UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1933

FOR THE QUARTERLY PERIOD ENDED ~~SEPTEMBER~~March 3031, ~~2021~~2022

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ~~________________~~_____________ TO ~~__________________~~_____________.

Commission File Number 333-174581

Sollensys Corp ~~(Exact name of registrant as specified in its charter)~~

(Exact name of registrant as specified in its charter)

Nevada		80-0651816
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2475 Palm Bay Road NE, Suite 120

Palm Bay, Florida 32905

(Address of principal executive offices) (Zip Code)

(866)-438-7657

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
N/A		N/A		N/A

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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated 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 ☒

As of ~~November~~May 1516, ~~2021~~2022, the registrant had ~~100~~104,~~052~~925,~~492~~598 shares of common stock issued and outstanding.

TABLE OF CONTENTS

			~~Page~~	Page
PART I. FINANCIAL INFORMATION			3
Item 1.	~~Unaudited Consolidated Financial Statements~~	Unaudited Consolidated Financial Statements	3	1
	Balance Sheets		3
		Consolidated Balance Sheets		1
	Statements of Operations		4
		Consolidated Statements of Operations		2
	Statements of Change in Stockholders’ Deficit		5
		Consolidated Statements of Change in Stockholders’ Equity (Deficit)		3
	Statements of Cash Flows		6
		Consolidated Statements of Cash Flows		4
	~~Notes to the Unaudited Consolidated Financial Statements~~	Notes to the Unaudited Consolidated Financial Statements	7	5
Item 2.	~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12	14
Item 3.	~~Quantitative and Qualitative Disclosures About Market Risk~~	Quantitative and Qualitative Disclosures About Market Risk	16	18
Item 4.	~~Controls and Procedures~~	Controls and Procedures	16	19
PART II. OTHER INFORMATION			17
Item 1.	~~Legal Proceedings~~	Legal Proceedings	17	20
Item 1A.	~~Risk Factors~~	Risk Factors	17	20
Item 2.	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	Unregistered Sales of Equity Securities and Use of Proceeds	17	20
Item 3.	~~Defaults Upon Senior Securities~~	Defaults Upon Senior Securities	17	20
Item 4.	~~Mine Safety Disclosures~~	Mine Safety Disclosures	17	20
Item 5.	~~Other Information~~	Other Information	17	20
Item 6.	~~Exhibits~~	Exhibits	18	21
	~~Signatures~~	Signatures	19	22

~~2 Table of Contents~~i

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

SOLLENSYS CORP.Consolidated Balance Sheets
	September 30,			December 31,
	2021			2020
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	146,406		$	129,624
Inventory		78,000			54,000
Prepaid expenses		96,969			-
Total current assets		321,375			183,624
Building, land and improvements -not in service		2,667,246			-
Fixed assets -net		233,854			-
Total assets	$	3,222,475		$	183,624
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		116,093			-
Accrued expenses		307,921			46,134
Customer deposits - short term		236,429			17,143
Mortgage payable - short term		58,101			-
Loan payable - short term		5,431			-
Total current liabilities		723,975			63,277
Mortgage payable -long term		2,441,899			-
Customer deposits-long term		201,428			72,857
Loan payable		20,550			-
Total liabilities		3,387,852			136,134
Commitments and contingencies		-			-
Stockholders' Equity:
Preferred stock, Series A, $0.001 par value, 10,000,000 shares authorized,
no shares issued and outstanding as of September 30, 2021 and December 31, 2020		-			-
Common stock, $0.001 par value, 300,000,000 shares authorized; 100,002,492 and
99,354,547 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively		100,003			99,355
Additional paid-in capital		5,730,905			3,390,213
Accumulated deficit		(5,996,285	)		(3,442,078	)
Total stockholders' equity(deficit)		(165,377	)		47,490
Total liabilities and equity	$	3,222,475		$	183,624
The accompanying notes are an integral part of the unaudited consolidated financial statements.

SOLLENSYS CORP.

3Consolidated Balance ~~Table of Contents~~Sheets

~~SOLLENSYS CORP.~~(unaudited)

Consolidated Statements of Operations


	March 31, 2022			December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	18,782		$	592,534
Accounts receivable		187,158			1,718
Inventory		78,000			78,000
Prepaid expenses		-			60,749
Total current assets		283,940			733,000
Property, plant and equipment, net		2,935,968			2,944,830
Right of use assets		495,538			-
Other assets		27,994			17,994
Goodwill		200,199			200,199
Intangible assets, net		177,954			194,638
Total assets	$	4,121,593		$	4,090,661

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	116,620		$	66,268
Accrued expenses		315,065			195,589
Deferred revenue		414,873			437,731
Operating lease liability - current portion		127,055			-
Related party loans		20,000			-
Notes payable		2,686,574			2,505,553
Total current liabilities		3,680,187			3,205,141
Notes payable - long term		17,597			19,137
Operating lease liabilities - long term		414,444			-
Deferred revenue - long term		192,857			205,714
Total liabilities		4,305,085			3,429,991

Commitments and contingencies		-			-

Stockholders’ Equity (Deficit):
Preferred stock, Series A, $0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of March 31, 2022 and December 31, 2021		-			-
Common stock, $0.001 par value, 300,000,000 shares authorized; 100,874,486 and 100,715,736 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively		100,875			100,716
Additional paid-in capital		9,088,307			8,527,616
Accumulated deficit		(9,372,674	)		(7,967,663	)
Total stockholders’ equity (deficit)		(183,492	)		660,669
Total liabilities and stockholders’ equity (deficit)	$	4,121,593		$	4,090,661

~~(Unaudited)~~The accompanying notes are an integral part of the consolidated financial statements.

	Three months			Three months			Nine months			Nine months
	ended			ended			ended			ended
	September 30,			September 30,			September 30,			September 30,
	2021			2020			2021			2020
Revenue	$	35,714		$	135,000			145,357		$	135,000
Cost of sales		104,608			45,000			167,352			45,000
Gross profit		(68,894	)		90,000			(21,995	)		90,000
Operating expenses:
General and administrative expense		1,058,574			98,440			2,505,120			2,010,858
Total operating expenses		1,058,574			98,440			2,505,120			2,010,858
Loss from operations		(1,127,468	)		(8,440	)		(2,527,115	)		(1,920,858	)
Other income (expense):
Other income		2,167			-			3,675			-
Gain on extinguishment of debt		-			-			-			85,771
Interest expense		(20,871	)		-			(30,767	)		-
Total other income (expense)		(18,704	)		-			(27,092	)		85,771
Net loss	$	(1,146,172	)	$	(8,440	)	$	(2,554,207	)	$	(1,835,087	)
Basic and diluted (loss) per common share	$	(0.01	)	$	(0.00	)	$	(0.03	)	$	(0.44	)
Weighted-average number of common shares outstanding:
Basic and diluted		99,802,328			4,183,962			99,554,582			4,183,962

~~The accompanying notes are an integral part of the unaudited consolidated financial statements~~SOLLENSYS CORP.

4Consolidated Statements ~~Table~~ of ~~Contents~~Operations

SOLLENSYS CORP.Statements of Changes in Stockholder's Equity(Unaudited)
	Preferred StockSeries A				Common stock				AdditionalPaid-in		RetainedEarnings			TotalStockholders'
	Shares		Value		Shares		Value		Capital		(Deficit)			Equity
Balance, December 31, 2019		-	$	-		4,183,962	$	4,184	$	497,891	$	(603,844	)	$	101,809
Net loss												(10,062	)		(10,062	)
March 31, 2020		-		-		4,183,962		4,184		497,891		(613,946	)		(111,871	)
Issuance of shares to related party		19,000,000	$	19,000						1,881,000					1,900,000
Net loss												(1,826,647	)		(1,826,647	)
Balance, June 30, 2020		19,000,000	$	19,000		4,183,962	$	4,184	$	2,378,891	$	(2,440,593	)	$	(38,518	)
Net loss												(8,440	)		(8,440	)
Related party loans reclassified as a capital contribution										46,943					46,943
Capital contribution from shareholder										500					500
Balance, September 30, 2020		19,000,000	$	19,000		4,183,962	$	4,184	$	2,426,334	$	(2,449,033	)	$	485

(unaudited)

	Preferred StockSeries A							Common stock				AdditionalPaid-in		RetainedEarnings			TotalStockholders'
	Three months ended March 31, 2022				Three months ended March 31, 2021
	Shares				Value			Shares		Value		Capital		(Deficit)			Equity
Revenue	$	444,096			$	71,429
Balance, December 31, 2020	-			$	-				99,354,547	$	99,355	$	3,390,213	$	(3,442,078	)	$	47,490
Cost of sales		396,656				32,344
Private placement of common shares									36,572		37		111,464					111,501
Gross margin		47,440				39,085
Net loss															(524,472	)		(524,472	)
Operating expenses:
Balance, March 31, 2021		-			$	-			99,391,119	$	99,392	$	3,501,677	$	(3,966,550	)	$	(365,481	)
General and administrative expense		1,360,544				563,557
Stock based compensation									44,365		44		234,316					234,360
Total operating expenses		1,360,544				563,557
Private placement of common shares									199,893		200		750,876					751,076
Loss from operations		(1,313,105	)			(524,472	)
Net loss															(883,563	)		(883,563	)
Other income (expense)
Balance, June 30, 2021		-			$	-			99,635,377	$	99,635	$	4,486,870	$	(4,850,113	)	$	(263,608	)
Interest expense		(45,945	)			-
Stock based compensation									12,000		12		65,988					66,000
Total other income (expense)		(45,945	)			-
Private placement of common shares									355,115		355		1,178,047					1,178,402
Loss before income taxes		(1,359,050	)			(524,472	)
Net loss															(1,146,172	)		(1,146,172	)
Provision (benefit) for income taxes		-				-
Balance, September 30, 2021		-			$	-			100,002,492		100,003	$	5,730,905	$	(5,996,285	)	$	(165,377	)
Net loss	$	(1,359,050	)		$	(524,472	)
Basic and diluted loss per common share	$	(0.01	)		$	(0.01	)
Weighted-average number of common shares outstanding:
Basic and diluted		100,751,486				99,374,928

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

~~5 Table of Contents~~2

SOLLENSYS CORP.

Consolidated Statements of ~~Cash~~Changes ~~Flows~~in Stockholder’s Equity (Deficit)

(~~Unaudited~~unaudited)

	Nine months			Nine months
	Preferred Stock Series A						Common stock				Additional Paid-in		Accumulated			Total Stockholders’ Equity
	ended			ended
	Shares			Value			Shares		Value		Capital		(Deficit)			(Deficit)
	September 30,			September 30,
Balance, December 31, 2020		-			-			99,354,547	$	99,355	$	3,390,213	$	(3,442,078	)	$	47,490
	2021			2020
Private placement of common shares								36,572		37		111,464					111,501
Cash flows from operating activities of continuing operations:
Net loss					-									(524,472	)		(524,472	)
Net loss	$	(2,554,207	)	$	(1,835,087	)
Balance, March 31, 2021		-		$	-			99,391,119	$	99,392	$	3,501,677	$	(3,966,550	)	$	(365,481	)
Stock based compensation		300,360			1,900,000
Gain on extinguishment of debt		-			(85,771	)
Depreciation expense		7,592			-
Changes in operating assets and liabilities
Prepaid expenses		(96,969	)		-
Inventory		(24,000	)		(90,000	)
Accounts payable		116,093			-
Accrued expenses		261,787			-
Related party payables					155,843
Customer deposits		347,858
Net cash provided by/(used in) operating activities		(1,641,486	)		44,985
Cash flows from investing activities
Purchase of land, buildings and improvements		(2,667,246	)		-
Purchase of furniture and equipment		(241,445	)		-
Net cash used in investing activities		(2,908,691	)		-
Cash flows from financing activities:
Loan payable-net		25,690			-
Proceeds from the sale of common stock		2,040,979			-
Mortgage loan - land and building		2,500,000			-
Capital contribution from shareholder		-			500
Net cash provided by financing activities		4,566,959			500
Net increase in cash and cash equivalents		16,782			45,485
Cash and cash equivalents at beginning of period		129,624			-
Cash and cash equivalents at end of period	$	146,406		$	45,485
Supplemental disclosure of cash flow information:
Cash paid for interest		30,767		$	-
Cash paid for income taxes	$	-		$	-
Supplemental disclosure of non-cash activities:
Expenses paid on behalf of the Company by related party	$	-		$	20,843
Related party loans reclassified as capital contributions	$	-		$	46,943

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

	Preferred Stock Series A				Common stock				Additional Paid-in		Accumulated			Total Stockholders’ Equity
	Shares		Value		Shares		Value		Capital		(Deficit)			(Deficit)
Balance, December 31, 2021		-	$	-		100,715,736	$	100,716	$	8,527,616	$	(7,967,663	)	$	660,669

Impact of the adoption of ASC 842												(45,961	)		(45,961	)

Private placement of common shares						158,750		159		509,842					510,001

Net loss				-								(1,359,050	)		(1,359,050	)

Stock based compensation										50,849					50,849

Balance, March 31, 2022		-	$	-		100,874,486	$	100,875	$	9,088,307	$	(9,372,673	)	$	(183,492	)

6The accompanying ~~Table~~notes are an integral part of ~~Contents~~the consolidated financial statements.

