ITEM
1 – BUSINESS
Corporate
History
We
were incorporated on December 19, 2014 in the State of Nevada.
On
February 4, 2019, we acquired BergaMet NA, LLC, a Delaware limited liability company (“BergaMet”). BergaMet is a wholly-owned
subsidiary through which we conduct our nutraceuticals business.
On
April 3, 2020, we acquired Ultimate Brain Nutrients, LLC, a Delaware limited liability company (“UBN”). UBN is a wholly-owned
subsidiary through which we conduct our plant-based neuro-products business.
Overview
BergaMet
NA, LLC
On
February 4, 2019, we issued and exchanged shares of our common stock for all of the outstanding equity securities of BergaMet. BergaMet
is an established company that was already generating revenues when we acquired it.
Ultimate
Brain Nutrients, LLC
On
April 3, 2020, we issued and exchanged shares of our common stock for all of the outstanding equity securities of UBN. UBN is a science-based
company that develops unique, plant-based health technology neuro-products that provide natural brain solutions. UBN has numerous proprietary
products, with four unique patent-pending formulations and two patents issued.
The
Market
Bergamot
BergaMet,
LLC holds the rights to distribute BergaMet products in the United States, Canada, Mexico, and South Korea pursuant to a Supply Agreement
with H&AD S.r.L., an Italian limited company. The Supply Agreement was entered into on January 1, 2019, has a term of five (5) years,
and is renewable for up to four (4) additional and successive three (3) year terms.
Bergamot,
or citrus bergamia, is a rare citrus fruit native to the Calabrian region of Southern Italy. Due to sensitivity to the weather and soil
conditions, this region accounts for 80 percent of the worldwide production of bergamot. This superfruit has been used for decades in
the Calabrian regions for its beneficial effects in promoting overall health - particularly, in support of cholesterol, cardiovascular,
and metabolic health1. Citrus bergamot contains five unique antioxidant polyphenols in unusually concentrated amounts, which
help protect your body’s trillions of cells from free radical damage. The juice and albedo of bergamot has a unique profile
of flavanoid and glycosides, such as neoeriocitrin, neohesperidin, naringin, rutin, neodesmin, rhoifolin, and poncirin. Naringin has
been shown to be beneficial in animal models of atherosclerosis, while neoeriocitrin and rutin have been found to exhibit a strong capacity
to prevent LDL from oxidation. Importantly, bergamot juice is rich in brutieridine and melitidine with an ability to inhibit HMG-CoA
reductase, which inhibits the liver’s ability to produce LDL, resulting in reduced cholesterol levels in liver cells.
BergaMet
sells its bergamot products in capsule form on its website and on distribution sites such as Amazon.
Bergamot
Products
Our
bergamot products are sold in capsule form under the following product labels:
| ● | BergaMet
Cholesterol Command |
Ultimate
Brain Nutrients
Our
UBN subsidiary is a science-based company that develops unique, plant-based health technology neuro-products that improve brain health,
including memory, cognition, focus and neuro-energy.
UBN’s
KETONOMICS® proprietary formulations — targeting brain activity, focus, headache and cognitive behavior — provide multiple
intellectual property license opportunities for monetizing the company’s portfolio. Sales and licensing opportunities include multiple
beverage formats, individual products, proprietary mixtures and other food platforms.
| 1 | These
statements have not been evaluated by the Food and Drug Administration. These products are not intended to diagnose, treat, cure, or
prevent any disease. |
UBN
has six unique formulation patents – two issued and four pending – targeting brain activity, focus, headache and cognitive
behavior.
UBN’s
(http://UBNutrients.com) mission is to naturally ‘Create Better Lifestyles with Superior Health Technology through our science-based
products.” UBN’s all-natural, sugar-free and caffeine-free proprietary formulations are the result of 20 years of scientific
research and are positioned to provide consumer neuro-products that are natural brain solutions. UBN’s KETONOMICS® supplementation
has also been studied in sports physiology, with specific regard to its potential benefits for competitive performance and endurance
UBN
Products
Over
50 million Americans consume unhealthy energy shots and drinks each day, while the neuro/energy market generates over $16 billion per
year in revenue2. Within this growing market, UBN is advancing its position to meet rising consumer demand for healthy, science-based
options with clinical studies. The company’s KETONOMICS® proprietary formulations have been proven to naturally elevate brain
energy and function, including memory, cognition and focus.
UBN’s
KETONOMICS® supplementation has also been studied in sports physiology, with specific regard to its potential benefits for competitive
performance and endurance.
We
are currently in the research and development phase on a UBN product called Ultimate Brain Nutrients with its proprietary Fuel for Thought
(F4T) formulations. BergaMet has been covering the costs of the product creation and development with our product manufactures, due to
UBN’s lack of positive cash flow. As we create and test new flavors of F4T, and once we have product production in place, UBN will
begin to sell the product in April 2022. We have been accounting for these costs as inter-company loans.
