018, the Company initiated a third lawsuit against an affiliate of Soex, Zhongshan Trans-Tech New Material Technology Co. Ltd. Zhongshan, China, (“Transtech”), and the Chairperson of the affiliate and Soex, based on new information learned by the Company during the trial. The Company ~~will~~is ~~seek~~appealing ~~maximum~~this ~~relief~~award, in which management and ~~damages~~the ~~for~~Board ~~this~~feel ~~on-gong~~we ~~and~~will ~~growing~~prevail. In ~~illegal~~January ~~misuse~~of 2021 the Company’s ~~Intellectual~~learned ~~Property.~~the ~~The~~Transtech ~~Company~~entity ~~feels~~merged ~~this~~with ~~third~~another ~~action~~entity ~~will~~in ~~lead~~China, toand athat ~~judgment~~entity in(“new ~~favor~~entity”) ofsold ~~the~~under ~~Company~~fifty percent off its interests to a large Swiss firm. In August 2021, the Company was notified the judge in the case in the October 2018 event, despite the recommendations of the jury to award no damages or court costs, overturned the ruling and assessed Dais $~~382~~481,~~664~~192 in court costs and fees. ~~The~~In ~~Company~~early is2022 ~~appealing~~the ~~this~~remainder ~~award~~of inthe ~~which~~new ~~management~~entity’s ~~and~~assets to the ~~Board~~large ~~feel~~Swiss ~~we will prevail~~firm.

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Accounts Payable

The firms below have pursued legal action against the Company to collect overdue accounts payable sums. The Company is working with each to enter into a settlement plan, or “pay over a period of time” payment plan. To date the Company has one agreement in place with SoftinWay.

Company	Sum Owned		Payment Plan	Legal Action
Old Dominion Freight Line	$	13,575.95	No	Yes
Old Dominion Freight Line (1)	$	13,575.95	No	Yes
Power Plant Services	$	85,199.11	No	Yes
Power Plant Services (2)	$	85,199.11	No	Yes
Softinway	$	10,850.00	Yes	Yes
Softinway (3)	$	3,350.00	Yes	Yes
The O-Ring Store	$	10,334.00	No	Yes
Total	$	~~119~~112,~~959~~459.06

Footnotes for Accounts Payable Table

	1.	This action moved towards settlement in December of 2022 and completing in March of 23, 2023. The sum the creditor froze $28,781 of the Company’s funds at the Company’s bank, the parties discussed the matter. The sum owed was agreed to be $17,212 including principle, interest, court costs and legal fees. The agreed sum ($17,212) is in the process of being deducted from the withheld sum at the company's bank. from the withheld $28,781.
	2.	The sum the creditor froze $4,700 of the Company’s funds at the Company’s bank. Company is exploring post judgement relief options/taking steps to ensure that Secured Noteholders priority is protected.
	3.	The original balance of approximately $24,165 has been consistently paid down per the repayment agreement.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES.

Our stock is currently trading on the OTC Pink Marketplace operated by OTC Markets Group Inc. under the symbol “DLYT”.

Authorized Capital.

On March 5, 2015, the Company amended its Certificate of Incorporation to increase the number of authorized shares to 250,000,000, consisting of 240,000,000 shares of common stock and 10,000,000 shares of preferred stock (the “Increase in Authorized Shares”) and to cancel the designated but unissued Series A-D Preferred Stock and create a new series of preferred stock designated as the Class a Preferred Stock (the “Class A Preferred Stock”). There are no shares of Class aA Preferred Stock currently issued by the Company.

On November 1, 2018, the Company issued ten (10) shares of Class B Redeemable Preferred Stock par value $0.01 per share (“Class B Stock”) having a stated value of $1.50 per share to Tim N. Tangredi, the Company’s Chief Executive Officer, in exchange for $15, pursuant to approval of the Board of Directors of the Company.

There are currently (10) shares of Class B Stock of the Company issued and outstanding.

Approved by the Board on December 31, 2021, and approved on March 23, 2022, by the NY Division of Corporations four new classes Convertible Preferred Stock were created; Series C, D, E, and F. Series C and E are for investors, Series D is for consultants, and Series F is for company employees, board members, and those contractually owned equity previously forfeited gratuitously in January of 2021. Series C and E are issued. Series D is on-hold pending need, and Series F is in process of being issued.

Approximate Number of Equity Security Holders

As of ~~April~~May 726, ~~2022~~2023, there were approximately ~~118~~121 shareholders of record of our common stock.

Dividends

We have not declared or paid any dividends and do not intend to pay any dividends in the foreseeable future to the holders of our common stock. We intend to retain future earnings, if any, for use in the operation and expansion of our business. Any future decision to pay dividends on common stock will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements and other factors our board of directors may deem relevant.

Transfer Agent

Our transfer agent is Clear Trust Transfer located at 16540 Point Village Drive #210, Lutz, FL 33558, telephone (813) 235-4490.

Please review the Subsequent Events section as there is an update, we believe may relates to the information above.

Equity Compensation Plan Information

The following table sets forth information regarding our 2000 Incentive Compensation Plan (the “2000 Plan”), 2009 Long-Term Incentive Plan (the “2009 Plan”) and 2015 Stock Incentive Plan (the “2015 Plan”) under which our securities are authorized for issuance as of December 31, ~~2021~~2022:

Plan Category	(a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights		(b) Weighted Average Exercise Price of Outstanding Options, Warrants and Rights

Equity compensation plans approved by security holders		-	$	-

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Unregistered Sales of Equity Securities and Use of Proceeds

OnThere ~~April~~were 3,no ~~2020,~~unregistered ~~the~~sales ~~parties amended the Loan and Security Agreement (“Twenty Third Amendment”) whereby the Maturity Date~~ of ~~the~~equity ~~Note~~securities ~~was extended to the earlier of (i) the date upon which the Company secures funds, regardless of source, equal to or exceeding,~~ in ~~the~~2022 ~~aggregate, $1,922,600~~ or ~~(ii) April 15, 2020~~2021.~~The Parties entered into a Consent and Waiver to authorize the Company to issue a promissory note and security agreement to Brian Kelly (see “2020 Note”).~~

On June 2, 2020, the parties amended the Loan and Security Agreement (“Twenty Fourth Amendment”) whereby the Maturity Date of the Note was extended to the earlier of (i) the date upon which the Company secures funds, regardless of source, equal to or exceeding, in the aggregate, $1,957,600 or (ii) July 15, 2020.

On July 15, 2020, the parties amended the Loan and Security Agreement (“Twenty Fifth Amendment”) whereby the Maturity Date of the Note was extended to the earlier of (i) the date upon which the Company secures funds, regardless of source, equal to or exceeding, in the aggregate, $1,957,600 or (ii) August 20, 2020.

On October 8, 2020, the parties amended the Loan and Security Agreement (“Twenty Sixth Amendment”) whereby the Maturity Date of the Note was extended to the earlier of (i) the date upon which the Company secures funds, regardless of source, equal to or exceeding, in the aggregate, $1,957,600 or (ii) October 15, 2020. The Parties entered into a Consent and Waiver to authorize the Company to issue a promissory note and security agreement to Brian Kelly (see “October 2020 Note”)

On October 28, 2020, the parties amended the Loan and Security Agreement (“Twenty Seventh Amendment”) whereby the Maturity Date of the Note was extended to the earlier of (i) the date upon which the Company secures funds, regardless of source, equal to or exceeding, in the aggregate, $2,025,600 or (ii) November 5, 2020.

On November 24, 2020, the parties amended the Loan and Security Agreement (“Twenty Eighth Amendment”) whereby the Maturity Date of the Note was extended to the earlier of (i) the date upon which the Company secures funds, regardless of source, equal to or exceeding, in the aggregate, $2,080,600 or (ii) November 30, 2020

On December 15, 2020, the parties amended the Loan and Security Agreement (“Twenty Seventh Amendment”) whereby the Maturity Date of the Note was extended to the earlier of (i) the date upon which the Company secures funds, regardless of source, equal to or exceeding, in the aggregate, $2,115,600 or (ii) December 23, 2020. The Parties entered into a Consent and Waiver to authorize the Company to issue a promissory note and security agreement to Brian Kelly (see “Kelly December 2020 Note”)

Recent Repurchases of Common Stock

There were no repurchases of our common stock during 2022 or 2021.

ITEM 6. SELECTED FINANCIAL DATA.

Not Applicable.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations includes a number of forward-looking statements that reflect Management’s current views with respect to current and future events and financial performance. You can identify these statements by forward-looking words such as “may”, “will”, “expect”, “anticipate”, “believe”, “estimate” and “continue”, or similar words. Those statements include statements regarding the intent, belief or current expectations of the management team as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements.

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Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the Securities and Exchange Commission. Important factors currently known to us could cause actual results to differ materially from those in forward-looking statements. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in the future operating results over time. We believe that its assumptions are based upon reasonable data derived from and known about our business and operations and the business and operations of the Company. No assurances are made that actual results of operations or the results of our future activities will not differ materially from its assumptions. Factors that could cause differences include, but are not limited to, expected market demand for the Company’s services, fluctuations in pricing for materials, and competition.

Unless otherwise indicated or the context requires otherwise, the words “we”, “us”, “our”, the “Company” or “our Company” refer to Dais Corporation, a New York corporation, and its subsidiaries.

OVERVIEW

Overview

Dais Corporation (“Dais”, “us,” “we,”, the “Company”) is a nanomaterial technology company developing and commercializing products using the nanomaterial called Aqualyte. The first commercial product is the Aqualyte nanomaterial itself. It is useful in managing moisture and key gases in a variety of cross-industry products. The second commercial product is called ConsERV, a fixed plate energy recovery ventilator which is useful in meeting building indoor fresh air requirements while saving energy and lowering emissions for most forms of heating, ventilation, and air conditioning (HVAC) equipment. We continue to develop other Aqualyte uses in cross-industry applications, HVAC/Refrigeration, energy, etc. One area of focused attention has been development work on a variant of Aqualyte targeting surface treatments to potentially create a protective layer designed to inactivate human coronaviruses.

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RESULTS OF OPERATIONS

Year Ended December 31, ~~2021~~2022 as compared with December 31, ~~2020~~2021

The following table sets forth, for the periods indicated, certain data derived from our Statements of Operations:

	For the Years EndedDecember 31,
	2021			2020
	2022			2021
REVENUE
Sales	$	~~372~~1,~~506~~077,058		$	~~952~~372,~~845~~506
Royalty and license fees		50,000			50,000
		422,506			1,002,845
		1,127,058			422,506
COST OF GOODS SOLD		~~267~~977,~~837~~518			~~545~~267,~~068~~837
GROSS MARGIN		~~154~~149,~~669~~540			~~457~~154,~~777~~669
OPERATING EXPENSES
Research and development, net of government grant proceeds of $89,617 and $123,055 for the years ended December 31, 2021 and 2020, respectively		133,808			98,645
Research and development, net of government grant proceeds of $0 and $89,617 for the years ended December 31, 2022 and 2021, respectively		328,480			133,808
Selling, general and administrative		1,~~958~~668,~~560~~389			1,~~079~~958,~~594~~560
TOTAL OPERATING EXPENSES		21,~~092~~996,~~368~~869			12,~~178~~092,~~239~~368
LOSS FROM OPERATIONS		(1,~~937~~847,~~699~~329	)		(~~720~~1,~~462~~937,699	)
OTHER INCOME (EXPENSE)
Interest expense		(2,~~065~~728,~~593~~360	)		(12,~~127~~065,~~807~~593	)
Loss on legal judgement		~~(382,664~~-	)		-(382,664	)
Forgiveness of debt income		~~146~~124,~~685~~126			-146,685
Change in fair value of derivative		~~2,241,678~~-			~~(939~~2,~~464~~241,678	)
Gain on extinguishment of debt		~~1,148,554~~-			-1,148,554
TOTAL OTHER INCOME (EXPENSE), NET		1(2,~~088~~604,~~660~~234	)		(21,~~067~~088,~~271~~660	)
NET LOSS	$	(~~849~~4,~~039~~451,563	)	$	(2849,~~787,733~~039	)
NET LOSS PER COMMON SHARE, BASIC AND DILUTED	$	(0.1543	)	$	(100.0215	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED		510,~~734~~448,~~795~~440			~~278~~5,~~128~~734,795

Revenue

We generate our revenues primarily from the sale of our ConsERV cores and systems, and our Aqualyte membrane. Product sales were $~~372~~1,~~506~~077,058 and $~~952~~372,~~845~~506 for the years ended December 31, ~~2021~~2022 and ~~2020~~2021, respectively, aan ~~decrease~~increase of $~~580~~704,~~339~~552 or 61189%. WeThis ~~had~~increase ain ~~53%~~product ~~decrease~~sales was primarily driven by an increase in sales of our ConsERV ~~sales~~product ~~and~~line, aoffset ~~64%~~by a decrease in Aqualyte ~~Only~~only OEM ~~membrane~~ sales.

~~The~~Revenues ~~decrease~~from inroyalty ~~sales~~and ~~revenue~~license isfees ~~attributed~~were ~~mainly to what management believes is a “pandemic driven bubble” in orders for Aqualyte nanomaterial in key Southeast Asia markets~~$50,000 and ~~lower~~$50,000 ~~orders~~ for ~~ConsERV cores used to replace out of warranty units. Given~~ the ~~initiatives~~years ~~the~~ended ~~Company~~December ~~has underway expanding the sales channels~~31, newer ConsERV product, and strong focus on selling Aqualyte into OEM uses management believes a continued downturn will be reversed by steady increases in sales from the newer initiatives beginning no later than 2Q 2022 and ~~beyond.~~2021, respectively.

~~Revenues~~12 ~~from~~Table ~~royalty~~of ~~and license fees were $50,000 and $50,000 for the years ended December 31, 2021 and 2020, respectively.~~Contents

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Cost of Sales

Our cost of sales consists primarily of materials (including freight), direct labor, and outsourced manufacturing expenses incurred to produce our ConsERV cores and systems and Aqualyte membrane. Cost of goods sold were $~~267~~977,~~837~~518 and $~~545~~267,~~068~~837 for the years ended December 31, ~~2021~~2022 and ~~2020~~2021, respectively, aan ~~decrease~~increase of $~~277~~709,~~231~~681 or 51265%. ~~resulting~~The ~~from~~increased ~~reduced~~cost is primarily due to increased product sales, labor costs, materials, and normal variances in costs between our product lines..

Supply Chain (Availability and Increased prices) and Tightening labor market (money and people)

Current world-wide supply chain issues are impacting many industries, including those of the Company. The lead time for materials and components is increasing, resulting in longer delivery dates. Management is working with existing partners to identify multiple sources of materials and components so as not to rely heavily on one or two suppliers.

Increasing crude oil prices is influencing the cost of resins, plastics and fuel. Shipping and trucking costs have increased while capacity has contracted. These issues are creating increased costs across industries and Management is evaluating its’ pricing and lead times regularly.

The labor market is having an impact across industries as competition for workers is increasing. Management is working to anticipate workforce needs and planning accordingly.

The Company is dependent on third parties to manufacture the key components needed for its nanostructured materials and some ~~portion~~portions of the value-added products made with these materials. Accordingly, a suppliers’ failure to supply components in a timely manner, or to supply components that meet the Company’s quality, quantity and cost requirements or technical specifications, or the inability to obtain alternative sources of these components on a timely basis or on acceptable terms, would create delays in production of the Company’s products and/or increase its unit costs of production. Certain of the components or the processes of the Company’s suppliers are proprietary. If the Company was ever required to replace any of its suppliers, it should be able to obtain comparable components from alternative suppliers at comparable costs, but this would create a delay in production and may briefly affect the Company’s operations.

Covid-19 World-wide Pandemic

Management continues to monitor the after effects the pandemic ~~is having on economies, and everyday life,~~ across the globe. As creative solutions to ~~defeat the current pandemic and~~ protect us from future infections ~~are~~the ~~developed,~~Company hasdeveloped what we believe using our technology is a uniquely positioned asproduct ~~its’ current products are~~ designed to provide a ~~solution~~positive tohealth ~~these~~supporting ~~issues especially in increased ventilation. The awareness of the benefits of increased ventilation in homes and workplaces is a major factor in the~~ solution to ~~battle~~ the ~~current,~~existing ~~and~~or similar possible future, pandemics. ~~The~~(virus ~~ConsERV~~or ~~products are specifically designed to increase new, fresh, ventilated, air in our homes and workplaces~~bacteria). ~~Management is developing and executing on plans to increase product awareness through existing and prospective sales channels.~~

We believe the integration of this newer solution, once development is complete, fits well to support even higher emphasis on the need for high efficiency ventilation which itself appears to management to be a lesson learned from the COVID19 pandemic Management is developing and plans to soon execute crease a program to focus on the integration of high efficiency ventilation and a industry-setting use of the company’s known features/benefits using its platform of nanomaterial. The plan is being formulated, will use, at a minimum, the existing sales channels to create what we believe is yet another benefit which finds ConsERV the best ventilation product in most instances.

Climate Change and Carbon Reduction

Countries and corporations around the world are adopting aggressive plans to achieve newly established Carbon Neutral goals by 2030 and 2050. This ~~world-wide~~worldwide effort is attracting attention to innovative technologies which reduce carbon emissions. Management is confident in the successful track record of current products, with a history of increasing the efficiency of HVAC systems and reducing CO2 emissions should drive increased business activity.

Dais is actively involved in preparing its existing and planned products and those products we are working on with partners, to fully participate in the decarbonization of business.

The Company’s goal is to incorporate novel features of its nanomaterial platform to enable evolutionary or industry changing products. This is accomplished by replacing energy consuming, emissions creating product components (pumps, motors, gases, ‘forever chemical’ laden items, etc.) with products made using an architecture best managing the features of the Company’s platform of nanomaterial having higher efficiencies, lower emissions, longer life, fewer breakdown, gentle on the environment, good for your health and productivity.

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Research and Development

Expenditures for research, development and engineering of products are expensed as incurred. We incurred research and development costs of $~~223~~328,~~425~~480 and $~~221~~223,~~700~~425 for the years ended December 31, ~~2021~~2022 and ~~2020~~2021, respectively, an increase of of $1105,~~725~~055 or 147%. We account for proceeds received from government funding for research as a reduction in research and development costs. We recorded proceeds against research and development expenses on the Statements of Operations of $~~89,617~~0 and $~~123~~89,~~055~~617 for the years ended December 31, ~~2021~~2022 and ~~2020~~2021, respectively, a decrease of $3389,~~438~~617 or 27100%. The decrease in proceeds from government funding was due to the completion of U.S. Army Corps of Engineers, $1,000,000, Phase II Small Business Innovation Research (SBIR) award ending in the third quarter of 2021.

Selling, General and Administrative

Our selling, general and administrative expenses consist primarily of payroll and related benefits, share-based compensation, professional fees, marketing and channel support costs, and other infrastructure costs such as insurance, information technology and occupancy expenses. Selling, general and administrative expenses were $1,~~958~~668,~~560~~389 and $1,~~079~~958,~~594~~560 for the years ended December 31, ~~2021~~2022 and ~~2020~~2021, respectively, ana ~~increase~~decrease of $~~878~~290,~~966~~171 or 8115%.

Our selling, general and administrative expenses may fluctuate due to a variety of factors, including, but not limited to:

·● Additional expenses because of being an SEC reporting company including, but not limited to, director and officer insurance, director fees, SEC compliance expenses, transfer agent fees, additional staffing, professional fees, and similar expenses; ·● Additional infrastructure needed to support the expanded commercialization of our ConsERV ~~and NanoClear~~ products and/or new product applications of our polymer technology for, among other things, administrative personnel, physical space, marketing and channel support and information technology; and ·● The issuance and recognition of expense related to fair value of new share-based awards, which is based on various assumptions including, among other things, the volatility of our stock price.

The 8115% ~~increase~~decrease in selling general and administrative expenses in the year ended December 31, ~~2021~~2022 compared to the same period in ~~2020~~2021 resulted primarily from ~~increased~~a ~~payroll~~decrease ~~costs and an increase~~ in stock -based compensation ~~provided~~offset ~~for~~by ~~services~~increased payroll costs.