~~SOLLENSYS CORP~~3

~~NOTES~~SOLLENSYS ~~TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~CORP.

~~NOTE~~Consolidated 1Statements of –Cash ~~ORGANIZATION AND DESCRIPTION OF BUSINESS~~Flows

~~Sollensys Corp~~ (~~“Sollensys” or the “Company”~~unaudited) ~~was formerly a development stage company, incorporated in Nevada on September 29, 2010, under the name Health Directory, Inc.~~

On November 30, 2020, Sollensys entered into a share exchange agreement (the “Share Exchange Agreement”) with (i) Eagle Lake Laboratories, Inc., a Florida corporation (“Eagle Lake”), (ii) each of the shareholders of Eagle Lake (the “Eagle Lake Shareholders”), and (iii) Donald Beavers as the representative of the Eagle Lake Shareholders.


	Three months ended March 31, 2022			Three months ended March 31, 2021
Cash flows from operating activities
Net loss	$	(1,359,050	)	$	(524,472	)
Adjustments to reconcile net loss to cash used in operating activities:
Stock-based compensation		50,849			-
Depreciation and amortization		41,622			-
Changes in operating assets and liabilities:
Accounts receivable		(185,440	)		-
Prepaid expenses		60,749			-
Other assets		(10,000	)		-
Accounts payable		50,353			42,508
Accrued expenses		119,476			71,561
Deferred revenues		(35,715	)		191,429
Net cash used in operating activities		(1,267,156	)		(218,974	)

Cash flows from investing activities
Purchase of fixed assets		(16,077	)		-
Net cash used in investing activities		(16,077	)		-

Cash flows from financing activities:
Proceeds from notes payable		199,960			-
Payments on notes payable		(20,480	)		-
Proceeds from related party loans		20,000
Proceeds from the sale of common stock		510,001			111,501
Net cash provided by financing activities		709,481			111,501

Net decrease in cash and cash equivalents		(573,752	)		(107,473	)
Cash and cash equivalents at beginning of period		592,534			129,624
Cash and cash equivalents at end of period		18,782		$	22,151

Supplemental disclosure of cash flow information:
Cash paid for interest	$	45,945		$	-

~~Among~~The accompanying ~~other~~notes ~~conditions~~are toan ~~the~~integral ~~closing~~part of the ~~transactions~~consolidated ~~contemplated~~financial by the Share Exchange Agreement (the “Closing”), pursuant to the terms of the Share Exchange Agreement, the parties agreed that the Company would acquire 100% of Eagle Lake’s issued and outstanding capital stock, in exchange for the issuance to the Eagle Lake Shareholders of a number of shares of the Company’s common stock, par value $0statements.~~001 per share, to be determined at the Closing of the Share Exchange Agreement.~~

Eagle Lake is a Florida-based science, technology, and engineering solutions corporation offering products that ensure their clients’ data integrity through the collection, storage, and transmission. The Company expects to generate revenue with Eagle’s innovative flagship product, the Blockchain Archive Server™ that can be utilized to protect client data from ransomware. Blockchain technology is a leading-edge tool for data security, providing an added layer of security against data loss due to malware.4

OnSOLLENSYS CORP NOTES ~~December~~TO ~~29,~~CONSOLIDATED ~~2020,~~FINANCIAL ~~the~~STATEMENTS ~~Company’s Board approved the change in the Company’s fiscal year-end from March 31 to December 31.~~(UNAUDITED)

~~Common~~NOTE 1 ~~Control~~– ~~Accounting~~ORGANIZATION ~~Treatment~~AND DESCRIPTION OF BUSINESS

Sollensys Corp ~~and Eagle Lake were under the common control of the CEO before and after the date of transfer. As a result, the Company adopted the guidance in the Financial Accounting Standards Board’s~~ (“~~FASB~~Sollensys”) ~~Accounting~~or ~~Standards~~the ~~Codification (~~“~~ASC~~Company”) ~~805-50-05-5~~was ~~for~~formerly ~~the transfer of net assets between entities under common control to apply~~ a ~~method~~development ~~similar~~stage ~~to the pooling-of-interests-method. Under the method~~company, ~~the~~incorporated ~~financial statements of the Company shall report results of operations for the period~~ in ~~which~~Nevada ~~the~~on ~~transfer~~September 29, ~~occurs~~2010, asunder ~~though~~ the ~~transfer~~name ofHealth the net assets had occurred at the beginning of the period. Results of operations for the period will thus comprise both those of the previously separate entities combined from the beginning of the period to the date the transfer is completed and those of the combined operations from that date to the end of the period. SimilarlyDirectory, the Company shall present the statements of financial position and other financial information presented as of the beginning of the period as though the assets and liabilities had been transferred at that dateInc. ~~Financial statements and financial information presented for prior years also shall be retrospectively adjusted to furnish comparative information.~~

~~Reverse~~Eagle Lake ~~Stock~~Laboratories, ~~Split~~Inc (“Eagle Lake”) is a Florida-based science, technology, and engineering solutions corporation offering products that ensure their clients’ data integrity through the collection, storage, and transmission. The Company expects to generate revenue with Eagle’s innovative flagship product, the Blockchain Archive Server™ that can be utilized to protect client data from ransomware. Blockchain technology is a leading-edge tool for data security, providing an added layer of security against data loss due to malware.

On October 14, 2020, the Company filed with the Secretary of State of Nevada a Certificate of Amendment to its Articles of Incorporation (the “Amendment”) to effect a 1-for-120 reverse stock split (the “Reverse Split”) of the Company’s issued and outstanding common stock. Pursuant to the Amendment, effective as of October 30, 2020, every 120 shares of the issued and outstanding common stock will be converted into one share of common stock, without any change in the par value per share.5

~~The~~On October ~~Reverse~~15, ~~Split~~2021, ~~became~~the ~~effective~~Company onentered ~~November~~into 2,a ~~2020.~~Membership ~~Following~~Interest ~~the~~Exchange ~~effectiveness~~Agreement of (the ~~Reverse Split~~“Agreement”), ondated ~~November~~as 2of October 15, ~~2020~~2021, ~~the~~by ~~number~~and ofamong ~~authorized~~(i) ~~shares~~the ofCompany; ~~common~~(ii) ~~stock~~Abstract ~~was~~Media, ~~reduced~~LLC ~~from~~(“Abstract 12Media”),~~000,000,000~~ ~~shares~~(iii) toeach ~~300,000,000.~~of ~~Additionally,~~the ~~following~~members ~~the~~of ~~Reverse~~Abstract Media ~~Split~~(collectively, ~~Eagle~~the ~~Lake’s~~“Abstract ~~11,400,000,000~~Media ~~common~~Members”); ~~shares~~and ~~were~~(iv) ~~adjusted~~Andrew toBaker ~~95,000,000~~as ~~shares~~the ~~and~~representative ~~they~~of ~~continued~~the toAbstract ~~maintain~~Media ~~95.8%~~Members (the of“Members’ ~~the~~Representative”). ~~total~~The ofAcquisition ~~99,193,962~~closed ~~common~~on ~~shares~~December ~~outstanding~~6, 2021.

NoAbstract Media ~~fractional~~is ~~shares~~a ofTexas ~~common~~limited ~~stock~~liability ~~were~~company ~~issued~~formed in ~~connection~~October 2011, with the ~~Reverse~~goal ~~Split.~~of ~~If,~~improving asuser aengagement ~~result~~using ofvisualization ~~the~~tools. The ~~Reverse~~Company ~~Split,~~has aevolved ~~shareholder~~into ~~would~~an ~~otherwise~~interactive ~~hold~~media aand ~~fractional~~software ~~share,~~development ~~the~~company ~~shareholder~~to ~~received,~~optimize ~~instead~~effective ofcorporate ~~the~~learning, ~~issuance~~operational workflow ofand ~~such~~communication ~~fractional~~using ~~share,~~technology ~~one~~in ~~whole~~the ~~share~~augmented ofreality ~~common~~or ~~stock.~~virtual Asreality aspace. ~~result,~~Abstract ~~143,585~~Media ~~additional~~conducts ~~shares~~its ~~were~~operations from ~~issued~~its ~~due~~office tolocation ~~the~~in ~~rounding~~Houston, ~~up fractional shares~~Texas.

7Management’s Representation ~~Table~~ of ~~Contents~~Interim Financial Statements

~~SOLLENSYS~~The ~~CORP~~accompanying unaudited consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company uses the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature.

~~NOTES~~Basis TOof ~~UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~Presentation

~~NOTE~~In 2the –opinion ~~SUMMARY~~of OFSollensys, ~~SIGNIFICANT~~the ~~ACCOUNTING~~accompanying ~~POLICIES~~unaudited consolidated financial statements contain all adjustments and reclassifications, which are of a normal recurring nature, necessary to present fairly its financial position as of March 31, 2022, the results of its operations for the three months ended March 31, 2022 and 2021 and its cash flows for the three months ended March 31, 2022 and 2021. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2021 and the notes thereto included in the Form 10-K for such period. The results of operations for the three months ended March 31, 2022 and 2021 are not necessarily indicative of the results to be expected for the full fiscal year.

~~Basis~~The consolidated financial statements of ~~Presentation~~Sollensys include its wholly-owned subsidiaries, Eagle Lake, and Abstract Media. All intercompany accounts and transactions have been eliminated in the consolidated financial statements.

The accompanying unaudited consolidated financial statements have been prepared in accordance with the FASB’s ASC, which is the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States. The unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Eagle Lake. All intercompany accounts and transactions are eliminated in consolidation.Celerit Merger

~~Going~~On October ~~Concern~~26, 2021, the Company entered into a Merger Agreement (“Merger Agreement”) by and among (i) the Company; (ii) S-CC Merger Sub, Inc., a wholly owned subsidiary of the Company (“S-CC Merger Sub”); (iii) S-Solutions Merger Sub, Inc., a wholly owned subsidiary of the Company (“S-Solutions Merger Sub”); (iv) Celerit Corporation (“Celerit”); (v) Celerit Solutions Corporation (“Celerit Solutions”); and (vi) Terry Rothwell (collectively, (i)-(v), the “Merger Parties”).

~~The~~On the ~~accompanying~~terms ~~unaudited~~and ~~consolidated~~subject ~~financial~~to ~~statements~~the ~~have~~conditions ~~been~~set ~~prepared~~forth ~~assuming~~in the ~~Company~~Merger ~~will~~Agreement, ~~continue~~ as asubsequently ~~going concern~~amended, ~~which~~and ~~contemplates~~subject ~~the~~further ~~realization~~to acceptance of ~~assets~~Articles ~~and~~of Merger filed on the ~~satisfaction~~Closing Date with the Secretary of ~~liabilities~~State inof Arkansas (“SOS AR”), on April 7, 2022 (the “Closing ~~normal~~Date”): ~~course~~(i) ofCelerit ~~business~~merged ~~for~~with and into S-CC Merger Sub (the ~~twelve~~“Celerit ~~months~~Merger”), ~~following~~and the ~~date~~separate corporate existence of ~~these~~S-CC ~~unaudited~~Merger ~~consolidated~~Sub ~~financial~~ceased, ~~statements.~~with ~~The~~Celerit ~~Company~~as ~~has~~the ~~incurred~~surviving ~~significant~~corporation ~~operating~~(the ~~losses~~“Celerit ~~since~~Surviving ~~its~~Corporation”); ~~inception.~~and (ii) AsCelerit ofSolutions ~~September~~merged 30with and into S-Solutions Merger Sub (the “Celerit Solutions Merger”), ~~2021~~and the separate corporate existence of S-Solutions Merger Sub ceased, with Celerit Solutions as the ~~Company~~surviving ~~had~~corporation a(the ~~working~~“Celerit ~~capital~~Solutions ~~deficit~~Surviving Corporation”) of(the ~~$402~~Celerit Merger and Celerit Solutions Merger together,~~600~~ the “Mergers”). On the Closing Date, SS-Merger Sub and anS-Solutions ~~accumulated~~Merger ~~deficit~~Sub filed Articles of $5Merger with the SOS AR,~~996,285~~ which are currently pending.

