Annual Report for Fiscal Year Ending December 31, 2023 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2023

or

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

For the transition period from _________ to _________

Commission File Number 000-53461

High Wire Networks, Inc.

(Exact name of registrant as specified in its charter)

Nevada		81-5055489
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

30 North Lincoln Street, Batavia, Illinois		60510		(952)974-4000
(Address of principal executive offices)		(Zip Code)		(Registrant's telephone number, including area code)

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock		HWNI		OTCQB

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

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

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

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

Indicate by check mark whether the registrant has submitted electronically 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See 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 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. ☐

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). ☐

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

The aggregate market value of the voting common equity held by non-affiliates as of June 30, 2023 based on the closing sales price of the Common Stock as quoted on the OTCQB was $23,786,061. For purposes of this computation, all officers, directors, and 5 percent beneficial owners of the registrant are deemed to be affiliates. Such determination should not be deemed an admission that such directors, officers, or 5 percent beneficial owners are, in fact, affiliates of the registrant.

As of April 15, 2024, there were 240,620,455 shares of registrant's common stock outstanding.

TABLE OF CONTENTS

		PAGE
PART I		1
Item 1.	Business	1
Item 1A.	Risk Factors	8
Item 1B.	Unresolved Staff Comments	21
Item 1C.	Cybersecurity	21
Item 2.	Properties	21
Item 3.	Legal Proceedings	21
Item 4.	Mine Safety Disclosures	21
PART II		22
Item 5.	Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	22
Item 6.	[Reserved]	23
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	23
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	33
Item 8.	Financial Statements and Supplementary Data	33
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	33
Item 9A.	Controls and Procedures	34
Item 9B.	Other Information	34
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	34
PART III		35
Item 10.	Directors, Executive Officers and Corporate Governance	35
Item 11.	Executive Compensation	37
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters	40
Item 13.	Certain Relationships and Related Transactions, and Director Independence	41
Item 14.	Principal Accountant Fees and Services	41
PART IV		42
Item 15.	Exhibits, Financial Statement Schedules	42
Item 16.	Form 10-K Summary	42

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements. Forward-looking statements include all statements that do not directly or exclusively relate to historical facts. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "could," "would," "expects," "plans," "anticipates," "believes," "estimates," "projects," "forecasts," "predicts," "potential," or the negative of those terms, and similar expressions and comparable terminology. These include, but are not limited to, statements relating to future events or our future financial and operating results, plans, objectives, expectations and intentions. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these expectations may not be achieved. Forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to known and unknown risks, uncertainties and other factors outside of our control that could cause our actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Actual results may differ materially from those anticipated or implied in the forward-looking statements.

You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. You should also consider carefully the statements under Item 1A. Risk Factors appearing in this report, which address additional factors that could cause our actual results to differ from those set forth in the forward-looking statements. Such risks and uncertainties include:

●	our ability to successfully execute our business strategies, including the acquisition of other businesses to grow our company and integration of recent and future acquisitions;

●	changes in aggregate capital spending, cyclicality and other economic conditions, and domestic and international demand in the industries we serve;

●	our ability to adopt and master new technologies and adjust certain fixed costs and expenses to adapt to our industry's and customers' evolving demands;

●	our ability to obtain additional financing in sufficient amounts or on acceptable terms when required;

●	our ability to adequately expand our sales force and attract and retain key personnel and skilled labor;

●	shifts in geographic concentration of our customers, supplies and labor pools and seasonal fluctuations in demand for our services;

●	our dependence on third-party subcontractors to perform some of the work on our contracts;

●	our ability to comply with certain financial covenants of our debt obligations;

●	the impact of new or changed laws, regulations or other industry standards that could adversely affect our ability to conduct our business; and

●

changes in general market, economic and political conditions in the United States and global economies or financial markets, including those resulting from natural or man-made disasters.

These risk factors also should be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. All written and oral forward looking statements made in connection with this report that are attributable to our company or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Given these uncertainties, you are cautioned not to place undue reliance on any forward-looking statements and you should carefully review this report in its entirety. These forward-looking statements speak only as of the date of this report, and you should not rely on these statements without also considering the risks and uncertainties associated with these statements and our business.

Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. We do not undertake any obligation to review or confirm analysts' expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events, except as required by applicable law or regulation.

PART I

Unless specifically set forth to the contrary, when used in this report the terms "we", "our", the "Company" and similar terms refer to High Wire Networks, Inc., a Nevada corporation, and its consolidated subsidiaries.

The information that appears on our website at www.HighWireNetworks.com is not part of this report.

ITEM 1. BUSINESS

Business Overview

HWN, Inc., (d/b/a High Wire Network Solutions, Inc.) ("HWN") was incorporated in Delaware on January 20, 2017. HWN is a global provider of managed cybersecurity, managed networks, and tech enabled professional services delivered exclusively through a channel sales model. Our Overwatch managed security platform-as-a-service offers organizations end-to-end protection for networks, data, endpoints and users via multiyear recurring revenue contracts in this fast-growing technology segment. HWN has continuously operated under the High Wire Networks brand for 23 years.

HWN and JTM Electrical Contractors, Inc. ("JTM"), an Illinois Corporation, entered into an operating agreement through which High Wire owned 50% of JTM. On February 15, 2022, HWN sold its 50% interest in JTM.

On June 16, 2021, we completed a merger with Spectrum Global Solutions, Inc. On January 7, 2022, Spectrum Global Solutions, Inc. legally changed its name to High Wire Networks, Inc. ("High Wire"). The merger was accounted for as a reverse merger. At the time of the reverse merger, High Wire's subsidiaries included ADEX Corporation, ADEX Puerto Rico LLC, ADEX Canada, ADEX Towers, Inc. and ADEX Telecom, Inc. (collectively "ADEX" or the "ADEX Entities"), AW Solutions Puerto Rico, LLC ("AWS PR"), and Tropical Communications, Inc. ("Tropical"). For accounting purposes, HWN is the surviving entity. On March 6, 2023, HWN divested the ADEX Entities. On July 31, 2023, HWN paused the operations of its AWS PR subsidiary. On November 3, 2023, HWN paused the operations of its Tropical subsidiary.

On November 4, 2021, we closed on the acquisition of Secure Voice Corp ("SVC"). The closing of the acquisition was facilitated by a senior secured promissory note which has been repaid.

On August 4, 2023, we formed a new entity - incorporated as Overwatch Cyberlab, Inc. ("OCL") - which is 80% owned by our company and 20% owned by John Peterson.

Our AWS PR and Tropical subsidiaries are professional services organizations that deliver services for Enterprise clients as well as wireline and wireless carriers. These subsidiaries are operated as part of our Technology segment. Our SVC subsidiary is a wholesale network services provider with network footprint in the Northeast United States. This network carries VoIP and other traffic for other service providers. OCL has not begun to generate revenue as of December 31, 2023.

We provide the following categories of offerings to our customers:

●

Security: High Wire's award-winning Overwatch Managed Security offers organizations end-to-end protection for networks, data, endpoints, and users via multiyear recurring revenue contracts in this fast-growing technology segment. This segment is nearly 100% recurring revenue with multi-year contracts. Overwatch delivers services through Managed Service Providers (MSPs), strategic partnerships and alliances, Value Added Resellers (VARs), Distributors, and Network Service Providers.

●

Technology Solutions: We provide technology enabled professional and managed services for a wide array of clients exclusively through our channel partner relationships with the largest technology companies in the world. We deliver in the Enterprise, Wireline Carrier, Wireless Carrier, Network Backbone Carriers, State and Local Government, Federal Government, and Data Center market segments. We deliver services for most of the Fortune 500 alongside our channel partners. We deliver a wide array of services across a wide variety of technologies that include Wi-Fi, networking, SD-WAN, Distributed Antenna Systems, Wireless Carrier Networking, Fiber Backhaul, and many more. We provide planning, installation, project management, and ongoing support for break/fix services. We operate 24/7/365 around the world. We leverage our own technology platform, Workview, to deliver these services cost effectively and in a highly efficient and scalable manner.

Our Technology Solutions division is supported by our subsidiaries: HWN, Inc.; AW Solutions Puerto Rico, LLC and Tropical Communications, Inc. (collectively known as "AWS" or the "AWS Entities"); and SVC.

Our Operating Units

Our company is comprised of the following:

	●	Managed Services: The Managed Services Segment encompasses all of our recurring revenue businesses including our Overwatch Managed Security, all network managed services, all managed services performed under a Statement of Work (SoW), and our SVC revenue.
	●	Technology Solutions: The Technology Solutions group is all service and project revenue generally globally by HWN, Tropical, and AWS PR. These business perform professional services for the Enterprise, SMB, Data Center, Carrier Wireline, Carrier Wireless, and Network Service Provider markets.

Our Industry

As technology evolves, the demand for more robust networks, faster speeds, better experiences, and protection from the ever-evolving cyber threat landscape continues to grow at a robust pace. This demand has been compounded by the global COVID-19 pandemic and the rapid transition to "work from home" for large swaths of the global workforce. Remote learning, remote video meetings, collaboration software, increased email volumes, all have transformed the way we share information, and created strain on the way business used to be done. Nearly two years later, the technology demands are yet again changing as businesses are calling staff back to the office and needing to refresh, redesign, and secure their networks. Next generation networks rely on cloud, on-premise, and remote work models, which brings new complexity and requires new strategies to defend this ever expanding attack surface.

With the rapid proliferation of device connectivity and the transition of the workforce to remote or hybrid, the demands on Enterprise networks and all traditional networks have shifted. Cyber security risks have proliferated right along with it. According to the IBM "Cost of Data Breach" report, the average cost of a data breach in the United States is now $9.4 million, 113% higher than the global average for the 12^th year in a row. Cyber risk is now something that every business is forced to address around the globe. Allianz Global and Specialty Report 2023 indicates that cyber incidents are the number one source of business disruption at 44% of reported claims. Closer to home, a patchwork of legislation has emerged in the United States with various states enacting different requirements for protection of sensitive data, networks, and adding duties to disclose. Congress has yet to enact federal laws mandating cyber security protections thus far, but there have been many discussions, task forces, and the Department of Defense has updated standards for private sector companies doing business with them.

Global Cyber Security spending is expected to reach $376 billion annually by 2029, a 13.9% CAGR according to Fortune Business Insighted (March '22). Service Providers, Wireless Providers, and Managed Service Providers are all working at a feverish pace to keep up with emerging threats. There are over 4000 different "point" solutions on the market today. Most focused on a single part of the problem or "attack surface". Traditional solutions require a lot of work to deploy, constant monitoring, and well-trained people to interpret the massive amounts of data they produce. This sets the stage for managed service solutions that meld best in breed tools together into a comprehensive solution, manage the solution 24x7x365, to detect and respond to threats.

High Wire Networks, Inc. was recently recognized by Frost and Sullivan in the 2023 Frost Radar: America's Top Professional and Managed Cybersecurity Companies, as one of the top 12 companies in the Americas. This was based on a number of criteria around growth and innovation, ranking us amongst the largest and best companies in the industry. One of these criteria is identification and exploitation of mega trend opportunities in the space. Our Overwatch Managed Cybersecurity platform is built around an open ecosystem that is vendor and technology agnostic, and built for scale around extensive automation capabilities. Identifying that customers need vendors that can "meet them exactly where they are at" and truly operationalize cybersecurity for them in a way that they often cannot themselves, resonates with customers as they seek to better improve their security posture.

In 2020, companies around the world shifted their technology spend to rapidly enable work from home capabilities for their workforce in response to the COVID-19 pandemic. As the pandemic waned in late 2022, companies began revisiting their workforce needs and planning for significant return to the office migrations. Over those three years, infrastructure upgrades were infrequent or non-existent. Companies are confronted with the need for technology refresh deployments to replace or upgrade outdated infrastructure or infrastructure components that are no longer deemed secure. With the continued sprawl of business applications and cloud native operations, networking connectivity and security are front of mind and point to increased spending cycles for the foreseeable future.

INDUSTRY TRENDS AND OPPORTUNITIES

●	Cyber Security Managed Service

●	Network buildout and deployment

●	IOT creating deployment and cyber security opportunities

●	Fiber backhaul network buildouts

●	Future forward Cloud Area Networks

●	Monetize existing technology intellectual property and develop the portfolio

●	International growth, developing and emerging markets

●	Monetize our existing telecom network (Secure Voice Corp) in new ways

Competitors

We provide, managed and professional services to carriers, service provider, utilities and enterprise clients on a national and international basis. Demand for our services is strong and growing in all segments of the business. Our channel-oriented sales model provides for very rapid expansion within our clients as they win contracts, develop new programs, build out their own suite of services, or leverage our portfolio to expand their own under private label.

Managed Services is a very competitive market and as such, our strategy to work exclusively through distribution channels with existing customer bases and robust sales organizations that can provide rapid growth. Most of our competitors are not channel only, but rather serve customers directly as well as have a channel component. Many are also wed to their own software, which makes it challenging to pivot as threats change. Some of our significant competitors would be Arctic Wolf, Herjevic Group, SecureWorks, and numerous smaller competitors. This space is rapidly evolving and hiring and retaining talent can be challenging. The company that develops a competitive edge in recruitment and employee retention will have a significant advantage. In a crowded and evolving landscape, there will be a continued need to spend on marketing and sales to acquire partners and help them convert and acquire new customers. We believe that with the combination of businesses we have, we are able to differentiate our services and compete aggressively in this market.

Our Competitive Strengths

We believe our market advantage is our positioning as a trusted authority in the space and the long-term relationships, Master Service Agreements (MSAs), industry leading provider of solutions and a reputation and track record of our ability to perform with agility, quality on a seamless and flawless manner for our clients is key in our success to date. High Wire's ability to provide a wide range of services in a turn-key integrated solution is critical to our clients. Our highly experienced and professional team provide such services as: Managed Services, Cyber security services, and high Technology Enabled Professional Services.

We believe our additional strengths described below will enable us to continue to compete effectively and to take advantage of anticipated growth opportunities:

	●	A significant portion of our overall revenues are derived from multi-year recurring revenue contracts providing stability and predictable cash flow.
	●	Established expertise in Cyber Security and manage services with over 230 established MSP channel partners
	●	Established expertise as demonstrated by Frost and Sullivan in the 2023 Frost Radar as one of the Top 12 Professional and Managed Service Companies in the Americas.

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Established operational expertise and channel partnerships with the largest technology resellers and channel partners in the world

Sample Customers

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Technology Resellers such as Presido, Tech Data/Synnex, Worldwide Technologies, NWN Carousel, Sirius, Myriad 360, HPE-Aruba, and many more.

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Long-Term Master Service Agreements (MSA) and Contracts: We have MSA's and agreements with service providers, OEMs, software manufacturers, technology resellers, managed services providers, value added distributors and other clients. Our relationships with our customers and existing master service agreements position us to continue to capture existing and emerging opportunities, both domestically and internationally. We believe the barriers are extremely high for new entrants to obtain master service agreements with service providers and OEMs unless there are established relationships, proven ability to execute, national coverage and licensing, spotless safety records and broad and deep insurance coverage.

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Proven Ability to Recruit, Manage and Retain High-Quality Personnel. Our ability to recruit, manage and retain skilled labor is a critical advantage in an industry where a shortage of highly skilled and experience personal is limited. This is often a key factor in our customers selecting High Wire Networks over our competitors. We believe that our highly skilled professionals with professional certifications gives us a competitive edge over our competitors as we continue to expand and meet our national and international clients needs across their entire service footprints.

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Expansion of our recurring revenue streams through increased focus on managed services, cyber security services, and professional services programs that are multiple years in duration will increase client retention, grow margins, and make the business more predictable through uncertain economic cycles.

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Increased value creation through continued expansion of our intellectual property (IP) and potential acquisition of additional IP.

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Our sales organization has extensive expertise and deep industry relationships. Paired with an effective and efficient marketing message that drives new client acquisition, we believe they position us to compete very well.

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Our highly experienced management team has deep industry knowledge and brings extensive combined experience across a broad range of disciplines. We believe our senior management team is a key driver of our success and is well-positioned to execute our strategy.

KEY ASPECTS

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Strong management team in place

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Extensive automation capabilities in Managed Cyber Services enabling scalability at high margin

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Competing in high growth markets

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Global operational capabilities

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Effective marketing and strong brand awareness in the industry

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Vast expertise in technology domains

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Top customers in the industry in every segment

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Diverse customer base of nearly 500 channel partners across three different sales channels

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Focused on high growth markets

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Multiple data centers/clouds and intellectual property portfolio

Our Growth Strategy

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Under our current management team we have developed a growth strategy based on a combination of organic growth and growth through operations. Our strategy is focused on building the business on high margin recurring revenue to drive long term sustainability. We have consolidated our sales and management team to leverage the strength of our clients and sell across the existing base. We will continue to focus on existing offerings while adding robust new capabilities.

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We will continue to grow and expand our award winning, channel only Overwatch Managed Cyber Security platform. This service leverages our extensive expertise to prevent, detect, and respond to cyber threats 24x7x365. These services are in high demand around the world, and our platform is cutting edge.

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Grow Revenues and Market Share through acquisition of recurring revenue in the highly fragmented managed services provider space without acquiring and integrating the entire business. This strategy is underpinned by our substantial investment in automation technologies which allow us to perform managed services with a fraction of the normal labor burden.

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Aggressively Expand Our Organic Growth Initiatives around our Professional Services Business. Our customers have an extensive array of needs and business segments they serve. We will expand our offerings, skillsets, and geographic reach with our customers to support their clients. As we expand the breadth of our service offerings through both organic growth and selective acquisitions, we believe we have opportunities to expand revenues with our existing clients.

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Expand Our Relationships with New Service Partners. We plan to capture and expand new relationships. We believe that the business model for the expansion of these relationships, leveraging our core strengths, experience and broad array of service solutions, will support our business model for organic growth.

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Increase Operating Margins by Leveraging Operating Efficiencies. We believe that by centralizing administrative functions, consolidating insurance coverage and eliminating redundancies across our newly acquired businesses, we will be positioned to offer more integrated end-to-end solutions and increase operating margins.

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Expansion of Sales and Marketing. We believe that we can continue to expand our outside sales team, build an effective inside sales team, and provide additional momentum through marketing support and partner focused events.

Our Services

We provide award winning managed cyber security solutions, managed services, and wholesale communications exclusively through our channel partners around the world. We leverage state of the art cyber security tools to deliver these services. We have built out extensive data center/cloud infrastructure enabling our partners to provide concierge level security services and extend their value proposition to their own clients with a high degree of certainty. Our U.S. based Security Operations Center (SOC) provides SOC as a Service (SOCaaS) to manage all of the tools 24x7x365. Our cybersecurity operations are 100% U.S. based with no offshore presence, entirely provided by our own employees. Our open architecture ecosystem is vendor and technology agnostic and allows us to integrate and automate with a nearly limitless number of security tools and solutions.

Our Technology Services teams support the deployment of new networks and technologies, expand and maintain existing networks, as well as decommissioning obsolete legacy networks. We also design, install and maintain hardware solutions for the leading OEMs that support voice, data and optical networks. Our consulting and professional solutions to the service-provider and enterprise market in support of all facets of telecommunications and next-generation networks, including project management, network implementation, network installation, network upgrades, rebuilds, maintenance and consulting services. Our global certified professional services organization offers consulting, design, engineering, integration, implementation and ongoing support of all solutions offered by our company. We believe our ability to respond rapidly is a differentiating factor for national and international-based customers needing a broad range of our services and solutions.

Customers

On behalf of our clients, we provide services for most of the Fortune 1000 enterprises and the like, software and hardware OEMs, wireless and wireline service providers, cable broadband MSOs and telecommunications OEMs. Our current service provider and OEM customers include the largest resellers of technology in the world, technology manufacturers, telecom carriers, and over 230 managed service providers.

During the years ended December 31, 2023 and 2022, our top four customers accounted for approximately 57% and 46%, respectively, of our total revenues.

A substantial portion of our revenue is derived from work performed under multi-year master service agreements and multi-year service contracts. We have entered into master service agreements, or MSAs, with numerous service providers and OEMs, and generally have multiple agreements with each of our customers. MSAs are generally the contracting vehicle with work awarded primarily through a competitive bidding process based on the depth of our service offerings, experience, price, geographic coverage and capacity. MSAs generally contain customer-specified service requirements, such as discrete pricing for individual tasks, but do not require our customers to purchase a minimum amount of services. To the extent that such contracts specify exclusivity, there are often a number of exceptions, including the ability of the customer to issue work orders valued above a specified dollar amount to other service providers, perform work with the customer's own employees and use other service providers. Most of our MSAs may be cancelled by our customers upon minimum notice (typically 60 days), regardless of whether we are or are not in default. In addition, many of these contracts permit cancellation of particular purchase orders or statements of work without any prior notice but do allow for payment for services performed up to the point of hold or cancellation.

Suppliers and Vendors

We have supply agreements with major technology vendors and material supply houses. However, for a majority of the professional services we perform, our customers supply the necessary major equipment and materials. We expect to continue to further develop our relationships with our technology vendors and to broaden our scope of work with each of our partners. In many cases, our relationships with our partners have extended for over a decade, which we attribute to our commitment to excellence. It is our objective to selectively expand our partnerships moving forward in order to expand our service offerings.

Safety and Risk Management

We require our employees to participate in internal training and service programs from time to time relevant to their employment and to complete any training programs required by law. The telecommunications division has not had any OSHA recordable incidents, lost workdays or fatalities since inception which includes: 2006 through 2023. Our policy is to review accidents and claims from our operations, examine trends and implement changes in procedures to address safety issues. We have no Claims in our business related to: workers' compensation claims, general liability and damage claims, or claims related to vehicle accidents, including personal injury and property damage. We insure against the risk of loss arising from our operations up to certain deductible limits in all of the states in which we operate. In addition, we retain risk of loss, up to certain limits, under our employee group health plan. We evaluate our insurance requirements on an ongoing basis to help ensure we maintain adequate levels of coverage internally and externally for our clients.

Our internal policy is to carefully monitor claims and actively participate with our insurers in determining claims estimates and adjustments. The estimated costs of claims are accrued as liabilities and include estimates for claims incurred but not reported. If we experience future insurance claims in excess of our umbrella coverage limit, our business could be materially and adversely affected.

Employees

As of December 31, 2023, we had 72 full-time employees and 5 part-time employees, of whom 8 were in administration and corporate management, 4 were accounting personnel, 16 were sales personnel and 49 are engaged in professional engineering, operations, project managerial and technical roles.

We maintain a core of professional, technical, and managerial personnel and add employees as deemed appropriate to address operational and scale requirements related to growth. Additionally, we will "flex" our work force through the use of temporary or agency staff and through subcontractors.

Environmental Matters

A portion of the work related to the telecommunication division is work associated with above ground and underground networks of our customers. As a result, we are potentially subject to material liabilities related to encountering underground objects that may cause the release of hazardous materials or substances. We are subject to federal, state, and local environmental laws and regulations, including those regarding the removal and remediation of hazardous substances and waste. These laws and regulations can impose significant fines and criminal sanctions for violations. Costs associated with the discharge of hazardous substances may include clean-up costs and related damages or liabilities. These costs could be significant and could adversely affect our results of operations and cash flows.

Regulation

Our operations are subject to various federal, state, local and international laws and regulations, including licensing, permitting and inspection requirements applicable to electricians and engineers; building codes; permitting and inspection requirements applicable to construction and installation projects; regulations relating to worker safety and environmental protection; telecommunication regulations affecting our wireless, wireline and fiber optic business; labor and employment laws; laws governing advertising, and laws governing our public business.

Our Corporate Information

Our principal offices are located at 30 North Lincoln Street, Batavia, Illinois 60510. Our telephone number is (952) 974-4000.

ITEM 1A. RISK FACTORS

Investing in our securities involves a high degree of risk. You should carefully consider the following risk factors and all other information contained in this report before purchasing our securities. If any of the following risks occur, our business, financial condition, results of operations and prospects could be materially and adversely affected. In that case, the market price of our common stock could decline, and you could lose some or all of your investment.

In addition to the other information in this annual report, you should carefully consider the following factors in evaluating us and our business. This annual report contains, in addition to historical information, forward-looking statements that involve risks and uncertainties, some of which are beyond our control. Should one or more of these risks and uncertainties materialize or should underlying assumptions prove incorrect, our actual results could differ materially. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below, as well as those discussed elsewhere in this annual report, including the documents incorporated by reference.

There are risks associated with investing in companies such as ours. In addition to risks which could apply to any company or business, you should also consider the business we are in and the following:

Risks Related to Our Financial Results and Financing Plans

We have a history of losses and may continue to incur losses in the future.

We have a history of losses and may continue to incur losses in the future, which could negatively impact the trading value of our common stock. We incurred losses from operations of $13,002,932 and $13,101,920 for the years ended December 31, 2023 and 2022, respectively. In addition, we incurred a net loss attributable to common stockholders of $14,486,000 and $19,035,088 for the years ended December 31, 2023 and 2022, respectively. We may continue to incur operating and net losses in future periods. These losses may increase, and we may never achieve profitability for a variety of reasons, including increased competition, decreased growth in the unified communications industry, and other factors described elsewhere in this "Risk Factors" section. If we cannot achieve sustained profitability, our stockholders may lose all or a portion of their investment in our company.

If we are unable to grow our revenue, we may never achieve or sustain profitability.

To become profitable, we must, among other things, continue increase our revenues. Our total revenues increased modestly from $26,766,795 in the year ended December 31, 2022 to $26,992,550 in the year ended December 31, 2023. In order to become profitable and maintain our profitability, we must, among other things, continue to increase our revenues. We may be unable to sustain our recent revenue growth, particularly if we are unable to develop and market our telecommunications, increase our sales to existing customers or develop new customers. However, even if our revenues continue to grow, they may not be sufficient to exceed increases in our operating expenses or to enable us to achieve or sustain profitability.

Our substantial indebtedness could adversely affect our business, financial condition and results of operations and our ability to meet our payment obligations.

As of December 31, 2023, we had total indebtedness of $6,879,572, consisting of $2,090,561 of convertible debentures, $3,092,355 of loans payable, $335,000 of loans payable to related parties, and $1,361,656 of factor financing. $5,659,572 of this debt is due within the year ending December 31, 2024. Our substantial indebtedness could have important consequences to our stockholders. For example, it could:

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increase our vulnerability to and limit our flexibility in planning for, or reacting to, changes in our business;

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place us at a competitive disadvantage compared to our competitors that have less debt;

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limit our ability to borrow additional funds, dispose of assets, pay dividends, and make certain investments; and

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make us more vulnerable to a general economic downturn than a company that is less leveraged.

A high level of indebtedness would increase the risk that we may default on our debt obligations. Our ability to meet our debt obligations and to reduce our level of indebtedness will depend on our future performance. General economic conditions and financial, business, and other factors affect our operations and our future performance. Many of these factors are beyond our control. We may not be able to generate sufficient cash flows to pay the interest on our debt and future working capital, borrowings or equity financing may not be available to pay or refinance such debt. Factors that will affect our ability to raise cash through an offering of our capital stock or a refinancing of our debt include our ability to access the public equity and debt markets, financial market conditions, the value of our assets and our performance at the time we need capital.

Risks Relating to Our Business

Our inability to obtain additional capital may prevent us from completing our acquisition strategy and successfully operating our business; however, additional financings may subject our existing stockholders to substantial dilution.

We expect to finance our anticipated future strategic acquisitions through public or private equity offerings or debt financings. Additional funds may not be available when we need them on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of, or eliminate one or more strategic acquisitions or business plans. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience significant dilution. In addition, debt financing, if available, may involve restrictive covenants. We may seek to access the public or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time. Our access to the financial markets and the pricing and terms we receive in the financial markets could be adversely impacted by various factors, including changes in financial markets and interest rates.

Our future funding requirements will depend on many factors, including, but not limited to, the costs and timing of our future acquisitions.

A failure to successfully execute our strategy of acquiring other businesses to grow our company could adversely affect our business, financial condition, results of operations and prospects.

We intend to continue pursuing growth through the acquisition of companies or assets to expand our product offerings, project skill sets and capabilities, enlarge our geographic markets, and increase critical mass to enable us to bid on larger contracts. However, we may be unable to find suitable acquisition candidates or to complete acquisitions on favorable terms, if at all. Moreover, any completed acquisition may not result in the intended benefits. For example, while the historical financial and operating performance of an acquisition target are among the criteria we evaluate in determining which acquisition targets we will pursue, there can be no assurance that any business or assets we acquire will continue to perform in accordance with past practices or will achieve financial or operating results that are consistent with or exceed past results. Any such failure could adversely affect our business, financial condition or results of operations. In addition, any completed acquisition may not result in the intended benefits for other reasons and our acquisitions will involve a number of other risks, including:

●	We may have difficulty integrating the acquired companies;

●	Our ongoing business and management's attention may be disrupted or diverted by transition or integration issues and the complexity of managing geographically or culturally diverse enterprises;

●	We may not realize the anticipated cost savings or other financial benefits we anticipated;

●	We may have difficulty retaining or hiring key personnel, customers and suppliers to maintain expanded operations;

●	Our internal resources may not be adequate to support our operations as we expand, particularly if we are awarded a significant number of contracts in a short time period;

●	We may have difficulty retaining and obtaining required regulatory approvals, licenses and permits;

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We may not be able to obtain additional equity or debt financing on terms acceptable to us or at all, and any such financing could result in dilution to our stockholders, impact our ability to service our debt within the scheduled repayment terms and include covenants or other restrictions that would impede our ability to manage our operations;

●	We may have failed to, or be unable to, discover liabilities of the acquired companies during the course of performing our due diligence; and

●	We may be required to record additional goodwill as a result of an acquisition, which will reduce our tangible net worth.

Any of these risks could prevent us from executing our acquisition growth strategy, which could adversely affect our business, financial condition, results of operations and prospects.

Our engagements can require longer implementations and other professional services engagements.

Our implementations can involve a longer period of delivery of telecommunication and infrastructure services and technologies. In addition, existing customers for other professional services projects often retain us for those projects sometime beyond an initial implementation. A successful implementation or other professional services project requires a close working relationship between us, the customer and often third- party consultants and systems integrators who assist in the process. These factors may increase the costs associated with completion of any given project award/sale, increase the timeline risks of collection of amounts due during implementations or other professional services projects, and increase risks of delay of such projects. Delays in the completion of an implementation or any other professional services project may require that the revenues associated with such implementation or project be recognized over a longer period than originally anticipated, or may result in disputes with customers, third-party consultants or systems integrators regarding performance as originally anticipated. Such delays in the implementation may cause material fluctuations in our operating results. In addition, customers may defer implementation projects or portions of such projects and such deferrals could have a material adverse effect on our business and results of operations.

Our future success is substantially dependent on third-party relationships.