Other Income (Expense)

Interest expense for the year ended December 31, ~~2021~~2022 was $2,~~065~~728,~~593~~360 compared to an expense of $12,~~127~~065,~~807~~593 for the year ended December 31, ~~2020. We recognized a loss on a legal judgement of $382,664 in~~ 2021~~, with no comparable item in 2020~~. ~~Gain~~Change ~~on change~~ in fair value of derivative ~~increased~~was to $~~2,241,678~~0 in 2022 compared to a ~~loss~~gain of $~~939~~2,~~464~~241,678 ~~from~~in ~~2020 to~~ 2021 and there was ana ~~increase~~decrease in gain on extinguishing debt from $01,148,554 in ~~2020~~2021 to $~~1,148,554~~0 in ~~2021~~2022. The gain on extinguishing debt in 2021 was due to the settlement of our convertible notes payable.

Net Loss

Net loss for the year ended December 31, ~~2021~~2022 was $~~849~~4,~~039~~451,563 compared to a net loss of $2849,~~787,733~~039 for the year ended December 31, ~~2020~~2021. The ~~decrease~~increased in net loss in ~~2021~~2022 was primarily due to the change in fair value of derivatives and the settlement of our convertible notes payable, ~~partially offset by a loss on a legal judgement~~ in 2021.

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Liquidity and Capital Resources

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. For the year ended December 31, ~~2021~~2022, the Company generated a net loss of $~~849~~4,~~039~~451,563 and has incurred significant losses since inception. As of December 31, ~~2021~~2022, the Company has an accumulated deficit of $5762,~~823~~274,~~102~~665, total stockholders’ deficit of $812,~~372~~430,~~175~~988, negative working capital of $812,~~270~~468,~~892~~ 216 and cash and cash equivalents of $~~773~~27,~~423~~412. The Company used $1,~~283~~451,~~772~~315 and $~~556~~1,~~423~~283,772 of cash for operations during the years ended December 31, ~~2021~~2022, and ~~2020~~2021, respectively, which was funded primarily by proceeds from loans from related parties and others. There is no assurance that any such financing will be available in the future. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company is currently pursuing the following sources of short and long-term working capital:

1. The Company ~~has~~guided ~~selected~~by ~~targeted~~its ~~parties~~Financial ~~that~~Advisors it is actively working with targeted third parties who have or are interested in licensing, purchasing the rights to, or establishing a joint venture to commercialize applications of the Company’s technology; 2. The Company continues to seek capital from ~~certain~~key strategic and/or government (grant) ~~opportunities and~~ related sources. These sources may, pursuant to any agreements that may be developed in conjunction with such funding, assist in the product definition and design, roll-out, and channel penetration of products; ~~and~~ 3. The Company is actively working with newer investors, private equity companies, purchase order financing parties, ~~has~~and ~~increased~~ its ~~value~~existing ~~and~~debt ~~potential~~holders to ~~attract~~restructure ~~new~~its ~~investors~~existing indebt ~~the~~and ~~eyes~~obtain ofshort ~~the~~and ~~Management~~long-term ~~team~~working ~~when~~and ~~the~~growth capital; and, 4. The Company ~~completed~~may ~~the~~license ~~exchange~~or ~~program~~sell ofan ~~‘debt~~asset to ~~equity’~~fund inits ~~the~~continued ~~2nd~~growth ~~quarter~~as ofit ~~2021~~is ~~clearing~~clear ~~out~~to ~~all~~management ~~convertible~~the ~~debt~~market infor ~~exchange~~the ~~for~~Company’s ~~equity~~product atinnovations has changed in a ~~fixed~~positive ~~price~~way atas ~~the~~demonstrated ~~end~~by ofthe interest the ~~second~~Company’s ~~quarter~~nano-material ofand ~~2021~~applications in certain markets.

Management believes:

1. The Company’s ability to solve continuing supply chain issues and raise sustainable growth capital will dictate future revenue and cash-flow for the Company. The quicker these issues are resolved we believe the faster the Company can participate in the market’s uptick momentum and follow the projected growth curve. These issues place heavy pressure on management to progress in key business areas being impacted. Continued supply chain impacts has roots in the funding challenges. The use of funds from affordable growth capital to resolve inventory levels of hard to acquire parts could be achieved within one quarter. Raising affordable capital is tied to addressing/fixing convertible debt transactions (recently found to be ‘criminally usurious - (Adar v. Geneysy, LLC) used in the past to grow the Company with a plan to replace this convertible debt with lower cost funds. The Company has made progress yet still faces a worldwide public market in turmoil since February of 2022. In the intertest of expediting this situation the Company is seeking affordable public, and non-public, growth resources, with Board approval, is seeking to monetize one asset via a license/supply agreement. Such a plan (monetize an asset) will require approval by the Company’s Senior Secured Noteholder. 2. The Senior Secured Note Holder has advised Management it is exploring its options to resolve the long standing unpaid – and growing debt by the Company. 3. Ventilation is regularly recommended as one of the solutions to Covid related mitigation and the market awareness for the ConsERV product(s) is increasing and lead activity is encouraging. 4. We believe our current cash position and our projected ability to obtain additional sources of growth capital, and to generate sustainable cash flow from operations and investments into 2023 is improving yet remains challenged.

2.We ~~The~~believe ~~Management and Board feel~~ the Company’s ~~ability~~prospects to ~~raise~~secure ~~new~~growth ~~funds~~funding isare ~~continuing~~good. toThe ~~improve~~company ~~with~~has ~~(a.)~~shown solid progress over the ~~financial~~last ~~clarity~~three ~~earned~~quarters, ~~with~~removed ~~the~~a serious impediment to growth by completing a ‘debt to equity’ program ~~completing~~where in the ~~2nd~~convertible ~~Quarter~~noteholders ofdebt ~~2021,~~positions were converted into equity (b.common stock and warrants). ~~the~~The ~~effects~~company ofintroduced ~~the~~a ~~bridge~~popular ~~funding~~new ~~provided~~line byof ~~JMS~~our ~~Investments~~ConsERV ~~and~~equipment having ~~others~~improved ~~allowing~~performance ~~the~~and ~~Company~~pricing to ~~once~~a ~~again~~growing beindependent ~~fully~~sales ~~reporting,~~channel ~~and~~through-out North (cAmerica. We reached agreement (now moving to contract stage) in late 4Q 2022 between the ~~shift~~company ~~seemingly~~and ~~occurring~~its ~~worldwide~~Senior ~~creating~~Secured aNote ~~pull~~Holder ~~for~~(having deep rights with the ~~Company’s~~assets ~~products~~of ~~showing~~the aCompany ~~proven~~which ~~linkage~~are topledged ~~lowering~~as ~~drivers~~security for ~~Climate~~repayment ~~Change~~of the Note). ~~This~~The ~~said,~~company itis ~~remains~~continuing to develop the basis of a ~~challenging~~long ~~time~~term tobusiness ~~raise~~relationship with ~~growth~~a ~~capital~~well-known, multi-national corporation interested in using the Company’s products for its own and ~~become~~third-party ~~profitable~~use.

3.There Weare ~~believe~~no ~~our~~assurances ~~current~~we ~~cash~~will ~~position~~be able to obtain the financing and ~~our~~planned ~~projected~~product development commercialization. Accordingly, we may not have the ability to ~~obtain~~continue ~~additional~~as ~~sources~~a going concern. The financial statements of ~~growth~~the ~~capital,~~Company ~~and~~do not include any adjustments relating to ~~generate~~the ~~sustainable~~recoverability ~~cash~~and ~~flow~~classification ~~from~~of ~~operations~~recorded assets, or the amounts and ~~investments~~classifications ~~into~~of ~~2022~~liabilities isthat ~~improving~~might ~~yet~~be ~~remains~~necessary ~~challenged~~should we be unable to continue as a going concern.

We15 ~~have,~~Table ~~and~~of ~~seemingly continue to, be successful in attracting new capital critical to support the Company’s operations and efforts needed to profitably manufacture and sell ConsERV and Aqualyte.~~Contents

The current geopolitical environment and continuing impacts of the worldwide pandemic could affect business worldwide in the long-term, however, the Management and Board are guardedly optimist, despite these times of uncharted causes/effects with companies, markets, sales channel challenges, and people, the Company will continue to be successful in securing needed funds to fund business continuation or secure growth capital funding.

Failure by us to timely procure additional financing or investment adequate to fund the ongoing operations, including planned product development initiatives and commercialization efforts, or experience a major supply chain disruption will have material adverse consequences on our financial condition, results of operations and cash flows as could any unfavorable terms. While we believe the Company’s prospects have improved for funding, there are no assurances we will be able to obtain the financing and planned product development commercialization. The Company may fail to reach an accord with the Senior Secured Note Holder who has deep rights with the assets of the Company pledged as security for repayment of the Note. Accordingly, we may not have the ability to continue as a going concern. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should we be unable to continue as a going concern.

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Statements of Cash Flows

Cash and cash equivalents as of December 31, ~~2021~~2022 were $~~773~~27,~~423~~412 compared to $36773,~~516~~423 as of December 31, ~~2020~~2021. Cash is primarily used to fund our working capital requirements.

Net cash used in operating activities was $1,~~283~~451,~~772~~315and ~~and~~ $~~556~~1,~~423~~ 283,772 for the years ended December 31, ~~2021~~2022 and ~~2020~~2021, respectively. The increase in net cash used in operations was primarily due to ana ~~increase~~decrease in ~~net~~cash ~~loss~~from ~~(after~~net ~~adjusting~~working ~~for~~capital ~~non-cash~~accounts ~~items)~~ partially offset by ana ~~increase~~decrease in ~~cash~~net ~~from~~loss ~~net~~(after ~~working~~adjusting ~~capital~~for ~~accounts~~non-cash items). For the year ended December 31, ~~2021~~2022, net loss (after adjusting for non-cash items) was $32,~~162~~874,~~483~~557. Accounts receivable, inventory and other assets together increased by $53422,~~624~~430. Accounts payable, accrued liabilities, customer deposits and deferred revenue increased in total by $1,~~932~~845,~~335~~672. For the year ended December 31, ~~2020~~2021, net loss (after adjusting for non-cash items) was $13,~~139~~162,~~702~~483. Accounts receivable, inventory and other assets together decreased by $6753,~~673~~624. Accounts payable, accrued liabilities, customer deposits and deferred revenue increased in total by $~~515~~1,~~606~~932,335.

Net cash used by investing activities was $2945,~~758~~148 and $2529,~~094~~758 for the year ended December 31, ~~2021~~2022 compared to the same period in ~~2020,~~2021.The increase was driven primarily by equipment purchases in ~~2021~~2022.

Net cash provided by financing activities was $2750,~~050,437~~452 and $~~613~~2,~~950~~050,437 for the years ended December 31, ~~2021~~2022 and ~~2020~~2021. respectively. The ~~increase~~decrease resulted from ~~increased~~decreased proceeds from notes payable offset by an increase in proceeds from notes payable to related parties.

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Material Financing Transactions

InDebt the period from June 2017 through the end of December 2019, the Company entered eight Convertible Note Holder agreements with eight Note Holders totaling with all fees, interest, and principal $2,008,812 as of December 31, 2020. The notes were not considered to beEquity inExchange default and were being renegotiated at December 31, 2020. Subsequently, as of May 31, 2021, each Convertible Noteholder received their fees, interest, and principal totaling $2,111,334 in shares of Common stock of the Company (at $0.30 per share) with 50% warrant coverage (1 year cash warrant with a strike price of $0.30). All documents were executed by June 30, 2021 with all equity/warrants issued by July 31, The Company issued 7,036,667 Common shares, and 3,576,733 Warrant shares in this transaction. Program

NoIn ~~new~~the period from June 2017 through the end of December 2019, the Company entered eight Convertible Note ~~Transactions~~Holder ~~were~~agreements ~~entered~~with ~~into~~eight ~~during~~Note Holders totaling, with all fees, interest, and principal, $2,008,812 as of December 31, 2020. orThe notes were not considered to be in default and were being renegotiated at March 31, 2021. Subsequently, as of May 31, 2021, each Convertible Noteholder received their fees, interest, and principal totaling $2,107,414 in shares of Common stock of the Company (at $0.030 per share) with 50% warrant coverage (1 year cash warrant with a strike price of 0.30). All documents were executed by June 30, 2021, with all equity/warrants issued by July 31, 2021. The Company issued 7,036,668 Common shares, and 3,576,733 Warrant shares in this transaction. All unexercised warrants expired as of May 15, 2022 per the terms and conditions of the Warrant document.

2022 Convertible Notes

On December 12, 2022, the Company entered a convertible promissory note in the amount of $40,000. The note matures on the earlier of June 12, 2023 or 5 days after demand and bears interest at 10% per year. The note is convertible into shares of common stock at a fixed conversion price of $0.30 per share.

On November 4, 2022, the Company entered a convertible promissory note in the amount of $25,000. The note matures on the earlier of May 4, 2023 or 5 days after demand and bears interest at 10% per year. The note is convertible into shares of common stock at a fixed conversion price of $0.30 per share.

On September 7, 2022, the Company entered a convertible promissory note in the amount of $100,000. The note matures on September 7, 2023 and bears interest at 8% per year. In connection with this note, the Company has issued a warrant to purchase 1,000,000 shares of common stock to the lender. The warrant has an exercise price of $0.30 per share and expires on September 7, 2027. The relative fair value of the warrant was $59,998, determined using the Black Scholes Model with the following assumptions: (1) risk free interest rate of 3.37%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of the Company’s common stock of 360%; and (4) an expected life of 5 years. The note is convertible into shares of common stock at a fixed conversion price of $0.10 per share. The company has recorded a beneficial conversion feature of $40,002. Amortization of discount was $31,781 for the year ended December 31, 2022.

On August 20, 2022, the Company entered a convertible promissory note in the amount of $49,850. The note matures on the earlier of February 20, 2023 or 10 days after demand and bears interest at 8% per year. The note is convertible into shares of common stock at a fixed conversion price of $0.30 per share.

On June 15, 2022, the Company entered two convertible promissory notes aggregating $300,000. The notes mature on the earlier of December 15, 2022 or 10 days after demand and bear interest at 8% per year. The Company received proceeds of $300,000. The notes are convertible into shares of common stock at a fixed conversion price of $0.30 per share. The Company has recorded debt discount of $200,000, related to the beneficial conversion feature of the notes. The discount will be amortized to interest expense over the six-month term of the notes, and $200,000 was amortized during the year ended December 31, 2022, respectively.

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2021 Convertible Notes

On September 20, 2021, the Company entered a convertible promissory note with GS Capital Partners, LLC. The note matured on September 20, 2022 and bears interest at 8% per year. The Company received proceeds of $197,000, after deduction of $20,000 of original issue discount and $3,000 of costs. In connection with this note, the Company has issued a warrant to purchase 1,466,666 shares of common stock to the lender. The warrant has an exercise price of $0.15 per share and expires on September 21, 2026. The relative fair value of the warrant was $110,000, determined using the Black Scholes Model with the following assumptions: (1) risk free interest rate of 0.84%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of the Company’s common stock of 389%; and (4) an expected life of 5 years. The note is convertible into shares of common stock at a fixed conversion price of $0.10 per share. The company has recorded a beneficial conversion feature of $90,000. Amortization of discount and costs was $160,071 and $62,929 for the years ended December 31, 2022 and 2021, respectively. The note matured on September 20, 2022. The lender has not declared a default as both parties are actively discussing a mutually beneficial path forward. It is expected an agreement will be reached in the fourth quarter of 2022.

During the fourth quarter of 2021, the Company entered twenty convertible promissory notes with various holders aggregating $1,412,000. The notes mature one year from issuance and bear interest at 8% per year. The Company received proceeds of $1,287,000, after deduction of $117,000 of original issue discount and $8,000 of costs. In connection with the notes, the Company has issued warrants to purchase 10,463,332 shares of common stock to the lenders. The warrants have an exercise price of $0.15 per share and expire five years from the date of issuance. The relative fair value of the warrants was $1,366,127, determined using the Black Scholes Model with the following assumptions: (1) risk free interest rate of 0.84% - 1.33%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of the Company’s common stock of 386% - 389%; and (4) an expected life of 5 years. The notes are convertible into shares of common stock at a fixed conversion price of $0.10 per share. A total of $1,412,000 has been recorded as debt discount, and 8,000 has been recorded as deferred debt costs. The discount and costs will be amortized to interest expense over the term of the notes Amortization of discount and costs was $1,236,089 and $142,233 for the years ended December 31, 2022 and 2021, respectively.

COVID-19 Disclosure

The Company’s operations ~~have been and~~ continue to be ~~affected~~impacted by the ~~ongoing~~aftermath of the outbreak of the coronavirus disease ~~2019~~ (COVID-19) which was declared a pandemic by the World Health Organization in March 2020. The ~~ultimate~~ongoing disruption ~~and~~relating ~~impact~~to on the ~~Company~~availability ~~which may be caused by the outbreak is uncertain. In 2020 we believe the company suffered materially adverse impacts caused by (1.) the late filing~~ of ~~required~~certain ~~SEC~~components ~~mandated reports which resulted from professionals~~ and ~~company~~parts ~~employees~~is ~~being~~impacting ~~ill,~~lead ~~dislocated from jobs, taking abnormally longer~~ times tocausing ~~necessary~~delays ~~filing~~in ~~information~~order ~~due to lack of access to computer from remote locations or limited/no access to needed 3rd party professionals, etc~~fulfillment. Further the ~~pandemic~~lasting ~~has~~impacts resulted in aan ~~material~~ adverse impact on the Company’s operations, ~~and cash flows~~ as ~~marketing~~ur ~~plans for new product introduction were delayed. Our~~ third-party manufacturers, ~~third-party~~and distributors, ~~and~~work ~~our~~through ~~customers~~the ~~have~~lasting ~~been~~impacts ~~and~~of ~~will~~shortages bein ~~disrupted~~the bysupply ~~worker absenteeism, quarantines~~ and ~~restrictions~~availability onof ~~employees’~~component ~~ability to work, office~~ and ~~factory closures, disruptions to ports and other shipping infrastructure, border closures, or other travel or health-related restrictions~~parts. ~~Depending~~Awareness ~~on the magnitude~~ of ~~such~~research ~~effects~~relating onto ~~our activities or~~ the ~~operations~~need offor ~~our~~increased ~~third-party manufacturers and third-party distributors~~ventilation, ~~the supply of our products will be delayed,~~ which ~~could~~aides ~~adversely affect our business, operations, and customer relationships. In addition, the Coronavirus (COVID-19) or other disease outbreak will~~ in the ~~short-run~~fight ~~and~~against ~~may~~viruses ~~over the longer term adversely affect the economies~~ and ~~financial~~other ~~markets~~allergens ~~of many countries, resulting~~ in ~~an economic downturn that will affect demand for~~ our ~~products~~indoor ~~and~~spaces, ~~services~~is ~~and~~changing ~~impact~~buying ~~our operating results~~habits. ~~Future~~This ~~possible~~change ~~impacts may include, but are not limited to, disruption to the Company’s customers and revenue, absenteeism~~ in ~~the~~attitudes ~~Company’s~~is ~~labor~~driving ~~workforce,~~an ~~unavailability~~increase ~~of products and supplies used~~ in ~~operations, and a decline in value of assets held by~~ the ~~Company,~~markets ~~including~~for ~~inventories,~~our ~~property~~nano-based ~~and equipment, marketable securities, and potential loss of key team members~~products.

Economy and Inflation

Except as disclosed herein, we have not experienced any significant cancellation of orders due to the downturn in the economy. Our management believes that inflation will have an effect on our cost of goods and shipping, however sales inquiries continue to be strong through ~~2021~~2022. .

Contractual Obligations

We do not have any liabilities related to long-term contractual obligations as of December 31, ~~2021~~2022.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, and results of operations, liquidity, or capital expenditures.

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of the accompanying financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires us to make judgments, assumptions and estimates that affect the amounts reported in the accompanying financial statements and the accompanying notes. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. When making these estimates and assumptions, we consider our historical experience, our knowledge of economic and market factors and various other factors that we believe to be reasonable under the circumstances. Actual results could differ from these estimates. Management has discussed the selection of critical accounting policies and estimates with our Board of Directors, and the Board of Directors has reviewed our disclosure relating to critical accounting policies and estimates in this annual report on Form 10-K. The following critical accounting policies are significantly affected by judgments, assumptions and estimates used in the preparation of the financial statements:

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Revenue Recognition

Generally, we recognize revenue for products upon shipment to customers, provided no significant obligations remain and collection is probable.