~~The~~By virtue ~~Company~~of, ~~expect~~and tosimultaneously ~~generate~~with, ~~operating~~the ~~cash~~Celerit ~~flow~~Merger ~~that~~and ~~will~~without beany ~~sufficient~~further toaction ~~fund~~(other ~~presently~~than ~~anticipated~~the ~~operations~~acceptance ~~although~~by ~~there~~the ~~can~~SOS beAR noof ~~assurance. This raises substantial doubt about~~ the applicable ~~Company’s~~Articles ~~ability~~of toMerger ~~continue~~or as aotherwise ~~going~~required ~~concern.~~pursuant ~~Therefore, the Company will need~~ to ~~raise~~applicable ~~additional~~law) ~~funds~~on ~~and~~the ispart ~~currently exploring alternative sources~~ of ~~financing~~the toMerger ~~supplement~~Parties, ~~expected~~at ~~cash~~the ~~flow.~~effective time ~~Historically,~~of the ~~Company~~Mergers ~~has~~(the ~~raised~~“Effective ~~capital through private placements~~Time”), asthe anCelerit ~~interim~~Merger ~~measure~~was tocompleted ~~finance working capital needs~~ and ~~may continue to raise additional capital through~~ the ~~sale~~Celerit ofSolutions ~~common~~Merger ~~stock~~was ~~or other securities and obtaining some short-term loans~~completed. ~~The Company will be required to continue to do so until its operations become profitable.~~

~~The~~Aggregate consideration ~~Company~~for ~~may~~the ~~attempt~~Mergers consisted of (i) $2,695,000, subject to ~~raise~~certain ~~capital~~adjustments set forth in the ~~near~~Merger ~~future~~Agreement, ~~through~~as amended (the ~~sale~~“Cash Consideration”), and (ii) 4,000,000 shares of ~~equity~~Sollensys orcommon ~~debt~~stock ~~financing;~~(the ~~however,~~“Sollensys ~~there~~Shares”). ~~can~~The Cash beConsideration ~~assurances~~was paid to Terry Rothwell via the ~~Company~~issuance ~~will~~to beTerry ~~successful~~Rothwell inat ~~doing~~the soclosing of a promissory note of Sollensys (the “Rothwell Note”). ~~There~~Additional ~~can~~consideration beof no$10,000 ~~assurance~~was ~~that~~paid ~~such~~to ~~additional~~Terry ~~financing~~Rothwell. ~~will~~The beRothwell ~~available~~Note has a principal amount of $2,695,000, bears simple interest at a rate of 0.0001% to the ~~Company~~maturity ondate, ~~acceptable~~June ~~terms~~30, or2022, and, if not paid at ~~all~~maturity, the Rothwell Note accrues simple interest at 6% per year until paid. There is no penalty or premium for prepayment. In the event of a default, Sollensys has agreed to pay Terry Rothwell’s reasonable legal fees and costs of collection.

~~Use~~Real Estate ~~of Estimates~~Agreement

~~The~~Terry Rothwell ~~preparation~~and George Rothwell are the members of ~~financial~~CRE ~~statements~~Holdings, inLLC ~~conformity~~(“CRE”), ~~with~~the ~~GAAP~~owner ~~requires~~of ~~management~~two tooffice ~~make~~buildings, ~~estimates~~a vacant commercial lot and ~~assumptions~~a condominium. The office buildings are leased by Celerit. The Merger Parties expect that, ~~affect~~shortly after the Effective ~~reported~~Time, ~~amounts~~Sollensys, ofCRE, ~~liabilities~~Terry Rothwell and ~~disclosure~~George ofRothwell ~~contingent~~shall ~~assets~~enter ~~and~~into ~~liabilities~~an atagreement (the ~~date~~“CRE ofAgreement”) related to the ~~financial~~purchase ~~statements~~by ~~and~~Sollensys of the ~~reported~~two ~~amount~~office ofbuildings, ~~expenses~~a ~~during~~vacant ~~the~~commercial ~~reporting~~lot ~~period.~~and ~~The~~a ~~most~~condominium, ~~significant~~as ~~estimates~~well ~~relate~~as toother ~~income~~assets owned ~~taxes~~by CRE, Terry Rothwell and ~~contingencies~~George Rothwell (the “CRE Transactions”). The ~~Company~~purchase ~~bases~~price ~~its~~for ~~estimates~~the onCRE ~~historical~~properties ~~experience~~is $3,295,000. The ~~known~~closing orof ~~expected~~the ~~trends,~~CRE ~~and~~Transactions ~~various~~shall ~~other~~occur ~~assumptions~~on ~~that~~a ~~are~~mutually ~~believed~~agreeable date toand betime ~~reasonable~~in ~~given~~accordance with the ~~quality~~terms and conditions of ~~information~~the ~~available~~CRE asAgreement. ofIf the ~~date~~closing ofdoes ~~these~~not ~~unaudited~~occur ~~consolidated~~on ~~financial~~or ~~statements.~~before ~~The~~June ~~results~~30, of2022, ~~these~~Sollensys ~~assumptions~~will ~~provide~~be ~~the~~obligated ~~basis~~to ~~for~~pay ~~making~~an monthly ~~estimates~~rent ~~about~~of $50,000 in addition to the ~~carrying~~then-existing ~~amounts~~lease ofobligations. ~~assets~~The CRE Agreement and ~~liabilities~~the ~~that~~CRE ~~are~~real ~~not~~estate ~~readily~~transactions ~~apparent~~operate ~~from~~independently ~~other~~of the ~~sources.~~Merger ~~Actual~~Agreement, ~~results~~as ~~could~~amended, ~~differ~~and ~~from~~the ~~these~~other ~~estimates~~transactions contemplated therein.

~~Management’s Representation of Interim Financial Statements~~6

The accompanying unaudited consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company uses the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These unaudited consolidated financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto on December 31, 2020, as presented in the Company’s Annual Report on Form 10-KT filed on March 31, 2021, with the SEC.Director Appointments

8Effective as ~~Table~~of the Closing Date, (i) the Sollensys Board of ~~Contents~~Directors was expanded by one person, and Terry Rothwell was named as a director; (ii) Celerit Surviving Corporation’s board of directors expanded the size of Celerit Surviving Corporation’s board of directors by two persons, and named Messrs. Anthony Nolte and Donald Beavers as directors on the Celerit Surviving Corporation board of directors, while retaining Terry Rothwell as a director; and (iii) Celerit Solutions Surviving Corporation’s board of directors expanded the size of the Celerit Solutions Surviving Corporation Board by two persons, and named Messrs. Nolte and Beavers as directors.

~~SOLLENSYS~~Executive Employment ~~CORP~~Agreements

~~NOTES~~Also as TOof ~~UNAUDITED~~the ~~CONSOLIDATED~~Closing ~~FINANCIAL~~Date, ~~STATEMENTS~~Sollensys entered into (i) an employment agreement with Terry Rothwell pursuant to which Terry Rothwell was appointed as the Chief Executive Officer of each of Celerit Surviving Corporation and Celerit Solutions Surviving Corporation (the “Rothwell Employment Agreement”), and (ii) an employment agreement with Ron Harmon pursuant to which he was appointed as the Chief Operating Officer of each of Celerit Surviving Corporation and Celerit Solutions Surviving Corporation (the “Harmon Employment Agreement” and, together with the Rothwell Employment Agreement, the “Employment Agreements”).

~~Revenue~~Rothwell Server ~~Recognition~~Agreement

~~Revenues~~On April ~~are~~7, ~~accounted~~2022, ~~for~~Sollensys inentered ~~accordance~~into the Rothwell Sollensys Blockchain Archive Server Distribution Data Center Agreement (2 Units) with Terry Rothwell and George Rothwell (the ~~FASB’s~~“Server ~~Accounting~~Agreement”). ~~Standards~~The ~~Update~~Rothwells ~~2014-09,~~together ~~Revenue~~own ~~from~~two ~~Contracts~~units of the Sollensys Blockchain Archive Server Distributive Data Center, each loaded with ~~Customers~~Sollensys application software (~~Topic~~R4 ~~606~~Enterprise) (the “Equipment”). Pursuant to the terms and conditions of the Server Agreement, Sollensys may use the Equipment in exchange for level monthly payments of $100,000 ($50,000 per server) from the servers’ revenue to the Rothwells, payable until both Rothwells are deceased.

~~The~~NOTE 2 ~~amount~~– GOING of revenue recognized reflects the consideration which the Company expects to be entitled to receive in exchange for the products and/or services. To achieve this principle, the Company applies the following five steps:CONCERN

~~1. Identify the contract with the customer;~~Going Concern

2.The accompanying ~~Identify~~consolidated financial statements have been prepared assuming the ~~performance~~Company ~~obligations~~will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the ~~contract;~~normal course of business for the twelve months following the date of these consolidated financial statements. The Company has incurred significant operating losses since its inception. As of March 31, 2022, the Company had a working capital deficit of $3,396,247 and an accumulated deficit of $(9,372,674).

3The Company expects to generate operating cash flows that will be sufficient to fund presently anticipated operations although there can be no assurance. ~~Determine~~This raises substantial doubt about the ~~transaction~~Company’s ~~price;~~ability to continue as a going concern. Therefore, the Company will need to raise additional funds and is currently exploring alternative sources of financing to supplement expected cash flow. Historically, the Company has raised capital through private placements, as an interim measure to finance working capital needs and may continue to raise additional capital through the sale of common stock or other securities and obtaining some short-term loans. The Company will be required to continue to do so until its revenues support its operations.

4.The Company ~~Allocate~~may attempt to raise capital in the ~~transaction~~near ~~price~~future tothrough ~~performance~~the ~~obligations~~sale of equity or debt financing; however, there can be assurances the Company will be successful in doing so. There can be no assurance that such additional financing will be available to the ~~contract,~~Company on ~~and~~acceptable terms or at all.

~~5. Recognize revenue when or as the Company satisfies a performance obligation.~~7

~~The~~NOTE 3 ~~Company~~– ~~recognizes~~SUMMARY ~~revenue~~OF ~~when~~SIGNIFICANT ~~the~~ACCOUNTING control of the products is transferred to the Company’s customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for these products. Control is generally transferred when products are delivered. The Company’s revenue contracts generally represent a single performance obligation to sell its products to customers. Additionally, the Company recognizes revenue when a service is completed thereby completing a performance obligation.POLICIES

~~Customer~~Use of ~~Deposits~~Estimates

~~Under~~The preparation ~~the~~of ~~terms~~financial ofstatements ~~the~~in ~~Company’s~~conformity ~~regional~~with ~~service~~GAAP ~~center~~requires ~~contracts,~~management to make estimates and assumptions that affect the ~~Company~~reported amounts ~~requires~~of aliabilities ~~substantial~~and ~~deposit~~disclosure inof ~~advance~~contingent assets and liabilities at the date of the ~~support~~consolidated ~~work~~financial ~~required~~statements toand bethe reported ~~performed~~amount byof expenses during the ~~Company~~reporting period. ~~All~~The ~~deposits~~most ~~that~~significant ~~have~~estimates ~~not~~relate ~~been~~to ~~deemed~~income ~~earned~~taxes, byright ~~the~~of use assets and liabilities, and contingencies. The Company ~~following~~bases ~~the~~its ~~guidelines~~estimates ofon ~~ASC~~historical ~~606~~experience, known or expected trends, and various other assumptions that are ~~considered~~believed to be reasonable ~~liabilities~~given on the ~~Company’s~~quality ~~balance~~of ~~sheet.~~information Asavailable as of ~~September~~the ~~30,~~date ~~2021,~~of ~~the~~these ~~current~~consolidated ~~balance~~financial ofstatements. ~~deposits~~The ~~was~~results ~~$236,439~~of ~~and~~these assumptions provide the ~~long-term~~basis ~~balance~~for ~~was~~making ~~$201,428,~~estimates ~~compared~~about tothe ~~$17,143~~carrying amounts of assets and ~~$72,857,~~liabilities ~~for~~that ~~the year~~are ~~ended~~not ~~December~~readily ~~31,~~apparent from ~~2020,~~other ~~respectively~~sources. Actual results could differ from these estimates.

~~Cash and cash equivalents~~Deferred Revenue

~~The~~Under the terms of the Company’s ~~considers~~regional ~~all~~service ~~highly~~center ~~liquid~~contracts, ~~temporary~~the ~~cash~~Company ~~investments~~requires ~~with~~a ansubstantial ~~original~~deposit ~~maturity~~in advance of ~~three~~the ~~months~~support work orrequired ~~less~~ to be ~~cash~~performed ~~equivalents~~by the Company. OnAll ~~September~~deposits ~~30,~~that ~~2021~~have not been deemed earned by the Company following the guidelines of Accounting Standards Codification (ASC) 606 are considered to be contract liabilities and ~~December~~are ~~31,~~classified ~~2020,~~as deferred revenue on the Company’s consolidated ~~cash~~balance ~~equivalents~~sheets. ~~totaled~~As ~~$146~~of March 31,~~406~~ 2022, the current balance of deferred revenue was $414,873 and the long-term balance was $~~129~~192,~~624~~587 compared to $437,731 and $205,714 respectively at December 31, 2021.