An element of our strategy is to establish and maintain alliances with other companies, such as suppliers of products and services for construction and maintenance. These relationships enhance our status in the marketplace, which generates new business opportunities and marketing channels and, in certain cases, additional revenue and profitability. To effectively generate revenue out of these relationships, each party must coordinate and support required hence the sales and marketing efforts of the other, often including making a sizable investment in such sales and marketing activity. Our inability to establish and maintain effective alliances with other companies could impact our success in the marketplace, which could materially and adversely impact our results of operations. In addition, as we cannot control the actions of these third-party alliances, if these companies suffer business downturns or fail to meet their objectives, we may experience a resulting diminished revenue and decline in results of operations.

If we do not accurately estimate the overall costs when we bid on a contract that is awarded to us, we may achieve a lower than anticipated profit or incur a loss on the contract.

A portion of our revenues from our technology and professional services offerings are derived from fixed unit price contracts that require us to perform the contract for a fixed unit price irrespective of our actual costs. We bid for these contracts based on our estimates of overall costs, but cost overruns may cause us to incur losses. The costs incurred and any net profit realized on such contracts can vary, sometimes substantially, from the original projections due to a variety of factors, including, but not limited to:

●	onsite conditions that differ from those assumed in the original bid and do not qualify for a job change order;

●	delays in project starts or completion;

●	contract modifications creating unanticipated costs not covered by change orders;

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development of new technologies;

●	availability and skill level of workers in the geographic location of a project;

●	our suppliers' or subcontractors' failure to perform due to various reasons, including bankruptcy;

●	fraud or theft committed by our employees or others;

●	citations or fines issued by any governmental authority;

●	delays caused by any government authority;

●	difficulties in obtaining required governmental permits or approvals or performance bonds;

●	labor and material cost greater than anticipated;

●	changes in applicable laws and regulations; and

●	claims or demands from third parties alleging damages arising from our work or from the project of which our work is a part.

These factors may cause actual reduced profitability or losses on projects, which could adversely affect our business, financial condition, results of operations and prospects.

Our contracts may require us to perform extra or change order work, which can result in disputes and adversely affect our business, financial condition, results of operations and prospects.

Our contracts generally require us to perform extra or change order work as directed by the customer, even if the customer has not agreed in advance on the scope or price of the extra work to be performed. This process may result in disputes over whether the work performed is beyond the scope of the work included in the original project plans and specifications or, if the customer agrees that the work performed qualifies as extra work, the price that the customer is willing to pay for the extra work. Even when the customer agrees to pay for the extra work, we may be required to fund the cost of such work for a lengthy period of time until the change order is approved by the customer and we are paid by the customer.

To the extent that actual recoveries with respect to change orders or amounts subject to contract disputes or claims are less than the estimates used in our financial statements, the amount of any shortfall will reduce our future revenues and profits, and this could adversely affect our reported working capital and results of operations. In addition, any delay caused by the extra work may adversely impact the timely scheduling of other project work and our ability to meet specified contract milestone dates.

We derive a significant portion of our revenue from a few customers and the loss of one of these customers, or a reduction in their demand for our services, could adversely affect our business, financial condition, results of operations and prospects.

Our customer base on the telecommunication sector is highly concentrated. Due to the size and nature of our contracts, one or a few customers have represented a substantial portion of our consolidated revenues and gross profits in any one year or over a period of several consecutive years. Our top four customers accounted for approximately 57% and 46% of our revenue in the years ended December 31, 2023 and 2022, respectively. Revenues under our contracts with significant customers may continue to vary from period to period depending on the timing or volume of work that those customers order or perform with in-house service organizations. A limited number of customers may continue to comprise a substantial portion of our revenue for the foreseeable future.

Because we do not maintain any reserves for payment defaults, a default or delay in payment on a significant scale could adversely affect our business, financial condition, results of operations and prospects. We could lose business from a significant customer for a variety of reasons, including:

●	the consolidation, merger, or acquisition of an existing customer, resulting in a change in procurement strategies employed by the surviving entity that could reduce the amount of work we receive;

●	our performance on individual contracts or relationships with one or more significant customers could become impaired due to another reason, which may cause us to lose future business with such customers and, as a result, our ability to generate income would be adversely impacted;

●	key customers could slow or stop spending on initiatives related to projects we are performing for them due to increased difficulty in the markets as a result of economic downturns or other reasons.

Since many of our customer contracts allow our customers to terminate the contract without cause, our customers may terminate their contracts with us at will, which could impair our business, financial condition, results of operations and prospects.

Our failure to adequately expand our direct sales force will impede our growth.

We will need to continue to expand and optimize our sales infrastructure in order to grow our customer base and our business. We plan to continue to expand our account management/sales force, both domestically and internationally. Identifying and recruiting qualified personnel and training them requires significant time, expense, and attention. If we are unable to hire, develop and retain talented account management/sales personnel or if the personnel are unable to achieve desired productivity levels in a reasonable period of time, we may not be able to realize the intended benefits of this investment or increase our revenue.

If we are unable to attract and retain qualified executive officers and managers, we will be unable to operate efficiently, which could adversely affect our business, financial condition, results of operations and prospects.

We depend on the continued efforts and abilities of our management, as well as the senior management of our subsidiaries, to establish and maintain our customer relationships and identify strategic opportunities. The loss of any one of them could negatively affect our ability to execute our business strategy and adversely affect our business, financial condition, results of operations and prospects. Competition for managerial talent with significant industry experience is high and we may lose access to executive officers for a variety of reasons, including more attractive compensation packages offered by our competitors. Although we have entered into employment agreements with certain of our senior level management, we cannot guarantee that any of them or other key management personnel will remain employed by us for any length of time.

We derive a significant portion of our revenues from master service agreements that may be cancelled by customers on short notice, or which we may be unable to renew on favorable terms or at all.

During the years ended December 31, 2023 and 2022 we derived substantially all of our revenues from master service agreements and long-term contracts, none of which require our customers to purchase a minimum amount of services. The majority of these contracts may be cancelled by our customers upon minimal notice (typically 60 days), regardless of whether or not we are in default. In addition, many of these contracts permit cancellation of particular purchase orders or statements of work without any notice.

These agreements typically do not require our customers to assign a specific amount of work to us until a purchase order or statement of work is signed. Consequently, projected expenditures by customers are not assured until a definitive purchase order or statement of work is placed with us and the work is completed. Furthermore, our customers generally require competitive bidding of these contracts. As a result, we could be underbid by our competitors or be required to lower the prices charged under a contract being rebid. The loss of work obtained through master service agreements and long-term contracts or the reduced profitability of such work could adversely affect our business or results of operations.

Unanticipated delays due to adverse weather conditions, global climate change and difficult work sites and environments may slow completion of our contracts, impair our customer relationships and adversely affect our business, financial condition, results of operations and prospects.

Because some of our work in the telecommunication sector is performed outdoors, our business is impacted by extended periods of inclement weather and is subject to unpredictable weather conditions, which could become more frequent or severe if general climatic changes occur. Generally, inclement weather is more likely to occur during the winter season, which falls during our first and fourth fiscal quarters. Additionally, adverse weather conditions can result in project delays or cancellations, potentially causing us to incur additional unanticipated costs, reductions in revenues or the payment of liquidated damages. In addition, some of our contracts require that we assume the risk that actual site conditions vary from those expected. Significant periods of bad weather typically reduce profitability of affected contracts, both in the current period and during the future life of affected contracts, which can negatively affect our results of operations in current and future periods until the affected contracts are completed.

Some of our projects involve challenging engineering, procurement and construction phases that may occur over extended time periods, sometimes up to several years. We may encounter difficulties in engineering, delays in designs or materials provided by the customer or a third party, equipment and material delivery delays, schedule changes, delays from customer failure to timely obtain rights-of-way, weather-related delays, delays by subcontractors in completing their portion of the project and other factors, some of which are beyond our control, but which may impact our ability to complete a project within the original delivery schedule. In some cases, delays and additional costs may be substantial, and we may be required to cancel a project and/or compensate the customer for the delay. We may not be able to recover any of these costs. Any such delays, cancellations, defects, errors or other failures to meet customer expectations could result in damage claims substantially in excess of revenue associated with a project. These factors could also negatively impact our reputation or relationships with our customers, which could adversely affect our ability to secure new contracts.

Environmental and other regulatory matters could adversely affect our ability to conduct our business and could require expenditures that could adversely affect our business, financial condition, results of operations and prospects.

Our operations are subject to laws and regulations relating to workplace safety and worker health that, among other things, regulate employee exposure to hazardous substances. While immigration laws require us to take certain steps intended to confirm the legal status of our immigrant labor force, we may nonetheless unknowingly employ illegal immigrants. Violations of laws and regulations could subject us to substantial fines and penalties, cleanup costs, third- party property damage or personal injury claims. In addition, these laws and regulations have become, and enforcement practices and compliance standards are becoming, increasingly stringent. Moreover, we cannot predict the nature, scope or effect of legislation or regulatory requirements that could be imposed, or how existing or future laws or regulations will be administered or interpreted, with respect to products or activities to which they have not been previously applied. Compliance with more stringent laws or regulations, as well as more vigorous enforcement policies of the regulatory agencies, could require us to make substantial expenditures for, among other things, pollution control systems and other equipment that we do not currently possess, or the acquisition or modification of permits applicable to our activities.

Fines, judgments, and other consequences resulting from our failure to comply with regulations or adverse outcomes in litigation proceedings could adversely affect our business, financial condition, results of operations and prospects.

From time to time, we may be involved in lawsuits and regulatory actions, including class action lawsuits that are brought or threatened against us in the ordinary course of business. These actions may seek, among other things, compensation for alleged personal injury, workers' compensation, violations of the Fair Labor Standards Act and state wage and hour laws, employment discrimination, breach of contract, property damage, punitive damages, civil penalties, and consequential damages or other losses, or injunctive or declaratory relief. Any defects or errors, or failures to meet our customers' expectations could result in large damage claims against us. Claimants may seek large damage awards and, due to the inherent uncertainties of litigation, we cannot accurately predict the ultimate outcome of any such proceedings. Any failure to properly estimate or manage cost, or delay in the completion of projects, could subject us to penalties.

The ultimate resolution of these matters through settlement, mediation or court judgment could have a material impact on our financial condition, results of operations and cash flows. Regardless of the outcome of any litigation, these proceedings could result in substantial cost and may require us to devote substantial resources to defend ourselves. When appropriate, we establish reserves for litigation and claims that we believe to be adequate in light of current information, legal advice and professional indemnity insurance coverage, and we adjust such reserves from time to time according to developments. If our reserves are inadequate or insurance coverage proves to be inadequate or unavailable, our business, financial condition, results of operations and prospects may suffer.

If we are required to reclassify independent contractors as employees, we may incur additional costs and taxes which could adversely affect our business, financial condition, results of operations and prospects.

We use a significant number of independent contractors in our operations for whom we do not pay or withhold any federal, state or provincial employment tax. There are a number of different tests used in determining whether an individual is an employee or an independent contractor and such tests generally take into account multiple factors. There can be no assurance that legislative, judicial, or regulatory (including tax) authorities will not introduce proposals or assert interpretations of existing rules and regulations that would change, or at least challenge, the classification of our independent contractors. Although we believe we have properly classified our independent contractors, the U.S. Internal Revenue Service or other U.S. federal or state authorities or similar authorities of a foreign government may determine that we have misclassified our independent contractors for employment tax or other purposes and, as a result, seek additional taxes from us or attempt to impose fines and penalties. If we are required to pay employer taxes or pay backup withholding with respect to prior periods with respect to or on behalf of our independent contractors, our operating costs will increase, which could adversely impact our business, financial condition, results of operations and prospects.

Our dependence on subcontractors and suppliers could increase our cost and impair our ability to complete contracts on a timely basis or at all.

We rely on third-party subcontractors to perform some of the work on our contracts. We also rely on third-party suppliers to provide materials needed to perform our obligations under those contracts. We generally do not bid on contracts unless we have the necessary subcontractors and suppliers committed for the anticipated scope of the contract and at prices that we have included in our bid. Therefore, to the extent that we cannot engage subcontractors or suppliers, our ability to bid for contracts may be impaired. In addition, if a subcontractor or third-party supplier is unable to deliver its goods or services according to the negotiated terms for any reason, we may suffer delays and be required to purchase the services from another source at a higher price. We sometimes pay our subcontractors and suppliers before our customers pay us for the related services. If customers fail to pay us and we choose, or are required, to pay our subcontractors for work performed or pay our suppliers for goods received, we could suffer an adverse effect on our business, financial condition, results of operations and prospects.

Our insurance coverage may be inadequate to cover all significant risk exposures.

We will be exposed to liabilities that are unique to the services we provide. While we intend to maintain insurance for certain risks, the amount of our insurance coverage may not be adequate to cover all claims or liabilities, and we may be forced to bear substantial costs resulting from risks and uncertainties of our business. It is also not possible to obtain insurance to protect against all operational risks and liabilities. The failure to obtain adequate insurance coverage on terms favorable to us, or at all, could have a material adverse effect on our business, financial condition, results of operations and prospects.

A portion of our operations are subject to hazards that may cause personal injury or property damage, thereby subjecting us to liabilities and possible losses, which may not be covered by insurance.

Our workers are subject to hazards associated with providing construction and related services on construction sites. For example, some of the work we perform is underground. If the field location maps supplied to us are not accurate, or if objects are present in the soil that are not indicated on the field location maps, our underground work could strike objects in the soil containing pollutants that could result in a rupture and discharge of pollutants. In such a case, we may be liable for fines and damages. These operating hazards can cause personal injury and loss of life, damage to or destruction of property, plant and equipment and environmental damage. Even though we believe that the insurance coverage we maintain is in amounts and against the risks that we believe are consistent with industry practice, this insurance may not be adequate to cover all losses or liabilities that we may incur in our operations. To the extent that we experience a material increase in the frequency or severity of accidents or workers' compensation claims, or unfavorable developments on existing claims, our business, financial condition, results of operations and prospects could be adversely affected.

The Occupational Safety and Health Act of 1970, as amended, or OSHA, establishes certain employer responsibilities, including the maintenance of a workplace free of recognized hazards likely to cause death or serious injury, compliance with standards promulgated by the Occupational Health and Safety and Health Administration and various recordkeeping, disclosure, and procedural requirements. While we have invested, and will continue to invest, substantial resources in occupational health and safety programs, serious accidents or violations of OSHA rules may subject us to substantial penalties, civil litigation, or criminal prosecution, which could adversely affect our business, financial condition, results of operations and prospects. However, our record to date has had no incidents or losses and we are in full compliance with a 100% safety record.

Errors in our contracting services may give rise to claims against us, increase our expenses, or harm our reputation.

Our contracting services are complex and our final work product may contain errors. We have not historically accrued reserves for potential claims as they have been immaterial. The costs associated with such claims, including any legal proceedings, could adversely affect our business, financial condition, results of operations and prospects.

Risks Related to Our Industry

Our industry is highly competitive, with a variety of larger companies with greater resources competing with us, and our failure to compete effectively could reduce the number of new contracts awarded to us or adversely affect our market share and harm our financial performance.

The contracts on which we bid are generally awarded through a competitive bid process, with awards generally being made to the lowest bidder, but sometimes based on other factors, such as shorter contract schedules, larger scale to complete projects or prior experience with the customer. Managed Services is a very competitive market and as such, our strategy to work exclusively through distribution channels with existing customer bases and robust sales organizations that can provide rapid growth. Most of our competitors are not channel only, but rather serve customers directly as well as have a channel component. Many are also wed to their own software, which makes it challenging to pivot as threats change. Some of our significant competitors would be Arctic Wolf, Herjevic Group, SecureWorks, and numerous smaller competitors. In some segments of our business, price is often an important factor in determining which service provider is selected by our customers, especially on smaller, less complex projects. As a result, any organization with adequate financial resources and access to technical expertise may become a competitor. Smaller competitors are sometimes able to win bids for these projects based on price alone because of their lower costs and financial return requirements. Additionally, our competitors may develop the expertise, experience and resources to provide services that are equal or superior in price to our services, and we may not be able to maintain or enhance our competitive position.

Some of our competitors have already achieved greater market penetration than we have in the markets in which we compete, and some have greater financial and other resources than we do. A number of national companies in our industry are larger than we are and, if they so desire, could establish a presence in our markets and compete with us for contracts. As a result of this competition, we may need to accept lower contract margins in order to compete against competitors that have the ability to accept awards at lower prices or have a pre-existing relationship with a customer. If we are unable to compete successfully in our markets, our business, financial condition, results of operations and prospects could be adversely affected.

Many of the industries we serve are subject to consolidation and rapid technological and regulatory change, and our inability or failure to adjust to our customers' changing needs could reduce demand for our services.

We derive, and anticipate that we will continue to derive, a substantial portion of our revenue from customers in the telecommunications and utilities industries. The telecommunications and utilities industries are subject to rapid changes in technology and governmental regulation. Changes in technology may reduce the demand for the services we provide. For example, new or developing technologies could displace the wireline systems used for the transmission of voice, video and data, and improvements in existing technology may allow telecommunications providers to significantly improve their networks without physically upgrading them. Alternatively, our customers could perform more tasks themselves, which would cause our business to suffer. Additionally, the telecommunications and utilities industries have been characterized by a high level of consolidation that may result in the loss of one or more of our customers. Our failure to rapidly adopt and master new technologies as they are developed in any of the industries we serve or the consolidation of one or more of our significant customers could adversely affect our business, financial condition, results of operations and prospects.

Further, many of our telecommunications customers are regulated by the Federal Communications Commission, or the FCC, and other international regulators. The FCC and other regulators may interpret the application of their regulations in a manner that is different than the way such regulations are currently interpreted and may impose additional regulations, either of which could reduce demand for our services and adversely affect our business and results of operations.

Economic downturns could cause capital expenditures in the industries we serve to decrease, which may adversely affect our business, financial condition, results of operations and prospects.

The demand for our services has been, and will likely continue to be, cyclical in nature and vulnerable to general downturns in the United States economy. The current election cycle may cause economic uncertainty. The wireless and wireline telecommunications industry are cyclical in nature and vulnerable to general downturns in the United States and international economies. Our customers are affected by economic changes that decrease the need for or the profitability of their services. This can result in a decrease in the demand for our services and potentially result in the delay or cancellation of projects by our customers. Slow-downs in real estate, fluctuations in commodity prices and decreased demand by end-customers for services could affect our customers and their capital expenditure plans. As a result, some of our customers may opt to defer or cancel pending projects. A downturn in overall economic conditions also affects the priorities placed on various projects funded by governmental entities and federal, state, and local spending levels.

In general, economic uncertainty makes it difficult to estimate our customers' requirements for our services. Our plan for growth depends on expanding our company both in the United States and internationally. If economic factors in any of the regions in which we plan to expand are not favorable to the growth and development of the telecommunications industries in those countries, we may not be able to carry out our growth strategy, which could adversely affect our business, financial condition, results of operations and prospects.

Other Risks Relating to Our Company and Results of Operations

Our operating results may fluctuate due to factors that are difficult to forecast and not within our control.

Our past telecommunications operating results may not be accurate indicators of future performance, and you should not rely on such results to predict our future performance.

Our operating results have fluctuated and could fluctuate in the future. Factors that may contribute to fluctuations include:

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changes in aggregate capital spending, cyclicality and other economic conditions, or domestic and international demand in the industries we serve;

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our ability to effectively manage our working capital;

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our ability to satisfy consumer demands in a timely and cost-effective manner;

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pricing and availability of labor and materials;

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shifts in geographic concentration of customers, supplies and labor pools; and

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seasonal fluctuations in demand and our revenue.

Actual results could differ from the estimates and assumptions that we use to prepare our financial statements.

To prepare financial statements in conformity with GAAP, management is required to make estimates and assumptions as of the date of the financial statements that affect the reported values of assets and liabilities, revenues and expenses, and disclosures of contingent assets and liabilities. Areas requiring significant estimates by our management include:

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contract costs and profits and application of percentage-of-completion accounting and revenue recognition of contract change order claims;

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provisions for uncollectible receivables and customer claims and recoveries of costs from subcontractors, suppliers, and others;

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valuation of assets acquired and liabilities assumed in connection with business combinations;

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accruals for estimated liabilities, including litigation and insurance reserves; and

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goodwill and intangible asset impairment assessment.

At the time the estimates and assumptions are made, we believe they are accurate based on the information available. However, our actual results could differ from, and could require adjustments to, those estimates.

We exercise judgment in determining our provision for taxes in the United States and Puerto Rico that are subject to tax authority audit review that could result in additional tax liability and potential penalties that would negatively affect our net income.

The amounts we record in intercompany transactions for services, licenses, funding, and other items affects our potential tax liabilities. Our tax filings are subject to review or audit by the U.S. Internal Revenue Service and state, local and foreign taxing authorities. We exercise judgment in determining our worldwide provision for income and other taxes and, in the ordinary course of our business, there may be transactions and calculations where the ultimate tax determination is uncertain. Examinations of our tax returns could result in significant proposed adjustments and assessment of additional taxes that could adversely affect our tax provision and net income in the period or periods for which that determination is made.

Risks Related to our Common Stock

An active trading market for our common stock may not develop.

Our common stock has not yet been listed on any national securities exchange and has not been quoted on The OTC Bulletin Board or any of the marketplaces of OTC Link. We cannot predict the extent to which investor interest in us will lead to the development of an active public trading market or how liquid that public market may become.

Additionally, because the quoted price of our common stock is less than $5.00 per share, our common stock is considered a "penny stock," and trading in our common stock is subject to the requirements of Rule 15g-9 under the Exchange Act. Under this rule, broker/dealers who recommend low-priced securities to persons other than established customers and accredited investors must satisfy special sales practice requirements, including making an individualized written suitability determination for the purchaser and receiving the purchaser's written consent prior to the transaction. Securities and Exchange Commission regulations also require additional disclosure in connection with any trades involving a "penny stock," including the delivery, prior to any penny stock transaction, of a disclosure schedule explaining the penny stock market and its associated risks. These requirements severely limit the liquidity of securities in the secondary market because few brokers or dealers are likely to undertake these compliance activities and this limited liquidity will make it more difficult for an investor to sell his shares of our common stock in the secondary market should the investor wish to liquidate the investment. In addition to the applicability of the penny stock rules, other risks associated with trading in penny stocks could also be price fluctuations and the lack of a liquid market.

Our stock price may be volatile, which could result in substantial losses to investors and litigation.

In addition to changes to market prices based on our results of operations and the factors discussed elsewhere in this "Risk Factors" section, the market price of and trading volume for our common stock may change for a variety of other reasons, not necessarily related to our actual operating performance. The capital markets have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common stock. In addition, the average daily trading volume of the securities of small companies can be very low, which may contribute to future volatility. Factors that could cause the market price of our common stock to fluctuate significantly include:

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the results of operating and financial performance and prospects of other companies in our industry;

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strategic actions by us or our competitors, such as acquisitions or restructurings;

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announcements of innovations, increased service capabilities, new or terminated customers or new, amended or terminated contracts by our competitors;

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the public's reaction to our press releases, other public announcements, and filings with the Securities and Exchange Commission;

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lack of securities analyst coverage or speculation in the press or investment community about us or market opportunities in the telecommunications services and staffing industry;

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changes in government policies in the United States and, as our international business increases, in other foreign countries;

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changes in earnings estimates or recommendations by securities or research analysts who track our common stock or failure of our actual results of operations to meet those expectations;

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market and industry perception of our success, or lack thereof, in pursuing our growth strategy;

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changes in accounting standards, policies, guidance, interpretations, or principles;

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any lawsuit involving us, our services, or our products;

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arrival and departure of key personnel;

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sales of common stock by us, our investors, or members of our management team; and

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changes in general market, economic and political conditions in the United States and global economies or financial markets, including those resulting from natural or man-made disasters.

Any of these factors, as well as broader market and industry factors, may result in large and sudden changes in the trading volume of our common stock and could seriously harm the market price of our common stock, regardless of our operating performance. This may prevent you from being able to sell your shares at or above the price you paid for your shares of our common stock, if at all. In addition, following periods of volatility in the market price of a company's securities, stockholders often institute securities class action litigation against that company. Our involvement in any class action suit or other legal proceeding could divert our senior management's attention and could adversely affect our business, financial condition, results of operations and prospects.

The sale or availability for sale of substantial amounts of our common stock could adversely affect the market price of our common stock.

Sales of substantial amounts of shares of our common stock, or the perception that these sales could occur, could adversely affect the market price of our common stock and could impair our future ability to raise capital through common stock offerings. As of December 31, 2023, we had 239,876,900 shares of common stock issued and outstanding, of which 93,824,849 shares were restricted securities pursuant to Rule 144 promulgated by the SEC. The sale of these shares into the open market may adversely affect the market price of our common stock.

In addition, at December 31, 2023, we also had outstanding $2,160,561 aggregate principal and $154,607 accrued interest of convertible loans payable to related parties and convertible debentures that were convertible into 24,653,949 shares of common stock on that date. However, we cannot currently determine the total number of shares of our common stock that may be issued upon the conversion or repayment of our convertible notes because the total number of shares and the conversion prices or the prices at which we can issue our common stock to pay down the principal of and interest on our convertible notes depend on a number of factors, including the prices and nature of any equity securities we may issue in the future and the market prices of our common stock in the periods leading up to any particular amortization payment date on which we elect to make amortization payments on our convertible notes in shares of our common stock. As of December 31, 2023, there were also outstanding warrants to purchase an aggregate of 39,076,249 shares of our common stock at a weighted-average exercise price of $0.09 per share, 28,625,139 of which were exercisable as of such date at a weighted-average exercise price of $0.13 per share, and outstanding stock options to purchase 26,514,617 shares of our common stock at a weighted-average exercise price of $0.18 per share, 18,479,733 of which were exercisable as of such date at a weighted-average exercise price of $0.21 per share. As of December 31, 2023, there were also outstanding preferred shares convertible into 55,345,812 shares of our common stock based on the conversion terms of each class. The conversion of a significant principal amount of our outstanding convertible debt securities into shares of our common stock, our repayment of a significant amount of principal, interest or other amounts payable under such debt securities in shares of our common stock or the exercise of outstanding warrants at prices below the market price of our common stock could adversely affect the market price of our common stock. The market price of our common stock also may be adversely affected by our issuance of shares of our capital stock or convertible securities in connection with future acquisitions, or in connection with other financing efforts.

If we do not meet the listing standards of a national securities exchange our investors' ability to make transactions in our securities will be limited and we will be subject us to additional trading restrictions.

Our securities currently are traded over-the-counter on the OTC QB market and are not qualified to be listed on a national securities exchange, such as NASDAQ. Accordingly, we face significant material adverse consequences, including:

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a limited availability of market quotations for our securities;

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reduced liquidity with respect to our securities;

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our shares of common stock are currently classified as "penny stock" which requires brokers trading in our shares of common stock to adhere to more stringent rules, resulting in a reduced level of trading activity in the secondary trading market for our shares of common stock;

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a limited amount of news and analyst coverage for our company; and

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a decreased ability to issue additional securities or obtain additional financing in the future.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as "covered securities." Since our common stock is traded on the OTC Pink, our common stock is a covered security. Although the states are preempted from regulating the sale of our securities, the federal statute allows the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. Further, if we were no longer traded over-the-counter, our common stock would not be a covered security and we would be subject to regulation in each state in which we offer our securities.

Our shares of common stock are subject to penny stock regulations. Because our common stock is a penny stock, holders of our common stock may find it difficult or may be unable to sell their shares.

The SEC has adopted rules that regulate broker/dealer practices in connection with transactions in penny stocks. Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange system). The penny stock rules require a broker/dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document prepared by the SEC that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker/dealer also must provide the customer with bid and offer quotations for the penny stock, the compensation of the broker/dealer, and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from such rules, the broker/dealer must make a special written determination that a penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in any secondary market for a stock that becomes subject to the penny stock rules, and accordingly, holders of our common stock may find it difficult or may be unable to sell their shares.

We have never paid cash dividends on our common stock and do not anticipate paying any cash dividends on our common stock.

We have never paid cash dividends and do not anticipate paying any cash dividends on our common stock in the foreseeable future. We currently intend to retain any earnings to finance our operations and growth. As a result, any short-term return on your investment will depend on the market price of our common stock, and only appreciation of the price of our common stock, which may never occur, will provide a return to stockholders. The decision whether to pay dividends will be made by our board of directors in light of conditions then existing, including, but not limited to, factors such as our financial condition, results of operations, capital requirements, business conditions, and covenants under any applicable contractual arrangements. Investors seeking cash dividends should not invest in our common stock.

If equity research analysts do not publish research or reports about our business, or if they issue unfavorable commentary or downgrade our common stock, the market price of our common stock will likely decline.

The trading market for our common stock will rely in part on the research and reports that equity research analysts, over whom we have no control, publish about us and our business. We may never obtain research coverage by securities and industry analysts. If no securities or industry analysts commence coverage of our company, the market price for our common stock could decline. In the event we obtain securities or industry analyst coverage, the market price of our common stock could decline if one or more equity analysts downgrade our common stock or if those analysts issue unfavorable commentary, even if it is inaccurate, or cease publishing reports about us or our business.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 1C. CYBERSECURITY

Our company has stringent processes and management that is used to assess, identify, and manage risks from unauthorized access through our information systems that may affect confidentiality, integrity, or availability of our information systems. We utilize the appropriate National Institute of Standards and Technology (NIST) controls for our sector and undergo yearly SOC II audits. These audits as well as our routine senior management level reviews ensure that our processes are designed to prevent, detect, or mitigate data loss, theft, misuse, unauthorized access, or other security incidents that may affect our data. We require coordinated IT security guidelines with our partners and vendors to mitigate risk associated with the distribution and holding of data sensitive to our company. A core portion of our business is as a channel partner for cybersecurity services through our Overwatch solution. This solution includes robust detection and response capabilities managed by a 24x7 US-based security operations center with dedicated senior leadership to the process and programs included in Overwatch. We utilize the same program that we offer as a service as our internal solution. In addition, we have hardware, site, and network protections around our physical devices that are located both onsite at High Wire Networks as well as a fully managed offsite data center.

We support the security systems by the usage of penetration testing, security audits, and ongoing risk assessments. We have a well-established incident response process that includes a rapid escalation of critical events to all senior leadership stakeholders. Our leadership team is led by our Chief Technology Officer (who is also a seasoned Chief Information Security Officer) who is responsible for implementing and maintaining a team of trained cybersecurity professionals. Senior leadership holds as needed, monthly, and quarterly governance meetings strictly focused on the management of our cybersecurity program and data practices. Our governance program includes a working team which encompasses several highly trained and experienced cybersecurity professionals as well as a steering committee including our CEO, CFO, and COO. In both the working and steering committee meetings, related and relevant risks are identified, tracked, mitigated, and reported to appropriate leaders, including the Board of Directors.

We provide and maintain data protection and cybersecurity training to limit the exposure of our business to security events based on soft attacks against our employees. We are also a strong proponent of defense in depth. By utilizing Enterprise Risk Management strategies ingrained in our protection, detection and response planning we are able to provide multiple layers of security to identify and mitigate protection points within our company.