In certain instances, our ConsERV system product may carry a limited warranty of up to two years for all parts contained therein except for the energy recovery ventilator core produced and sold by us. The distributor of the ConsERV system may carry a limited warranty of up to ten years. The limited warranty includes replacement of defective parts for the ConsERV system and includes workmanship and material failure for the ConsERV core. We have recorded an accrual of $91,531 for future warranty expenses on December 31, ~~2021~~2022, which is included in accrued expenses, other.

Revenue derived from the sale of licenses is deferred and recognized as license fee revenue on a straight-line basis over the life of the license, or until the license arrangement is terminated. We recognized license fee revenue of $50,000 and $50,000 for the years ended December 31, ~~2021~~2022 and ~~2020~~2021, respectively. Royalties are recognized as earned. We did not recognize any revenue from royalties for the years ended December 31, ~~2021~~2022 and ~~2020~~2021.

The Company has adopted the new revenue recognition guidelines in accordance with ASC 606, Revenue from Contracts with Customers (ASC 606), commencing from the period under this report. The Company analyzes its contracts to assess that they are within the scope and in accordance with ASC 606. In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under each of its agreements, whether for goods and services or licensing, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company acts as a principal in its revenue transactions as the Company is the primary obligor in the transactions. Generally, the Company recognizes revenue for its products upon shipment to customers, provided no significant obligations remain and collection is probable.

Accounts Receivable

Accounts receivable consist primarily of receivables from the sale of our ERV products and Aqualyte membrane. We regularly review accounts receivables for any bad debts based on an analysis of our collection experience, customer credit worthiness and current economic trends. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Based on management’s review of accounts receivable, an allowance for doubtful accounts of $0 and $0 has been recorded on December 31, ~~2021~~2022 and ~~2020~~2021, respectively.

Impairment of Long-Lived and Intangible Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. We periodically evaluate whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, we use market quotes, if available, or an estimate of the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether the asset values are recoverable. We did not recognize impairment on its long-lived assets during the years ended December 31, ~~2021~~2022 or ~~2020~~2021.

Identified intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Our existing intangible assets consist solely of patents. Patents are amortized over their estimated useful or economic lives of 17 years. Patent amortization expense was $1819,~~885~~989and ~~and~~ $1718,~~637~~885 for the years ended December 31, ~~2021~~2022 and ~~2020~~2021, respectively. Based on current capitalized costs, total patent amortization expense is estimated to be approximately $1920,~~400~~000 per year for the next five years and thereafter.

Stock-Based Compensation

We recognize all share-based payments to employees, including grants of employee stock options, as compensation expense in the financial statements based on their fair values. That expense will be recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period) or immediately if the share-based payments vest immediately.

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There were no stock options issued during the year ended December 31, ~~2021~~2022 and ~~2020~~2021.

Derivative Financial Instruments

We do not use derivative instruments to hedge exposure to cash flow, market, or foreign currency risk. Terms of convertible promissory note instruments are reviewed to determine whether they contain embedded derivative instruments that are required under ASC 815 “ Derivative and Hedging” (ASC 815) to be accounted for separately from the host contract and recorded on the balance sheet at fair value. The fair value of derivative liabilities, if any, is required to be revalued at each reporting date, with corresponding changes in fair value recorded in current period operating results.

Freestanding warrants issued by us in connection with the issuance or sale of debt and equity instruments are considered to be derivative instruments and are evaluated and accounted for in accordance with the provisions of ASC 815. Pursuant to ASC 815, an evaluation of specifically identified conditions is made to determine whether fair value of warrants issued is required to be classified as equity or as a derivative liability.

Income Taxes

Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes resulting from temporary differences. Such temporary differences result from differences in the carrying value of assets and liabilities for tax and financial reporting purposes. The deferred tax assets and liabilities represent the future tax consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

We identify and evaluate uncertain tax positions, if any, and recognize the impact of uncertain tax positions for which there is a less than more-likely-than-not probability of the position being upheld when reviewed by the relevant taxing authority. Such positions are deemed to be unrecognized tax benefits and a corresponding liability is established on the balance sheet. We have not recognized a liability for uncertain tax positions. If there were an unrecognized tax benefit, we would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company’s ~~2017~~2018-~~2020~~2021 tax years remain open and subject to examination by the Internal Revenue Service.

RECENT ACCOUNTING PRONOUNCEMENTS

For a description of recent accounting standards, including the expected dates of adoption and estimated effects, if any, on our financial statements, see Part II, Item 8 Note 3 Significant Accounting Policies: Recent Accounting Pronouncements.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our financial statements and the related notes begin on Page F-1 which are included in this Annual Report on Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the Exchange Act)). Management has assessed the effectiveness of our internal control over financial reporting as of December 31, ~~2021~~2022. Management’s assessment was based on criteria set forth in Internal Control Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

Limitations on the Effectiveness of Controls

Our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our disclosure control system are met. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected. Based on their evaluation as of the end of the period covered by this report, management concluded that our disclosure controls and procedures were not effective to provide reasonable assurance that the objectives of our disclosure control system were met as a result of limited resources, and a lack of segregation of duties.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Internal control over financial reporting is a process, including policies and procedures, designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles. Based on the results of this assessment, our management concluded that the Company’s existing internal controls over financial reporting were not effective as defined in Rule 12a-15(f) under the Exchange act as of December 31, ~~2021~~2022 as a result of limited resources, and a lack of segregation of duties.

Auditor’s Report on Internal Control over Financial Reporting

This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this Annual Report.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with our evaluation that occurred during the quarter ended December 31, ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION.

None.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following table sets forth the names and ages of all our directors and executive officers as of the date of this Annual Report. Also, provided herein is a brief description of the business experience of each director and executive officer during the past five years and an indication of directorships held by each director in other companies subject to the reporting requirements under the Federal securities laws. All the directors will serve until the next annual meeting of shareholders and until their successors are elected and qualified, or until their earlier death, retirement, resignation, or removal. There are no arrangements or understandings between any director or executive officer and any other person pursuant to which the director or executive officer was selected.

Name	Age		Position	~~Position~~
Tim N. Tangredi	67	66	President, Chief Executive Officer and Chairman of the Board of Directors	~~President, Chief Executive Officer and Chairman of the Board of Directors~~
Brian C. Johnson	50	49	Chief Technology Officer	~~Chief Technology Officer~~
Robert W. Schwartz		77		Director
Rasool Nasr Isfahani	37		Chief Innovation Officer
Ira William McCollum, Jr.		77		Director
Kailey M. Humpel	26		Office Manager, Board Secretary
Eliza Wang		44		Director
Robert W. Schwartz	78		Director
Ira William McCollum, Jr.	78		Director
Eliza Wang	45		Director

Directors and Executive Officers

The following are our key executive officers:

Tim Tangredi has been our Chief Executive Officer since 1996. Mr. Tangredi joined us part time in 1996 and was appointed a member of our board of directors in 1998. In 1999 and 2000, respectively, Mr. Tangredi initiated and executed the strategic purchases of assets of other companies, created serval joint ventures, and sold company assets in his tenure with the Company. From 1979 to 1990, Mr. Tangredi worked for AT&T working in technical marketing, network operations, and project management. From 1991 – 1998 Tangredi started/purchased/sold two companies. Mr. Tangredi earned his BS from Siena College and MBA from Rensselaer Polytechnic Institute. He is a founder and member of the board of directors of Aegis Biosciences, LLC (“Aegis”). Aegis, created in 1995, is a licensee of our nano-structured intellectual property and materials in the biomedical and healthcare fields.

Brian Johnson is our Chief Technology Officer and joined us in 1999. Mr. Johnson was the lead engineer responsible for developing our successful ConsERV product line and has served as Principal Investigator on multiple development efforts involving NanoClear and NanoAir. He holds patents in both the U.S. and China and brings 20 years of advanced product development experience and knowledge of every aspect of Dais’ nanotechnology. Mr. Johnson earned degrees in Mechanical Engineering (Thermal Science emphasis) from the University of Florida (BSME 1995, MSME 1997).

Rasool Isfahani, PhD. is our Chief Innovation Officer. Dr. Isfahani joined Dais in 2015 after earning his doctorate degree from University of Florida in Mechanical Engineering. Dr. Isfahani is responsible for bringing new revenue generating ideas from ‘concept to product”, and the continued innovation of the Aqualyte material platform. He has more than 12 years’ experience in membrane-based technologies resulting with 20+ reviewed journal/conference articles and patents.

~~John~~Kailey ~~Walsh~~Humpel ishas ~~the~~been ~~Company’s~~added ~~General Manager. Mr. Walsh started~~ as ~~General~~a ~~Manager~~secretary ~~in June of 2021. John is responsible~~ for the ~~operational~~Company ~~effectiveness~~by of the ~~Dais~~Board ~~team and business. John’s prior positions included counseling CEO’s and entrepreneurs in the development~~ of ~~internal~~Directors ~~systems~~during ~~and~~its ~~business~~December ~~growth strategies creating high powered teams bringing new~~17, ~~innovative,~~2021 ~~and disruptive technologies to market~~meeting. ~~John joined Dais after a long and successful economic development career in the Tampa Bay region of Florida.~~

The following are our Board of Directors:

Eliza Xuan Wang joined our board of directors on April 1, 2015. Ms. Wang has been the Managing Attorney of The Meridian Law, a Professional Law Corporation, since 2009. Her legal practice includes venture capital, general civil and commercial litigation, and immigration matters. Ms. Wang is licensed to practice law in the states of California and New York. She has a Bachelor of Law degree from China University of Political Science and Law (Beijing, China) and L.L.M. degree from Hastings College of The Law, University of California. Ms. Wang’s expertise in commercial and legal matters in both the United States and China will be an asset to us as we conduct further business in China.

Robert W. Schwartz was appointed to our board of directors in 2001. Mr. Schwartz founded the Schwartz-Heslin Group (“SHG”) in 1985 and serves as its chairman. Mr. Schwartz specializes in corporate planning, finance, and development. Prior to starting SHG, he was a founder, President and Chief Executive Officer of a venture-funded high-tech telecommunications company (Windsource, Inc.). In addition, he was the President and Chief Operating Officer of an AMEX listed company (Coradian Corporation). He was also the Chief Financial Officer of a major manufacturer of outdoor power equipment (Troy Built Products). His earlier experience was with KPMG and IBM as a management consultant. Mr. Schwartz received a Bachelor of Science from Cornell University and attended graduate courses at the University of New York at Albany. He currently serves on the boards of five corporations, including ours. Mr. Schwartz’s experience in financial planning and reporting provides assistance to us in these areas and he is considered to be a financial expert to us.

Ira William McCollum, Jr. joined our board of directors on March 25, 2013. In 2011, Mr. McCollum joined as a partner in Denton’s Public Policy and Regulation practice in 2012. He joined the firm following his term as the 36th attorney general of the state of Florida. Mr. McCollum served as attorney general from 2007 to 2011. Prior to becoming the Florida Attorney General in 2007, Mr. McCollum was a partner with Baker & Hostetler’s Government Policy practice from 2001 to 2007. Between 1981 and 2001, Mr. McCollum was a Member of the U.S. House of Representatives representing Florida’s 8th District where he served on the Judiciary, Banking and Financial Services and Intelligence Committees. He also held a number of leadership positions, including Chairman of the Judiciary Subcommittee on Crime, Vice Chairman for six years at the Banking and Financial Services Committee, ranking Member of the subcommittee overseeing the Federal Reserve, and Vice Chairman of the House of Republican Conference for three terms (one of eight House GOP leadership positions). Mr. McCollum’s expertise in federal and state government and regulations is an asset to the board.

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The Board members serve for the latter of a period of one year or until the next annual meeting of Company’s shareholders.

Significant Employees

~~Kailey~~John ~~Humpel~~Walsh ~~has~~is ~~been~~the ~~added~~Company’s General Manager. Mr. Walsh started as aGeneral ~~secretary~~Manager in June of 2021. John is responsible for the ~~Company~~operational byeffectiveness of the ~~Board~~Dais team and business. John’s prior positions included counseling CEO’s and entrepreneurs in the development of ~~Directors~~internal ~~during~~systems ~~its~~and ~~December~~business 17growth strategies creating high powered teams bringing new, ~~2021~~innovative, ~~meeting~~and disruptive technologies to market. John joined Dais after a long and successful economic development career in the Tampa Bay region of Florida.

Proceedings

During the last ten years, none of our officers, directors, promoters, or control persons have been involved in any legal proceedings as described in Item 401(f) of Regulation S-K.

Director Independence

We have determined that our board of directors currently has two members who qualify as “independent” as the term is used in Item 407 of Regulation S-K as promulgated by the SEC and as that term is defined under NASDAQ Rule 4200(a)(15). As of the date of this report, Robert W. Schwartz and Eliza Wang are our independent directors. Based on information solicited from Mr. Schwartz, and Ms. Wang, none of them has a material relationship with us and is independent within the meaning of such rules.

Board Meetings and Committees; Annual Meeting Attendance

Although we intend to establish an audit committee and compensation committee, our board of directors has not adopted any committees to the board of directors. Our board of directors held six formal meetings during the most recently completed fiscal year. Other proceedings of the board of directors were conducted by resolutions consented to in writing by all the directors and filed with the minutes of the proceedings of the directors. Such resolutions consented to in writing by the directors entitled to vote on that resolution at a meeting of the directors are, according to the corporate laws of the State of New York and our bylaws, as valid and effective as if they had been passed at a meeting of the directors duly called and held.

At ~~each~~ annual ~~meeting~~meetings of shareholders, ~~directors~~Directors ~~will~~are be elected by the holders of common stock to succeed those directors whose terms are expiring. Directors will be elected annually and will serve until successors are duly elected and qualified or until a director’s earlier death, resignation, or removal. Our bylaws provide that the authorized number of directors may be changed by action of most of the board of directors or by a vote of the shareholders of our Company. Vacancies in our board of directors may be filled by a majority vote of the board of directors with such a newly appointed director to serve until the next annual meeting of shareholders, unless sooner removed or replaced. We currently do not have a policy regarding the attendance of board members at the annual meeting of shareholders.

Code of Ethics

We have adopted a code of ethics that applies to our officers, directors, and employees in accordance with applicable federal securities laws. We have filed a copy of our code of ethics as an exhibit to our Annual Report on Form 10-K as filed on March 31, 2009. This document may be reviewed by accessing our public filings at the SEC’s web site at www.sec.gov. In addition, a copy of the code of ethics will be provided without charge upon request to us. We intend to disclose any amendments to or waivers of certain provisions of our code of ethics in a Current Report on Form 8-K.

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Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who own more than 10% of any publicly traded class of our equity securities, to file reports of ownership and changes in ownership of our equity securities with the SEC. Officers, directors, and greater than ten percent stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms that they file. Based solely on the reports received and on the representations of the reporting persons, we believe that these persons have complied with all applicable filing requirements of Section 16(a) of the Exchange Act during fiscal year 2018.

ITEM 11. EXECUTIVE COMPENSATION

Executive Officer Compensation

The Summary Compensation Table below sets forth the total compensation paid or earned for the fiscal years ended December 31, ~~2021~~2022 and ~~2020~~2021 for: (i) each individual serving as our chief executive officer (“ CEO “”) or acting in a similar capacity during any part of fiscal ~~2021~~2022; and (ii) the other two most highly paid executive officers (collectively, the “Named Executive Officers”) who were serving as executive officers at the end of fiscal ~~2021~~2022.

	Year	Salary ($)		Bonus ($)		Option Awards	All Other Compensation		Total ($)
Name and principal position (a)	(b)	(c)		(d)		($)(1)(f)	($)(i)		(j)
Tim N. Tangredi (2)
Chief Executive Officer, President,	~~2021~~2022	$	~~149~~166,~~359~~367					36,674	$	~~186~~203,~~033~~041
and Chairman of the Board of Directors	~~2020~~2021	$	~~135~~149,~~500~~359	$	-	$	$	36,674	$	~~172~~186,~~174~~033
Brian Johnson	2022	$	140,644						$	140,644
Chief Technology Officer	2021	$	135,000	$	-	$	$	-	$	135,000
	2020	$	135,003	$	-	$	$	-	$	135,003
Rasool Nasr Isfahani	2022	$	141,000						$	141,000
Chief Innovation Officer	2021	$	115,360						$	115,360

_____________

(1)

The amounts included in these columns are the aggregate dollar amounts of the grant date fair value of option awards granted in the indicated year as adjusted to disregard the effects of any estimate of forfeitures related to service-based vesting, in accordance with Accounting Standards Codification 718, Compensation-Stock Compensation, for the fiscal years ended December 31, ~~2021~~2022 and ~~2020~~2021. See Part II, Item 8, Financial Statements and Supplementary Data - Note 3 for information on the valuation assumptions used in calculating these dollar amounts included in this Annual Report for the fiscal years ended December 31, ~~2021~~2022 and ~~2020~~2021. These amounts reflect our accounting expense for these awards and do not correspond to the actual value that may be recognized by the individuals upon option exercise.

(2)

Mr. Tangredi’s contract in 2011 stated a salary of $200,000 per year, effective September 14, 2011, and he may receive a bonus in an amount not to exceed 100% of his salary, which bonus shall be measured by meeting certain performance goals as determined in the sole discretion of our board of directors. In ~~2021~~2022 and ~~2020~~2021, Mr. Tangredi was paid $~~149~~166,~~359~~367 and $~~135~~149,~~500~~359, respectively and had accrued unpaid salary of $6332,~~333~~633 and $6451,~~500~~067 for the years ended December 31, ~~2021~~2022 and ~~2020~~2021, respectively. All other compensation includes accruals for unused vacation, health insurance and auto allowance. As of December 31, ~~2021~~2022, we owed Mr. Tangredi accrued compensation in the aggregate amount of $2,~~071~~140,~~380~~687.

2523 Table of Contents

Narrative Disclosure to Summary Compensation Table

Tim N. Tangredi. The Company entered into an employment agreement with Mr. Tangredi, our President, Chief Executive Officer, and Director, which was amended and restated on September 14, 2011 and subsequently on February 27, 2015 (the “Tangredi Employment Agreement”). The Tangredi Employment Agreement provides for an initial term of three years commencing on September 14, 2011 with the term extending on the second anniversary thereof for an additional two-year period and on each subsequent anniversary of the commencement date for an additional year period. Mr. Tangredi’s initial base salary is $200,000. Mr. Tangredi’s base salary shall be increased annually, if applicable, by a sum equal to his current base salary multiplied by one third of the percentage increase in our yearly revenue compared to our prior fiscal year revenue; provided however any annual increase in Mr. Tangredi’s base salary shall not exceed a maximum of 50% for any given year. Any further increase in Mr. Tangredi’s base salary shall be at the sole discretion of our board of directors or compensation committee (if applicable). In addition, Mr. Tangredi will be eligible for bonus compensation at the discretion of the Board, as well as option-based compensation under our equity compensation plans. Under the Tangredi Employment Agreement, Mr. Tangredi is eligible to receive a grant to purchase up to 520,000 shares of common stock from the Company upon the successful completion of a secondary public offering. For a full description of the Tangredi Employment Agreement please refer to Item 13. Certain Relationships and Related Party Transactions —Employment Agreements below.

Outstanding Equity Awards at Fiscal Year End

The following table sets forth certain information regarding outstanding stock options awards for each of the Named Executive Officers as of December 31, ~~2021~~2022.

Note: inIn January of 2021 any previous Company issued ~~Option~~Options or Warrant to employees, or Board members had been voluntarily returned to the Company. On January 27, 2022, the Board approved the issuance of Series C, D, E, and F convertible preferred warrants, and once approved, Board further authorized the distribution of Series F Convertible Preferred Warrants to Board members, the Dais Team, and those contractually bound to receive these warrants on January 27, 2022. The four new Series were approved by NYS Division of Corporations on March 23, 2022. Series C, and E have been issued to investors as previously reported. Series D, and F are pending issuance. See Subsequent Events for an update.