~~Stock-based Compensation~~8

~~The~~Net Loss ~~Company~~Per accounts for stock-based compensation using the fair value method following the guidance outlined in Section 718-10 of the FASB ASC for disclosure about stock-based compensation. This section requires a public entity to measure the cost of employee and non-employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which service is provided. No compensation cost is recognized for equity instruments for which service is not provided or rendered.Share

~~Related~~Net loss ~~party~~per ~~transactions~~common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by ASC 260, “Earnings per Share.” Basic earnings per common share calculations are determined by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share calculations are determined by dividing net income (loss) by the weighted average number of common shares and dilutive common share equivalents outstanding. As of March 31, 2022 and December 31 2021, there were no instruments which would have a dilutive effect.

~~The~~Recently Issued ~~Company~~Accounting follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions. In accordance with ASC 850, the Company’s financial statements include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business, as well as transactions that are eliminated in the preparation of financial statements.Pronouncements

~~9 Table of Contents~~Leases

~~SOLLENSYS~~In ~~CORP~~February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which establishes a new lease accounting model for lessees. The updated guidance requires an entity to recognize assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. The amended guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. In March 2019, the FASB issued ASU 2019-01, Codification Improvements, which clarifies certain aspects of the new lease standard. The FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases in July 2018. Also in 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements, which provides an optional transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings. The amendments have the same effective date and transition requirements as the new lease standard. On November 15, 2019, the FASB issued ASU 2019-10, which amends the effective dates for three major accounting standards. The ASU defers the effective dates for the credit losses, derivatives, and lease standards for certain companies. Since the Company is classified as a small reporting company and emerging growth company and has a calendar-year end, the Company was eligible for deferring the adoption of ASC 842 to January 1, 2022.

~~NOTES~~In TOthe ~~UNAUDITED~~first ~~CONSOLIDATED~~quarter ~~FINANCIAL~~of ~~STATEMENTS~~fiscal 2022, we adopted ASU 2016-02 using the “Comparatives Under 840 Option” approach to transition. Under this method, financial information related to periods prior to adoption will be as originally reported under the previous standard – ASC 840, Leases. The effects of adopting the new standard (ASC 842, Leases) in fiscal 2022 were recognized as a cumulative-effect adjustment to accumulated deficit as of the beginning of the fiscal first quarter. We elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carry forward the historical lease classification as operating or capital leases. We also elected to combine lease and non-lease components and to exclude short-term leases from our consolidated balance sheets.

~~Net~~The ~~Loss~~most ~~per~~significant ~~Share~~impact of adoption was the recognition of right of use operating lease assets and right of use operating lease liabilities of $496 thousand and $541 thousand, respectively. The cumulative impact of these changes increased accumulated deficit by $46 thousand. We expect the impact of adoption to be immaterial to our consolidated statements of operations and consolidated statements of cash flows on an ongoing basis. As part of our adoption, we also modified our control procedures and processes, none of which materially affected our internal control over financial reporting. See Note 9 Leases, for additional information regarding our accounting policy for leases and additional disclosures.

~~Net~~NOTE 4 ~~loss~~– ~~per~~NOTES common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by ASC Topic 260, “Earnings per Share.” Basic earnings per common share calculations are determined by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income (loss) by the weighted average number of common shares and dilutive common share equivalents outstanding. As of September 30, 2021, there were no common stock equivalents.PAYABLE

~~NOTE~~The Company 3has –a ~~ACCRUED~~$2,500,000 mortgage ~~EXPENSES~~note payable from the acquisition of a building in Palm Bay, Florida. The terms of the mortgage note payable called for monthly interest only payments of approximately $10,000 each through December 2021. Effective January 8, 2022, the mortgage note payable required monthly mortgage payments of principal and interest of $16,250 each, at an interest rate of 4.75% per annum, with a maturity date of December 8, 2024 and a balloon principal payment due of approximately $2,270,000. The mortgage is secured by the underlying real estate all equipment and fixtures owned or subsequently acquired, and 500,000 shares of the Company’s common stock pledged by the Company’s CEO, as well his personal guarantee for the full amount of the mortgage. Additionally, the mortgage note payable provides the lender a due on demand feature at the discretion of the lender. As a result, the Company has recorded the outstanding balance of the note payable as a current liability. At March 31, 2022 and December 31, 2021, the balance outstanding on the mortgage note payable is $2,480,869 and $2,500,000, respectively.

As of September 30, 2021, and December 31, 2020, the balances of accrued expenses were $307,921 and $46,134 respectively. The accrued expenses as of September 30, 2021, were comprised of $58,987 in credit card payables, $127,287 in liabilities associated with maintaining the Company’s servers, $64,147 in liabilities related to the Company’s purchase of a new building, and $57,500 in miscellaneous liabilities.9

~~NOTE~~The Company 4has ~~– LONG~~a ~~TERM ASSETS~~vehicle loan which requires monthly payments of principal and interest in the amount of $710. The loan matures August 2025, bears interest at 13.1%, and is secured by the specific vehicle.

AsAdditionally as of ~~September~~March 3031, ~~2021~~2022 ~~and~~the ~~December~~Company ~~31,~~has ~~2020 long~~unsecured ~~term assets~~demand ~~amounted~~loans amounting to $2199,~~901,110~~960. ~~and~~This ~~$-0-,~~loan ~~respectively.~~is Atsupported ~~September~~by 30a personal guarantee from the Company’s CEO, ~~2021 long~~bears ~~term assets were~~interest ~~comprised~~at of6% ~~the~~annually, ~~following:~~and matures in March 2023.

Land, building and building improvements	$	2,653,552
Furniture and equipment-net		233,854
Security deposits		13,694
Total	$	2,901,110

At March 31, 2022, the aggregate maturities of notes payable for the next five years and thereafter are as follows:

On September 8, 2021, the Company acquired a building in Palm Bay, Florida with approximately 36,810 square feet of office space for $2,430,762 excluding closing costs. Since the building has not yet been occupied, no depreciation has been recorded for the period ended September 30, 2021. The Company purchased the building by entering into a $2,500,000 mortgage. After closing costs and adjustments, the Company received $46,651 in cash at closing.

Schedule of maturities of notes payable
2022	$	2,686,574
2023		6,658
2024		7,523
2025		3,416
Total	$	2,704,171

~~The~~NOTE 5 ~~terms~~– BUSINESS of the mortgage call for monthly interest only payments of approximately $10,000 each through December 2021 at an interest rate of 4.75%. Effective January 8, 2022, monthly mortgage payments of principal and interest of $16,250 each, at an interest rate of 4.75% per annum, with a maturity date of December 8, 2024 and a balloon payment due of approximately $2,270,000. The mortgage is secured by the underlying real estate all equipment and fixtures owned or subsequently acquired, and 500,000 shares of the Company’s common pledged by the Company’s CEO, as well his personal guarantee for the full amount of the mortgage.ACQUISITION

~~The~~On October 4215, ~~month~~2021, ~~principal~~the ~~payment~~Company ~~schedule~~entered oninto a Membership Interest Exchange Agreement (the 42“Agreement”), ~~month~~dated ~~loan~~as isof October 15, 2021, by and among (i) the Company; (ii) Abstract Media, LLC (“Abstract Media”), (iii) each of the members of Abstract Media (collectively, the “Abstract Media Members”); and (iv) Andrew Baker as ~~follows:~~the representative of the Abstract Media Members (the “Members’ Representative”). The Acquisition closed on December 6, 2021.

2021	$	-0-
2022		77,931
2023		81,716
2024		2,340,353
Total	$	2,500,000

Pursuant to the terms of the Agreement, the Company agreed to acquire from the Abstract Media Members all of the membership interests of Abstract Media held by the Abstract Media Members, representing 100% of the membership interests of Abstract Media, in exchange for the issuance by the Company to the Abstract Media Members of (i) shares of the Company’s common stock, plus (ii) $15,000 paid to the Abstract Media members, plus (iii) $15,000 to be paid solely to John Swain as additional consideration for Mr. Swain’s membership interests (the “Acquisition”).

AsPursuant to the terms of ~~September~~the 30Agreement, on December 6, 2021, the ~~balance~~Abstract ofMedia ~~the~~Members ~~short-term~~assigned ~~mortgage~~their ~~payable~~respective ~~was~~membership ~~$58~~interests in Abstract Media to the Company,~~101~~ and Abstract Media became a wholly owned subsidiary of the ~~long-term~~Company. ~~portion~~In ~~was~~exchange $2therefor,~~441~~ on December 6,~~899~~ 2021, the Company issued to the Abstract Media Members an aggregate of 73,244 shares of the Company’s common stock.

~~NOTE~~For the 5acquisition –of ~~STOCKHOLDERS’~~Abstract ~~EQUITY~~Media, the following table summarizes the acquisition date fair value of consideration paid, identifiable assets acquired and liabilities assumed:

~~Series A Preferred Stock~~Consideration paid

On March 21, 2020, the Company filed a Certificate of Designation to authorize 25,000,000 shares of Series A preferred stock, par value $0.001 per share. Among other rights, the holders of Series A preferred stock have the right to convert each share of Series A preferred stock into 50 shares of common stock. On April 1, 2020, the Company issued 19,000,000 shares of Series A preferred stock to the Company’s then-Chief Executive Officer, David Lazar. The fair value of the issuance was estimated at $1,900,000 and recorded as stock-based compensation.


Cash and cash equivalents	$	30,000
Common stock, 73,244 shares of the Company restricted common stock valued at $4.00 per share		292,976
Net liabilities assumed		77,422
Fair value of total consideration paid	$	400,398

~~Common~~Net assets ~~Stock~~acquired and liabilities assumed

The Company has authorized 300,000,000 shares of common stock, $0.001 par value per share. As of September 30, 2021 and December 31, 2020, respectively, there were 100,002,492 and 99,327,547 shares of common stock issued and outstanding.


Cash and cash equivalents	$	21,080
Accounts receivable		39,345
Other current assets		19,758
Fixed assets, net		15,467
Total assets	$	95,650

Accounts payable		69,724
Accrued liabilities		103,348
Total liabilities		173,072

Net liabilities assumed	$	77,422

~~During the nine months ended September 30, 2021, the Company raised $2,040,979 from sale of 591,580 shares to investors.~~10

~~Additionally,~~The Company ~~during~~has allocated the ~~nine~~fair ~~months~~value ~~ended~~of ~~September~~the 30total consideration paid of $400,398 ~~2021~~to goodwill of $200,199 and the ~~Company~~same ~~issued~~amount anof ~~aggregate~~$200,199 to intangible assets with a life of ~~56,365~~three ~~shares~~years. The value of ~~common~~goodwill ~~stock,~~represents ~~valued~~Abstract Media’s ability to generate profitable operations going forward. Management estimated the provisional fair values of the intangible assets and goodwill at ~~$300~~December 31,~~360,~~ 2021. ~~pursuant~~The Company’s accounting for the acquisition of Abstract Media is incomplete. Management is performing a valuation study to calculate the ~~Sollensys~~fair ~~Corp~~value ~~2021~~of ~~Equity~~the ~~Incentive~~acquired ~~Plan~~intangible assets, which it plans to ~~numerous~~complete ~~consultants~~within the one-year measurement period.

10NOTE 6 ~~Table~~– INTANGIBLE ~~of Contents~~ASSETS

~~SOLLENSYS~~As of ~~CORP~~March 31, 2022 the balance of intangible assets was $177,954. During the three months ended March 31, 2022 and 2021, the Company recorded $16,683 and $-0- in amortization expense, respectively. As discussed in Note 5, the intangible assets have been valued based on provisional estimates of fair value and are subject to change as the Company completes its valuation assessment by the completion of the one year measurement period. Remaining amortization at March 31, 2022 for the following fiscal years is estimated to be: 2022 - $50,049; 2023 - $66,733; and 2024 - $61,172.

~~NOTES~~NOTE 7 TO– ~~UNAUDITED~~RELATED ~~CONSOLIDATED~~PARTY ~~FINANCIAL STATEMENTS~~TRANSACTIONS

OnDuring the ~~September~~three ~~30,~~months ~~2021,~~ended ~~and~~March ~~December~~ 31, ~~2020~~2022, ~~there~~the ~~were~~Company’s ~~10,000,000~~CEO ~~shares~~extended ofan ~~Series~~unsecured A$20,000 interest ~~preferred~~free ~~stock~~demand ~~authorized,~~loan ~~with~~to ~~-0-~~the ~~shares~~Company. ~~issued~~This ~~and~~loan remains outstanding atas ~~both~~of ~~periods~~March 31, ~~respectively.~~2022

~~NOTE~~During 2021, 6the –Company ~~SUBSEQUENT~~entered ~~EVENTS~~into a contract with a member of management to provide service to them. For that service the member of management paid a deposit of $90,000, which is currently reflected as deferred revenue at March 31, 2022 and December 31, 2021.

