You should read the following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and related notes appearing elsewhere in this annual report on Form 10-K. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth under ''Risk Factors'' and elsewhere in this annual report on Form 10-K.





Overview

We design and market to business customers digital watermarking, streaming video and video-on-demand (VOD) systems, services and source-to-destination digital media delivery solutions that allow live or recorded digitized and compressed video to be transmitted through Internet, intranet, satellite or wireless connectivity. The Company's systems, services and delivery solutions include digital watermark solutions and video content production, content encoding, media asset management, media and application hosting, multi-mode content distribution, transaction data capture and reporting, e-commerce, specialized engineering services, and Internet streaming hardware.

The Company's products and services are based on its data privacy, data protection and media delivery infrastructure, software and services. It has developed a number of specific products and services that include Cloud-DPS, CTSS and Forget-Me-Yes™.

As more fully discussed below we have not been profitable, and our revenues for 2022 and 2021 were $Nil. We cannot predict our revenue levels for the next 12 months, or thereafter, nor when, or if, our operations will become profitable. We will require additional financing, both for the remainder of fiscal 2021 and thereafter, to continue to operate and expand our business. There is no assurance that such financing will be available on commercially reasonable terms, if at all.

CRITICAL ACCOUNTING POLICIES

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate these estimates, including those related to bad debts, intangible assets, income taxes, impairment or disposal of long-lived assets, contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We have identified the policies below as critical to our business operations and to the understanding of our financial results. The impact and any associated risks related to these policies on our business operations is discussed throughout management's discussion and analysis of financial condition and results of operations where such policies affect our reported and expected financial results:





  ? Impairment or disposal of long-lived assets;
  ? Deferred taxes;
  ? Accounting for stock-based compensation; and
  ? Commitments and contingencies.

IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS. Long-lived assets are reviewed in accordance with ASC Topic 360-10-05. Impairment or disposal of long-lived assets losses are recognized in the period the impairment or disposal occurs.

DEFERRED TAXES. We record a valuation allowance to reduce deferred tax assets when it is more likely than not that some portion of the amount may not be realized.

ACCOUNTING FOR STOCK-BASED COMPENSATION. Under ASC Topic 718, Stock Compensation, the Company estimates the fair value of stock options granted using the Black-Scholes option pricing model. The fair value for awards that are expected to vest is then amortized on a straight-line basis over the requisite service period of the award, which is generally the option vesting term. The amount of expense attributed is based on estimated forfeiture rate, which is updated based on actual forfeitures as appropriate. This option pricing model requires the input of highly subjective assumptions, including the expected volatility of the Company's common stock, pre-vesting forfeiture rate and an option's expected life. The financial statements include amounts that are based on the Company's best estimates and judgments.





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COMMITMENTS AND CONTINGENCIES. We account for commitments and contingencies in accordance with ASC Topic 450 Contingencies. We record a liability for commitments and contingencies when the amount is both probable and reasonably estimable.





Results of Operations

For the Year Ended December 31, 2022

Selling, General and Administrative Expenses

Selling, general and administrative expenses, consisting of product marketing expenses, consulting fees, office, professional fees and other expenses to execute our business plan and for our day-to-day operations, increased in the year ended December 31, 2022. We continue to develop and market C-DPS - Cloud Document Protection System and the "Right-to-be-Forgotten" and "Right-to-Erase" platform. Administrative expenses have decreased/increased moderately as a result of insignificant fluctuations in general costs.

Selling, general and administrative expenses for the year ended December 31, 2022 decreased by $31,224 to $399,467 from $430,691 for the year ended December 31, 2021. This included professional expenses for the year ended December 31, 2022 which decreased to $104,801 from $133,134 for the comparable period in 2021. We incurred decreased costs in 2022 due to minimal corporate and filing activities during the fiscal year.

Research and development for the year ended December 31, 2022 increased to $1,137,883 from $818,269 for the comparable period in 2021. This was a result of the Company's effort to improve the platform by conducting further research and development.

We have arranged for additional staff and consultants to engage in marketing activities in an effort to identify and assess appropriate market segments, develop business arrangements with prospective partners, create awareness of new products and services, and communicate to the industry and potential customers. Other components of selling, general and administrative expenses did not change significantly.





Research and Development

Research and development costs for the three months ended December 31, 2022, decreased to $224,991 from $239,270 for the comparable period in 2021. We incurred comparable costs in 2022 as the management maintain its decision in 2021, to develop CTSS (ComplyScan®) as well as the on-going development of our subsidiary's Forget-Me-Yes® zero trust data privacy platform. ("Right-to-be-Forgotten" and "Right-to-Erase").





Net Losses

To date, we have not achieved profitability and expect to incur substantial losses for the foreseeable future. Our net loss for fiscal 2022 was $1,649,589, compared with a net loss of $1,986,665 for fiscal 2021. Our total comprehensive loss for fiscal 2022 was $1,608,543, compared with a comprehensive loss of $1,992,855, which includes currency translation differences of $41,046.





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Liquidity and Capital Resources

At December 31, 2022 our cash position was $687,602, a decrease from $2,208,451 at December 31, 2021. We had a working capital of $415,417 and an accumulated deficit of $47,795,434 at December 31, 2022.

We have historically satisfied our capital needs primarily by shareholders' loans and issuing equity securities to our officers, directors, employees and a small group of investors, and from short-term bridge loans from members of management.

As of December 31, 2022, we had $687,602 in cash. Management has forecasted the Company will not have sufficient working capital to operate for the ensuing 12 months. We will require an additional $3 million to $5 million to finance operations for the fiscal 2023 and we intend to obtain such financing through sales of our equity securities. While the Company has been successful in the past in obtaining financing, there can be no assurance that the Company will be able to obtain adequate financing, or that such financing will be on terms acceptable to the Company, to meet future operational needs which may result in the delay, reduction, or discontinuation of ongoing development programs.

Assuming the aforementioned $3 million to $5 million in financing is obtained, continuing operations for the longer-term will be supported through anticipated growth in revenues and through additional sales of our securities. Although longer-term financing requirements may vary depending upon our sales performance, management expects that we will require additional financing of $3 million to $5 million for fiscal 2023. We have no binding commitments or arrangements for additional financing, and there is no assurance that management will be able to obtain any additional financing on terms acceptable to us, if at all.





Statement of Cash Flows

The Company had cash and cash equivalents of $687,602 (2021 - $2,208,451) as of December 31, 2022.

The decrease in cash and cash equivalents during the year ended December 31, 2022 was primarily due to cash used in operating activities during the fiscal year.

Cash Flow used in Operating Activities

Cash and cash equivalents used in operating activities were $1,484,369 (2021 - $1,350,175) for the year ended December 31, 2022. Operating activities were affected by the change in non-cash working capital balances because of a increase in prepaid expense and other current assets of $2,441, a increase in accounts payable and accrued expenses of $180,387, and a increase in accounts payable and accrued expenses due to related parties of $Nil.

Cash Flow provided by Financing Activities

Cash provided by financing activities was $Nil (2021 - $3,062,246) for the year ended December 31, 2022 for the proceeds from sales of common stocks of $Nil (2021 - $3,098,616).

Off-Balance Sheet Arrangements

As of fiscal 2022 we have no off-balance sheet arrangements.

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