RDGA Ridgefield Acquisition Corp (PK)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 10-K

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(Mark One)

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For the fiscal year ended December 31, 2022

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For the transition period from                 to

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Commission file number 000-16335

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3827 S Carson St, Unit 505-25 PMB 1078, Carson City, NV 89701

(Address of Principal Executive Offices) (Zip Code)

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(805) 484-8855
(Registrant’s Telephone Number, Including Area Code)

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Securities registered pursuant to Section 12(b) of the Act: None

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

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Common Stock, $0.001 par value

(Title of Class)

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

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

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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 ☐

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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 fi les). Yes ☒  No ☐

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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:

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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.  ☐

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

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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

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If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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As of June 30, 2022 the aggregate market value of the voting and non-voting common equity held by non-affiliates was $482,336 computed by reference to the closing price on that date.

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As of February 28, 2023, the registrant had 2,860,773 shares of common stock issued and outstanding.

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DOCUMENTS INCORPORATED BY REFERENCE

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None

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RIDGEFIELD ACQUISITION CORP.

FORM 10-K

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The words “believe,” “may,” “will,” “potentially,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “plan,” “expect” and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements. These forward-looking statements speak only as of the date of this Form 10-K and are subject to uncertainties, assumptions and business and economic risks. As such, our actual results could differ materially from those set forth in the forward-looking statements. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Form 10-K may not occur, and actual results could differ materially and adversely from those anticipated or implied in our forward-looking statements.

Forward-looking statements should not be relied upon as predictions of future events. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances described in the forward-looking statements will be achieved or occur. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Form 10-K, to conform these statements to actual results or to changes in our expectations, except as required by law.

This Annual Report on Form 10-K and the documents that we reference in this Annual Report on Form 10-K and have filed with the Securities and Exchange Commission as exhibits thereto should be read with the understanding that our actual future results and circumstances may be materially different from what we expect.

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The selection of a business opportunity is a complex process and involves a number of risks, because potentially available business opportunities may occur in many different industries and may be in various stages of development. Due in part to economic conditions in a number of geographic areas, rapid technological advances being made in some industries and shortages of available capital, we believe that there are numerous firms seeking either the limited additional capital which the Company will have or the benefits of a publicly traded corporation, or both. The perceived benefits of a publicly traded corporation may include facilitating or improving the terms upon which additional equity financing may be sought, providing liquidity for principal shareholders, creating a means for providing incentive stock options or similar benefits to key employees, and other factors.

In many cases, management of the Company will have the authority to effect acquisitions without submitting the proposal to the shareholders for their consideration. In some instances, however, the proposed participation in a business opportunity may be submitted to the shareholders for their consideration, either voluntarily by the Board of Directors to seek the shareholders’ advice and consent, or because of a requirement of state law to do so.

The Company may need additional funds in order to effectuate a merger, acquisition or other arrangement by and between the Company and a viable operating entity, although there is no assurance that we will be able to obtain such additional funds, if needed. Even if we are able to obtain additional funds there is no assurance that the Company will be able to effectuate a merger, acquisition or other arrangement by and between the Company and a viable operating entity.

Competition

In connection with its Acquisition Strategy, the Company expects to encounter intense competition from other entities having business objectives similar to those of the Company. Many of these entities, including SPACs, venture capital firms, blind pool companies, large industrial and financial institutions, small business investment companies and wealthy individuals, are well-established and have extensive experience in connection with identifying and effecting acquisitions directly or through affiliates. Many of these competitors possess greater financial, technical, human and other resources than the Company and there can be no assurance that the Company will have the ability to compete successfully with such entities. The Company’s financial resources will be limited in comparison to those of many of its competitors. The Company’s limited financial resources may compel the Company to select certain less attractive acquisition prospects.

Employees

As of February 28, 2023, the Company had 1 employee, Steven N. Bronson, who serves as the Company’s Chairman, President and Chief Executive Officer but takes no salary. The Company does not have any employees that are represented by a union or other collective bargaining group.

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These disclosure requirements may have the effect of reducing the trading activity for our common stock. Therefore, stockholders may have difficulty selling our securities.

Dividend Policy

We currently intend to retain all available funds and any future earnings for use in the execution of our acquisition strategy and the operation of our business and do not anticipate paying any cash dividends on our common stock in the foreseeable future, if at all. Any future determination to declare cash dividends will be made at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, general business conditions and other factors that our board of directors may deem relevant.