InNOTE 8 ~~accordance~~– ~~with~~STOCK ~~ASC~~BASED 855-10, management has performed an evaluation of subsequent events from September 30, 2021 through the date the financial statements were available to be issued and noted no subsequent events requiring disclosure except as follows:COMPENSATION

~~Sale~~During 2021, the Company issued 56,365, free trading common shares to various consultants in lieu of ~~Restricted~~cash ~~Common~~payment. ~~Stock~~The awards were valued at the market price on the date of grant. The shares were valued at $310,048 and are amortized and vest ratably over the one year service period that the consultants provided service over. During the three months ended March 31, 2022 the Company expensed $50,849. The remaining unamortized stock based compensation amount of $17,750 amortized to expense through August 2022. Of the 56,365 shares issued, 45,274 have vested during 2021, and the remaining 11,091 shares vest in 2022.

~~The Company sold an aggregate of 50,000 shares of common stock to investors and raised $200,000 in proceeds.~~ 11

~~Proceeds~~NOTE 9 of– ~~Unsecured Demand Loan~~LEASES

~~Additionally, the Company received $300,000 in proceeds in the form of an unsecured 2% demand loan from an investor.~~ Leases

~~Abstract~~The majority ~~Media~~of ~~Acquisition~~our lease obligations are real estate operating leases from which we conduct our business. For any lease with an initial term in excess of 12 months, the related lease assets and liabilities are recognized on the Consolidated Balance Sheets as either operating or finance leases at the inception of an agreement where it is determined that a lease exists. Leases with an initial term of 12 months or less are not recorded on our Consolidated Balance Sheets; we recognize lease expense for these leases on a straight-line basis over the lease term.

OnOperating lease ~~October~~assets ~~15,~~represent ~~2021,~~the right to use an underlying asset for the ~~Company~~lease ~~entered~~term, ~~into~~and ~~that~~operating ~~certain~~lease ~~Membership~~liabilities ~~Interest~~represent ~~Exchange~~the ~~Agreement~~obligation to (make lease payments arising from the ~~“Agreement”),~~lease. ~~dated~~These asassets and liabilities are recognized based on the present value of ~~October~~future ~~15,~~payments over ~~2021,~~the bylease ~~and~~term ~~among~~at ~~(i)~~commencement date. We use a collateralized incremental borrowing rate based on the ~~Company;~~information ~~(ii)~~available ~~Abstract~~at ~~Media~~commencement date, ~~LLC~~including ~~(“Abstract~~lease ~~Media”)~~term, ~~(iii)~~in ~~each~~determining the present value of future payments. Our lease terms generally do not include options to extend or terminate the ~~members~~lease ofunless ~~Abstract~~it ~~Media~~is ~~(collectively,~~reasonably certain that the ~~“Abstract~~option ~~Media~~will ~~Members”);~~be ~~and~~exercised. ~~(iv)~~Fixed ~~Andrew~~payments ~~Baker~~may ascontain predetermined fixed rent escalations. We recognize the ~~representative~~related ofrent expense on a straight-line basis from the ~~Abstract~~commencement ~~Media~~date ~~Members~~to (the ~~“Members’~~end ~~Representative”)~~of the lease term.

~~Pursuant~~The weighted toaverage ~~the~~remaining ~~terms~~lease ofterm ~~the~~is ~~Agreement,~~3.77 ~~the~~years ~~Company~~and ~~agreed to acquire from~~ the ~~Abstract~~weighted ~~Media~~average ~~Members~~discount ~~all~~rate ofis ~~the membership interests of Abstract Media held by the Abstract Media Members, representing 100~~12%. ofFuture ~~the~~lease ~~membership~~payments ~~interests~~under ofour ~~Abstract~~non-cancellable leases ~~Media, in exchange for the issuance by the Company to the Abstract Media Members of (i) shares of the Company’s common stock equal to $605,000 minus the Debt Repayment Amount (~~as ~~hereinafter defined), divided by the VWAP (as defined in the Agreement) as~~ of ~~the~~March ~~closing date~~31, ~~plus~~2022 ~~(ii)~~were ~~$15,000, plus (iii) $15,000 to be paid solely to John Swain~~ as additional consideration for Mr. Swain’s membership interests (the “Acquisition”). The “Debt Repayment Amount” means the debt owned by the Company to Mr. Swain pursuant to a promissory note dated as of August 15, 2017, which debt the parties agree is approximately $80,000, but which shall be finally calculated on the closing date.follows:

The Agreement includes customary representations, warranties and closing conditions.

Schedule of future lease payments Schedule of lease payment
2022	$	134,581
2023		188,267
2024		157,065
2025		161,777
2026		144,347
Total	$	786,037
Imputed interest		(244,538	)
Lease liability	$	541,499

~~The~~NOTE 10 ~~Acquisition~~– ~~closed~~STOCKHOLDERS’ ~~on October 15, 2021. As a result of the Acquisition, Abstract Media became a wholly owned subsidiary of the Company.~~EQUITY

~~Formation~~Series A ofPreferred ~~S-CC Merger Sub, Inc. and S-Solutions Merger Sub, Inc.~~Stock

On March ~~October 20~~31, ~~2021~~2022, ~~the~~and ~~Company~~December ~~formed S-CC Merger Sub~~31, ~~Inc.~~2021, anthere ~~Arkansas~~were ~~corporation~~10,000,000 ~~and~~shares ~~a wholly owned subsidiary~~ of ~~the~~Series ~~Company.~~A ~~Also~~preferred onstock ~~October 20~~authorized, ~~2021,~~with ~~the Company formed S~~-~~Solutions~~0- ~~Merger~~shares ~~Sub,~~issued ~~Inc., an Arkansas corporation~~ and outstanding aat ~~wholly~~both ~~owned~~periods, ~~subsidiary of the Company~~respectively.

~~Celerit Merger Agreement~~Common Stock

~~On October 26, 2021, the~~ The Company ~~entered~~has ~~into~~authorized ~~that certain Merger Agreement (“Merger Agreement”) by and among (i) the Company; (ii) S-CC Merger Sub~~300, ~~Inc.~~000,000 anshares ~~Arkansas corporation and a wholly owned subsidiary~~ of ~~the~~common ~~Company (“S-CC Merger Sub”); (iii) S-Solutions Merger Sub~~stock, ~~Inc~~$0.,001 anpar ~~Arkansas~~value ~~corporation~~per ~~and~~share. aAs ~~wholly owned subsidiary~~ of ~~the~~March ~~Company~~31, ~~(“S-Solutions~~2022 ~~Merger~~and ~~Sub”);~~December ~~(iv) Celerit~~31, ~~Corporation~~2021, anrespectively, there ~~Arkansas~~were ~~corporation~~100,874,486 ~~(“Celerit”);~~and ~~(v) Celerit Solutions Corporation~~100,715,736 anshares ~~Arkansas~~of ~~corporation~~common ~~(“Celerit~~stock ~~Solutions”);~~issued and ~~(vi) Terry Rothwell (“Shareholder”)~~outstanding.

~~Pursuant to~~ During the ~~terms~~three ofmonths ~~the~~ended ~~Merger~~March ~~Agreement~~31, on2022 the closing date, (i) Celerit will merge with and into S-CC Merger Sub, with Celerit surviving, (ii) Celerit Solutions will merge with and into S-Solutions Merger Sub, with Celerit Solutions surviving, and (iii) the Shareholder will receive from the Company certain cash consideration and other consideration as set forth in the Merger Agreement (the “Merger”), on the terms and subject to the conditions set forth therein, including but not limited to payment by the Company of (a) the sum of $4,440,000 in cash, and (b) 3,000,000 shares of the Company’s common stock.

~~Celerit,~~● ~~together~~Raised ~~with its affiliate Celerit Solutions~~$510,001 ~~are~~from ~~an IT services business with a world class customer success department serving~~ the ~~financial~~sale ~~sector~~of ~~since~~158,750 ~~1985.~~shares ~~The Merger is being effected~~ to ~~further the Company’s mission to create a safe and immutable environment, in conjunction with Celerit and Celerit Solutions, for the future of banking~~investors.

~~Pursuant to~~ During the ~~terms~~year ofended ~~the~~December ~~Merger Agreement~~31, ~~the~~2021 ~~Company expects to enter into a Purchase Agreement (“Purchase Agreement”) by and among (i)~~ the Company; (ii) CRE Holdings LLC, an Arkansas limited liability company (“CRE”); and (iii) Terry Rothwell and George Rothwell, the sole members of CRE (together, the “Rothwells”). The Company expects that the Purchase Agreement will stipulate the terms of the acquisition of four real property parcels owned by CRE, as well as one real property parcel owned by the Rothwells, for a total purchase price of $5,560,000 (the “Real Estate Acquisition”). Included within the combined five real property parcels are Celerit’s and Celerit Solutions’ administrative offices, data center, as well as three vacant land parcels.:

~~The~~● ~~Merger~~raised ~~Agreement~~$4,603,979 ~~includes~~from ~~customary~~the ~~representations~~sale 1,231,580 ~~warranties~~common ~~and~~shares ~~closing~~to ~~conditions.~~investors

~~Neither~~● ~~the~~issued ~~Merger~~73,244 ~~nor~~shares ~~the~~valued ~~Real~~at ~~Estate Acquisition have closed yet~~$292,976 ~~however~~in ~~pursuant~~connection towith the ~~terms~~acquisition of ~~the~~Abstract ~~Merger Agreement, they are expected to close substantially simultaneously.~~ Media

11● ~~Table~~issued an aggregate of ~~Contents~~56,365 shares of common stock, valued at $310,048 pursuant to the Sollensys Corp 2021 Equity Incentive Plan to numerous consultants.

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.~~12

~~The~~NOTE 11 ~~following~~– ~~discussion~~SUBSEQUENT and analysis should be read in conjunction with our unaudited consolidated financial statements and the related notes thereto. The management's discussion and analysis contains forward-looking statements, such as statements of our plans, objectives, expectations, and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words "believe," "plan," "intend," "anticipate," "target," "estimate," "expect" and the like, and/or future tense or conditional constructions ("will," "may," "could," "should," etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q. The following discussion should be read in conjunction with our audited financial statements and the related notes that appear in our Annual Report on Form 10-KT as filed with the Securities and Exchange Commission on March 31, 2021. EVENTS

~~Overview~~In accordance with FASB ASC 855-10, Subsequent Events, the Company has analyzed its operations subsequent to March 31, 2022 to the date these consolidated financial statements were issued, and has determined that it does not have any additional material subsequent events to disclose in these consolidated financial statements.

Sollensys Corp’s (“Sollensys” or the “Company”) primary product is the Blockchain Archive Server—a turn-key, off-the-shelf, blockchain solution that works with virtually any hardware and software combinations currently used in commerce, without the need to replace or eliminate any part of the client's data security that is being utilized. The Blockchain Archive Server encrypts, fragments, and distributes data across thousands of secure nodes every day, which makes it virtually impossible for hackers to compromise. Using blockchain technology, the Blockchain Archive Server maintains a redundant, secure, and immutable backup of data. Redundant backups and the blockchain work together to assure not only the physical security of the database but also the integrity of the information held within.13

~~Blockchain~~Item 2. ~~Archive~~Management’s ~~Server~~Discussion ~~protects client data from “ransomware”—malicious software that infects your computer~~ and ~~displays~~Analysis ~~messages demanding a fee to be paid in order for your system to work again. Blockchain technology is a leading-edge tool for data security, providing an added layer~~ of ~~security~~Financial ~~against~~Condition ~~data~~and ~~loss~~Results ~~due to all types~~ of ~~software specifically designed to disrupt, damage, or gain unauthorized access to a computer system (i~~Operations.~~e., malware).~~

~~Uniquely,~~The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and the ~~Blockchain~~related notes ~~Archive~~thereto. ~~Server~~The ismanagement’s adiscussion ~~turn~~and analysis contains forward-~~key~~looking ~~solution~~statements, such as statements of our plans, objectives, expectations, and intentions. Any statements that ~~can~~are ~~stand~~not ~~alone~~statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect” and the like, and/or ~~seamlessly~~future ~~integrate~~tense ~~into~~or anconditional ~~existing~~constructions ~~data~~(“will,” ~~infrastructure~~“may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to ~~quickly~~risks ~~recover~~and uncertainties that could cause actual results or events to differ materially from athose ~~cyber~~expressed or implied by the forward-~~attack~~looking statements. ~~The~~Our ~~Blockchain~~actual ~~Archive~~results ~~Server~~and isthe timing of events could differ materially from those anticipated in these forward-looking statements as a ~~server~~result ~~that~~of ~~comes~~several ~~pre~~factors. We do not undertake any obligation to update forward-~~loaded~~looking ~~with~~statements to reflect events or circumstances occurring after the ~~blockchain~~date of this Quarterly Report on Form 10-~~powered~~Q. ~~cybersecurity~~The ~~software,~~following ~~which~~discussion ~~can~~should be ~~delivered,~~read in ~~installed,~~conjunction with our audited financial statements and ~~integrated~~the ~~into~~related anotes ~~client’s~~that ~~computer~~appear ~~systems~~in our Annual Report on Form 10-K, as filed with the ~~ease~~Securities and Exchange Commission on March 30, 2022.

