UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~September~~March 3031, ~~2022~~2023

☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _______ to _______

Commission File No. 000-53554

DAIS CORPORATION

(Exact name of Registrant as specified in its charter)

New York

14-1760865

(State or other jurisdiction of

incorporation or organization)

(IRS Employer

Identification No.)

11552 Prosperous Drive, Odessa, Florida		33556
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (727) 375-8484

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

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

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

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

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

Large, accelerated filer ☐ Accelerated filer ☐ Non-accelerated ~~filer~~Filer ☒ Smaller reporting company ☒ Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

There were 1020,~~619~~149,~~331~~365 shares of the Registrant’s $0.01 par value common stock outstanding as of ~~November~~June 2128, ~~2022~~2023.

DAIS CORPORATION

TABLE OF CONTENTS

		Page No.
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Condensed Balance Sheets as of September 30, 2022 (unaudited) and December 31, 2021	3
	Condensed Balance Sheets as of March 31, 2023 (unaudited) and December 31, 2022	3
	Condensed Statements of Operations for the three and nine months ended September 30, 2022 and 2021 (unaudited)	4
	Condensed Statements of Operations for the three months ended March 31, 2023 and 2022 (unaudited)	4
	Condensed Statement of Stockholders’ Deficit for the three and nine months ended September 30, 2022 and 2021 (unaudited)	5
	Condensed Statement of Stockholders’ Deficit for the three months ended March 31, 2023 and 2022 (unaudited)	5
	Condensed Statements of Cash Flows for the nine months ended September 30, 2022 and 2021 (unaudited)	6
	Condensed Statements of Cash Flows for the three months ended March 31, 2023 and 2022 (unaudited)	6
	Notes to Condensed Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1516
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2625
Item 4.	Controls and Procedures	2625
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	2726
Item 1A.	Risk Factors	2726
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2726
Item 3.	Defaults Upon Senior Securities	2726
Item 4.	Mine Safety Disclosures	2726
Item 5.	Other Information	2726
Item 6.	Exhibits	2827
SIGNATURES		2928

Table of Contents

PART I -– FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

DAIS CORPORATION

CONDENSED BALANCE SHEETS

	September 30,2022			December 31,2021
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash	$	151,557		$	773,423
Accounts receivable, net		76,250			51,917
Inventory		194,045			72,067
Prepaid expenses		126,563			32,637
Total Current Assets		548,415			930,044
Property and equipment, net		34,797			13,353
OTHER ASSETS:
Deposits		4,780			4,780
Patents, net		154,777			152,924
Total Other Assets		159,557			157,704
TOTAL ASSETS	$	742,769		$	1,101,101
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES:
Accounts payable, including related party payables of $275,490 and $282,729 at September 30, 2022 and December 31, 2021, respectively	$	1,003,450		$	922,305
Accrued expenses, other, including interest due to related party of $2,611,291 and $2,153,723 at September 30, 2022 and December 31, 2021, respectively		3,540,601			2,945,918
Accrued compensation and related benefits		2,230,974			2,208,692
Customer deposits		336,416			35,306
Advance payment received for convertible note		15,000			15,000
Advance payment received for purchase of common stock		30,000			30,000
Notes payable to related parties		2,537,697			2,174,897
Current portion of deferred revenue		261,156			298,656
Note payable - due within one year		376,000			376,000
Convertible notes payable, net of unamortized discount and debt costs of $377,813 and $1,437,838, respectively		1,612,037			194,162
Total Current Liabilities		11,943,331			9,200,936
Notes payable - due after one year		150,000			272,340
Total Liabilities		12,093,331			9,473,276
STOCKHOLDERS’ DEFICIT
Preferred stock, undesignated; $0.01 par value; 7,990,000 shares authorized; no shares issued and outstanding		-			-
Preferred stock, Series A; $0.01 par value; 2,000,000 shares authorized; no shares issued and outstanding		-			-
Preferred stock, Series B; $0.01 par value; 10,000 shares authorized; 10 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively		-			-
Common stock; $0.01 par value; 1,100,000,000 shares authorized; 10,619,331 and 9,415,425 shares issued and 10,618,702 and 9,414,796 shares outstanding at September 30, 2022 and December 31, 2021, respectively		106,193			94,154
Common stock to be issued, 1,000,000 and no shares, respectively		10,000			-
Capital in excess of par value		51,189,596			50,818,885
Accumulated deficit		(61,194,239	)		(57,823,102	)
		(9,888,450	)		(6,910,063	)
Treasury stock at cost, 629 shares at September 30, 2022 and December 31, 2021, respectively		(1,462,112	)		(1,462,112	)
Total Stockholders’ Deficit		(11,350,562	)		(8,372,175	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	742,769		$	1,101,101

(Unaudited)

	March 31, 2023			December 31, 2022
ASSETS	(Unaudited)
CURRENT ASSETS:
Cash	$	37,149		$	27,412
Accounts receivable, net		127,616			258,708
Inventory		336,492			294,472
Prepaid expenses		18,990			25,871
Reimbursements receivable		36,743			-
Total Current Assets		556,990			606,463
Property and equipment, net		31,493			32,400
OTHER ASSETS:
Deposits		4,780			4,780
Patents, net		148,045			150,048
Total Other Assets		152,825			154,828
TOTAL ASSETS	$	741,308		$	793,691

LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES:
Accounts payable, including related party payables of $310,192 and $298,903 at March 31, 2023 and December 31, 2022, respectively	$	1,180,553		$	1,401,934
Accrued expenses, other, including interest due to related party of $3,315,152 and $3,031,112 at March 31, 2023 and December 31, 2022, respectively		4,341,058			4,018,588
Accrued compensation and related benefits		2,311,812			2,281,414
Customer deposits		306,077			305,957
Advance payment received for convertible note		15,000			15,000
Advance payment received for purchase of common stock		-			30,000
Notes payable to related parties		3,069,458			2,410,499
Current portion of deferred revenue		236,156			248,656
Note payable - due within one year		376,000			376,000
Convertible notes payable, net of unamortized discount and debt costs of $43,562 and $68,219, respectively		1,867,536			1,986,631
Total Current Liabilities		13,703,650			13,074,679
Notes payable - due after one year		150,000			150,000
Total Liabilities		13,853,650			13,224,679
STOCKHOLDERS’ DEFICIT
Preferred stock, undesignated; $0.01 par value; 6,130,000 shares authorized; no shares issued and outstanding		-			-
Preferred stock, Series A; $0.01 par value; 2,000,000 shares authorized; no shares issued and outstanding		-			-
Preferred stock, Series B; $0.01 par value; 10,000 shares authorized; 10 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively		-			-
Preferred stock, Series C; $0.01 par value; 100,000 shares authorized; no shares issued and outstanding		-			-
Preferred stock, Series D; $0.01 par value; 10,000 shares authorized; no shares issued and outstanding		-			-
Preferred stock, Series E; $0.01 par value; 250,000 shares authorized; no shares issued and outstanding		-			-
Preferred stock, Series F; $0.01 par value; 1,500,000 shares authorized; no shares issued and outstanding		-			-
Common stock; $0.01 par value; 1,100,000,000 shares authorized; 18,691,770 and 10,619,331 shares issued and 18,691,141 and 10,618,702 shares outstanding at March 31, 2023 and December 31, 2022, respectively		186,918			106,193
Common stock to be issued, 1,500,000 and 1,000,000 shares, respectively		147,000			10,000
Capital in excess of par value		52,294,620			51,189,596
Accumulated deficit		(64,278,767	)		(62,274,665	)
		(11,650,229	)		(10,968,876	)
Treasury stock at cost, 629 shares at March 31, 2023 and December 31, 2022, respectively		(1,462,112	)		(1,462,112	)
Total Stockholders’ Deficit		(13,112,341	)		(12,430,988	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	741,309		$	793,691

See accompanying Notes to Unaudited Condensed Financial Statements

Table of Contents

DAIS CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

	For the Three Months Ended						For the Nine Months Ended
	For the Three Months EndedMarch 31,
	September 30,						September 30,
	2023			2022
	2022			2021			2022			2021
REVENUE
REVENUE
Sales	$	288,557		$	43,195
Sales	$	492,394		$	116,864		$	653,288		$	288,854
Royalty and license fees		12,500			12,500
Royalty and license fees		12,500			12,500			37,500			37,500
Revenue		301,057			55,695
		504,894			129,364			690,788			326,354
COST OF GOODS SOLD		269,343			52,440
COST OF GOODS SOLD		381,214			90,749			610,859			173,639
GROSS MARGIN		31,714			3,255
GROSS MARGIN		123,680			38,615			79,929			152,715
OPERATING EXPENSES
OPERATING EXPENSES
Research and development, net of government grant proceeds of $0 and $0 for the three months ended March 31, 2023 and 2022, respectively		134,135			64,873
Research and development, net of government grant proceeds of $0, $28,651, $0 and $89,617, respectively		85,887			29,814			212,508			69,660
Selling, general and administrative		379,400			425,276
Selling, general and administrative		430,455			305,833			1,259,080			1,590,907
TOTAL OPERATING EXPENSES		513,535			490,149
TOTAL OPERATING EXPENSES		516,342			335,647			1,471,588			1,660,567
LOSS FROM OPERATIONS		(481,821	)		(486,894	)
LOSS FROM OPERATIONS		(392,662	)		(297,032	)		(1,391,659	)		(1,507,852	)
OTHER INCOME (EXPENSE)
OTHER INCOME (EXPENSE)
Interest expense		(675,040	)		(595,636	)
Interest expense		(800,072	)		(110,938	)		(2,103,604	)		(471,746	)
Loss on conversion of debt		(847,241	)		-
Forgiveness of debt income		124,126			146,685			124,126			146,685
TOTAL OTHER INCOME (EXPENSE), NET		(1,522,281	)		(595,636	)
Change in fair value of derivative liabilities		-			-			-			2,241,678
NET INCOME (LOSS)	$	(2,004,102	)	$	(1,082,530
Gain on extinguishment of debt		-			-			-			1,148,554
NET LOSS PER COMMON SHARE, BASIC AND DILUTED	$	(0.13	)	$	(0.12	)
TOTAL OTHER INCOME (EXPENSE), NET		(675,946	)		38,459			(1,979,478	)		3,067,883
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED		15,394,933			9,414,796
NET INCOME (LOSS)	$	(1,068,608	)	$	(261,285	)	$	(3,371,137	)	$	1,557,319
NET INCOME (LOSS) PER COMMON SHARE, BASIC	$	(0.10	)	$	0.03		$	(0.33	)	$	0.35
NET LOSS PER COMMON SHARE, DILUTED	$	(0.10	)	$	(0.03	)	$	(0.33	)	$	(0.19	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC		11,170,719			9,414,796			10,107,546			4,494,649
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, DILUTED		11,170,719			9,414,796			10,107,546			8,360,950

See accompanying Notes to Unaudited Condensed Financial Statements

Table of Contents

DAIS CORPORATION

DAIS CORPORATION
CONDENSED STATEMENT OF STOCKHOLDERS’ DEFICIT
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(Unaudited)

	Preferred Stock				Common Stock				Common Stock to be			Capital In Excess of Par			Accumulated			Treasury
	Shares		Amount		Shares		Amount		issued			Value			Deficit			Stock			Total
Balance - December 31, 2022		10	$	-		10,619,331	$	106,193	$	10,000		$	51,189,596		$	(62,274,665	)	$	(1,462,112	)	$	(12,430,988	)
Reissuance of cancelled shares		-		-		1,000,000		10,000		(10,000	)		-			-			-			-
Shares issued for conversion of debt and finance cost		-		-		5,344,939		53,450		-			951,404			-			-			1,004,854
Shares to be issued for finance cost		-		-		-		-		196,000			-			-			-			196,000
Shares issued for finance cost		-		-		500,000		5,000		(49,000	)		44,000			-			-			-
Cashless exercise of warrant		-		-		577,500		5,775		-			(5,775	)		-			-			-
Shares issued for cash		-		-		200,000		2,000		-			28,000			-			-			30,000
Shares issued for services		-		-		450,000		4,500		-			9,000			-			-			13,500
Warrants issued as financing cost		-		-		-		-		-			78,395			-			-			78,395
Net loss for the three months ended March 31, 2023		-		-		-		-		-			-			(2,004,102	)		-			(2,004,102	)
Balance - March 31, 2023		10	$	-		18,691,770	$	186,918	$	147,000		$	52,294,620		$	(64,278,767	)	$	(1,462,112	)	$	(13,112,341	)

CONDENSED STATEMENT OF STOCKHOLDERS’ DEFICIT

	Redeemable Convertible Preferred Stock				Common Stock				Common Stock to be		Additional Paid-in		Accumulated			Treasury
	Shares		Amount		Shares		Amount		issued		Capital		Deficit			Stock			Total
Balance - December 31, 2021		10	$	-		9,415,425	$	94,154	$	-	$	50,818,885	$	(57,823,102	)	$	(1,462,112	)	$	(8,372,175	)
Net loss for the three months ended March 31, 2022		-		-		-		-		-		-		(1,082,530	)		-			(1,082,530	)
Balance - March 31, 2022		10	$	-		9,415,425	$	94,154	$	-	$	50,818,885	$	(58,905,632	)	$	(1,462,112	)	$	(9,454,705	)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

(Unaudited)

	Preferred Stock				Common Stock						CommonStock to be		Capital in Excess of Par			Accumulated			Treasury			Total Stockholders’
	Shares		Amount		Shares			Amount			issued		Value			Deficit			Stock			Deficit
Balance at December 31, 2021		10	$	-		9,415,425		$	94,154		$	-	$	50,818,885		$	(57,823,102	)	$	(1,462,112	)	$	(8,372,175	)
Net loss for the three months ended March 31, 2022		-		-		-			-					-			(1,082,530	)		-			(1,082,530	)
Balance at March 31, 2022		10		-		9,415,425			94,154					50,818,885			(58,905,632	)		(1,462,112	)		(9,454,705	)
Shares issued for conversion of debt and finance cost		-		-		457,500			4,575					41,175			-			-			45,750
Cashless exercise of warrants		-		-		396,637			3,966					(3,966	)		-			-			-
Shares Cancelled - to be reissued						(1,000,000	)		(10,000	)		10,000
Beneficial conversion feature of debt														200,000									200,000
Net loss for the three months ended June 30, 2022		-		-		-			-					-			(1,219,999	)		-			(1,219,999	)
Balance at June 30, 2022		10		-		9,269,562			92,695			10,000		51,056,094			(60,125,631	)		(1,462,112	)		(10,428,954	)
Shares issued for conversion of debt		-		-		470,000			4,700			-		42,300			-			-			47,000
Cashless exercise of warrants		-		-		879,769			8,798			-		(8,798	)		-			-			-
Beneficial conversion feature of debt		-		-		-			-			-		100,000			-			-			100,000
Net loss for the three months ended September 30, 2022		-		-		-			-			-		-			(1,068,608	)		-			(1,068,608	)
Balance at September 30, 2022		10	$	-		10,619,331		$	106,193		$	10,000	$	51,189,596		$	(61,194,239	)	$	(1,462,112	)	$	(11,350,562	)
Balance at December 31, 2020		10	$	-		278,757		$	2,788				$	45,976,660		$	(56,974,063	)	$	(1,462,112	)	$	(12,456,727
Net income for the three months ended March 31, 2021		-		-		-			-					-			1,743,060			-			1,743,060
Balance at March 31, 2020		10		-		278,757			2,788					45,976,660			(55,231,003	)		(1,462,112	)		(10,713,667	)
Shares and warrants issued for services		-		-		2,100,000			21,000					730,457			-			-			751,457
Shares and warrants issued for settlement of debt		-		-		7,036,668			70,366					2,616,768			-			-			2,687,134
Net income for the three months ended June 30, 2021		-		-		-			-					-			75,544			-			75,544
Balance at June 30, 2021		10		-		9,415,425			94,154					49,323,885			(55,155,459	)		(1,462,112	)		(7,199,532	)
Warrants issued with debt		-		-		-			-					110,000			-			-			110,000
Beneficial conversion feature of debt		-		-		-			-					90,000			-			-			90,000
Net loss for the three months ended September 30, 2021		-		-		-			-					-			(261,285	)		-			(261,285	)
Balance at September 30, 2021		10	$	-		9,415,425		$	94,154				$	49,523,885		$	(55,416,744	)	$	(1,462,112	)	$	(7,260,817	)