Name Number of securities underlying unexercised options (#) Exercisable Optionexerciseprice($) Optionexpiration date Tim Tangredi Brian Johnson Kailey M. Humpel

2624 Table of Contents

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

Beneficial Ownership Information

The following table sets forth information as of the date of ~~April~~May 626, ~~2022~~2023, as to each person or group who is known to us to be the beneficial owner of more than 5% of our outstanding voting securities and as to the security and percentage ownership of each of our executive officers and directors and of all of our officers and directors as a group.

Name and Address of Beneficial Owner	Common Stock Owned Beneficially		Percentof Class			Series BPreferred Stock		Percentof Class
Named Executive Officers and Directors
Tim Tangredi, Officer, Chairman of the Board(1) #		596	*%		%		10		100	%
Brian Johnson, Chief Technology Officer #		1	*				-		-
Robert W. Schwartz, Director #		0	*				-		-
Eliza Wang, Director		0	*				-		-
Ira William McCollum Jr., Director #		0	*				-		-
All directors and officers as a group (5 persons)		597	*%				10		100	%
Kailey M. Humpel, Office Manager, Board Secretary #		0	*				-		-
Rasool Nasr Isfahani, Chief Innovation Officer #		0	*				-		-
All directors and officers as a group (7 persons)		597	*		%		10		100	%
5% or greater shareholders
LG Capital Funding LLC(3)		1,333,741		14.2
JEB Partners, L.P. (2)		2,466,667		11
GS Capital Partners LLC(4)		1,000,550		10.6
GS Capital Partners LLC (3)		2,354,811		11
Cerberus Finance Group, LTD.(5)		700,000		7.4
LG Capital Funding LLC (4)		1,333,741		7
J&R Medallion Funding Corp(6)		696,667		7.4
AES Capital Management LLC (5)		1,222,500		6
All 5% or greater shareholders as a group		3,730,958		39.6	%		-		-
Jefferson Street Capital LLC (6)		1100000		5
Total		3,731,555		39.6	%		10		100	%
Robele Corp (7)		1000000		5
All 5% or greater shareholders as a group		9,477,719		44	%		-		-
Total		9,478,316		44	%		10		100	%

~~___________~~____________

*	Less than 1%
#	Address is Company’s principal office at 11552 Prosperous Driver, Odessa, Florida 33556
(1)	Includes 516 shares beneficially owned by Mr. Tangredi’s wife, Patricia Tangredi.
(2)	The natural person with voting power on behalf of LGJEB ~~Capital~~Partners, ~~Funding~~L.P. ~~LLC~~ is ~~Mr.~~Jeb ~~Joseph Lerman~~Besser.
(3)	The natural person with voting power on behalf of GS Capital Partners LLC is Mr. Gabe Sayegh.
(4)	The natural person with voting power on behalf of ~~Cerberus~~LG ~~Finance~~Capital ~~Group,~~Funding ~~LTD.~~LLC Isis ~~Eliot~~Mr. ~~Dayan~~Joseph Lerman.
(5)	The natural person with voting power on behalf of ~~J&R~~AES ~~Medallion~~Capital ~~Funding~~Management ~~Corp.,~~LLC is ~~Jon Lieberman~~Mr. Eli Safdieh
(6)	The natural person with voting power on behalf of Jefferson Street Capital LLC is Mr. Brian Goldberg
(7)	The natural person with voting power on behalf of Robele Corp is Mr. Joseph Harazmus

Applicable percentage ownership in the preceding table is based on approximately 920,~~415~~149,~~425~~365 shares of common stock outstanding as of ~~April~~May 626, ~~2022~~2023 plus, for everyone, any securities that individual has the right to acquire within 60 days of ~~April~~May 626, ~~2022~~2023. Beneficial ownership is determined under the rules of the SEC and generally includes voting or investment power over securities. The number of shares shown as beneficially owned in the tables below are calculated pursuant to Rule 13d-3(d)(1) of the Exchange Act. Under Rule 13d-3(d)(1), shares not outstanding that are subject to options, warrants, rights or conversion privileges exercisable within 60 days are deemed outstanding for the purpose of calculating the number and percentage owned by such person, but not deemed outstanding for the purpose of calculating the percentage owned by each other person listed.

Securities Authorized for Issuance under Equity Compensation Plans

Plan Category	(a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights		(b) Weighted Average Exercise Price of Outstanding Options, Warrants and Rights

Equity compensation plans approved by security holders		-	$	-

2725 Table of Contents

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS; AND DIRECTOR INDEPENDENCE.

Tim Tangredi, our Chief Executive Officer and Chairman, is a founder and a member of the board of directors of Aegis Biosciences, LLC (“Aegis”). Mr. Tangredi currently owns 52% of Aegis’ outstanding equity and spends approximately one week per year on Aegis business for which he is compensated by Aegis. Aegis has two exclusive, world-wide licenses from us under which it has the right to use and sell products containing our polymer technologies in biomedical and health care applications. Pursuant to the second license, Aegis is required to make royalty payments of 1.5% of the net sales price it receives with respect to any personal hygiene product, surgical drape or clothing products (the latter when employed in medical and animal related fields) and license revenue it receives should Aegis grant a sublicense to a third party. Aegis sold no such products, nor has it received any licensing fees requiring a royalty payment be made to us. All obligations for such payments ended on June 2, 2015.

The Company rents a building that is owned by two stockholders of the Company, one of which is the Chief Executive Officer. Rent expense for this building is $4,066 per month, including sales tax. The Company recognized rent expense (including property tax charges) related to this lease of $58,~~015~~333 and $5758,~~946~~015 for the years ended December 31, ~~2021~~2022 and ~~2020~~2021, respectively. The lease term will terminate upon 30 days’ written notice from landlord or 90 days written termination from us.

The Company has accrued compensation due to the Chief Executive Officer as of December 31, ~~2021~~2022 and ~~2020~~2021 of $2,~~071~~140,~~380~~687 and $12,~~983~~071,~~639~~380, respectively, included in accrued compensation and related benefits in the accompanying balance sheets.

On June 24, 2016, the Company entered into a Loan and Security Agreement (“Security Agreement”) with ~~the~~Patricia ~~entity~~Tangredi ~~known as PKT Strategic Assets, LLC~~ (the “Holder”) pursuant to which the Company issued a Senior Secured Promissory Note for $150,000 (the “Note”). The interest rate is 12% per annum compounded daily with a minimum interest payment of $2,000. The Note grants the Holder a secured interest in the assets of the Company. ~~The~~Ms. ~~Holder’s~~Tangredi ~~corporation~~ is ~~majority~~the ~~controlled~~wife byof MsTim N. Tangredi, ~~related to Tim Tangredi,~~ the Company’s CEO and stockholder, and therefore is a related party of the Company. Pursuant to the Note, the Company is to pay the Holder the principal amount of $150,000 plus all interest due thereon in accordance with terms and conditions of the Security Agreement on the earlier of: (i) the date upon which the Company secures funds, regardless of source, equal to or exceeding, in the aggregate, $1,000,000 or (ii) October 31, 2016 (the “Maturity Date”).

During 2016 to the period ended December 31, ~~2021~~2022, the Holder extended the Note pursuant to various amendments. Pursuant to the amendments, the principal amount due was increased to $2,~~115~~400,~~600~~499 and interest owed of $23,~~152~~029,~~373~~162 with an extension of the maturity date in negations between the Company and the Secured Noteholder.

2826 Table of Contents

Employment Agreements

We entered into the following employment agreements with our officers and significant employees:

Tim Tangredi - President, Chief Executive Officer, and Director, which was amended and restated on September 14, 2011, and subsequently on February 27, 2015. The documents and any amendments were filed in Form 10-K on March 31, 2016 and in Attachment 10.18.

Currently, we have non-interest-bearing accrued compensation due to Mr. Tangredi for deferred salaries earned and unpaid as described above. Pursuant to the February 27, 2015 amendment to the Tangredi Employment Agreement if at any time during a calendar year, the unpaid compensation is greater than $500,000, Mr. Tangredi must convert $100,000 of unpaid compensation into shares of common stock of the Company during such calendar year. The conversion rate shall be equal to 75% of the average closing price for the common stock for the 30 trading days prior to the date of conversion. We shall also pay to Mr. Tangredi a cash payment equal to 20% of the compensation income incurred because of the conversion. Further, at any time any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under such Act) of greater of 40% of the then-outstanding voting power of the voting equity interests or a person or group initiate a tender offer for our common stock, Mr. Tangredi may convert unpaid compensation to Class A Convertible Preferred Stock at $1.50 per share. The Board of Directors did not require Mr. Tangredi to convert $100,000 of unpaid compensation into common stock during 2015-~~2021~~2022.

Brian Johnson – Chief Technology Officer. The documents and any amendments were filed in the 2019 10-K Fiscal Year ending December 31, 2018 and in Attachment 10.15.

Rasool Nasr Isfahani – Chief Innovation Officer. On March 15, 2021 (the “Effective Date”), the Company entered into an employment agreement with Mr. Rasool Nasr Isfahani, pursuant to which Isfahani was appointed as Chief Innovation Officer of the Company. Isfahani’s initial base salary pursuant to the Employment Agreement was $135,000. Isfahani may receive a performance bonus at the discretion of the Board. Isfahani is entitled to participate in any benefits programs offered by the Company and shall be reimbursed for reasonably incurred expenses incurred in the performance of the functions and duties under the Employment Agreement. The initial term of the Employment Agreement was from the Effective Date through March 15, 2022 (the “Initial Term”). Upon expiration of the Initial Term, the Employment Agreement will be automatically extended for additional one-year terms unless Isfahani or the Company shall, upon 30 days written notice to the other, elect not to extend this Employment Agreement for an additional one-year term. Isfahani’s base salary as of December 31, 2022 is $147,000

John Walsh – General Manager. On June 15, 2021 (the “Effective Date”), the Company entered into an employment agreement with Mr. Walsh, pursuant to which Walsh was appointed as General Manager of the Company. Walsh’s initial base salary pursuant to the Employment Agreement was $~~145~~140,000. Walsh may receive a performance bonus at the discretion of the Board. Walsh is entitled to participate in any benefits programs offered by the Company and shall be reimbursed for reasonably incurred expenses incurred in the performance of the functions and duties under the Employment Agreement. The initial term of the Employment Agreement was from the Effective Date through, June 15, 2022, (the “Initial Term”). Upon expiration of the Initial Term, the Employment Agreement will be automatically extended for additional one-year terms unless Walsh or the Company shall, upon 30 days written notice to the other, elect not to extend this Employment Agreement for an additional one-year term.

29 Table of Contents

On August 17, 2015 (the “Effective Date”), the Company entered into an employment agreement (the “Johnson Employment Agreement”) with Mr. Brian Johnson (“Johnson”), pursuant to which Johnson was appointed as Chief Technology Officer of the Company. Johnson’s initial base salary pursuant to the Johnson Employment Agreement was $135,000. Johnson may receive a performance bonus at the discretion of the Board. Johnson is entitled to participate in any benefits programs offered by the Company and shall be reimbursed for reasonably incurred expenses incurred in the performance of the functions and duties under the Johnson Employment Agreement. The initial term of the Johnson Employment Agreement was from the Effective Date through February 29, 2016 (the “Initial Term”). Upon expiration of the Initial Term, the Johnson Employment Agreement will be automatically extended for additional one-year terms unless Johnson or the Company shall, upon 30 days written notice to the other, elect not to extend this Agreement for an additional one-year term.

Table of Contents

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Audit Fees

The aggregate audit fees billed for the years ended December 31, ~~2021~~2022 and ~~2020~~2021 was $5436,~~750~~000 and $7054,~~000~~750, respectively. Audit services include the audits of the financial statements included in our annual reports on Form 10-K and reviews of interim financial statements included in our quarterly reports on Form 10-Q.

Audit-Related Fees

None.

Tax Fees

None

All Other Fees

None

Audit Committee Pre-Approval Policies and Procedures

The Board has completed a competitive process to review the appointment of the Company’'s independent registered public accounting firm for the year ending December 31, 2021. As a result of this process, on September 27, 2021, the Board elected to engage Hudgens CPA, PLLC as the Company’'s independent registered public accounting firm for the fiscal year ending December 31, 2021 and dismissed RBSM LLP from that role.

We do not have an audit committee and, as a result, our Board of Directors evaluates the scope and cost of the engagement before the auditor renders audit or non-audit services. The Board of Directors has considered the services provided by Hudgens CPA, PLLC as disclosed above in the captions audit fees and all other fees and has concluded that such services are compatible with the independence of Hudgens CPA, PLLC as our principal accountant.

3028 Table of Contents

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

Exhibit		Incorporated by Reference			Filed orFurnished
Number	Exhibit Description	Form	Exhibit	Filing Date	Herewith
3.1	Certificate of Incorporation of The Dais Corporation	S-1	3.1	08/11/2008
3.2	Certificate of Amendment of the Certificate of Incorporation of The Dais Corporation	S-1	3.2	08/11/2008
3.3	Certificate of Amendment of the Certificate of Incorporation of The Dais Corporation	S-1	3.3	08/11/2008
3.4	Certificate of Amendment of the Certificate of Incorporation of The Dais Corporation	S-1	3.4	08/11/2008
3.5	Certificate of Amendment of the Certificate of Incorporation of Dais Analytic Corporation	S-1	3.5	08/11/2008
3.6	Certificate of Amendment of the Certificate of Incorporation of Dais Analytic Corporation	S-1	3.6	08/11/2008
3.7	Certificate of Amendment of the Certificate of Incorporation of Dais Analytic Corporation	S-1	3.7	08/11/2008
3.8	Certificate of Amendment of the Certificate of Incorporation of Dais Analytic Corporation	S-1	3.8	08/11/2008
3.9	Certificate of Amendment of the Certificate of Incorporation of Dais Analytic Corporation	8-K	3.1	03/05/2015
3.10	Certificate of Amendment of the Certificate of Incorporation of Dais Analytic Corporation	8-K	3.1	02/28/2019
3.11	Certificate of Designation
3.12	Bylaws of The Dais Corporation	S-1	3.9	08/11/2008
10.1	Dais Analytic Corporation 2000 Incentive Compensation Plan	S-1	10.1	08/11/2008
10.2	Form of Employee Non-Disclosure and Non-Compete Agreement	S-1	10.2	08/11/2008
10.3	Form of Secured Patent Agreement (Financing)	S-1	10.11	08/11/2008
10.4	Dais Analytic Corporation 2009 Long Term Incentive Plan	DEF 14A	A	10/09/2009
10.5	Executive Compensation Agreement dated April 11, 2011, by and between Dais Analytic Corporation and Timothy N. Tangredi	S-1/A	10.17	04/13/2011
10.6	Executive Compensation Agreement dated September 14, 2011, by and between Dais Analytic Corporation and Timothy N. Tangredi	8-K	10.1	09/15/2011
10.7	Executive Compensation Agreement dated January 11, 2012, by and between Dais Analytic Corporation and Timothy N. Tangredi	S-1/A	10.28	01/13/2012
10.8	Executive Compensation Agreement dated February 27, 2015, by and between Dais Analytic Corporation and Timothy N. Tangredi	8-K	10.1	03/05/2015
10.10	Securities Purchase Agreement dated October 21, 2014, by and between Dais Analytic Corporation and Soex (Hong Kong) Industry & Investment Co., Ltd.	8-K	10.1	01/27/2014
10.11	Distribution Agreement dated April 24, 2014, by and between Dais Analytic Corporation and Soex (Hong Kong) Industry & Investment Co., Ltd.	8-K	10.1	04/28/2014
10.12	Loan and Security Agreement dated June 24, 2016, by and between Dais Analytic Corporation and Patricia K. Tangredi	8-K	10.1	06/28/2016
10.13	Amendment to Senior Secured Promissory Note dated September 7, 2016 by and between Dais Analytic Corporation and Patricia K. Tangredi	8-K	10.1	10/28/2016
10.14	Second Amendment to Senior Secured Promissory Note dated October 30, 2016 by and between Dais Analytic Corporation and Patricia K. Tangredi	10-Q	10.1	11/14/2016
10.15	Employment Agreement dated August 17, 2015, by and between Dais Analytic Corporation and Brian C. Johnson.
14.1	Code of Ethics of Dais Analytic Corporation	10-K	14.1	3/31/2009
31.1	Certification by the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a))				☒
31.2	Certification by the Principal Financial Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a))				☒
32.1	Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				☒
32.2	Certification by the Principal Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				☒
101.INS	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).				☒
101.SCH	Inline XBRL Taxonomy Extension Schema Document				☒
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document				☒
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document				☒
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document				☒
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document				☒
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).				☒

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	DAIS CORPORATION
Date: April 15, 2022	By:	/s/ Tim Tangredi
Date: May 30, 2023	By:	/s/ Tim Tangredi
		Tim Tangredi
		Chairman of the BoardChief Executive Officer and Director(Principal Executive Officer)(Principal Financial and Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacity and on the dates indicated.

Signatures	Title	Date
/s/ Tim Tangredi	Chairman of the Board,	~~April~~May 1530, ~~2022~~2023
Tim N. Tangredi	Chief Executive Officer and Director
/s/ Robert W. Schwartz	Director	~~April~~May 1530, ~~2022~~2023
Robert W. Schwartz
/s/ Ira William McCollum, Jr.	Director	~~April~~May 1530, ~~2022~~2023
Ira William McCollum, Jr.
/s/ Eliza Xuan Wang	Director	~~April~~May 1530, ~~2022~~2023
Eliza Xuan Wang

3230 Table of Contents

Dais Corporation

(Formerly Dais Analytic Corporation)

Financial Statements

Years Ended December 31, ~~2021~~2022 and ~~2020~~2021

Contents

Report of Independent Registered Public Accounting Firm. (PCAOB ID# 6849)		F-2
Report of Independent Registered Public Accounting Firm. (ID #6849)		F-2
Financial Statements:
Balance Sheets		F-43
Statements of Operations		F-54
Statements of Stockholders’ Deficit		F-65
Statements of Cash Flows		F-76
Notes to Financial Statements		F-87

F-1

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of Dais Corporation

Opinion on the Financial Statements

We have audited the accompanying balance ~~sheet~~sheets of Dais Corporation (the Company) as of December 31, 2022 and 2021, and the related ~~statement~~statements of operations, stockholders’ deficit, and cash flows for each of the years in the two year period ended December 31, ~~2021~~2022, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the two year period ended December 31, ~~2021~~2022, in conformity with accounting principles generally accepted in the United States of America. ~~The financial statements of Dais Corporation as of December 31, 2020 were audited by other auditors, whose reported dated September 17, 2021 expressed an unqualified opinion on those statements.~~

Going Concern ~~Matter~~

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. We have determined that there were no critical audit matters.

/s/ Hudgens CPA, PLLC www.hudgenscpas.com We have served as the Company’s auditor since 2021. Houston, Texas ~~April~~May 1530, ~~2022~~2023

F-2

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Dais Corporation

(formerly Dais Analytic Corporation)

Opinion on the Financial Statements

We have audited the accompanying balance sheet of Dais Corporation (formerly Dais Analytic Corporation) (the “Company”), as of December 31, 2020, and the related statements of operations, stockholders’ deficit and cash flows for the period ended December 31, 2020 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

The Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the accompanying financial statements, the Company has suffered recurring losses from operations, generated negative cash flows from operating activities, has an accumulated deficit that raise substantial doubt about Company’s ability to continue as a going concern. Management’s evaluation of the events and conditions and management’s plans in regarding these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The company is not required to have, nor were we engaged to perform, an audit of the Company’s internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters.