Patents
and Intellectual Property Rights
Our
subsidiary, UBN, has four unique patent-pending formulations and two patents issued. We have not otherwise filed for any intellectual
property protection. However, we rely on intellectual property law that may include a combination of copyright, trade secret and confidentiality
agreements to protect our intellectual property. Our employees and independent contractors will be required to sign agreements acknowledging
that all inventions, trade secrets, works of authorship, developments and other processes generated by them on our behalf are our property,
and assigning to us any ownership that they may claim in those works. Despite our precautions, it may be possible for third parties to
obtain and use without consent intellectual property that we own. Unauthorized use of our intellectual property by third parties, and
the expenses incurred in protecting our intellectual property rights, may adversely affect our business.
| Status |
Serial
No. |
Date
Filed |
Title |
| Pending |
15/743,448 |
January
10, 2018 |
PROHYLAXIS
AND MITIGATION OF MIGRAINE HEADACHES USING MEDIUM CHAIN TRIGLYCERIDES, KETONE ESTER, AND OTHER KETONIC SOURCES |
| Pending/In
Appeal |
16/501,502 |
April
22, 2019 |
PROHYLAXIS
AND MITIGATION OF MIGRAINE HEADACHES USING MEDIUM CHAIN TRIGLYCERIDES, KETONE ESTER, AND OTHER KETONIC SOURCES |
| Pending |
16/350,663 |
December
19, 2018 |
COMPOSITIONS
OF MEDIUM CHAIN TRIGLYCERIDES AND PLANT-BASED NUTRIENTS FOR BRAIN HEALTH |
| Issued |
16/350,664 |
December
19, 2018 |
COMPOSITIONS
WITH KETOGENIC AGENTS, CANNABINOIDS, PLANT-DERIVED SUBSTANCES AND MICRONUTRIENTS |
| Issued |
16/501,249
(Patent No. 10,500,182) |
December
17, 2018 |
COMPOSITIONS
OF KETOGENIC SOURCES, MICRONUTRIENTS AND HYTOCHEMICALS FOR PROPHYLAXIS AND MITIGATION OF MIGRAINE HEADACHE |
| Pending |
17/011,650 |
September
3, 2020 |
PROPHYLAXIS
AND MIIGATION OF MIGRAINE HEADACHES USING MEDIUM CHAIN TRIGLYCERIDES, KETONE ESTERS, AND OTHER KETOGENIC SOURCES |
| 2 | https://financial-news-now.com/nootropic-beverages-set-to-take-over-the-16-billion-dollar-energy-drink-market/ |
From
time to time, we may encounter disputes over rights and obligations concerning intellectual property. While we believe that our product
and service offerings do not infringe the intellectual property rights of any third party, we cannot assure you that we will prevail
in any intellectual property dispute. If we do not prevail in such disputes, we may lose some or all of our intellectual property protection,
be enjoined from further sales of the applications determined to infringe the rights of others, and/or be forced to pay substantial royalties
to a third party.
Governmental
Controls, Approval and Licensing Requirements
Federal
laws related to the advertising, distribution and sale of health supplements.
We
expect that the formulation, manufacturing, packaging, labeling, advertising, distribution and sale (hereafter, “sale” or
“sold” may be used to signify all of these activities) of our vitamin and nutritional supplement products will be subject
to regulation by one or more federal agencies, primarily the Food and Drug Administration (“FDA”) and the Federal Trade Commission
(“FTC”), and to a lesser extent the Consumer Product Safety Commission (“CPSC”), the United States Department
of Agriculture, and the Environmental Protection Agency. Our activities are also regulated by various governmental agencies for the states
and localities in which our products are sold, as well as by governmental agencies in certain countries outside the United States in
which our products are sold. Among other matters, regulation by the FDA and the FTC is concerned with product safety and claims made
with respect to a product’s ability to provide health-related benefits. Specifically, the FDA, under the Federal Food, Drug, and
Cosmetic Act (“FDCA”), regulates the formulation, manufacturing, packaging, labeling, distribution, and sale of food, including
dietary supplements and over-the-counter (“OTC”) drugs. The FTC regulates the advertising of these products. The National
Advertising Division (“NAD”) of the Council of Better Business Bureaus oversees an industry-sponsored, self-regulatory system
that permits competitors to resolve disputes over advertising claims. The NAD has no enforcement authority of its own, but may refer
matters that appear to violate the FTC Act or the FDCA to the FTC or the FDA for further action, as appropriate.
Most
of the nutritional supplement products that we plan to sell are classified as dietary supplements. The FDA’s revision of nutrition
labeling requirements also affects the nutrition labeling of certain dietary supplements. Our affected manufacturers may have to
revise labels on some of their dietary supplements in the next two years. Moreover, these manufacturers may need to reformulate their
products to maintain eligibility for certain marketing claims.
The
Dietary Supplement Health and Education Act (“DSHEA”) was enacted in 1994, amending the FDCA. Among other things, DSHEA prevents
the FDA from regulating dietary ingredients in dietary supplements as “food additives” and allows the use of statements of
nutritional support on product labels and in labeling. DSHEA establishes a statutory class of “dietary supplements,” which
includes vitamins, minerals, herbs, amino acids and other dietary ingredients for human use to supplement the diet. Dietary ingredients
marketed in the United States before October 15, 1994 may be marketed without the submission of a “new dietary ingredient”
(“NDI”) premarket notification to the FDA. Dietary ingredients not marketed in the United States before October 15,
1994 may require the submission, at least 75 days before marketing, of an NDI notification containing information establishing that
the ingredient is reasonably expected to be safe for its intended use. The FDA has issued final regulations under DSHEA.