~~12 Table of Contents~~Overview

In December 2020, Sollensys made its second product offering—the Regional Service Center—available on a limited test market basis. The Regional Service Center was added to the Company’s standard product line effective January 1, 2021. A Regional Service Center is a single unit system of 32 Blockchain Archive Servers capable of servicing up to 2,580 individual small accounts, and is marketed to existing IT service providers with established accounts. The Regional Service Center offers small businesses the same state of the art technology previously available only to large or very well-funded companies. Sollensys believes that smaller companies, and even certain individuals, will find the Regional Service Center affordable, paying only for the actual space they use.Business Overview

InOur primary ~~connection~~product ~~with~~is the ~~closing~~Blockchain ofArchive ~~the~~Server—a ~~Stock~~turn-key, ~~Purchase~~off-the-shelf, onblockchain ~~August~~solution 5,that ~~2020,~~works ~~Mr.~~with ~~Lazar~~virtually any hardware and software combinations currently used in commerce, without the ~~then-sole~~need ~~member~~to replace or eliminate any part of the ~~Board~~client’s ofdata ~~Directors~~security that ~~(the~~is ~~“Board”)~~being ofutilized. ~~Sollensys,~~The ~~pursuant~~Blockchain toArchive ~~the~~Server ~~power~~encrypts, ~~granted~~fragments, toand ~~the~~distributes ~~Board~~data inacross ~~Sollensys’~~thousands ~~bylaws~~of secure nodes every day, ~~increased~~which ~~the~~makes ~~size~~it ofvirtually ~~Sollensys’~~impossible ~~Board~~for hackers to ~~two members~~compromise. ~~Simultaneously,~~Using ~~Mr.~~blockchain ~~Lazar~~technology, as the ~~sole~~Blockchain ~~Board~~Archive ~~member~~Server maintains a redundant, ~~appointed~~secure, ~~Donald~~and ~~Beavers~~immutable asbackup aof ~~director~~data. toRedundant ~~fill~~backups and the ~~newly~~blockchain ~~created~~work ~~Board~~together ~~vacancy.~~to Atassure ~~the~~not ~~same~~only ~~time,~~the ~~Mr.~~physical security ~~Lazar~~of ~~appointed~~the ~~Donald~~database ~~Beavers~~but asalso ~~Chief~~the ~~Executive~~integrity ~~Officer~~of ~~and~~the ~~Secretary~~information ofheld ~~Sollensys~~within.

~~Also~~Blockchain Archive onServer ~~August~~protects 5,client ~~2020,~~data ~~following~~from ~~the~~“ransomware”—malicious ~~above~~software ~~officer~~that ~~and~~infects ~~director~~your ~~appointments~~computer and ~~effective~~displays onmessages demanding ~~the~~a ~~closing~~fee ofto ~~the~~be ~~Stock~~paid ~~Purchase,~~in Mrorder for your system to work again. ~~Lazar~~Blockchain ~~resigned~~technology ~~from~~is ~~any~~a ~~and~~leading-edge tool for data security, providing an added layer of security against data loss due to all ~~officer~~types ~~and~~of ~~director~~software ~~positions~~specifically ~~with~~designed ~~Sollensys~~to disrupt, damage, or gain unauthorized access to a computer system (i.e., malware).

~~On November 30~~Uniquely, the ~~2020,~~Blockchain ~~Sollensys~~Archive ~~entered~~Server ~~into~~is a ~~share~~turn-key ~~exchange~~solution ~~agreement~~that ~~(the~~can ~~“Share~~stand ~~Exchange~~alone ~~Agreement”)~~or ~~with~~seamlessly ~~(i)~~integrate ~~Eagle~~into ~~Lake~~an ~~Laboratories,~~existing ~~Inc.~~data ~~(“Eagle~~infrastructure to ~~Lake”),~~quickly ~~(ii)~~recover ~~each~~from ofa ~~the shareholders of Eagle Lake (the “Eagle Lake Shareholders”) and (iii) Mr~~cyber-attack. ~~Beavers~~The asBlockchain ~~the~~Archive ~~representative~~Server ofis ~~the~~a ~~Eagle~~server ~~Lake~~that ~~Shareholders.~~comes ~~Among~~pre-loaded ~~other~~with ~~conditions to~~ the ~~closing~~blockchain-powered ofcybersecurity software, ~~the~~which ~~transactions~~can ~~contemplated~~be ~~by the Share Exchange Agreement (the “SEA Closing”)~~delivered, ~~pursuant to the terms of the Share Exchange Agreement~~installed, ~~the~~and ~~parties~~integrated ~~agreed~~into ~~that~~a ~~Sollensys would acquire 100% of Eagle Lake~~client’s ~~issued~~computer ~~and~~systems ~~outstanding~~with ~~capital stock, in exchange for the issuance to the Eagle Lake Shareholders of a number of shares of Sollensys common stock to be determined at the SEA Closing~~ease.

~~The~~In December ~~SEA Closing occurred on November 30~~2020, ~~2020.~~Sollensys ~~Pursuant~~Corp to(“Sollensys” ~~the~~or ~~terms of~~ the ~~Share~~“Company”) ~~Exchange~~made ~~Agreement,~~its ~~Sollensys~~second ~~acquired~~product ~~from~~ offering—the ~~Eagle~~Regional Service ~~Lake~~Center—available ~~Shareholders~~on ~~10,000,000~~a ~~shares~~limited ~~Eagle~~test ~~Lake’s~~market ~~common~~basis. ~~stock,~~The noRegional ~~par~~Service ~~value~~Center ~~per~~was ~~share,~~added ~~representing~~to ~~100% of~~ the ~~issued~~Company’s ~~and~~standard product ~~outstanding~~line ~~capital~~effective ~~stock~~January ~~of Eagle Lake~~1, in2021. ~~exchange~~A ~~for~~Regional ~~the~~Service ~~issuance~~Center tois ~~the~~a ~~Eagle~~single ~~Lake~~unit ~~Shareholders~~system of ~~95,000,000~~32 ~~shares~~Blockchain ofArchive ~~Sollensys~~Servers ~~common~~capable ~~stock (the “Share Exchange”). At the time~~ of servicing ~~the~~up ~~SEA~~to ~~Closing~~2,580 ~~Eagle~~individual ~~Lake~~small ~~had 10~~accounts,~~011,667~~ ~~shares of its common stock issued~~ and ~~outstanding,~~is ~~which~~marketed ~~was~~to ~~11,667~~existing ~~shares~~IT inservice ~~excess~~providers ofwith ~~the~~established ~~number~~accounts. ofThe ~~shares~~Regional Service ofCenter ~~common~~offers ~~stock~~small ~~authorized~~businesses ~~pursuant~~the tosame ~~Eagle~~state ~~Lake’s articles~~ of ~~incorporation.~~the ~~Such~~art ~~over-issued~~technology ~~shares~~previously ~~are~~available ~~void~~only ~~under Florida law and are not entitled~~ to ~~any~~large ~~rights~~or ofvery awell-funded ~~stockholder of Eagle Lake~~companies. Sollensys Asbelieves ~~such,~~that ~~the~~smaller 10companies,~~000,000~~ ~~shares~~and ofeven ~~Eagle~~certain ~~Lake common stock that Sollensys acquired from the Eagle Lake Shareholders~~individuals, ~~represented~~will ~~100%~~find of the ~~issued~~Regional ~~and~~Service ~~outstanding~~Center ~~capital~~affordable, ~~stock~~paying ofonly for ~~Eagle Lake of~~ the ~~presence~~actual ofspace ~~over-issued~~they ~~shares~~use.

AsThe aCompany ~~result~~acquired ofAbstract ~~the~~Media, ~~Share~~LLC ~~Exchange,~~(Abstract ~~Eagle~~Media) in ~~Lake~~December ~~became~~2021. Abstract Media is a ~~wholly~~Texas ~~owned~~limited ~~subsidiary~~liability ofcompany ~~Sollensys~~formed ~~and~~in October 2011, with the ~~business~~goal of ~~Eagle~~improving ~~Lake~~user ~~became~~engagement using visualization tools. The Company has evolved into an interactive media and software development company to optimize effective corporate learning, operational workflow and communication using technology in the ~~business~~augmented ofreality ~~Sollensys~~or virtual reality space. Abstract Media conducts its operations from its office location in Houston, Texas.

~~13 Table of Contents~~14

Eagle Lake was incorporated in the State of Florida on May 8, 2020. Eagle Lake offers advanced technology products for cybersecurity that ensure a clients’ data integrity through collection, storage, and transmission.Recent Developments

On September 8, 2021, the Company closed on the purchase of a commercial building, land, and fixtures in Palm Bay, Florida, as a location for the Company’s new headquarters. The Company intends to complete the renovations/buildout in the fourth quarter of 2021, and to occupy the building in in January 2022. Celerit Merger

~~Impact~~On October 26, 2021, the Company entered into a Merger Agreement (“Merger Agreement”) by and among (i) the Company; (ii) S-CC Merger Sub, Inc., a wholly owned subsidiary of ~~COVID~~the Company (“S-19CC Merger Sub”); (iii) S-Solutions Merger Sub, Inc., a wholly owned subsidiary of the Company (“S-Solutions Merger Sub”); (iv) Celerit Corporation (“Celerit”); (v) Celerit Solutions Corporation (“Celerit Solutions”); and (vi) Terry Rothwell (collectively, (i)-(v), the “Merger Parties”).

On the ~~January~~terms ~~30,~~and ~~2020,~~subject to the ~~World~~conditions ~~Health~~set ~~Organization~~forth ~~announced~~in athe ~~global~~Merger ~~health~~Agreement, ~~emergency~~as ~~because~~subsequently amended, and subject further to acceptance of Articles of Merger filed on the ~~spread~~Closing ofDate awith ~~new~~the ~~strain~~Secretary of ~~the~~State ~~novel~~of ~~coronavirus~~Arkansas (“~~COVID-19~~SOS AR”)., Onon ~~March~~April 117, ~~2020,~~2022 (the “Closing ~~World~~Date”): ~~Health~~(i) ~~Organization~~Celerit ~~declared~~merged with and into S-CC Merger Sub (the ~~outbreak~~“Celerit Merger”), and the separate corporate existence of ~~COVID~~S-19CC aMerger ~~global~~Sub ~~pandemic.~~ceased, ~~COVID~~with Celerit as the surviving corporation (the “Celerit Surviving Corporation”); and (ii) Celerit Solutions merged with and into S-19Solutions ~~has~~Merger ~~significantly~~Sub ~~affected~~(the “Celerit Solutions Merger”), and ~~continues~~the toseparate ~~significantly~~corporate existence ~~affect~~of S-Solutions Merger Sub ceased, with Celerit Solutions as the ~~United~~surviving ~~States~~corporation (the “Celerit Solutions Surviving Corporation”) (the Celerit Merger and ~~global~~Celerit ~~economies~~Solutions Merger together, the “Mergers”). On the Closing Date, SS-Merger Sub and S-Solutions Merger Sub filed Articles of Merger with the SOS AR, which are currently pending.

~~The~~By virtue ~~outbreak has~~of, and ~~may~~simultaneously ~~continue to~~with, ~~spread, which could materially impact~~ the ~~Company’s~~Celerit ~~business.~~Merger ~~The~~and ~~full~~without ~~extent~~any offurther ~~potential~~action ~~impacts~~(other onthan the ~~Company’s~~acceptance ~~business,~~by ~~financing~~the ~~activities~~SOS ~~and~~AR of the applicable ~~global~~Articles ~~economy~~of ~~will~~Merger ~~depend~~or onas ~~future~~otherwise ~~developments,~~required ~~which~~pursuant ~~cannot~~to beapplicable ~~predicted~~law) ~~due~~on to the ~~uncertain~~part ~~nature~~ of the ~~continued~~Merger ~~COVID-19 pandemic~~Parties, ~~government~~at ~~mandated shutdowns, and its adverse effects, including new information which may emerge concerning~~ the ~~severity~~effective time of ~~COVID-19~~the ~~and~~Mergers (the ~~actions~~“Effective ~~to contain COVID-19 or treat its impact~~Time”), ~~among~~the ~~others.~~Celerit ~~These~~Merger ~~effects~~was ~~could~~completed ~~have~~and ~~a material adverse impact on~~ the ~~Company’s~~Celerit ~~business,~~Solutions ~~operations,~~Merger ~~financial~~was ~~condition, and results of operations~~completed.