/s/ RBSM LLP

We have served as the Company’s auditor since 2017

New York, New York

September 17, 2021

F-3 Table of Contents

DAIS CORPORATION

BALANCE SHEETS

	December 31,2021			December 31,2020
	December 31,2022			December 31,2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	773,423		$	36,516
Cash	$	27,412		$	773,423
Accounts receivable, net		51258,~~917~~708			~~502~~51,917
Other receivables		-			6,169
Inventory		294,472			72,067
Inventory		72,067			65,656
Prepaid expenses		25,871			32,637
Prepaid expenses		32,637			30,670
Total Current Assets		606,463			930,044
Total Current Assets		930,044			139,513
Property and equipment, net		32,400			13,353
Property and equipment, net		13,353			4,501
OTHER ASSETS:
Deposits		4,780			4,780
Patents, net		~~152~~150,~~924~~048			~~153~~152,~~592~~924
Total Other Assets		~~157~~154,~~704~~828			~~158~~157,~~372~~704
TOTAL ASSETS	$	1793,~~101,101~~691		$	~~302~~1,~~386~~101,101
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES:
Accounts payable, including related party payables of $282,729 and $305,081 on December 31, 2021 and 2020, respectively	$	922,305		$	984,485
Accounts payable, including related party payables of $298,903 and $282,729 at December 31, 2022 and 2021, respectively	$	1,401,934		$	922,305
Accrued expenses, other, including interest due to related party of $2,153,723 and $679,239 on December 31, 2021 and 2020, respectively		2,945,918			1,515,740
Accrued expenses, other, including interest due to related party of $3,031,112 and $2,153,723 at December 31, 2022 and 2021, respectively		4,018,588			2,945,918
Accrued compensation and related benefits		2,~~208~~281,~~692~~414			2,~~120~~208,~~951~~692
Customer deposits		35305,~~306~~957			4335,~~109~~306
Advance payment received for convertible note		15,000			-15,000
Advance payment received for purchase of common stock		30,000			-30,000
Notes payable to related parties		2,~~174~~410,~~897~~499			2,~~125~~174,~~600~~897
Current portion of deferred revenue		~~298~~248,656			~~348~~298,656
Derivative liabilities		-			3,845,662
Note payable - due within one year		376,000			376,000
Note payable – due within one year		376,000			26,200
Convertible notes payable, net of unamortized discount and debt costs of $68,219 and $1,437,838, respectively		1,986,631			194,162
Convertible notes payable, net of unamortized discount and debt costs of $1,437,838 and $0, respectively		194,162			1,453,960
Total Current Liabilities		13,074,679			9,200,936
Total Current Liabilities		9,200,936			12,464,363
Notes payable - due after one year		150,000			272,340
Notes payable – due after one year		272,340			294,750
Total Liabilities		13,224,679			9,473,276
Total Liabilities		9,473,276			12,759,113
STOCKHOLDERS’ DEFICIT
Preferred stock, undesignated; $0.01 par value; 7,990,000 shares authorized; no shares issued and outstanding		-			-
Preferred stock, undesignated; $0.01 par value; 6,130,000 shares authorized; no shares issued and outstanding		-			-
Preferred stock, Series A; $0.01 par value; 2,000,000 shares authorized; no shares issued and outstanding		-			-
Preferred stock, Series B; $0.01 par value; 10,000 shares authorized; 10 and 10 shares issued and outstanding, respectively		-			-
Preferred stock, Series B; $0.01 par value; 10,000 shares authorized; 10 shares issued and outstanding at December 31, 2022 and 2021, respectively		-			-
Common stock; $0.01 par value; 1,100,000,000 shares authorized; 9,415,425 and 278,757 shares issued and 9,414,796 and 278,128 shares outstanding on December 31, 2021 and 2020, respectively		94,154			2,788
Preferred stock, Series C; $0.01 par value; 100,000 shares authorized; no shares issued and outstanding		-			-
Capital in excess of par value		50,818,885			45,976,660
Preferred stock, Series D; $0.01 par value; 10,000 shares authorized; no shares issued and outstanding		-			-
Accumulated deficit		(57,823,102	)		(56,974,063	)
Preferred stock, Series E; $0.01 par value; 250,000 shares authorized; no shares issued and outstanding		-			-
		(6,910,063	)		(10,994,615	)
Preferred stock, Series F; $0.01 par value; 1,500,000 shares authorized; no shares issued and outstanding		-			-
Treasury stock at cost, 629 shares on December 31, 2021 and 2020, respectively		(1,462,112	)		(1,462,112	)
Common stock; $0.01 par value; 1,100,000,000 shares authorized; 10,619,331 and 9,415,425 shares issued and 10,618,702 and 9,414,796 shares outstanding at December 31, 2022 and 2021, respectively		106,193			94,154
Total Stockholders’ Deficit		(8,372,175	)		(12,456,727	)
Common stock to be issued, 1,000,000 and no shares, respectively		10,000			-
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	1,101,101		$	302,386
Capital in excess of par value		51,189,596			50,818,885
Accumulated deficit		(62,274,665	)		(57,823,102	)
		(10,968,876	)		(6,910,063	)
Treasury stock at cost, 629 shares at December 31, 2022 and 2021, respectively		(1,462,112	)		(1,462,112	)
Total Stockholders’ Deficit		(12,430,988	)		(8,372,175	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	793,691		$	1,101,101

See accompanying Notes to Financial Statements

F-43 Table of Contents

DAIS CORPORATION

STATEMENTS OF OPERATIONS

	For the Years EndedDecember 31,
	2021			2020
	2022			2021
REVENUE
Sales	$	~~372~~1,~~506~~077,058		$	~~952~~372,~~845~~506
Royalty and license fees		50,000			50,000
		422,506			1,002,845
		1,127,058			422,506
COST OF GOODS SOLD		~~267~~977,~~837~~518			~~545~~267,~~068~~837
GROSS MARGIN		~~154~~149,~~669~~540			~~457~~154,~~777~~669
OPERATING EXPENSES
Research and development, net of government grant proceeds of $89,617 and $123,055 for the years ended December 31, 2021 and 2020, respectively		133,808			98,645
Research and development, net of government grant proceeds of $0 and $89,617 for the years ended December 31, 2022 and 2021, respectively		328,480			133,808
Selling, general and administrative		1,~~958~~668,~~560~~389			1,~~079~~958,~~594~~560
TOTAL OPERATING EXPENSES		21,~~092~~996,~~368~~869			12,~~178~~092,~~239~~368
LOSS FROM OPERATIONS		(1,~~937~~847,~~699~~329	)		(~~720~~1,~~462~~937,699	)
OTHER INCOME (EXPENSE)
Interest expense		(2,~~065~~728,~~593~~360	)		(12,~~127~~065,~~807~~593	)
Loss on legal judgement		~~(382,664~~-	)		-(382,664	)
Forgiveness of debt income		~~146~~124,~~685~~126			-146,685
Change in fair value of derivative		~~2,241,678~~-			~~(939~~2,~~464~~241,678	)
Gain on extinguishment of debt		~~1,148,554~~-			-1,148,554
TOTAL OTHER INCOME (EXPENSE), NET		1(2,~~088~~604,~~660~~234	)		(21,~~067~~088,~~271~~660	)
NET LOSS	$	(~~849~~4,~~039~~451,563	)	$	(2849,~~787,733~~039	)
NET LOSS PER COMMON SHARE, BASIC AND DILUTED	$	(0.1543	)	$	(100.0215	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED		510,~~734~~448,~~795~~440			~~278~~5,~~128~~734,795

See accompanying Notes to Financial Statements

F-4

Table of Contents

DAIS CORPORATION
STATEMENT OF STOCKHOLDERS’ DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

											Common		Capital In
	Preferred				Common						Stock		Excess									Total
	Stock Shares		Amount		Stock Shares			Amount			to be issued		of Par Value			Accumulated Deficit			Treasury Stock			Stockholders' Deficit
Balance - December 31, 2020		10	$	-		278,757			2,788		$	-	$	45,976,660		$	(56,974,063	)	$	(1,462,112	)	$	(12,456,727	)
Shares and warrants issued for services		-		-		2,100,000			21,000			-		730,457			-			-			751,457
Shares and warrants issued for settlement of debt		-		-		7,036,668			70,366			-		2,616,768			-			-			2,687,134
Warrants issued with debt		-		-		-			-			-		1,405,000			-			-			1,405,000
Beneficial conversion feature of debt		-		-		-			-			-		90,000			-			-			90,000
Net loss		-		-		-			-			-		-			(849,039	)		-			(849,039	)
Balance - December 31, 2021		10		-		9,415,425			94,154			-		50,818,885			(57,823,102	)		(1,462,112	)		(8,372,175	)
Shares issued for conversion of debt and finance cost		-		-		927,500			9,275			-		83,475			-			-			92,750
Cashless exercise of warrants		-		-		1,276,406			12,764			-		(12,764	)		-			-			-
Shares cancelled - to be reissued		-		-		(1,000,000	)		(10,000	)		10,000		-			-			-			-
Beneficial conversion feature of debt		-		-		-			-			-		300,000			-			-			300,000
Net loss		-		-		-			-			-		-			(4,451,563	)		-			(4,451,563	)
Balance - December 31, 2022		10	$	-		10,619,331		$	106,193		$	10,000	$	51,189,596		$	(62,274,665	)	$	(1,462,112	)	$	(12,430,988	)

See accompanying Notes to Financial Statements

F-5

Table of Contents

DAIS CORPORATION

STATEMENTS OF STOCKHOLDERS’ DEFICIT

	Preferred Stock				Common Stock				Capital in Excess of Par		Accumulated			Treasury			Total Stockholders’
	Shares		Amount		Shares		Amount		Value		Deficit			Stock			Deficit
Balance at December 31, 2019		10	$	-		278,757	$	2,788	$	45,976,660	$	(54,186,330	)	$	(1,462,112	)	$	(9,668,994	)
Net loss		-		-		-		-		-		(2,787,733	)		-			(2,787,733	)
Balance at December 31, 2020		10		-		278,757		2,788		45,976,660		(56,974,063	)		(1,462,112	)		(12,456,727	)
Shares and warrants issued for services		-		-		2,100,000		21,000		730,457		-			-			751,457
Shares and warrants issued for settlement of debt		-		-		7,036,668		70,366		2,616,768		-			-			2,687,134
Warrants issued with debt		-		-		-		-		1,405,000		-			-			1,405,000
Beneficial conversion feature of debt		-		-		-		-		90,000		-			-			90,000
Net loss		-		-		-		-		-		(849,039	)		-			(849,039	)
Balance at December 31, 2021		10	$	-		9,415,425	$	94,154	$	50,818,885	$	(57,823,102	)	$	(1,462,112	)	$	(8,372,175	)

See accompanying Notes to Financial Statements

F-6 Table of Contents

DAIS CORPORATION

STATEMENTS OF CASH FLOWS

	For the Years EndedDecember 31,
	2021			2020
	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(~~849~~4,~~039~~451,563	)	$	(2849,~~787,733~~039	)
Adjustments to reconcile net loss to net cash used by operating activities:
Amortization of deferred debt issue costs		19,~~888~~112			51,~~848~~888
Depreciation and amortization		2128,~~574~~977			4421,~~093~~574
Stock based compensation		~~751,457~~750			-751,457
Change in fair value of derivative liability		~~(2,241,678~~-	)		~~939~~(2,~~464~~241,678	)
Non-cash interest expenses		124,290			556,727
Forgiveness of debt		(122,340	)		(146,685	)
Amortization of debt discount		324,264			101,899
Non-cash interest expenses		-			124,290
Gain on extinguishment of debt		(1,295,239	)		-
Amortization of debt discount		1,660,507			324,264
Gain on extinguishment of debt		-			(1,148,554	)
(Increase) decrease in:
Accounts receivable		(51206,~~415~~791	)		12(51,~~381~~415	)
Inventory		(6222,~~411~~405	)		25(6,~~625~~411	)
Other receivables		~~6,169~~-			276,~~975~~169
Prepaid expenses/Other assets		(16,~~967~~766	)		(1,~~692~~967	)
Increase (decrease) in:
Accounts payable		~~(62~~479,~~180~~629	)		32(62,~~070~~180	)
Accrued expenses		21,~~052~~145,~~318~~392			~~582~~2,~~169~~052,318
Customer deposits		(7270,~~803~~651	)		(487,~~633~~803	)
Deferred revenue		(50,000	)		(50,000	)
Net cash used in operating activities		(1,~~283~~451,~~772~~315	)		(~~556~~1,~~423~~283,772	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment		(1128,~~541~~035	)		-(11,541	)
Increase in patent costs		(1817,~~217~~113	)		(2518,~~094~~217	)
Net cash used in investing activities		(2945,~~758~~148	)		(2529,~~094~~758	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable - related parties		49482,~~297~~800			~~293~~49,~~000~~297
Proceeds from notes payable		2,112,340			393,450
Repayment of notes payable - related parties		(247,198	)		-
Advance payment for note payable		15,000			-
Proceeds from notes payable		514,850			2,112,340
Advance payment on purchase of common stock		30,000			-
Advance payment for note payable		-			15,000
Repayments of notes		(156,200	)		(72,500	)
Advance payment on purchase of common stock		-			30,000
Net cash provided by financing activities		2,050,437			613,950
Repayments of notes		-			(156,200	)
Net increase in cash		736,907			32,433
Net cash provided by financing activities		750,452			2,050,437
Cash, beginning of period		36,516			4,083
Net increase (decrease) in cash		(746,011	)		736,907
Cash, end of period	$	773,423		$	36,516
Cash, beginning of period		773,423			36,516
Cash, end of period	$	27,412		$	773,423
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	~~744~~-		$	~~1,841~~744
NON-CASH FINANCING AND FINANCING ACTIVITIES
Issuance of common stock and warrants upon settlement of notes and accrued interest	$	~~2,687,134~~-		$	-2,687,134
Notes and accrued interest settled with common stock and warrants	$	2,107,414		$	-
Issuance of common stock upon conversion of notes	$	92,750		$	-
Derivative liability extinguished	$	1,728,274		$	-
Notes and accrued interest settled with common stock and warrants	$	-		$	2,107,414
Relative fair value of warrant, recorded as debt discount	$	1,405,000		$	-
Derivative liability extinguished	$	-		$	1,728,274
Beneficial conversion feature of debt	$	90,000		$	-
Relative fair value of warrant, recorded as debt discount	$	59,998		$	1,405,000
Common stock to be issued for finance cost, accrued and recorded as debt discount	$	120,990		$	-
Beneficial conversion feature of convertible debt	$	240,002		$	90,000
Original issued discount, deducted from proceeds and recorded as debt discount	$	137,000		$	-
Common stock to be issued for finance cost, accrued and recorded as debt discount	$	-		$	120,990
Debt costs deducted from proceeds of note	$	11,000		$	-
Original issued discount, deducted from proceeds and recorded as debt discount	$	-		$	137,000
Initial debt discount at issuance of notes	$	1,752,990		$	-
Debt costs deducted from proceeds of note	$	-		$	11,000
Initial debt discount at issuance of notes	$	300,000		$	1,752,990

See accompanying Notes to Financial Statements

F-76 Table of Contents

Dais Corporation

Notes to Financial Statements

Years Ended December 31, ~~2021~~2022 and ~~2020~~2021

Note 1. Background Information

Dais Corporation (“Dais”, “us,” “we,”, the “Company”), a New York corporation, is a nano-structured polymer technology materials company having developed and now commercializing products using its family of nanomaterial called Aqualyte. ~~The~~Aqualyte itself is the first product being commercialized. The second commercial product is called ConsERV, a fixed plate energy recovery ventilator which we believe is useful in meeting building indoor fresh air requirements while saving energy and lowering emissions for most forms of heating, ventilation, and air conditioning (HVAC) equipment. The second commercial product is NanoClear, a water clean-up process useful in the creation of potable water from most forms of contaminated water including industrial process wastewater (petrochemical, steel, etc.) sea, brackish, or wastewater. We continue to develop other nano-structured polymer technology applications in a variety of markets. The Company was incorporated in April 1993 and its corporate headquarters is in Odessa, Florida.

The Company is dependent on third parties to manufacture the key components needed for its nanostructured materials and some portion of the value-added products made with these materials. Accordingly, a suppliers’ failure to supply components in a timely manner, or to supply components that meet the Company’s quality, quantity and cost requirements or technical specifications, or the inability to obtain alternative sources of these components on a timely basis or on acceptable terms, would create delays in production of the Company’s products and/or increase its unit costs of production. Certain of the components or the processes of the Company’s suppliers are proprietary. If the Company was ever required to replace any of its suppliers, it should be able to obtain comparable components from alternative suppliers at comparable costs, but this would create a delay in production and may briefly affect the Company’s operations.

Note 2. Going Concern and Management’s Plans

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. For the year ended December 31, ~~2021~~2022, the Company generated a net loss of $~~849~~4,~~039~~451,563 and has incurred significant losses since inception. As of December 31, ~~2021~~2022, the Company has an accumulated deficit of $5762,~~823~~274,~~102~~665, total stockholders’ deficit of $812,~~372~~430,~~175~~988, negative working capital of $812,~~270~~468,~~892~~216 and cash and cash equivalents of $~~773~~27,~~423~~412. The Company used $1,~~283~~451,~~772~~315 and $~~556~~1,~~423~~283,772 of cash for operations during the years ended December 31, ~~2021~~2022, and ~~2020~~2021, respectively, which was funded primarily by proceeds from loans from related parties and others. There is no assurance that any such financing will be available in the future. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company is currently pursuing the following sources of short and long-term working capital:

1. The Company ~~has~~guided ~~selected~~by ~~targeted~~its ~~parties~~Financial ~~that~~Advisors it is actively working with targeted third parties who have or are interested in licensing, purchasing the rights to, or establishing a joint venture to commercialize applications of the Company’s technology; 2. The Company continues to seek capital from key strategic and/or government (grant) related sources. These sources may, pursuant to any agreements that may be developed in conjunction with such funding, assist in the product definition and design, roll-out, and channel penetration of products; 3. The Company is actively working with newer investors, private equity companies, purchase order financing parties, and its existing debt holders to restructure its existing debt and obtain short and long-term working and growth capital; and, 4. The Company may license or sell an asset to fund its continued growth as it is clear to management the market for the Company’s product innovations has changed in a positive way as demonstrated by the interest the Company’s nano-material and applications in certain markets.

~~The~~Management Company continues to seek capital from certain strategic and/or government grant opportunities and related sources. These sources may, pursuant to any agreements that may be developed in conjunction with such funding, assist in the product definition and design, roll-out and channel penetration of products; and believes:

1. The Company’s isability ~~actively~~to ~~working~~solve ~~with~~continuing ~~newer~~supply ~~investors,~~chain ~~private~~issues ~~equity~~and ~~companies,~~raise ~~purchase~~sustainable ~~order~~growth ~~financing~~capital ~~parties,~~will ~~has~~dictate ~~increased~~future ~~its~~revenue ~~value~~ and ~~potential~~cash-flow tofor ~~attract~~the ~~new~~Company. ~~investors~~The inquicker these issues are resolved we believe the ~~eyes~~faster ofthe Company can participate in the ~~Management~~market’s ~~team~~uptick ~~when~~momentum and follow the ~~Company~~projected ~~completed~~growth curve. These issues place heavy pressure on management to progress in key business areas being impacted. Continued supply chain impacts has roots in the ~~exchange~~funding ~~program~~challenges. The use of ‘funds from affordable growth capital to resolve inventory levels of hard to acquire parts could be achieved within one quarter. Raising affordable capital is tied to addressing/fixing convertible debt transactions (recently found to ~~equity’~~be ‘criminally usurious - (Adar v. Geneysy, LLC) used in the ~~2nd~~past ~~quarter~~to ofgrow ~~2021~~the ~~clearing~~Company ~~out~~with ~~all~~a plan to replace this convertible debt with lower cost funds. The Company has made progress yet still faces a worldwide public market in ~~exchange~~turmoil ~~for~~since ~~equity~~February atof 2022. In the intertest of expediting this situation the Company is seeking affordable public, and non-public, growth resources, with Board approval, is seeking to monetize one asset via a ~~fixed~~license/supply ~~price~~agreement. atSuch a plan (monetize an asset) will require approval by the ~~end~~Company’s Senior Secured Noteholder. 2. The Senior Secured Note Holder has advised Management it is exploring its options to resolve the long standing unpaid – and growing debt by the Company. 3. Ventilation is regularly recommended as one of the ~~second~~solutions ~~quarter~~to Covid related mitigation and the market awareness for the ConsERV product(s) is increasing and lead activity is encouraging. 4. We believe our current cash position and our projected ability to obtain additional sources of ~~2021~~growth capital, and to generate sustainable cash flow from operations and investments into 2023 is improving yet remains challenged.