As
required by Section 113(b) of the Food Safety Modernization Act, the FDA published in July 2011 a draft guidance document clarifying
when the FDA believes a dietary ingredient is an NDI, when a manufacturer or distributor must submit an NDI premarket notification to
the FDA, the evidence necessary to document the safety of an NDI and the methods for establishing the identity of an NDI. Industry strongly
objected to several aspects of the draft guidance. In 2016, the FDA issued revised draft guidance on what constitutes an NDI and NDI
notification requirements. Regardless of whether the FDA finalizes this draft guidance, the FDA has recently acted more aggressively
to remove ingredients from the market that the FDA views as unlawful dietary ingredients. This trend, if it continues, may limit the
dietary supplement market. Several bills to amend DSHEA in ways that would make this law less favorable to consumers and industry have
been proposed in Congress.
The
FDA issued a Final Rule on GMPs for dietary supplements on June 22, 2007. The GMPs cover manufacturers and holders of finished dietary
supplement products, including dietary supplement products manufactured outside the United States that are imported for sale into the
United States. Among other things, the new GMPs: (a) require identity testing on all incoming dietary ingredients, (b) call
for a “scientifically valid system” for ensuring finished products meet all specifications, (c) include requirements
related to process controls, including statistical sampling of finished batches for testing and requirements for written procedures and
(d) require extensive recordkeeping. We have reviewed the GMPs and have taken steps to ensure compliance. While we believe we are
in compliance, there can be no assurance that our operations or those of our suppliers will be in compliance in all respects at all times.
Additionally, there is a potential risk of increased audits as the FDA and other regulators seek to ensure compliance with the GMPs.
On
December 22, 2006, Congress passed the Dietary Supplement and Nonprescription Drug Consumer Protection Act, which went into effect on
December 22, 2007. The law requires, among other things, that companies that manufacture or distribute nonprescription drugs or
dietary supplements report serious adverse events allegedly associated with their products to the FDA and institute recordkeeping requirements
for all adverse events (serious and non-serious). There is a risk that consumers, the press and government regulators could misinterpret
reported serious adverse events as evidence of causation by the ingredient or product complained of, which could lead to additional regulations,
banned ingredients or products, increased insurance costs and a potential increase in product liability litigation, among other things.
All
states regulate foods and drugs under laws that generally parallel federal statutes. We are also subject to state consumer health and
safety regulations, such as the California Safe Drinking Water and Toxic Enforcement Act of 1986 (“Proposition 65”). Violation
of Proposition 65 may result in substantial monetary penalties and compliance with Proposition 65 is a major focus. Contemplated changes
in the Proposition 65 labeling requirements could potentially lead to substantial costs. Current legislation in Massachusetts regarding
restrictions on weight loss and sports nutrition products could also impact the marketing of dietary supplements generally. Further,
state attorneys general have pressured industry to adopt DNA testing for herbal-based products to assure plant identity, and have taken
other actions relating to dietary ingredient status. It is uncertain whether these efforts will have a material impact on the dietary
supplement market.
Competition
Nutritional
Supplements
We
compete with other manufacturers, distributors and marketers of vitamins, minerals, herbs, and other nutritional supplements both within
and outside the U.S. The nutritional supplement industry is highly fragmented and competition for the sale of nutritional supplements
comes from many sources. These products are sold primarily through retailers (drug store chains, supermarkets, and mass market discount
retailers), health and natural food stores, and direct sales channels (network marketing and internet sales).
The
nutritional supplement industry is highly competitive and we expect the level of competition to remain high over the near term. We do
not believe it is possible to accurately estimate the total number or size of our competitors. The nutritional supplement industry has
undergone consolidation in the recent past and we expect that trend may continue in the near term.
Employees
As
of the date hereof, we do not have any employees other than our officers and directors. BergaMet has 2 employees, and UBN does not have
any employees but uses outside contract help on an as-needed basis. Our officers and directors will continue to work for us for the foreseeable
future. We anticipate hiring appropriate personnel on an as-needed basis, and utilizing the services of independent contractors as needed.
ITEM
1A. – RISK FACTORS.
As
a smaller reporting company, we are not required to provide a statement of risk factors. Nonetheless, we are voluntarily providing risk
factors herein.
Any
investment in our common stock involves a high degree of risk. You should consider carefully the following information, together with
the other information contained in this Annual Report, before you decide to buy our common stock. If one or more of the following events
actually occurs, our business will suffer, and as a result our financial condition or results of operations will be adversely affected.
In this case, the market price, if any, of our common stock could decline, and you could lose all or part of your investment in our common
stock.
We
are providing services to an industry that is heavily regulated and, in some respects, illegal under federal law and the laws of most
states. We face risks in developing our product candidates and services and eventually bringing them to market. We also face risks that
our business model may become obsolete. The following risks are material risks that we face. If any of these risks occur, our business,
our ability to achieve revenues, our operating results and our financial condition could be seriously harmed.
Risk
Factors Related to the Business of the Company
Our
operations rely on professionals all over the United States, which was impacted by the global pandemic, causing our resources to be affected.
Our business operations have been and may continue to be materially and adversely affected by the coronavirus disease COVID-19.