Purchases of Equity Securities By The Issuer and Affiliated Purchasers

None.

Recent Sale of Unregistered Securities

None.

Purchase of Our Equity by Officers and Directors

On March 26, 2021, the Company sold 1,600,000 shares of its Common Stock to its President and Chief Executive Officer, Steven N. Bronson at a price of $0.25 per share, for an aggregate purchase price of $400,000. Mr. Bronson paid the purchase price for the shares by cancelling $349,442 in principal and accrued interest outstanding under a Revolving Promissory Note, dated as of December 31, 2016, made by the Company in favor of Mr. Bronson, as amended to date, and paying $50,558 in cash.

Other Information

The Company’s shares are covered by Section 15(g) of the Securities Exchange Act of 1934, as amended, and Rules 15g-1 through 15g-6 promulgated thereunder, which impose additional sales practice requirements on broker-dealers who sell our securities to persons other than established customers and accredited investors.

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In seeking to arrange a merger, acquisition, business combination or other arrangement by and between the Company and a viable operating entity, our objective will be to obtain long-term capital appreciation for the Company’s shareholders. As stated before, there can be no assurance that we will be able to complete any merger, acquisition, business combination or other arrangement by and between the Company and a viable operating entity, and there can be no assurance that such a transaction will result in long-term capital appreciation.

In connection with its Acquisition Strategy, the Company expects to encounter competition from other entities having business objectives similar to those of the Company. Many of these entities, including SPACs, venture capital firms, blind pool companies, large industrial and financial institutions, small business investment companies and wealthy individuals, are well-established and have extensive experience in connection with identifying and effecting acquisitions directly or through affiliates. Many of these competitors possess greater financial, technical, human and other resources than the Company and there can be no assurance that the Company will have the ability to compete successfully with such entities. The Company’s financial resources will be limited in comparison to those of many of its competitors. The Company’s limited financial resources may compel the Company to select certain less attractive acquisition prospects.

Results of Operations for the year ended December 31, 2022, as compared to the year ended December 31, 2021

Revenues

During the twelve months ended December 31, 2022 and the twelve months ended December 31, 2021, the Company earned no revenues from operations. Overall, the Company incurred a net loss of $63,899 during the twelve months ended December 31, 2022 as compared to $58,533 during the twelve months ended December 31, 2021.

Because the Company’s operations are primarily administrative, the increase in net loss relates entirely to an increase in general and administrative (G&A) expenses, offset slightly by a reduction in interest expense.

General and Administrative Expenses

G&A expenses consist of professional fees, service charges, office expenses and similar items. During the twelve months ended December 31, 2022, the Company incurred G&A expenses of $58,923 compared to G&A expenses of $50,148 during the twelve months ended December 31, 2021. The increase of $8,775 is almost entirely attributable to an increase in legal and other professional fees incurred as part of due diligence for a potential transaction that was abandoned. Going forward we expect to see annual increases in costs related to compliance and expenses of being a public company, as well as fees related to due diligence when potential transactions are presented.

Other Expenses

Other expenses primarily represent state licenses, filing fees, minimum tax expense and net interest expense. Other expenses decreased to $4,976 during the twelve months ended December 31, 2022, as compared to $8,385 during the twelve months ended December 31, 2021. The decrease relates primarily to interest expense. The Company incurred net interest expense of $2,411 during the twelve months ended December 31, 2022 compared to $5,681 during the twelve months ended December 31, 2021, largely as a result of the cancellation of a loan from the President of the Company. The loan was cancelled on March 26, 2021 and the Company has since carried a lower debt burden. The decrease in interest expense is consistent with the decrease in underlying principal, and is expected to continue that track going forward.

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Historically, the Company satisfied its working capital needs from related party loans from Steven N. Bronson, the Chairman, President, CEO, and majority shareholder. On December 31, 2016, Mr. Bronson entered into a revolving loan agreement (the “2016 Bronson Note”) whereby Mr. Bronson would loan the Company money from time-to-time to fund working capital needs to pay operating expenses. The 2016 Bronson Note was unsecured, was repayable upon demand and accrued interest at the rate of 10% per annum.