See accompanying Notes to Unaudited Condensed Financial Statements

Table of Contents

DAIS CORPORATION

~~CONDENSED~~ STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Nine Months EndedSeptember 30,
	For the Three Months EndedMarch 31,
	2022			2021
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(3,371,137	)	$	1,557,319
Net loss	$	(2,004,102	)	$	(1,082,530	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization		217,~~451~~605			156,~~767~~682
Stock based compensation		-13,500			~~751,457~~-
Change in fair value of derivative liability		-			(2,241,678	)
Non-cash interest expenses		317,695			-
Forgiveness of debt		(122,340	)		(146,685	)
Amortization of debt discount		24,657			405,123
Gain on extinguishment of debt		-			(1,148,554	)
Loss on conversion of debt		847,241			-
Non-cash interest expenses		750			124,290
Amortization of debt discount and debt costs		1,360,025			32,557
(Increase) decrease in:
Accounts receivable		~~(24~~131,~~333~~092	)		~~(62~~29,~~266~~080	)
Inventory		(~~121~~42,~~978~~020	)		(2743,~~261~~207	)
Other receivables		-			6,169
Reimbursements receivable		(36,743	)		-
Prepaid expenses/Other assets		~~(93~~6,~~926~~881	)		(3954,~~021~~698	)
Increase (decrease) in:
Accounts payable		81(221,~~145~~381	)		874,~~060~~400
Accrued expenses		~~616~~361,~~965~~477			~~388~~43,~~764~~342
Customer deposits		~~301,110~~120			1346,~~331~~001
Deferred revenue		(3712,500	)		(3712,500	)
Net cash used in operating activities		(1606,~~389,768~~478	)		(~~726~~658,~~251~~307	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in property and equipment		(28,035	)		(11,541	)
Purchase of equipment		(1,675	)		(26,435	)
Increase in patent costs		(163,~~713~~020	)		(138,~~577~~049	)
Net cash used in investing activities		(444,~~748~~695	)		(2534,~~118~~484	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable - related parties		~~362~~970,~~800~~910			~~49,297~~-
Proceeds from note payable		449,850			825,340
Repayment of notes payable - related parties		(350,000	)		-
Repayment of note payable		-			(26,200	)
Net cash provided by financing activities		620,910			-
Net cash provided by financing activities		812,650			848,437
Net increase (decrease) in cash		9,737			(692,791	)
Net decrease in cash		(621,866	)		97,068
Cash, beginning of period		27,412			773,423
Cash, beginning of period		773,423			36,516
Cash, end of period	$	37,149		$	80,632
Cash, end of period	$	151,557		$	133,584
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	~~154,398~~-		$	-154,398
NON-CASH FINANCING AND FINANCING ACTIVITIES
Issuance of common stock and warrants upon settlement of notes and accrued interest	$	-		$	2,687,134
Issuance of common stock upon conversion of notes	$	1,004,853		$	-
Issuance of common stock upon conversion of notes	$	92,750			-
Notes and accrued interest settled with common stock	$	152,362		$	-
Notes and accrued interest settled with common stock and warrants	$	-		$	2,107,414
Common stock issued, proceeds received in prior year	$	30,000		$	-
Beneficial conversion feature of convertible debt	$	240,002		$	90,000
Fair value of warrant, recorded as finance cost	$	78,395		$	-
Derivative liability extinguished	$	-		$	1,728,274
Common stock to be issued for finance cost	$	196,000		$	-
Relative fair value of warrant, recorded as debt discount		59,998		$	110,000
Finance cost deducted from related party note	$	38,050		$	-
Common stock to be issued for finance cost, accrued and recorded as debt discount		-		$	120,990
Original issue discount, deducted from proceeds and recorded as debt discount		-		$	20,000
Debt costs deducted from proceeds		-		$	3,000

See accompanying Notes to Unaudited Condensed Financial Statements

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Dais Corporation

Notes to Condensed Financial Statements

~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022

(Unaudited)

Note 1. Background Information

Dais Corporation (“Dais”, “us,” “we,”, the “Company”), a New York corporation, is a nano-structured polymer technology materials company having developed and now commercializing products using its family of nanomaterial called Aqualyte. Aqualyte itself is the first product being commercialized. The second commercial product is called ConsERV, a fixed plate energy recovery ventilator which we believe is useful in meeting building indoor fresh air requirements while saving energy and lowering emissions for most forms of heating, ventilation, and air conditioning (HVAC) equipment. The Company was incorporated in April 1993 and its corporate headquarters is in Odessa, Florida.

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

Basis of Presentation

The Company’s accompanying condensed financial statements are unaudited, but in the opinion of management reflect all adjustments necessary to fairly state the Company’s financial position, results of operations, stockholders’ deficit and cash flows as of and for the dates and periods presented. The financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information.

The unaudited financial statements and notes are presented as permitted by Form 10-Q. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted although the Company generally believes that the disclosures are adequate to ensure that the information presented is not misleading. The accompanying financial statements and notes should be read in conjunction with the audited financial statements and notes of the Company for the fiscal year ended December 31, ~~2021~~2022 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on ~~April~~May 1530, ~~2022~~2023. The results of operations for the three- ~~and nine-~~month ~~periods~~period ended ~~September~~March 3031, ~~2022~~2023 are not necessarily indicative of the results that may be expected for any future quarters or for the entire year ending December 31, ~~2022~~2023.

Note 2. Going Concern and Management’s Plans

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. ~~The~~For ~~Company~~the ~~has~~three ~~incurred~~months ~~significant~~ended ~~losses~~March ~~since~~31, ~~inception~~2023, ~~incurred~~the Company generated a net loss of $32,~~371~~004,~~137~~102 ~~for~~and ~~the~~has ~~nine~~incurred ~~months~~significant ~~ended~~losses ~~September~~since ~~30,~~inception. ~~2022,~~As ~~and, as~~ of ~~September~~March 3031, ~~2022~~2023, the Company has an accumulated deficit of $6164,~~194~~278,~~239~~767, total stockholders’ deficit of $1113,~~350~~112,~~562~~341, negative working capital of $1113,~~394~~146,~~916~~660 and cash and cash equivalents of $~~151~~37,~~557~~149. The Company used $1606,~~389,768~~478 and $~~726~~658,~~251~~307 of cash infor operations during the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023, and ~~2021~~2022, respectively, which was funded primarily by proceeds from loans from related parties and others. There is no assurance that any such financing will be available in the future. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company is currently pursuing the following sources of short and long-term working capital:

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

Management believes:

1. In the face of world-wide supply chain, financial market gyrations, geopolitical events, and continuing pandemic related issues the market(s) demand for its product(s) is entering a more sluggish period but not due to interest the company’s products. 2. The effect on the company’s ability to raise new funds or on its current and projected cash position resulting from slower growth in sales and revenues due to a regional or world-wide economic downturn is placing heavy pressures on management to widen the approaches to targeted places to seek growth resources. Management with Board approval is seeking to monetize one use (license, outright sale, etc.) of a particular asset. Monetizing the entire technology would be done to extract the maximum value of the technology for the benefit of the company’s stakeholder at a higher short-term cost. Whereas monetizing a technology segment would be pursued to raise sufficient cash to continue in smaller, more concentrated manner. 3. We believe our current cash position and our projected ability to obtain additional sources of cash flow from operations and investments for the balance of 2022 supporting the company’s operations needed to manufacture and create sales of ConsERV and Aqualyte product is more challenged as it relates to the public markets. However, with investors (PE groups, Family funds, individuals, etc.) savvy in the areas the Company is working are increasing resource commitments in such opportunities. There is no assurance, in these times of uncharted cause/effect with companies, markets, and people, that management or the Board will be successful in securing needed funds to fund business continuation or secure growth capital funding. 4. The Senior Secured Note Holder has advised Management it is exploring its options in this matter.

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

	1.	The Company’s ability to solve continuing supply chain issues and raise sustainable growth capital will dictate future revenue and cash-flow for the Company. The quicker these issues are resolved we believe the faster the Company can participate in the market’s uptick momentum and follow the projected growth curve. These issues place heavy pressure on management to progress in key business areas being impacted. Continued supply chain impacts has roots in the funding challenges. The use of funds from affordable growth capital to resolve inventory levels of hard to acquire parts could be achieved within one quarter. Raising affordable capital is tied to addressing/fixing convertible debt transactions (recently found to be ‘criminally usurious - (Adar Bays, LLC v. GeneSYS ID, Inc.) used in the past to grow the Company with a plan to replace this convertible debt with lower cost funds. The Company has made progress yet still faces a worldwide public market in turmoil since February of 2022. In the intertest of expediting this situation the Company is seeking affordable public, and non-public, growth resources, with Board approval, is seeking to monetize one asset via a license/supply agreement. Such a plan (monetize an asset) will require approval by the Company’s Senior Secured Noteholder.

	2.	The Senior Secured Note Holder has advised Management it is exploring its options to resolve the long standing unpaid – and growing debt by the Company.

	3.	Ventilation is regularly recommended as one of the solutions to Covid related mitigation and the market awareness for the ConsERV product(s) is increasing and lead activity is encouraging.

	4.	We believe our current cash position and our projected ability to obtain additional sources of growth capital, and to generate sustainable cash flow from operations and investments into 2023 is improving yet remains challenged.

We believe the Company’s prospects to secure growth funding remain good. On a macro level we believe the world-wide market for equipment the type the Company is selling (and developing) has changed for the positive in the last two years reflecting end user awareness of the need to address Climate Change related issues faster, and the changes in buying habits forged by the world-wide pandemic. On more of a micro level the company has shown solid progress over the last three quarters, removed a serious impediment to growth by completing a ‘debt to equity’ program where the convertible noteholders debt positions were converted into equity (common stock and warrants). The company introduced a popular new line of our ConsERV equipment having improved performance and pricing to a growing independent sales channel through-out North America. We reached agreement (now moving to contract stage) in late 4Q 2022 between the company and its Senior Secured Note Holder (having deep rights with the assets of the Company which are pledged as security for repayment of the Note). The company is continuing to develop the basis of a long-term business relationship with a well-known, multi-national corporation interested in using the Company’s HVAC and water products for its own and third-party use.

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

Note 3. Significant Accounting Policies

The significant accounting policies followed are:

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

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

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

In certain instances, the Company’s ConsERV system product may carry a limited warranty of up to one year for all parts contained therein except for the energy recovery ventilator core produced and sold by the Company. The distributor of the ConsERV system may carry a limited warranty of up to ten years. The limited warranty includes replacement of defective parts for the ConsERV system and includes workmanship and material failure for the ConsERV core. The Company recorded an accrual of $91,531 for future warranty expenses at ~~September~~March 3031, ~~2022,~~2023 and December 31, ~~2021~~2022, which is included in accrued expenses, other.

Royalty revenue is recognized as earned. The Company recognized royalty revenue of $0 for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022, respectively. Revenue derived from the sale of licenses is deferred and recognized as license fee revenue on a straight-line basis over the life of the license, or until the license arrangement is terminated. The Company recognized license fee revenue of $12,500 and $12,500 for the three months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021, respectively and $37,500 and $37,500 for the nine months ended September 30,~~ 2022 ~~and 2021~~, respectively.

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

In December 2017, the Company and Zhejiang MENRED Environmental Tech Co, Ltd., Zhejiang Province, China (“Menred”), entered into a License and Supply Agreement (the “Agreement”), effective December 21, 2017. Pursuant to the Agreement, the Company licensed certain intellectual property and improvements to Menred, for use in the manufacture and sale of energy recovery ventilators (“ERV”) and certain other HVAC systems for installation in commercial, residential, or industrial buildings in China. Menred also agreed to purchase its requirements of certain products from the Company for Menred’s use, pursuant to the terms and conditions of the Agreement. Menred will also pay royalties, as defined, to the Company on a quarterly basis, based on price and production volume as provided by Menred. No royalties are due within the first year of the Agreement. Also pursuant to the Agreement, the Company is required to purchase 50,000 square meters of Product from Menred for delivery as an annual minimum with a 10,000 square meter minimum order quantity per delivery. The Agreement has a ten-year term with mutually agreed upon five-year extensions. Shipping and handling fees billed to customers are included in revenue. Shipping and handling fees associated with freight are generally included in cost of revenue.

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~~Cash~~In December 2017, the Company and ~~cash~~Zhejiang ~~equivalents~~MENRED -Environmental ~~For~~Tech ~~purposes~~Co, ofLtd., Zhejiang Province, China (“Menred”), entered into a License and Supply Agreement (the ~~Statements~~“Agreement”), ofeffective ~~Cash~~December ~~Flows~~21, 2017. Pursuant to the Agreement, the Company ~~considers~~licensed ~~all~~certain ~~highly~~intellectual ~~liquid~~property ~~debt~~and ~~instruments~~improvements ~~with~~to aMenred, ~~maturity~~for ofuse ~~three~~in ~~months~~the ormanufacture ~~less~~and tosale beof ~~cash~~energy ~~equivalents.~~recovery ~~Cash~~ventilators (“ERV”) and ~~cash~~certain ~~equivalents~~other ~~are~~HVAC ~~maintained~~systems atfor ~~financial~~installation ~~institutions,~~in ~~and~~commercial, ~~at times~~residential, ~~balances~~or ~~may~~industrial ~~exceed~~buildings ~~federally~~in ~~insured limits~~China. ~~The~~Menred ~~Company~~also ~~had~~agreed ~~uninsured~~to ~~balances~~purchase its requirements of ~~approximately~~certain $0products ~~and~~from ~~$483,000~~the atCompany ~~September~~for 30Menred’s use, ~~2022~~pursuant to the terms and ~~December~~conditions 31of the Agreement. Menred will also pay royalties, ~~2021~~as defined, ~~respectively.~~to ~~The~~the Company ~~has~~on ~~never~~a ~~experienced~~quarterly ~~any~~basis, ~~losses~~based ~~related~~on toprice ~~these~~and ~~balances~~production volume as provided by Menred. ~~The~~No ~~company~~royalties ~~does~~are ~~not~~due ~~have~~within ~~any~~the ~~cash~~first ~~equivalents~~year atof ~~September~~the ~~30,~~Agreement. ~~2022~~Also ~~and~~pursuant ~~December~~to 31the Agreement, ~~2021~~the Company is required to purchase a certain amount of Product from Menred. The Agreement has a ten-year term with mutually agreed upon five-year extensions.