Throughout
2020, 2021, and into 2022, the COVID-19 outbreak has caused disruptions in our operations, which have resulted in delays on existing
projects. A prolonged disruption or any further unforeseen delay in our operations could continue to result in increased costs and reduced
revenue.
We
cannot foresee whether the outbreak of COVID-19 will be effectively contained, nor can we predict the severity and duration of its impact.
If the outbreak of COVID-19 is not effectively and timely controlled, our business operations and financial condition may be materially
and adversely affected as a result of the deteriorating market outlook for sales, the slowdown in regional and national economic growth,
weakened liquidity and financial condition of our customers and vendors or other factors that we cannot foresee. Any of these factors
and other factors beyond our control could have an adverse effect on the overall business environment, cause uncertainties, cause our
business to suffer in ways that we cannot predict and materially and adversely impact our business, financial condition and results of
operations.
The
ongoing COVID-19 pandemic and responses thereto have adversely affected and we expect will continue to adversely affect our supply chain,
workforce, approval process, and business operations.
The
ongoing COVID-19 pandemic, and related government and social responses, have resulted in widespread impacts on our industry and the economy
in general, including closures of businesses not deemed “essential,” limitations on the availability of elective medical
procedures, work stoppages, slowdowns and delays, work-from-home policies, travel restrictions and cancellation of events, as well as
record declines in stock prices, among other effects. We continue to monitor our operations and government mandates and may elect or
be required to limit our access to customers and limit customer use of our products as they are required to prioritize resources to address
the public healthcare needs arising from the COVID-19 pandemic. Such disruptions to our activities and operations will negatively impact
our business and some of our operating results and may negatively impact our financial condition.
The
duration of COVID-19’s impact on our business may be difficult to assess or predict. The widespread pandemic has resulted, and may continue
to result for an extended period, in significant disruption of global financial markets, reducing our ability to access capital, which
would negatively affect our liquidity. Further, quarantines or government reaction or shutdowns could disrupt our supply chain. Travel
and import restrictions may also disrupt our ability to manufacture or distribute our products. Any import or export or other cargo restrictions
related to our products or the raw materials used to manufacture our products would restrict our ability to manufacture and ship products
and harm our business, financial condition and results of operations. Our key personnel and other employees could also be affected
by COVID-19, potentially reducing their availability, and an outbreak such as COVID-19 or the procedures we take to mitigate its effect
on our workforce could reduce the efficiency of our operations or prove insufficient. We may delay or reduce certain spending related
to certain projects until the travel and logistical impacts related to COVID-19 are lifted, which will delay the completion of such projects.
The
global outbreak of COVID-19 continues to rapidly evolve. The ultimate impact of the COVID-19 outbreak is highly uncertain and subject
to change, and its duration and extent depends on factors such as the evolution of variants of the virus, and the development and widespread
distribution of vaccines. We do not yet know the full extent of potential delays or impacts on our business or the global economy as
a whole. However, these effects have harmed our business, financial condition, and results of operations in the near term and could have
a continuing material impact on our operations, sales, and ability to continue operations.
We
have a limited operating history, we are not profitable, and we do not expect to be profitable in the near future. There is no assurance
our future operations will result in revenues sufficient to obtain or sustain profitability. If we cannot generate sufficient revenues
to operate profitably, we may suspend or cease operations.
We
were incorporated on December 19, 2014, but we have changed our business focus with the acquisition of BergaMet and UBN and we have not
fully developed our current business operations and have not yet experienced significant revenue. Our ability to continue as a going
concern is dependent upon our ability to obtain adequate financing and to reach profitable levels of operations. In that regard we have
no proven history of performance, earnings or success.
Our
net loss from inception to December 31, 2021, was ($14,943,620). Based on our cash position of $222,098 as of December 31, 2021, we will
need to raise additional capital from the sale of our stock or debt. Such funding may not be available, or may be available only on terms
which are not beneficial and/or acceptable to us.
Our
ability to maintain profitability and positive cash flow is dependent upon our ability to attract new customers who will buy our nutritional
supplement products and services, and our ability to generate sufficient revenue through the sale of those products and services.
Based
upon current plans, we expect to incur operating losses in future periods because we will be incurring expenses that may exceed revenues.
We cannot guarantee that we will be successful in generating sufficient revenues in the future. In the event we cannot generate sufficient
revenues and/or secure additional financing, we may be forced to cease operations.
Our
competitors may develop nutritional supplement products that are less expensive, safer or otherwise more appealing, which may diminish
or eliminate the commercial success of any potential product that we may commercialize.
If
our competitors market nutritional supplement products that are less expensive, safer or otherwise more appealing than our current and
potential products, or that reach the market before our current and potential products, we may not achieve commercial success. The market
may choose to continue utilizing existing products for any number of reasons, including familiarity with or pricing of these existing
products. The failure of any of our products to compete with products marketed by our competitors would impair our ability to generate
revenue, which would have a material adverse effect on our future business, financial condition, results of operations, and cash flows.
Our competitors may:
| ● | develop
and market products that are less expensive, safer, or otherwise more appealing than our
products; |
| ● | commercialize
competing products before we or our partners can launch our products; and |
| ● | initiate
or withstand substantial price competition more successfully than we can. |
Our
auditors have substantial doubt about our ability to continue as a going concern.