~~Failure~~F-7 byTable us to timely procure additional financing or investment adequate to fund the ongoing operations, including planned product development initiatives and commercialization efforts, or experience a major supply chain disruption will have material adverse consequences on our financial condition, results of operations and cash flows as could any unfavorable terms. While we believe the Company’s prospects have improved for funding, there are no assurances we will be able to obtain the financing and planned product development commercialization. The Company may fail to reach an accord with the Senior Secured Note Holder who has deep rights with the assets of the Company pledged as security for repayment of the Note. Accordingly, we may not have the ability to continue as a going concern. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should we be unable to continue as a going concern.Contents

FWe believe the Company’s prospects to secure growth funding are good. The company has shown solid progress over the last three quarters, removed a serious impediment to growth by completing a ‘debt to equity’ program where the convertible noteholders debt positions were converted into equity (common stock and warrants). The company introduced a popular new line of our ConsERV equipment having improved performance and pricing to a growing independent sales channel through-8out North ~~Table~~America. We reached agreement (now moving to contract stage) in late 4Q 2022 between the company and its Senior Secured Note Holder (having deep rights with the assets of ~~Contents~~the Company which are pledged as security for repayment of the Note). The company is continuing to develop the basis of a long term business relationship with a well-known, multi-national corporation interested in using the Company’s products for its own and third-party use.

There are no assurances we will be able to obtain the financing and planned product development commercialization. Accordingly, we may not have the ability to continue as a going concern. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should we be unable to continue as a going concern.

Note 3. Significant Accounting Policies

The significant accounting policies followed are:

Use of estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant estimates underlying the Company’s reported financial position and results of operations include the allowance for doubtful accounts, fair value of stock-based compensation, fair value of derivative liabilities, valuation allowance on deferred taxes and the warranty reserve.

Revenue recognition - The Company has adopted the new revenue recognition guidelines in accordance with ASC 606, Revenue from Contracts with Customers (ASC 606). The Company analyzes its contracts to assess that they are within the scope and in accordance with ASC 606. In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under each of its agreements, whether for goods and services or licensing, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company acts as a principal in its revenue transactions as the Company is the primary obligor in the transactions. Generally, the Company recognizes revenue for its products upon shipment to customers, provided no significant obligations remain and collection is probable.

In certain instances, the Company’s ConsERV system product may carry a limited warranty of up to one year for all parts contained therein except for the energy recovery ventilator core produced and sold by the Company. The distributor of the ConsERV system may carry a limited warranty of up to ten years. The limited warranty includes replacement of defective parts for the ConsERV system and includes workmanship and material failure for the ConsERV core. The Company recorded an accrual of $91,531 for future warranty expenses at December 31, ~~2021~~2022 and ~~2020~~2021, which is included in accrued expenses, other.

Royalty revenue is recognized as earned. The Company recognized royalty revenue of $0 for the years ended December 31, ~~2021~~2022 and ~~2020~~2021. Revenue derived from the sale of licenses is deferred and recognized as license fee revenue on a straight-line basis over the life of the license, or until the license arrangement is terminated. The Company recognized license fee revenue of $50,000 for each of the years ended December 31, ~~2021~~2022 and ~~2020~~2021.

The Company accounts for revenue arrangements with multiple elements under the provisions of the Financial Accounting Standards Boards (FASB) Accounting Standards Codification (ASC) Topic 605-25, “Revenue Recognition-Multiple-Element Arrangements.” In order to account for these agreements, the Company must identify the deliverables included within the agreement and evaluate which deliverables represent separate units of accounting based on if certain criteria are met, including whether the delivered element has stand-alone value to the licensee. The consideration received is allocated among the separate units of accounting, and the applicable revenue recognition criteria are applied to each of the separate units.

F-8

Table of Contents

In December 2017, the Company and Zhejiang MENRED Environmental Tech Co, Ltd., Zhejiang Province, China (“Menred”), entered into a License and Supply Agreement (the “Agreement”), effective December 21, 2017. Pursuant to the Agreement, the Company licensed certain intellectual property and improvements to Menred, for use in the manufacture and sale of energy recovery ventilators (“ERV”) and certain other HVAC systems for installation in commercial, residential, or industrial buildings in China. Menred also agreed to purchase its requirements of certain products from the Company for Menred’s use, pursuant to the terms and conditions of the Agreement. Menred will also pay royalties, as defined, to the Company on a quarterly basis, based on price and production volume as provided by Menred. No royalties are due within the first year of the Agreement. Also pursuant to the Agreement, the Company is required to purchase a certain amount of Product from Menred. The Agreement has a ten-year term with mutually agreed upon five-year extensions.

Cash and cash equivalents - For purposes of the Statements of Cash Flows, the Company considers all highly liquid debt instruments with a maturity of three months or less to be cash equivalents. Cash and cash equivalents are maintained at financial institutions, and, at times, balances may exceed federally insured limits. The Company had uninsured balances of approximately $0 and $483,000 at December 31, 2022 and 2021, respectively. The Company has never experienced any losses related to these balances. The Company does not have any cash equivalents at December 31, 2022 and 2021.

Accounts receivable - Accounts receivable consist primarily of receivables from the sale of the Company’s ERV products and royalties due under license and supply agreements. The Company regularly reviews accounts receivable for any bad debts based on an analysis of the Company’s collection experience, customer credit worthiness and current economic trends. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Based on management’s review of accounts receivable, no allowance for doubtful accounts was deemed necessary at December 31, 2022 and 2021, respectively.

Concentrations - At December 31, 2022, two customers accounted for 76% of accounts receivable. For the year ended December 31, 2022, four customers accounted for 74% of total revenue. For the year ended December 31, 2021, three customers accounted for 73% of total revenue.

Other receivables - Other receivables consist primarily of receivables from the U.S. Department of Defense (See Note 3 - Research and development expenses and funding proceeds). The Company prepares invoices as it meets funding program milestones. There were no such receivables at December 31, 2022 and 2021.

Fair Value of Financial Instruments - The Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, deferred revenue, customer deposits and notes payable are carried at historical cost. At December 31, 2022 and 2021 the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments.

Inventory - Inventory consists of raw materials, work-in-process and finished goods and is stated at the lower of cost, determined by first-in, first-out method, or market. Market is determined based on the net realizable value, with appropriate consideration given to obsolescence, excessive levels, deterioration, and other factors. At December 31, 2022 and 2021, the Company had $269,083 and $59,631 of raw materials, $5,997 and $1,844 of in-process inventory and $269,083 and $10,592 of finished goods inventory, respectively. A reserve is recorded for any inventory deemed excessive or obsolete. No reserve is recorded at December 31, 2022 and 2021, respectively.

Property and equipment - Property and equipment is recorded at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets ranging from 3 to 7 years. Leasehold improvements are amortized over the shorter of their estimated useful lives of 5 years or the related lease term. Depreciation and amortization expense was $8,988 and $2,689 for the years ended December 31, 2022 and 2021, respectively. Gains and losses upon disposition are reflected in the Statement of Operations in the period of disposition. Maintenance and repair expenditures are charged to expense as incurred. There were no dispositions of property and equipment in 2022 or 2021.

Intangible assets - Identified intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company’s existing intangible assets consist solely of patents. Patents are amortized over their estimated useful or economic lives of 17 years. Patent amortization expense was $19,989 and $18,885 for the years ended December 31, 2022 and 2021, respectively. Based on current capitalized costs, total patent amortization expense is estimated to be approximately $20,000 per year for the next five years and thereafter.

Long-lived assets - Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the Company estimates the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether the asset values are recoverable. The Company did not recognize impairment on its long-lived assets during the years ended December 31, 2022 or 2021.

F-9

Table of Contents

InGovernment ~~December~~Funding ~~2017,~~- ~~the~~Government ~~Company~~funding ~~and~~represents ~~Zhejiang~~grants ~~MENRED~~from ~~Environmental~~the ~~Tech Co, Ltd~~U.,S. ~~Zhejiang~~Department ~~Province,~~of ~~China~~Defense ~~(“Menred”), entered into a License~~ and ~~Supply~~are ~~Agreement~~recognized ~~(the~~when ~~“Agreement”),~~there ~~effective~~is ~~December~~reasonable ~~21,~~assurance ~~2017.~~that ~~Pursuant to~~ the ~~Agreement,~~funding ~~the~~will ~~Company~~be ~~licensed~~received, ~~certain intellectual property~~ and ~~improvements~~conditions toassociated ~~Menred,~~with ~~for~~the ~~use~~funding inare ~~the~~met. ~~manufacture~~When ~~and~~fundings ~~sale~~are ofreceived ~~energy~~related ~~recovery~~to ~~ventilators~~property ~~(“ERV”)~~ and ~~certain other HVAC systems for installation in commercial~~equipment, ~~residential, or industrial buildings in China. Menred also agreed to purchase its requirements of certain products from~~ the Company ~~for~~reduces ~~Menred’s use, pursuant to~~ the ~~terms~~basis ~~and conditions~~ of the ~~Agreement.~~assets ~~Menred~~on ~~will also pay royalties, as defined, to~~ the ~~Company~~balance ~~on a quarterly basis~~sheet, ~~based~~resulting onin ~~price~~lower ~~and~~depreciation ~~production~~expense ~~volume~~over ~~as provided by Menred. No royalties are due within~~ the ~~first~~life ~~year~~ of the ~~Agreement~~associated asset. ~~Also~~When ~~pursuant~~fundings toare ~~the~~received ~~Agreement,~~which ~~the~~relate ~~Company is required~~ to ~~purchase~~expense ~~50,000~~reimbursement ~~square~~they ~~meters~~are ofrecorded ~~Product from Menred for delivery~~ as ~~an annual minimum with~~ a ~~10,000~~reduction ~~square~~of ~~meter~~the ~~minimum~~associated ~~order~~expense ~~quantity~~in ~~per~~the ~~delivery.~~period ~~The~~in ~~Agreement~~which ~~has~~the aexpense ~~ten-year~~is ~~term with mutually agreed upon five-year extensions~~incurred.

~~Shipping~~Research and ~~handling~~development ~~fees~~expenses ~~billed~~and tofunding ~~customers~~proceeds - Expenditures for research, development and engineering of products are ~~included~~expensed inas ~~revenue~~incurred. ~~Shipping~~The Company incurred research and ~~handling~~development ~~fees~~costs ~~associated~~of ~~with~~$328,480 ~~freight~~and ~~are~~$223,425 ~~generally~~for ~~included~~the years ended December 31, 2022 and 2021, respectively. The Company accounts for proceeds received from government funding’s for research as a reduction in ~~cost~~research and development costs. The Company recorded proceeds against research and development expenses on the Statements of ~~revenue~~Operations of $0 and $89,617 for the years ended December 31, 2022 and 2021, respectively.

Cash and cash equivalents - For purposes of the Statements of Cash Flows, the Company considers all highly liquid debt instruments with a maturity of three months or less to be cash equivalents. Cash and cash equivalents are maintained at financial institutions, and, at times, balances may exceed federally insured limits. The Company had uninsured balances of approximately $483,000 and $0 at December 31, 2021 and 2020, respectively. The Company has never experienced any losses related to these balances. The Company had no cash equivalents at December 31, 2021 or 2020.

Accounts receivable - Accounts receivable consist primarily of receivables from the sale of the Company’s ERV products and royalties due under license and supply agreements. The Company regularly reviews accounts receivable for any bad debts based on an analysis of the Company’s collection experience, customer credit worthiness and current economic trends. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Based on management’s review of accounts receivable, no allowance for doubtful accounts was deemed necessary at December 31, 2021 and 2020, respectively.

Concentrations - At December 31, 2021, two customers accounted for 100% of accounts receivable. For the year ended December 31, 2021, three customers accounted for 73% of total revenue. For the year ended December 31, 2020, three customers accounted for 63% of total revenue.

Other receivables - Other receivables consist primarily of receivables from the U.S. Department of Defense (See Note 3 - Research and development expenses and funding proceeds). The Company prepares invoices as it meets funding program milestones. Based on management’s review of other receivables, management has determined that no allowance for other receivables is necessary at December 31, 2021 and 2020.

Fair Value of Financial Instruments - The Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, deferred revenue, customer deposits and notes payable are carried at historical cost. At December 31, 2021 and 2020 the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments.

Inventory - Inventory consists of raw materials, work-in-process and finished goods and is stated at the lower of cost, determined by first-in, first-out method, or market. Market is determined based on the net realizable value, with appropriate consideration given to obsolescence, excessive levels, deterioration, and other factors. At December 31, 2021 and 2020, the Company had $59,631 and $48,734 of raw materials, $1,844 and $4,843 of in-process inventory and $10,592 and $12,079 of finished goods inventory, respectively. A reserve is recorded for any inventory deemed excessive or obsolete. No reserve is recorded at December 31, 2021 and 2020, respectively.

Property and equipment - Property and equipment is recorded at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets ranging from 3 to 7 years. Leasehold improvements are amortized over the shorter of their estimated useful lives of 5 years or the related lease term. Depreciation and amortization expense were $2,689 and $26,456 for the years ended December 31, 2021 and 2020, respectively. Gains and losses upon disposition are reflected in the Statement of Operations in the period of disposition. Maintenance and repair expenditures are charged to expense as incurred. There were no dispositions of property and equipment in 2021 or 2020.

F-10 Table of Contents

Intangible assets - Identified intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company’s existing intangible assets consist solely of patents. Patents are amortized over their estimated useful or economic lives of 17 years. Patent amortization expense was $18,885 and $17,637 for the years ended December 31, 2021 and 2020, respectively. Based on current capitalized costs, total patent amortization expense is estimated to be approximately $19,400 per year for the next five years and thereafter.

Long-lived assets - Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the Company estimates the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether the asset values are recoverable. The Company did not recognize impairment on its long-lived assets during the years ended December 31, 2021 or 2020.

Government Funding - Government funding represents grants from the U.S. Department of Defense and are recognized when there is reasonable assurance that the funding will be received, and conditions associated with the funding are met. When funding’s are received related to property and equipment, the Company reduces the basis of the assets on the balance sheet, resulting in lower depreciation expense over the life of the associated asset. When funding’s are received which relate to expense reimbursement they are recorded as a reduction of the associated expense in the period in which the expense is incurred.

Research and development expenses and funding proceeds - Expenditures for research, development and engineering of products are expensed as incurred. The Company incurred research and development costs of $223,425 and $221,700 for the years ended December 31, 2021 and 2020, respectively. The Company accounts for proceeds received from government funding’s for research as a reduction in research and development costs. The Company recorded proceeds against research and development expenses on the Statements of Operations of $89,617 and $123,055 for the years ended December 31, 2021 and 2020, respectively.

Stock issuance costs - Stock issuance costs are recorded as a reduction of the related proceeds through a charge to stockholders’ deficit.

Common stock - The Company records common stock issuances when all the legal requirements for the issuance of such common stock have been satisfied.

Derivative Liability - The Company, up until June 30, 2021, had financial instruments that are considered derivatives or contain embedded features subject to derivative accounting. Embedded derivatives are valued separately from the host instrument and are recognized as derivative liabilities in the Company’s balance sheet. The Company measures these instruments at their estimated fair value and recognizes changes in their estimated fair value in results of operations during the period of change.

Warranties - The Company offers a limited warranty generally ranging from one to three years, A provision for product warranties has been recorded at December 31, ~~2021~~2022 and ~~2020~~2021. The Company has not incurred any warranty expense in either ~~2021~~2022 or ~~2020~~2021.

Stock based compensation - The Company recognizes all share-based payments to employees, including grants of employee stock options, as compensation expense in the financial statements based on their fair values. That expense will be recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period) or immediately if the share-based payments vest immediately.

There were no grants in ~~2021~~2022 or ~~2020~~2021.

F-11 Table of Contents

Fair Value Measurements - The Company accounts for financial instruments in accordance with FASB Accounting Standards Codification (ASC) 820 “Fair value Measurement and Disclosures” (ASC 820). ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs).

The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

·● Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. ·● Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g. interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. ·● Level 3 - Inputs that are both significant to the fair value measurement and unobservable.

AF-10 ~~financial~~Table asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The Company has recorded a derivative liability for its convertible notes which contain variable conversion prices. The table below summarizes the fair values of ~~our financial liabilities as of December 31, 2021 and 2020:~~Contents

	Fair Value atDecember 31,		Fair Value Measurement Using
	2021		Level 1		Level 2		Level 3
Derivative liability	$	-	$	-	$	-	$	-

The reconciliation of the derivative liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows for the year ended December 31, 2021:

	Fair Value atDecember 31,			Fair Value Measurement Using
	December 31,
	2020			Level 1		Level 2		Level 3
	2021
Derivative liability	$	3,845,662		$	-	$	-	$	3,845,662
Balance, beginning of year	$	3,845,662
Additions		124,290
Extinguished derivative liability		(1,728,274	)
Change in fair value of derivative liabilities		(2,241,678	)
	$	-

F-12 Table of Contents

The reconciliation of the derivative liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows for the years ended December 31, 2021 and 2020:

	December 31,			December 31,
	2021			2020
Balance, beginning of year	$	3,845,662		$	2,349,471
Additions		124,290			556,727
Extinguished derivative liability		(1,728,274	)		-
Change in fair value of derivative liabilities		(2,241,678	)		939,464
	$	-		$	3,845,662

Income taxes - Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes resulting from temporary differences. Such temporary differences result from differences in the carrying value of assets and liabilities for tax and financial reporting purposes. The deferred tax assets and liabilities represent the future tax consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

The Company identifies and evaluates uncertain tax positions, if any, and recognizes the impact of uncertain tax positions for which there is a less than more-likely-than-not probability of the position being upheld when reviewed by the relevant taxing authority. Such positions are deemed to be unrecognized tax benefits and a corresponding liability is established on the balance sheet. The Company has not recognized a liability for uncertain tax positions. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company’s 2017 through 2020 tax years remain open and subject to examination by the Internal Revenue Service.

Earnings (loss) per share - Basic income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average common shares outstanding for the period. Diluted income (loss) per share is computed giving effect to all potentially dilutive common shares. Potentially dilutive common shares may consist of incremental shares issuable upon the exercise of stock options and warrants and upon the conversion of notes. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation. Common share equivalents of 3230,~~526~~212,~~731~~831 and 1532,~~365~~526,~~623~~731 were excluded from the computation of diluted earnings per share for the years ended December 31, ~~2021~~2022 and ~~2020~~2021, respectively, because their effect is anti-dilutive.

Recent Accounting Pronouncements - ~~There~~Recent ~~are new~~ accounting pronouncements issued by the ~~Financial~~FASB ~~Accounting~~and ~~Standards~~the ~~Board~~SEC ~~(“FASB”)~~did ~~which~~not or are not ~~yet~~believed ~~effective~~by asmanagement ~~follows:~~to have a material impact on the Company’s present or future consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes.” This guidance, among other provisions, eliminates certain exceptions to existing guidance related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. This guidance also requires an entity to reflect the effect of an enacted change in tax laws or rates in its effective income tax rate in the first interim period that includes the enactment date of the new legislation, aligning the timing of recognition of the effects from enacted tax law changes on the effective income tax rate with the effects on deferred income tax assets and liabilities. Under existing guidance, an entity recognizes the effects of the enacted tax law change on the effective income tax rate in the period that includes the effective date of the tax law. ASU 2019-12 is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. The adoption of ASU 2019-12 did not have a material impact on our financial statements.

F-13 Table of Contents

Other recent accounting pronouncements issued by the FASB and the SEC did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.