On March 26, 2021, the Company sold 1,600,000 shares of its Common Stock to Mr. Bronson at a price of $0.25 per share, for an aggregate purchase price of $400,000. Mr. Bronson paid the purchase price for the shares by cancelling $349,442 in principal and accrued interest outstanding under the 2016 Bronson Note and paying $50,558 in cash.

On March 23, 2022, the Company executed a Revolving Promissory Note (the “2022 Bronson Note”), in the principal amount of up to $200,000 payable to Mr. Bronson, pursuant to which Mr. Bronson may make loans to the Company from time to time. The 2022 Bronson Note has a maturity date of March 23, 2027, and provides for interest to accrue on the unpaid principal at a rate of eight percent (8)% per annum (calculated on the basis of a 360-day year), compounded quarterly and payable quarterly on the last business day of the calendar quarter. The 2022 Bronson Note may be prepaid by the Company at any time without penalty.

On September 27, 2022, the Company executed a Revolving Promissory Note (the “Qualstar Note”), payable to Qualstar Corporation (“Qualstar”). Mr. Bronson, the Company’s Chairman of the Board, President and Chief Executive Officer, is the President and CEO of Qualstar Corporation, as well as its largest shareholder. Under the terms of the Qualstar Note, Qualstar may (but is not required to) make loans to the Company from time to time upon request by the Company, up to a maximum principal amount of $200,000 outstanding at any time. The Note may be prepaid by the Company at any time without penalty and is repayable on demand by Qualstar on or after December 31, 2024. The Note provides for interest to accrue on the outstanding principal balance at a rate of ten percent (10%) per annum (calculated on the basis of a 360-day year), compounded and payable quarterly. The Company borrowed an initial amount of $20,000 under the Note on September 27, 2022, and an additional $30,000 on December 1, 2022.

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During the twelve months ended December 31, 2021, and December 31, 2022, the following amounts were payable under all loans:

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While the cash received from the related party loans will satisfy the Company’s immediate financial needs, it will not by itself provide the Company with sufficient capital to finance a merger, acquisition or business combination between the Company and a viable operating entity. The Company may need additional funds to complete a merger, acquisition or business combination between the Company and a viable operating entity. There can be no assurances that the Company will be able to obtain additional funds if and when needed.

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Critical Estimates and Judgments

The preparation of the Company’s financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management evaluates its estimates and judgments, including those related to receivables and accrued expenses. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable based on the circumstances. Actual results may differ from these estimates under different assumptions or conditions. The most significant accounting estimates inherent in the preparation of the Company’s financial statements include estimates as to the appropriate carrying value of the Company’s deferred income tax asset valuation allowance. These accounting policies are described at relevant sections in this discussion and analysis and in the notes to the consolidated financial statements.

Critical Accounting Policies

The preparation of financial statements in conformity with generally accepted accounting principles of the United States (“U.S. GAAP”) requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. The SEC has defined a company’s critical accounting policies as the ones that are most important to the portrayal of the company’s financial condition and results of operations, and which require the company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, we have identified the critical accounting policies and judgments addressed below. We also have other key accounting policies, which involve the use of estimates, judgments, and assumptions that are significant to understanding our results. Although we believe that our estimates, assumptions, and judgments are reasonable, they are based upon information presently available. Actual results may differ significantly from these estimates under different assumptions, judgments, or conditions.

Going Concern

The Company has an accumulated deficit balance as of December 31, 2022 and net loss during the year ended December 31, 2022. The Company’s financial statements are prepared using U.S. GAAP applicable to a going concern for the next twelve months from the date of this filing, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it establishes a revenue stream and becomes profitable. The Company is continually analyzing its current costs and is attempting to make additional cost reductions where possible. We expect that we will continue to generate losses from operations throughout 2023.

In order to continue as a going concern and to develop a reliable source of revenues and achieve a profitable level of operations the Company will need, among other things, additional capital resources. Management’s plans to continue as a going concern include raising additional capital through borrowing and/or sales of equity and debt securities. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

Economy and Inflation

Many leading economists predict high rates of inflation will continue into 2023 and potentially beyond. While we do not believe inflation has had a material effect on our Company’s results of operations, inflation generally interferes with the provision of investment capital. A prolonged period of high inflation may impact our ability to carry out our acquisition strategy. On the other hand, when business conditions worsen and the stock market corrects, it may be easier for us to identify an acquisition candidate.