Our
financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. Our auditor’s report reflects that our ability to continue as a going concern is
dependent upon our ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant
operating revenues. If we are unable to continue as a going concern, our stockholders will lose their investment. We will be required
to seek additional capital to fund future growth and expansion. No assurance can be given that such financing will be available or, if
available, that it will be on commercially favorable terms. Moreover, favorable financing may be dilutive to our stockholders.
Our
controlling stockholders have significant influence over the Company.
Our
officers and directors own stock representing approximately 2% of shareholder votes; however, if you add in our controlling shareholder,
Jay Decker, they hold approximately 53% of shareholder votes. As a result they will possess a significant influence over our affairs
and may have the effect of delaying or preventing a future change in control, impeding a merger, consolidation, takeover or other business
combination or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of the company,
which in turn could materially and adversely affect the market price of our common stock. Our minority shareholders will be unable to
affect the outcome of stockholder voting as long as our officers and directors retain a controlling interest.
Our
current officers and directors may set salaries and perquisites in the future which we are unable to support with our current assets.
Although
our officers and directors have written employment or services agreements, our officers and directors may decide to award themselves
higher salaries and other benefits but all changes to these agreements will need to be approved by the Board of Directors. We do not
have significant revenues, and there is no guarantee that we will have significant revenue in the near future. If we do not increase
our revenues, we will be unable to support any higher salaries or other benefits for management, which may cause us to cease operations.
We
may engage in strategic transactions that fail to enhance stockholder value.
From
time to time, we may consider possible strategic transactions, including the potential acquisitions or licensing of products or technologies
or acquisition of companies, and other alternatives with the goal of maximizing stockholder value. We may never complete a strategic
transaction, and in the event that we do complete a strategic transaction, implementation of such transactions may impair stockholder
value or otherwise adversely affect our business. Any such transaction may require us to incur non-recurring or other charges and may
pose significant integration challenges and/or management and business disruptions, any of which could harm our results of operation
and business prospects.
We
may not be able to gain or sustain market acceptance for our products and services.
Failure
to establish a brand and presence in the marketplace on a timely basis could adversely affect our financial condition and results of
operations. Moreover, there can be no assurance that we will successfully complete our development and introduction of new products and
services or that any such products and services will achieve acceptance in the marketplace. We may also fail to develop and deploy new
products and services on a timely basis.
We
have a significant amount of unsold inventory, which could affect our assets and our profitability.
As
of December 31, 2021, we had over $1.9 million in inventory, after writing off over $400,000 in inventory for the year. The amount of
our inventory exceeds our revenues for the year ended December 31, 2021. Our inventory could spoil or be damaged, or we could never sell
it, affecting the assets on our balance sheet as well as our future profitability.
We
have incurred costs in completing the transactions with BergaMet and UBN, and failure to successfully integrate those businesses into
each other and with our own will have an adverse impact on our financial position and prevent us from obtaining the benefits that the
transaction would have given us.
We
have recently completed our acquisitions of BergaMet and UBN. Our executives have spent considerable time and incurred legal and accounting
costs in the acquisitions. If we are unable to fully integrate those businesses into our business or maintain their existing customer
base, we will not be able to acquire the technologies, partnerships and potential customers that the transaction was intended given us.
The increase in acquisition and integration costs without the corresponding benefit will have an adverse impact on our financial statements
and foreclose potential revenue-producing opportunities in the near future.
We
are subject to and affected by extensive governmental regulations.
We
are subject to and affected by extensive governmental regulations, including, among other things, regulations pertaining to (i) the formulation,
manufacturing, packaging, labeling, distribution, importation, sale and storage of our products, and (ii) product claims and advertising
(including direct claims and advertising by us, as well as claims and advertising by distributors for which we may be held responsible)
We
could be found not to be in compliance with existing regulations as a result, among other things, of the ambiguous nature of certain
of the regulations, the considerable interpretive and enforcement discretion given to regulators or misconduct by distributors, who are
generally independent contractors over whom we have limited control. Enforcement actions that could be undertaken by state and federal
regulators include product seizures, injunctions against further product distribution, requests for product recall, and possible criminal
prosecution. Any assertion or determination that we or our distributors are not in compliance with existing regulations could have a
material adverse effect on our revenues.
In
addition, the adoption of new regulations, or changes in the interpretation of existing regulations, could have a material adverse effect
on us. For example, in September 1997 the United States Food and Drug Administration (the “FDA”) issued regulations governing
the labeling and marketing of dietary supplement products.
In
addition, claims made with respect to weight management, dietary supplement, personal care or other products of ours may change the regulatory
status of the products. For example, it is possible that the FDA could take the position that claims made in connection with certain
of our products place those products within the scope of an FDA “over-the counter” (OTC) drug monograph. OTC monographs prescribe
permissible ingredients and appropriate labeling language, and require the marketer or supplier of the products to register and file
annual drug listing information with the FDA.
The
U.S. Federal Trade Commission (“FTC”), which exercises jurisdiction over the advertising of all our products, has in the
past instituted enforcement actions against dietary supplement companies for false and misleading advertising of certain products. These
enforcement actions have resulted in consent decrees and monetary payments by the companies involved. In addition, the FTC has increased
its scrutiny of the use of testimonials.