Note 4. Property and Equipment

Property and equipment consist of the following:

	December 31,
	2021		2020
	2022		2021
Furniture and fixtures	$	20,966	$	20,966
Computer equipment and software		2131,~~761~~581		21,761
Demonstration equipment		92,733		92,733
Office and lab equipment		~~295~~310,~~987~~902		~~307~~295,~~899~~987
Leasehold improvements		14,808		14,808
Property and equipment, gross		~~446~~470,~~255~~990		~~458~~446,~~167~~255
Less accumulated depreciation		~~432~~438,~~902~~590		~~453~~432,~~666~~902
Property and equipment, net	$	1332,~~353~~400	$	413,~~501~~353

Note 5. Accrued Expenses, Other

Accrued expenses, other consists of the following:

	December 31,
	2021		2020
	2022		2021
Accrued expenses, other	$	~~274~~673,~~146~~270	$	~~185~~274,~~656~~146
Accrued interest		23,~~197~~253,~~577~~787		12,~~238~~197,~~553~~577
Accrued warranty costs		91,531		91,531
	$	24,~~945~~018,~~918~~588	$	12,~~515~~945,~~740~~918

F-11

Table of Contents

Note 6. Related Party Transactions

On June 24, 2016, the Company entered into a Loan and Security Agreement (“Security Agreement”) with the entity ~~now~~ known as PKT -- Strategic Assets, LLC (the “Holder”) pursuant to which the Company issued a Senior Secured Promissory Note for $150,000 (the “Note”). The Note has an interest rate is 12% per annum compounded daily with a minimum interest payment of $2,000. The Note grants the Holder a ~~secured~~secure interest in all the assets of the Company. During 2016 to the period ended December 31, ~~2021~~2022, the Holder extended the Note pursuant to various amendments. Pursuant to the amendments, the principal amount and interest totaled $5,429,661 and $4,317,270 (including fees and other expenses) at December 31, 2022 and 2021, respectively. We received advances aggregating $482,800 and $49,297 during 2022 and 2021, respectively, and repaid $247,198 during 2022. The Holder’s corporation is ~~majority~~ controlled by Ms. Tangredi, related to Tim Tangredi: the Company’s CEO and stockholder, and therefore, is a Related Party of the Company. The Company is to pay the Holder the principal, plus all interest and fees due in accordance with terms and conditions of the Security Agreement on the earlier of: (i) the date upon which the Company secures funds, regardless of source, equal to or exceeding, in the aggregate, $1,000,000 or (ii.). November 1, 2021 which has expired. The Holder has not declared the Note in Default as the Parties are actively renegotiating a new Maturity Date (the “Maturity Date”) with changes terms and conditions. The Parties fully expect to come to reasonable terms on all issues during the first quarter of 2022. The Company has recorded interest expense of $1,473,884 and $234,163 for the years ended December 31, 2021 and 2020, respectively. Accrued interest was $2,152,373 and $678,489 at December 31, 2021 and 2020, respectively.

~~During~~(i) ~~May~~The ~~2019~~date ~~Dais~~upon ~~Holdings~~which ~~Corp.~~the ~~(Dais~~Company ~~Holdings”)~~secures ~~was~~funds, ~~formed~~regardless inof ~~Vancouver~~source, ~~B.C.~~equal ~~and~~to isor ~~wholly~~exceeding, ~~owned~~in bythe ~~our~~aggregate, ~~Chief~~$1,000,000 ~~Executive~~or ~~Officer.~~November ~~Dais~~1, ~~Holdings’~~2021, ~~purpose~~which isas toof ~~facilitate~~the ~~debt~~date ~~financing~~of infiling, ~~Europe~~has expired. (ii) The ~~intent~~Holder ishas ~~for~~not ~~Dais~~declared ~~Holdings~~the toNote ~~enter~~in ~~into~~Default as the ~~debt~~Parties ~~transactions.~~have Itreached ~~will~~terms ~~then~~to ~~immediately~~address ~~loan~~several ~~any~~issues ~~proceeds~~including ~~received to~~ the ~~Company~~extension onof the ~~same~~Maturity orDate ~~similar~~(the ~~terms~~“Maturity asDate”). ~~the~~The ~~European~~parties ~~debt.~~have Toagreed ~~date,~~to ~~Dais~~new ~~Holdings~~language ~~has~~to ~~not~~solve ~~entered~~this ~~any~~matter ~~transactions~~with ~~and~~the ~~Dais~~plan ~~Corporation~~to ~~has~~have ~~not~~it ~~received~~complete ~~any~~no ~~funding~~later ~~from~~than ~~Dais~~April ~~Holdings~~30, 2023. (iii) The Company has ~~paid~~recorded ~~the~~interest ~~professional~~expense ~~and~~of ~~other~~$876,789 ~~fees~~and $1,473,884 for ~~setting up~~ the ~~Dais~~years ~~Holdings~~ended ~~structure~~December 31, ~~aggregating~~2022 ~~$150,000.~~and ~~Ultimately~~2021, ~~Dais~~respectively. ~~Corporation~~(iv) ~~will~~Accrued ~~benefit~~interest ~~from~~was ~~the Dais Holdings capital raise activities~~$3,029,162 and ~~therefore~~$2,152,373 ~~has~~at ~~borne~~December ~~the~~31, ~~cost.~~2022 ~~The~~and ~~costs~~2021, ~~have been expensed as incurred~~respectively.

On October 12, 2019, the Company entered ~~into~~ a promissory note with an entity controlled by our Chief Executive Officer in the amount of $10,000. The note bears interest at 10% per year and ~~matures~~matured on October 12, 2021. Interest expense on the note was $600 for each of the years ended December 31, ~~2021~~2022 and ~~2020~~2021. Accrued interest was $1,~~350~~950 and $~~750~~1,350 at December 31, ~~2021~~2022 and ~~2020~~2021, respectively. The Holder has not declared the Note in Default or extended the Maturity Date.

~~F-14~~On ~~Table~~April 29, 2022, the Company received a loan of ~~Contents~~$100,000 from its Chief Executive Officer. This was repaid in full on May 17, 2022.

On February 27, 2015, the Company, and Tim N. Tangredi, the Company’s Chief Executive Officer entered ~~into~~ an amendment (the “Tangredi Employment Agreement Amendment”) to Mr. Tangredi’s Amended and Restated Employment Agreement. Currently, the Company has non-interest-bearing accrued compensation due to the Chief Executive Officer for deferred salaries earned and unpaid as described above. The Tangredi Employment Agreement Amendment provides that, if at any time during a calendar year, the unpaid compensation is greater than $500,000, Mr. Tangredi must convert $100,000 of unpaid compensation into the Company’s common stock during such calendar year. The conversion rate shall be equal to 75% of the average closing price for the Company’s common stock for the 30 trading days prior to the date of conversion. The Company shall also pay to Mr. Tangredi a cash payment equal to 20% of the compensation income incurred because of the ~~conversion~~change. The Company has waived the conversion requirement from 2015 to the present. ~~See Note 13 Commitments and Contingencies for further disclosure of the terms of Mr. Tangredi’s employment agreement.~~

Further, at any time any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under such Act) of greater of 40% of the then-outstanding voting power of the voting equity interests of the Company or a person or group initiate a tender offer for the Company’s common stock, Mr. Tangredi may convert unpaid compensation into Class A Convertible Preferred Stock (“Class A Preferred Stock”) of the Company at a conversion price of $1.50 per share. The Board of Directors waived the requirement to convert $100,000 of unpaid compensation into common stock during 2016. No amounts have been converted under the terms of the Tangredi Employment Agreement Amendment to date.

On January 27, 2022, the Board approved the distribution of Series F Convertible Preferred Warrants to Board members, the Dais Team, and those contractually bound to receive these warrants on January 27, 2022. These new Series were approved by NYS Division of Corporations on March 23, 2022.

The above terms and amounts are not necessarily indicative of the terms and amounts that would have been incurred had comparable transactions been entered into with independent parties.

Note 7. Equity Transactions

Preferred Stock

On December 31, ~~2021~~2022 and ~~2020~~2021, the Company’s Board of Directors ~~has~~ authorized 10,000,000 shares of preferred stock with a par value of $0.01 to be issued in series with terms and conditions to be determined by the Board of Directors.

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Table of Contents

2,000,000 of the shares of preferred stock has been designated as Class A Preferred Stock. The Class A Preferred Stock shall entitle the holder thereof to 150 votes on all matters submitted to a vote of the stockholders of the Company.

10,000 of the shares of preferred stock has been designated as Class B Preferred Stock. The Class A Preferred Stock shall entitle the holder thereof to 150 votes on all matters submitted to a vote of the stockholders of the Company. The Class B Stock includes the right to vote in an amount equal to 51% of the votes to approve certain corporate actions, including, without limitation, changing the name of the Company and increasing the number of authorized shares.

F-15 Table of Contents

Upon any liquidation, dissolution or winding up of the Company, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Class A or Class B Preferred Stock unless, prior thereto, the holders of shares of Class A or Class B Preferred Stock shall have received $1.50 per share (the “Stated Amount”). The Class A and Class B Preferred Stock shall rank, with respect to the payment of liquidation, dividends and the distribution of assets, senior to the Company’s Common Stock.

The Holder (as defined in the Class A Preferred Stock certificate of designations) of the Class A Preferred Stock may convert all or part of the outstanding and unpaid Stated Amount (as defined in the Class A Preferred Stock certificate of designations) into fully paid and non-assessable shares of the Company’s common stock at the Conversion Price (as defined in the Class A Preferred Stock certificate of designations). The number of shares receivable upon conversion equals the Stated Amount divided by the Conversion Price. The Conversion Price shall be equal to ~~the~~ 75% of the average closing price for the 30 trading days prior to the election to convert. At no time will the Company convert any of the Stated Amount into common stock if that would result in the Holder beneficially owning more than 49% of the sum of the voting power of the Company’s outstanding shares of common stock plus the voting power of the Class A Preferred Stock. No shares of Class A Preferred Stock have been issued.

The shares of the Class B Preferred Stock shall be automatically redeemed by the Company at $0.01 per share on the date that Tim N. Tangredi ceases, for any reason, to serve as an officer, director, or consultant of the Company.

During January and February 2022, after the Company’s fiscal year ended December 31, 2021, the Company’s Board of Directors, with input from the Company’s financial advisors, completed its reevaluation of the Company’s capital structure, including the advisability of authorizing addition series of preferred stock, par value $0.01 (“Preferred Stock”). The Board of Directors determined that it was in the best interests of the Company and its stockholders to authorize four new series of Preferred Stock (sometimes referred to as “New Series of Preferred Stock”).

As a result, the Board of Directors and management with the assistance of its outside financial advisors prepared a Certificate of Amendment to its Certificate of Incorporation for the purpose authorizing the four New Series of Preferred Stock, which was subject to the filing by the Company of a Certificate of Amendment with the Department of State of the State of New York (“Certificate of Amendment”).

To implement the authorization of the four New Series of Preferred Stock, the Certificate of Amendment was submitted to the Department of State on March 17, 2022, and was accepted for filing on March 22, 2022. The recently authorized New Series of Preferred Stock included: (i) Series C Convertible Preferred Stock, consisting of 100,000 shares, all of which were to be issued following acceptance of the Certificate of Amendment by the Department of State, to two (2) third-party accredited investors who had provided bona fide financial consulting services to the Company; (ii) Series D Convertible Preferred Stock, consisting of 10,000 shares, which shares may be issued, at the sole discretion of the Board of Directors, from time to time, to consultants and other third parties for, among other purposes, new services to the Company and for other good and valuable consideration, none of which shares have been issued; (iii) Series E Convertible Preferred Stock, consisting of 250,000 shares, all of which were to be issued following final acceptance of the Certificate of Amendment by the Department of State, being issued to three (3) “accredited investors” including the Company’s financial advisors in consideration for their capital contributions to the Company; and (iv) Series F Convertible Preferred Stock consisting of 1,500,000 shares which are intended to be issued to several long-tenured key employees and the Company’s Board of Directors in consideration for previously rendered services to the Company as well as to certain noteholders and others under agreements and arrangements that have been authorized by the Board of Directors. Equity issuances within these various classes was to take place during the 4^th quarter of 2022 now reset for 1Q of 2023.

Common Stock

At December 31, ~~2021~~2022, and ~~2020~~2021, the Company’s Board of Directors ~~has~~ authorized 1,100,000,000 shares of common stock with a par value of $0.01 to be issued in series with terms and conditions to be determined by the Board of Directors.

~~2021~~2022 Common Stock Transactions:

During ~~the~~May ~~year ended December 31~~2022, ~~2021,~~ the Company issued 7457,~~036,668~~500 shares of common stock ~~and~~upon ~~2,826,733~~the ~~common~~conversion ~~stock~~of ~~purchase~~$45,000 ~~warrants in settlement~~ of ~~convertible~~ notes payable, ~~and~~plus ~~related accrued interest. The shares are valued at~~ $~~1,829,534~~750 ~~and~~of ~~the warrants are valued at $857,600~~costs.

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Table of Contents

During July 2022, the Company issued 470,000 shares of common stock upon the conversion of $47,000 of notes payable.

The company issued 1,276,406 shares of common stock upon the cashless exercise of 1,510,000 common stock warrants.

The Company cancelled 1,000,000 shares of common stock, which are to be reissued in the future.

In connection with a note issued in September 2022, the Company issued a warrant to purchase 1,000,000 shares of common stock to the lender. The warrant has an exercise price of $0.30 per share and expires on September 7, 2027.

2021 Common Stock Transactions:

During the nine months ended September 30, 2021, the Company issued 7,036,668 shares of common stock and 3,576,733 common stock purchase warrants in settlement of convertible notes payable and related accrued interest. The shares were valued at $1,829,534 and the warrants were valued at $857,600. Of these warrants, 3,266,733 expired during 2022, and 310,000 were exercised on a cashless basis into 203,103 shares of common stock in 2022.

During the year ended December 31, 2021, the Company issued 2,100,000 shares of common stock, valued at $567,000, for services.

2020 Transactions:

There were no common stock transactions in 2020.

Options and Warrants

In January 2021, outstanding Options and Warrants held by Employees, Board Members and the Company’s Secured Note Holder were surrendered by Holders to the Company.

The 3,576,733 warrants issued in 2021 in connection with the settlement of debt described in Note 98 have an exercise price of $0.30 per share and ~~expire~~expired if unexercised on June 30, 2022. The fair value of the warrants was $857,600, determined using the Black Scholes Model with the following assumptions: (1) risk free interest rate of 0.05%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of the Company’s common stock of 367%; and (4) an expected life of 11.5 months. Of these warrants, 3,266,733 expired during 2022, and 310,000 were exercised on a cashless basis into 203,103 shares of common stock in 2022.

During the three months ended June 30, 2021, the Company issued 700,000 warrants for services. The warrants have an exercise price of $0.05 per share and ~~expire~~expired on May 18, 2022. The fair value of the warrants was $184,457, determined using the Black Scholes Model with the following assumptions: (1) risk free interest rate of 0.06%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of the Company’s common stock of 376%; and (4) an expected life of 1 year. The 700,000 warrants were exercised on a cashless basis into 676,666 shares of common stock in 2022.

F-16 Table of Contents

In September 2021, the Company issued 1,466,666 warrants in connection with a note in the amount of $220,000. The warrants have an exercise price of $0.15 per share and expire on September 21, 2026. The relative fair value of the warrants was $110,000, determined using the Black Scholes Model with the following assumptions: (1) risk free interest rate of 0.84%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of the Company’s common stock of 389%; and (4) an expected life of 5 years. The Company recorded debt discount of $110,000 related to the warrants.

During the fourth quarter of 2021, the Company issued 10,463,332 warrants in connection with convertible notes in the aggregate amount of $1,412,000. The warrants have an exercise price of $0.15 per share and expire five years from the dates of issuance. The relative fair value of the warrants was $1,366,127, determined using the Black Scholes Model with the following assumptions: (1) risk free interest rate of 0.84% - 1.33%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of the Company’s common stock of 386% - 389%; and (4) an expected life of 5 years. The Company recorded debt discount of $1,295,000 related to the warrants, limited to the proceeds received. Of these warrants, 500,000 were exercised on a cashless basis into 396,667 shares of common stock in 2022.

~~Note~~In 8connection with a convertible note issued in September 2022, the Company has issued a warrant to purchase 1,000,000 shares of common stock to the lender. ~~Notes~~The ~~Payable~~warrant has an exercise price of $0.30 per share and expires on September 7, 2027. The relative fair value of the warrant was $59,998, determined using the Black Scholes Model with the following assumptions: (1) risk free interest rate of 3.37%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of the Company’s common stock of 360%; and (4) an expected life of 5 years.

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Table of Contents

Note 8. Convertible Notes Payable and Exchange Program

Debt to Equity Exchange Program

In the period from June 2017 through the end of December 2019, the Company entered eight Convertible Note Holder agreements with eight Note Holders totaling, with all fees, interest, and principal, $2,008,812 as of December 31, 2020. The notes were not considered to be in default and were being renegotiated at March 31, 2021. Subsequently, as of May 31, 2021, each Convertible Noteholder received their fees, interest, and principal totaling $2,107,414 in shares of Common stock of the Company (at $0.030 per share) with 50% warrant coverage (1 year cash warrant with a strike price of 0.30). All documents were executed by June 30, 2021, with all equity/warrants issued by July 31, 2021. The Company issued 7,036,668 Common shares, and 3,576,733 Warrant shares in this transaction. All unexercised warrants expired as of May 15, 2022 per the terms and conditions of the Warrant document.

2022 Convertible Notes

2021 Convertible Notes

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Table of Contents

During May 2022, the Company issued 457,500 shares of common stock upon the conversion of $45,000 of notes payable, plus $750 of costs. Unamortized discount and debt costs related to the principal converted were $21,206 and $514, respectively, which were charged against interest expense upon conversion.

During July 2022, the Company issued 470,000 shares of common stock upon the conversion of $47,000 of notes payable. Unamortized discount related to the principal converted was $19,958, which was charged against interest expense upon conversion.

The Company’s convertible promissory notes at December 30, 2022, and 2021 are as follows:

	December 31, 2022			December 31, 2021
Convertible notes payable, bearing interest at 8-10%	$	2,054,850		$	1,453,960
Unamortized debt discount		(68,219	)		(1,428,726	)
Unamortized deferred debt issuance cost		-			(9,112	)
Total		1,986,631			194,162
Current portion	$	1,986,631		$	194,162

Note 9. Notes Payable

JMS Investments

Between April of 2021 and September 30, 2021, JMS Investments of Staten Island, NY, USA invested $376,000 in seven separate transactions. The sums are repayable in the form of one-year demand notes having an interest rate of 8.5%.

GEX Management, Inc.

On August 30, 2021, the Company entered into a promissory note with GEX Management, Inc. The note matured on February 28, 2022 and bears interest at 10% per year. The note was repaid in December 2021. In connection with this note, the Company has agreed to issue 1,000,000 shares of common stock to the lender. These shares have not been issued at ~~September~~December 3031, ~~2021~~2022. The shares to be issued have been valued at $120,990, which has been recorded as debt discount. The discount has been fully amortized in 2021. The value of the shares has been included in accrued expenses at December 31, ~~2021~~2022.

Paycheck Protection Program Loans

On January 25, 2021, the Company received $122,340 in a loan borrowed from a bank pursuant to the Paycheck Protection Program under the CARES Act guaranteed by the Small Business Administration (“SBA”), which we expect to be forgiven in part or in full, subject to our compliance with the conditions of the Paycheck Protection Program. If not forgiven, the terms on the note provide for interest at 1% per year and the note mature in 24 months, with 18 monthly payments of $8,146 beginning after the initial 6 month deferral period for payments. The loan and related accrued interest of $1,786 was forgiven on July 12, 2022.

On April 29, 2020, the Company received $144,750 in a loan borrowed from a bank pursuant to the Paycheck Protection Program under the CARES Act guaranteed by the Small Business Administration (“SBA”), which we expect to be forgiven in part or in full, subject to our compliance with the conditions of the Paycheck Protection Program. If not forgiven, the terms on the note provide for interest at 1% per year and the note mature in 24 months, with 18 monthly payments of $8,146 beginning after the initial 6 month deferral period for payments. This loan was subsequently forgiven in full on August 29, 2021 and the Company recorded forgiveness of debt income of $146,685, including accrued interest forgiven of $1,935.

F-17 Table of Contents

Small Business Administration Loan

On June 12, 2020, the Company received $150,000 in a loan borrowed from the SBA. Installment payments, including principal and interest, of $731 monthly, will begin 12 months from the date of the note. The balance of principal and interest will mature 30 years from the date of the note. Interest will accrue at the rate of 3.75% per year. On March 16, 2021, the U.S. Small Business Administration announced that the deferment period for the repayment would be extended an additional 12 months.

