This Form 10-K contains forward-looking statements.
Forward-looking statements are projections of events, revenues, income, future economic performance or management’s plans
and objectives for our future operations. In some cases, you can identify forward-looking statements by terminology such as “may,”
“should,”” expects,” “plans,” “anticipates,” “believes,” “estimates,”
“predicts,” “potential,” or “continue,” or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including
the risks in the section entitled “Risk Factors” and the risks set out below, any of which may cause our or our industry’s
actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity,
performance or achievements expressed or implied by these forward-looking statements. These risks include, by way of example and
not in limitation:
This list is not an exhaustive list of the
factors that may affect any of our forward-looking statements. These and other factors should be considered carefully, and readers
should not place undue reliance on our forward-looking statements. Forward looking statements are made based on management’s
beliefs, estimates and opinions on the date the statements are made, and we undertake no obligation to update forward-looking statements
if these beliefs, estimates and opinions or other circumstances should change. Although we believe that the expectations reflected
in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.
Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the
forward-looking statements to conform these statements to actual results.
Our financial statements are stated in United
States dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. All references
to “common stock” refer to the common shares in our capital stock.
ITEM 1. BUSINESS.
GENERAL
The following is a summary of some of the information
contained in this document. Unless the context requires otherwise, references in this document to “our Company,” “us,”
“we,” “our,” “Atlas,” or the “Company” are to Atlas Technology Group, Inc.
DESCRIPTION OF BUSINESS
Atlas Technology Group, Inc., a Florida corporation,
(“Atlas”, “the Company”, “We", "Us" or “Our’) is a SEC reporting shell
company. Shares of our common stock can only be traded in the expert market as of the date of this report. We believe this is due
to there being no broker dealers willing to quote our stock. We intend to seek approval for our shares of common stock to
be traded on the Pink Sheets again. Once relisted on the Pink Sheets, we will then seek to merge with an entity with experienced
management and opportunities for growth in return for shares of our common stock to create values for our shareholders. There is
no guarantee that we will be successful in becoming relisted on the Pink Sheets and no potential merger candidate has been identified
at this time.
Our principal executive offices are located
at PO Box 147165, Lakewood, Colorado, 80214 and the telephone number is (303) 323-4896.
IMPACT OF COVID-19
We have only limited
operations at this time and consequently have not been directly impacted by the COVID-19 outbreak at this time. However, the detrimental
effect of the COVID-19 outbreak on the economy as a whole may have a detrimental impact on our ability to raise funding and commence
operations for the foreseeable future.
Reports to Security Holders
We are subject to the reporting requirements
of Section 12(g) of the Exchange Act, and as such, we intend to file all required disclosures.
We provide an annual report that includes audited
financial information to our shareholders. We will make our financial information equally available to any interested parties or
investors through compliance with the disclosure rules for a small business issuer under the Securities Exchange Act of 1934. We
are subject to disclosure filing requirements including filing Form 10-K annually and Form 10-Q quarterly. In addition, we will
file Form 8-K and other proxy and information statements from time to time as required. We do not intend to voluntarily file the
above reports in the event that our obligation to file such reports is suspended under the Exchange Act. The public may read and
copy any materials that we file with the Securities and Exchange Commission, (“SEC”), at the SEC’s Public Reference
Room at 100 F Street NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room
by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and
information statements, and other information regarding issuers that file electronically with the SEC.
Jumpstart Our Business Startups Act
We qualify as an “emerging growth
company” as defined in Section 101 of the Jumpstart our Business Startups Act (“JOBS Act”) as we did not have
more than $1.07 billion in annual gross revenues and did not have such amount as of December 31, 2021, our last fiscal year.
We may lose our status as an emerging
growth company on the last day of our fiscal year during which (i) our annual gross revenue exceeds $1.07 billion or (ii) we issue
more than $1.0 billion in non-convertible debt in a three-year period. We will lose our status as an emerging growth company if
at any time we are deemed to be a large accelerated filer. We will lose our status as an emerging growth company on the last day
of our fiscal year following the fifth anniversary of the date of the first sale of common equity securities pursuant to an effective
registration statement.
As an emerging growth company, we may
take advantage of specified reduced reporting and other burdens that are otherwise applicable to generally reporting companies.