Economic
uncertainties or downturns could materially adversely affect our business.
Current
or future economic uncertainties or downturns could adversely affect our business and results of operations. Negative conditions in the
general economy including conditions resulting from changes in gross domestic product growth, the continued sovereign debt crisis, financial
and credit market fluctuations, political deadlock, natural catastrophes, warfare and terrorist attacks on the United States, Europe,
the Asia Pacific region or elsewhere, could cause a decrease in business investments.
General
worldwide economic conditions have experienced a significant downturn and continue to remain unstable. These conditions make it extremely
difficult for us to forecast and plan future business activities accurately, and they could cause our potential customers to reevaluate
their decisions to purchase our product, which could delay and lengthen our sales cycles or result in cancellations of planned purchases.
Furthermore, during challenging economic times our potential customers may tighten their advertising budgets which may impact their spend
on local inventory based digital marketing products. To the extent purchases of our products are perceived by potential customers to
be discretionary, sales of our products may never occur. Also, customers may choose to seek other methods to achieve the benefits our
products provide.
We
cannot predict the timing, strength or duration of any economic slowdown, instability or recovery, generally or within any particular
industry. If the economic conditions of the general economy or industries in which we operate do not improve, or worsen from present
levels, our business, results of operations, financial condition and cash flows could be adversely affected.
We
are dependent on the services of key personnel and failure to attract qualified management could limit our growth and negatively impact
our results of operations.
We
are highly dependent on the principal members of our management team, including our President, Kevin “Duke” Pitts, and our
Chief Financial Officer, William Bossung. At this time, we do not know of the availability of such experienced management personnel or
how much it may cost to attract and retain such personnel. The loss of the services of any member of senior management or the inability
to hire experienced technical or programing personnel could have a material adverse effect on our financial condition and results of
operations.
Other
companies may claim that we have infringed upon their intellectual property or proprietary rights.
We
do not believe that our products and services violate third-party intellectual property rights; however, we have not had an independent
party conduct a study of possible patent infringements. Nevertheless, we cannot guarantee that claims relating to violation of such rights
will not be asserted by third parties. If any of our products or services are found to violate third-party intellectual property rights,
we may be required to expend significant funds to re-engineer or cause to be re-engineered one or more of those products or services
to avoid infringement, or seek to obtain licenses from third parties to continue offering our products and services without substantial
re-engineering, and such efforts may not be successful.
In
addition, future patents may be issued to third parties upon which our products and services may infringe. We may incur substantial costs
in defending against claims under any such patents. Furthermore, parties making such claims may be able to obtain injunctive or other
equitable relief, which effectively could block our ability to further develop or commercialize some or all of our products or services
in the United States or abroad, and could result in the award of substantial damages against us. In the event of a claim of infringement,
we may be required to obtain one or more licenses from third parties. There can be no assurance that we will be able to obtain such licenses
at a reasonable cost, if at all. Defense of any lawsuit or failure to obtain any such license could be costly and have a material adverse
effect on our business.
Our
success depends on our ability to protect our proprietary technology.
Our
success depends, to a significant degree, upon the protection of our proprietary technology, and that of any licensors. Legal fees and
other expenses necessary to obtain and maintain appropriate patent protection could be material. Currently, no material aspect of our
business is protected by registered patents, copyrights or trademarks. Insufficient funding may inhibit our ability to obtain and maintain
such protection. Additionally, if we must resort to legal proceedings to enforce our intellectual property rights, the proceedings could
be burdensome and expensive, and could involve a high degree of risk to our proprietary rights if we are unsuccessful in, or cannot afford
to pursue, such proceedings.
We
may also rely on trademarks, trade secrets and contract law to protect certain of our proprietary technology. There can be no assurance
that any trademarks will be approved, that such contract will not be breached, or that if breached, we will have adequate remedies. Furthermore,
there can be no assurance that any of our trade secrets will not become known or independently discovered by third parties.
Our
future growth may be inhibited by the failure to implement new technologies.
Our
future growth is partially tied to our ability to improve our knowledge and implementation of mobile, AI, machine learning, and other
advanced technologies in a retail environment, which is a rapidly changing market. The inability to successfully implement commercially
technologies in response to market conditions in a manner that is responsive to our customers’ requirements could have a material
adverse effect on our business.
Risks
Related To Our Common Stock
The
market price of our common stock may be volatile and may be affected by market conditions beyond our control.
The
market price of our common stock is subject to significant fluctuations in response to, among other factors:
| ● | variations
in our operating results and market conditions specific to technology companies; |
| ● | changes
in financial estimates or recommendations by securities analysts; |
| ● | announcements
of innovations or new products or services by us or our competitors; |
| ● | the
emergence of new competitors; |
| ● | operating
and market price performance of other companies that investors deem comparable; |
| ● | changes
in our board or management; |
| ● | sales
or purchases of our common stock by insiders; |
| ● | commencement
of, or involvement in, litigation; |
| ● | changes
in governmental regulations; and |
| ● | general
economic conditions and slow or negative growth of related markets. |
In
addition, if the market for stocks in our industry or the stock market in general, experiences a loss of investor confidence, the market
price of our common stock could decline for reasons unrelated to our business, financial condition or results of operations. If any of
the foregoing occurs, it could cause the price of our common stock to fall and may expose us to lawsuits that, even if unsuccessful,
could be costly to defend and a distraction to the board of directors and management.