ITEM 2. PROPERTIES

Our principal executive offices are located in Batavia, Illinois. We are occupying our 8,050 sq ft offices under a three-year lease that expires in July 2026 and has current monthly lease payments of $9,093.

ITEM 3. LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition, or operating results.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

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

Common Stock

Our common stock is currently available for quotation on the OTC QB market under the symbol "HWNI".

On April 15, 2024, the closing sale price of our common stock, as reported by OTC Markets, was $0.05 per share. On April 15, 2024, there were 111 holders of record of our common stock and 240,620,455 common shares outstanding. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.

Dividends

We have never paid or declared any dividend on our common stock and we do not anticipate paying cash dividends in the foreseeable future.

Securities Authorized for Issuance Under Equity Compensation Plans

Information regarding our equity compensation plans is set forth in Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Unregistered Sales of Equity Securities

In the fourth quarter of 2023, we issued securities in the following transactions, each of which was exempt from the registration requirements of the Securities Act. Except for the shares of our common stock that were issued upon the conversion of our convertible debt securities, the grants of shares of common stock under our 2012 Performance Incentive Plan, and the shares of common stock issued pursuant to a Securities Purchase Agreement discussed in the notes to our consolidated financial statements included in this report in Item 8, Financial Statements and Supplementary Data, all of the below-referenced securities were issued pursuant to the exemption from registration under Section 4(2) of the Securities Act and are deemed to be restricted securities for purposes of the Securities Act. There were no underwriters or placement agents employed in connection with any of these transactions. Use of the exemption provided in Section 4(2) for transactions not involving a public offering is based on the following facts:

	●	Neither we nor any person acting on our behalf solicited any offer to buy or sell securities by any form of general solicitation or advertising.
	●	The recipients were either accredited or otherwise sophisticated individuals who had such knowledge and experience in business matters that they were capable of evaluating the merits and risks of the prospective investment in our securities.

	●	The recipients had access to business and financial information concerning our company.
	●	All securities issued were issued with a restrictive legend and may only be disposed of pursuant to an effective registration or exemption from registration in compliance with federal and state securities laws.

The shares of our common stock that were issued upon the conversion of our convertible debt securities were issued pursuant to the exemption from registration under Section 3(a)(9) of the Securities Act and are deemed to be restricted securities for purposes of the Securities Act.

On October 11, 2023, we issued 400,000 shares of our common stock to Capital Market Access LLC for performance-based compensation in connection with services provided under a consulting agreement.

On December 7, 2023, we issued 944,197 shares of our common stock to Mast Hill Fund, L.P. in connection with the issuance of a convertible debenture.

On December 11, 2023, we issued 472,098 shares of our common stock to FirstFire Global Opportunities Fund, LLC in connection with the issuance of a convertible debenture.

On December 13, 2023, we issued 200,000 shares of our common stock to Capital Market Access LLC for performance-based compensation in connection with services provided under a consulting agreement.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

ITEM 6. [RESERVED]

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

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

Basis of Presentation

Our consolidated financial statements are stated in United States dollars ($) and are prepared in accordance with United States generally accepted accounting principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this annual report.

All references to "common stock" refer to the common shares in our capital stock.

Unless specifically set forth to the contrary, when used in this report the terms "we", "our", the "Company" and similar terms refer to High Wire Networks, Inc., a Nevada corporation, and its consolidated subsidiaries.

The information that appears on our website at www.HighWireNetworks.com is not part of this report.

Description of Business

HWN, Inc., (d/b/a High Wire Network Solutions, Inc.) ("HWN") was incorporated in Delaware on January 20, 2017. HWN is a global provider of managed cybersecurity, managed networks, and tech enabled professional services delivered exclusively through a channel sales model. Our Overwatch managed security platform-as-a-service offers organizations end-to-end protection for networks, data, endpoints and users via multiyear recurring revenue contracts in this fast-growing technology segment. HWN has continuously operated under the High Wire Networks brand for 23 years.

HWN and JTM Electrical Contractors, Inc. ("JTM"), an Illinois Corporation, entered into an operating agreement through which High Wire owned 50% of JTM. On February 15, 2022, HWN sold its 50% interest in JTM.

On June 16, 2021, we completed a merger with Spectrum Global Solutions, Inc. On January 7, 2022, Spectrum Global Solutions, Inc. legally changed its name to High Wire Networks, Inc. ("High Wire"). The merger was accounted for as a reverse merger. At the time of the reverse merger, High Wire's subsidiaries included ADEX Corporation, ADEX Puerto Rico LLC, ADEX Canada, ADEX Towers, Inc. and ADEX Telecom, Inc. (collectively "ADEX" or the "ADEX Entities"), AW Solutions Puerto Rico, LLC ("AWS PR"), and Tropical Communications, Inc. ("Tropical"). For accounting purposes, HWN is the surviving entity. On March 6, 2023, HWN divested the ADEX Entities. On July 31, 2023, HWN paused the operations of its AWS PR subsidiary. On November 3, 2023, HWN paused the operations of its Tropical subsidiary.

On November 4, 2021, we closed on the acquisition of Secure Voice Corp ("SVC"). The closing of the acquisition was facilitated by a senior secured promissory note which has been repaid.

On August 4, 2023, we formed a new entity - incorporated as Overwatch Cyberlab, Inc. ("OCL") - which is 80% owned by our company and 20% owned by John Peterson.

Our AWS PR and Tropical subsidiaries are professional services organizations that deliver services for Enterprise clients as well as wireline and wireless carriers. These subsidiaries are operated as part of our Technology segment. Our SVC subsidiary is a wholesale network services provider with network footprint in the Northeast United States. This network carries VoIP and other traffic for other service providers. OCL has not begun to generate revenue as of December 31, 2023.

We provide the following categories of offerings to our customers:

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Security: High Wire's award-winning Overwatch Managed Security offers organizations end-to-end protection for networks, data, endpoints, and users via multiyear recurring revenue contracts in this fast-growing technology segment. This segment is nearly 100% recurring revenue with multi-year contracts. Overwatch delivers services through Managed Service Providers (MSPs), strategic partnerships and alliances, Value Added Resellers (VARs), Distributors, and Network Service Providers.

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Technology Solutions: We provide technology enabled professional and managed services for a wide array of clients exclusively through our channel partner relationships with the largest technology companies in the world. We deliver in the Enterprise, Wireline Carrier, Wireless Carrier, Network Backbone Carriers, State and Local Government, Federal Government, and Data Center market segments. We deliver services for most of the Fortune 500 alongside our channel partners. We deliver a wide array of services across a wide variety of technologies that include Wi-Fi, networking, SD-WAN, Distributed Antenna Systems, Wireless Carrier Networking, Fiber Backhaul, and many more. We provide planning, installation, project management, and ongoing support for break/fix services. We operate 24/7/365 around the world. We leverage our own technology platform, Workview, to deliver these services cost effectively and in a highly efficient and scalable manner.

Our Technology Solutions division is supported by our subsidiaries: HWN, Inc.; AW Solutions Puerto Rico, LLC and Tropical Communications, Inc. (collectively known as "AWS" or the "AWS Entities"); and SVC.

Our Operating Units

Our company is comprised of the following:

	●	Managed Services: The Managed Services Segment encompasses all of our recurring revenue businesses including our Overwatch Managed Security, all network managed services, all managed services performed under a Statement of Work (SoW), and our SVC revenue.
	●	Technology Solutions: The Technology Solutions group is all service and project revenue generally globally by HWN, Tropical, and AWS PR. These business perform professional services for the Enterprise, SMB, Data Center, Carrier Wireline, Carrier Wireless, and Network Service Provider markets.

Factors Affecting Our Performance

Changes in Demand for Data Capacity and Reliability.

The telecommunications industry has undergone and continues to undergo significant changes due to advances in technology, increased competition as telephone and cable companies converge, the growing consumer demand for enhanced and bundled services and increased governmental broadband stimulus funding. As a result of these factors, the networks of our customers increasingly face demands for more capacity and greater reliability. Telecommunications providers continue to outsource a significant portion of their engineering, construction and maintenance requirements in order to reduce their investment in capital equipment, provide flexibility in workforce sizing, expand product offerings without large increases in incremental hiring and focus on those competencies they consider core to their business success. These factors drive customer demand for our services.

The proliferation of smart phones and other wireless data devices has driven demand for mobile broadband. This demand and other advances in technology have prompted wireless carriers to upgrade their networks. Wireless carriers are actively increasing spending on their networks to respond to the explosion in wireless data traffic, upgrade network technologies to improve performance and efficiency and consolidate disparate technology platforms. These customer initiatives present long-term opportunities for us for the wireless services we provide. Further, the demand for mobile broadband has increased bandwidth requirements on the wired networks of our customers. As the demand for mobile broadband grows, the amount of cellular traffic that must be "backhauled" over customers' fiber and coaxial networks increases and, as a result, carriers are accelerating the deployment of fiber optic cables to cellular sites. These trends are increasing the demand for the types of services we provide.

Our Ability to Recruit, Manage and Retain High-Quality IT and Telecommunications Personnel.

The shortage of skilled labor in the telecommunications industry and the difficulties in recruiting and retaining skilled personnel can frequently limit the ability of specialty contractors to bid for and complete certain contracts. We believe our access to a skilled labor pool gives us a competitive edge over our competitors as we continue to expand.

Our Ability to Expand Internationally

We believe international expansion represents a compelling opportunity for additional growth over the long-term because of the worldwide need for telecommunications infrastructure. We plan to expand our global presence either by expanding our current operations or by acquiring subsidiaries with international platforms.

Our Ability to Expand and Diversify Our Customer Base.

Our customers for specialty contracting services consist of leading telephone, wireless, cable television, utility and other companies. Historically, our revenue has been significantly concentrated in a small number of customers. Although we still operate at a net loss, we have acquired additional subsidiaries and diversified our customer base and revenue streams.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based on our historical consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make certain estimates and assumptions that affect the amounts reported therein and accompanying notes. On an ongoing basis, we evaluate these estimates and assumptions, including those related to recognition of revenue for costs, the fair value of reporting units for goodwill impairment analysis, the assessment of impairment of intangibles and other long-lived assets, income taxes, asset lives used in computing depreciation and amortization, allowance for doubtful accounts, stock-based compensation expense, contingent consideration and accruals for contingencies, including legal matters. These estimates and assumptions require the use of judgment as to the likelihood of various future outcomes and as a result, actual results could differ materially from these estimates.

We have identified the accounting policies below as critical to the accounting for our business operations and the understanding of our results of operations because they involve making significant judgments and estimates that are used in the preparation of our historical consolidated financial statements. The impact of these policies affects our reported and expected financial results and are discussed in this "Management's Discussion and Analysis of Financial Condition and Results of Operations." We have discussed the development, selection and application of our critical accounting policies with the Audit Committee of our board of directors, and the Audit Committee has reviewed the disclosure relating to our critical accounting policies in this "Management's Discussion and Analysis of Financial Condition and Results of Operations."

Other significant accounting policies, primarily those with lower levels of uncertainty than those discussed below, are also important to understanding our historical consolidated financial statements. The notes to our consolidated financial statements in this report contain additional information related to our accounting policies, including the critical accounting policies described herein, and should be read in conjunction with this discussion.

Our consolidated financial statements are impacted by the accounting policies used and the estimates and assumptions made by management during their preparation. A complete summary of these policies is included in Note 2 of the notes to our financial statements. We have identified below the accounting policies that are of particular importance in the presentation of our financial position, results of operations and cash flows, and which require the application of significant judgment by management.

Revenue Recognition

We recognize revenue based on the five criteria for revenue recognition established under Topic 606: 1) identify the contract, 2) identify separate performance obligations, 3) determine the transaction price, 4) allocate the transaction price among the performance obligations, and 5) recognize revenue as the performance obligations are satisfied.

Contract Types

Our contracts fall under two main types: 1) fixed-price and 2) time-and-materials. Fixed-price contracts are based on purchase order line items that are billed on individual invoices as the project progresses and milestones are reached. Time-and-materials contracts include employees working on an as needed basis at customer locations and materials costs incurred by those employees.

A significant portion of our revenues come from customers with whom we have a master service agreement ("MSA"). These MSA's generally contain customer specific service requirements.

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For our different revenue service types the performance obligation is satisfied at different times. For professional services revenue, the performance obligation is met when the work is performed. In certain cases this may be each day, or each week depending on the customer. For construction services, the performance obligation is met when the work is completed and the customer has approved the work.

Revenue Service Types

The following is a description of our revenue service types, which include Technology Solutions and Managed Services:

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Technology Solutions: The Technology Solutions group is all service and project revenue generated globally by HWN, Tropical, and AWS PR. These business perform project-based professional services for the Enterprise, SMB, Data Center, Carrier Wireline, Carrier Wireless, and Network Service Provider markets.

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Managed Services are services provided to the clients where we monitor, maintain, handle break/fix issues and protect customer networks. The Managed Services Segment encompasses all of our recurring revenue businesses including Overwatch Managed Security, all network managed services, all managed services performed under a Statement of Work (SoW), and our SVC revenue.

Disaggregation of Revenues

We disaggregate our revenue from contracts with customers by service type. We also disaggregate our revenue by operating segment and geographic location.

Contract Assets and Liabilities

Contract assets include costs and services incurred on contracts with open performance obligations. These amounts are included in contract assets on the consolidated balance sheets.

Contract liabilities include payment received for incomplete performance obligations and are included in contract liabilities on the consolidated balance sheets.

Goodwill

We have two reporting units, HWN and SVC, and test our goodwill for impairment at least annually on December 31st and whenever events or circumstances change that indicate impairment may have occurred. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others: a significant decline in our expected future cash flows; a significant adverse change in legal factors or in the business climate; unanticipated competition; and slower growth rates. Any adverse change in these factors could have a significant impact on the recoverability of goodwill and our consolidated financial results.

We test goodwill by estimating fair value using a Discounted Cash Flow ("DCF") model. The key assumptions used in the DCF model to determine the highest and best use of estimated future cash flows include revenue growth rates and profit margins based on internal forecasts, terminal value and an estimate of a market participant's weighted-average cost of capital used to discount future cash flows to their present value. Our HWN reporting unit, which included goodwill of $1,732,431 as of December 31, 2023, had a negative carrying amount as of that date. During the year ended December 31, 2023, there was a goodwill impairment charge of $2,243,820 on our SVC reporting unit. There were no impairment charges during the year ended December 31, 2022.

Intangible Assets

At December 31, 2023 and 2022, definite-lived intangible assets consist of tradenames and customer relationships which are being amortized over their estimated useful lives of 10 years.

We periodically evaluate the reasonableness of the useful lives of these assets. Once these assets are fully amortized, they are removed from the accounts. These assets are reviewed for impairment or obsolescence when events or changes in circumstances indicate that the carrying amount may not be recoverable. If impaired, intangible assets are written down to fair value based on discounted cash flows or other valuation techniques. We have no intangibles with indefinite lives.

For long-lived assets, impairment losses are only recorded if the asset's carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. We measure the impairment loss based on the difference between the carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to fair value. During the year ended December 31, 2023, there was an intangible asset impairment charge of $438,374 on HWN's customer relationships and lists. There were no impairment charges during the year ended December 31, 2022.

Long-lived Assets

In accordance with ASC 360, "Property, Plant and Equipment", we test long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value, which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value. Other than the intangible asset impairment charges noted above, there were no impairment charges recorded on long-lived assets during the years ended December 31, 2023 and 2022.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We regularly evaluate estimates and assumptions related to allowance for doubtful accounts, the estimated useful lives and recoverability of long-lived assets, equity component of convertible debt, stock-based compensation, and deferred income tax asset valuation allowances. We base our estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by our company may differ materially and adversely from our estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Going Concern Assessment

Management assesses going concern uncertainty in our consolidated financial statements to determine whether there is sufficient cash on hand and working capital, including available borrowings on loans, to operate for a period of at least one year from the date of the consolidated financial statements are issued or available to be issued, which is referred to as the "look-forward period", as defined in GAAP. As part of this assessment, based on conditions that are known and reasonably knowable to management, management will consider various scenarios, forecasts, projections, estimates and will make certain key assumptions, including the timing and nature of projected cash expenditures or programs, its ability to delay or curtail expenditures or programs and its ability to raise additional capital, if necessary, among other factors. Based on this assessment, as necessary or applicable, management makes certain assumptions around implementing curtailments or delays in the nature and timing of programs and expenditures to the extent it deems probable those implementations can be achieved and management has the proper authority to execute them within the look-forward period.

We generated losses in 2023 and 2022, and High Wire has generated losses since its inception and has relied on cash on hand, sales of securities, external bank lines of credit, and issuance of third-party and related party debt to support cash flow from operations. As of and for the year ended December 31, 2023, we had an operating loss of $13,002,932, cash flows used in continuing operations of $6,936,584, and a working capital deficit of $9,915,819. These factors raise substantial doubt regarding our ability to continue as a going concern for a period of one year from the issuance of Annual Report on Form 10-K.

The accompanying consolidated financial statements have been prepared on a going concern basis under which we are expected to be able to realize its assets and satisfy its liabilities in the normal course of business.

Management believes that based on relevant conditions and events that are known and reasonably knowable (including the cash proceeds from the Securities Purchase Agreement discussed in the notes to our consolidated financial statements included in this report in Item 8, Financial Statements and Supplementary Data), our forecasts of operations for one year from the date of the filing of the consolidated financial statements in our Annual Report on Form 10-K indicate improved operations and our company's ability to continue operations as a going concern. We have contingency plans to reduce or defer expenses and cash outlays should operations not improve in the look forward period. The continuation of our company as a going concern is dependent upon the continued financial support from our shareholders, the ability of management to raise additional equity capital through private and public offerings of our common stock, and the attainment of profitable operations. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

Management requires additional funds over the next twelve months to fully implement our business plan. Management is currently seeking additional financing through the sale of equity and from borrowings from private lenders to cover our operating expenditures. There can be no certainty that these sources will provide the additional funds required for the next twelve months.

Results of Operations

Year Ended December 31, 2023 Compared to Year Ended December 31, 2022

The following summary of our results of operations should be read in conjunction with our financial statements for the years ended December 31, 2023 and 2022.

Our operating results for the years ended December 31, 2023 and 2022 are summarized as follows:

		For the years ended
		December 31,
Statement of Operations Data:		2023			2022
Revenue		$	26,992,550			$	26,766,795
Operating expenses			39,995,482				39,868,715
Loss from operations			(13,002,932	)			(13,101,920	)
Total other (expense) income			(145,356	)			1,843,657
Net loss from discontinued operations, net of tax			(1,337,712	)			(7,905,312	)
Net loss from discontinued operations attributable to noncontrolling interest			-				128,487
Net loss attributable to common shareholders			(14,486,000	)			(19,035,088	)
Net loss per share, basic and diluted			(0.06	)			(0.28	)
Weighted average common shares outstanding, basic and diluted			226,708,549				68,713,880

Revenues

Our revenue increased modestly from $26,766,795 for the year ended December 31, 2022 to $26,992,550 for the year ended December 31, 2023.

A significant portion of our services are performed under master service agreements and other arrangements with customers that extend for periods of one or more years. We are currently party to numerous master service agreements, and typically have multiple agreements with each of our customers. Master Service Agreements (MSAs) generally contain customer-specified service requirements, such as discreet pricing for individual tasks. To the extent that such contracts specify exclusivity, there are often a number of exceptions, including the ability of the customer to issue work orders valued above a specified dollar amount to other service providers, perform work with the customer's own employees and use other service providers when jointly placing facilities with another utility. In most cases, a customer may terminate an agreement for convenience with written notice. The remainder of our services are provided pursuant to contracts for specific projects. Long-term contracts relate to specific projects with terms in excess of one year from the contract date. Short-term contracts for specific projects are generally three to four months in duration. The percentage of revenue from long-term contracts varies between periods depending on the mix of work performed under our contracts.

Operating Expenses

Cost of revenues includes all direct costs of providing services under our contracts, including costs for direct labor provided by employees, services by independent subcontractors, operation of capital equipment (excluding depreciation and amortization), direct materials, insurance claims and other direct costs.

For a majority of the contract services we perform, our customers provide all required materials while we provide the necessary personnel, tools and equipment. Materials supplied by our customers, for which the customer retains financial and performance risk, are not included in our revenue or costs of revenues.

General and administrative costs include all of our corporate costs, as well as costs of our subsidiaries' management personnel and administrative overhead. These costs primarily consist of employee compensation and related expenses, including legal, consulting, and professional fees, information technology and development costs, provision for or recoveries of bad debt expense and other costs that are not directly related to performance of our services under customer contracts. Information technology and development costs included in general and administrative expenses are primarily incurred to support and to enhance our operating efficiency. We expect these expenses to continue to generally increase as we expand our operations but expect that such expenses as a percentage of revenues will decrease if we succeed in increasing revenues.

During the year ended December 31, 2023, our operating expenses were $39,995,482, compared to operating expenses of $39,868,715 for the same period of 2022. The increase was primarily related to 2023 goodwill and intangible asset impairment charges of $2,243,820 and $438,374, respectively, along with increases of $1,451,038 and $965,097, respectively, in general and administrative expenses and cost of revenue. A Majority of these increases were offset by a decrease of $5,001,917 in salaries and wages due to certain cost cutting measures taken during 2023.

Other Expense

During the year ended December 31, 2023, we had other expense of $145,356, compared to other income of $1,843,657 for the same period of 2022. The change of $1,989,013 is primarily related to a decrease in the gain on change in fair value of derivatives of $3,305,127, a $1,115,161 increase in interest expense, and $1,222,000 of liquidated damages related to escrow shares during 2023. This decrease was partially offset by a $2,083,000 decrease in amortization of debt discounts and a gain on extinguishment of derivatives of $1,692,232 during 2023.

Net Loss

For the year ended December 31, 2023, we incurred a net loss attributable to High Wire Networks, Inc. common shareholders of $14,486,000, compared to a net loss attributable to High Wire Networks, Inc. common shareholders of $19,035,088 for the same period in 2022.

Liquidity and Capital Resources

As of December 31, 2023, our total current assets were $2,744,711 and our total current liabilities were $12,660,530, resulting in a working capital deficit of $9,915,819, compared to a working capital deficit of $10,889,962 as of December 31, 2022.

We suffered recurring losses from operations. The continuation of our company is dependent upon our company attaining and maintaining profitable operations and raising additional capital as needed. In this regard, we have historically raised additional capital through equity offerings and loan transactions.

Cash Flows

		For the years ended
		December 31,
		2023			2022
Net cash used in operating activities		$	(7,931,673	)		$	(2,115,767	)
Net cash provided by investing activities		$	190,000			$	70,299
Net cash provided by financing activities		$	7,426,003			$	2,249,016
Change in cash		$	(315,670	)		$	203,548

For the year ended December 31, 2023, cash decreased $315,670, compared to an increase in cash of $203,548 for the same period of 2022. The primary cash inflows during the year ended December 31, 2023 were net proceeds of from loans payable to related parties, loans payable, convertible debentures, and factor financing of $4,223,511, along with Securities Purchase Agreement proceeds of $3,500,000. The net loss from continuing operations of $13,148,288 was partially offset by a net cash inflow from changes in operating assets and liabilities of $1,671,666.

In order to improve our liquidity, we intend to pursue additional equity financing from private placement sales of our equity securities or shareholders' loans. Issuances of additional shares will result in dilution to our existing shareholders. There is no assurance that we will be successful in completing any further private placement financings. If we are unable to achieve the necessary additional financing, then we plan to reduce the amounts that we spend on our business activities and administrative expenses in order to preserve our liquidity.

As of December 31, 2023, we had cash of $333,357 compared to $649,027 as of December 31, 2022.

Indebtedness

As of December 31, 2023, the outstanding balances of loans payable to related parties, loans payable, convertible debentures, and factor financing were $298,735, $2,995,803, $1,011,166, and $1,361,656, respectively. The loans payable to related parties, loans payable, and convertible debentures amounts are net of debt discounts of $36,265, $96,552, and $1,079,395, respectively.

The total outstanding principal balance per the loan agreements and factor financing due to our debt holders was $6,879,571 at December 31, 2023. We are currently in discussions with certain of our creditors to restructure some of these loan agreements to reduce the principal balance and extend maturity dates. However, there can be no assurance that we will be successful in reducing the principal balance or extending the maturity dates of any of our outstanding notes.

Loans Payable to Related Parties

At December 31, 2023 and 2022, we had outstanding the following loans payable to related parties:

		December 31,			December 31,
		2023			2022
Promissory note issued to Mark Porter, 9% interest, unsecured, matured December 15, 2021, due on demand		$	100,000			$	100,000
Convertible promissory note issued to Mark Porter, 18% interest, secured, matures March 25, 2025, net of debt discount of $25,297			44,703				-
Convertible promissory note issued to Mark Porter, 12% interest, secured, matures February 5, 2024, net of debt discount of $10,968			154,032				-
Convertible promissory note issued to Keith Hayter, 10% interest, unsecured, matures March 31, 2023			-				109,031
Total		$	298,735			$	209,031
Less: Current portion of loans payable to related parties			(254,032	)			(209,031	)
Loans payable to related parties, net of current portion		$	44,703			$	-

Additional information on our loans payable to related parties is set forth in our consolidated financial statements included in this report in Item 8, Financial Statements and Supplementary Data.

Loans Payable

As of December 31, 2023 and 2022, loans payable consisted of the following:

		December 31,			December 31,
		2023			2022
Future receivables financing agreement with Cedar Advance LLC, non-interest bearing, matures February 16, 2024, net of debt discount of $23,040		$	623,118			$	-
Future receivables financing agreement with Pawn Funding, non-interest bearing, matures February 22, 2024, net of debt discount of $18,240			692,885				-
Future receivables financing agreement with Slate Advance LLC, non-interest bearing, matures December 22, 2023, net of debt discount of $26,786			630,092				-
Future receivables financing agreement with Meged Funding Group, non-interest bearing, matures January 17, 2024, net of debt discount of $24,986			700,059				-
Future receivables financing agreement with Arin Funding LLC, non-interest bearing, matures January 12, 2024, net of debt discount of $1,000			47,741				-
Future receivables financing agreement with Arin Funding LLC, non-interest bearing, matures January 23, 2024, net of debt discount of $2,500			84,508				-
Promissory note issued to InterCloud Systems, Inc., non-interest bearing, unsecured and due on demand			217,400				217,400
Promissory note, Jeffrey Gardner, 12% interest, unsecured, matures April 15, 2023			-				-
Future receivables financing agreement with Cedar Advance LLC, non-interest bearing, matures July 28, 2023			-				-
Future receivables financing agreement with Pawn Funding, non-interest bearing, matures August 4, 2023			-				-
Promissory note issued to Cornerstone National Bank & Trust, 4.5% interest, unsecured, matures on October 9, 2024			-				245,765
Future receivables financing agreement with Cedar Advance LLC, non-interest bearing, matures August 17, 2023, net of debt discount of $329,419			-				825,656
Future receivables financing agreement with Pawn Funding, non-interest bearing, matures August 17, 2023, net of debt discount of $329,419			-				825,656
Total		$	2,995,803			$	2,114,477
Less: Current portion of loans payable, net of debt discount			(2,995,803	)			(1,928,964	)
Loans payable, net of current portion		$	-			$	185,513

Additional information on our loans payable is set forth in our consolidated financial statements included in this report in Item 8, Financial Statements and Supplementary Data.

Convertible Debentures

At December 31, 2023 and 2022, we had outstanding the following convertible debentures:

		December 31,			December 31,
		2023			2022
Convertible promissory note, Jeffrey Gardner, 6% interest, unsecured, matured September 15, 2021, due on demand		$	125,000			$	125,000
Convertible promissory note, James Marsh, 6% interest, unsecured, matured September 15, 2021, due on demand			125,000				125,000
Convertible promissory note issued to Roger Ponder, 10% interest, unsecured, matures September 30, 2023			23,894				23,894
Convertible promissory note issued to Herald Investment Management Limited, 18% interest, secured, matures March 25, 2025, net of debt discount of $282,945			417,055				-
Convertible promissory note issued to Kings Wharf Opportunities Fund, LP, 18% interest, secured, matures March 25, 2025, net of debt discount of $181,894			268,106				-
Convertible promissory note issued to Mast Hill Fund, L.P., 12% interest, unsecured, matures December 7, 2024, net of debt discount of $407,890			36,555				-
Convertible promissory note issued to FirstFire Global Opportunities Fund, LLC, 12% interest, unsecured, matures December 11, 2024, net of debt discount of $206,666			15,556				-
Convertible promissory note issued to the Mark Munro 1996 Charitable Remainder UniTrust, 9% interest, unsecured, due April 30, 2024			-				2,450,000
Convertible promissory note, FJ Vulis and Associates LLC, 12% interest, secured, matures May 11, 2023			-				500,000
Total			1,011,166				3,223,894
Less: Current portion of convertible debentures, net of debt discount/premium			(326,005	)			(1,598,894	)
Convertible debentures, net of current portion, net of debt discount		$	685,161			$	1,625,000

Additional information on our convertible debentures is set forth in our consolidated financial statements included in this report in Item 8, Financial Statements and Supplementary Data.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.

Inflation

The effect of inflation on our revenue and operating results has not been significant.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required under Regulation S-K for "smaller reporting companies."

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements required to be filed pursuant to this Item 8 are appended to this report. An index of those financial statements is found in Item 15.

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

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures.

Our management, with the participation of our Chief Executive Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on management's evaluation, our Chief Executive Officer concluded that, as a result of the material weaknesses described below, as of December 31, 2023, our disclosure controls and procedures are not designed at a reasonable assurance level and are not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer, as appropriate, to allow timely decisions regarding required disclosure. The material weaknesses, which relate to internal control over financial reporting, that were identified are:

a)

Due to our small size, we do not have a proper segregation of duties in certain areas of our financial reporting process. The areas where we have a lack of segregation of duties include cash receipts and disbursements, approval of purchases and approval of accounts payable invoices for payment. This control deficiency, which is pervasive in nature, results in a reasonable possibility that material misstatements of the consolidated financial statements will not be prevented or detected on a timely basis; and

b)

the lack of the quantity of resources to implement an appropriate level of review controls to properly evaluate the completeness and accuracy of transactions entered into by our company.

We are committed to improving our financial organization. In addition, we will look to increase our personnel resources and technical accounting expertise within the accounting function to resolve non-routine or complex accounting matters.

Management's report on internal control over financial reporting.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that our internal control over financial reporting was not effective as of December 31, 2023 for the reasons discussed above.

Changes in internal control over financial reporting.

There were no changes in our internal control over financial reporting that occurred during the year ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Our bylaws state that the authorized number of directors shall be not less than one and not more than fifteen and shall be set by resolution of the board of directors. Our board of directors consists of three (3) members, all of whom are not considered "independent directors," as defined in applicable rules of the SEC and NASDAQ. Officers are appointed and serve at the discretion of our board of directors. There are no family relationships among any of our directors or executive officers.