~~Secured~~F-16 ~~Promissory~~Table ~~Notes~~of Contents

On April 3, 2020, the Company received $54,000 pursuant to a secured promissory note. The note bore interest at 10% per year and matured on June 25, 2020. The note provided for a minimum payment of $7,500 for fees and expenses incurred by the lender. The note was secured by the Company’s receivables, inventory and interest in a certain purchase order issued to the Company by a customer. The note was repaid on August 3, 2020.

On October 8, 2020, the Company received $18,500 pursuant to a secured promissory note. The note bore interest at 10% per year and matured on December 8, 2020. The note provided for a minimum payment of $2,300 for fees and expenses incurred by the lender. The note was secured by the Company’s receivables, inventory and interest in a certain purchase order issued to the Company by a customer. The note was repaid on December 7, 2020.

On December 15, 2020, the Company received $26,200 pursuant to a secured promissory note. The note bears interest at 10% per year and matures on March 20, 2021. The note provides for a minimum payment of $2,000 for fees and expenses incurred by the lender. The note is secured by the Company’s receivables, inventory and interest in a certain purchase order issued to the Company by a customer. The principal amount of $26,200 was repaid on March 18, 2021.

Note 9. Convertible Notes Payable

Debt to Equity Exchange Program

In the period from June 2017 through the end of December 2019, the Company entered eight Convertible Note Holder agreements with eight Note Holders totaling, with all fees, interest, and principal, $2,008,812 as of December 31, 2020. The notes were not considered to be in default and were being renegotiated at March 31, 2021. Subsequently, as of May 31, 2021, each Convertible Noteholder received their fees, interest, and principal totaling $2,107,414 in shares of Common stock of the Company (at $0.030 per share) with 50% warrant coverage (1 year cash warrant with a strike price of 0.30). All documents were executed by June 30, 2021 with all equity/warrants issued by July 31, 2021. The Company issued 7,036,668 Common shares, and 3,576,733 Warrant shares in this transaction.

2021 Convertible Notes

On September 20, 2021, the Company entered into a convertible promissory note with GS Capital Partners, LLC. The note matures on September 20, 2022 and bears interest at 8% per year. The Company received proceeds of $197,000, after deduction of $20,000 of original issue discount and $3,000 of costs. In connection with this note, the Company has issued a warrant to purchase 1,466,666 shares of common stock to the lender. The warrant has an exercise price of $0.15 per share and expires on September 21, 2026. The relative fair value of the warrant was $110,000, determined using the Black Scholes Model with the following assumptions: (1) risk free interest rate of 0.84%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of the Company’s common stock of 389%; and (4) an expected life of 5 years. The note is convertible into shares of common stock at a fixed conversion price of $0.10 per share. The company has recorded a beneficial conversion feature of $90,000.

A total of $220,000 has been recorded as debt discount, and 3,000 has been recorded as deferred debt costs. The discount and costs will be amortized to interest expense over the term of the note, and $62,929 was amortized during the year ended December 31, 2021.

F-18 Table of Contents

During the fourth quarter of 2021, the Company entered into twenty convertible promissory notes with various holders aggregating $1,412,000. The notes mature one year from issuance and bear interest at 8% per year. The Company received proceeds of $1,287,000, after deduction of $117,000 of original issue discount and $8,000 of costs. In connection with the notes, the Company has issued warrants to purchase 10,463,332 shares of common stock to the lenders. The warrants have an exercise price of $0.15 per share and expire five years from the date of issuance. The relative fair value of the warrants was $1,366,127, determined using the Black Scholes Model with the following assumptions: (1) risk free interest rate of 0.84% - 1.33%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of the Company’s common stock of 386% - 389%; and (4) an expected life of 5 years. The notes are convertible into shares of common stock at a fixed conversion price of $0.10 per share.

A total of $1,295,000 has been recorded as debt discount, and 8,000 has been recorded as deferred debt costs. The discount and costs will be amortized to interest expense over the term of the notes, and $142,233 was amortized during the year ended December 31, 2021.

The Company’s convertible promissory notes at December 31, 2021 and 2020 are as follows:

	December 31,2021			December 31,2020
Convertible notes payable, bearing interest at 8- 10%	$	1,632,000		$	1,453,960
Unamortized debt discount		(1,428,726	)		-
Unamortized deferred debt issuance cost		(9,112	)		-
Total		194,162			1,453,960
Current portion	$	194,162		$	1,453,960

Note 10. Derivative Liabilities

The Company had identified certain embedded derivatives related to its convertible notes. Since the notes were convertible into a variable number of shares or have a price reset feature, the conversion features of those notes were recorded as derivative liabilities. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date and to adjust to fair value as of each subsequent balance sheet date.

The Company has recorded additions to the derivative conversion liabilities related to the conversion feature attributable to interest accrued during the period. These additions totaled $124,290 ~~and $556,727~~ for the ~~years~~year ended December 31, 2021 and ~~2020, respectively and~~ were charged to interest expense.

During the year ended December 31, 2021, through the date of settlement of the debt, the Company recorded income of $2,241,678 related to the change in the fair value of the derivatives. The fair value of the embedded derivatives was $1,728,274 at the date of settlement, determined using the Black Scholes Model with the following assumptions: (1) risk free interest rate of 0.01%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of the Company’s common stock of 315%; and (4) an expected life of 3 months.

During the year ended December 31, 2020, the Company recorded expense of $Warrant coverage 939,464 related to the change in the fair value of the derivatives.

During the second quarter of 2021 the Company issued 7,036,668 shares of common stock, valued at $1,829,534 and 2,826,733 warrants, valued at $857,600, in settlement of $1,453,960 of notes payable and $653,454 of accrued interest. Derivative liability of $1,728,274 was extinguished because of the settlement. The Company recorded a gain on extinguishment of $1,148,554.

F-19 Table of Contents

Note 11. Stock Options and Warrants

Options

In June 2000 and November 2009, the Company’s Board of Directors adopted, and the shareholders approved, the 2000 Plan and 2009 Plan, respectively (together the “Plans”). The Plans provide for the granting of options to qualified employees of the Company, independent contractors, consultants, directors, and other individuals. The Company’s Board of Directors approved and made available 5,547 and 7,500 shares of common stock to be issued pursuant to the 2000 Plan and the 2009 Plan, respectively. On February 27, 2015, the shareholders approved the Dais Analytic Corporation 2015 Stock Incentive Plan (the “2015 Plan”). The number of shares of common stock reserved for issuance under the 2015 Plan is 5,000. The Plans and the 2015 Plan permit grants of options to purchase common shares authorized and approved by the Company’s Board of Directors. The shares authorized by the Plans have been reduced pursuant to the one-for-2,000 reverse stock split effective December 6, 2019.

There were no stock options issued during the years ended December 31, ~~2021~~2022 and ~~2020~~2021.

The following summarizes the information relating to outstanding stock options activity during ~~2021~~2022 and ~~2020~~2021:

	CommonShares			WeightedAverageExercisePrice		WeightedAverageRemaining ContractualTerm(in years)		AggregateIntrinsicValue
Outstanding at December 31, 2019		10,514		$	252.61		5.5	$	-
Outstanding at December 31, 2020		9,876		$	230.18		4.8	$
Granted		-			-
Forfeited or expired		~~(638~~9,876	)		~~600~~230.0018
Outstanding at December 31, 2020		~~9,876~~-			~~230.18~~-		~~4.8~~	$	-
Granted		-			-
Forfeited or expired		~~(9,876~~-	)		~~230.18~~-
Outstanding at December 31, 2021		-		$	-		-	$	-
Exercisable at December 31, 2021		-		$	-		-	$	-

There was no stock compensation expense related to options for the years ended December 31, ~~2021~~2022 and ~~2020~~2021.

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Table of Contents

Warrants

At December 31, ~~2021~~2022, the Company had outstanding warrants to purchase the Company’s common stock which were issued in connection with multiple financing arrangements and consulting agreements. Information relating to these warrants is summarized as follows:

	Number ofShares			WeightedAverageRemaining Life (Years)		WeightedAverageExercisePrice
Warrants at December 31, 2019		239,125			9.7	$	3.41
Granted		-					-
Forfeited or expired		-					-
Warrants at December 31, 2020		239,125			8.7	$	3.41
Granted		16,206,731					0.18
Forfeited or expired		(239,125	)				3.41
Warrants at December 31, 2021		1516,~~456~~206,731			3.8	$	0.18
Granted		1,000,000					0.30
Exercised		(1,510,000	)				0.13
Forfeited or expired		(3,266,733	)				0.30
Warrants at December 31, 2022		12,429,998			4.0	$	0.16

F-20 Table of Contents

Note 12. Deferred Revenue

In December 2017, the Company and Zhejiang MENRED Environmental Tech Co, Ltd., Zhejiang Province, China (“Menred”), entered into a royalty bearing License and Supply Agreement (the “License and Supply Agreement”), effective December 21, 2017. Pursuant to the License and Supply Agreement, the Company licensed certain intellectual property and improvements to Menred, for use in the manufacture and sale of certain product types sold by Menred mostly for installation in buildings in China. Menred also agreed to purchase its requirements of certain products from the Company for Menred’s use, pursuant to the terms and conditions of the License and Supply Agreement. Also pursuant to the License and Supply Agreement, each year the Parties have minimum sales commitments of each other’s products. The License and Supply Agreement has a ten-year term with mutually agreed upon five-year extensions. The parties began a renegotiation of the terms and conditions of this agreement in December of 2022.

The Company recognized license revenue of $50,000 for each of the years ended December 31, ~~2021~~2022, and ~~2020~~2021. Deferred revenue for the agreement was $~~298~~248,656 and $~~348~~298,656 at December 31, ~~2021~~2022 and ~~2020~~2021, respectively. The Company recognized royalty revenue of $0 for the years ended December 31, ~~2021~~2022 and ~~2020~~2021.

Note 13. Commitments and Contingencies

Litigation

From time to time, claims are made against the Company in the ordinary course of its business, which could result in litigation. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, such as monetary damages, fines, penalties, or injunctions prohibiting the Company from selling one or more products or engaging in other activities. The occurrence of an unfavorable outcome in any specific period could have a material adverse effect on the Company’s results of operations for that period or future periods.

In 2015, the Company commenced an action for the cancellation of shares issued to Soex (the “Shares”) in connection with a breached Securities Purchase Agreement and Distribution Agreement entered 2014.

The Soex Litigation was tried in U.S. District Court for the Middle District of Florida in October of 2018. The jury at the conclusion of the trial did not award monetary damages to either party for claims or counterclaims.

On October 24, 2018, the Company initiated a third lawsuit against an affiliate of Soex, Zhongshan Trans-Tech New Material Technology Co. Ltd. Zhongshan, China, (“Transtech”), and the Chairperson of the affiliate and Soex, based on new information learned by the Company. The Company will seek maximum relief and damages for this on-going and growing illegal misuse the Company’s Intellectual Property. The Company feels this third action will lead in a judgment in favor of the Company.

On October 8, 2021 the Company was notified of a unusual order by the Federal District Court judge who oversaw the initial 2018 proceedings. This activity was initiated at the request of Soex’s counsel. The Order awards the defendant (Soex) $300,568 in attorney’s fees and $82,096 in costs for a total award of $382,664 to be paid by Dais. The Order doesn’t specify the date by which the award needs to be paid. The sum is recorded in accrued liabilities.

The Company will vigorously defend itself against this Order, as well as move on all possible avenues open to it to stop, what Management believes, is an on-going misuse of the Company’s core Intellectual Property. The Company believes –- based on the content of the Order and other admissions and actions on the part of others –- it has a chance to prevail in an appeal to the benefit of the Company and its shareholders.

F-2118 Table of Contents

Accounts Payable

Company	Sum Owned		Payment Plan	Legal Action
Old Dominion Freight Line	$	13,576.95	No	Yes
Old Dominion Freight Line (1)	$	13,575.95	No	Yes
Power Plant Services	$	85,199.11	No	Yes
Power Plant Services (2)	$	85,199.11	No	Yes
SoftinWay	$	8,850.00	Yes	Yes
Softinway (3)	$	3,350.00	Yes	Yes
The O-Ring Store	$	10,334.00	No	Yes
Total	$	~~117~~112,~~960~~459.06

Footnotes for Accounts Payable Table

	1.	This action moved towards settlement in December of 2022 and completing in March of 23, 2023. The sum the creditor froze $28,781 of the Company’s funds at the Company’s bank, the parties discussed the matter. The sum owed was agreed to be $17,212 including principle, interest, court costs and legal fees. The agreed sum ($17,212) is in the process of being deducted from the withheld sum at the company's bank. from the withheld $28,781.
	2.	The sum the creditor froze $4,700 of the Company’s funds at the Company’s bank. The company is exploring post judgement relief options/taking steps to ensure that Secured Noteholders priority is protected and to negotiate an acceptable repayment plan.
	3.	The original balance of approximately $24,165 has been consistently paid down per a verbal repayment agreement.

Note 14. Income Taxes

The Company had, subject to limitation, approximately $2524.7 million of net operating loss carryforwards at December 31, ~~2021~~2022, of which approximately $18.34 million will expire at various dates beginning in 2021 through 2037. In addition, the Company has research and development tax credits of approximately $~~378~~409,000 at December 31, ~~2021~~2022 available to offset future taxable income, which will expire from 2030 through ~~2038~~2040. We have provided a 100% valuation allowance for the deferred tax benefits resulting from the net operating loss carryover and our tax credits due to our lack of earnings history. In addressing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences are deductible. The valuation allowance ~~decreased~~increased by approximately $~~323~~200,000 and decreased by approximately $~~781~~323,000 for the years ended December 31, ~~2021~~2022 and ~~2020~~2021, respectively. Significant components of deferred tax assets and liabilities are as follows:

	2021			2020
	2022			2021
Deferred revenue	$	7663,000		$	8876,000
Depreciation		1(5,000	)		51,000
Accrued compensation		~~550~~568,000			~~529~~550,000
Research and development credit		~~378~~409,000			~~362~~378,000
Accrued warranty and interest expense		~~564~~786,000			~~191~~564,000
Net operating loss carryforward		6,~~308~~256,000			76,~~025~~308,000
Valuation allowance		(78,~~877~~077,000	)		(87,~~200~~877,000	)

A reconciliation of the federal statutory income tax rate to the Company’s effective income tax rate is as follows:

	December 31,
	2021			2020
	2022			2021
Federal statutory income tax rate		(21.0	)%		(21.0		)%
State income taxes, net of federal benefit		(4.3	)		(4.3	)
Permanent differences		6521.25			5365.752
Change in valuation allowance		~~(39~~3.98	)		(2839.49	)
Provision for income taxes		0.0	%		0.0	%

F-2219 Table of Contents

As of December 31, ~~2021~~2022, the Company has not performed an IRC Section 382 study to determine the amount, if any, of its net operating losses that may be limited because of the ownership change percentages during ~~2021~~2022 and prior years. However, the Company will complete the study prior to the utilization of any of its recorded net operating losses.

Income ~~Tax~~tax returns remain open by statue, generally for the years ~~2018~~2019 through ~~2021~~2022.

Note 15. Subsequent Events

The following material events occurred after December 31, ~~2021~~2022, and as such this requires recognition or disclosure in the financial statements:

~~Item~~1. Litigation – SOEX: In early 2023, the Company learned two members of the former Transtech management team allegedly have established two companies to compete with the large Swiss entity still using Dais IP. This is new to the Company and its legal counsel. It is formulating a plan to pursue this matter to the ultimate satisfaction of the Dais shareholders. We remain confident with appropriate counsel the Company will prevail in its reformatted approach to this matter. 2. Financing; During the first quarter of 2023 the Company borrowed from the PKT Strategic Technologies, LLC, Senior Note Holder under the same terms and conditions as the existing sums of money which have been loaned to the Company since June 16, 2016 with principal and interest on these sums for this period remaining to be repaid, the Company increased the amount of its debt to the Senior Note Holder by borrowing $66,000, and $592,960. 3. Financing: During the first quarter of 2023 the company borrowed $350,000 from a related party, but it was repaid in full during the same period. There were no fees or interest incurred. The Company issued 500,000 shares of common stock as part of this agreement. 4. Financing: In March of 2022 the NYS Department of Corporation approved the issuance of Series C, D, E, and F of preferred convertible warrant stock. Series C and E have been issued as outlined in previous reporting. Series D is pending. Series F, for Board members, company employees and those contractually bound to receive these shares, is in the process of being issued. 5. Financing: The company filed a Temporary Restraining Order against four convertible note holders over the terms of its conversion from debt to equity these convertible noteholders. The judge met with the Parties on May 1. It was decided at the conclusion of this meeting to cancel the request for the TRO. More effective tactics are projected to be deployed by the Company to address areas of concern coved in the TRO application. 6. Repayment: In March of 2023 the judgment against the company for Old Dominion Trucking was satisfied. The creditor froze $28,781 of the Company’s funds at the Company’s bank, the parties discussed the matter. The sum owed was agreed to be $17,212 including principle, interest, court costs and legal fees. On May 1, 2023, the Company’s bank refunded the additional $11,444 held. 7. Share issuances: During the first quarter of 2023, the company issued a total of 9,530,034 shares comprising of: · 2,750,939 shares issued for consulting services; · 4,501,959 shares issued for notes payable conversions; · 1,200,000 shares issued as part of obligations in 2022 previously disclosed; · 500,000 shares issued for the $350,000 related party note mentioned in the 3rd subsequent event item and; · 577,500 shares issued for warrant exercises 8. Financing: During April 2023, the company received a total of $168,950 from convertible notes payable.

~~During~~No ~~January~~other ~~and~~material ~~February~~events ~~2022,~~have occurred after ~~the Company’s fiscal year ended~~ December 31, ~~2021~~2022, ~~the~~requiring ~~Company’s~~recognition ~~Board~~or ofdisclosure Directors, with input from the Company’s financial advisors, completed its reevaluation of the Company’s capital structure, including the advisability of authorizing addition series of preferred stock, par value $0.01 (“Preferred Stock”). The Board of Directors determined that it was in the ~~best interests of the Company and its stockholders to authorize four new series of Preferred Stock (sometimes referred to as “New Series of Preferred Stock”)~~financials.

To implement the authorization of the four New Series of Preferred Stock, the Certificate of Amendment was submitted to the Department of State on March 17, 2022, and was accepted for filing on March 22, 2022. The recently authorized New Series of Preferred Stock included: (i) Series C Convertible Preferred Stock, consisting of 100,000 shares, all of which were to be issued following acceptance of the Certificate of Amendment by the Department of State, to two (2) third-party accredited investors who had provided bona fide financial consulting services to the Company; (ii) Series D Convertible Preferred Stock, consisting of 10,000 shares, which shares may be issued, at the sole discretion of the Board of Directors, from time to time, to consultants and other third parties for, among other purposes, new services to the Company and for other good and valuable consideration, none of which shares have been issued; (iii) Series E Convertible Preferred Stock, consisting of 250,000 shares, all of which were to be issued following final acceptance of the Certificate of Amendment by the Department of State, being issued to three (3) “accredited investors” including the Company’s financial advisors in consideration for their capital contributions to the Company; and (iv) Series F Convertible Preferred Stock consisting of 1,500,000 shares, 1,000,000 shares of which are intended to be issued to several long-tenured key employees and the Company’s Board of Directors in consideration for previously rendered services to the Company as well as to certain noteholders and others under agreements and arrangements that have been authorized by the Board of Directors.

A copy of the Certificate of Amendment to the Certificate of Incorporation, which included the respective Certificates of Designation for the Series C Convertible Preferred Stock, Series D Convertible Preferred Stock, Series E Convertible Preferred Stock and Series F Convertible Preferred Stock, is attached as Exhibit 3.11 to this Annual Report on Form 10-K.

Reference is made to the complete disclosure contained in Exhibit 3.11 of this Annual Report for the preferences, rights, limitations qualifications and restrictions, including conversion rights, of each of the above-referenced New Series of Preferred Stock.

Item Two

The Company and its Board of Directors have reached a tentative agreement on April 12, 2022, with its Senior Secured Noteholder. The transaction has been renegotiated. The Parties are working to complete a definitive agreement prior to May 15, 2022. Therefore, this update on the status of the Senior Secured Note has been placed in the Subsequent Events section. When the definitive agreement is complete relevant information will be shared in an SEC Form 8K filing.

F-23

Filing Compare · DAIS Corp