If
we are unable to pay the costs associated with being a public, reporting company, we may be forced to discontinue operations.
Our
common stock is quoted on the OTCQB tier of the marketplace maintained by OTC Markets Group, Inc. We expect to have significant costs
associated with being a public, reporting company, which may raise substantial doubt about our ability to sell our equity securities
and/or continue as a going concern. Our ability to continue as a going concern will depend on positive cash flow, if any, from future
operations and on our ability to raise additional funds through equity or debt financing. If we are unable to achieve the necessary product
sales or raise or obtain needed funding to cover the costs of operating as a public, reporting company, we may be forced to discontinue
operations.
Our
common stock is listed for quotation on the OTCQB tier of the marketplace maintained by OTC Markets Group, Inc., which may make it more
difficult for investors to resell their shares due to suitability requirements.
Our
common stock is currently quoted on the OTCQB tier of the marketplace maintained by OTC Markets Group, Inc. Broker-dealers often decline
to trade in over-the-counter stocks given the market for such securities are often limited, the stocks are more volatile, and the risk
to investors is greater. These factors may reduce the potential market for our common stock by reducing the number of potential investors.
This may make it more difficult for investors in our common stock to sell shares to third parties or to otherwise dispose of their shares.
This could cause our stock price to decline.
Our
principal stockholders have the ability to exert significant control in matters requiring stockholder approval and could delay, deter,
or prevent a change in control of our company.
Jay
Decker has beneficial ownership of our common stock with over 51% of the shareholder votes. As a result, he has the ability to influence
matters affecting our shareholders, including the election of our directors, the acquisition or disposition of our assets, and the future
issuance of our shares. Because he controls such shares, investors may find it difficult to replace our management if they disagree with
the way our business is being operated. Because the influence by these shareholders could result in management making decisions that
are in the best interest of those shareholders and not in the best interest of the investors, you may lose some or all of the value of
your investment in our common stock. Investors who purchase our common stock should be willing to entrust all aspects of operational
control to our current management team.
We
do not intend to pay dividends in the foreseeable future.
We
do not intend to pay any dividends in the foreseeable future. We do not plan on making any cash distributions in the manner of a dividend
or otherwise. Our Board presently intends to follow a policy of retaining earnings, if any.
Future
sales and issuances of our capital stock or rights to purchase capital stock could result in additional dilution of the percentage ownership
of our stockholders and could cause our stock price to decline.
Future
sales and issuances of our capital stock or rights to purchase our capital stock could result in substantial dilution to our existing
stockholders. We may sell common stock, convertible securities and other equity securities in one or more transactions at prices and
in a manner as we may determine from time to time. If we sell any such securities in subsequent transactions, investors may be materially
diluted. New investors in such subsequent transactions could gain rights, preferences and privileges senior to those of holders of our
common stock.
In
addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for
public companies, increasing legal and financial compliance costs and making some activities more time consuming. These laws, regulations
and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application
in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty
regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to
invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative
expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If our
efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due
to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business
may be adversely affected.
We
also expect that being a public company and these new rules and regulations will make it more expensive for us to obtain director and
officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage.
These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly
to serve on our audit committee and compensation committee, and qualified executive officers.
As
a result of disclosure of information in this Annual Report and in filings required of a public company, our business and financial condition
will become more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties.
If such claims are successful, our business and results of operations could be adversely affected, and even if the claims do not result
in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources
of our management and adversely affect our business and results of operations.
The
market for penny stocks has suffered in recent years from patterns of fraud and abuse
Stockholders
should be aware that, according to SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of
fraud and abuse. Such patterns include:
| ● | control
of the market for the security by one or a few broker-dealers that are often related to the
promoter or issuer; |
| ● | manipulation
of prices through prearranged matching of purchases and sales and false and misleading press
releases; |
| ● | boiler
room practices involving high-pressure sales tactics and unrealistic price projections by
inexperienced salespersons; |
| ● | excessive
and undisclosed bid-ask differential and markups by selling broker-dealers; and, |
| ● | the
wholesale dumping of the same securities by promoters and broker-dealers after prices have
been manipulated to a desired level, along with the resulting inevitable collapse of those
prices and with consequential investor losses. |
Our
management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position
to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines
of practical limitations to prevent the described patterns from being established with respect to our securities. The occurrence of these
patterns or practices could increase the volatility of our share price.
Due
to the lack of a developed trading market for our securities, you may have difficulty selling your shares.
Our
stock currently trades on the OTCQB tier maintained by OTC Markets Group, Inc. There currently is a very limited public trading market
for our common stock. The lack of a developed public trading market for our shares may have a negative effect on your ability to sell
your shares in the future and it also may have a negative effect on the price, if any, for which you may be able to sell your shares.
As a result an investment in the shares may be illiquid in nature and investors could lose some or all of their investment.
Our
status as an “emerging growth company” under the JOBS Act OF 2012 may make it more difficult to raise capital when we need
to do it.