~~Concentrations~~Cash and cash equivalents - AtFor ~~September~~purposes ~~30,~~of ~~2022~~the Statements of Cash Flows, ~~one~~the ~~customer~~Company ~~accounted~~considers ~~for~~all ~~92%~~highly liquid debt instruments with a maturity of ~~accounts~~three ~~receivable~~months or less to be cash equivalents. AtCash ~~December~~and 31cash equivalents are maintained at financial institutions, ~~2021~~and, ~~two~~at ~~customers~~times, ~~accounted~~balances ~~for~~may ~~100%~~exceed offederally ~~accounts~~insured ~~receivable~~limits. ~~For~~The ~~the~~Company ~~nine~~had ~~months~~no ~~ended~~uninsured ~~September~~balances 30at March 31, ~~2022~~2023 and December 31, ~~one~~2022. ~~customer~~The ~~accounted~~Company ~~for~~has ~~60%~~never ofexperienced ~~total~~any ~~revenue~~losses related to these balances. ~~For~~The ~~the~~Company ~~nine~~does ~~months~~not ~~ended~~have ~~September~~any ~~30,~~cash ~~2021,~~equivalents ~~three~~at ~~customers~~March ~~accounted~~31, ~~for~~2023 ~~75%~~and ofDecember ~~total~~31, ~~revenue~~2022.

~~Fair~~Concentrations ~~Value of Financial Instruments~~ - ~~The~~At ~~Company’s~~March ~~financial~~31, ~~instruments~~2023, ~~including~~four ~~cash~~customers ~~and~~accounted ~~cash~~for ~~equivalents,~~85% of accounts receivable,. ~~accounts~~At ~~payable,~~December ~~accrued expenses~~31, ~~deferred revenue~~2022, ~~customer~~two ~~deposits~~customers ~~and~~accounted ~~notes~~for ~~payable~~76% ~~are~~of ~~carried~~accounts ~~at historical cost~~receivable. AtFor ~~September~~the ~~30,~~three ~~2022~~months ~~and~~ended ~~December~~March 31, ~~2021~~2023, ~~the~~four ~~carrying~~customers ~~amounts~~accounted for 55% of ~~these~~total ~~instruments~~revenue. ~~approximated~~For ~~their~~the ~~fair~~three ~~values~~months ~~because~~ended ofMarch ~~the~~31, ~~short-term~~2022, ~~nature~~four customers accounted for 83% of ~~these~~total ~~instruments~~revenue.

~~Inventory~~Fair -Value ~~Inventory consists~~ of ~~raw~~Financial ~~materials,~~Instruments ~~work~~-~~in-process~~ ~~and~~The ~~finished~~Company’s ~~goods~~financial ~~and~~instruments, isincluding ~~stated~~cash atand ~~the~~cash ~~lower~~equivalents, ofaccounts ~~cost~~receivable, ~~determined~~accounts ~~by first-in~~payable, ~~first-out~~accrued ~~method~~expenses, ordeferred ~~market. Market is determined based on the net realizable value~~revenue, ~~with~~customer ~~appropriate~~deposits ~~consideration~~and ~~given~~notes topayable ~~obsolescence,~~are ~~excessive~~carried ~~levels,~~at ~~deterioration,~~historical ~~and other factors~~cost. At ~~September~~March 3031, ~~2022~~2023 and December 31, ~~2021,~~2022 the ~~Company~~carrying ~~had~~amounts ~~$182,377~~of ~~and~~these ~~$59,631~~instruments ofapproximated ~~raw~~their ~~materials,~~fair ~~$11,668~~values ~~and~~because ~~$1,844~~ of inthe short-~~process~~term ~~inventory~~nature ~~and $0 and $10,592~~ of ~~finished~~these ~~goods inventory, respectively~~instruments. ~~A reserve is recorded for any inventory deemed excessive or obsolete. No reserve is recorded at September 30, 2022 and December 31, 2021, respectively.~~

~~Property~~Inventory ~~and~~- ~~equipment~~Inventory -consists ~~Property~~of ~~and~~raw ~~equipment~~materials, iswork-in-process ~~recorded~~and atfinished ~~cost.~~goods ~~Depreciation~~and is ~~calculated~~stated ~~using~~at the ~~straight-line~~lower ~~method over the estimated useful lives~~ of ~~the~~cost, ~~assets~~determined ~~ranging~~by ~~from~~first-in, 3first-out tomethod, 7or ~~years~~market. ~~Leasehold~~Market ~~improvements~~is ~~are~~determined ~~amortized~~based ~~over~~on the ~~shorter~~net ofrealizable ~~their~~value, ~~estimated~~with ~~useful~~appropriate ~~lives~~consideration ofgiven 5to ~~years~~obsolescence, orexcessive ~~the~~levels, ~~related~~deterioration, ~~lease~~and ~~term~~other factors. ~~Depreciation~~At ~~expense~~March ~~was $2~~31,~~424~~ 2023 and ~~$367~~December ~~for~~31, 2022, the ~~three~~Company ~~months~~had ~~ended September 30~~$303,038 ~~2022~~ and ~~2021~~$269,083 ~~respectively,~~of ~~and~~raw materials, $633,~~591~~454 and $15,~~722~~997 ~~for~~of ~~the~~in-process ~~nine~~inventory ~~months~~and ~~ended~~$0 ~~September~~and 30$19,392 ~~2022~~of ~~and~~finished ~~2021~~goods inventory, respectively. ~~Gains~~A ~~and~~reserve ~~losses~~is ~~upon~~recorded ~~disposition~~for ~~are~~any ~~reflected~~inventory indeemed ~~the~~excessive ~~Statement~~or ~~of Operations in the period of disposition~~obsolete. ~~Maintenance~~No ~~and~~reserve ~~repair~~is ~~expenditures~~recorded ~~are~~at ~~charged~~March to31, ~~expense~~2023 ~~as incurred. There were no dispositions of property~~ and ~~equipment~~December in31, 2022, ~~or 2021~~respectively.

~~Intangible~~Property ~~assets~~and equipment - ~~Identified~~Property ~~intangible~~and ~~assets~~equipment ~~are~~is ~~reviewed~~recorded ~~for~~at ~~impairment~~cost. ~~whenever~~Depreciation ~~events~~is orcalculated ~~changes~~using inthe ~~circumstances~~straight-line ~~indicate~~method ~~that~~over the ~~carrying~~estimated ~~amount~~useful ~~may~~lives ~~not~~of bethe ~~recoverable.~~assets ~~The~~ranging ~~Company’s~~from ~~existing~~3 ~~intangible~~to ~~assets~~7 ~~consist solely of patents~~years. ~~Patents~~Leasehold improvements are amortized over the shorter of their estimated useful ~~or economic~~ lives of 175 years. ~~Patent~~or ~~amortization~~the related lease term. Depreciation expense was $52,~~078~~582 and $41,~~795~~851 for the three months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022, respectively. Gains and ~~$14,860~~losses ~~and~~upon ~~$14,045~~disposition ~~for~~are ~~the~~reflected ~~nine~~in ~~months~~the ~~ended~~Statement ~~September~~of ~~30,~~Operations ~~2022~~in ~~and~~the ~~2021,~~period ~~respectively~~of disposition. ~~Based~~Maintenance onand ~~current~~repair ~~capitalized~~expenditures ~~costs,~~are ~~total~~charged ~~patent~~to ~~amortization~~ expense isas ~~estimated~~incurred. toThere bewere ~~approximately~~no ~~$19,400~~dispositions ~~per~~of ~~year~~property ~~for~~and ~~the~~equipment ~~next~~in ~~five~~2023 ~~years~~or ~~and thereafter~~2022.

~~Research~~Intangible ~~and~~assets ~~development~~- ~~expenses~~Identified ~~and~~intangible ~~funding~~assets ~~proceeds~~are -reviewed ~~Expenditures~~ for ~~research~~impairment ~~and~~whenever ~~development~~events ~~are~~or ~~expensed~~changes asin ~~incurred~~circumstances indicate that the carrying amount may not be recoverable. The Company’s ~~incurred~~existing ~~research~~intangible ~~and~~assets ~~development~~consist ~~costs~~solely of ~~$85,887~~patents. ~~and~~Patents ~~$58,465~~are ~~for~~amortized ~~the~~over ~~three~~their ~~months~~estimated ~~ended~~useful ~~September~~or ~~30,~~economic ~~2022~~lives ~~and~~of ~~2021,~~17 ~~respectively~~years. ~~and~~Patent amortization expense was $~~212~~5,~~508~~023 and $~~159~~4,~~277~~831 for the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022, respectively. ~~The~~ ~~Company~~Based ~~accounts~~on ~~for~~current ~~proceeds~~capitalized ~~received from government funding for research as a reduction in research and development~~ costs., ~~The~~total ~~Company~~patent ~~recorded~~amortization ~~proceeds~~expense ~~against~~is ~~research~~estimated ~~and~~to ~~development~~be ~~expenses~~approximately ~~on the Statements of Operations of~~ $~~0 and $28~~20,~~651~~000 ~~for~~per ~~the~~year ~~three months ended September 30, 2022 and 2021, respectively and $0 and $89,617~~ for the ~~nine~~next ~~months~~five ~~ended~~years ~~September 30, 2022~~ and ~~2021, respectively~~thereafter.

~~Derivative~~Research ~~Liability~~and -development ~~The~~expenses ~~Company,~~and upfunding ~~until~~proceeds ~~June~~- ~~30,~~Expenditures ~~2021~~for research, ~~had~~development ~~financial~~and ~~instruments~~engineering ~~that~~of products are ~~considered~~expensed ~~derivatives~~as orincurred. ~~contain~~The ~~embedded~~Company ~~features~~incurred ~~subject~~research toand ~~derivative~~development ~~accounting.~~costs ~~Embedded~~of ~~derivatives~~$134,135 ~~are~~and ~~valued~~$64,873 ~~separately~~for ~~from~~ the ~~host~~three ~~instrument~~months ~~and~~ended ~~are~~March ~~recognized~~31, as2023 ~~derivative~~and ~~liabilities~~2022, inrespectively. ~~the~~The Company’s ~~balance~~accounts ~~sheet.~~for ~~The~~proceeds ~~Company~~received ~~measures~~from ~~these~~government ~~instruments~~funding atfor ~~their~~research ~~estimated~~as ~~fair~~a ~~value~~reduction in research and ~~recognizes~~development ~~changes~~costs. inThe ~~their~~Company ~~estimated~~recorded ~~fair~~no ~~value~~proceeds inagainst ~~results~~research ofand ~~operations~~development ~~during~~expenses for the ~~period~~three ofmonths ~~change~~ended March 31, 2023 and 2022.

~~Fair~~Earnings ~~Value~~(loss) ~~Measurements~~per share - ~~The~~Basic ~~Company~~income ~~accounts~~(loss) ~~for~~per ~~financial~~share ~~instruments~~is incomputed ~~accordance~~by ~~with~~dividing ~~ASC~~net ~~820~~income ~~“Fair~~(loss) ~~value~~attributable ~~Measurement~~to ~~and~~common ~~Disclosures”.~~stockholders ~~ASC~~by ~~820~~the ~~defines~~weighted ~~fair~~average ~~value,~~common ~~establishes~~shares aoutstanding ~~framework~~ for ~~measuring~~the ~~fair~~period. ~~value~~Diluted ~~and~~income ~~expands~~(loss) ~~disclosures~~per ~~about~~share ~~fair~~is ~~value~~computed ~~measurements.~~giving ~~ASC~~effect ~~820~~to ~~defines~~all ~~fair~~potentially ~~value~~dilutive ascommon ~~the~~shares. ~~exchange~~Potentially ~~price~~dilutive ~~that~~common ~~would~~shares bemay ~~received~~consist ~~for~~of anincremental ~~asset~~shares orissuable ~~paid~~upon tothe ~~transfer~~exercise aof ~~liability~~stock ~~(an~~options ~~exit~~and ~~price)~~warrants inand upon the ~~principal~~conversion orof ~~most~~notes. ~~advantageous~~In ~~market~~periods ~~for the asset or liability~~ in anwhich ~~orderly~~a ~~transaction~~net ~~between~~loss ~~market~~has ~~participants~~been onincurred, ~~the~~all ~~measurement~~potentially ~~date.~~dilutive ~~ASC~~common ~~820~~shares ~~also~~are ~~establishes~~considered aanti-dilutive ~~fair~~and ~~value~~thus ~~hierarchy~~are ~~that~~excluded ~~distinguishes~~from ~~between~~the ~~(1)~~calculation. ~~market~~Common ~~participant~~share ~~assumptions~~equivalents ~~developed~~of ~~based~~29,508,645 onand ~~market~~32,526,731 ~~data~~were ~~obtained~~excluded from ~~independent~~the ~~sources~~computation ~~(observable~~of ~~inputs)~~diluted ~~and~~earnings ~~(2)~~per anshare ~~entity’s~~for ~~own~~the ~~assumptions~~three ~~about~~months ~~market~~ended ~~participant~~March ~~assumptions~~31, ~~developed~~2023 ~~based~~and on2022, ~~the~~respectively, ~~best~~because ~~information~~their ~~available~~effect inis ~~the circumstances (unobservable inputs)~~anti-dilutive.

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

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

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The reconciliation of the derivative liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows for the nine months ended September 30, 2021:

	September 30,
	2021
Balance, beginning of period	$	3,845,662
Additions		124,290
Extinguished derivative liability		(1,728,274	)
Change in fair value of derivative liabilities		(2,241,678	)
Balance, end of period	$	-

Reconciliation of diluted loss per share for the nine-month period ended September 30, 2021, is as follows:

	Nine MonthsEndedSeptember 30,2021
Net income attributable to common shareholders	$	1,557,319
Income attributable to note derivatives
Change in fair value of derivatives		(2,241,678	)
Gain on extinguishment of debt		(1,148,554	)
Expense attributable to note derivatives
Interest expense		216,378
Diluted loss attributable to common shareholders	$	(1,616,535	)
Basic shares outstanding		4,494,649
Derivative notes and interest shares		3,866,301
Diluted shares outstanding		8,360,950
Diluted loss per share	$	(0.19	)

The Company had no derivative liabilities so measured for the three and nine months ended September 30, 2022 and accordingly no diluted loss per share over those periods.

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

Note 4. Accrued Expenses, Other

Accrued expenses, other consists of the following:

	September 30,		December 31,
	March 31,		December 31,
	2022		2021
	2023		2022
Accrued expenses, other	$	~~664~~671,~~845~~649	$	~~656~~673,~~810~~270
Accrued interest		23,~~784~~577,~~225~~878		23,~~197~~253,~~577~~787
Accrued warranty costs		91,531		91,531
	$	34,~~540~~341,~~601~~058	$	24,~~945~~018,~~918~~588

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Note 5. Related Party Transactions

The Company rents a building that is owned by two stockholders of the Company, one of which is the Chief Executive Officer. Rent expense for this building is $4,066 per month, including sales tax. The Company recognized rent expense (including property tax charges) related to this lease of $12,198 and $12,198 for the three months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021, respectively and $36,594 and $36,594 for the nine months ended September 30,~~ 2022 ~~and 2021~~, respectively. The lease term will terminate upon 30 days’ written notice from landlord or 90 days written termination from us. The lease is considered to be short term or month to month.

The Company has accrued compensation due to the Chief Executive Officer as of ~~September~~March 3031, ~~2022~~2023 and December 31, ~~2021~~2022 of $2,~~098~~166,~~636~~523 and $2,~~071~~140,~~380~~687, respectively, included in accrued compensation and related benefits in the accompanying balance sheets.