~~Results~~Aggregate consideration for the Mergers consisted of ~~Operations~~(i) $2,695,000, subject to certain adjustments set forth in the Merger Agreement, as amended (the “Cash Consideration”), and (ii) 4,000,000 shares of Sollensys common stock (the “Sollensys Shares”). The Cash Consideration was paid to Terry Rothwell via the issuance to Terry Rothwell at the closing of a promissory note of Sollensys (the “Rothwell Note”). Additional consideration of $10,000 was paid to Terry Rothwell. The Rothwell Note has a principal amount of $2,695,000, bears simple interest at a rate of 0.0001% to the maturity date, June 30, 2022, and, if not paid at maturity, the Rothwell Note accrues simple interest at 6% per year until paid. There is no penalty or premium for prepayment. In the event of a default, Sollensys has agreed to pay Terry Rothwell’s reasonable legal fees and costs of collection.

~~Comparison~~Real Estate ~~of Results of Operations for the Three and Nine Months Ended September 30, 2021 and 2020~~Agreement

~~Revenue~~Terry Rothwell and George Rothwell are the members of CRE Holdings, LLC (“CRE”), the owner of two office buildings, a vacant commercial lot and a condominium. The office buildings are leased by Celerit. The Merger Parties expect that, shortly after the Effective Time, Sollensys, CRE, Terry Rothwell and George Rothwell shall enter into an agreement (the “CRE Agreement”) related to the purchase by Sollensys of the two office buildings, a vacant commercial lot and a condominium, as well as other assets owned by CRE, Terry Rothwell and George Rothwell (the “CRE Transactions”). The purchase price for the CRE properties is $3,295,000. The closing of the CRE Transactions shall occur on a mutually agreeable date and time in accordance with the terms and conditions of the CRE Agreement. If the closing does not occur on or before June 30, 2022, Sollensys will be obligated to pay a monthly rent of $50,000 in addition to the then-existing lease obligations. The CRE Agreement and the CRE real estate transactions operate independently of the Merger Agreement, as amended, and the other transactions contemplated therein.

For the three months ended September 30, 2021, we recorded $35,714 in subscription revenue from the rental of customized servers compared to $135,000 from the sale of servers for the three months ended September 30, 2020.Director Appointments

~~For~~Effective as of the ~~nine~~Closing ~~months~~Date, ~~ended~~(i) ~~September~~the ~~30,~~Sollensys ~~2021,~~Board weof ~~recorded~~Directors ~~$145~~was expanded by one person,~~357~~ inand ~~subscription~~Terry ~~revenue~~Rothwell ~~from~~was named as a director; (ii) Celerit Surviving Corporation’s board of directors expanded the ~~rental~~size of ~~customized~~Celerit ~~servers~~Surviving ~~compared~~Corporation’s toboard ~~$135~~of directors by two persons,~~000~~ ~~from~~and named Anthony Nolte and Donald Beavers as directors on the ~~sale~~Celerit Surviving Corporation board of ~~servers~~directors, ~~for~~while retaining Terry Rothwell as a director; and (iii) Celerit Solutions Surviving Corporation’s board of directors expanded the ~~nine~~size of ~~months~~the ~~ended September~~Celerit 30Solutions Surviving Corporation Board by two persons, ~~2020~~and named Messrs. Nolte and Beavers as directors.

~~14 Table of Contents~~15

~~Gross~~Executive Employment ~~Profit (Loss)~~Agreements

~~Our~~Also as ~~negative~~of ~~gross~~the ~~margin~~Closing onDate, ~~revenue~~Sollensys ~~was~~entered $into (~~68,694~~i) ~~for~~an employment agreement with Terry Rothwell pursuant to which Terry Rothwell was appointed as the ~~three~~Chief ~~months~~Executive ~~ended~~Officer ~~September~~of 30each of Celerit Surviving Corporation and Celerit Solutions Surviving Corporation (the “Rothwell Employment Agreement”), ~~2021~~and ~~compared~~(ii) an employment agreement with Ron Harmon pursuant to ~~gross~~which ~~profit~~he ~~margin~~was appointed as the Chief Operating Officer of ~~$90,000~~each ~~for~~of Celerit Surviving Corporation and Celerit Solutions Surviving Corporation (the ~~three~~“Harmon ~~months~~Employment ~~ended~~Agreement” and, ~~September~~together 30with the Rothwell Employment Agreement, ~~2020~~the “Employment Agreements”).

~~Our~~Rothwell Server ~~negative gross margin on revenue was $(21,995) for the nine months ended September 30, 2021 compared to gross profit margin of $90,000 for the nine months ended September 30, 2020.~~Agreement

~~Operating~~On April ~~Expenses~~7, 2022, Sollensys entered into the Rothwell Sollensys Blockchain Archive Server Distribution Data Center Agreement (2 Units) with Terry Rothwell and George Rothwell (the “Server Agreement”). The Rothwells together own two units of the Sollensys Blockchain Archive Server Distributive Data Center, each loaded with Sollensys application software (R4 Enterprise) (the “Equipment”). Pursuant to the terms and conditions of the Server Agreement, Sollensys may use the Equipment in exchange for level monthly payments of $100,000 ($50,000 per server) from the servers’ revenue to the Rothwells, payable until both Rothwells are deceased.

~~Operating~~Results of ~~expenses~~Operations for the ~~three~~Three ~~months~~Months ~~ended~~Ended ~~September~~March 3031, ~~2021~~2022 ~~were~~Compared ~~$1,058,574, compared~~ to ~~$98,440 for~~ the ~~three~~Three ~~months~~Months ~~ended~~Ended ~~September~~March 3031, ~~2020. Key components of the Company’s expenses for the three months ended September 30,~~ 2021 ~~include approximately $758,000 in payroll and benefits (which includes $66,000 in stock based compensation), approximately $144,000 in legal and professional services, and $25,000 in rent expense.~~

~~Operating~~The comparison ~~expenses~~of ~~for~~operating ~~the~~results ~~nine~~include ~~months ended September 30, 2021 were $2,505,120 compared to $2,010,858 for~~ the ~~nine~~operations ~~months ended September 30, 2020. Key components~~ of ~~the~~Abstract ~~Company’s~~Media ~~expenses~~in ~~for~~ the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022 ~~include~~compared ~~approximately~~to ~~$1,886,000~~zero inoperating results ~~payroll~~for ~~and~~Abstract ~~benefits~~Media ~~(which includes approximately $300,000~~ in ~~stock~~same ~~based~~three ~~compensation),~~month ~~approximately~~period ~~$288,000~~ in ~~legal and professional services, and $89,000 in rent expense~~2021.

~~Liquidity and Capital Resources~~Revenue

AsFor the ofthree ~~September~~months 30ended March 31, ~~2021~~2022, we ~~had~~recorded $~~146~~444,~~406~~096 in ~~cash~~revenue from the execution of our blockchain archive server agreements and ~~cash~~due ~~equivalents.~~to ~~Net~~addition ~~cash~~of ~~used~~Abstract inMedia ~~operating~~revenue, ~~activities~~compared ~~was~~to $171,~~641,486~~429 from the sale of servers for the ~~nine~~three months ended ~~September~~March 3031, 2021,. We ~~compared~~are toin ~~net~~the ~~cash~~process ~~provided~~of indeveloping ~~operating~~our ~~activities~~strategic ofbusiness ~~$44~~plan going forward and,~~985~~ ~~for~~therefore, ~~the~~revenue ~~nine~~may ~~months~~vary ~~ended~~from ~~September~~period ~~30,~~to ~~2020~~period.

~~Net cash used in investing activities was $2,908,691 for the nine months ended September 30, 2021 compared to $-0- for the nine months ended September 30, 2020. Key components~~ Cost of ~~investing activities include the purchase of land, buildings and improvements for the Palm Bay, Florida operations.~~sales

~~Net~~Cost of ~~cash~~sales ~~from financing activities~~ was $4396,~~566,959~~656 for the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022, ~~from~~compared ~~the~~to ~~proceeds~~cost of ~~private~~ sales of ~~common~~$32,344 ~~stock~~for tothe ~~accredited~~three ~~investors~~months ended March 31, ~~and~~2021. ~~the~~The ~~mortgage~~significant ~~loan~~increase onin ~~the~~cost ~~Company’s~~of ~~new~~sales ~~building,~~is ~~compared~~attributable to ~~$500~~higher ~~during~~sales, the buildout of our infrastructure in the prior period ~~ended~~in ~~September~~anticipation 30of higher sales levels in 2022, ~~2020~~and the addition of Abstract Media’s revenue and cost of sales.

We will have significant ongoing needs for working capital to fund operations and to continue to expand our operations. To that end, we would be required to raise additional funds through equity or debt financing. However, there can be no assurance that we will be successful in securing additional capital on favorable terms, if at all. Our inability to raise capital could require us to significantly curtail or terminate our operations altogether.Operating expenses

15Operating expenses ~~Table~~for the three months ended March 31, 2022 were $1,360,544 compared to $563,567 for the three months ended March 31, 2021. The significant increase in operating expenses in the three months ended March 31, 2022, compared to the same period in 2021 is due to the buildout of ~~Contents~~the infrastructure at the Company in 2021 to support higher levels of activity and revenue generation in 2022, and due to the addition of Abstract Media’s operating expenses.

~~Going~~Key components ~~Concern~~of the Company’s operating expenses for the three months ended March 31, 2022 include approximately (i) $709,000 in payroll, consultants, temporary staff and benefits (ii) approximately $427,000 in legal and professional services; and approximately (iii) $54,000 in rent expense.

The accompanying unaudited consolidated financial statements have been prepared assuming we will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the date of these unaudited consolidated financial statements. We have incurred significant operating losses since inception. Because we do not expect that existing operational cash flow will be sufficient to fund presently anticipated operations, this raises substantial doubt about our ability to continue as a going concern. Therefore, we will need to raise additional funds and are currently exploring sources of financing. Historically, we have raised capital through private offerings of debt and equity and officer loans to finance working capital needs. There can be no assurances that we will be able to continue to raise additional capital through the sale of common stock or other securities or obtain short-term loans.16

~~Critical~~Liquidity and ~~Accounting~~Capital ~~Estimates~~Resources

~~Our~~We had ~~unaudited~~$18,782 ~~consolidated financial statements and accompanying notes have been prepared~~ in ~~accordance~~cash with GAAP. The preparation of these unaudited consolidated financial statements requires management to make estimates, judgments, and assumptions that affect reported amounts of assets, liabilities, revenues, and expenses. We continually evaluate the accounting policies and estimates used to prepare the unaudited consolidated financial statements. The estimates are based on ~~historical~~hand ~~experience~~as and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could differ from these estimates made by management. Certain accounting policies that require significant management estimates and are deemed critical to our results of ~~operations~~March ~~or financial position. Our critical accounting estimates are more fully discussed in Note 2~~31, ~~“Summary of Significant Accounting Policies,” to our unaudited consolidated financial statements contained herein~~2022.

~~Item~~Net cash 3used in operating activities was $1,267,156 for the three months ended March 31, 2022, compared to $218,974 for the three months ended March 31, 2021. ~~Quantitative~~The material increase in cash used in operating activities during the three months ended March 31, 2022 was primarily due to an increase of approximately $742,000 in operating losses in the three months ended 2022 (net of non-cash stock-based compensation, depreciation and ~~Qualitative~~amortization) ~~Disclosures~~and ~~about~~an ~~Market~~increase ~~Risk.~~in accounts receivable balances of approximately $185,000 over prior year levels

WeNet cash ~~are~~used ain ~~smaller~~investing ~~reporting~~activities ~~company~~during ~~and~~the ~~are~~three ~~not~~months ~~required~~ended March 31, 2022 was $16,077 compared to ~~provide~~$-0- ~~this~~for ~~information~~the three months ended March 31, 2021. The investing activity in 2022 related to the purchase of office equipment.

~~Item~~Net cash 4provided by financing activities was $709,481 for the three months ended March 31, 2022, compared to $111,501 for the three months ended March 31, 2021. ~~Controls~~The material increase during the 2022 period was due to an increase in proceeds from the sale of common stock of approximately $400,000, and ~~Procedures~~loan proceeds of approximately $220,000.