Because
of the exemptions from various reporting requirements provided to us as an “emerging growth company” and because we will
have an extended transition period for complying with new or revised financial accounting standards, we may be less attractive to investors
and it may be difficult for us to raise additional capital as and when we need it. Investors may be unable to compare our business with
other companies in our industry if they believe that our financial accounting is not as transparent as other companies in our industry.
If we are unable to raise additional capital as and when we need it, our financial condition and results of operations may be materially
and adversely affected.
Our
internal controls may be inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated
to the public.
Our
management is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Exchange
Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive
and principal financial officer and effected by the board of directors, management and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles and includes those policies and procedures that: (i) pertain to the maintenance of records that
in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management
and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of the company’s assets that could have a material effect on the financial statements. Our internal controls
may be inadequate or ineffective, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated
to the public.
Our
common stock is governed under The Securities Enforcement and Penny Stock Reform Act of 1990.
The
Securities Enforcement and Penny Stock Reform Act of 1990 requires additional disclosure relating to the market for penny stocks in connection
with trades in any stock defined as a penny stock. The Commission has adopted regulations that generally define a penny stock to be any
equity security that has a market price of less than $5.00 per share, subject to certain exceptions. Such exceptions include any equity
security listed on NASDAQ and any equity security issued by an issuer that has (i) net tangible assets of at least $2,000,000, if
such issuer has been in continuous operation for three years, (ii) net tangible assets of at least $5,000,000, if such issuer has
been in continuous operation for less than three years, or (iii) average annual revenue of at least $6,000,000, if such issuer has
been in continuous operation for less than three years. Unless an exception is available, the regulations require the delivery, prior
to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated therewith.
The
forward looking statements contained in this Annual Report may prove incorrect.
This
Annual Report contains certain forward-looking statements, including among others: (i) anticipated trends in our financial condition
and results of operations; (ii) our business strategy for expanding distribution; and (iii) our ability to distinguish ourselves from
our current and future competitors. These forward-looking statements are based largely on our current expectations and are subject to
a number of risks and uncertainties. Actual results could differ materially from these forward-looking statements. In addition to the
other risks described elsewhere in this “Risk Factors” discussion, important factors to consider in evaluating such forward-looking
statements include: (i) changes to external competitive market factors or in our internal budgeting process which might impact trends
in our results of operations; (ii) anticipated working capital or other cash requirements; (iii) changes in our business strategy or
an inability to execute our strategy due to unanticipated changes in the biotechnology industry; and (iv) various competitive factors
that may prevent us from competing successfully in the marketplace. In light of these risks and uncertainties, many of which are described
in greater detail elsewhere in this “Risk Factors” discussion, there can be no assurance that the events predicted in forward-looking
statements contained in this Annual Report will, in fact, transpire.
General
Risk Factors
We
will incur ongoing costs and expenses for SEC reporting and compliance, without increased revenue we may not be able to remain in compliance,
making it difficult for investors to sell their shares, if at all.
Going
forward, we will have ongoing SEC compliance and reporting obligations. Such ongoing obligations will require us to expend additional
amounts on compliance, legal and auditing costs. In order for us to remain in compliance, we will require increased revenues to cover
the cost of these filings, which could comprise a substantial portion of our available cash resources. If we are unable to generate sufficient
revenues to remain in compliance, it may be difficult for you to resell any shares you may purchase, if at all.
We
have the right to issue additional common stock without consent of stockholders. This would have the effect of diluting investors’
ownership and could decrease the value of their investment.
We
are authorized to issue 2,500,000,000 shares of common stock. Of these authorized shares, 338,091,821 shares are issued and outstanding
as of March 22, 2022. Therefore, we are authorized to issue up to an additional 2,161,908,179 unissued shares of our common stock that
may be issued by us for any purpose without the further consent or vote of our stockholders that would dilute stockholders’ percentage
ownership of our company.
Our
officers and directors can sell some of their stock, which may have a negative effect on our stock price and ability to raise additional
capital, and may make it difficult for investors to sell their stock at any price.
Our
officers and directors, as a group, are the beneficial owners of 12,120,139 shares of our common stock, representing less than 4% of
our total issued shares; however, with the addition of our largest shareholder, they own a combined 190,926,973 shares. Each individual
officer, director, and control party may be able to sell up to 1% of our outstanding stock (currently approximately 3,300,000 shares)
every 90 days in the open market pursuant to Rule 144, which may have a negative effect on our stock price and may prevent us from obtaining
additional capital. In addition, if our officers and directors are selling their stock into the open market, it may make it difficult
or impossible for investors to sell their stock at any price.
SPECIAL
NOTE ABOUT FORWARD-LOOKING STATEMENTS
We
have made forward-looking statements in this Annual Report, including the sections entitled “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” and “Business,” that are based on our management’s
beliefs and assumptions and on information currently available to our management. Forward-looking statements include the information
concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry
environment, potential growth opportunities, the effects of future regulation, and the effects of competition. Forward-looking statements
include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words
“believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate”
or similar expressions. These statements are only predictions and involve known and unknown risks and uncertainties, including the risks
outlined under “Risk Factors” and elsewhere in this Annual Report.
Although
we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee future results, events,
levels of activity, performance or achievement. We are not under any duty to update any of the forward-looking statements after the date
of this Annual Report to conform these statements to actual results, unless required by law.