Our current directors and officers are as follows:

Name		Position		Age		Date First Elected or Appointed
Mark W. Porter		Chief Executive Officer and Chairman of the Board		51		March 1, 2021
Curtis E. Smith		Chief Financial Officer		56		May 31, 2023
Stephen W. LaMarche		Chief Operating Officer and Director		60		August 9, 2021
Peter H. Kruse		Director		60		September 27, 2021

All directors serve for one year and until their successors are elected and qualified. All officers serve at the pleasure of the Board of Directors. There are no family relationships among any of our officers and directors.

The following is information about the experience and attributes of the members of our board of directors and senior executive officers as of the date of this report. The experience and attributes of our directors discussed below provide the reasons that these individuals were selected for board membership, as well as why they continue to serve in such positions.

Mark W. Porter, Chief Executive Officer and Chairman of the Board

Mr. Porter was appointed our Chief Executive Officer on March 1, 2021. Since January 2001, Mr. Porter has been President and Chief Executive Officer of HWN, Inc. ("High Wire Networks"). With over two decades of technology industry experience, Mr. Porter is a channel veteran with extensive experience in pioneering new and more innovative ways to deliver professional and managed services.

Curtis E. Smith, Chief Financial Officer

On May 31, 2023, the Board appointed Curtis E. Smith to serve as our Chief Financial Officer. Mr. Smith has over 30 years of finance and operational experience, primarily as a Chief Financial Officer for NASDAQ-listed and privately held companies.

Stephen W. LaMarche, Chief Operating Officer and Director

On August 9, 2021, Stephen W. LaMarche was appointed to the Board of Directors. Since 2019, Mr. LaMarche has been providing consulting services to the managed technology and professional services space where he has extensive experience leading sales & marketing, product and service innovation, finance and operational management. From 2016 to 2018, Mr. LaMarche served as Vice President of Product Management at TPx Communications. On February 1, 2023, the Board appointed Stephen W. LaMarche to serve as our Chief Operating Officer.

Peter H. Kruse, Director

On September 27, 2021, Peter H. Kruse was appointed to the Board of Directors. Since 2016, Mr. Kruse has been President of P410 Group LLC, which provides coaching to companies to implement a practical business operating system to align, simplify and focus entrepreneurial businesses to achieve strong results.

Family Relationships

None.

Board Independence and Committees

We are not required to have any independent members of the Board of Directors.

Involvement in Certain Legal Proceedings

To the best of our knowledge, none of our directors or executive officers has, during the past ten years:

1.

been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offences);

2.

had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;

3.

been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;

4.

been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

5.

been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

6.

been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Code of Ethics

We adopted a Code of Ethics applicable to all of our directors, officers, employees and consultants, which is a "code of ethics" as defined by applicable rules of the SEC. Our Code of Ethics was attached as an exhibit to our Registration Statement filed on Form S-1 filed with the SEC on February 26, 2008. If we make any amendments to our Code of Ethics other than technical, administrative, or other non-substantive amendments, or grant any waivers, including implicit waivers, from a provision of our Code of Ethics to our Chief Executive Officer, Chief Financial Officer, or certain other finance executives, we will disclose the nature of the amendment or waiver, its effective date and to whom it applies in a Current Report on Form 8-K filed with the SEC.

We have adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers and directors. We will provide a copy of our Code of Business Conduct and Ethics, without charge, to any person desiring a copy, by written request to our company at 30 North Lincoln Street, Batavia, Illinois 60510.

Section 16(a) Beneficial Ownership Compliance Reporting

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors and persons who own more than 10% of a registered class of our equity securities to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our shares of common stock and other equity securities, on Forms 3, 4 and 5, respectively. Executive officers, directors and greater than 10% shareholders are required by the SEC regulations to furnish us with copies of all Section 16(a) reports they file.

ITEM 11. EXECUTIVE COMPENSATION

The following table provides certain summary information concerning compensation awarded to, earned by or paid to our Chief Executive Officer, the two highest paid executive officers and up to two other highest paid individuals whose total annual salary and bonus exceeded $100,000 for the years ended December 31, 2023 and 2022.

																				Changes in
																				Pension Value and
																	Non-Equity			Non-Qualified
																	Incentive			Deferred			All
Name and											Stock			Option			Plan			Compensation			Other
Principal		Fiscal			Salary			Bonus			Awards			Awards			Compensation			Earnings			Compensation			Total
Position		Year			($)			($)			($)			($)			($)			($)			($)			($)
Mark W. Porter			2023				259,615				-				-				151,789				-				-				27,500	(a)			438,904
Chief Executive Officer			2022				289,231				-				-				-				-				-				30,000	(a)			319,231
Curt Smith (1)			2023				171,384				-				-				500,627				-				-				-				672,011
Chief Financial Officer			2022				-				-				-				-				-				-				-				-
Stephen W. LaMarche (2)			2023				228,462				-				-				580,347				-				-				-				808,809
Chief Operating Officer			2022				-				-				-				-				-				-				-				-
Daniel J. Sullivan (3)			2023				112,529				-				-				-				-				-				-				112,529
Former Chief Financial Officer			2022				200,000				-				-				14,493				-				-				-				214,493

(a)	This amount represents a car allowance.
(1)	Mr. Smith was appointed as the Company's Chief Financial Officer on May 31, 2023
(2)	Mr. LaMarche was appointed as the Company's Chief Operating Officer on January 31, 2023
(3)	Mr. Sullivan, the Company's former Chief Financial Officer, retired effective May 31, 2023

Outstanding Equity Awards at Fiscal Year-End

The following table shows the outstanding equity awards held by the named executive officers and directors as of December 31, 2023.

		Equity compensation plans not approved by shareholders		Equity compensation plans approved by shareholders
		Number of securities		Number of securities			Number of securities			Number of securities
		underlying unexercised		underlying unexercised			underlying unexercised			underlying unexercised
	options exercisable		options exercisable			options exercisable			options exercisable			Option exercise price			Option expiration
Name and Principal Position		(#)		(#)			(#)			(#)			($)			date
Current Officers:
Mark W. Porter
First Award					3,318,584											$	0.2500			June 16, 2026
Second Award									218,892				93,811			$	0.2545			August 18, 2026
Third Award													894,737			$	0.0950			February 8, 2028
Fourth Award													274,123			$	0.1100			May 30, 2028
Fifth Award													147,754			$	0.1249			July 18, 2028
Sixth Award													236,701			$	0.0742			October 24, 2028
Seventh Award													171,233			$	0.0730			December 31, 2028
Curtis E. Smith
First Award													4,011,000			$	0.1100			May 17, 2028
Second Award													187,155			$	0.1249			July 18, 2028
Third Award													299,821			$	0.0742			October 24, 2028
Fourth Award													216,895			$	0.0730			December 31, 2028
Stephen W. LaMarche
First Award													100,603			$	0.2485			August 11, 2026
Second Award													285,714			$	0.0875			September 28, 2027
Third Award													869,565			$	0.1150			February 27, 2028
Fourth Award													4,011,000			$	0.1100			May 17, 2028
Fifth Award													175,439			$	0.1100			May 30, 2028
Sixth Award													118,203			$	0.1249			July 18, 2028
Seventh Award													189,361			$	0.0742			October 24, 2028
Eight Award													136,986			$	0.0730			December 31, 2028
Current Directors:
Peter H. Kruse
First Award													96,712			$	0.2545			August 18, 2026
Second Award													285,714			$	0.0875			September 28, 2027
Third Award													295,508			$	0.1249			July 18, 2028
Former Officers:
Daniel J. Sullivan
First Award					77,587											$	0.5800			February 21, 2026
Second Award									129,666				302,554			$	0.2545			August 18, 2026

Employment Contracts and Termination of Employment and Change-In-Control Arrangements

Mark W. Porter Employment Agreement

On March 31, 2021, we entered into an employment agreement (the "Employment Agreement") with Mark W. Porter, our Chief Executive Officer, pursuant to which Mr. Porter will serve as our Chief Executive Officer for an initial term of five (5) years with automatic two (2) year renewals unless terminated by us or Mr. Porter. Pursuant to the Employment Agreement, Mr. Porter will receive an annual base salary of $375,000, plus an annual cash bonus based on our achievement of certain performance targets made at the discretion of our Board of Directors. If all performance targets are achieved, Mr. Porter's annual cash bonus shall not be less than five percent (5%) of our EBITDA for the applicable year.

Curtis E. Smith Employee Agreement

On June 29, 2023, we entered into an employment agreement (the "Employment Agreement") with Curtis E. Smith, our Chief Financial Officer. Pursuant to the Employment Agreement, Mr. Smith will receive a base salary of $360,000. However, until such time as the Company achieves listing on a national exchange or is acquired in a private or public company transaction, Mr. Smith has agreed to receive an annualized base salary of $265,000, with the difference from the base salary of $360,000 being granted in options to purchase shares of our common stock. Mr. Smith is also entitled to an annual cash bonus based on our achievement of certain performance targets made at the discretion of our Board of Directors. If all performance targets are achieved, Mr. Smith's annual cash bonus shall not be less than one percent (1%) of our EBITDA for the applicable year.

Board of Directors Compensation

Directors who are employees of our company or of any of our subsidiaries receive no additional compensation for serving on our Board of Directors or any of its committees. All directors who are not employees of our company or of any of our subsidiaries are compensated at the rate of $25,000 per year in stock compensation and are paid $1,500 for each board meeting attended and are reimbursed for their expenses incurred in attending Board and committee meetings.

														Non-Equity			Non-Qualified
					Fees									Incentive			Deferred			All
Name and					earned or			Stock			Option			Plan			Compensation			Other
Principal		Fiscal			paid in cash			Awards			Awards			Compensation			Earnings			Compensation			Total
Position		Year			($)			($)			($)			($)			($)			($)			($)
Stephen W. LaMarche (1)			2023				-				-				-				-				-				25,000	(a)			25,000
Director and Chief Operating Officer			2022				-				-				25,000				-				-				165,000	(a)			190,000
Peter H. Kruse			2023				-				-				36,791				-				-				42,500	(a)			79,291
Director			2022				-				-				25,000				-				-				15,000	(a)			40,000

(1)	Mr. LaMarche was appointed as the Company's Chief Operating Officer on January 31, 2023

(a)	Represents consulting fees.

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

The following table sets forth, as of April 15, 2024, the names, addresses and number of shares of our common stock beneficially owned by all persons known to us to be beneficial owners of more than 5% of the outstanding shares of our common stock, and the names and number of shares beneficially owned by all of our directors and all of our executive officers and directors as a group (except as indicated, each beneficial owner listed exercises sole voting power and sole dispositive power over the shares beneficially owned). As of April 15, 2024, we had a total of 240,620,455 shares of common stock outstanding.

		Number of shares and nature of			Percent of
		beneficial			common stock
Name of beneficial owner		ownership (1)			outstanding (2)
Mark W. Porter (3)			27,389,168				11.4	%
Curtis E. Smith (4)			1,907,171				*
Peter H. Kruse (5)			677,934				*
Stephen W. LaMarche (6)			2,369,872				1.0	%
All directors and officers as a Group			32,344,145				13.4	%
Shannon Kizer (7)			55,000,000				22.9	%
Aaron Kizer (8)			11,000,000				4.6	%
Jason Kizer (9)			22,000,000				9.1	%
William Kizer (10)			25,333,333				10.5	%
Herald Investment Management (11)			17,600,000				7.3	%
Mark Munro IRA, Trust & 1996 Charitable Remainder UniTrust (12)			7,569,209				3.2	%
GSD Capital Management LLC (13)			12,500,000				5.2	%

*	Less than 1%

(1)

A person is considered to beneficially own any shares: (i) over which such person, directly or indirectly, exercises sole or shared voting or investment power, or (ii) of which such person has the right to acquire beneficial ownership at any time within 60 days (such as through exercise of stock options or warrants). Unless otherwise indicated, voting and investment power relating to the shares shown in the table for our directors and executive officers is exercised solely by the beneficial owner or shared by the owner and the owner's spouse or children.

(2)

Shares of our common stock issuable upon the conversion of our convertible preferred stock are deemed outstanding for purposes of computing the percentage shown above. In addition, for purposes of this table, a person or group of persons is deemed to have "beneficial ownership" of any shares of common stock that such person has the right to acquire within 60 days after the date of this annual report. For purposes of computing the percentage of outstanding shares of our common stock held by each person or group of persons named above, any shares that such person or persons has the right to acquire within 60 days after the date of this annual report is deemed to be outstanding, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. The inclusion herein of any shares listed as beneficially owned does not constitute an admission of beneficial ownership.

(3)	Represents 21,333,333 shares issuable upon the conversion of Series D preferred stock, 5,355,835 shares issuable upon the exercise of stock options, and 700,000 shares issuable upon the exercise of warrants.
(4)	Represents 1,907,171 shares issuable upon the exercise of stock options.
(5)	Represents 677,934 shares issuable upon the exercise of stock options.
(6)	Represents 2,369,872 shares issuable upon the exercise of stock options.
(7)	Represents 55,000,000 shares held in connection with the Securities Purchase Agreement. The address of Shannon Kizer is 8917 Country Road, Lubbock, TX 79407.
(8)	Represents 11,000,000 shares held in connection with the Securities Purchase Agreement. The address of Aaron Kizer is 6970 Filly Road, Wolfforth, TX 79382.
(9)	Represents 22,000,000 shares held in connection with the Securities Purchase Agreement. The address of Jason Kizer is 5623 State Highway 206, Pep, NM 88126.
(10)	Represents 25,333,333 shares held in connection with the Securities Purchase Agreement. The address of William Kizer is 1698 South Roosevelt Road, Portales, NM 88130.

(11)	Represents 17,600,000 shares held in connection with the Securities Purchase Agreement. The address of Herald Investment Management is 0-11 Charterhouse Square, London EC1M 6EE.
(12)	Represents 7,569,209 shares issuable upon the conversion of Series E preferred stock. The address of the Mark Munro IRA, Trust & 1996 Charitable Remainder UniTrust is 980 North Federal Highway, Suite 304, Boca Raton, FL 33432.
(13)	Represents 12,500,000 shares issuable upon the exercise of share purchase warrants. The address of GSD Capital Management LLC is 365 Fifth Ave, Naples, FL 34102.

From time to time, the number of our shares held in the "street name" accounts of various securities dealers for the benefit of their clients or in centralized securities depositories may exceed 5% of the total shares of our common stock outstanding.

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

Other than compensation arrangements for our named executive officers and directors, we describe below each transaction or series of similar transactions, since January 1, 2023, to which we were a party or will be a party, in which:

●

the amounts involved exceeded or will exceed $120,000; or

●

any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family of the foregoing persons, had or will have a direct or indirect material interest.

See "Executive Compensation" for a description of certain arrangements with our executive officers and directors.

Loans Payable to Related Parties

Convertible promissory note, Mark Porter, 18% interest, secured, matures March 25, 2025

In connection with the Securities Purchase Agreement discussed in Note 8, Convertible Debentures, on September 25, 2023, we issued to Mark Porter a senior subordinated secured convertible promissory note in the aggregate principal amount of $70,000. The interest on the outstanding principal due under the note accrues at a rate of 18% per annum. All principal and accrued but unpaid interest under the note are due on March 25, 2025. The note is convertible into shares of our common stock at a fixed conversion price of $0.10 per share.

Additionally, in connection with the note, we issued Mark Porter a warrant to purchase 700,000 shares of our common stock at an exercise price of $0.15 per share. These warrants expire on September 25, 2028.

Convertible promissory note, Mark Porter, 12% interest, unsecured, matures February 5, 2024

On December 6, 2023, we issued to Mark Porter an unsecured promissory note in the aggregate principal amount of $165,000. We received cash of $150,000 and recorded a debt discount of $15,000. The interest on the outstanding principal due under the note accrues at a rate of 12% per annum. All outstanding principal and accrued interest under the note is due on February 5, 2024.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The aggregate fees billed for the years ended December 31, 2023 and 2022 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:

		For the year ended
		December 31,
		2023			2022
Sadler, Gibb & Associates, LLC
Audit Fees		$	135,000			$	120,500
Audit-Related Fees			10,080				-
Tax Fees			-				-
All Other Fees			-				-
Total		$	145,080			$	120,500

Our board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the board of directors either before or after the respective services were rendered.

Our board of directors has considered the nature and amount of fees billed by our independent auditors and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independent auditors' independence.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Financial Statements.

See the "Index to Consolidated Financial Statements" on page F-1 below for the list of financial statements filed as part of this report.

Financial Statement Schedules.

All schedules have been omitted because they are not required or because the required information is given in the Consolidated Financial Statements or Notes thereto set forth below beginning on page F-1.

Exhibits.

See the Exhibit Index immediately following the signature page of this Report on Form 10-K. The exhibits listed in the Exhibit Index below are filed or incorporated by reference as part of this Report on Form 10-K.

ITEM 16. FORM 10-K SUMMARY

None.

HIGH WIRE NETWORKS, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
	Number
Report of Independent Registered Public Accounting Firm (PCAOB ID Number 3627)	F-2
Consolidated Balance Sheets as of December 31, 2023 and December 31, 2022	F-5
Consolidated Statements of Operations for the years ended December 31, 2023 and December 31, 2022	F-6
Consolidated Statements of Stockholders' Deficit for the years ended December 31, 2023 and December 31, 2022	F-7
Consolidated Statements of Cash Flows for the years ended December 31, 2023 and December 31, 2022	F-8
Notes to Consolidated Financial Statements	F-9

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of High Wire Networks, Inc.:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of High Wire Networks, Inc.,("the Company") as of December 31, 2023 and 2022, the related consolidated statements of operations, stockholders' deficit , and cash flows for each of the years in the two-year period ended December 31, 2023 and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph Regarding Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has incurred losses since inception, has negative cash flows from operations, and has negative working capital, which creates substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

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

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

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

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) related to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgements. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Goodwill Impairment Assessment

Critical Audit Matter Description

As described in Note 2 to the consolidated financial statements, the Company tests goodwill for impairment annually at the reporting unit level, or more frequently if events or circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Reporting units are tested for impairment by comparing the estimated fair value of each reporting unit with its carrying amount. If the carrying amount of a reporting unit exceeds its estimated fair value, an impairment loss is recorded based on the difference between the fair value and carrying amount, not to exceed the associated carrying amount of goodwill. The Company's annual impairment test occurred on December 31, 2023 and resulted in the recognition of a goodwill impairment expense of approximately $2.2 million. The Company utilized a third-party valuation specialist to assist in the preparation of the goodwill impairment tests for each reporting unit. The Company primarily used a discounted cash flow income method to estimate the fair value of each reporting unit.

How the Critical Audit Matter was Addressed in the Audit

We identified the evaluation of the impairment analysis for goodwill as a critical audit matter because of the significant estimates and assumptions management used in the discounted cash flow analysis performed by management to determine fair value of the reporting unit. Performing audit procedures to evaluate the reasonableness of these estimates and assumptions required a high degree of auditor judgment and an increased extent of effort. In addition, the audit effort involved the use of professionals with specialized skill and knowledge.

Our audit procedures related to the following:

●	Testing management's process for developing the fair value of each reporting unit.

●	Evaluating the appropriateness of the discounted cash flow model utilized by the Company.

●	Testing the completeness and accuracy of underlying data used in the fair value estimate.

●

Evaluating the significant assumptions provided by management or developed by the third-party valuation specialist related to revenues, EBITDA, income taxes, long term growth rate, and discount rate to discern whether they are reasonable considering (i) the current and past performance of the entity; (ii) the consistency with external market and industry data; and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.

In addition, professionals with specialized skill and knowledge were utilized by the Firm to assist in the evaluation of the discounted cash flow model.

Long-Lived Asset Impairment Assessment

Critical Audit Matter Description

As described in note 2 to the financial statements, the Company performs impairment testing for its long-lived assets when events or changes in circumstances indicate that its carrying amount may not be recoverable and exceeds its fair value. Due to economic performance and challenging industry and economic conditions, the Company tested certain long-lived assets for impairment at December 31, 2023 which resulted in the recognition of an impairment charge of approximately $438,000 related to the Company's intangible assets. The Company's evaluation of the recoverability of the long-lived asset group involved comparing the undiscounted future cash flows expected to be generated by the long-lived asset group to its carrying amount. The Company's determination of the fair value of the long-lived asst groups primarily involved the use of a discounted cash flow model. In addition, the Company determined the fair value of certain trade names using the relief-from-royalty method. The Company's recoverability analysis and determination of fair value requires management to make significant estimates and assumptions related to forecasted sales growth rates and cash flows over the remaining useful life of the long-lived asset groups.

We identified the evaluation of the impairment analysis for these long-lived assets as a critical audit matter because of the significant estimates and assumptions management used in the fair value models. Performing audit procedures to evaluate the reasonableness of these estimates and assumptions required a high degree of auditor judgment and an increased extent of effort.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the following:

●	Testing management's process for developing the tests for recoverability and fair value estimates.

●	Evaluating the appropriateness of the valuation models used.

●	Testing the completeness and accuracy of underlying data used in the fair value estimates.

●

Evaluating the significant assumptions provided by management or developed by the third¬-party valuation specialist related to revenues, EBITDA, income taxes, long term growth rate, hypothetical royalty rates, and discount rates to discern whether they are reasonable considering (i) the current and past performance of the entity; (ii) the consistency with external market and industry data; and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.

●	Professionals with specialized skill and knowledge were utilized by the Firm to assist in the evaluation of the discounted cash flow model and discount rate assumptions.

/s/ Sadler, Gibb & Associates, LLC

We have served as the Company's auditor since 2014.

Draper, UT

April 19, 2024

High Wire Networks, Inc.

Consolidated balance sheets

		December 31,
	2023			2022
ASSETS
Current assets:
Cash		$	333,357			$	649,027
Accounts receivable, net of allowances of $311,610 and $36,000, respectively, and unbilled revenue of $99,916 and $225,415, respectively			2,294,324				3,925,504
Prepaid expenses and other current assets			117,030				883,858
Current assets of discontinued operations			-				5,211,442
Total current assets			2,744,711				10,669,831
Property and equipment, net of accumulated depreciation of $477,763 and $294,763, respectively			1,026,293				1,549,609
Goodwill			3,162,499				8,028,106
Intangible assets, net of accumulated amortization of $2,350,059 and $1,670,556, respectively			3,620,256				4,738,134
Operating lease right-of-use assets			277,995				57,408
Noncurrent assets of discontinued operations			-				7,551,883
Total assets		$	10,831,754			$	32,594,971
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued liabilities			6,417,525				6,525,226
Contract liabilities			382,576				1,665,831
Current portion of loans payable to related parties, net of debt discount of $10,968 and $0, respectively			254,032				209,031
Current portion of loans payable, net of debt discount of $96,552 and $658,838, respectively			2,995,803				1,928,964
Current portion of convertible debentures, net of debt discount of $614,556 and $0, respectively			326,005				1,598,894
Factor financing			1,361,656				-
Warrant liabilities			833,615				-
Current portion of derivative liabilities			-				4,720,805
Operating lease liabilities, current portion			89,318				74,266
Current liabilities of discontinued operations			-				4,836,776
Total current liabilities			12,660,530				21,559,793
Long-term liabilities:
Loans payable to related parties, net of current portion, net of debt discount of $25,297			44,703				-
Loans payable, net of current portion			-				185,513
Convertible debentures, net of current portion, net of debt discount of $464,839 and $0, respectively			685,161				1,625,000
Operating lease liabilities, net of current portion			190,989				-
Derivative liabilities, net of current portion			-				3,324,126
Noncurrent liabilities of discontinued operations			-				152,102
Total long-term liabilities			920,853				5,286,741
Total liabilities			13,581,383				26,846,534
Commitments and contingencies (Note 16)
Series A preferred stock; $0.00001 par value; 8,000,000 shares authorized; 0 and 300,000 issued and outstanding as of December 31, 2023 and 2022, respectively			-				722,098
Series B preferred stock; $3,500 stated value; 1,000 shares authorized; 1,000 issued and outstanding as of December 31, 2023 and 2022			-				-
Series D preferred stock; $10,000 stated value; 1,590 shares authorized; 1,405 issued and outstanding as of December 31, 2022			-				11,641,142
Series E preferred stock; $10,000 stated value; 650 shares authorized; 526 issued and outstanding as of December 31, 2022			-				5,104,658
Total mezzanine equity			-				17,467,898
Stockholders' deficit:
Common stock; $0.00001 par value; 1,000,000,000 shares authorized; 239,876,900 and 164,488,370 issued and outstanding as of December 31, 2023 and 2022, respectively			2,399				1,645
Series D preferred stock; $10,000 stated value; 1,590 shares authorized; 943 issued and outstanding as of December 31, 2023			7,745,643				-
Series E preferred stock; $10,000 stated value; 650 shares authorized; 311 issued and outstanding as of December 31, 2023			4,869,434				-
Additional paid-in capital			31,178,365				20,338,364
Accumulated deficit			(46,545,470	)			(32,059,470	)
Total stockholders' deficit			(2,749,629	)			(11,719,461	)
Total liabilities and stockholders' deficit		$	10,831,754			$	32,594,971

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

High Wire Networks, Inc.
Consolidated statements of operations

		For the years ended
		December 31,
		2023			2022
Revenue		$	26,992,550			$	26,766,795
Operating expenses:
Cost of revenue			20,293,751				19,328,654
Depreciation and amortization			844,457				814,102
Salaries and wages			9,095,874				14,097,791
General and administrative			7,079,206				5,628,168
Goodwill impairment charge			2,243,820				-
Intangible asset impairment charge			438,374				-
Total operating expenses			39,995,482				39,868,715
Loss from operations			(13,002,932	)			(13,101,920	)
Other income (expenses):
Interest expense			(2,458,263	)			(1,343,102	)
Amortization of debt discounts			(1,113,589	)			(3,196,589	)
Gain on change in fair value of derivative liabilities			3,140,404				6,445,531
Gain on extinguishment of derivatives			1,692,232				-
Liquidated damages related to escrow shares			(1,222,000	)			-
Warrant expense			(484,818	)			-
Gain on sale of asset			204,081
Gain on change in fair value of warrant liabilities			67,465				-
Exchange loss			(8,368	)			(846	)
Loss on settlement of debt			-				(260,932	)
Amortization of premiums on convertible debentures and loans payable to related parties			-				1,031,353
Initial derivative expense			-				(1,289,625	)
Gain (loss) on settlement of warrants			-				176,735
Other income			37,500				281,132
Total other (expense) income			(145,356	)			1,843,657
Net loss from continuing operations before income taxes			(13,148,288	)			(11,258,263	)
Provision for income taxes			-				-
Net loss from continuing operations			(13,148,288	)			(11,258,263	)
Net loss from discontinued operations, net of tax			(1,337,712	)			(7,905,312	)
Less: net loss from discontinued operations attributable to noncontrolling interest			-				128,487
Net loss attributable to High Wire Networks, Inc. common shareholders		$	(14,486,000	)		$	(19,035,088	)
Loss per share attributable to High Wire Networks, Inc. common shareholders, basic and diluted:
Net loss from continuing operations		$	(0.06	)		$	(0.16	)
Net loss from discontinued operations, net of taxes		$	(0.01	)		$	(0.12	)
Net loss per share		$	(0.06	)		$	(0.28	)
Weighted average common shares outstanding, basic and diluted			226,708,549				68,713,880

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

High Wire Networks, Inc.
Consolidated statements of stockholder's deficit

		For the year ended December 31, 2023
		Common stock			Series D preferred stock			Series E preferred stock			Additional paid-in			Accumulated
		Shares			$			Shares			$			Shares			$			capital			deficit			Total
Balances, January 1, 2023			164,488,370			$	1,645				-			$	-				-			$	-			$	20,338,364			$	(32,059,470	)		$	(11,719,461	)
Issuance of common stock upon conversion of Series A preferred stock			3,750,000				38				-				-				-				-				722,060				-				722,098
Issuance of common stock pursuant to PIPE transaction			51,333,334				513				-				-				-				-				3,499,487				-				3,500,000
Reclassification of Series D and E preferred stock to permanent equity			-				-				1,125				9,245,462				526				5,104,658				-				-				14,350,120
Issuance of common stock upon conversion of Series D preferred stock			14,807,083				148				(182	)			(1,499,819	)			-				-				2,944,891								1,445,220
Issuance of common stock to third-party vendors			3,400,000				34				-				-				-				-				290,526				-				290,560
Issuance of common stock upon conversion of Series E preferred stock			681,818				7				-				-				(15	)			(235,224	)			235,217				-				-
Cancelation of Series E preferred stock shares			-				-				-				-				(200	)			-				-				-				-
Issuance of common stock and warrants upon issuance of debt			1,416,295				14				-				-				-				-				674,364				-				674,378
Liquidated damages related to escrow shares			-				-				-				-				-				-				1,222,000				-				1,222,000
Stock-based compensation			-				-				-				-				-				-				1,251,456				-				1,251,456
Net income for the period			-				-				-				-				-				-				-				(14,486,000	)			(14,486,000	)
Ending balance, December 31, 2023			239,876,900			$	2,399				943			$	7,745,643				311			$	4,869,434			$	31,178,365			$	(46,545,470	)		$	(2,749,629	)

		For the year ended December 31, 2022
		Common stock			Additional paid-in			Accumulated			Noncontrolling
		Shares			$			capital			deficit			interest			Total
Balances, January 1, 2022			46,149,117			$	462			$	8,630,910			$	(13,024,382	)		$	1,949,701			$	(2,443,309	)
Issuance of common stock upon conversion of convertible debentures			18,698,727				187				2,554,261				-				-				2,554,448
Issuance of common stock upon conversion of Series D preferred stock			2,315,609				23				516,136				-				-				516,159
Issuance of common stock upon conversion of Series E preferred stock			5,658,250				57				1,209,102												1,209,159
Issuance of common stock pursuant to PIPE transaction			91,666,667				916				6,199,084				-				-				6,200,000
Stock-based compensation			-				-				1,228,871				-				-				1,228,871
Disposal of JTM			-				-				-				-				(1,949,701	)			(1,949,701	)
Net income for the period			-				-				-				(19,035,088	)			-				(19,035,088	)
Ending balance, December 31, 2022			164,488,370			$	1,645			$	20,338,364			$	(32,059,470	)		$	-			$	(11,719,461	)

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

High Wire Networks, Inc.