10On ~~Table~~June 24, 2016, the Company entered into a Loan and Security Agreement (“Security Agreement”) with the entity known as PKT -- Strategic Assets, LLC (the “Holder”) pursuant to which the Company issued a Senior Secured Promissory Note for $150,000 (the “Note”). The Note has an interest rate is 12% per annum compounded daily with a minimum interest payment of ~~Contents~~$2,000. The Note grants the Holder a secure interest in all the assets of the Company. During 2016 to the period ended March 31, 2023, the Holder extended the Note pursuant to various amendments. Pursuant to the amendments, the principal amount and interest totaled $6,372,511 and $5,429,661 (including fees and other expenses) at March 31, 2023 and December 31, 2022, respectively. We received advances aggregating $658,960 during the three months ended March 31, 2023, and repaid $154,398 during the three months ended March 31, 2022. Financing cost of $38,050 was deducted from the 2023 advances. The Holder’s corporation is controlled by Ms. Tangredi, related to Tim Tangredi: the Company’s CEO and stockholder, and therefore, is a Related Party of the Company. The Company is to pay the Holder the principal, plus all interest and fees due in accordance with terms and conditions of the Security Agreement on the earlier of:

On(i) ~~June~~The ~~24,~~date ~~2016,~~upon which the Company ~~entered~~secures ~~into~~funds, aregardless ~~Loan~~of ~~and~~source, ~~Security~~equal ~~Agreement~~to ~~(“Security~~or ~~Agreement”)~~exceeding, ~~with~~in the ~~entity~~aggregate, ~~known~~$1,000,000 asor ~~PKT~~November --1, ~~Strategic Assets~~2021, ~~LLC~~which ~~(the~~as ~~“Holder”)~~of ~~pursuant to which~~ the ~~Company~~date ~~issued~~of afiling, ~~Senior~~has ~~Secured~~expired. ~~Promissory Note for $150,000~~ (~~the “Note”~~ii). The ~~Note~~Holder has annot ~~interest~~declared ~~rate~~the isNote ~~12%~~in ~~per~~Default ~~annum~~as ~~compounded~~the ~~daily~~Parties ~~with~~have areached ~~minimum~~terms ~~interest~~to ~~payment~~address ofseveral ~~$2,000.~~issues ~~The~~including ~~Note grants~~ the ~~Holder~~extension aof ~~secured~~the ~~interest~~Maturity inDate ~~all~~ (the ~~assets~~“Maturity ofDate”). ~~the~~The ~~Company.~~parties ~~During~~have ~~2016~~agreed to ~~the~~new ~~period~~language ~~ended~~to ~~September~~solve ~~30,~~this ~~2022,~~matter ~~the~~with ~~Holder extended~~ the ~~Note~~plan ~~pursuant~~ to ~~various~~have ~~amendments.~~it ~~Pursuant~~complete toin the ~~amendments,~~third ~~the~~quarter ~~principal~~of ~~amount~~2023. ~~and interest totaled $5,137,188~~ (~~including fees and other expenses~~iii) atThe ~~September~~Company ~~30,~~has ~~2022.~~recorded Weinterest ~~received~~expense ~~advances~~of ~~aggregating~~ $~~362~~283,~~800~~890 ~~during~~and ~~2022.~~$149,066 ~~The~~for ~~Holder’s~~the ~~corporation~~three ismonths ~~controlled~~ended byMarch ~~Ms. Tangredi~~31, ~~related~~2023 ~~to Tim Tangredi: the Company’s CEO~~ and ~~stockholder~~2022, ~~and therefore, is a Related Party of the Company~~respectively. ~~The~~(iv) ~~Company~~Accrued isinterest towas ~~pay the Holder the principal~~$3,313,052 ~~plus all interest~~ and ~~fees~~$3,029,162 ~~due~~at inDecember ~~accordance~~31, ~~with~~2022 ~~terms~~ and ~~conditions~~2021, ~~of the Security Agreement on the earlier of:~~respectively.

~~(i)~~Of ~~The~~the ~~date~~2023 ~~upon~~advances, ~~which~~funds in the ~~Company~~amount ~~secures~~of ~~funds~~$592,960 ~~regardless~~originally ofcame ~~source,~~from ~~equal~~Ethos toBusiness orVentures. ~~exceeding,~~It inwas ~~the~~a ~~aggregate,~~last ~~$1,000,000~~minute orchange ~~November~~of 1,plan ~~2021,~~to ~~which~~assist asthe ofCompany ~~the~~meet ~~date~~its ofobligations ~~filing,~~in ~~has~~a ~~expired~~timely manner. ~~(ii)~~This ~~The~~last ~~Holder~~minute ~~has~~change ~~not~~was ~~declared~~made ~~the~~necessary ~~Note~~by inan ~~Default~~administrative aserror at the ~~Parties~~bank ~~have~~of ~~reached~~PKT ~~terms~~Strategic toAssets, ~~address~~LLC. ~~several~~who ~~issues~~was ~~including~~to have been the ~~extension~~lender of ~~the~~record, ~~Maturity~~and ~~Date~~is (the ~~“Maturity~~lender ~~Date”).~~of Athe ~~binding~~Company's ~~agreement~~senior issecured ~~being~~promissory ~~prepared~~note ~~for~~and ~~the~~security ~~parties~~agreement. To tocorrect ~~execute~~this byerror, management ~~the~~of ~~end~~Dais of(with ~~the~~BOD ~~fourth~~approval), ~~quarter~~Ethos, ofand ~~2022.~~PKT ~~(iii)~~agreed ~~The~~on ~~Company~~April ~~has~~3, ~~recorded~~2023 ~~interest~~effective ~~expense~~immediately ofthe ~~$242,055~~ownership ~~and~~of the $67592,~~099~~960 ~~for~~sum ~~the~~will ~~three-month~~be ~~periods~~transferred ~~ended~~to ~~September~~PKT ~~30,~~Strategic ~~2022~~Assets, ~~and~~LLC ~~2021,~~at ~~respectively~~no ~~and~~cost ~~$611,516~~or term and ~~$197,452~~condition ~~for~~alteration ~~the~~except ~~nine-month~~as ~~periods~~it ~~ended~~pertains ~~September~~to ~~30,~~relevant ~~2022,~~language ~~and~~to ~~2021,~~effect ~~respectively.~~the ~~(iv)~~change in ownership. The ~~Company~~definitive ~~made~~paperwork awill ~~payment~~be ofcomplete ~~fees~~in ~~and~~3Q ~~accrued~~2023. ~~interest~~Dais ~~totaling~~is ~~$154,398~~to ~~during~~pay a ~~the~~minimum ~~nine~~of ~~months~~$6,000 ~~ended~~per ~~September~~month ~~30,~~in ~~2022.~~interest ~~Accrued~~only ~~interest~~to ~~was~~PKT $2Strategic Assets,~~609,491~~ ~~and~~LLC. This ~~$2,152,373~~change onwill ~~September~~be ~~30,~~fully ~~2022,~~reported ~~and~~in ~~December~~3Q ~~31,~~2023 ~~2021~~Form 10Q.

On October 12, 2019, the Company entered a promissory note with an entity controlled by our Chief Executive Officer in the amount of $10,000. The note bears interest at 10% per year and matured on October 12, 2021. Interest expense on the note was $150 for each of the three~~-month~~ ~~periods~~months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021, respectively, and was $450 for each of the nine month periods ended September 30,~~ 2022 ~~and 2021, respectively~~. Accrued interest was $12,~~800~~100 and $1,~~350~~950 at ~~September~~March 3031, ~~2022~~2023 and December 31, ~~2021~~2022, respectively. The Holder has not declared the Note in Default or extended the Maturity Date.

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

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

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

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

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

Note 6. Equity Transactions

Preferred Stock

At ~~September~~March 3031, ~~2022~~2023 and December 31, ~~2021~~2022, the Company’s Board of Directors ~~had~~ authorized 10,000,000 shares of preferred stock with a par value of $0.01 to be issued in series with terms and conditions to be determined by the Board of Directors.

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

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

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

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

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

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

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

11To ~~Table~~implement the authorization of ~~Contents~~the four New Series of Preferred Stock, the Certificate of Amendment was submitted to the Department of State on March 17, 2022, and was accepted for filing on March 22, 2022. The recently authorized New Series of Preferred Stock included: (i) Series C Convertible Preferred Stock, consisting of 100,000 shares, all of which were to be issued following acceptance of the Certificate of Amendment by the Department of State, to two (2) third-party accredited investors who had provided bona fide financial consulting services to the Company; (ii) Series D Convertible Preferred Stock, consisting of 10,000 shares, which shares may be issued, at the sole discretion of the Board of Directors, from time to time, to consultants and other third parties for, among other purposes, new services to the Company and for other good and valuable consideration, none of which shares have been issued; (iii) Series E Convertible Preferred Stock, consisting of 250,000 shares, all of which were to be issued following final acceptance of the Certificate of Amendment by the Department of State, being issued to three (3) “accredited investors” including the Company’s financial advisors in consideration for their capital contributions to the Company; and (iv) Series F Convertible Preferred Stock consisting of 1,500,000 shares which are intended to be issued to several long-tenured key employees and the Company’s Board of Directors in consideration for previously rendered services to the Company as well as to certain noteholders and others under agreements and arrangements that have been authorized by the Board of Directors. Issuances within Series C, and E were completed earlier in 2023, there has been no need to issue any Series D, and Series F has been agreed to and will be issued in Q3 of 2023.

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

Common Stock

AsAt ofMarch ~~September 30~~31, ~~2022~~2023 and December 31, ~~2021~~2022, the Company’s ~~has~~Board of Directors authorized 1,100,000,000 ~~authorized~~ shares of common stock with a par value of $0.01 to be issued in series with terms and conditions to be determined by the Board of Directors.

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2023 Common Stock Transactions

During the three months ended March 31, 2023, an aggregate of 5,344,939 shares of common stock were issued upon the conversion of $143,752 of notes payable, $8,610 of related accrued interest, and $5,250 of fees. The value of the shares issued was $1,004,853, and we recorded a loss on conversion of $847,241.

During 2023, we reissued 1,000,000 shares of common stock that had been cancelled in 2022.

In connection with a loan received in January 2023, we agreed to issue 2,000,000 shares of common stock valued at $196,000, calculated by the open market share value on the date of the grant. As of March 31, 2023, 500,000 shares have been issued and the remaining 1,500,000 shares, valued at $147,000, are classified as Common Stock To Be Issued.

During March of 2023, we issued 577,500 shares of common stock upon the cashless exercise of 733,333 warrants.

During March 2023, we issued 450,000 shares of common stock, valued at $13,500, for services, calculated by the open market share value on the date of the grant.

During March 2023, we issued 200,000 shares of common stock for cash. The proceeds had been advanced to the Company in December 2021.

2022 Common Stock Transactions

~~During~~There ~~May~~were ~~2022,~~no ~~the Company issued 457,500 shares of~~ common stock ~~upon~~transactions during the ~~conversion~~three ofmonths ~~$45,000~~ended ofMarch ~~notes payable~~31, ~~plus $750 of costs~~2022.

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

~~The~~In ~~company~~January 2023, the Company issued 1a warrant to purchase 800,~~276,406~~000 shares of common stock, ~~upon~~in connection with the amendment of a convertible note. The warrant has a term of five years and has a cash exercise price of $0.10 or a cashless exercise price of 1$0.20. The fair value of the warrant was $78,~~510~~395,~~000~~ determined using the Black Scholes Model with the following assumptions: (1) risk free interest rate of 3.9% - 1.33%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of the Company’s common stock ~~warrants~~of 362%; and (4) an expected life of 5 years.

~~The~~During ~~Company~~March ~~cancelled~~of 12023,~~000~~ 733,~~000~~333 ~~shares~~warrants ofwere ~~common~~exercised ~~stock,~~on ~~which~~a ~~are~~cashless tobasis beinto ~~reissued~~577,500 inshares ~~the~~of ~~future~~common stock.

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

2021 Common Stock Transactions

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

During the nine months ended September 30, 2021, the Company issued 2,100,000 shares of common stock, valued at $567,000, for services.

Note 7. Convertible Notes Payable and Exchange Program

Debt to Equity Exchange Program

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

2022 Convertible Notes

On ~~September~~December 712, 2022, the Company entered a convertible promissory note in the amount of $~~100~~40,000. The Note was amended in January, 2023. The note matures on ~~September~~January 75, ~~2023~~2024 and bears interest at 8% per year. InThe ~~connection with this~~ note, ~~the~~is ~~Company~~convertible ~~has~~into ~~issued a warrant to purchase 1,000,000~~ shares of common stock toat ~~the~~a ~~lender.~~fixed ~~The~~conversion ~~warrant has an exercise~~ price of $0.3005 per share ~~and expires on September 7, 2027~~. ~~The~~As ~~relative~~consideration ~~fair~~for ~~value of~~ the ~~warrant was $59~~amendment,~~998,~~ ~~determined using~~ the ~~Black~~Company ~~Scholes~~issued ~~Model~~a ~~with~~warrant ~~the~~to ~~following~~purchase ~~assumptions:~~800,000 ~~(1)~~shares ~~risk free interest rate~~ of ~~3.37%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of the Company’s~~ common stock. ofThe ~~360%;~~warrant ~~and~~has ~~(4)~~a anterm ~~expected life~~ of 5five years. ~~The~~and ~~note~~has isa ~~convertible~~cash ~~into~~exercise ~~shares~~price of ~~common~~$0.10 ~~stock~~or at a ~~fixed~~cashless ~~conversion~~exercise price of $0.~~10 per share~~20. The ~~company~~warrant ~~has~~had ~~recorded~~ a ~~beneficial~~value ~~conversion feature~~ of $4078,~~002. Amortization of discount was $6~~395,~~575~~ ~~for~~which ~~the~~has ~~three~~been ~~and~~charged ~~nine~~to ~~months~~finance ~~ended September 30, 2022~~cost.

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

On September 7, 2022, the Company entered a convertible promissory note in the amount of $100,000. The note matures on September 7, 2023 and bears interest at 8% per year. The note is convertible into shares of common stock at a fixed conversion price of $0.10 per share. The company has recorded a discount of $100,000. Amortization of discount was $24,658 for the three months ended March 31, 2023.

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

On June 15, 2022, the Company entered two convertible promissory notes aggregating $300,000. The notes mature on the earlier of December 15, 2022 or 10 days after demand and bear interest at 8% per year. The Company received proceeds of $300,000. The notes are convertible into shares of common stock at a fixed conversion price of $0.30 per share. The Company has recorded debt discount of $200,000, related to the beneficial conversion feature of the notes~~. The discount will be amortized to interest expense over the six-month term of the notes~~, ~~and~~which ~~$100,546 and $118,032~~ was fully amortized ~~during~~in ~~the three and nine months ended September 30,~~ 2022~~, respectively~~.

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2021 Convertible Notes

On September 20, 2021, the Company entered a convertible promissory note with GS Capital Partners, LLC with a face value of $220,000. The note matured on September 20, 2022 and bears interest at 8% per year. The ~~Company received proceeds of $197,000, after deduction of $20,000 of original issue discount and $3,000 of costs. In connection with this~~ note, ~~the~~is ~~Company~~convertible ~~has~~into ~~issued a warrant to purchase 1,466,666~~ shares of common stock toat ~~the~~a ~~lender.~~fixed ~~The~~conversion ~~warrant has an exercise~~ price of $0.1510 per share. ~~and~~The ~~expires~~lender onhas ~~September~~not ~~21,~~declared ~~2026.~~a ~~The~~default ~~relative~~as ~~fair~~both ~~value~~parties ofare ~~the~~actively ~~warrant~~discussing ~~was~~a ~~$110,000,~~mutually ~~determined~~beneficial ~~using~~path ~~the~~forward ~~Black Scholes Model~~ with ~~the~~an ~~following~~agreement ~~assumptions:~~expected ~~(1)~~during ~~risk~~the ~~free~~first ~~interest~~quarter ~~rate~~ of 02023.~~84%;~~ ~~(2)~~This ~~dividend~~did ~~yield~~not ofoccur. ~~0%;~~Please ~~(3)~~see ~~volatility~~the ~~factor~~section oftitled ~~the~~“ ~~expected~~Subsequent ~~market~~Events” ~~price~~for ofmore ~~the~~information. ~~Company’s~~During ~~common~~the ~~stock~~three ofmonths ~~389%;~~ended ~~and~~March ~~(4)~~31, 2023, an ~~expected~~aggregate ~~life~~ of 52,299,000 ~~years. The note is convertible into~~ shares of common stock atwere aissued ~~fixed~~upon ~~conversion~~the ~~price of $0.10 per share. The company has recorded a beneficial~~ conversion ~~feature~~ of $9060,000. ~~Amortization~~ of ~~discount~~notes ~~and costs was $49~~payable,~~488~~ ~~and~~ $68,~~721~~610 ~~for~~of ~~the~~related ~~three~~accrued ~~months ended September 30~~interest, ~~2022~~ and ~~2021~~$3,000 ~~respectively,~~of ~~and~~fees. ~~$160,072~~The ~~and~~value ~~$6,721~~of ~~for~~ the ~~nine~~shares ~~months~~issued ~~ended~~was ~~September 30~~$457,921, ~~2022~~ and ~~2021,~~we ~~respectively.~~recorded ~~The~~a ~~note~~loss ~~matured~~ on ~~September~~conversion ~~20, 2022. The lender has not declared a default as both parties are actively discussing a mutually beneficial path forward. It is expected an agreement will be reached in the fourth quarter~~ of ~~2022~~$386,311.