The new strain of coronavirus first identified in Wuhan, Hubei Province, China, in 2019 (“COVID”) has since spread globally, with more contagious variants, such as the Delta and Omicron variants, also emerging. While vaccines have proven effective at reducing the risk of serious health consequences from COVID, some governments have continued to implement various measures, or impose restrictions, in an effort to lessen the spread of the virus. We cannot make any predictions concerning the continuing severity, magnitude and duration of the pandemic, including impacts of virus variants and resurgences, and of government, business and individual responses. Although we do not expect COVID to impact our operations, it could impact our acquisition strategy, positively or negatively.

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The extent to which new opportunities are presented to us will depend on future developments, which remain highly uncertain and cannot be predicted with confidence.

Off-Balance-Sheet and Contractual Obligations

Our liquidity is not dependent on the use of off-balance-sheet financing arrangements.

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See accompanying notes to these consolidated financial statements.

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See accompanying notes to these consolidated financial statements.

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See accompanying notes to these consolidated financial statements.

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See accompanying notes to these consolidated financial statements.

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RIDGEFIELD ACQUISITION CORP. AND SUBSIDIARY

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RIDGEFIELD ACQUISITION CORP. AND SUBSIDIARY

Notes to Consolidated Financial Statements

CASH EQUIVALENTS

The Company considers as cash equivalents all highly liquid investments with a maturity of 90 days or less at the time of purchase. At December 31, 2022 and 2021, the Company had no cash equivalents.

RELATED PARTIES

The Company defines a related person as any director, executive officer, nominee for director, or greater than 5% beneficial owner of our common stock, in each case since the beginning of the most recently completed year, and any of their immediate family members. Transactions with related parties are conducted on terms equivalent to those prevailing in arm’s-length transactions with unrelated parties.

USE OF ESTIMATES

The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and disclosures made in the accompanying notes to the consolidated financial statements. Management regularly evaluates estimates and assumptions related to items such as revenue recognition, allowances for doubtful accounts, warranty reserves, inventory valuation reserves, stock-based compensation, purchased intangible asset valuations and useful lives, asset retirement obligations, and deferred income tax asset valuation allowances. These estimates and assumptions are based on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. The actual results we experience may differ materially and adversely from our original estimates. To the extent there are material differences between the estimates and the actual results, our future results of operations will be affected.

RISK AND UNCERTAINTIES

Our future results of operations involve a number of risks and uncertainties. Factors that could affect our business or future results and cause actual results to vary materially from historical results include, but are not limited to, the ability to raise additional capital, complying with the requirements of being a public company, and our ability to execute our acquisition strategy.

NEW ACCOUNTING STANDARDS

We reviewed recently issued accounting pronouncements and concluded they are either not applicable or not expected to be material to our financial statements.

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NOTE 2 – INCOME TAXES

Income tax provision (benefit) consists of the following for the twelve months ended December 31, 2022 and 2021:

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A reconciliation of the income tax provision (benefit) by applying the statutory United States federal income tax rate to net income before income tax provision (benefit) is as follows:

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Deferred tax assets and liabilities are recognized for future tax consequences between the carrying amounts of assets and liabilities and their respective tax basis using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Significant deferred tax assets and liabilities, consist of the following:

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RIDGEFIELD ACQUISITION CORP. AND SUBSIDIARY

Notes to Consolidated Financial Statements

At December 31, 2022, the Company has a federal net operating loss carry-forward of $685,271 available to offset future federal taxable income. The Company’s remaining federal net operating loss carry-forward will expire between 2026 and 2037, with the exception of $331,010 which may be carried forward indefinitely. Utilization of future net operating losses may be limited due to ownership changes under applicable sections of the Internal Revenue Code.

At December 31, 2022, the Company has a state net operating loss carry-forward in California of $644,486 available to offset future state taxable income in that state. The Company’s remaining California net operating loss carry-forward will expire between 2028 and 2037, with the exception of 300,056 which may be carried forward indefinitely. Utilization of future net operating losses may be limited due to ownership changes under applicable sections of the California Revenue and Taxation Code.