Consolidated statements of cash flows

		For the years ended
		December 31,
		2023			2022
Cash flows from operating activities:
Net loss from continuing operations		$	(13,148,288	)		$	(11,258,263	)
Adjustments to reconcile net loss to net cash used in operating activities:
Gain on change in fair value of derivative liabilities			(3,140,404	)			(6,445,531	)
Amortization of debt discounts			1,113,589				2,165,236
Depreciation and amortization			844,457				814,102
Amortization of operating lease right-of-use assets			99,244				111,447
Stock-based compensation related to stock options			1,251,456				1,228,871
Stock-based compensation related to third-party vendors			290,560				-
Liquidated damages related to escrow shares			1,222,000				-
Gain on extinguishment of derivatives			(1,692,232	)			-
Loss (gain) on disposal of subsidiary			1,434,392				(919,873	)
Gain on sale of asset			(204,081	)			-
Write-offs of fixed assets			221,510				-
Gain on change in fair value of warrant liabilities			(67,465	)			-
Goodwill impairment charge			2,243,820				-
Intangible asset impairment charge			438,374				-
Warrant expense			484,818				-
Loss on settlement of debt			-				260,932
Stock-based compensation related to Series D issuances			-				5,498,845
Initial derivative expense			-				1,289,625
Gain on settlement of warrants			-				(176,735	)
Changes in operating assets and liabilities:
Accounts receivable			1,631,180				(1,189,998	)
Prepaid expenses and other current assets			766,828				(540,561	)
Accounts payable and accrued liabilities			670,704				3,076,865
Contract liabilities			(1,283,255	)			1,320,752
Operating lease liabilities			(113,791	)			(133,258	)
Net cash used in operating activities of continuing operations			(6,936,584	)			(4,897,544	)
Net cash (used in) provided by operating activities of discontinued operations			(995,089	)			2,781,777
Net cash used in operating activities			(7,931,673	)			(2,115,767	)
Cash flows from investing activities:
Purchase of fixed assets			(20,000	)			(404,701	)
Cash received in connection with disposal of JTM			50,000				475,000
Cash received in connection with sale of AWS PR assets			160,000				-
Net cash provided by investing activities			190,000				70,299
Cash flows from financing activities:
Proceeds from loans payable to related parties			220,000				-
Proceeds from loans payable			6,782,350				3,374,965
Repayments of loans payable			(5,776,195	)			(5,383,005	)
Proceeds from convertible debentures			1,635,700				500,000
Repayments of convertible debentures			-				(2,744,015	)
Proceeds from factor financing			12,885,071				-
Repayments of factor financing			(11,523,415	)			-
Securities Purchase Agreement proceeds			3,500,000				-
Proceeds from related party advances			-				380,000
Repayments of related party advances			-				(380,000	)
Proceeds from PIPE investment			-				6,200,000
Net cash provided by financing activities of continuing operations			7,723,511				1,947,945
Net cash (used in) provided by financing activities of discontinued operations			(297,508	)			301,071
Net cash provided by financing activities			7,426,003				2,249,016
Net (decrease) increase in cash			(315,670	)			203,548
Cash, beginning of period			649,027				445,479
Cash, end of period		$	333,357			$	649,027
Supplemental disclosures of cash flow information:
Cash paid for interest		$	1,777,530			$	1,172,388
Cash paid for income taxes		$	-			$	-
Non-cash investing and financing activities:
Common stock issued for conversion of Series D preferred stock		$	2,945,039			$	516,159
Common stock issued for conversion of Series E preferred stock		$	235,224			$	1,209,159
Original issue discounts on loans payable and convertible debentures		$	874,117			$	1,524,835
Common stock issued for conversion of Series A preferred stock		$	722,098			$	-
Right-of-use asset obtained in exchange for lease liability		$	319,832			$	-
Issuance of common stock and warrants upon issuance of debt		$	674,378			$	-
Common stock issued for conversion of convertible debentures		$	-			$	2,554,448
Issuance of Series D preferred stock		$	-			$	5,498,845
Receivable from JTM disposition		$	-			$	50,000

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

High Wire Networks, Inc.

Notes to the consolidated financial statements

December 31, 2023

1. Organization

HWN, Inc., (d/b/a High Wire Network Solutions, Inc.) ("HWN" or the "Company") was incorporated in Delaware on January 20, 2017. The Company is a global provider of managed cybersecurity, managed networks, and tech enabled professional services delivered exclusively through a channel sales model. The Company's Overwatch managed security platform-as-a-service offers organizations end-to-end protection for networks, data, endpoints and users via multiyear recurring revenue contracts in this fast-growing technology segment.

HWN and JTM Electrical Contractors, Inc. ("JTM"), an Illinois Corporation, entered into an operating agreement through which High Wire owned 50% of JTM.

On June 16, 2021, the Company completed a merger with Spectrum Global Solutions, Inc. On January 7, 2022, Spectrum Global Solutions, Inc. legally changed its name to High Wire Networks, Inc. ("High Wire" or, collectively with HWN, "the Company"). The merger was accounted for as a reverse merger. At the time of the reverse merger, High Wire's subsidiaries included ADEX Corporation, ADEX Puerto Rico LLC, ADEX Canada, ADEX Towers, Inc. and ADEX Telecom, Inc. (collectively "ADEX" or the "ADEX Entities"), AW Solutions Puerto Rico, LLC ("AWS PR"), and Tropical Communications, Inc. ("Tropical"). For accounting purposes, HWN is the surviving entity.

High Wire was incorporated in the State of Nevada on January 22, 2007 to acquire and commercially exploit various new energy related technologies through licenses and purchases. On December 8, 2008, High Wire reincorporated in the province of British Columbia, Canada.

On November 4, 2021, the Company closed on its acquisition of Secure Voice Corp ("SVC"). The closing of the acquisition was facilitated by a senior secured promissory note.

On February 15, 2022, HWN sold its 50% interest in JTM, which qualified for discontinued operations treatment (refer to Note 19, Discontinued Operations, for additional detail).

On March 6, 2023, HWN divested the ADEX Entities (refer to Note 3, Recent Subsidiary Activity, for additional detail). The divestiture of the ADEX Entities qualified for discontinued operations treatment (refer to Note 19, Discontinued Operations, for additional detail).

On July 31, 2023, the Company paused the operations of its AWS PR subsidiary and sold off certain assets (refer to Note 3, Recent Subsidiary Activity, for additional detail).

On August 4, 2023, the Company formed a new entity - incorporated as Overwatch Cyberlab, Inc. ("OCL") - which is 80% owned by the Company and 20% owned by John Peterson (refer to Note 3, Recent Subsidiary Activity, for additional detail).

On November 3, 2023, the Company paused the operations of its Tropical subsidiary (refer to Note 3, Recent Subsidiary Activity, for additional detail).

The Company's AWS PR and Tropical subsidiaries are professional, multi-service line, telecommunications infrastructure companies that provide outsourced services to the wireless and wireline industry. The Company's SVC subsidiary is a wholesale network services provider with network footprint and licenses in the Northeast and Southeast United States as well as Texas. This network carries VoIP and other traffic for other service providers. OCL has not begun to generate revenue as of December 31, 2023.

2. Significant Accounting Policies

Basis of Presentation/Principles of Consolidation

These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States. These consolidated financial statements include the accounts of the Company as well as High Wire and its subsidiaries, AWS PR, Tropical, SVC, and OCL. All subsidiaries are wholly-owned.

All inter-company balances and transactions have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to allowance for doubtful accounts, the estimated useful lives and recoverability of long-lived assets, equity component of convertible debt, stock-based compensation, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company's estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

Accounts Receivable

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company records unbilled receivables for services performed but not billed. Management reviews a customer's credit history before extending credit. The Company maintains an allowance for doubtful accounts for estimated losses. Estimates of uncollectible amounts are reviewed each period, and changes are recorded in the period in which they become known. Management analyzes the collectability of accounts receivable each period. This review considers the aging of account balances, historical bad debt experience, and changes in customer creditworthiness, current economic trends, customer payment activity and other relevant factors. Should any of these factors change, the estimate made by management may also change. The allowance for doubtful accounts at December 31, 2023 and 2022 was $311,610 and $36,000, respectively.

Property and Equipment

Property and equipment are stated at cost. The Company depreciates the cost of property and equipment over their estimated useful lives at the following annual rates:

Computers and office equipment	3-7 years straight-line basis
Vehicles	3-5 years straight-line basis
Leasehold improvements	5 years straight-line basis
Software	5 years straight-line basis
Machinery and equipment	5 years straight-line basis

Goodwill

The Company has two reporting units, HWN and SVC, and tests its goodwill for impairment at least annually on December 31 and whenever events or circumstances change that indicate impairment may have occurred. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others: a significant decline in the Company's expected future cash flows; a significant adverse change in legal factors or in the business climate; unanticipated competition; and slower growth rates. Any adverse change in these factors could have a significant impact on the recoverability of goodwill and the Company's consolidated financial results.

The Company tests goodwill by estimating fair value using a Discounted Cash Flow ("DCF") model. The key assumptions used in the DCF model to determine the highest and best use of estimated future cash flows include revenue growth rates and profit margins based on internal forecasts, terminal value and an estimate of a market participant's weighted-average cost of capital used to discount future cash flows to their present value. The Company's HWN reporting unit, which included goodwill of $1,732,431 as of December 31, 2023, had a negative carrying amount as of that date. During the year ended December 31, 2023, there was a goodwill impairment charge of $2,243,820 on the Company's SVC reporting unit. There were no impairment charges during the year ended December 31, 2022.

Intangible Assets

At December 31, 2023 and 2022, definite-lived intangible assets consist of tradenames and customer relationships which are being amortized over their estimated useful lives of 10 years.

The Company periodically evaluates the reasonableness of the useful lives of these assets. Once these assets are fully amortized, they are removed from the accounts. These assets are reviewed for impairment or obsolescence when events or changes in circumstances indicate that the carrying amount may not be recoverable. If impaired, intangible assets are written down to fair value based on discounted cash flows or other valuation techniques. The Company has no intangibles with indefinite lives.

For long-lived assets, impairment losses are only recorded if the asset's carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. The Company measures the impairment loss based on the difference between the carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to fair value. During the year ended December 31, 2023, there was an intangible asset impairment charge of $438,374 on HWN's customer relationships and lists. There were no impairment charges during the year ended December 31, 2022.

Long-lived Assets

In accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 360, "Property, Plant and Equipment", the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value, which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value. Other than the intangible asset impairment charges noted above, there were no impairment charges on long-lived assets during the years ended December 31, 2023 and 2022.

Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, "Accounting for Income Taxes". The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

The Company conducts business, and files federal and state income, franchise or net worth, tax returns in United States, in various states within the United States and the Commonwealth of Puerto Rico. The Company determines its filing obligations in a jurisdiction in accordance with existing statutory and case law. The Company may be subject to a reassessment of federal and provincial income taxes by Canadian tax authorities for a period of three years from the date of the original notice of assessment in respect of any particular taxation year. For Canadian and U.S. income tax returns, the open taxation years range from 2020 to 2023. In certain circumstances, the U.S. federal statute of limitations can reach beyond the standard three year period. U.S. state statutes of limitations for income tax assessment vary from state to state. Tax authorities of the U.S. have not audited any of the Company's, or its subsidiaries', income tax returns for the open taxation years noted above.

Significant management judgment is required in determining the provision for income taxes, and in particular, any valuation allowance recorded against the Company's deferred tax assets. Deferred tax assets are regularly reviewed for recoverability. The Company currently has significant deferred tax assets resulting from net operating loss carryforwards and deductible temporary differences, which should reduce taxable income in future periods. The realization of these assets is dependent on generating future taxable income.

The Company follows the guidance set forth within ASC 740, "Income Taxes" which prescribes a two-step process for the financial statement recognition and measurement of income tax positions taken or expected to be taken in an income tax return. The first step evaluates an income tax position in order to determine whether it is more likely than not that the position will be sustained upon examination, based on the technical merits of the position. The second step measures the benefit to be recognized in the financial statements for those income tax positions that meet the more likely than not recognition threshold. ASC 740 also provides guidance on de-recognition, classification, recognition and classification of interest and penalties, accounting in interim periods, disclosure and transition. Penalties and interest, if incurred, would be recorded as a component of current income tax expense.

Prior to 2021, the Company had elected to be treated as a Subchapter S Corporation for income tax purposes, and as such recognized no income tax liability or benefit.

Revenue Recognition

The Company recognizes revenue based on the five criteria for revenue recognition established under ASC 606, "Revenue from Contracts with Customers": 1) identify the contract, 2) identify separate performance obligations, 3) determine the transaction price, 4) allocate the transaction price among the performance obligations, and 5) recognize revenue as the performance obligations are satisfied.

Contract Types

The Company's contracts fall under two main types: 1) fixed-price and 2) time-and-materials. Fixed-price contracts are based on purchase order line items that are billed on individual invoices as the project progresses and milestones are reached. Time-and-materials contracts include employees working on an as needed basis at customer locations and materials costs incurred by those employees.

A significant portion of the Company's revenues come from customers with whom the Company has a master service agreement ("MSA"). These MSA's generally contain customer specific service requirements.

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For the Company's different revenue service types, the performance obligation is satisfied at different times. For professional services revenue, the performance obligation is met when the work is performed. In certain cases, this may be each day or each week, depending on the customer. For construction services, the performance obligation is met when the work is completed and the customer has approved the work.

Revenue Service Types

The following is a description of the Company's revenue service types, which include Technology Solutions and Managed Services:

●

Technology Solutions: The Technology Solutions group is all service and project revenue generated globally by HWN, Tropical, and AWS PR. These business perform project-based professional services for the Enterprise, SMB, Data Center, Carrier Wireline, Carrier Wireless, and Network Service Provider markets.

●

Managed Services are services provided to the clients where the Company monitors, maintains, handles break/fix issues and protects customer networks. The Managed Services Segment encompasses all of the Company's recurring revenue businesses including Overwatch Managed Security, all network managed services, all managed services performed under a Statement of Work (SoW), and the Company's SVC revenue.

Disaggregation of Revenues

The Company disaggregates its revenue from contracts with customers by service type. See the below table:

Revenue by service type		Year Ended December 31, 2023			Year Ended December 31, 2022
Technology Solutions		$	21,452,565			$	17,811,667
Managed Services			5,539,985				8,955,128
Total		$	26,992,550			$	26,766,795

The Company also disaggregates its revenue by operating segment and geographic location (refer to Note 17, Segment Disclosures, for additional information).

Contract Assets and Liabilities

Contract assets would include costs and services incurred on contracts with open performance obligations. These amounts would be included in contract assets on the consolidated balance sheets. At December 31, 2023 and 2022, the Company did not have any contract assets.

Contract liabilities include payment received for incomplete performance obligations and are included in contract liabilities on the consolidated balance sheets. At December 31, 2023 and 2022, contract liabilities totaled $382,576 and $1,665,831, respectively.

Cost of Revenues

Cost of revenues includes all direct costs of providing services under the Company's contracts, including costs for direct labor provided by employees, services by independent subcontractors, operation of capital equipment, direct materials, insurance claims and other direct costs.

Research and Development Costs

Research and development costs are expensed as incurred.

Stock-based Compensation

The Company records stock-based compensation in accordance with ASC 718, "Compensation - Stock Compensation", using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the grant date fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

The Company accounts for stock-based compensation awards issued to non-employees for services, as prescribed by ASC 718, at either the grant date fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in Accounting Standards Update ("ASU") 2018-07. In accordance with ASU 2016-09, the Company accounts for forfeitures as they occur.

The Company uses certain pricing models to calculate the fair value of stock-based awards. This model is affected by the Company's stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to, the Company's expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the consolidated statement of operations over the requisite service period, which is generally the vesting period.

Loss per Share

The Company computes loss per share in accordance with ASC 260, "Earnings per Share" which requires presentation of both basic and diluted loss per share ("EPS") on the face of the income statement. Basic EPS is computed by dividing the loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the conversion of convertible debentures or preferred stock and the exercise of stock options or warrants. Diluted EPS excludes dilutive potential shares if their effect is anti-dilutive. As of December 31, 2023 and 2022, respectively, the Company had 145,710,627 and 178,640,968 common stock equivalents outstanding.

Leases

ASC 842, "Leases" requires recognition of leases on the consolidated balance sheets as right-of-use ("ROU") assets and lease liabilities. ROU assets represent the Company's right to use underlying assets for the lease terms and lease liabilities represent the Company's obligation to make lease payments arising from the leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value and future minimum lease payments over the lease term at commencement date. As the Company's leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Certain of the Company's lease agreements contain options to renew and options to terminate the leases early. The lease term used to calculate ROU assets and lease liabilities only includes renewal and termination options that are deemed reasonably certain to be exercised.

The Company recognized lease liabilities, with corresponding ROU assets, based on the present value of unpaid lease payments for existing operating leases longer than twelve months as of January 1, 2019. The ROU assets were adjusted per ASC 842 transition guidance for existing lease-related balances of accrued and prepaid rent, unamortized lease incentives provided by lessors, and restructuring liabilities, Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term and is recorded in selling, general and administrative expenses. Variable lease payments for common area maintenance, property taxes and other operating expenses are recognized as expense in the period when the changes in facts and circumstances on which the variable lease payments are based occur. The Company has elected not to separate lease and non-lease components for all property leases for the purposes of calculating ROU assets and lease liabilities.

Going Concern Assessment

Management assesses going concern uncertainty in the Company's consolidated financial statements to determine whether there is sufficient cash on hand and working capital, including available borrowings on loans, to operate for a period of at least one year from the date the consolidated financial statements are issued or available to be issued, which is referred to as the "look-forward period", as defined in GAAP. As part of this assessment, based on conditions that are known and reasonably knowable to management, management will consider various scenarios, forecasts, projections, estimates and will make certain key assumptions, including the timing and nature of projected cash expenditures or programs, its ability to delay or curtail expenditures or programs and its ability to raise additional capital, if necessary, among other factors. Based on this assessment, as necessary or applicable, management makes certain assumptions around implementing curtailments or delays in the nature and timing of programs and expenditures to the extent it deems probable those implementations can be achieved and management has the proper authority to execute them within the look-forward period.

The Company generated operating losses in the years ended December 31, 2023 and 2022, and High Wire has generated operating losses since its inception and has relied on cash on hand, sales of securities, external bank lines of credit, and issuance of third-party and related party debt to support cash flow from operations. As of and for the year ended December 31, 2023, the Company had an operating loss of $13,002,932, cash flows used in continuing operations of $6,936,584, and a working capital deficit of $9,915,819. These factors raise substantial doubt regarding the Company's ability to continue as a going concern for a period of one year from the issuance of these consolidated financial statements.

The accompanying consolidated financial statements have been prepared on a going concern basis under which the Company is expected to be able to realize its assets and satisfy its liabilities in the normal course of business.

Management believes that based on relevant conditions and events that are known and reasonably knowable, its forecasts of operations for one year from the date of the filing of the consolidated financial statements in the Company's Annual Report on Form 10-K indicate improved operations and the Company's ability to continue operations as a going concern. The Company has contingency plans to reduce or defer expenses and cash outlays should operations not improve in the look forward period. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of management to raise additional equity capital through private and public offerings of its common stock, and the attainment of profitable operations. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Management requires additional funds over the next twelve months to fully implement its business plan. Management is currently seeking additional financing through the sale of equity and from borrowings from private lenders to cover its operating expenditures. There can be no certainty that these sources will provide the additional funds required for the next twelve months.

Recent Accounting Pronouncements

ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). In June 2016, the FASB issued ASU No. 2016-13. The amendments in ASU 2016-13, among other things, require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, ASU 2016-13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The FASB has issued multiple updates to ASU 2016-13 as codified in Topic 326, including ASU's 2019-04, 2019-05, 2019-10, 2019-11, 2020-02, and 2020-03. These ASU's have provided for various minor technical corrections and improvements to the codification as well as other transition matters. Smaller reporting companies who file with the U.S. Securities and Exchange Commission (the "SEC") and all other entities who do not file with the SEC are required to apply the guidance for fiscal years, and interim periods within those years, beginning after December 15, 2022. The Company adopted ASU 2016-13 effective January 1, 2023. The adoption did not have a material effect on the Company's consolidated financial statements.

ASU 2021-08, Business Combination (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU 2021-08). In October 2021, the FASB issued ASU 2021-08. This guidance amends ASC 805 to "require acquiring entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination." Under current GAAP, an acquirer generally recognizes such items at fair value on the acquisition date. As a public business entity, this standard will become effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted ASU 2021-08 effective January 1, 2023. The adoption did not have a material effect on the Company's consolidated financial statements.

Any other new accounting pronouncements recently issued, but not yet effective, have been reviewed and determined to be not applicable or were related to technical amendments or codification. As a result, the adoption of such new accounting pronouncements, when effective, is not expected to have a material effect on the Company's financial position or results of operations.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable. The Company maintains its cash balances with high-credit-quality financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. These deposits may be withdrawn upon demand and therefore bear minimal risk. As of December 31, 2023, HWN had a cash balance in excess of provided insurance of $37,752.

The Company provides credit to customers on an uncollateralized basis after evaluating client creditworthiness. For the year ended December 31, 2023, three customers accounted for 21%, 17%, and 15%, respectively, of consolidated revenues for the period. In addition, amounts due from these customers represented 41%, 3%, and 0%, respectively, of trade accounts receivable as of December 31, 2023. For the year ended December 31, 2022, three customers accounted for 16%, 14%, and 10%, respectively, of consolidated revenues for the period. In addition, amounts due from these customers represented 10%, 16%, and 8%, respectively, of trade accounts receivable as of December 31, 2022.

The Company's customers are primarily located within the domestic United States of America and Puerto Rico. Revenues generated within the domestic United States of America accounted for approximately 99% and 95% of consolidated revenues for the years ended December 31, 2023 and 2022, respectively. Revenues generated from customers in Puerto Rico accounted for approximately 1% and 5% of consolidated revenues for the years ended December 31, 2023 and 2022, respectively.

Fair Value Measurements

The Company measures and discloses the estimated fair value of financial assets and liabilities using the fair value hierarchy prescribed by US generally accepted accounting principles. The fair value hierarchy has three levels, which are based on reliable available inputs of observable data. The hierarchy requires the use of observable market data when available. The three-level hierarchy is defined as follows:

Level 1 - quoted prices for identical instruments in active markets;

Level 2 - quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations in which significant inputs and significant value drivers are observable in active markets; and

Level 3 - fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Financial instruments consist principally of cash and cash equivalents, accounts receivable, restricted cash, accounts payable, loans payable and convertible debentures. Derivative liabilities and warrant liabilities are determined based on "Level 3" inputs, which are significant and unobservable and have the lowest priority. There were no transfers into or out of "Level 3" during the year ended December 31, 2023 and 2022. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations.

As a result of the divesture of the ADEX Entities discussed in Note 3, Recent Subsidiary Activity, the Company no longer had any assets or liabilities carried at fair value as December 31, 2023 (refer to Note 8, Convertible debentures, for additional detail). In connection with the issuance of new convertible debentures during December 2023, the associated warrants qualified for fair value measurement.

The Company's financial assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2023 and 2022 consisted of the following:

		Total fair value at December 31, 2022			Quoted prices in active markets (Level 1)			Quoted prices in active markets (Level 2)			Quoted prices in active markets (Level 3)
Description:
Warrant liabilities (1)		$	833,615			$	-			$	-			$	833,615

		Total fair value at December 31, 2022			Quoted prices in active markets (Level 1)			Quoted prices in active markets (Level 2)			Quoted prices in active markets (Level 3)
Description:
Derivative liabilities (1)		$	8,044,931			$	-			$	-			$	8,044,931

(1)	The Company estimated the fair value of these warrant liabilities and derivative liabilities using either the Monte-Carlo model or the Black-Scholes model.

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial statement. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Refer to Note 10, Derivative Liabilities, and Note 11, Warrant Liabilities, for additional information.

Derivative Liabilities

The Company accounts for derivative instruments in accordance with ASC 815, "Derivatives and Hedging" and all derivative instruments are reflected as liabilities at fair value in the balance sheet. The Company uses estimates of fair value to value its derivative instruments. Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. In general, the Company's policy in estimating fair values is to first look at observable market prices for identical assets and liabilities in active markets, where available. When these are not available, other inputs are used to model fair value such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default rates and credit spreads, relying first on observable data from active markets. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The values presented may not represent future fair values and may not be realizable. The Company categorizes its fair value estimates in accordance with ASC 820 based on the hierarchical framework associated with the three levels of price transparency utilized in measuring financial instruments at fair value as discussed above. As a result of the divesture of the ADEX Entities discussed in Note 3, Recent Subsidiary Activity, the Company no longer had any derivative liabilities as of December 31, 2023 (refer to Note 8, Convertible debentures, for additional detail). As of December 31, 2022, the Company had derivative liabilities of $8,044,931.

Warrant Liabilities

The Company accounts for its liability-classified warrants in accordance with ASC 480, "Distinguishing Liabilities from Equity" and all warrant liabilities are reflected as liabilities at fair value in the balance sheet. The Company uses estimates of fair value to value its warrant liabilities. Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. In general, the Company's policy in estimating fair values is to first look at observable market prices for identical assets and liabilities in active markets, where available. When these are not available, other inputs are used to model fair value such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default rates and credit spreads, relying first on observable data from active markets. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The values presented may not represent future fair values and may not be realizable. The Company categorizes its fair value estimates in accordance with ASC 820 based on the hierarchical framework associated with the three levels of price transparency utilized in measuring financial instruments at fair value as discussed above. As of December 31, 2023, the Company had warrant liabilities of $833,615.

Sequencing Policy

Under ASC 815-40-35, the Company has adopted a sequencing policy whereby, in the event that reclassification of contracts from equity to assets or liabilities is necessary pursuant to ASC 815 due to the Company's inability to demonstrate it has sufficient authorized shares as a result of certain securities with a potentially indeterminable number of shares, shares will be allocated on the basis of the earliest issuance date of potentially dilutive instruments, with the earliest grants receiving the first allocation of shares. Pursuant to ASC 815, issuance of securities to the Company's employees or directors are not subject to the sequencing policy.

3. Recent Subsidiary Activity

Divestiture of the ADEX Entities

On March 6, 2023, the Company entered into a stock purchase agreement, by and among ADEX Corporation, ADEX Canada LTD., ADEX Puerto Rico, LLC and ADEXCOMM, and ADEX Acquisition Corp., pursuant to which the Company sold to ADEX Acquisition Corp. its legacy staffing business in a transaction valued at approximately $11,500,000, comprised primarily of the elimination of approximately $10,000,000 of debt, representing monthly debt payments of approximately $325,000, and the cancellation of 140 shares of the Company's Series D preferred stock. The sale of ADEX Corporation closed simultaneously with the signing of the agreement.

The Company considered whether or not this transaction would cause the ADEX Entities to qualify for discontinued operations treatment. The Company determined that the sale of the ADEX Entities qualifies for discontinued operations treatment during the year ended December 31, 2023 due to the size of their operations and because the sale represents a strategic shift (refer to Note 19, Discontinued Operations, for additional detail).

In connection with the sale, the Company recorded a loss on disposal of subsidiary of $1,434,392 to the consolidated statement of operations for the year ended December 31, 2023. Additionally, the ADEX Entities had net income of $96,680 during the period of January 1, 2023 through March 6, 2023. The net of these amounts is included within net loss from discontinued operations, net of taxes on the consolidated statement of operations.

Pause of AWS PR operations

On July 31, 2023, the Company entered into an asset purchase Tower Tech Engineering, pursuant to which Tower Tech Engineering will take over and complete certain AWS PR projects existing as of that date. As part of the agreement, Tower Tech Engineering has the right to hire the AWS PR employees working on the associated projects.

AWS PR retains the right to do business in Puerto Rico provided that such business does not compete with Tower Tech Engineering. As a result of the asset purchase agreement, the operations of AWS PR are now paused. AWS PR remains a subsidiary of HWN, and the Company retained AWS PR's cash, accounts receivable, and accounts payable.

In connect with the asset purchase agreement, the Company received a cash payment of $160,000 and recorded a gain on sale of asset of $204,081 to the consolidated statement of operations for the year ended December 31, 2023.

Formation of Overwatch CyberLabs, Inc.

On June 30, 2023, the Company entered into an agreement (the "Agreement") with John Peterson, pursuant to which John Peterson sold and the Company purchased certain intellectual property assets (the "Assets"). As consideration for the Assets, the Company has agreed to pay to John Peterson $100,000, subject to certain conditions described in the Agreement, which $100,000 will be paid in $25,000 installments based on the completion of certain milestones as set forth in the Agreement. In addition, John Peterson was entitled to receive 20% ownership of a new entity that was to be formed for the purposes of holding the Assets. On August 4, 2023, the Company formed the new entity - incorporated as Overwatch Cyberlab, Inc. ("OCL") - which is 80% owned by the Company and 20% owned by John Peterson. The 20% ownership received by John Peterson is considered a noncontrolling interest.

The Agreement also provides that John Peterson shall receive a $2 million liquidation preference for up to 18 months after the closing of the Agreement, during which time any liquidity event related to the Assets, will result in Peterson receiving the first $2 million of proceeds from liquidation of the entity that owns the Assets, should the valuation of such Assets be less than $20 million. As part of the Agreement, the Company appointed John Peterson as Chief Product Officer on July 17, 2023.

As of December 31, 2023, none of the milestones set forth in the Agreement have been met. Additionally, as of December 31, 2023, OCL has not begun to generate revenue. The only activity currently running through the entity is the payroll and related benefits and expenses for John Peterson. On December 29, 2023, John Peterson resigned from the Company.

Pause of the operations of Tropical

On November 3, 2023, the Company paused the operations of its Tropical subsidiary to allow the management team to focus on the Company's core businesses.

4. Property and Equipment

Property and equipment as of December 31, 2023 and 2022 consisted of the following:

		December 31			December 31
		2023			2022
Computers and office equipment		$	175,008			$	167,401
Vehicles			11,938				11,938
Leasehold improvements			6,113				6,113
Software			472,197				820,120
Machinery and equipment			838,800				838,800
Total			1,504,056				1,844,372
Less: accumulated depreciation			(477,763	)			(294,763	)
Equipment, net		$	1,026,293			$	1,549,609

During the years ended December 31, 2023 and 2022, the Company recorded depreciation expense of $164,954 and $134,607, respectively.

5. Intangible Assets

Intangible assets as of December 31, 2023 and 2022 consisted of the following:

		Cost			Accumulated Amortization			Impairment			Net carrying value at December 31, 2023			Net carrying value at December 31, 2022
Customer relationship and lists		$	5,266,705			$	(1,820,629	)		$	(438,374	)		$	3,007,702			$	4,006,705
Trade names			1,141,984				(529,430	)			-				612,554				731,429
Total intangible assets		$	6,408,689			$	(2,350,059	)		$	(438,374	)		$	3,620,256			$	4,738,134

During the years ended December 31, 2023 and 2022, the Company recorded amortization expense of $679,503 and $679,495, respectively.