~~During~~12 ~~the~~Table ~~fourth quarter~~ of 2021, the Company entered twenty convertible promissory notes with various holders aggregating $1,412,000. The notes mature one year from issuance and bear interest at 8% per year. The Company received proceeds of $1,287,000, after deduction of $117,000 of original issue discount and $8,000 of costs. In connection with the notes, the Company has issued warrants to purchase 10,463,332 shares of common stock to the lenders. The warrants have an exercise price of $0.15 per share and expire five years from the date of issuance. The relative fair value of the warrants was $1,366,127, determined using the Black Scholes Model with the following assumptions: (1) risk free interest rate of 0.84% - 1.33%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of the Company’s common stock of 386% - 389%; and (4) an expected life of 5 years. The notes are convertible into shares of common stock at a fixed conversion price of $0.10 per share. A total of $1,412,000 has been recorded as debt discount, and 8,000 has been recorded as deferred debt costs. The discount and costs will be amortized to interest expense over the term of the notes Amortization of discount and costs was $334,176 and $1,033,668 for the three and nine months ended September 30, 2022, respectively.Contents

During ~~May~~the ~~2022~~fourth quarter of 2021, the Company ~~issued~~entered ~~457~~twenty convertible promissory notes with various holders aggregating $1,~~500~~412,000. The notes matured one year from issuance and bear interest at 8% per year. The notes are convertible into shares of common stock ~~upon~~at ~~the~~a fixed conversion price of $~~45,000~~0.10 ofper ~~notes~~share. ~~payable~~During the three months ended March 31, ~~plus~~2023, ~~$750~~an aggregate of ~~costs.~~3,045,939 ~~Unamortized~~shares ~~discount~~of ~~and~~common ~~debt~~stock ~~costs~~were ~~related~~issued toupon the ~~principal~~conversion ~~converted~~of ~~were~~ $2183,~~206~~752 of notes payable and $~~514~~2,250 ~~respectively,~~of ~~which~~fees. ~~were~~The ~~charged~~value ~~against~~of ~~interest~~the ~~expense~~shares ~~upon~~issued was $546,932, and we recorded a loss on conversion of $460,930.

~~During~~The ~~July 2022, the~~ Company’s ~~issued~~convertible ~~470,000~~promissory ~~shares~~notes ofat ~~common~~March ~~stock upon the conversion of $47~~31,~~000~~ of2023 ~~notes~~and ~~payable.~~December ~~Unamortized discount related to the principal converted was $19~~31,~~958,~~ ~~which~~2022 ~~was~~are ~~charged~~as ~~against interest expense upon conversion.~~follows:

The Company’s convertible promissory notes at September 30, 2022 and December 31, 2021 are as follows:

	March 31, 2023			December 31, 2022
Convertible notes payable, bearing interest at 8-10%	$	1,911,098		$	2,054,850
Unamortized debt discount		(43,562	)		(68,219	)
Unamortized deferred debt issuance cost		-			-
Total		1,867,536			1,986,631
Current portion	$	1,867,536		$	1,986,631

	September 30,2022			December 31,2021
Convertible notes payable, bearing interest at 8-10%	$	2,036,850		$	1,453,960
Unamortized debt discount		(385,108	)		(1,428,726	)
Unamortized deferred debt issuance cost		(817	)		(9,112	)
Total		1,650,925			194,162
Current portion	$	1,650,925		$	194,162

Note 8. Notes Payable

~~Paycheck~~JMS ~~Protection Program Loans~~Investments

OnBetween ~~January~~April ~~25,~~of 2021, ~~the~~and ~~Company~~September ~~received~~30, ~~$122~~2021,~~340~~ inJMS aInvestments ~~loan~~of ~~borrowed~~Staten ~~from~~Island, aNY, ~~bank~~USA ~~pursuant~~invested ~~to the Paycheck Protection Program under the CARES Act guaranteed by the Small Business Administration (“SBA”)~~$376,000 ~~which~~in weseven ~~expect~~separate totransactions. beThe ~~forgiven~~sums inare ~~part~~repayable or in ~~full, subject to our compliance with~~ the ~~conditions~~form of ~~the~~one-year ~~Paycheck~~demand ~~Protection~~notes ~~Program.~~having Ifan ~~not forgiven, the terms on the note provide for~~ interest atrate ~~1% per year and the note mature in 24 months, with 18 monthly payments~~ of $8~~,146 beginning after the initial 6-month deferral period for payments~~. ~~The loan and related accrued interest of $1,786 was forgiven on July 12, 2022~~5%.

~~Note~~GEX 9.Management, ~~Derivative Liabilities~~Inc.

~~The~~On ~~Company~~August ~~had~~30, ~~identified~~2021, ~~certain~~the ~~embedded~~Company ~~derivatives~~entered ~~related~~into toa ~~its~~promissory ~~convertible~~note ~~notes~~with GEX Management, Inc. ~~Since~~The ~~the~~note ~~notes~~matured ~~were~~on ~~convertible~~February ~~into~~28, a2022 ~~variable~~and ~~number~~was ofrepaid ~~shares~~in orDecember ~~have~~2021. aIn ~~price~~connection ~~reset~~with ~~feature~~this note, the ~~conversion~~Company ~~features~~has ofagreed ~~those~~to ~~notes~~issue ~~were~~1,000,000 ~~recorded~~shares asof ~~derivative~~common ~~liabilities.~~stock ~~The~~to ~~accounting~~the ~~treatment~~lender. ofThese ~~derivative~~shares ~~financial~~have ~~instruments~~not ~~requires~~been ~~that~~issued ~~the~~at ~~Company~~March ~~record~~31, ~~fair~~2023. ~~value~~The ofshares ~~the~~have ~~derivatives~~been asvalued ofat ~~the~~$120,990, ~~inception~~which ~~date~~has ~~and~~been toincluded ~~adjust~~in toaccrued ~~fair~~expenses ~~value~~at asMarch of31, ~~each~~2023 ~~subsequent~~and ~~balance~~December ~~sheet~~31, ~~date~~2022.

~~The~~Small ~~Company~~Business ~~has~~Administration recorded additions to the derivative conversion liabilities related to the conversion feature attributable to interest accrued during the period. These additions totaled $0 and $106,366 for the three months ended September 30, 2021 and 2020, respectively, and $124,290 and $368,312 for the nine months ended September 30, 2021 and 2020, respectively and were charged to interest expense.Loan

~~During~~On ~~the~~June ~~three~~12, ~~and~~2020, ~~nine~~the ~~months~~Company ~~ended~~received ~~September 30~~$150,000 ~~2021,~~in ~~through~~a ~~the~~loan ~~date~~borrowed offrom ~~settlement~~the ofSBA. ~~the~~Installment ~~debt~~payments, ~~the~~including ~~Company~~principal ~~recorded~~and ~~income~~interest, of $0731 ~~and $2~~monthly,~~241,678~~ ~~related~~will tobegin ~~the~~12 ~~change~~months infrom the ~~fair~~date ~~value~~ of the ~~derivatives~~note. The ~~fair~~balance ~~value~~of principal and interest will mature 30 years from the date of the ~~embedded~~note. ~~derivatives~~Interest ~~was~~will ~~$1,728,274~~accrue at the ~~date~~rate of ~~settlement,~~3.75% ~~determined~~per ~~using~~year. On March 16, 2021, the ~~Black~~U.S. ~~Scholes~~Small ~~Model~~Business ~~with~~Administration announced that the ~~following~~deferment ~~assumptions:~~period ~~(1)~~for ~~risk~~the ~~free~~repayment ~~interest~~would ~~rate~~be ofextended 0an additional 12 months.~~01%;~~ ~~(2)~~The ~~dividend~~company ~~yield~~received a past due notice dated June 6 , 2023 for $4,386 due since December 12, of ~~0%;~~2022 ~~(3)~~due ~~volatility~~to ~~factor~~an error on the part of the ~~expected~~company. ~~market~~The ~~price~~company ofanticipates the ~~Company’s~~sum ~~common~~will ~~stock~~be ofpaid ~~315%;~~in ~~and~~full ~~(4)~~during anthe ~~expected~~first ~~life~~part of 3the ~~months~~3rd quarter of 2023.

~~During~~2023 ~~the three and nine months ended September 30, 2020, the Company recorded expense of $208,916 and income of $376,282, respectively, related to the change in the fair value of the derivatives.~~Note

13On ~~Table~~January 27, 2023, the Company received a short-term loan of ~~Contents~~$350,000. The loan was repaid in full on March 6, 2023. In connection with this loan, the Company agreed to issue 2,000,000 shares to the individual, valued at $196,000. As of March 31, 2023, 500,000 shares have been issued and the remaining 1,500,000 shares, valued at $147,000, are classified as Common Stock To Be Issued.

~~During~~Note the second quarter of 2021 the Company issued 7,036,668 shares of common stock, valued at $1,829,534 and 2,826,733 warrants, valued at $857,600, in settlement of $1,453,960 of notes payable and $653,454 of accrued interest9. ~~Derivative~~Deferred ~~liability of $1,728,274 was extinguished because of the settlement. The Company recorded a gain on extinguishment of $1,148,554.~~Revenue

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

The Company recognized license revenue of $12,500 for each of the three months ended March 31, 2023 and 2022. Deferred revenue for the agreement was $236,156 and $248,656 at March 31, 2023 and December 31, 2022, respectively. The Company recognized royalty revenue of $0 for the three months ended March 31, 2023 and 2022.

Note 10. Commitments and Contingencies

Litigation

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

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

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

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

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

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

Accounts Payable

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

Company	Sum Owned		Payment Plan	Legal Action
Old Dominion Freight Line	$	13,576.95	No	Yes
Old Dominion Freight Line (1)	$	13,575.95	No	Yes
Power Plant Services	$	85,199.11	No	Yes
Power Plant Services (2)	$	85,199.11	No	Yes
SoftinWay	$	3,850.00	Yes	Yes
SoftinWay (3)	$	1,850.00	Yes	Yes
The O-Ring Store	$	10,334.00	No	Yes
Total	$	~~113~~112,~~960~~459.06

~~Note~~Footnotes ~~11.~~for ~~Subsequent~~Accounts ~~Events~~Payable Table

1. OnThis ~~October~~action 5,moved ~~2022,~~towards ~~the~~settlement ~~sums~~in December of ~~$30,000 and $62,800 (total $92,800) borrowed from the PKT Strategic Technologies, LLC, on July 28,~~ 2022, ~~Senior Note Holder under the same terms~~ and ~~conditions~~completing asin ~~the~~March ~~existing sums~~ of ~~money which have been loaned to the Company since June 16, 2016, was repaid~~2023. ~~Interest~~The ~~on this~~ sum ~~for this period remains to be repaid. This interest payment is an item covered by~~ the ~~pending~~creditor ~~updated~~froze ~~Senior Secured Note Holder agreement referred to Related Party~~$28,781 ~~Note~~of 3.the 2.Company’s Onfunds ~~October~~at ~~24, 2022,~~ the Company’s ~~received $48~~bank,~~000~~ ~~pursuant to~~ the ~~terms~~parties ~~and~~discussed ~~conditions of~~ the ~~Senior Secured Promissory Noteholder held by PKT Strategic Assets, LLC~~matter. The ~~note~~sum isowed ~~secured~~was byagreed ~~all the company’s assets including but not limited~~ to ~~the~~be ~~Company’s cash~~$17,212 ~~receivables,~~including ~~inventory~~principle, ~~WIP~~interest, ~~patents,~~court ~~etc.~~costs 3.and Onlegal ~~October 31~~fees, ~~2022,~~and the ~~Company~~balance ~~received~~being $7211,~~000~~569 ~~(another~~was ~~additive~~returned ~~amount~~ to the ~~initial~~company ~~loan~~on ~~made~~May ~~since~~8, ~~June~~2023 ~~2016)~~2. ~~pursuant~~The tosum the ~~terms~~creditor ~~and~~froze ~~conditions~~$4,700 of the ~~Senior Secured Promissory Noteholder held by PKT Strategic Assets, LLC. The note is secured by all the company~~Company’s ~~assets~~funds ~~including~~at ~~but not limited to~~ the Company’s ~~cash, receivables, inventory, WIP, patents, etc~~bank. 4.The Oncompany ~~November~~is 4,exploring ~~2022,~~post ~~the~~judgement ~~Company~~relief ~~borrowed~~options/taking ~~$25,000~~steps ~~from~~to ~~JEB~~ensure ~~Partners,~~that ~~L.P.,~~Secured aNoteholders ~~Delaware~~priority ~~limited partnership. Interest on the one-year note~~ is ~~10%~~protected and ~~JEB~~to ~~Partners~~negotiate ~~will~~an ~~receive~~acceptable ~~a warrant for 100,000 common shares, five-year term, strike price of $.15, and a price per of $.10 per share if Company defaults on~~ repayment. ~~Full document being prepared for signing by the parties prior to December 15, 2022~~plan. 5. On ~~August~~June 312, ~~2022~~2023, the ~~Company~~creditor ~~received~~obtained the frozen $~~270~~4,~~000~~700. ~~(another~~Discussions ~~additive~~are ~~amount~~on-going towith the ~~initial~~creditor ~~loan made June 2016) pursuant~~ to ~~the~~set ~~terms~~up ~~and~~a ~~conditions~~repayment ofplan. ~~the Senior Secured Promissory Noteholder held by PKT Strategic Assets, LLC~~3. The ~~note~~original isbalance ~~secured~~of byapproximately ~~all~~$24,165 ~~the~~has ~~company’s~~been ~~assets~~consistently ~~including~~paid ~~but~~down ~~not~~per ~~limited~~a toverbal ~~the~~repayment ~~Company’s cash, receivables, inventory, WIP, patents, etc~~agreement.

No other material events have occurred after September 30, 2022, requiring recognition or disclosure in the financials.

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Note 11. Subsequent Events

No material events have occurred after March 31, 2023 that requires recognition or disclosure in the financial statements except as follows:

On April 11, 2023 the Company received funding in the amount of $43,950 in the form of a convertible note with terms similar to past notes.

On April 14, 2023 the Company issued a total of 570,000 shares of common stock in exchange for consulting services.

On April 27, 2023 the Company received funding in the amount of $25,000 in the form of a convertible note with terms similar to past notes.