~~Evaluation~~During the three months ended March 31, 2022, we issued shares of ~~Disclosure~~our ~~Controls~~common stock and ~~Procedures~~raised $510,001.

~~Under~~Since we ~~the~~have ~~supervision~~been ~~and~~incurring ~~with~~losses ~~the~~from ~~participation of our management~~operations, ~~including~~we ~~our~~have ~~Chief~~relied ~~Executive~~on ~~Officer~~ongoing ~~and~~sales ~~principal financial officer, as~~ of ~~September~~unregistered ~~30,~~securities ~~2021, we conducted an evaluation of our disclosure controls~~ and ~~procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under~~ the ~~Securities~~personnel ~~Exchange Act~~ guarantees of ~~1934, as amended~~Mr. ~~Based on this evaluation~~Beavers, our Chief Executive Officer ~~and principal financial officer concluded that our disclosure controls and procedures were not effective as of September 30~~, ~~2021~~ to ~~ensure~~obtain ~~that~~financing ~~information required~~ to befund disclosed by us in reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), were recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that our disclosure controls are effectively designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosureoperations.

Our management, including our Chief Executive Officer and principal financial officer, do not expect that our disclosure controls and procedures will prevent all error and all fraud. A control system, no matter how well-conceived and operated, There can provide only reasonable, not absolute, assurance that the objectives of the control system are met. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that ~~any~~we ~~design~~ will ~~succeed~~be inable ~~achieving~~to ~~its~~continue ~~stated~~to ~~goals~~raise ~~under~~capital ~~all~~from ~~potential future conditions. Further,~~ the ~~design~~sale of aour ~~control system must reflect the fact that there are resource constraints~~securities, ~~and~~or ~~the~~use ~~benefits~~our ofsecurities ~~controls must be considered relative~~ to ~~their costs~~make acquisitions. ~~Because of the inherent limitations in all control systems~~Additionally, nothere ~~evaluation of controls~~ can ~~provide~~be ~~absolute assurance that all control issues and instances of fraud, if~~ any, ~~within~~assurances ~~our company have been detected. These inherent limitations include the realities~~ that ~~judgments in decision-making can be faulty, and that breakdown can occur because of simple error or mistake~~Mr. InBeavers ~~particular,~~will ~~many~~continue ofto ~~our~~provide ~~current~~his ~~processes~~personal ~~rely~~guaranty ~~upon~~on ~~manual~~financing transactions ~~reviews and processes~~ to ~~ensure~~help ~~that~~raise ~~neither human error nor system weakness has resulted in erroneous reporting of financial data~~capital.

~~Changes in Internal Control over~~ Financial Impact ~~Reporting~~of COVID-19

~~There~~The COVID-19 pandemic has ~~were~~affected nohow ~~changes~~we inare operating our ~~internal~~business, ~~control~~and ~~over~~the duration and extent to which this will impact our future results of operations and overall financial ~~reporting~~performance ~~during~~remains uncertain. The COVID-19 pandemic is having widespread, rapidly evolving, and unpredictable impacts on global society, economies, financial markets, and business practices. Federal, state and foreign governments have implemented measures to contain the ~~quarter~~virus, ~~ended~~including ~~September~~social 30distancing, ~~2021~~travel ~~that~~restrictions, border closures, limitations on public gatherings, work from home, and closure of non-essential businesses. To protect the health and well-being of our employees, partners, and third-party service providers, we have ~~materially~~implemented ~~affected~~work-from-home requirements, made substantial modifications to employee travel policies, and cancelled or ~~are~~shifted ~~reasonably~~marketing ~~likely~~and other corporate events to ~~materially~~virtual-only formats for the foreseeable future. While we continue to monitor the situation and may adjust our current policies as more information and public health guidance become available, such precautionary measures could negatively affect our customer success efforts, sales and marketing efforts, delay and lengthen our ~~internal~~sales ~~control~~cycles, ~~over~~or create operational or other challenges, any of which could harm our business and results of operations. In addition, the COVID-19 pandemic has disrupted the operations of our current enterprise customers, as well as many potential enterprise customers, and may continue to disrupt their operations, for an indefinite period of time, including as a result of travel restrictions and/or business shutdowns, uncertainty in the financial ~~reporting~~markets, or other harm to their businesses and financial results, resulting in delayed purchasing decisions, extended payment terms, and postponed or cancelled projects, all of which could negatively impact our business and results of operations, including our revenue and cash flows.

16Beginning in ~~Table~~March 2020, the U.S. and global economies have reacted negatively in response to worldwide concerns due to the economic impacts of the COVID-19 pandemic. ~~Contents~~These factors also may adversely impact enterprise and government spending on technology as well as such customers’ ability to pay for our products and services on an ongoing basis. For example, some businesses in industries particularly impacted by the COVID-19 pandemic, such as travel, hospitality, retail, and oil and gas, have significantly cut or eliminated capital expenditures. A prolonged economic downturn could adversely affect technology spending, demand for our offerings, which could have a negative impact on our financial condition, results of operations and cash flows. Any resulting instability in the financial markets could also adversely affect the value of our common stock, our ability to refinance our indebtedness, and our access to capital.

~~PART~~The ultimate IIduration –and ~~OTHER~~extent ~~INFORMATION~~of the impact from the COVID-19 pandemic depends on future developments that cannot be accurately forecasted at this time, such as the severity and transmission rate of the disease, the actions of governments, businesses and individuals in response to the pandemic, the extent and effectiveness of containment actions, the impact on economic activity and the impact of these and other factors on our employees, partners, and third-party service providers. These uncertainties may increase variability in our future results of operations and adversely impact our ability to accurately forecast changes in our business performance and financial condition in future periods. If we are not able to respond to and manage the impact of such events effectively or if global economic conditions do not improve, or deteriorate further, our business, financial condition, results of operations, and cash flows could be adversely affected.

~~Item 1. Legal Proceedings.~~17

~~There~~Off-Balance Sheet are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company's property is not the subject of any pending legal proceedings.Arrangements

~~Item~~We do ~~1A.~~not ~~Risk~~have ~~Factors~~any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

AsCritical Accounting aPolicies ~~smaller~~and ~~reporting company, we are not required to include this disclosure in this Quarterly Report on Form 10-Q.~~ Estimates

~~Item~~The preparation 2of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) ~~Unregistered~~requires ~~Sales~~management to make estimates and assumptions that affect the reported amounts of ~~Equity~~assets ~~Securities~~and liabilities and ~~Use~~disclosure of contingent assets and liabilities at the date of ~~Proceeds~~the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

~~During~~We believe that the ~~three~~following ~~months~~critical ~~ended~~policies ~~September~~affect ~~30,~~our ~~2021,~~more wesignificant ~~issued~~judgments ~~355,115 shares to investors~~ and ~~raised~~estimates ~~$1,178,402.~~used ~~Additionally~~in wepreparation ~~issued~~of ~~12,000~~our ~~shares~~consolidated financial ~~to consultants valued at $66,000~~statements.

~~The~~New Accounting ~~above sales were made pursuant to an exemption from registration as set forth in Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated under the Securities Act.~~Pronouncements

~~Item~~In 3February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. ~~Defaults~~2016-02, ~~Upon~~Leases ~~Senior~~(Topic ~~Securities~~842), which establishes a new lease accounting model for lessees. The updated guidance requires an entity to recognize assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. The amended guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. In March 2019, the FASB issued ASU 2019-01, Codification Improvements, which clarifies certain aspects of the new lease standard. The FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases in July 2018. Also in 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements, which provides an optional transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings. The amendments have the same effective date and transition requirements as the new lease standard On November 15, 2019, the FASB issued ASU 2019-10, which amends the effective dates for three major accounting standards. The ASU defers the effective dates for the credit losses, derivatives, and lease standards for certain companies. Since the Company is classified as a small reporting company, emerging growth company, and has a calendar-year end the Company was eligible for deferring the adoption of ASC 842 to January 1, 2022.

~~None~~In the first quarter of fiscal 2022, we adopted ASU 2016-02 using the “Comparatives Under 840 Option” approach to transition. Under this method, financial information related to periods prior to adoption will be as originally reported under the previous standard – ASC 840, Leases. The effects of adopting the new standard (ASC 842, Leases) in fiscal 2022 were recognized as a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal first quarter. We elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carry forward the historical lease classification as operating or capital leases. We also elected to combine lease and non-lease components and to exclude short-term leases from our consolidated balance sheets.

~~Item~~The 4most significant impact of adoption was the recognition of operating lease assets and operating lease liabilities of $496 thousand and $541 thousand, respectively. ~~Mine~~The ~~Safety~~cumulative ~~Disclosures~~impact of these changes increased accumulated deficit by $46 thousand. We expect the impact of adoption to be immaterial to our consolidated statements of earnings and consolidated statements of cash flows on an ongoing basis. As part of our adoption, we also modified our control procedures and processes, none of which materially affected our internal control over financial reporting. See Note 9, Leases, for additional information regarding our accounting policy for leases and additional disclosures.

~~Not~~Item 3. ~~applicable~~Quantitative and Qualitative Disclosures about Market Risk.

~~Item~~We are 5.a ~~Other~~smaller ~~Information~~reporting company and are not required to provide this information.

~~(a) None.~~18

~~(b)~~Item 4. ~~There~~Controls ~~have~~and been no material changes to the procedures by which security holders may recommend nominees to the Company’s Board of Directors since the filing with the SEC of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021Procedures.

17Evaluation of ~~Table~~Disclosure ofControls ~~Contents~~and Procedures

~~Item~~Under the 6supervision and with the participation of our management, including our Chief Executive Officer and principal financial officer, as of March 31, 2022, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended. ~~Exhibits~~Based on this evaluation, our Chief Executive Officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of March 31, 2022 to ensure that information required to be disclosed by us in reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), were recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that our disclosure controls are effectively designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Exhibit No.		Document
31.1*		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act.
31.2*		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act.
32.1**		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act.
101.INS*		Inline XBRL Instance 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).

Our management, including our Chief Executive Officer and principal financial officer, do not expect that our disclosure controls and procedures will prevent all error and all fraud. A control system, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdown can occur because of simple error or mistake. In particular, many of our current processes rely upon manual reviews and processes to ensure that neither human error nor system weakness has resulted in erroneous reporting of financial data.

~~_____________~~Changes in Internal Control over Financial Reporting

+There were ~~Management~~no ~~contract~~changes in our internal control over financial reporting during the quarter ended March 31, ~~compensation~~2022 ~~plan~~that have materially affected, or ~~arrangement~~are reasonably likely to materially affect, our internal control over financial reporting.

* Filed herewith.19

**PART II ~~Furnished~~- ~~herewith.~~OTHER INFORMATION

18Item 1. ~~Table~~Legal ~~of Contents~~Proceedings.

~~SIGNATURES~~There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.

~~Pursuant~~Item 1A. toRisk ~~the requirements 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~~Factors.

	SOLLENSYS CORP
Dated: November 15, 2021	By:	/s/ Donald Beavers
		Chief Executive Officer (principal executive officer, principal financial officer and principal accounting officer)

As a smaller reporting company, we are not required to include this disclosure in this Quarterly Report on Form 10-Q.

19Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

During the three months ended March 31, 2022, we issued 158,750 shares to investors and raised $510,001.

The above sales were made pursuant to an exemption from registration as set forth in Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated under the Securities Act.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

(a)

None.

(b)

There have been no material changes to the procedures by which security holders may recommend nominees to the Company’s Board of Directors since the filing with the SEC of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022.

Item 6. Exhibits

Exhibit No.		Document
10.1		Amendment to Merger Agreement, dated as of January 28, 2022, by and among the registrant, S-CC Merger Sub, Inc., S-Solutions Merger Sub, Inc.; Celerit Corporation; Celerit Solutions Corporation; and Terry Rothwell (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the SEC on February 3, 2022).
10.2		Second Amendment to Merger Agreement, dated as of March 31, 2022, by and among the registrant, S-CC Merger Sub, Inc., S-Solutions Merger Sub, Inc.; Celerit Corporation; Celerit Solutions Corporation; and Terry Rothwell (incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K filed with the SEC on April 5, 2022).
31.1*		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act.
31.2*		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act.
32.1**		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act.
101.INS*		Inline XBRL Instance 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).

Management contract, compensation plan or arrangement.

Filed herewith.

Furnished herewith.

SIGNATURES

Pursuant to the requirements 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.

	SOLLENSYS CORP

Dated: May 16, 2022	By:	/s/ Donald Beavers
		Chief Executive Officer
		(principal executive officer, principal financial officer and principal accounting officer)

Filing Compare · SOLLENSYS CORP.