The estimated future amortization expense for the next five years and thereafter is as follows:

Year ending December 31,
2024		$	502,768
2025			502,768
2026			502,768
2027			502,768
2028			502,768
Thereafter			1,106,416
Total		$	3,620,256

6. Related Party Transactions

Loans Payable to Related Parties

As of December 31, 2023 and 2022, the Company had outstanding the following loans payable to related parties:

		December 31,			December 31,
		2023			2022
Promissory note issued to Mark Porter, 9% interest, unsecured, matured December 15, 2021, due on demand		$	100,000			$	100,000
Convertible promissory note issued to Mark Porter, 18% interest, secured, matures March 25, 2025, net of debt discount of $25,297			44,703				-
Convertible promissory note issued to Mark Porter, 12% interest, secured, matures February 5, 2024, net of debt discount of $10,968			154,032				-
Convertible promissory note issued to Keith Hayter, 10% interest, unsecured, matures March 31, 2023			-				109,031
Total		$	298,735			$	209,031
Less: Current portion of loans payable to related parties			(254,032	)			(209,031	)
Loans payable to related parties, net of current portion		$	44,703			$	-

Promissory note, Mark Porter, 9% interest, unsecured, matures December 15, 2021

On June 1, 2021, the Company issued a $100,000 promissory note to the Chief Executive Officer of the Company in connection with the 2021 merger transaction. The note was originally due on December 15, 2021 and bears interest at a rate of 9% per annum.

On December 15, 2021, this note matured and is now due on demand.

As of December 31, 2023, the Company owed $100,000 pursuant to this agreement.

Convertible promissory note, Mark Porter, 18% interest, secured, matures March 25, 2025

In connection with the Securities Purchase Agreement discussed in Note 8, Convertible Debentures, on September 25, 2023, the Company issued to Mark Porter a senior subordinated secured convertible promissory note in the aggregate principal amount of $70,000. The interest on the outstanding principal due under the note accrues at a rate of 18% per annum. All principal and accrued but unpaid interest under the note are due on March 25, 2025. The note is convertible into shares of the Company's common stock at a fixed conversion price of $0.10 per share.

Additionally, in connection with the note, the Company issued Mark Porter a warrant to purchase 700,000 shares of the Company's common stock at an exercise price of $0.15 per share. These warrants expire on September 25, 2028.

The warrants, including those issued to the placement agent, had a relative fair value of $31,852, which resulted in a debt discount of $31,852. The amount is also included within additional paid-in capital.

As of December 31, 2023, the Company owed $70,000 pursuant to this note and will record accretion equal to the debt discount of $25,297 over the remaining term of the note.

Convertible promissory note, Mark Porter, 12% interest, unsecured, matures February 5, 2024

On December 6, 2023, the Company issued to Mark Porter an unsecured promissory note in the aggregate principal amount of $165,000. The Company received cash of $150,000 and recorded a debt discount of $15,000. The interest on the outstanding principal due under the note accrues at a rate of 12% per annum. All outstanding principal and accrued interest under the note was due on February 5, 2024.

As of December 31, 2023, the Company owed $165,000 pursuant to this note and will record accretion equal to the debt discount of $10,968 over the remaining term of the note.

The note matured on February 5, 2024 and is now due on demand.

Convertible promissory note, Keith Hayter, 10% interest, unsecured, matures August 31, 2022

On June 15, 2021, in connection with the 2021 merger transaction, the Company assumed High Wire's convertible promissory note issued to Keith Hayter. The note was originally issued on August 31, 2020 in the principal amount of $554,031. Interest accrued at 10% per annum. All principal and accrued but unpaid interest under the note was originally due on August 31, 2022. The note was convertible into shares of the Company's common stock at a fixed conversion price of $0.06 per share, subject to adjustment based on the terms of the note. The embedded conversion option did not qualify for derivative accounting. As a result of the conversion price being fixed at $0.06, the note had an original conversion premium of $1,359,761, and the fair value of the note was $378,000.

During the period of June 16, 2021 through December 31, 2021, the holder of the note converted $200,000 of principal into shares of the Company's common stock.

For the year ended December 31, 2022, the Company recorded $988,917 of amortization of premium to the consolidated statement of operations.

On September 30, 2022, the Company and the holder of the note mutually agreed to extend the maturity date to October 31, 2022. The terms of the note were unchanged.

On October 31, 2022, the Company and the holder of the note mutually agreed to extend the maturity date to November 30, 2022. The terms of the note were unchanged.

On December 31, 2022, the Company and the holder of the note mutually agreed to extend the maturity date to March 31, 2023. The terms of the note were unchanged.

As of January 1, 2023, the holder was no longer considered a related party.

On January 1, 2023, the note was exchanged by the holder for a new unsecured promissory note with no conversion feature (refer to Note 7, Loans Payable, for additional detail). The amount exchanged was the outstanding principal and accrued interest of $109,031 and $126,806, respectively).

7. Loans Payable

As of December 31, 2023 and 2022, the Company had outstanding the following loans payable:

		December 31,			December 31,
		2023			2022
Future receivables financing agreement with Cedar Advance LLC, non-interest bearing, matures February 16, 2024, net of debt discount of $23,040		$	623,118			$	-
Future receivables financing agreement with Pawn Funding, non-interest bearing, matures February 22, 2024, net of debt discount of $18,240			692,885				-
Future receivables financing agreement with Slate Advance LLC, non-interest bearing, matures December 22, 2023, net of debt discount of $26,786			630,092				-
Future receivables financing agreement with Meged Funding Group, non-interest bearing, matures January 17, 2024, net of debt discount of $24,986			700,059				-
Future receivables financing agreement with Arin Funding LLC, non-interest bearing, matures January 12, 2024, net of debt discount of $1,000			47,741				-
Future receivables financing agreement with Arin Funding LLC, non-interest bearing, matures January 23, 2024, net of debt discount of $2,500			84,508				-
Promissory note issued to InterCloud Systems, Inc., non-interest bearing, unsecured and due on demand			217,400				217,400
Promissory note, Jeffrey Gardner, 12% interest, unsecured, matures April 15, 2023			-				-
Future receivables financing agreement with Cedar Advance LLC, non-interest bearing, matures July 28, 2023			-				-
Future receivables financing agreement with Pawn Funding, non-interest bearing, matures August 4, 2023			-				-
Promissory note issued to Cornerstone National Bank & Trust, 4.5% interest, unsecured, matures on October 9, 2024			-				245,765
Future receivables financing agreement with Cedar Advance LLC, non-interest bearing, matures August 17, 2023, net of debt discount of $329,419			-				825,656
Future receivables financing agreement with Pawn Funding, non-interest bearing, matures August 17, 2023, net of debt discount of $329,419			-				825,656
Total		$	2,995,803			$	2,114,477
Less: Current portion of loans payable, net of debt discount			(2,995,803	)			(1,928,964	)
Loans payable, net of current portion		$	-			$	185,513

The Company's loans payable have an effective interest rate range of 0.0% to 144.3%.

Unsecured promissory note, Keith Hayter, 15% interest, matures August 31, 2023

On January 1, 2023, Keith Hayter, formerly a related party, exchanged a convertible promissory note for an unsecured promissory note with no conversion feature. The principal amount of the new note is $235,837, which was the outstanding principal and accrued interest of the exchanged note as of that date. Interest accrues at 15% per annum. All principal and accrued but unpaid interest under the note is due on August 31, 2023.

During the year ended December 31, 2023, the Company made cash payments for principal of $235,837 and accrued interest of $19,533. As a result of these payments, the amount owed at December 31, 2023 was $0.

Promissory note, Jeffrey Gardner, 12% interest, unsecured, matures April 15, 2023

On January 16, 2023, the Company issued a $330,000 promissory note to Jeffrey Gardner. The note had a maturity date of April 15, 2023 and bore interest at a rate of 12% per annum. The Company received cash proceeds of $300,000 and recorded a debt discount of $30,000.

During the year ended December 31, 2023, the Company made cash payments for principal and accrued interest of $330,000 and $20,000, respectively. As a result of these payments, the amount owed at December 31, 2023 was $0.

Future receivables financing agreement with Cedar Advance LLC, non-interest bearing, matures July 28, 2023

On February 9, 2023, the Company, together with its subsidiaries (collectively with the Company, the "Financing Parties"), entered into an Agreement of Sale of Future Receipts (the "Financing Agreement") with Cedar Advance LLC. Under the Financing Agreement, the Financing Parties sold to Cedar Advance future receivables in an aggregate amount equal to $725,000 for a purchase price of $500,000. The Company received cash of $475,000 and recorded a debt discount of $250,000.

Pursuant to the terms of the Financing Agreement, the Company agreed to pay Cedar Advance $30,208 each week based upon an anticipated 25% of its future receivables until such time as $725,000 has been paid, a period Cedar Advance and the Financing Parties estimated to be approximately six months. The Financing Agreement also contained customary affirmative and negative covenants, representations and warranties, and default and termination provisions.

During the year ended December 31, 2023, the Company paid $725,000 of the original balance under the agreement. Of that amount, $332,292 was paid using proceeds from the May 2023 loan with Cedar Advance discussed below. As a result of these payments, the amount owed at December 31, 2023 was $0.

Future receivables financing agreement with Pawn Funding, non-interest bearing, matures August 4, 2023

On February 16, 2023, the Company, together with its subsidiaries (collectively with the Company, the "Financing Parties"), entered into an Agreement of Sale of Future Receipts (the "Financing Agreement") with Pawn Funding. Under the Financing Agreement, the Financing Parties sold to Pawn Funding future receivables in an aggregate amount equal to $725,000 for a purchase price of $500,000. The Company received cash of $475,000 and recorded a debt discount of $250,000.

Pursuant to the terms of the Financing Agreement, the Company agreed to pay Pawn Funding $15,104 each week based upon an anticipated 25% of its future receivables until such time as $362,500 has been paid, a period Pawn Funding and the Financing Parties estimated to be approximately six months. The Financing Agreement also contained customary affirmative and negative covenants, representations and warranties, and default and termination provisions.

During the year ended December 31, 2023, the Company paid $725,000 of the original balance under the agreement. Of that amount, $362,500 was paid using proceeds from the May 2023 loan with Pawn Funding discussed below. As a result of these payments, the amount owed at December 31, 2023 was $0.

Future receivables financing agreement with Cedar Advance LLC, non-interest bearing, matures February 16, 2024

On May 15, 2023, the Company, together with its subsidiaries (collectively with the Company, the "Financing Parties"), entered into an Agreement of Sale of Future Receipts (the "Financing Agreement") with Cedar Advance LLC. Under the Financing Agreement, the Financing Parties sold to Cedar Advance future receivables in an aggregate amount equal to $1,280,000 for a purchase price of $1,228,800. The Company received cash of $1,228,800 and recorded a debt discount of $51,200.

Pursuant to the terms of the Financing Agreement, the Company agreed to pay Cedar Advance $43,840 each week, including interest, based upon an anticipated 10% of its future receivables until such time as $1,753,600 has been paid, a period Cedar Advance and the Financing Parties estimate to be approximately nine months. The Financing Agreement also contains customary affirmative and negative covenants, representations and warranties, and default and termination provisions.

During the year ended December 31, 2023, the Company paid $633,842 of the original balance under the agreement, along with $374,478 of interest.

As of December 31, 2023, the Company owed $646,158 pursuant to this agreement and will record accretion equal to the debt discount of $23,040 over the remaining term of the note.

Future receivables financing agreement with Pawn Funding, non-interest bearing, matures February 22, 2024

On May 15, 2023, the Company, together with its subsidiaries (collectively with the Company, the "Financing Parties"), entered into an Agreement of Sale of Future Receipts (the "Financing Agreement") with Pawn Funding. Under the Financing Agreement, the Financing Parties sold to Pawn Funding future receivables in an aggregate amount equal to $1,280,000 for a purchase price of $1,280,000. The Company received cash of $1,241,600 and recorded a debt discount of $38,400.

Pursuant to the terms of the Financing Agreement, the Company agreed to pay Pawn Funding $43,840 each week, including interest, based upon an anticipated 4% of its future receivables until such time as $1,753,600 has been paid, a period Pawn Funding and the Financing Parties estimate to be approximately nine months. The Financing Agreement also contains customary affirmative and negative covenants, representations and warranties, and default and termination provisions.

During the year ended December 31, 2023, the Company paid $568,874 of the original balance under the agreement, along with $351,765 of interest.

As of December 31, 2023, the Company owed $711,125 pursuant to this agreement and will record accretion equal to the debt discount of $18,240 over the remaining term of the note.

Future receivables financing agreement with Slate Advance LLC, non-interest bearing, matures December 22, 2023

On June 9, 2023, the Company, together with its subsidiaries (collectively with the Company, the "Financing Parties"), entered into an Agreement of Sale of Future Receipts (the "Financing Agreement") with Slate Advance. Under the Financing Agreement, the Financing Parties sold to Slate Advance future receivables in an aggregate amount equal to $1,500,000 for a purchase price of $1,425,000. The Company received cash of $1,425,000 and recorded a debt discount of $75,000.

Pursuant to the terms of the Financing Agreement, the Company agreed to pay Slate Advance $75,000 each week, including interest, based upon an anticipated 25% of its future receivables until such time as $2,100,000 has been paid, a period Slate Advance and the Financing Parties estimate to be approximately seven months. The Financing Agreement also contains customary affirmative and negative covenants, representations and warranties, and default and termination provisions.

During the year ended December 31, 2023, the Company paid $843,121 of the original balance under the agreement, along with $506,879 of interest.

As of December 31, 2023, the Company owed $656,878 pursuant to this agreement and will record accretion equal to the debt discount of $26,786 over the remaining term of the note.

Future receivables financing agreement with Meged Funding Group, non-interest bearing, matures January 17, 2024

On July 25, 2023, the Company, together with its subsidiaries (collectively with the Company, the "Financing Parties"), entered into an Agreement of Sale of Future Receipts (the "Financing Agreement") with Meged Funding Group. Under the Financing Agreement, the Financing Parties sold to Slate Advance future receivables in an aggregate amount equal to $1,200,000 for a purchase price of $1,151,950. The Company received cash of $1,151,950 and recorded a debt discount of $48,050.

Pursuant to the terms of the Financing Agreement, the Company agreed to pay Meged Funding Group $67,200 each week, including interest, based upon an anticipated 25% of its future receivables until such time as $1,680,000 has been paid, a period Meged Funding Group and the Financing Parties estimate to be approximately six months. The Financing Agreement also contains customary affirmative and negative covenants, representations and warranties, and default and termination provisions.

During the year ended December 31, 2023, the Company paid $474,955 of the original balance under the agreement, along with $331,445 of interest.

As of December 31, 2023, the Company owed $725,045 pursuant to this agreement and will record accretion equal to the debt discount of $24,986 over the remaining term of the note.

Future receivables financing agreement with Arin Funding LLC, non-interest bearing, matures January 12, 2024

On August 25, 2023, the Company, together with its subsidiaries (collectively with the Company, the "Financing Parties"), entered into an Agreement of Sale of Future Receipts (the "Financing Agreement") with Arin Funding LLC. Under the Financing Agreement, the Financing Parties sold to Arin Funding LLC future receivables in an aggregate amount equal to $200,000 for a purchase price of $195,000. The Company received cash of $195,000 and recorded a debt discount of $5,000.

Pursuant to the terms of the Financing Agreement, the Company agreed to pay Arin Funding LLC $13,000 each week, including interest, based upon an anticipated 5% of its future receivables until such time as $260,000 has been paid, a period Arin Funding LLC and the Financing Parties estimate to be approximately five months. The Financing Agreement also contains customary affirmative and negative covenants, representations and warranties, and default and termination provisions.

During the year ended December 31, 2023, the Company paid $151,259 of the original balance under the agreement, along with $56,741 of interest.

As of December 31, 2023, the Company owed $48,741 pursuant to this agreement and will record accretion equal to the debt discount of $1,000 over the remaining term of the note.

Future receivables financing agreement with Arin Funding LLC, non-interest bearing, matures January 23, 2024

On September 5, 2023, the Company, together with its subsidiaries (collectively with the Company, the "Financing Parties"), entered into an Agreement of Sale of Future Receipts (the "Financing Agreement") with Arin Funding LLC. Under the Financing Agreement, the Financing Parties sold to Arin Funding LLC future receivables in an aggregate amount equal to $300,000 for a purchase price of $290,000. The Company received cash of $290,000 and recorded a debt discount of $10,000.

Pursuant to the terms of the Financing Agreement, the Company agreed to pay Arin Funding LLC $19,500 each week, including interest, based upon an anticipated 8% of its future receivables until such time as $390,000 has been paid, a period Arin Funding LLC and the Financing Parties estimate to be approximately five months. The Financing Agreement also contains customary affirmative and negative covenants, representations and warranties, and default and termination provisions.

During the year ended December 31, 2023, the Company paid $212,992 of the original balance under the agreement, along with $79,508 of interest.

As of December 31, 2023, the Company owed $87,008 pursuant to this agreement and will record accretion equal to the debt discount of $2,500 over the remaining term of the note.

Promissory note issued to InterCloud Systems, Inc., non-interest bearing, unsecured and due on demand

On June 15, 2021, in connection with the 2021 merger transaction, the Company assumed High Wire's promissory note issued to InterCloud Systems, Inc. The note was originally issued on February 27, 2018 in the principal amount of $500,000. As of June 15, 2021, $217,400 remained outstanding. The note is non-interest bearing and is due on demand.

As of December 31, 2023, the Company owed $217,400 pursuant to this agreement.

Promissory note issued to Cornerstone National Bank & Trust, 4.5% interest, matures October 9, 2024

On October 21, 2019, the Company issued a promissory note to Cornerstone National Bank & Trust with an original principal amount of $420,000. The note bore interest at a rate of 4.5% per annum and the maturity date was October 9, 2024. The Company was to make monthly payments of principal and interest of $5,851, with a final balloon payment of $139,033 due on October 9, 2024.

During the year ended December 31, 2022, the Company made cash payments for principal of $58,422.

During the year ended December 31, 2023, the remaining principal balance of $245,765 was paid using proceeds from factor financing. As a result of these payments, the amount owed at December 31, 2023 was $0.

Future receivables financing agreement with Cedar Advance LLC, non-interest bearing, matures August 17, 2023

On November 9, 2022, the Company, together with its subsidiaries (collectively with the Company, the "Financing Parties"), entered into an Agreement of Sale of Future Receipts (the "Financing Agreement") with Cedar Advance LLC. Under the Financing Agreement, the Financing Parties sold to Cedar Advance future receivables in an aggregate amount equal to $1,399,900 for a purchase price of $1,000,000. The Company received cash of $960,000 and recorded a debt discount of $439,900.

Pursuant to the terms of the Financing Agreement, the Company agreed to pay Cedar Advance $34,975 each week based upon an anticipated 25% of its future receivables until such time as $1,399,900 has been paid, a period Cedar Advance and the Financing Parties estimated to be approximately nine months. The Financing Agreement also contained customary affirmative and negative covenants, representations and warranties, and default and termination provisions. The effective interest rate is 78%.

During the year ended December 31, 2022, the Company paid $244,825 of the original balance under the agreement.

During the period of January 1, 2023 and March 6, 2023, the Company paid $314,775 of the original balance under the agreement. As a result of these payments, the Company owed $840,330 as of March 6, 2023.

On March 6, 2023, in connection with the divestiture of the ADEX Entities, the buyer assumed this note (refer to Note 3, Recent Subsidiary Activity, for additional detail).

Future receivables financing agreement with Pawn Funding, non-interest bearing, matures August 17, 2023

On November 9, 2022, the Company, together with its subsidiaries (collectively with the Company, the "Financing Parties"), entered into an Agreement of Sale of Future Receipts (the "Financing Agreement") with Pawn Funding. Under the Financing Agreement, the Financing Parties sold to Pawn Funding future receivables in an aggregate amount equal to $1,399,900 for a purchase price of $1,000,000. The Company received cash of $960,000 and recorded a debt discount of $439,900.

Pursuant to the terms of the Financing Agreement, the Company agreed to pay Pawn Funding $34,975 each week based upon an anticipated 25% of its future receivables until such time as $1,399,900 has been paid, a period Pawn Funding and the Financing Parties estimated to be approximately nine months. The Financing Agreement also contained customary affirmative and negative covenants, representations and warranties, and default and termination provisions. The effective interest rate is 78%.

During the year ended December 31, 2022, the Company paid $244,825 of the original balance under the agreement.

During the period of January 1, 2023 and March 6, 2023, the Company paid $314,775 of the original balance under the agreement. As a result of these payments, the Company owed $840,330 as of March 6, 2023.

On March 6, 2023, in connection with the divestiture of the ADEX Entities, the buyer assumed this note (refer to Note 3, Recent Subsidiary Activity, for additional detail).

8. Convertible Debentures

As of December 31, 2023 and 2022, the Company had outstanding the following convertible debentures:

		December 31,			December 31,
		2023			2022
Convertible promissory note, Jeffrey Gardner, 6% interest, unsecured, matured September 15, 2021, due on demand		$	125,000			$	125,000
Convertible promissory note, James Marsh, 6% interest, unsecured, matured September 15, 2021, due on demand			125,000				125,000
Convertible promissory note issued to Roger Ponder, 10% interest, unsecured, matures September 30, 2023			23,894				23,894
Convertible promissory note issued to Herald Investment Management Limited, 18% interest, secured, matures March 25, 2025, net of debt discount of $282,945			417,055				-
Convertible promissory note issued to Kings Wharf Opportunities Fund, LP, 18% interest, secured, matures March 25, 2025, net of debt discount of $181,894			268,106				-
Convertible promissory note issued to Mast Hill Fund, L.P., 12% interest, unsecured, matures December 7, 2024, net of debt discount of $407,890			36,555				-
Convertible promissory note issued to FirstFire Global Opportunities Fund, LLC, 12% interest, unsecured, matures December 11, 2024, net of debt discount of $206,666			15,556				-
Convertible promissory note issued to the Mark Munro 1996 Charitable Remainder UniTrust, 9% interest, unsecured, due April 30, 2024			-				2,450,000
Convertible promissory note, FJ Vulis and Associates LLC, 12% interest, secured, matures May 11, 2023			-				500,000
Total			1,011,166				3,223,894
Less: Current portion of convertible debentures, net of debt discount/premium			(326,005	)			(1,598,894	)
Convertible debentures, net of current portion, net of debt discount		$	685,161			$	1,625,000

The Company's convertible debentures have an effective interest rate range of 11.2% to 136.0%.

Convertible promissory note, Jeffrey Gardner, 6% interest, unsecured, due on demand

On June 15, 2021 the Company issued to Jeffrey Gardner an unsecured convertible promissory note in the aggregate principal amount of $125,000 in connection with the 2021 merger transaction.

The interest on the outstanding principal due under the note accrues at a rate of 6% per annum. All principal and accrued but unpaid interest under the note is due on September 15, 2021. The note is convertible into shares of the Company's common stock at a fixed conversion price of $0.075 per share.

The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 "Derivatives and Hedging."

On September 15, 2021, this note matured and is now due on demand. Additionally, the interest rate increased to 18% per annum.

As of December 31, 2023, the Company owed $125,000 pursuant to this agreement.

Convertible promissory note, James Marsh, 6% interest, unsecured, due on demand

On June 15, 2021 the Company issued to James Marsh an unsecured convertible promissory note in the aggregate principal amount of $125,000 in connection with the 2021 merger transaction.

The interest on the outstanding principal due under the note accrues at a rate of 6% per annum. All principal and accrued but unpaid interest under the note are due on September 15, 2021. The note is convertible into shares of the Company's common stock at a fixed conversion price of $0.075 per share.

The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 "Derivatives and Hedging."

On September 15, 2021, this note matured and is now due on demand. Additionally, the interest rate increased to 18% per annum.

As of December 31, 2023, the Company owed $125,000 pursuant to this agreement.

Convertible promissory note, Roger Ponder, 10% interest, unsecured, matures August 31, 2022

On June 15, 2021, in connection with the 2021 merger transaction, the Company assumed High Wire's convertible promissory note issued to Roger Ponder. The note was originally issued on August 31, 2020 in the principal amount of $23,894. Interest accrues at 10% per annum. All principal and accrued but unpaid interest under the note are due on August 31, 2022. The note is convertible into shares of the Company's common stock at a fixed conversion price of $0.06 per share, subject to adjustment based on the terms of the note. The embedded conversion option does not qualify for derivative accounting. As a result of the conversion price being fixed at $0.06, the note has a conversion premium of $58,349, and the fair value of the note is $19,000.

On September 30, 2022, the Company and the holder of the note mutually agreed to extend the maturity date to December 31, 2022. The terms of the note were unchanged.

On December 31, 2022, the Company and the holder of the note mutually agreed to extend the maturity date to March 31, 2023. The terms of the note were unchanged.

On March 31, 2023, the Company and the holder of the note mutually agreed to extend the maturity date to June 30, 2023. The terms of the note were unchanged.

On June 30, 2023, the Company and the holder of the note mutually agreed to extend the maturity date to September 30, 2023. The terms of the note were unchanged.

On September 30, 2023, the Company and the holder of the note mutually agreed to extend the maturity date to December 31, 2023. The terms of the note were unchanged.

On December 31, 2023, the Company and the holder of the note mutually agreed to extend the maturity date to March 31, 2024. The terms of the note were unchanged.

As of December 31, 2023, the Company owed $23,894 pursuant to this agreement.

Securities Purchase Agreement - September 2023

On September 25, 2023, the Company entered into a Securities Purchase Agreement (the "Purchase Agreement") pursuant to which the Company may issue to accredited investors (the "Investors") 18% Senior Secured Convertible Promissory Notes having an aggregate principal amount of up to $5,000,000 (the "Notes") and Common Share Purchase Warrants (the "Warrant") to purchase up to 1,000,000 shares of common stock ("Common Stock") of the Company per $100,000 of principal amount of the Notes (the "Warrant Shares").

The Notes mature 18 months after issuance (the "Maturity Date"), bear interest at a rate of 18% per annum and are convertible into Common Stock (the "Conversion Shares" and, together with the Warrant Shares, the "Underlying Shares"), at the Investor's election at any time after the Maturity Date, at an initial conversion price equal to $0.10, subject to adjustment for certain stock splits, stock combinations and dilutive share issuances. The Company may prepay all, but not less than all, of the then outstanding principal amount of the Notes by paying to the Investor an amount equal to the product of (i) the sum of (a) the outstanding principal amount of the Notes, plus (b) accrued and unpaid interest hereon, plus (c) all other amounts, costs, expenses and liquidated damages due in respect of the Notes, multiplied by (ii) (x) 1.18 if the Company prepays the Notes during the first month following the original issue date and (y) if the Company prepays thereafter, 1.18 minus 0.01 for every month following the closing until the Maturity Date. The Notes contain a number of customary events of default.

The Notes constitute senior secured indebtedness of the Company, subject to a preexisting senior lien, and are guaranteed by all existing or future formed, direct and indirect, domestic subsidiaries of the Company (the "Guarantors") pursuant to a subsidiary guarantee (the "Subsidiary Guarantee") with the collateral agent for the Investor (the "Agent"). On September 25, 2023, the Company, the Investor, the Guarantors and the Agent also entered into a security agreement (the "Security Agreement") pursuant to which the Notes are secured by a lien in, and security interest upon, and a right of set-off against all of its right, title and interest of whatsoever kind and nature in and to, all assets of the Company and the Guarantors, subject to customary and mutually agreed permitted liens.

The Warrant is exercisable at an initial exercise price of $0.15 per share for a term ending on the 5-year anniversary of the date of issuance. The exercise price of the Warrant is subject to adjustment for certain stock splits, stock combinations and dilutive share issuances.

As of December 31, 2023, the Company had issued an aggregate of $1,220,000 of principal and an aggregate of 12,200,000 warrants to debt holders in connection with the Purchase Agreement.

Additionally, the placement agent for the Purchase agreement receives 7% cash and 7% warrant compensation on amounts closed on pursuant to the agreement. As of December 31, 2023, the placement agent had received an aggregate of 854,000 warrants.

For information on the debt issued under the agreement, refer to the "Convertible promissory note, Herald Investment Management Limited, 18% interest, secured, matures March 25, 2025" and "Convertible promissory note, Kings Wharf Opportunities Fund, LP, 18% interest, secured, matures March 25, 2025" sections of this note, along with the "Convertible promissory note, Mark Porter, 18% interest, secured, matures March 25, 2025" section of Note 6, Loans Payable to Related Parties.

Convertible promissory note, Herald Investment Management Limited, 18% interest, secured, matures March 25, 2025

On September 25, 2023, the Company issued to Herald Investment Management Limited a senior subordinated secured convertible promissory note in the aggregate principal amount of $700,000. The Company received cash of $669,687 and recorded a debt discount of $30,313. The interest on the outstanding principal due under the note accrues at a rate of 18% per annum. All principal and accrued but unpaid interest under the note are due on March 25, 2025. The note is convertible into shares of the Company's common stock at a fixed conversion price of $0.10 per share.

Additionally, in connection with the note, the Company issued Herald Investment Management Limited a warrant to purchase 7,000,000 shares of the Company's common stock at an exercise price of $0.15 per share. These warrants expire on September 25, 2028.

The warrants, including those issued to the placement agent, had a relative fair value of $318,523, which resulted in an additional debt discount of $318,523. The amount is also included within additional paid-in capital.

As of December 31, 2023, the Company owed $700,000 pursuant to this note and will record accretion equal to the debt discount of $282,945 over the remaining term of the note.

Convertible promissory note, Kings Wharf Opportunities Fund, LP, 18% interest, secured, matures March 25, 2025

On September 25, 2023, the Company issued to Kings Wharf Opportunities Fund, LP a senior subordinated secured convertible promissory note in the aggregate principal amount of $450,000. The Company received cash of $430,513 and recorded a debt discount of $19,487. The interest on the outstanding principal due under the note accrues at a rate of 18% per annum. All principal and accrued but unpaid interest under the note are due on March 25, 2025. The note is convertible into shares of the Company's common stock at a fixed conversion price of $0.10 per share.

Additionally, in connection with the note, the Company issued Kings Wharf Opportunities Fund, LP a warrant to purchase 4,500,000 shares of the Company's common stock at an exercise price of $0.15 per share. These warrants expire on September 25, 2028.

The warrants, including those issued to the placement agent, had a relative fair value of $204,765 which resulted in an additional debt discount of $204,765. The amount is also included within additional paid-in capital.

As of December 31, 2023, the Company owed $450,000 pursuant to this note and will record accretion equal to the debt discount of $181,894 over the remaining term of the note.

Securities Purchase Agreement - December 2023

On December 7, 2023, the Company entered into a securities purchase agreement pursuant to which the Company may issue to accredited investors (the "Investors") 12% senior promissory notes having an aggregate principal amount of up to $2,250,000, up to 4,780,000 shares of common stock as a commitment fee (the "commitment shares"), common share purchase warrants for the purchase of up to 5,400,000 shares of common stock at an initial price per share of $0.125 (the "First Warrants"), as well as common share purchase warrants for the purchase of up to 37,500,000 shares of common stock at an initial price per share of $0.001 (the "Second Warrants").

The notes have a term of one year from the date of issuance. The First Warrants have a term of five years from the date of issuance. The Second Warrants have a term of five years from the date of a triggering event as defined in the terms of the agreement.