On April 27, 2023 the Company issued 887,595 shares of common stock in relation to conversions on convertible notes payable.

On April 28, 2023 the Company received funding in the amount of $100,000 in the form of a convertible note with terms similar to past notes.

On March 24, 2023 a filing was made in the 2^nd Judicial District in NY State. The Company named five defendants in an action designed to obtain a temporary restraining order stopping all conversations of convertible notes held by four of the named defendants. Ruling to obtain the order was adjourned by two weeks after the initial hearing date in the hope the parties could reach an agreement. A second adjournment was issued to May 1, 2023. On May 1, 2023 the Judge denied the temporary restraining order stating the use of Adar Bays v. GeneSYS ID, Inc., and other related court cases was inappropriate. Subsequently, the case was dismissed. The Company fully intends to use all legal means at its disposal to correct the misappropriation of its equity by convertible note holders.

On May 2, 2023 the Company received notice the garnishment to repay Old Dominion Trucking had been fully satisfied.

On June 2, 2023 the Company receive notice from Alin Machining Company (Power Plant Services) restating the sum owed of $84,681 plus interest from entry of judgement in foreign court (Cook County, IL) on February 11, 2021.

On June 2, 2023 the Company received funding in the amount of $195,000. There is a payment due weekly on this note. To date, the company has repaid $11,259 of the note.

On June 20, 2023 the Company received funding in the amount of $150,000 as an addition to the Senior Secured Note.

As of the day of filing, the Company has repaid $12,000 in interest towards the Senior Secured Note.

No other material events have occurred after March 31, 2023, requiring recognition or disclosure in the financials.

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ITEM 2. 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 current and future events and financial performance. You can identify these statements by forward-looking words such as “may”, “will”, “expect”, “anticipate”, “believe”, “estimate” and “continue”, or similar words. Those statements include statements regarding the intent, belief or current expectations of the management team as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements.

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

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

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

COVID-19 World-wide Pandemic

~~Effects~~Increased ~~from~~awareness of the ~~pandemic~~benefits ~~are~~of ~~still~~increased ~~impacting~~ventilation ~~economies,~~in homes and ~~routine~~the ~~life,~~workplace ~~across~~have ~~the~~emerged ~~globe.~~as ~~Certain~~a ~~key~~primary ~~economies~~focus ~~are~~on ~~still~~the ~~being~~prevention ~~negatively~~of ~~impacted~~exposure byto ~~shutdowns~~bacteria and viruses. The Company is uniquely positioned as its current products are designed to provide a solution to these issues, especially with increased ventilation. ~~The~~Health ~~awareness~~experts ofcontinue ~~the~~to ~~benefits~~cite of increased ventilation ~~in homes and workplaces are being cited~~ as a major factor ~~by health experts and customers as a solution~~ to battle future outbreaks ~~and other pandemics~~. The ConsERV products are specifically designed to increase new, fresh, ventilated, air in our homes and workplaces. Management is developing and executing on plans to increase product awareness through existing and prospective sales channels.

Climate Change and Carbon Reduction

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

Supply Chain Management

Economies around the World are experiencing inflationary pressures which isare impacting prices and availability of materials throughout the supply chain. Management is taking a more aggressive strategy to identify a diverse portfolio of suppliers to increase options for materials and parts. The supply and availability of certain components remain sporadic and limited across the supply chain.

Overview

Dais Corporation (“Dais”, “us,” “we,”, the “Company”) is a nanomaterial technology company developing and commercializing products using the nanomaterial called Aqualyte. The first commercial product is the Aqualyte nanomaterial itself. It is useful in managing moisture and key gases in a variety of cross-industry products and is effective in the destruction of pathogens that meet the material, (As verified by 3^rd part analysis).

The second commercial product is called ConsERV, a fixed plate energy recovery ventilator which is useful in meeting building indoor fresh air requirements while saving energy and lowering emissions for most forms of heating, ventilation, and air conditioning (HVAC) equipment. We continue to develop other Aqualyte uses in cross-industry applications, HVAC/Refrigeration, energy, etc. One area of focused attention has been development work on a variant of Aqualyte targeting surface treatments to potentially create a protective layer designed to inactivate human coronaviruses.

Corporate History

We were incorporated as a New York corporation on April 8, 1993 as Dais Corporation. The Company was formed to develop new, cost-effective polymer materials for various applications, including providing a lower cost membrane material for Polymer Electrolyte Membrane fuel cells. We believe our research on materials science has yielded technological advances in the field of selective ion transport polymer materials.

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In December 1999, the Company purchased the assets of Analytic Power Corporation, a corporation founded in 1984 to provide design, analysis, and systems integration services in the field of fuel cells, fuel processors, and integrated fuel cell power systems. Subsequently, on December 13, 1999, the Company changed its name to Dais Analytic Corporation. In the ensuing years the Company has purchased and/or sold assets for cash and/or assumption of certain company’s obligations seeking a path to solid, continuing growth, or monetize non-performing Company assets.

In November of 2018 the board of directors unanimously voted to change the name of the Company from Dais Analytic Corporation to Dais Corporation (the “Name Change”). The Name Change took effect with FINRA on February 27, 2019.

Our Technology

Aqualyte^TM

We use proprietary nanotechnology to reformulate thermoplastic materials called polymers, creating a material which water and a select group of similar substances can permeate through at a molecular level as opposed to flowing in bulk as liquid water through a pore. At the same time, the permeability of oxygen, nitrogen, and most other substances is severely limited, making the material extremely selective. We call this specialized material Aqualyte^TM and we have been granted a series of patents relating to its manufacture and use.

Aqualyte^TM is the foundation of the Dais product line, using the unique material’s properties to enable differentiated air, energy, and water products. Products generally are highly efficient, have fewer or no moving parts, and notably are kinder and gentler to our planet Earth. The nanomaterial-based products market is growing worldwide as more eyes are on the accelerating push for highly efficient products like those Dais features.

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ConsERV^TM

Sales channels for our ConsERV product continue to expand. This energy conservation product ~~which~~typically ~~should~~saves ~~save~~ an average of 30% on HVAC operating costs while providing increased amounts of ventilation air. The economic savings typically allow the remainder of the system to be smaller ~~and~~ (less expensive) and/or achieve the same results from a reduced run time, reducing carbon dioxide (CO2) emissions from electrical power generation. ConsERV generally attaches onto existing HVAC systems and is useful in both commercial and residential structures to provide improved ventilation air within the structure. In turn, this yields health benefits (reduced COVID-19 exposure, fewer allergy, and asthma ‘trigger’ contaminants) and productivity improvements (improvement in cognitive abilities).

ConsERV separates incoming fresh ventilation air from outgoing exhaust air with our Aqualyte nanotechnology polymer in an enthalpy heat exchanger referred to as a “core”. While Aqualyte physically isolates the air streams so they don’t mix, heat and moisture are freely exchanged through the material. For summer air conditioning, the core preconditions the incoming air by removing some of the heat and humidity and transfers it to the exhaust air stream, saving energy. For winter heating, the core recovers a portion of the heat and humidity in the exhaust air and transfers it to the incoming air to reduce heating requirements.

When compared to similar competitive products, and based on test results conducted by the Air-Conditioning, Heating and Refrigeration Institute (AHRI), a leading industry association, ConsERV maintains an industry-leading position in the management of latent heat.

The market for energy recovery ventilation equipment is changing as the technology is better understood. Management believes this change is linked to the industry’s specification-setting body (ASHRAE) and the US Centers for Disease Control stating that pathogens can and do travel via HVAC systems and duct work as reported by the White House Science Advisory Panel, the US EPA, NIH/Harvard, Trane Corporation, and more. This potential change in the market for ERVs coupled with the seemingly proven value proposition Dais’s ConsERV product provides optimism to the Management team and the Board of Directors for the future of the ConsERV product.

The Company began engineering for an updated line of ConsERV products in the year 2020 (known as the “N Series”) with new cores and packaged systems that incorporate the Company’s experience with the ERV market. The line was certified by the needed outside agencies and initial market introduction began in the 4th quarter of 2021. We have seen positive market reception to date, and believe based on the N Series performance, price-point, and end-user feedback that the product will continue to be well received in the market. Sales of existing cores and customer systems are expected to continue generating revenue as we increase the number of sales channels for ConsERV. The newer N Series has begun contributing to increasing revenues in the second quarter of 2022 and beyond. Engineering efforts continue to optimize the N Series design for both manufacturing and customer usage.

17The ~~Table~~Company has increased its product offerings by selling and delivering custom-engineered systems in addition to the N Series. These products are constructed from an aluminum frame-and-panel system that allows ready modification and configuration to match customer requirements, making them well-suited to large projects with a relatively customized HVAC plant. These designs are evolutions of ~~Contents~~the D, J, and Z Series systems the Company sold prior to 2013, allowing them to be introduced to the market relatively quickly.

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Product Summary

Dais’s advanced material has many demonstrated uses. Management is positioning most of the Company’s resources behind ConsERV, and is working to grow revenues of Aqualyte™ nanomaterials and engineering support in areas where Aqualyte has shown proven results and Dais has partners well-placed to bring products to market. This strategy leverages the Company’s experience and depth in marketing, building, and selling ConsERV cores and systems and in manufacturing and selling high performance Aqualyte nanomaterial.

Increased sales activities for advanced materials are focused on targeted companies within key industries worldwide, taking full advantage of Dais’s past and continuing market penetration efforts. The uses include energy recovery ventilation and other known HVAC and select cross-industry uses.

To help us support our capabilities to deliver ConsERV cores and systems, and Aqualyte advanced nanomaterials, we have qualified manufacturing companies to join our supply chain to produce materials and components. Guided by Dais-qualified manufacturing practices these efforts target the growing demand for product in North America, European Union, and Southeast Asia (including China). We project this expansion of the supply chain will result in lower costs and quicker order fulfillment, generating revenues faster.

Orders are already being generated from these agreements, and we expect them to increase as we expand and add new strategic partnerships along the way. The new orders include sales of Aqualyte nanomaterials, components for energy recovery ventilation, and other known HVAC and select cross industry products.

Results of Operations

Three Months Ended ~~September~~March 3031, ~~2022~~2023 Compared to ~~September~~March 3031, ~~2021~~2022

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

	For the Three Months Ended
	For the Three Months EndedMarch 31,
	September 30,
	2023			2022
	2022			2021
REVENUE
Sales	$	~~492~~288,~~394~~557		$	~~116~~43,~~864~~195
Royalty and license fees		12,500			12,500
		504,894			129,364
		301,057			55,695
COST OF GOODS SOLD		~~381~~269,~~214~~343			9052,~~749~~440
GROSS MARGIN		~~123~~31,~~680~~714			383,~~615~~255
OPERATING EXPENSES
Research and development, net of government grant proceeds of $0 and $28,651, respectively		85,887			29,814
Research and development, net of government grant proceeds of $0 and $0 for the three months ended March 31, 2023 and 2022, respectively		134,135			64,873
Selling, general and administrative		~~430~~379,~~455~~400			~~305~~425,~~833~~276
TOTAL OPERATING EXPENSES		~~516~~513,~~342~~535			~~335~~490,~~647~~149
LOSS FROM OPERATIONS		(~~392~~481,~~662~~821	)		(~~297~~486,~~032~~894	)
OTHER INCOME (EXPENSE)
Interest expense		(~~800~~675,~~072~~040	)		(~~110~~595,~~938~~636	)
Forgiveness of debt income		124,126			146,685
Loss on conversion of debt		(847,241	)		-
Change in fair value of derivative liabilities		-			-
TOTAL OTHER INCOME (EXPENSE), NET		(1,522,281	)		(595,636	)
Gain on extinguishment of debt		-			-
NET INCOME (LOSS)	$	(2,004,102	)	$	(1,082,530
TOTAL OTHER INCOME (EXPENSE), NET		(675,946	)		38,459
NET LOSS PER COMMON SHARE, BASIC AND DILUTED	$	(0.13	)	$	(0.12	)
NET INCOME (LOSS)	$	(1,068,608	)	$	(261,285	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED		15,394,933			9,414,796
NET INCOME (LOSS) PER COMMON SHARE, BASIC	$	(0.10	)	$	0.03
NET LOSS PER COMMON SHARE, DILUTED	$	(0.10	)	$	(0.03	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC		11,170,719			9,414,796
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, DILUTED		11,170,719			9,414,796

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Revenue

We generate our revenues primarily from the sale of our ConsERV cores and systems and Aqualyte membrane. Product sales were $504,894 and $129,364 for the three months ended September 30, 2022, and 2021, respectively, an increase of $375,530 or 290%. The increase in revenue was driven by a decrease in Aqualyte sales, offset by an increase in ConsERV sales. We are focusing on creating sustainable revenues with Aqualyte and ConsERV core and system sales with the expectation that this will allow for growth in 2022 and beyond.

Revenues from royalty and license fees were $12,500 and $12,500 for the three months ended September 30, 2022 and 2021, respectively.

Cost of sales

Our cost of sales consists primarily of materials (including freight), direct labor, and outsourced manufacturing expenses incurred to produce our ConsERV cores and systems and Aqualyte nanomaterial. Cost of goods sold were $381,214 and $90,749 for the three months ended September 30, 2022 and 2021 respectively, an increase of $290,465 or 320%. This reflects price increases throughout our supply chain, general increases in labor costs, and increases in product sales.

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

Gross margin

Gross margin from the sales of products was $123,680 and 38,615 for the three months ended September 30, 2022 and 2021 respectively, representing 25% and 30% for the three months ended September 30, 2022 and 2021.

We believe there are largely three reasons driving this change. The first is the cost of components and related shipping as well as supply-chain related challenges forcing a change type of pricing of the component and associated engineering costs. Some of these changes have costs not recoverable from the custom. Our way of addresses these two issues are found (1) in newer IT system allowing closing tracking of all production costs actively monitoring increases production cost, (2.) we have raised the prices for our ConsERV product line while continuing to work within our supply chain to reduce these costs, and to attract and maintain a high-quality team the company’s direct labor costs have risen by approximately 25% since June 1, 2022.

Research and development costs

Expenditures for research and development are expensed as incurred. We incurred research and development costs of $85,887 and $58,465 for the three months ended September 30, 2022 and 2021, an increase of $27,422 or 47%. We account for proceeds received from government funding for research and development as a reduction in research and development costs. We recorded proceeds against research and development expenses on the Statements of Operations of $0 and $28,651 for the three months ended September 30, 2022 and 2021, a decrease of $28,651 or 100%. Variances in grant expenditures and reimbursements are due to an emphasis on completing an existing Small Business Innovation Research (SBIR) Phase II grant. This grant was completed in August 2021.

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Selling, general and administrative expenses

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

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

We continue to focus on decreasing selling, general and administrative expenses for all our product efforts.

Other Income (Expense)

Other expense for the three months ended September 30, 2022 was $675,946 compared to income of $38,459 for the three months ended September 30, 2021, a decrease of $714,405 or 1,858%. The increased net other expense is primarily due to increased interest expense.

Net Income (Loss)

Net loss was $1,068,608 and 261,285 for the three months ended September 30, 2022 and 2021.. The increased loss in the three months ended September 30, 2022 was primarily due to the increase in other expense described above.