At December 31, 2022, the Company also has a state net operating loss carry-forward in Florida of $250,715 available to offset future state taxable income in that state. The Company’s remaining Florida net operating loss carry-forward will expire between 2026 and 2033. Utilization of future net operating losses may be limited due to ownership changes under applicable sections of the Florida Income Tax Code. Because the Company no longer has taxable nexus in Florida, we do not expect to have taxable income there in the future. As a result, the Company permanently wrote-off the related deferred tax assets. However, since the Company maintained a full valuation allowance against these deferred tax assets, this write-off had no impact on tax expense.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, cumulative losses, and tax planning strategies in making this assessment. Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a full valuation allowance as of December 31, 2022. The valuation allowance at December 31, 2022 was $189,590, an increase of $2,411 from December 31, 2021 when the balance was $187,179. The valuation allowance increased due to additional tax losses in 2022, offset by the tax effect of expiring NOLs of $15,415.

Under GAAP, we use the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

U.S. federal income tax returns after 2018 remain open to examination. Generally, state income tax returns after 2017 remain open to examination. No income tax returns are currently under examination. As of December 31, 2022, and December 31, 2021, the Company does not have any unrecognized tax benefits, and continues to monitor its current and prior tax positions for any changes. The Company recognizes penalties and interest related to unrecognized tax benefits as income tax expense. For the years ended December 31, 2022 and December 31, 2021, there were no penalties or interest recorded in income tax expense.

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NOTE 3 – RELATED PARTY TRANSACTIONS

The Company previously occupied a portion of the offices leased by BKF Capital Group, Inc. (OTCMKTS: BKFG), on a month to month basis for a rental fee of $50 per month that was intended to cover administrative costs. Steven N. Bronson, the Company’s Chairman, CEO, and majority shareholder, is also the Chairman, CEO and majority shareholder of BKF Capital Group, Inc. Effective September 30, 2019, the Company terminated this arrangement with BKF Capital Group, Inc., and leased an administrative office from an unrelated party on a month-to-month basis for a minimum of $10 per month. Additional charges, if any, are based upon services provided by the lessor.

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RIDGEFIELD ACQUISITION CORP. AND SUBSIDIARY

Notes to Consolidated Financial Statements

In April 2021, we paid BKF the full amount owed of $2,800 for this previous arrangement. There are no amounts payable to or receivable from BKF at December 31, 2022.

On December 31, 2016, Steven N. Bronson, the Company’s Chairman, President, CEO, and majority shareholder entered into a revolving loan agreement (the “2016 Bronson Note”) whereby Mr. Bronson would loan the Company money from time-to-time to fund working capital needs to pay operating expenses. The 2016 Bronson Note was unsecured, repayable upon demand and accrued interest at the rate of 10% per annum.

On March 26, 2021, the Company sold 1,600,000 shares of its Common Stock to Mr. Bronson at a price of $0.25 per share, for an aggregate purchase price of $400,000. Mr. Bronson paid the purchase price for the shares by cancelling $349,442 in principal and accrued interest outstanding under the 2016 Bronson Note and paying $50,558 in cash.

On March 23, 2022, the Company executed a Revolving Promissory Note (the “2022 Bronson Note”), in the principal amount of up to $200,000.00 payable to Steven N. Bronson, the Company’s Chairman of the Board, President and Chief Executive Officer, pursuant to which Mr. Bronson may make loans to the Company from time to time. The 2022 Bronson Note has a maturity date of March 23, 2027, and provides for interest to accrue on the unpaid principal at a rate of eight percent (8%) per annum (calculated on the basis of a 360-day year), compounded quarterly and payable quarterly on the last business day of the calendar quarter. The 2022 Bronson Note may be prepaid by the Company at any time without penalty.

On September 27, 2022, the “Company executed a Revolving Promissory Note (the “Qualstar Note”), payable to Qualstar Corporation (“Qualstar”). Mr. Bronson, the Company’s Chairman of the Board, President and Chief Executive Officer, is the President and CEO of Qualstar Corporation, as well as its largest shareholder. Under the terms of the Qualstar Note, Qualstar may (but is not required to) make loans to the Company from time to time upon request by the Company, up to a maximum principal amount of $200,000 outstanding at any time. The Note may be prepaid by the Company at any time without penalty and is repayable on demand by Qualstar on or after December 31, 2024. The Note provides for interest to accrue on the outstanding principal balance at a rate of ten percent (10%) per annum (calculated on the basis of a 360-day year), compounded and payable quarterly. The Company borrowed an initial amount of $20,000 under the Note on September 27, 2022, and an additional $30,000 on December 1, 2022.

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During the twelve months ended December 31, 2021, and December 31, 2022, the following amounts were payable under all loans:

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