As of December 31, 2023, the Company had issued an aggregate of $666,667 of principal, an aggregate of 1,416,295 commitment shares, an aggregate of 1,599,999 First Warrants, and an aggregate of 11,111,110 Second Warrants to debt holders in connection with the agreement. Refer to Note 20, Subsequent Events, for information on additional issuances during 2024.

For information on the debt issued under the agreement, refer to the "Convertible promissory note, Mast Hill Fund, L.P., 12% interest, unsecured, matures December 7, 2024" and "Convertible promissory note, FirstFire Global Opportunities Fund, LLC, 12% interest, unsecured, matures December 11, 2024" sections of this note.

In connection with the issuances of debt discussed below, the Company issued 211,141 First Warrants to a broker.

Convertible promissory note, Mast Hill Fund, L.P., 12% interest, unsecured, matures December 7, 2024

On December 7, 2023, the Company issued to Mast Hill Fund, L.P. a senior convertible promissory note in the aggregate principal amount of $444,445. The Company received cash of $357,000, net of legal fees of $43,000, which resulted in an original issue discount of $44,445. The interest on the outstanding principal due under the note accrues at a rate of 12% per annum. Under the terms of the agreement the Company will begin paying accrued interest on March 7, 2024 and principal on June 7, 2024, with all remaining amounts under the note due on December 7, 2024. The note is convertible into shares of the Company's common stock at a fixed conversion price of $0.10 per share.

Additionally, in connection with the note, the Company issued Mast Hill Fund, L.P. 944,197 commitment shares, 1,066,666 First Warrants with an exercise price of $0.125 which expire on December 7, 2028, and 7,407,407 Second Warrants with an exercise price of $0.001 which expire five years from the date of a triggering event as defined in the terms of the agreement.

On December 7, 2023, the Company issued 944,197 commitment shares to Mast Hill Fund, L.P. The shares had a fair value of $80,713, which resulted in an additional debt discount of $80,713.

The warrants qualified for warrant liability accounting under ASC 480 "Distinguishing Liabilities from Equity". The initial fair value of the warrants was $609,116, which resulted in an additional debt discount of $319,287 and warrant expense of $332,819, which was recorded on the consolidated statement of operations for the year ended December 31, 2023.

A total of $80,703 was recorded to additional paid-in capital in connection with the issuance of debt and warrants.

As of December 31, 2023, the Company owed $444,445 pursuant to this note and will record accretion equal to the debt discount of $407,890 over the remaining term of the note.

Convertible promissory note, FirstFire Global Opportunities Fund, LLC, 12% interest, unsecured, matures December 11, 2024

On December 11, 2023, the Company issued to FirstFire Global Opportunities Fund, LLC a senior convertible promissory note in the aggregate principal amount of $222,222. The Company received cash of $178,500, net of legal fees of $21,500, which resulted in an original issue discount of $22,222. The interest on the outstanding principal due under the note accrues at a rate of 12% per annum. Under the terms of the agreement the Company will begin paying accrued interest on March 11, 2024 and principal on June 11, 2024, with all remaining amounts under the note due on December 11, 2024. The note is convertible into shares of the Company's common stock at a fixed conversion price of $0.10 per share.

Additionally, in connection with the note, the Company issued FirstFire Global Opportunities Fund, LLC 472,098 commitment shares, 533,333 First Warrants with an exercise price of $0.125 which expire on December 11, 2028, and 3,703,703 Second Warrants with an exercise price of $0.001 which expire five years from the date of a triggering event as defined in the terms of the agreement.

On December 11, 2023, the Company issued 472,098 commitment shares to FirstFire Global Opportunities Fund, LLC. The shares had a fair value of $38,540, which resulted in an additional debt discount of $38,540.

The warrants qualified for warrant liability accounting under ASC 480 "Distinguishing Liabilities from Equity". The initial fair value of the warrants was $291,964, which resulted in an additional debt discount of $161,460 and warrant expense of $151,999, which was recorded on the consolidated statement of operations for the year ended December 31, 2023.

A total of $38,535 was recorded to additional paid-in capital in connection with the issuance of debt and warrants.

As of December 31, 2023, the Company owed $222,222 pursuant to this note and will record accretion equal to the debt discount of $206,666 over the remaining term of the note.

Convertible promissory note issued to the Mark Munro 1996 Charitable Remainder UniTrust, 9% interest, unsecured, due April 30, 2024

On December 28, 2021, the Mark Munro 1996 Charitable Remainder UniTrust, the holder of a note with a principal balance of $2,292,971 described in Note 6, Loans Payable to Related Parties, exchanged the note for a new convertible promissory note in the principal amount of $2,750,000. The note bore interest at a rate of 9% per annum and was due on September 1, 2022. The note was convertible into shares of the Company's common stock at a fixed conversion price of $0.15 per share, subject to adjustment as set forth in the note. The note called for monthly payments of $75,000 from April 2022 through August 2022, with a balloon payment of $2,375,000 due on September 1, 2022.

The embedded conversion option qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 "Derivatives and Hedging". The initial fair value of the conversion feature of $5,129,000 resulted in loss on settlement of debt of $5,129,000.

On April 11, 2022, the Mark Munro 1996 charitable Remainder Unitrust amended the terms of the Company's convertible promissory note payable. The note maturity was amended from September 30, 2022 to April 30, 2024. Payment terms were also amended, and no payments were due until October 1, 2022. All other terms of the note remained the same.

On September 30, 2022, the holder of the note agreed to defer payment due under the note to October 30, 2022. In exchange, the Company paid a fee of $5,000. Additionally, interest was to accrue at a rate of 18% per annum until the note was current on payments.

During the year ended December 31, 2022, the Company made cash payments of $300,000.

As of March 6, 2023, the Company owed $2,450,000 pursuant to this agreement.

On March 6, 2023, in connection with the divestiture of the ADEX Entities, the buyer assumed this note (refer to Note 3, Recent Subsidiary Activity, for additional detail).

As a result of this note being assumed by the buyer, the Company's other convertible debt, warrants, and stock options were no longer considered tainted in accordance with ASC 815. As a result, all remaining derivatives were extinguished as of March 6, 2023. The Company recorded a gain on extinguishment of derivatives of $1,692,232 to the consolidated financial statements for the year ended December 31, 2023.

Convertible promissory note, FJ Vulis and Associates LLC, 12% interest, secured, matures May 11, 2023

On May 11, 2022, the Company issued to FJ Vulis and Associates LLC a secured convertible redeemable note in the aggregate principal amount of $500,000. The interest on the outstanding principal due under the note accrued at a rate of 12% per annum. All principal and accrued but unpaid interest under the note were due on May 11, 2023. The note was convertible into shares of the Company's common stock at a fixed conversion price of $0.065 per share. In any event of default, or if the Company's common stock has a closing price of less than $0.013 per share, the fixed price was to be removed.

The embedded conversion option and warrant qualified for derivative accounting and the conversion option qualified for bifurcation under ASC 815-15 "Derivatives and Hedging". The initial fair value of the conversion feature of $511,000 resulted in a debt discount of $500,000 and an initial derivative expense of $11,000.

On October 28, 2022, the Company executed an agreement with FJ Vulis and Associates, LLC whereby FJ Vulis and Associates, LLC agreed to extend its option to call for payment of the principal amount and accrued interest of its convertible debenture from November 7, 2022 to December 22, 2022.

On December 22, 2022, the Company executed an agreement with FJ Vulis and Associates, LLC whereby FJ Vulis and Associates, LLC agreed to extend its option to call for payment of the principal amount and accrued interest of its convertible debenture from December 22, 2022 to February 6, 2023.

On February 6, 2023, the Company executed an agreement with FJ Vulis and Associates, LLC whereby FJ Vulis and Associates, LLC agreed to extend its option to call for payment of the principal amount and accrued interest of its convertible debenture from February 6, 2023 to March 3, 2023. In exchange, the Company agreement to pay FJ Vulis and Associates a one-time extension fee of $30,000.

As of March 6, 2023, the Company owed $500,000 pursuant to this agreement.

On March 6, 2023, in connection with the divestiture of the ADEX Entities, the buyer assumed this note (refer to Note 3, Recent Subsidiary Activity, for additional detail).

9. Factor Financing

On February 22, 2023, ADEX, a former subsidiary of the Company, entered into an amendment to its factor financing agreement, pursuant to which ADEX agreed to sell and assign and Bay View Funding agreed to buy and accept, certain accounts receivable owing to ADEX. The amendment amended the agreement to include the Company's HWN and SVC subsidiaries. Under the terms of the Amendment, upon the receipt and acceptance of each assignment of accounts receivable, Bay View Funding will pay ADEX, HWN and SVC, individually and together, ninety percent (90%) of the face value of the assigned accounts receivable, up to maximum total borrowings of $9,000,000 outstanding at any point in time. ADEX, HWN and SVC additionally granted Bay View Funding a continuing security interest in, and lien upon, all accounts receivable, inventory, fixed assets, general intangibles, and other assets.

Under the factoring agreement, HWN and SVC may borrow up to the lesser of $4,000,000 or an amount equal to the sum of all undisputed purchased receivables multiplied by the advance percentage, less any funds in reserve. HWN and SVC will pay to Bay View Funding a factoring fee upon purchase of receivables by Bay View Funding equal to 0.45% of the gross face value of the purchased receivable for the first 30 day period from the date said purchased receivable is first purchased by Bay View Funding, and a factoring fee of 0.25% per 15 days thereafter until the date said purchased receivable is paid in full or otherwise repurchased by HWN and SVC or otherwise written off by Bay View Funding within the write off period. HWN and SVC will also pay a finance fee to Bay View Funding on the outstanding advances under the agreement at a floating rate per annum equal to the Prime Rate plus 1.75%. The finance rate will increase or decrease monthly, on the first day of each month, by the amount of any increase or decrease in the Prime Rate, but at no time will the finance fee be less than 9.25%.

The Company used proceeds from the amended agreement to pay the remaining principal on the promissory note outstanding to Cornerstone National Bank & Trust discussed in Note 7, Loans Payable.

On March 6, 2023, in connection with the divestiture of the ADEX Entities, the amounts owed and related to ADEX accounts receivable were assumed by the buyer (refer to Note 3, Recent Subsidiary Activity, for additional detail).

During the year ended December 31, 2023, the Company paid $210,375 in factoring fees. These amounts are included within general and administrative expenses on the consolidated statement of operations.

During the year ended December 31, 2023, the Company received an aggregate of $12,885,071 and repaid an aggregate of $11,523,415.

The Company owed $1,361,656 under the agreement as of December 31, 2023.

10. Derivative Liabilities

On June 15, 2021, in connection with the 2021 merger transaction, the Company assumed High Wire's derivative liabilities. As of June 15, 2021, the derivative liabilities balance of $7,496,482 was comprised of $6,929,000 of derivatives related to High Wire's convertible debentures, and $567,482 of derivatives related to High Wire's share purchase warrants and stock options. Not all of the Company's stock options qualified for derivative treatment.

The embedded conversion options of the convertible debentures described in Note 8, Convertible Debentures, which were assumed as part of the merger transaction, contain conversion features that qualified for embedded derivative classification. The fair value of the liability was re-measured at the end of every reporting period and the change in fair value was reported in the statement of operations as a gain or loss on change in fair value of derivatives. Derivative liabilities also included the fair value of the Company's share purchase warrants and stock options discussed in Note 14, Share Purchase Warrants and Stock Options. As a result of the divesture of the ADEX Entities discussed in Note 3, Recent Subsidiary Activity, the Company no longer had any derivative liabilities as of December 31, 2023 (refer to Note 8, Convertible debentures, for additional detail). As of December 31, 2022, the derivative liabilities balance of $8,044,931 was comprised of $6,141,282 of derivatives related to the Company's convertible debentures, and $1,903,649 of derivatives related to the Company's share purchase warrants and stock options.

The table below sets forth a summary of changes in the fair value of the Company's Level 3 derivative liabilities for the year ended December 31, 2023:

		December 31,
		2023
Balance at the beginning of the period		$	8,044,931
Change in fair value of embedded conversion option			(3,140,404	)
Divestiture of the ADEX Entities			(3,212,295	)
Extinguishment of derivatives			(1,692,232	)
Balance at the end of the period			-

*	The current and long-term breakout of derivatives liabilities is based on the current and long-term breakout of the associated convertible debentures.

The Company uses Level 3 inputs for its valuation methodology for the embedded conversion option liabilities as their fair values were determined by using Monte-Carlo model based on various assumptions.

Significant changes in any of these inputs in isolation would result in a significant change in the fair value measurement. As required, these are classified based on the lowest level of input that is significant to the fair value measurement. The following table shows the assumptions used in the calculations:

		Expected volatility			Risk-free interest rate			Expected dividend yield			Expected life (in years)
At December 31, 2022			122 - 269%			3.99 - 4.73%			0%			0.25 - 4.88

11. Warrant Liabilities

Certain of the warrants related to the convertible debentures described in Note 8, Convertible Debentures, qualify for liability classification under ASC 480, "Distinguishing Liabilities from Equity". The fair value of the warrant liabilities was measured upon issuance and is re-measured at the end of every reporting period, with the change in fair value reported in the consolidated statement of operations as a gain or loss on change in fair value of warrant liabilities.

The table below sets forth a summary of changes in the fair value of the Company's Level 3 warrant liabilities for the year ended December 31, 2023:

		December 31,
		2023
Balance at the beginning of the period		$	-
Issuance of warrants			901,080
Change in fair value of warrant liabilities			(67,465	)
Balance at the end of the period			833,615

*	The current and long-term breakout of warrant liabilities is based on the current and long-term breakout of the associated convertible debentures.

The Company uses Level 3 inputs for its valuation methodology for the warrant liabilities as their fair values were determined by using Monte-Carlo model based on various assumptions.

Significant changes in any of these inputs in isolation would result in a significant change in the fair value measurement. As required, these are classified based on the lowest level of input that is significant to the fair value measurement. The following table shows the assumptions used in the calculations:

		Expected volatility			Risk-free interest rate			Expected dividend yield			Expected life (in years)
At December 31, 2023			221 - 222%			4.11 - 4.25%			0%		4.94 - 4.95

12. Common Stock

Authorized shares

The Company has 1,000,000,000 common shares authorized with a par value of $0.00001.

Share issuances

Issuance of Shares Pursuant to Conversion of Series A Preferred Stock

On January 5, 2023, the Company issued 3,750,000 shares of common stock to Dominion Capital upon the conversion of 300,000 shares of Series A preferred stock with a stated value of $1 per share. The shares had a carrying value of $722,098. Subsequent to the conversion, there were 0 remaining shares of Series A preferred stock outstanding.

Issuance of Shares Pursuant to Conversion of Series D Preferred Stock

On February 7, 2022, the Company issued 1,136,364 shares of common stock to SCS, LLC upon the conversion of 25 shares of Series D preferred stock with a stated value of $10,000 per share. The shares had a fair value of $258,080, which was the carrying value of the Series D preferred converted.

On October 11, 2022, the Company issued 1,179,245 shares of common stock to FJ Vulis and Associates, LLC upon the conversion of 25 shares of Series D preferred stock with a stated value of $10,000 per share. The shares had a fair value of $258,080, which was the carrying value of the Series D preferred converted.

On January 20, 2023, the Company issued 6,511,628 shares of common stock to Cobra Equities SPV, LLC upon the conversion of 140 shares of Series D preferred stock with a stated value of $10,000 per share. The shares had a fair value of $1,445,220, which was the carrying value of the Series D preferred converted.

On May 24, 2023, the Company issued 8,295,455 shares of common stock to the Mark E Munro Charitable Remainder Unitrust 1996 upon the conversion of 182.5 shares of Series D preferred stock with a stated value of $10,000 per share. The shares had a fair value of $1,499,819, which was the carrying value of the Series D preferred converted.

Issuance of Shares Pursuant to Conversion of Series E Preferred Stock

On December 5, 2022, the Company issued 5,658,250 shares of common stock to a holder upon the conversion of 124.4815 shares of Series E preferred stock with a stated value of $10,000 per share. The shares had a fair value of $1,209,159, which was the carrying value of the Series E preferred converted.

On June 5, 2023, the Company issued 681,818 shares of common stock to Oscar Steiner upon the conversion of 15 shares of Series E preferred stock with a stated value of $10,000 per share. The shares had a fair value of $235,224, which was the carrying value of the Series E preferred converted.

Issuance of shares pursuant to consulting agreements

On February 20, 2023, the Company issued 800,000 shares of common stock to Ocean Street Partners in connection with a consulting agreement. The shares had a fair value of $69,200.

On February 20, 2023, the Company issued 2,000,000 shares of common stock to Capital Market Access LLC in connection with a consulting agreement. The shares had a fair value of $173,000. Additionally, the Company issued to Capital Market Access LLC options to purchase 600,000 shares of its common stock with an exercise price of $0.30. These options vest equally every three months from the date of grant.

On October 11, 2023, the Company issued 400,000 shares of common stock to Capital Market Access LLC for performance-based compensation in connection with services provided under a consulting agreement. The shares had a fair value of $32,360.

On December 13, 2023, the Company issued 200,000 shares of common stock to Capital Market Access LLC for performance-based compensation in connection with services provided under a consulting agreement. The shares had a fair value of $16,000.

Securities Purchase Agreement

On November 18, 2022, the Company entered into a Securities Purchase Agreement with several accredited investors (the "Investors") for the offering, sale, and issuance (the "Offering") by the Company of an aggregate of 133,333,333 shares of its common stock at a price per share of $0.075. Maximum gross proceeds in the offering are $10,000,000. The shares issued to Investors are subject to Subscription Agreements in connection with the Offering. Additionally, for any shares purchased under the Securities Purchase Agreement, the Company is required to deposit a number of shares into escrow equal to 10% of the shares purchased. This 10% of shares is related to the Agreement's Uplisting of Common Stock provision, which requires the Company to use its reasonable best efforts to apply for uplisting to the New York Stock Exchange or The Nasdaq Capital Market by April 15, 2023.

The Company has used and intends to continue to use the proceeds from the Offering to retire outstanding convertible debt, for working capital, and other general corporate purposes.

The shares issued in the Offering have not been registered under the Securities Act and are instead being offered pursuant to the exemption provided in Section 4(a)(2) thereof and/or Rule 506(b) of Regulation D promulgated thereunder, based on the Investors being "accredited investors" within the meaning of said Regulation D.

The shares issued as part of the Offering are subject to Lockup Leak-out Agreements, under which the Investors are unable to transfer or sell their shares within six months of the closing date (the "lockup period"). After that date, the Investors can sell up to 10% of their shares every 30-day period for the subsequent six months (the "leak-out" period). These sales cannot represent more than 10% of the daily trading volume of the Company's common stock. After the first anniversary of the Securities Purchase Agreement there are no further restrictions.

As of December 31, 2023, the Company had received an aggregate of $9,700,000 as part of the Offering (see below for a breakout of the current and prior year issuances).

Issuances of shares pursuant to a Securities Purchase Agreement

On November 17, 2022, the Company issued an aggregate of 80,000,000 shares of common stock to Investors in exchange for aggregate cash proceeds of $5,950,000 pursuant to a Securities Purchase Agreement. The Company deposited an additional 800,000 shares into escrow. The aggregate fair value of these shares was $8,976,000.

On December 15, 2022, the Company issued an aggregate of 2,666,667 shares of common stock to Investors in exchange for aggregate cash proceeds of $200,000 pursuant to a Securities Purchase Agreement. The Company deposited an additional 266,667 shares into escrow. The aggregate fair value of these shares was $375,467.

On December 30, 2022, the Company issued an aggregate of 666,667 shares of common stock to Investors in exchange for aggregate cash proceeds of $50,000 pursuant to a Securities Purchase Agreement. The Company deposited an additional 66,667 shares into escrow. The aggregate fair value of these shares was $93,867.

On January 6, 2023, the Company issued an aggregate of 8,666,667 shares of common stock to Investors in exchange for aggregate cash proceeds of $650,000 pursuant to a Securities Purchase Agreement. The Company deposited an additional 866,667 shares into escrow.

On January 17, 2023, the Company issued an aggregate of 10,000,000 shares of common stock to Investors in exchange for aggregate cash proceeds of $750,000 pursuant to a Securities Purchase Agreement. The Company deposited an additional 1,000,000 shares into escrow.

On February 3, 2023, the Company issued an aggregate of 2,666,667 shares of common stock to Investors in exchange for aggregate cash proceeds of $200,000 pursuant to a Securities Purchase Agreement. The Company deposited an additional 266,667 shares into escrow.

On March 17, 2023, the Company issued an aggregate of 3,333,333 shares of common stock to Investors in exchange for aggregate cash proceeds of $250,000 pursuant to a Securities Purchase Agreement. The Company deposited an additional 333,333 shares into escrow.

On March 22, 2023, the Company issued an aggregate of 16,000,000 shares of common stock to Investors in exchange for aggregate cash proceeds of $1,200,000 pursuant to a Securities Purchase Agreement. The Company deposited an additional 1,600,000 shares into escrow.

On March 23, 2023, the Company issued an aggregate of 5,000,000 shares of common stock to Investors in exchange for aggregate cash proceeds of $375,000 pursuant to a Securities Purchase Agreement. The Company deposited an additional 500,000 shares into escrow.

On April 21, 2023, the Company issued an aggregate of 1,000,000 shares of common stock to Investors in exchange for aggregate cash proceeds of $75,000 pursuant to a Securities Purchase Agreement. The Company deposited an additional 100,000 shares into escrow.

Issuance of shares pursuant to a Cobra Equities SPV, LLC convertible debenture

On January 11, 2022, the Company issued 1,261,818 shares of common stock to Cobra Equities SPV, LLC upon the conversion of $33,600 of principal and $1,100 of accrued interest pursuant to a convertible debenture described in Note 8, Convertible Debentures. The shares had a fair value of $258,420.

On February 22, 2022, the Company issued 1,160,000 shares of common stock to Cobra Equities SPV, LLC upon the conversion of $31,900 of principal pursuant to a convertible debenture described in Note 8, Convertible Debentures. The shares had a fair value of $237,800.

On March 16, 2022, the Company issued an aggregate of 1,679,322 shares of common stock to Cobra Equities SPV, LLC upon the conversion of an aggregate of $45,000 of principal and $1,181 of accrued interest pursuant to convertible debentures described in Note 8, Convertible Debentures. The shares had an aggregate fair value of $319,071.

On April 4, 2022, the Company issued 1,515,152 shares of common stock to Cobra Equities SPV, LLC upon the conversion of $150,000 of principal pursuant to a convertible debenture described in Note 8, Convertible Debentures. The shares had a fair value of $287,879.

On May 19, 2022, the Company issued 1,948,308 shares of common stock to Cobra Equities SPV, LLC upon the conversion of $50,227 of principal and $20,000 of accrued interest pursuant to a convertible debenture described in Note 8, Convertible Debentures. The shares had a fair value of $214,704.

On July 5, 2022, the Company issued 1,350,763 shares of common stock to Cobra Equities SPV, LLC upon the conversion of $29,000 of principal and $2,000 of accrued interest pursuant to a convertible debenture described in Note 8, Convertible Debentures. The shares had a fair value of $85,098.

On July 29, 2022, the Company issued 1,107,367 shares of common stock to Cobra Equities SPV, LLC upon the conversion of $25,000 of principal and $613 of accrued interest pursuant to a convertible debenture described in Note 8, Convertible Debentures. The shares had a fair value of $161,676.

On September 6, 2022, the Company issued 1,392,663 shares of common stock to Cobra Equities SPV, LLC upon the conversion of $28,547 of principal and $36,295 of accrued interest pursuant to a convertible debenture described in Note 8, Convertible Debentures. The shares had a fair value of $107,235.

On September 21, 2022, the Company issued 1,200,000 shares of common stock to Cobra Equities SPV, LLC upon the conversion of $60,000 of accrued interest pursuant to a convertible debenture described in Note 8, Convertible Debentures. The shares had a fair value of $116,640.

On November 11, 2022, the Company issued 2,000,000 shares of common stock to Cobra Equities SPV, LLC upon the conversion of $60,000 of principal and $40,000 of accrued interest pursuant to a convertible debenture described in Note 8, Convertible Debentures. The shares had a fair value of $200,000.

Issuance of shares pursuant to a related party convertible debenture

On April 27, 2022, the Company issued 2,416,667 shares of common stock to Keith Hayter upon the conversion of $145,000 of principal pursuant to a convertible loan payable to a related party described in Note 6, Related Parties. The shares had a fair value of $362,258, resulting in a loss on debt conversion of $217,258.

On December 5, 2022, the Company issued 1,666,667 shares of common stock to Keith Hayter upon the conversion of $100,000 of principal pursuant to a convertible loan payable to a related party described in Note 6, Related Parties. The shares had a fair value of $203,667, resulting in a loss on debt conversion of $103,667.

13. Preferred Stock

On June 15, 2021, in connection with the 2021 merger transaction, the Company assumed High Wire's Series A preferred stock obligations. Additionally, the holders of High Wire's Series B preferred stock transferred their shares to the Company's Chief Executive Officer. Lastly, a new class of preferred stock, Series D, was designated and issued. At the time of the merger transaction, the fair value of the Series A and Series B preferred stock was $1,024,000 and $0, respectively. The fair value of the Series D preferred stock which was received in the exchange was $1,271,000, which was recorded as additional paid in capital.

See below for a description of each of the Company's outstanding classes of preferred stock, including historical and current information.

Series A

On November 15, 2017, High Wire created one series of the 20,000,000 preferred shares it is authorized to issue, consisting of 8,000,000 shares, to be designated as Series A preferred stock.

On October 29, 2018, High Wire made the first amendment to the Certificate of Designation of its Series A convertible preferred stock. This amendment updated the conversion price to be equal to the greater of 75% of the lowest VWAP during the ten trading day period immediately preceding the date a conversion notice is delivered or $120.00, subject to adjustment for any subdivision or combination of the Company's outstanding shares of common stock.

On August 16, 2019, High Wire made the second amendment to the Certificate of Designation of its Series A convertible preferred stock. As a result of this amendment, the Company recorded a deemed dividend in accordance with ASC 260-10-599-2.

On April 8, 2020, High Wire made the third amendment to the Certificate of Designation of its Series A preferred stock which lowered the fixed conversion price and the conversion price floor to $3.00 per share.

On June 18, 2020, High Wire made the fourth amendment to the Certificate of Designation of its Series A preferred stock, which lowered the fixed conversion price to $0.20 per share and the conversion price floor to $0.01 per share.

On January 27, 2021, High Wire made the fifth amendment to the Certificate of Designation of its Series A preferred stock which lowered the fixed conversion price to $0.0975 per share. High Wire accounted for the amendment as an extinguishment and recorded a deemed dividend in accordance with ASC 260-10-599-2.

On December 30, 2022, High Wire made the sixth amendment to the Certificate of Designation of its Series A preferred stock which lowered the fixed conversion price to $0.08 per share in exchange for the remaining holder forfeiting their 5,400,000 outstanding share purchase warrants.

Subsequent to the sixth amendment, the principal terms of the Series A preferred stock shares are as follows:

Voting rights - The Series A preferred stock shares do not have voting rights.

Dividend rights - The holders of the Series A preferred stock shares shall not be entitled to receive any dividends. No dividends (other than those payable solely in common stock) shall be paid on the common stock or any class or series of capital stock ranking junior, as to dividends, to the Series A preferred stock shares during any fiscal year of the Company until there shall have been paid or declared and set apart during that fiscal year for the holders of the Series A preferred stock shares a dividend in an amount per share equal to (i) the number of shares of common stock issuable upon conversion of the Series A preferred stock times (ii) the amount per share of the dividend to be paid on the common stock.

Conversion rights - The holders of the Series A preferred stock shares have the right to convert each Series A preferred stock share and all accrued and unpaid dividends thereon shall be convertible at the option of the holder thereof, at any time after the issuance of such share into fully paid and nonassessable shares of common stock of the Company. The number of shares of common stock into which each share of the Series A preferred stock shares may be converted shall be determined by dividing the sum of the stated value of the Series A preferred stock shares ($1.00 per share) being converted and any accrued and unpaid dividends by the conversion price in effect at the time of the conversion. The Series A preferred stock shares may be converted at a fixed conversion price of $0.08, subject to adjustment for any subdivision or combination of the Company's outstanding shares of common stock. The conversion price has a floor of $0.01 per share.

Liquidation rights - Upon the occurrence of any liquidation, each holder of Series A preferred stock shares then outstanding shall be entitled to receive, out of the assets of the Company available for distribution to its stockholders, before any payment shall be made in respect of the common stock, or other series of preferred stock then in existence that is outstanding and junior to the Series A preferred stock shares upon liquidation, an amount per share of Series A preferred stock shares equal to the amount that would be receivable if the Series A preferred stock shares had been converted into common stock immediately prior to such liquidation distribution, plus, accrued and unpaid dividends.

On June 24, 2021, the Company issued 985,651 shares of common stock to Dominion Capital upon the conversion of 96,101 shares of Series A preferred stock with a stated value of $1 per share. The shares had a fair value of $209,016, which was the carrying value of the Series A preferred converted.

On August 12, 2021, the Company issued 1,025,641 shares of common stock to Dominion Capital upon the conversion of 100,000 shares of Series A preferred stock with a stated value of $1 per share. The shares had a fair value of $206,410, which was the carrying value of the Series A preferred converted.

In accordance with ASC 480 Distinguishing Liabilities from Equity, the Company has classified the Series A preferred stock shares as temporary equity or "mezzanine."

On January 5, 2023, Dominion Capital converted the remaining 300,000 shares of the Company's Series A preferred stock into shares of the Company's common stock (refer to Note 12, Common Stock, for additional detail).

Series B

On April 16, 2018, High Wire designated 1,000 shares of Series B preferred stock with a stated value of $3,500 per share. The Series B preferred stock is neither redeemable nor convertible into common stock. The principal terms of the Series B preferred stock shares are as follows:

Issue Price - The stated price for the Series B preferred stock shares shall be $3,500 per share.

Redemption - The Series B preferred stock shares are not redeemable.

Dividends - The holders of the Series B preferred stock shares shall not be entitled to receive any dividends.

Preference of Liquidation - The Corporation's Series A preferred stock (the "Senior Preferred Stock) shall have a liquidation preference senior to the Series B preferred stock. Upon any fundamental transaction, liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the holders of the shares of the Series B preferred stock shares shall be entitled, after any distribution or payment is made upon any shares of capital stock of the Company having a liquidation preference senior to the Series B preferred stock shares, including the Senior Preferred Stock, but before any distribution or payment is made upon any shares of common stock or other capital stock of the Company having a liquidation preference junior to the Series B preferred stock shares, to be paid in cash the sum of $3,500 per share. If upon such liquidation, dissolution or winding up, the assets to be distributed among the Series B preferred stock holders and all other shares of capital stock of the Company having the same liquidation preference as the Series B preferred stock shall be insufficient to permit payment to said holders of such amounts, then all of the assets of the Company then remaining shall be distributed ratably among the Series B preferred stock holders and such other capital stock of the Company having the same liquidation preference as the Series B preferred stock, if any. Upon any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, after provision is made for Series B preferred stock holders and all other shares of capital stock of the Company having the same liquidation preference as the Series B preferred stock, if any, then-outstanding as provided above, the holders of common stock and other capital stock of the Company having a liquidation preference junior to the Series B preferred stock shall be entitled to receive ratably all remaining assets of the Company to be distributed.