Nine Months Ended September 30, 2022 Compared to September 30, 2021

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

	For the Nine Months Ended
	September 30,
	2022			2021
REVENUE
Sales	$	653,288		$	288,854
Royalty and license fees		37,500			37,500
		690,788			326,354
COST OF GOODS SOLD		610,859			173,639
GROSS MARGIN		79,929			152,715
OPERATING EXPENSES
Research and development, net of government grant proceeds of $0 and $89,617, respectively		212,508			69,660
Selling, general and administrative		1,259,080			1,590,907
TOTAL OPERATING EXPENSES		1,471,588			1,660,567
LOSS FROM OPERATIONS		(1,391,659	)		(1,507,852	)
OTHER INCOME (EXPENSE)
Interest expense		(2,103,604	)		(471,746	)
Forgiveness of debt income		124,126			146,685
Change in fair value of derivative liabilities		-			2,241,678
Gain on extinguishment of debt		-			1,148,554
TOTAL OTHER INCOME (EXPENSE), NET		(1,979,478	)		3,067,883
NET INCOME (LOSS)	$	(3,371,137	)	$	1,557,319
NET INCOME (LOSS) PER COMMON SHARE, BASIC	$	(0.33	)	$	0.35
NET LOSS PER COMMON SHARE, DILUTED	$	(0.33	)	$	(0.19	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC		10,107,546			4,494,649
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, DILUTED		10,107,546			8,360,950

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Revenue

We generate our revenues primarily from the sale of our ConsERV cores and systems and Aqualyte membrane. Product sales were $~~653,~~288,557 and $~~288~~43,~~854~~195 for the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023, and ~~2021~~2022, respectively, an increase of $~~364~~245,~~434~~362 or ~~126~~568%. The increase in revenue was driven by a decrease in Aqualyte sales, offset by an increase in ConsERV core and system sales. We are focusing on creating sustainable revenues with Aqualyte and ConsERV core and system sales with the expectation that this will continue to allow for growth in ~~2022~~2023 and beyond.

Revenues from royalty and license fees were $3712,500 and $3712,500 for the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022, respectively.

Cost of sales

Our cost of sales consists primarily of materials (including freight), direct labor, and outsourced manufacturing expenses incurred to produce our ConsERV cores and systems and Aqualyte nanomaterial. Cost of goods sold were $~~610~~269,~~859~~343 and $~~173~~52,~~639~~440 for the ~~nine~~three months ended ~~September~~March 3031, ~~2022,~~2023 and ~~2021~~2022 respectively, an increase of $~~437~~243,~~220~~903 or ~~252~~465%. This ~~reflects~~increase ~~our~~in ~~increased~~cost ~~revenue,~~of ~~price~~goods ~~increases~~sold ~~throughout~~reflects our ~~supply~~increased ~~chain,~~product ~~and general increases in labor costs~~sales.

Gross margin

Gross margin from the sales of products was $7931,~~929~~714 and $~~152~~3,~~715~~255 for the ~~nine~~three months ended ~~September~~March 3031, ~~2022,~~2023 and ~~2021~~2022 respectively, representing 12 11% and 476% for the ~~nine~~three months ended ~~September~~March 3031, ~~2022,~~2023 and ~~2021~~2022.

We believe there are ~~largely~~continuing ~~three~~issues ~~reasons~~relating ~~driving~~to ~~this change. The first is~~ the cost of components and related shipping as ~~well as~~ supply-chain related challenges ~~forcing~~force achanges ~~change~~in ~~type of~~ pricing of ~~the~~certain ~~component and associated engineering costs~~components. ~~Some~~We ofcontinue ~~these~~to ~~changes~~address ~~have costs not recoverable from the custom. Our way of addresses~~ these ~~two~~ issues ~~are~~by ~~found~~closely ~~(1) in newer IT system allowing closing~~ tracking ~~of all~~ production costs ~~actively~~and ~~monitoring~~adjusting ~~increases production cost, (2.) we have raised~~ the prices for our ConsERV product line while continuing to work within our supply chain to reduce these costs~~, and to attract and maintain a high-quality team the company’s direct labor costs have risen by approximately 25% since June 1, 2022.~~

Research and development costs

Expenditures for research and development are expensed as incurred. We incurred research and development costs of $~~212~~134,~~508~~135 and $~~159~~64,~~277~~873 for the ~~nine~~three months ended ~~September~~March 3031, ~~2022,~~2023 and ~~2021~~2022, an increase of $5369,~~231~~262 or 33107%. We account for proceeds received from government funding for research and development as a reduction in research and development costs. We recorded proceeds against research and development expenses on the Statements of Operations of $0 and $~~89,617~~0 for the ~~nine~~three months ended ~~September~~March 3031, ~~2022,~~2023 and ~~2021~~2022, a decrease of $89,617 or 100%. Variances in grant expenditures and reimbursements are due to an emphasis on completing an existing Small Business Innovation Research (SBIR) Phase II grant. This grant was completed in August 2021.

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Selling, general and administrative expenses

Our selling, general and administrative expenses consist primarily of payroll and related benefits, professional fees, marketing and channel support costs, and other infrastructure costs such as insurance, information technology and occupancy expenses. Selling, general and administrative expenses were $1379,~~259,080~~400 and $1425,~~590,907~~276 for the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022, a decrease of $~~331~~45,~~827~~876 or 2111%. This decrease is primarily ~~due~~resulted tofrom ~~stock-based~~a ~~compensation~~decrease ~~issued~~ in ~~the~~professional ~~second~~fees ~~quarter~~and ofcorporate ~~2021~~insurances, ~~offset~~and by an ~~increase~~adjustment into ~~payroll~~correct ~~costs~~prepaid ~~in 2022~~expenses.

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

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

We continue to focus on decreasing selling, general and administrative expenses for all our product efforts.

Other Income (Expense)

Other expense for the ~~nine~~three months ended ~~September~~March 3031, 2023 and 2022 was $1,~~979~~522,~~478~~281and ~~compared to income of $3~~595,~~067~~636,~~883~~ ~~for~~an ~~the~~increase ~~nine months ended September 30, 2021, a decrease~~ of $5926,~~047,361~~645 or ~~165~~156%. The increased net other expense is primarily due to ~~the~~increased ~~lack~~loss ofon ~~income~~conversion ~~relating to the change in fair value~~ of ~~derivative liabilities and~~ debt ~~extinguishment,~~in ~~and an increased interest expense~~2023.

Net Income (Loss)

Net loss ~~for the nine months ending September 30, 2022~~ was $32,~~371~~004,~~137~~102 ~~compared~~and ~~to an income of~~ $1,~~557~~082,~~319~~530 for the ~~nine~~three months ended ~~September~~March 3031, ~~2021.~~2023 and 2022 The increased loss in the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 was primarily due to the increase in other ~~expense~~expenses described above.

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Liquidity and Capital Resources

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. ~~The~~For ~~Company~~the ~~has~~three ~~incurred~~months ~~significant~~ended ~~losses~~March ~~since~~31, ~~inception~~2023, ~~incurred~~the Company generated a net loss of $32,~~371~~004,~~137~~102 ~~for~~and ~~the~~has ~~nine~~incurred ~~months~~significant ~~ended~~losses ~~September~~since ~~30,~~inception. ~~2022~~As ~~and, as~~ of ~~September~~March 3031, ~~2022~~2023, the Company has an accumulated deficit of $6164,~~194~~278,~~239~~767, total stockholders’ deficit of $1113,~~350~~112,~~562~~341, negative working capital of $1113,~~394~~146,~~916~~660 and cash and cash equivalents of $~~151~~37,~~557~~149. The Company used $1606,~~389,768~~478 and $~~726~~658,~~251~~307 of cash infor operations during the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023, and ~~2021~~2022, respectively, which was funded primarily by by proceeds from loans from related parties and others. There is no assurance that any such financing will be available in the future. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company is currently pursuing the following sources of short and long-term working capital:

1. The Company guided by its Financial Advisors is actively working with ~~selected~~ targeted third parties who have or are interested in licensing, purchasing the rights to, or establishing a joint venture to commercialize applications of the Company’s technology; 2. The Company continues to seek capital from ~~certain~~key strategic and/or government (grant) ~~opportunities and~~ related sources. These sources may, pursuant to any agreements that may be developed in conjunction with such funding, assist in the product definition and design, roll-out, and channel penetration of products; ~~and~~ 3. The Company ~~increased~~is ~~its~~actively ~~value~~working ~~and~~with ~~potential~~newer toinvestors, ~~attract~~private ~~new~~equity ~~investors~~companies, ~~when~~purchase itorder ~~completed~~financing ~~the~~parties, ~~exchange~~and ~~program~~its ofexisting ‘debt holders to ~~equity’~~restructure inits ~~the~~existing ~~2nd~~debt ~~quarter~~and ofobtain ~~2021~~short ~~clearing~~and ~~out~~long-term ~~all~~working ~~convertible~~and ~~debt~~growth incapital; ~~exchange~~and, ~~for~~4. ~~equity~~The atCompany amay ~~fixed~~license ~~price~~or atsell ~~the~~an ~~end~~asset ofto ~~the~~fund ~~second~~its ~~quarter~~continued ofgrowth ~~2021.~~as ~~This~~it ~~has~~is ~~helped~~clear to management the market for the Company’s ~~attract~~product ~~growth~~innovations ~~capital~~has itchanged ~~could~~in ~~not~~a ~~prior~~positive toway ~~this~~as ~~‘debt~~demonstrated toby ~~equity~~the interest the Company’s ~~exchange~~nano-material and applications in certain markets.

Management ~~and the Board believe~~believes:

1. InThe ~~the~~Company’s ~~face~~ability ofto ~~current~~solve ~~world~~continuing ~~events~~supply ~~(financial~~chain ~~market~~issues ~~see-sawing,~~and ~~war,~~raise ~~China~~sustainable ~~slow-down,~~growth ~~supply~~capital ~~chain~~will ~~challenges,~~dictate ~~etc.)~~future ~~our~~revenue ~~products~~and ~~remain~~cash-flow infor ~~demand. 2. We believe~~ the Company’s. ~~prospects~~The toquicker ~~secure~~these ~~growth~~issues ~~funding~~are ~~remained~~resolved ~~challenged~~we bybelieve ~~world~~the ~~events~~faster ~~having~~the ~~varying~~Company ~~degrees~~can ofparticipate ~~effect~~in on the ~~Company~~market’s ~~going~~uptick ~~forward~~momentum ~~ability~~and tofollow ~~raise~~the ~~reasonably~~projected ~~priced~~ growth ~~capital in the amount(s) required~~curve. ~~Assisting~~These ~~the~~issues ~~company~~place isheavy ~~the~~pressure ~~internal~~on ~~and~~management ~~external~~to progress ~~over~~in ~~the~~key ~~last~~business ~~three~~areas ~~quarters~~being impacted. ~~The~~Continued ~~solution~~supply ofchain ~~the~~impacts ~~convertible~~has ~~debt~~roots ~~matter,~~in ~~introduced~~the afunding ~~popular~~challenges. ~~new~~The ~~line~~use of ~~our~~funds ~~ConsERV~~from ~~equipment,~~affordable ~~growing~~growth ~~independent~~capital ~~sales~~to ~~channel,~~resolve ~~believe~~inventory ~~will~~levels beof ~~signing~~hard ~~updated~~to ~~agreement~~acquire inparts ~~late~~could 4Qbe ~~2022~~achieved ~~between~~within ~~the~~one ~~company~~quarter. ~~and~~Raising ~~its~~affordable ~~Senior~~capital ~~Secured~~is ~~Note~~tied ~~Holder~~to ~~(having~~addressing/fixing ~~deep~~convertible ~~rights~~debt ~~with~~transactions ~~the~~(recently ~~assets~~found ofto ~~the~~be ~~Company~~‘criminally ~~which~~usurious ~~are~~- ~~pledged~~(Adar asBays ~~security~~v. ~~for~~GeneSYS ~~repayment~~ID, ~~of the Note~~Inc.), ~~and~~used ~~for~~in ~~creating~~ the ~~basis~~past ofto agrow ~~long~~the ~~term~~Company ~~business relationship~~ with a ~~well-known,~~plan ~~multi-national~~to ~~corporation~~replace ~~interested~~this inconvertible ~~using~~debt ~~the~~with ~~Company’s~~lower ~~products~~cost ~~for its own and third-party use~~funds. 3.The WeCompany ~~believe~~has ~~our~~made ~~current~~progress ~~cash~~yet ~~position,~~still ~~and~~faces ~~our~~a ~~projected~~worldwide ~~ability~~public tomarket ~~attract~~in ~~additional~~turmoil ~~growth~~since ~~capital~~February ~~including revenue generation (cash flow) from operations, is adequate through the end~~ of ~~the fourth quarter~~ 2022. AtIn ~~which time~~ the ~~combination~~intertest of ~~our~~expediting ~~progress~~this insituation the ~~market,~~Company ~~greater~~is ~~and~~seeking ~~stronger~~affordable ~~market validation of our industry changing benefits~~public, and ~~cautiously optimistic optimism that the recent downturn of the~~ non-public, ~~markets~~growth ~~worldwide~~resources, ~~will~~with ~~have~~Board ~~turned~~approval, ~~finding~~is ~~additional~~seeking ~~growth~~to ~~capital~~monetize ~~will~~one beasset invia ~~place.~~a 4license/supply agreement. ~~The~~Such ~~supply~~a ~~chain~~plan ~~impact~~(monetize ofan ~~recent~~asset) ~~world~~will ~~events~~require isapproval ~~affecting~~by the Company’s ~~ability~~Senior toSecured ~~produce~~Noteholder. ~~product~~2. ~~for~~The ~~its~~Senior ~~customers.~~Secured ~~Inability~~Note toHolder ~~timely~~has ~~acquire~~advised ~~specified~~Management ~~components~~it ~~may~~is ~~find~~exploring ~~the~~its ~~Company~~options ~~needing~~ to ~~redesign~~resolve ~~and~~the ~~recertify~~long ~~its~~standing ~~products,~~unpaid or– toand ~~stop~~growing ~~production~~debt ~~until~~by the ~~supply~~Company. ~~chain~~3. ~~matter~~Ventilation is ~~resolved.~~regularly Inrecommended ~~either~~as ~~event~~one ~~this~~of ~~will~~the ~~cause~~solutions ~~loss~~to ofCovid ~~sales~~related ~~revenue,~~mitigation ~~potentially~~and ~~key~~the ~~Dais~~market ~~team~~awareness ~~members,~~for ~~and~~the ~~customers.~~ConsERV ~~The~~product(s) ~~Company~~is ~~has~~increasing ~~successfully~~and ~~implemented~~lead ~~several~~activity ~~workarounds~~is ~~including~~encouraging. ~~sourcing~~4. ~~‘similar~~We ~~but~~believe ~~when~~our ~~installed~~current ~~equal’~~cash ~~components~~position ~~with~~and ~~new~~our ~~vendors~~projected ability to ~~supply~~obtain ~~needed~~additional ~~components.~~sources ~~Additionally,~~of ~~the~~growth ~~Company~~capital, isand ~~collaborating~~to ~~with~~generate ~~its~~sustainable ~~highest~~cash ~~profile~~flow ~~suppliers~~from tooperations ~~accelerate~~and ~~improved~~investments ~~paths~~into to2023 ~~minimize~~is ~~the~~improving ~~impact~~yet ofremains ~~this situation~~challenged.