Voting - The holders of shares of Series B preferred stock shall be voted together with the shares of common stock such that the aggregate voting power of the Series B preferred stock is equal to 51% of the total voting power of the Company.

Conversion - There are no conversion rights.

In accordance with ASC 480 Distinguishing Liabilities from Equity, the Company has classified the Series B preferred stock shares as temporary equity or "mezzanine."

Series D

On June 14, 2021, High Wire designated 1,590 shares of Series D preferred stock with a stated value of $10,000 per share. The Series D preferred stock is not redeemable.

On December 13, 2021, the Company made the first amendment to the Certificate of Designation of its Series D preferred stock which changed the conversion right. As a result of this amendment, the Company recorded a deemed dividend of $5,852,000 for the year ended December 31, 2021 in accordance with ASC 260-10-599-2.

Subsequent to the first amendment, the principal terms of the Series D preferred stock shares are as follows:

Issue Price - The stated price for the Series D preferred stock shares shall be $10,000 per share.

Redemption - The Series D preferred stock shares are not redeemable.

Dividends - The holders of the Series D preferred stock shares shall not be entitled to receive any dividends.

Preference of Liquidation - Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a "Liquidation"), the Holders shall (i) first be entitled to receive out of the assets, whether capital or surplus, of the Corporation an amount equal to $10,000 for each share of Series D before any distribution or payment shall be made to the holders of any other securities of the Corporation and (ii) then be entitled to receive out of the assets, whether capital or surplus, of the Corporation the same amount that a holder of Common Stock would receive if the Series D were fully converted (disregarding for such purposes any conversion limitations hereunder) to Common Stock which amounts shall be paid pari passu with all holders of Common Stock. The Corporation shall mail written notice of any such Liquidation, not less than 45 days prior to the payment date stated therein, to each Holder.

Voting - Except as otherwise provided in the agreement or as required by law, the Series D shall be voted together with the shares of common stock, par value $0.00001 per share of the Corporation ("Common Stock"), and any other series of preferred stock then outstanding that have voting rights, and except as provided in Section 7, not as a separate class, at any annual or special meeting of stockholders of the Corporation, with respect to any question or matter upon which the holders of Common Stock have the right to vote, such that the voting power of each share of Series D is equal to the voting power of the shares of Common Stock that each such share of Series D would be convertible into pursuant to Section 6 if the Series D Conversion Date was the date of the vote. The Series D shall be entitled to notice of any stockholders' meeting in accordance with the Bylaws of the Corporation and may act by written consent in the same manner as the holders of Common Stock of the Corporation.

Conversion - Beginning ninety (90) days from the date of issuance, all or a portion of the Series D may be converted into Common Stock at the greater of the Fixed Price and the Average Price (as defined below). On the business day immediately preceding the listing of the Common Stock on a national securities exchange (the "Automatic Series D Conversion Date"), without any further action, all shares of Series D shall automatically convert into shares of Common Stock at the Fixed Price, which is defined as the closing price of the Common Stock on the trading day immediately preceding the date of issuance of the Series D ( subject to adjustment for any reverse or forward split of the Common Stock). The Series D shares were issued on June 16, 2021, and the closing price of the Company's common stock was $0.225 on June 15, 2021. The Average Price is defined as the average closing price of the Company's common stock for the 10 trading days immediately preceding, but not including, the conversion date.

Vote to Change the Terms of or Issuance of Series D - The affirmative vote at a meeting duly called for such purpose, or written consent without a meeting, of the holders of not less than fifty-one (51%) of the then outstanding shares of Series D shall be required for any change to the Certificate of Designation, Preferences, Rights and Other Rights of the Series D.

On October 20, 2021, Keith Hayter assigned 140 shares of Series D preferred stock to Cobra Equities SPV, LLC.

On December 16, 2021, the Company issued 2,045,454 shares of common stock to SCS, LLC upon the conversion of 45 shares of Series D preferred stock with a stated value of $10,000 per share. The shares had a fair value of $464,543, which was the carrying value of the Series D preferred converted.

On February 7, 2022, the Company issued 1,136,364 shares of common stock to SCS, LLC upon the conversion of 25 shares of Series D preferred stock with a stated value of $10,000 per share. The shares had a fair value of $258,080, which was the carrying value of the Series D preferred converted.

On October 11, 2022, Mark Porter assigned 25 shares of Series D preferred stock to FJ Vulis and Associates, LLC.

On October 11, 2022, the Company issued 1,179,245 shares of common stock to FJ Vulis and Associates, LLC upon the conversion of 25 shares of Series D preferred stock with a stated value of $10,000 per share. The shares had a fair value of $258,080, which was the carrying value of the Series D preferred converted.

On December 23, 2022, the Company issued an additional 810 shares of its Series D preferred stock. As a result of this issuance, the Company recorded stock compensation of $5,498,845 to the consolidated statement of operations for the year ended December 31, 2022.

On January 20, 2023, the Company issued 6,511,628 shares of common stock to Cobra Equities SPV, LLC upon the conversion of 140 shares of Series D preferred stock with a stated value of $10,000 per share. The shares had a fair value of $1,445,220, which was the carrying value of the Series D preferred converted.

On March 6, 2023, in connection with the divestiture of the ADEX Entities, 140 shares of Series D preferred stock were canceled (refer to Note 3, Recent Subsidiary Activity, for additional detail).

On May 24, 2023, the Company issued 8,295,455 shares of common stock to the Mark E Munro Charitable Remainder Unitrust 1996 upon the conversion of 182.5 shares of Series D preferred stock with a stated value of $10,000 per share. The shares had a fair value of $1,499,819, which was the carrying value of the Series D preferred converted.

In accordance with ASC 480 Distinguishing Liabilities from Equity, the Company had classified the Series D preferred stock shares as temporary equity or "mezzanine." As a result of the Company no longer having instruments which require derivative accounting, the Series D preferred stock was reclassified to permanent equity as of March 6, 2023 at its carrying value of $9,245,462.

As of December 31, 2023, the carrying value of the Series D Preferred Stock was $7,745,643. This amount is recorded within equity on the consolidated balance sheet.

Series E

On December 20, 2021, the Company designated 650 shares of Series E preferred stock with a stated value of $10,000 per share. The Series E preferred stock is not redeemable.

The principal terms of the Series E preferred stock shares are as follows:

Issue Price - The stated price for the Series E preferred stock shares shall be $10,000 per share.

Redemption - The Series E preferred stock shares are not redeemable.

Dividends - The holders of the Series E preferred stock shares shall not be entitled to receive any dividends.

Preference of Liquidation - Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a "Liquidation"), the Holders shall (i) first be entitled to receive out of the assets, whether capital or surplus, of the Corporation an amount equal to $10,000 for each share of Series E before any distribution or payment shall be made to the holders of any other securities of the Corporation and (ii) then be entitled to receive out of the assets, whether capital or surplus, of the Corporation the same amount that a holder of Common Stock would receive if the Series E were fully converted (disregarding for such purposes any conversion limitations hereunder) to Common Stock which amounts shall be paid pari passu with all holders of Common Stock. The Corporation shall mail written notice of any such Liquidation, not less than 45 days prior to the payment date stated therein, to each Holder.

Voting - Except as otherwise provided herein or as required by law, the Series E shall be voted together with the shares of common stock, par value $0.00001 per share of the Corporation ("Common Stock"), and any other series of preferred stock then outstanding that have voting rights, and except as provided in Section 7, below, not as a separate class, at any annual or special meeting of stockholders of the Corporation, with respect to any question or matter upon which the holders of Common Stock have the right to vote, such that the voting power of each share of Series E is equal to the voting power of the shares of Common Stock that each such share of Series E would be convertible into pursuant to Section 6 if the Series E Conversion Date was the date of the vote. The Series E shall be entitled to notice of any stockholders' meeting in accordance with the Bylaws of the Corporation and may act by written consent in the same manner as the holders of Common Stock of the Corporation.

Conversion - Beginning ninety (90) days from the date of issuance, all or a portion of the Series E may be converted into Common Stock at the Fixed Price (as defined below). On the business day immediately preceding the listing of the Common Stock on a national securities exchange (the "Automatic Series E Conversion Date"), without any further action, all shares of Series E shall automatically convert into shares of Common Stock at the Fixed Price. "Fixed Price" shall be defined as the closing price of the Common Stock on the trading day immediately preceding the date of issuance of the Series E (subject to adjustment for any reverse or forward split of the Common Stock or similar occurrence). The Series E shares were issued on December 30, 2021, and the closing price of the Company's common stock was $0.23075 on December 29, 2021.

Vote to Change the Terms of or Issuance of Series E - The affirmative vote at a meeting duly called for such purpose, or written consent without a meeting, of the holders of not less than fifty-one (51%) of the then outstanding shares of Series E shall be required for any change to the Certificate of Designation, Preferences, Rights and Other Rights of the Series E.

On December 5, 2022, the Company issued 5,658,250 shares of common stock to a holder upon the conversion of 124.4815 shares of Series E preferred stock with a stated value of $10,000 per share. The shares had a fair value of $1,209,159, which was the carrying value of the Series E preferred converted.

On April 17, 2023, 200 shares of Series E preferred stock were canceled in connection with conditions for an earnout related to the acquisition of SVC not being met.

On June 5, 2023, the Company issued 681,818 shares of common stock to Oscar Steiner upon the conversion of 15 shares of Series E preferred stock with a stated value of $10,000 per share. The shares had a fair value of $235,224, which was the carrying value of the Series E preferred converted.

In accordance with ASC 480 Distinguishing Liabilities from Equity, the Company had classified the Series E preferred stock shares as temporary equity or "mezzanine." As a result of the Company no longer having instruments which require derivative accounting, the Series E preferred stock was reclassified to permanent equity as of March 6, 2023 at its carrying value of $5,104,658.

As of December 31, 2023, the carrying value of the Series E Preferred Stock was $4,869,434. This amount is recorded within equity on the consolidated balance sheet.

14. Share Purchase Warrants and Stock Options

On June 15, 2021, in connection with the 2021 merger transaction, the Company assumed High Wire's share purchase warrants and stock options. As of June 15, 2021, the total fair value of High Wire's share purchase warrants and stock options was $567,402.

As a result of the divesture of the ADEX Entities discussed in Note 3, Disposal of Subsidiary, the Company no longer had any derivative liabilities as of December 31, 2023 (refer to Note 8, Convertible debentures, for additional detail), and the Company's outstanding share purchase warrants and stock options no longer qualified for fair value measurement as of the divestiture date. In connection with the issuance of new convertible debentures during December 2023, the associated warrants qualified for liability classification. The fair value of these warrants was $833,615 as of December 31, 2023. This amount is included in warrant liabilities on the consolidated balance sheet. The weighted-average remaining life on the share purchase warrants as of December 31, 2023 was 3.1 years. The weighted-average remaining life on the stock options as of December 31, 2023 was 3.6 years. With the exception of those issued during February 2021 and June 2021, the stock options outstanding at December 31, 2023 were subject to vesting terms.

The following table summarizes the activity of share purchase warrants for the period of December 31, 2022 through December 31, 2023:

		Number of warrants			Weighted average exercise price			Intrinsic value
Balance at December 31, 2022			13,100,000			$	0.11			$	-
Granted			25,976,249				0.08				805,185
Exercised			-				-
Expired/forfeited			-				-
Outstanding at December 31, 2023			39,076,249			$	0.09			$	738,889
Exercisable at December 31, 2023			27,965,139			$	0.13			$	-

As of December 31, 2023, the following share purchase warrants were outstanding:

Number of warrants			Exercise price			Issuance Date		Expiry date		Remaining life
	200,000				0.25			12/14/2021		12/14/2024			0.96
	400,000				0.25			12/14/2021		12/14/2024			0.96
	12,500,000				0.10			11/18/2022		11/18/2027			3.88
	7,000,000				0.15			9/25/2023		9/25/2028			4.74
	4,500,000				0.15			9/25/2023		9/25/2028			4.74
	700,000				0.15			9/25/2023		9/25/2028			4.74
	854,000				0.15			9/25/2023		9/25/2028			4.74
	1,066,666				0.125			12/7/2023		12/7/2028			4.94
	7,407,407				0.001			12/7/2023		*			*
	140,760				0.125			12/7/2023		12/7/2028			4.94
	533,333				0.125			12/11/2023		12/11/2028			4.95
	3,703,703				0.001			12/11/2023		*			*
	70,380				0.125			12/11/2023		12/11/2028			4.95
	39,076,249

*	These warrants expire five years from the date of a triggering event as defined in the terms of the agreements discussed in Note 8, Convertible Debentures.

The following table summarizes the activity of stock options for the period of December 31, 2022 through December 31, 2023:

		Number of stock options			Weighted average exercise price			Intrinsic value
Balance at December 31, 2022			12,034,280			$	0.26			$	89,238
Issued			15,717,289				0.11
Exercised			-				-
Cancelled/expired/forfeited			(1,236,952	)			0.12
Outstanding at December 31, 2023			26,514,617			$	0.18			$	-
Exercisable at December 31, 2023			18,479,733			$	0.21			$	-

As of December 31, 2023, the following stock options were outstanding:

Number of stock options			Exercise price			Issuance Date		Expiry date		Remaining Life
	961,330				0.58			2/23/2021		2/23/2026			2.15
	3,318,584				0.25			6/16/2021		6/16/2026			2.46
	100,603				0.25			8/11/2021		8/11/2026			2.61
	5,767,429				0.25			8/18/2021		8/18/2026			2.63
	185,254				0.54			11/3/2021		11/3/2026			2.84
	120,128				0.19			3/21/2022		3/21/2027			3.22
	95,238				0.11			5/16/2022		5/16/2027			3.38
	1,205,714				0.09			9/28/2022		9/28/2027			3.75
	894,737				0.10			2/8/2023		2/8/2028			4.11
	600,000				0.30			2/8/2023		2/8/2026			2.11
	1,552,174				0.12			2/27/2023		2/27/2028			4.16
	8,022,000				0.11			5/17/2023		5/17/2028			4.38
	1,047,131				0.11			5/30/2023		5/30/2028			4.42
	1,014,577				0.12			7/18/2023		7/18/2028			4.55
	1,104,604				0.07			10/24/2023		10/24/2028			4.82
	525,114				0.07			12/31/2023		12/31/2028			5.00
	26,514,617

The remaining stock-based compensation expense on unvested stock options was $448,067 as of December 31, 2023. The stock options granted during 2023 were to employees, officers, and directors.

15. Leases

The Company leases certain office space and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The depreciable lives of operating lease assets and leasehold improvements are limited by the expected lease term. The Company's leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities.

The following table sets forth the operating lease right of use ("ROU") assets and liabilities as of December 31, 2023 and 2022:

		December 31,			December 31,
		2023			2022
Operating lease assets		$	277,995			$	57,408
Operating lease liabilities:
Current operating lease liabilities			89,318				74,266
Long term operating lease liabilities			190,989				-
Total operating lease liabilities		$	280,307			$	74,266

Expense related to leases is recorded on a straight-line basis over the lease term, including rent holidays. During the years ended December 31, 2023 and 2022, the Company recognized operating lease expense of $106,430 and $122,743, respectively. Operating lease costs are included within selling, administrative and other expenses on the consolidated statements of operations. During the years ended December 31, 2023 and 2022, short-term lease costs were $48,423 and $63,508, respectively.

Cash paid for amounts included in the measurement of operating lease liabilities were $120,976 and $144,553, respectively, for the years ended December 31, 2023 and 2022. These amounts are included in operating activities in the consolidated statements of cash flows. During the years ended December 31, 2023 and 2022, the Company reduced its operating lease liabilities by $113,791 and $133,258, respectively, for cash paid.

The operating lease liabilities as of December 31, 2023 reflect a weighted average discount rate of 5%. The weighted average remaining term of the leases is 2.6 years. Remaining lease payments as of December 31, 2023 are as follows:

Year ending December 31,
2024			111,395
2025			116,965
2026			70,179
Total lease payments			298,539
Less: imputed interest			(18,232	)
Total		$	280,307

16. Commitments and Contingencies

Leases

The Company leases certain of its properties under leases that expire on various dates through 2023. Some of these agreements include escalation clauses and provide for renewal options ranging from one to five years. Leases with an initial term of 12 months or less and immaterial leases are not recorded on the balance sheet (refer to Note 15, Leases, for amounts expensed during the years ended December 31, 2023 and 2022).

Legal proceedings

In the normal course of business or otherwise, the Company may become involved in legal proceedings. The Company will accrue a liability for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated. When only a range of possible loss can be established, the most probable amount in the range is accrued. If no amount within this range is a better estimate than any other amount within the range, the minimum amount in the range is accrued. The accrual for a litigation loss contingency might include, for example, estimates of potential damages, outside legal fees and other directly related costs expected to be incurred.

17. Segment Disclosures

During the years ended December 31, 2023 and 2022, the Company had three operating segments including:

●	Technology, which is comprised of AWS PR, Tropical, OCL, and HWN.

	●	SVC, which consists of the Company's SVC subsidiary.
	●	Corporate, which consists of the rest of the Company's operations.

Factors used to identify the Company's reportable segments include the organizational structure of the Company and the financial information available for evaluation by the chief operating decision-maker in making decisions about how to allocate resources and assess performance. The Company's operating segments have been broken out based on similar economic and other qualitative criteria. The Company operates the SVC and Corporate reporting segments in one geographical area (the United States) and the AWS PR/ Tropical/OCL/HWN operating segment in two geographical areas (the United States and Puerto Rico).

Financial statement information by operating segment for the year ended December 31, 2023 is presented below:

		Year Ended December 31, 2023
		Corporate			Technology			SVC			Total
Net sales		$	-			$	23,117,969			$	3,874,581			$	26,992,550
Operating loss			(2,622,121	)			(7,824,695	)			(2,556,116	)			(13,002,932	)
Interest expense			334,609				2,123,654				-				2,458,263
Depreciation and amortization			-				255,263				589,194				844,457
Total assets as of December 31, 2023			14,929				4,990,874				5,825,951				10,831,754

Geographic information as of and for the year ended December 31, 2023 is presented below:

		Revenues For The Year Ended December 31, 2023			Long-lived Assets as of December 31, 2023
Puerto Rico and Canada		$	391,413			$	-
United States			26,601,137				8,087,043
Consolidated total			26,992,550				8,087,043

Financial statement information by operating segment for the year ended December 31, 2022 is presented below:

		Year Ended December 31, 2022
		Corporate			Technology			SVC			Total
Net sales		$	-			$	20,467,463			$	6,299,332			$	26,766,795
Operating (loss) income			(3,982,007	)			(9,661,958	)			542,045				(13,101,920	)
Interest expense			1,164,641				81,261				97,200				1,343,102
Depreciation and amortization			-				210,743				603,359				814,102
Total assets as of December 31, 2022			606,752				7,797,819				11,427,075				19,831,646

Geographic information as of and for the year ended December 31, 2022 is presented below:

		Revenues For The Year Ended December 31, 2022			Long-lived Assets as of December 31, 2022
Puerto Rico and Canada		$	1,435,013			$	5,338
United States			25,331,782				14,367,919
Consolidated total			26,766,795				14,373,257

18. Income Taxes

The Company's pre-tax loss for the years ended December 31, 2023 and 2022 consisted of the following:

		Years Ended December 31,
		2023			2022
Domestic		$	(12,732,735	)		$	(11,587,158	)
Foreign			(415,553	)			328,895
Pre-tax Loss		$	(13,148,288	)		$	(11,258,263	)

The provision for income taxes for the years ended December 31, 2023 and 2022 was as follows:

			Years Ended December 31,
			2023				2022
Federal		$	-			$	-
State			-				-
Foreign			-				-
Total current		$	-			$	-
Deferred:
Federal		$	-			$	-
State			-				-
Total deferred			-				-
Total provision for income taxes		$	-			$	-

The Company's income taxes were calculated on the basis of domestic and foreign pre-tax loss of $12,732,735 and $415,553, respectively, for the year ended December 31, 2023. The Company's income taxes were calculated on the basis of domestic pre-tax loss and foreign pre-tax income of $11,587,158 and $328,895, respectively, for the year ended December 31, 2022.

The Company's effective tax rate for the years ended December 31, 2023 and 2022 differed from the U.S. federal statutory rate as follows:

		Years Ended December 31,
		2023			2022
		%			%
Federal tax benefit at statutory rate			(21.0	)			(21.0	)
Permanent differences			(4.4	)			(22.9	)
State tax benefit, net of Federal benefits			-				-
Other			-				-
Effect of foreign income taxed in rates other than the U.S. Federal statutory rate			-				-
Net change in valuation allowance			25.4				43.9
Provision			-				-

The tax effects of temporary differences and carryforwards that gave rise to significant portions of the deferred tax assets and liabilities were as follows:

		Years Ended December 31,
		2023			2022
Net operating loss carryforwards		$	28,000,639			$	18,187,286
Depreciation			(357,531	)			59,454
Total assets			27,643,108				18,246,740
Total liabilities			-				-
Less: Valuation allowance			(27,643,108	)			(18,246,740	)
Net deferred tax liabilities		$	-			$	-

As of December 31, 2023 and 2022, the Company had federal net operating loss carryforwards ("NOL's") of $28,000,639 and $18,187,286, respectively, that will be available to reduce future taxable income, if any. These NOL's begin to expire in 2027. The NOL was acquired in the reverse merger and there is more likely than not a Section 382 limitation.

Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, provide for annual limitations on the utilization of net operating loss, capital loss and credit carryforwards if the Company were to undergo an ownership change, as defined in Section 382 of the Code. In general, an ownership change occurs whenever the percentage of the shares of a corporation owned, directly or indirectly, by 5-percent shareholders, as defined in Section 382 of the Code, increases by more than 50 percentage points over the lowest percentage of the shares of such corporation owned, directly or indirectly, by such 5-percent shareholders at any time over the preceding three years. In the event such ownership change occurs, the annual limitation may result in the expiration of net operating losses capital losses and credits prior to full utilization.

The Company has not completed a study to assess whether ownership change occurred as a result of the reverse merger. However, as a result of the reverse merger in 2021, the Company believes an ownership change under Sec. 382 may have occurred. As a result of this potential ownership change, certain of the Company's net operating loss, capital loss and credit carryforwards could expire prior to full utilization. Additionally, further share issuances, such as the share issuances for debt conversions or acquisitions, may cause a change in ownership.

The Company performs an analysis each year to determine whether the expected future income will more likely than not be sufficient to realize the deferred tax assets. The Company's recent operating results and projections of future income weighed heavily in the Company's overall assessment.

The Company's continuing practice is to recognize interest and/or penalties related to income tax matters as a component of income tax expense. As of December 31, 2023 and 2022, there was no accrued interest and penalties related to uncertain tax positions.

The Company is subject to U.S. federal income taxes and to income taxes in various states in the United States. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. Due to the Company's net operating loss carryforwards all years remain open to examination by the major domestic taxing jurisdictions to which the Company is subject. In addition, all of the net operating loss and credit carryforwards that may be used in future years are still subject to adjustment.

19. Discontinued Operations

On February 15, 2022, HWN sold its 50% interest in JTM, which qualified for discontinued operations treatment.

The results of operations of JTM have been included within net loss from discontinued operations, net of taxes, on the consolidated statements of operations for the year ended December 31, 2022.

On March 6, 2023, HWN divested the ADEX Entities (refer to Note 3, Recent Subsidiary Activity, for additional detail). The divestiture of the ADEX Entities qualified for discontinued operations treatment.

The assets and liabilities of the ADEX Entities as of December 31, 2022 have been included within the consolidated balance sheet as current assets of discontinued operations, noncurrent assets of discontinued operations, current liabilities of discontinued operations, and noncurrent liabilities of discontinued operations.

The results of operations of the ADEX Entities have been included within net loss from discontinued operations, net of taxes, on the consolidated statements of operations for the years ended December 31, 2023 and 2022.

The following table shows the balance sheet of the Company's discontinued operations as of December 31, 2022:

		December 31, 2022
Current assets:
Cash		$	237,542
Accounts receivable			4,822,531
Contract assets			-
Prepaid expenses and deposits			151,369
Current assets of discontinued operations		$	5,211,442
Noncurrent assets:
Goodwill		$	1,841,040
Intangible assets, net of accumulated amortization of $752,865			5,692,473
Operating lease right-of-use assets			18,370
Noncurrent assets of discontinued operations		$	7,551,883
Current liabilities:
Accounts payable and accrued liabilities		$	716,620
Contract liabilities			405,478
Current portion of loans payable			5,729
Factor financing			3,689,593
Current portion of operating lease liabilities			19,356
Current liabilities of discontinued operations		$	4,836,776
Noncurrent liabilities:
Loans payable, net of current portion		$	152,102
Noncurrent liabilities of discontinued operations		$	152,102

The following table shows the statements of operations for the Company's discontinued operations for the years ended December 31, 2023 and 2022:

		For the years ended
		December 31,
		2023			2022
Revenue		$	4,759,216			$	28,414,679
Operating expenses:
Cost of revenues			3,824,134				22,463,646
Depreciation and amortization			107,627				519,666
Salaries and wages			197,456				1,294,876
General and administrative			532,396				3,126,609
Goodwill impairment			-				11,826,894
Total operating expenses			4,661,613				39,231,691
Income (loss) from operations			97,603				(10,817,012	)
Other income:
(Loss) gain on disposal of subsidiary			(1,434,392	)			919,873
Exchange loss			(923	)			(6,703	)
Interest expense			-				(1,470	)
PPP loan forgiveness			-				2,000,000
Total other (loss) income			(1,435,315	)			2,911,700
Pre-tax income (loss) from operations			(1,337,712	)			(7,905,312	)
Provision for income taxes			-				-
Net income (loss) from discontinued operations, net of tax		$	(1,337,712	)		$	(7,905,312	)

20. Subsequent Events

Convertible promissory note, Mast Hill Fund, L.P., 12% interest, unsecured, matures January 11, 2025

On January 11, 2024, the Company issued to Mast Hill Fund, L.P. a senior convertible promissory note in the aggregate principal amount of $350,000 in connection with the December 2023 Securities Purchase Agreement discussed in Note 8, Convertible Debentures. The Company received cash of $281,150, net of legal fees of $33,850, resulting in an original issue discount of $35,000. The interest on the outstanding principal due under the note accrues at a rate of 12% per annum. Under the terms of the agreement the Company will begin paying accrued interest on April 11, 2024 and principal on July 11, 2024, with all remaining amounts under the note due on January 11, 2025. The note is convertible into shares of the Company's common stock at a fixed conversion price of $0.10 per share.

Additionally, in connection with the note, the Company issued Mast Hill Fund, L.P. 743,555 commitment shares, 840,000 First Warrants with an exercise price of $0.125 which expire on January 11, 2029, and 5,833,333 Second Warrants with an exercise price of $0.001 which expire five years from the date of a triggering event as defined in the terms of the agreement.

On January 11, 2024, the Company issued 743,555 commitment shares to Mast Hill Fund, L.P. The shares had a fair value of $49,075.

In connection with the issuance of this debt, the Company issued 110,849 First Warrants to a broker.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	High Wire Networks, Inc.
Date: April 19, 2024	By:	/s/ Mark W. Porter
		Mark W. Porter
		Chief Executive Officer
Date: April 19, 2024	By:	/s/ Curtis E. Smith
		Curtis E. Smith
		Chief Financial Officer

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

Name		Position		Date
/s/ Mark W. Porter		Chief Executive Officer and Chairman of the		April 19, 2024
Mark W. Porter		Board of Directors
/s/ Curtis E. Smith		Chief Financial Officer		April 19, 2024
Curtis E. Smith		(Principal Financial Officer and Principal Accounting Officer)
/s/ Stephen W. LaMarche		Chief Operating Officer and Director		April 19, 2024
Stephen W. LaMarche
/s/ Peter H. Kruse		Director		April 19, 2024
Peter H. Kruse

Exhibit Index

Exhibit #		Exhibit Description
2.1		Agreement and Plan of Merger, by and among Spectrum Global Solutions, Inc., HW Merger Sub, Inc., HWN, Inc. and the other parties thereto (incorporated by reference to our Current Report on Form 8-K filed with the SEC on February 2, 2021)
3.2		Amendment to Articles of Incorporation (incorporated by reference to our Current Report on Form 8-K filed with the SEC on January 10, 2022)
3.3		Amended Certificate of Designation, Preferences, Rights and Other Rights of Series D Preferred Stock (incorporated by reference to our Current Report on Form 8-K filed with the SEC on December 22, 2021)
3.4		Certificate of Designation, Preferences, Rights and Other Rights of Series D Preferred Stock (incorporated by reference to our Current Report on Form 8-K filed with the SEC on June 22, 2021)
4*		Description of registered securities
10.1		Securities Purchase Agreement, dated as of November 3, 2021, by and between HWN, Inc. (f/k/a Spectrum Global Solutions, Inc. and Dominion Capital, LLC (incorporated by reference to our Current Report on Form 8-K filed with the SEC on November 10, 2021)
10.2		Senior Secured Convertible Promissory Note, dated November 3, 2021, issued to Dominion Capital LLC (incorporated by reference to our Current Report on Form 8-K filed with the SEC on November 10, 2021)
10.3		Registration Rights Agreement, dated as of November 3, 2021, by and between HWN, Inc. and Dominion Capital LLC (incorporated by reference to our Current Report on Form 8-K filed with the SEC on November 10, 2021)
10.4		Stock Purchase Agreement, dated as of April 13, 2021, by and among Spectrum Global Solutions, Inc., SVC, Inc., Secure Voice Corp. and Telecom Assets Corp. (incorporated by reference to our Current Report on Form 8-K filed with the SEC on April 16, 2021)
10.5		2009 Stock Compensation Plan and 2009 Stock Option Plan (incorporated by reference to our Registration Statement on Form S-8 filed on November 24, 2009)
10.6		Employment Agreement, dated as of March 1, 2021, by and between Spectrum Global Solutions, Inc. and Mark W. Porter (incorporated by reference to our Annual Report on Form 10-K filed on April 17, 2023)
10.7		Employment Agreement, dated as of January 31, 2023, by and between High Wire Networks, Inc. and Stephen LaMarche (incorporated by reference to our Annual Report on Form 10-K filed on April 17, 2023)
21.1*		List of Subsidiaries
31.1*		Certification of the Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of the Principal Financial Officer and Principal Accounting Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*		Certification of the Principal Financial Officer and Principal Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Labels Linkbase Document
101.PRE		Inline XBRL Taxonomy Presentation Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101)

*	Filed herewith.

44