~~There~~We ~~are~~believe nothe ~~assurances~~Company’s prospects to secure growth funding remain good. On a macro level we ~~will~~believe bethe ~~able~~world-wide tomarket ~~obtain~~for equipment the ~~financing~~type the Company is selling (and ~~planned~~developing) ~~product~~has ~~development~~changed ~~commercialization.~~for ~~Accordingly~~the positive in the last two years reflecting end user awareness of the need to address Climate Change related issues faster, weand ~~may~~the ~~not~~changes ~~have~~in buying habits forged by the ~~ability~~world-wide pandemic. On more of a micro level the company has shown solid progress over the last three quarters, removed a serious impediment to ~~continue~~growth asby completing a ~~going~~‘debt ~~concern~~to equity’ program where the convertible noteholders debt positions were converted into equity (common stock and warrants). The ~~financial~~company ~~statements~~introduced a popular new line of ~~the~~our ~~Company~~ConsERV doequipment having ~~not~~improved ~~include~~performance ~~any~~and ~~adjustments~~pricing ~~relating~~to a growing independent sales channel through-out North America. We reached agreement (now moving to contract stage) in late 4Q 2022 between the ~~recoverability~~company and ~~classification~~its ofSenior ~~recorded~~Secured Note Holder (having deep rights with the assets, orof the ~~amounts~~Company ~~and~~which ~~classifications~~are ofpledged ~~liabilities~~as ~~that~~security ~~might~~for berepayment ~~necessary~~of ~~should~~the weNote). beThe ~~unable~~company is continuing to ~~continue~~develop asthe basis of a ~~going~~long ~~concern~~term business relationship with a well-known, multi-national corporation interested in using the Company’s HVAC and water products for its own and third-party use.

23There ~~Table~~are no assurances we will be able to obtain the financing and planned product development commercialization. Accordingly, we may not have the ability to continue as a going concern. The financial statements of ~~Contents~~the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should we be unable to continue as a going concern.

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Statement of Cash Flows

Cash as of ~~September~~March 3031, ~~2022~~2023, was $~~151~~37,~~557~~149 compared to $~~773~~27,~~423~~412 as of December 31, ~~2021~~2022. Cash is primarily used to fund our working capital requirements.

Net cash used in operating activities was $1606,~~389,768~~478 for the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 compared to $~~726~~658,~~251~~307 for the same period in ~~2021~~2022. The ~~increase~~decrease in net cash used was primarily due to an increase in ~~net~~cash ~~loss~~from ~~(after~~net ~~adjusting~~working ~~for~~capital ~~non-cash~~accounts ~~items)~~ partially offset by an increase in ~~cash~~net ~~from~~loss ~~net~~(after ~~working~~adjusting ~~capital~~for ~~accounts~~non-cash items). For the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023, net loss (after adjusting for non-cash items) was $2793,~~111,251~~404. Accounts receivable, inventory and other assets together ~~increased~~decreased by $~~240~~59,~~237~~210. Accounts payable, accrued liabilities, customer deposits and deferred revenue increased in total by $~~961~~127,~~720~~716. For the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022, net loss (after adjusting for non-cash items) was $1670,~~055,527~~725. Accounts receivable, inventory and other assets together increased by $~~122~~68,~~379~~825. Accounts payable, accrued liabilities, customer deposits and deferred revenue increased in total by $~~451~~81,~~655~~243.

Net cash used in investing activities was $444,~~748~~695 for the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 compared to $2534,~~118~~484 for the same period in ~~2021~~2022, driven by ana ~~increase~~decrease in patent costs and purchases of equipment in 2023.

Net cash provided by financing activities was $~~812~~620,~~650~~910 for the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 compared to $~~848,437~~0 for the same period in ~~2021~~2022. The ~~decrease~~increase ~~resulted~~is ~~from~~due ato ~~decrease in~~ proceeds from notes payable ~~, offset by an increase in notes payable~~ due to related parties.

Financing and Capital Transactions

Paycheck Protection Program Loan

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

On April 29, 2020, the Company received $144,750 in a loan borrowed from a bank pursuant to the Paycheck Protection Program under the CARES Act guaranteed by the Small Business Administration (“SBA”). This loan was subsequently forgiven in full on August 29, 2021.

Small Business Administration Loan

On June 12, 2020, the Company received $150,000 in a loan borrowed from the SBA. Installment payments, including principal and interest, of $731 monthly, will begin 12 months from the date of the note. The balance of principal and interest will mature 30 years from the date of the note. Interest will accrue at the rate of 3.75% per year. On March 15, 2022, the U.S. Small Business Administration announced that the deferment period for the repayment would be extended to 30 months from the date of the note. The company received a past due notice dated June 6 , 2023 for $4,386 due since December 12, of 2022 due to an error on the part of the company. The company anticipates the sum will be paid in full during the first part of the 3rd quarter.

Related Party Note

On June 24, 2016, the Company entered into a Loan and Security Agreement (“Security Agreement”) with the entity known as PKT -- Strategic Assets, LLC (the “Holder”) pursuant to which the Company issued a Senior Secured Promissory Note for $150,000 (the “Note”). The Note has an interest rate is 12% per annum compounded daily with a minimum interest payment of $2,000. The Note grants the Holder a ~~secured~~secure interest in all the assets of the Company. During 2016 to the period ended ~~September~~March 3031, ~~2022~~2023, the Holder extended the Note pursuant to various amendments. Pursuant to the amendments, the principal amount and interest totaled $6,372,511 and $5,~~137~~429,~~188~~661 (including fees and other expenses) at ~~September~~March 3031, 2023 and December 31, 2022, respectively. We received advances aggregating $~~362~~658,~~800~~960 during the three months ended March 31, 2023, and repaid $154,398 during the three months ended March 31, 2022. Financing cost of $38,050 was deducted from the 2023 advances. The Holder’s corporation is controlled by Ms. Tangredi, related to Tim Tangredi: the Company’s CEO and stockholder, and therefore, is a Related Party of the Company. The Company is to pay the Holder the principal, plus all interest and fees due in accordance with terms and conditions of the Security Agreement on the earlier of:

(i) The date upon which the Company secures funds, regardless of source, equal to or exceeding, in the aggregate, $1,000,000 or November 1, 2021, which as of the date of filing, has expired. (ii) The Holder has not declared the Note in Default as the Parties have reached terms to address several issues including the extension of the Maturity Date (the “Maturity Date”). AThe ~~binding~~parties ~~agreement~~have isagreed ~~being~~to ~~prepared~~new ~~for~~language ~~the~~to ~~parties~~solve tothis ~~execute~~matter bywith the ~~end~~plan ofto have it complete in the ~~fourth~~third quarter of ~~2022~~2023. (iii) The Company has recorded interest expense of $~~242~~283,~~055~~890 and $67149,~~099~~066 for the three~~-month~~ ~~periods~~months ended ~~September~~March 3031, ~~2022,~~2023 and ~~2021, respectively and $611,516 and $197,452 for the nine-month periods ended September 30,~~ 2022, ~~and 2021,~~ respectively. (iv) ~~The Company made a payment of fees and accrued interest totaling $154,398 during the nine months ended September 30, 2022.~~ Accrued interest was $23,~~609~~313,~~491~~052 and $23,~~152~~029,~~373~~162 onat ~~September~~December 3031, 2022, and ~~December 31~~2021, ~~2021~~respectively.

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Of the 2023 advances, funds in the amount of $592,960 originally came from Ethos Business Ventures. It was a last minute change of plan to assist the Company meet its obligations in a timely manner. This last minute change was made necessary by an administrative error at the bank of PKT Strategic Assets, LLC. who was to have been the lender of record, and is the lender of the Company's senior secured promissory note and security agreement. To correct this error, management of Dais (with BOD approval), Ethos, and PKT agreed on April 3, 2023 effective immediately the ownership of the $592,960 sum will be transferred to PKT Strategic Assets, LLC at no cost or term and condition alteration except as it pertains to relevant language to effect the change in ownership. The definitive paperwork will be complete in 3Q 2023. Dais is to pay a minimum of $6,000 per month in interest only to PKT Strategic Assets, LLC. This change will be fully reported in 3Q 2023 Form 10Q.

2023 Note

On January 27, 2023, the Company received a short-term loan of $350,000. The loan was repaid in full on March 6, 2023. In connection with this loan, the Company agreed to issue 2,000,000 shares to the individual, valued at $196,000. As of March 31, 2023, 500,000 shares have been issued and the remaining 1,500,000 shares, valued at $147,000, are classified as Common Stock To Be Issued.

JMS Investments

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

~~On August 30, 2021, the Company entered a promissory note with~~ GEX Management, Inc. The note matured on February 28, 2022 and bears interest at 10% per year. The note was repaid in December 2021. In connection with this note, the Company has agreed to issue 1,000,000 shares of common stock to the lender. These shares have not been issued at June 30, 2022. The shares to be issued have been valued at $120,990, which has been recorded as debt discount. The discount has been fully amortized in 2021. The value of the shares has been included in accrued expenses at December 31, 2021. The company and GEX Management, Inc. met on 11/04/2022 and tentatively agreed, pending signing a definitive agreement being prepared by GEX, to make key changes in the party’s original agreement. One of the items included in the definitive agreement is the disposition of the issuance of the 1M common shares in the Company. A definitive agreement is being prepared by GEX and is projected to be signed by both parties before 12/31/2022.

24On ~~Table~~August 30, 2021, the Company entered into a promissory note with GEX Management, Inc. The note matured on February 28, 2022 and was repaid in December 2021. In connection with this note, the Company has agreed to issue 1,000,000 shares of ~~Contents~~common stock to the lender. These shares have not been issued at March 31, 2023. The shares have been valued at $120,990, which has been included in accrued expenses at March 31, 2023 and December 31, 2022.

2022 Convertible Notes

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2021 Convertible Notes

On September 20, 2021, the Company entered a convertible promissory note with GS Capital Partners, LLC with a face value of $220,000. The note matured on September 20, 2022 and bears interest at 8% per year. The ~~Company received proceeds of $197,000, after deduction of $20,000 of original issue discount and $3,000 of costs. In connection with this~~ note, ~~the~~is ~~Company~~convertible ~~has~~into ~~issued a warrant to purchase 1,466,666~~ shares of common stock toat ~~the~~a ~~lender.~~fixed ~~The~~conversion ~~warrant has an exercise~~ price of $0.1510 per share. ~~and~~The ~~expires~~lender onhas ~~September~~not ~~21,~~declared ~~2026.~~a ~~The~~default ~~relative~~as ~~fair~~both ~~value~~parties ofare ~~the~~actively ~~warrant~~discussing ~~was~~a ~~$110,000,~~mutually ~~determined~~beneficial ~~using~~path ~~the~~forward ~~Black Scholes Model~~ with ~~the~~an ~~following~~agreement ~~assumptions:~~expected ~~(1)~~during ~~risk~~the ~~free~~first ~~interest~~quarter ~~rate~~ of 02023.~~84%;~~ ~~(2)~~This ~~dividend~~did ~~yield~~not ofoccur. ~~0%;~~Please ~~(3)~~see ~~volatility~~the ~~factor~~section oftitled ~~the~~“ ~~expected~~Subsequent ~~market~~Events” ~~price~~for ofmore ~~the~~information. ~~Company’s~~During ~~common~~the ~~stock~~three ofmonths ~~389%;~~ended ~~and~~March ~~(4)~~31, 2023, an ~~expected~~aggregate ~~life~~ of 52,299,000 ~~years. The note is convertible into~~ shares of common stock atwere aissued ~~fixed~~upon ~~conversion~~the ~~price of $0.10 per share. The company has recorded a beneficial~~ conversion ~~feature~~ of $9060,000. ~~Amortization~~ of ~~discount~~notes ~~and costs was $49~~payable,~~488~~ ~~and~~ $68,~~721~~610 ~~for~~of ~~the~~related ~~three~~accrued ~~months ended September 30~~interest, ~~2022~~ and ~~2021~~$3,000 ~~respectively,~~of ~~and~~fees. ~~$160,072~~The ~~and~~value ~~$6,721~~of ~~for~~ the ~~nine~~shares ~~months~~issued ~~ended~~was ~~September 30~~$457,921, ~~2022~~ and ~~2021,~~we ~~respectively.~~recorded ~~The~~a ~~note~~loss ~~matured~~ on ~~September~~conversion ~~22, 2022. The lender has not declared a default as both parties are actively discussing a mutually beneficial path forward. It is expected an agreement will be reached in the fourth quarter~~ of ~~2022~~$386,311.

During the fourth quarter of 2021, the Company entered twenty convertible promissory notes with various holders aggregating $1,412,000. The notes ~~mature~~matured one year from issuance and bear interest at 8% per year. The ~~Company received proceeds of $1,287,000, after deduction of $117,000 of original issue discount and $8,000 of costs. In connection with the~~ notes, ~~the~~are ~~Company~~convertible ~~has~~into ~~issued warrants to purchase 10,463,332~~ shares of common stock toat ~~the~~a ~~lenders.~~fixed ~~The~~conversion ~~warrants have an exercise~~ price of $0.1510 per share. ~~and~~During ~~expire five years from~~ the ~~date~~three ofmonths ~~issuance.~~ended ~~The~~March ~~relative~~31, ~~fair value of the warrants was $1~~2023,~~366,127,~~ ~~determined~~an ~~using~~aggregate ~~the Black Scholes Model with the following assumptions: (1) risk free interest rate~~ of ~~0.84% - 1.33%; (2) dividend yield of 0%; (~~3),045,939 ~~volatility factor of the expected market price of the Company’s common stock of 386% - 389%; and (4) an expected life of 5 years. The notes are convertible into~~ shares of common stock atwere aissued ~~fixed~~upon the conversion ~~price~~ of $~~0.10~~83,752 ~~per share. A total~~ of ~~$1,412,000~~notes ~~has~~payable ~~been recorded as debt discount,~~ and 8$2,~~000~~250 ~~has~~of ~~been recorded as deferred debt costs~~fees. The ~~discount~~value ~~and costs will be amortized to interest expense over the term~~ of the ~~notes~~shares ~~Amortization~~issued ~~of discount and costs~~ was $~~334~~546,~~176~~932, and ~~$1,033,668~~we ~~for~~recorded ~~the~~a ~~three~~loss ~~and~~on ~~nine~~conversion ~~months~~of ~~ended September 30~~$460, ~~2022, respectively~~930.

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

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

The sums advanced by GS Capital Partners and JMS Investments have been moved to be part of the convertible note issuances of late 2021.

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Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, sales or expenses, results of operations, liquidity or capital expenditures, or capital resources that are material to an investment in our securities.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

ITEM 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and outside legal and accounting resources of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the Exchange Act)). Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are not effective in alerting them in a timely manner to material information required to be disclosed in our periodic reports filed with the SEC as a result of limited resources, and a lack of segregation of duties.

During our most recent quarter, there has not been any change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II -– OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may be engaged in various lawsuits and legal proceedings in the ordinary course of our business. We are currently not aware of any pending legal proceedings the ultimate outcome of which, in our judgment based on information currently available, would have a material adverse effect on our business, financial condition or results of operations. The information required by this Item is incorporated herein by reference to Notes to Financial Statements--––Note 10. Litigation in Part I, Item 1, of this Quarterly Report on Form 10-Q.

ITEM 1A. RISK FACTORS

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

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

There were no unregistered sales of the Company’s equity securities during the quarter ended ~~June~~March 3031, ~~2022~~ 2023, that were not previously reported in a Current Report on Form 8-K.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Not applicable.

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ITEM 6. EXHIBITS

Exhibit		Incorporated by Reference			Filed orFurnished
Number	Exhibit Description	Form	Exhibit	Filing Date	Herewith
31.1	Certification by the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a))				☒
31.2	Certification by the Principal Financial Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a))				☒
32.1	Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*				☒
32.2	Certification by the Principal Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*				☒
101.INS	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).				☒
101.SCH	Inline XBRL Taxonomy Extension Schema Document				☒
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document				☒
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document				☒
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document				☒
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document				☒
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)				☒

___________

*	In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	DAIS CORPORATION
Date: November 21, 2022	By:	/s/ Tim N. Tangredi
Date: June 28, 2023	By:	/s/ Tim N. Tangredi
		Tim N. Tangredi
		President and Chief Executive Officer
		(Principal Executive Officer)
		(Principal Financial and Accounting Officer)

2928

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