These provisions include:
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A requirement to have only two years of audited financial statement and only two years of related Management Discussion and Analysis Disclosures: |
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Reduced disclosure about the emerging growth company’s executive compensation arrangements; and |
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No non-binding advisory votes on executive compensation or golden parachute arrangements. |
As an emerging growth company, we are
exempt from Section 404(b) of the Sarbanes-Oxley Act of 2002 and Section 14A(a) and (b) of the Securities Exchange Act of 1934.
Such sections are provided below:
Section 404(b) of the Sarbanes-Oxley
Act of 2002 requires a public company’s auditor to attest to, and report on, management’s assessment of its internal
controls.
Sections 14A(a) and (b) of the Securities
and Exchange Act, implemented by Section 951 of the Dodd-Frank Act, require companies to hold shareholder advisory votes on executive
compensation and golden parachute compensation.
We have already taken advantage of these
reduced reporting burdens in this Form 10-K, which are also available to us as a smaller reporting company as defined under Rule
12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
As long as we qualify as an emerging
growth company, we will not be required to comply with the requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002 and
Section 14A(a) and (b) of the Securities Exchange Act of 1934.
In addition, Section 107 of the JOBS
Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B)
of the Securities Act of 1933, as amended (the “Securities Act”) for complying with new or revised accounting standards.
We are choosing to irrevocably opt in to the extended transition period for complying with new or revised accounting standards
under Section 102(b)(2) of the JOBS Act.
CURRENT BUSINESS
Atlas Technology Group, Inc., a Florida corporation,
(“Atlas,” “the Company,” “We," "Us," or “Our’) is a SEC reporting shell
company. Shares of our common stock can only be traded in the expert market as of the date of this report. We believe this is due
to there being no broker dealers willing to quote our stock. We intend to seek approval for our shares of common stock to
be traded on the Pink Sheets again. Once relisted on the Pink Sheets, we will then seek to merge with an entity with experienced
management and opportunities for growth in return for shares of our common stock to create values for our shareholders. There is
no guarantee that we will be successful in becoming relisted on the Pink Sheets and no potential merger candidate has been identified
at this time.
Effective May 29, 2021, we entered into an
agreement with Corporate Excellence Consulting Inc. (“CECI”), our then controlling shareholder, and Mr. David Cutler
(“Mr. Cutler”) (“the Agreement”) under which:
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CECI surrendered, and we cancelled, the single outstanding share of Series A Preferred Stock. The single outstanding share of Series A Preferred Stock carried super preferred voting rights enabling the holder to vote the equivalent of 61% of all voteable preferred and common shares issued and outstanding, |
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We issued a new share of Series A Preferred Stock, carrying the same super preferred voting rights described above, to Mr. Cutler. As a consequence of this issuance, Mr. Cutler became our new controlling shareholder, |
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Mr. Cutler was appointed as a director of ours and as our Chief Financial Officer, |
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Mr. Cutler paid $5,000 to CECI on our behalf as a partial repayment of the outstanding fees due by us to CECI, |
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Mr. Cutler undertook to pay a further $30,000 on our behalf as a full and final settlement of the outstanding fees due by us to CECI, such payment to be made on the approval by FINRA of a proposed name change and reverse stock split, and |
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CECI agreed to accept the $35,000 to be paid to them by Mr. Cutler on our behalf in full and final settlement of the outstanding fees due by us to CECI. |
The initial payment of $5,000 to CECI was made
by Mr. Cutler as agreed.
There is no guarantee that it will be possible
to complete the remaining terms of the Agreement.
History
Atlas was incorporated in the state of Nevada
in August 1996 under the name Pan World Corporation. In November 1999, the Company changed its name to Tribeworks, Inc. and redomiciled
to the state of Delaware. In August 2007, the Company changed its name to Atlas Technology Group, Inc. In August 2015, the Company
redomiciled to the State of Florida. In December 2015, the Company changed its name to Moxie Motion Pictures, Inc. In November
2018, the Company changed its name back to Atlas Technology Group, Inc.
Since its Inception in August 1996, the Company
has at various times been involved in the following business activities: software sales, provision of information technology application
support services, distribution of energy efficient lighting products and movie production and talent management. All of these business
activities have been ultimately unsuccessful.
By December 31, 2018, the Company had ceased
all operations and had disposed of all its former operating subsidiaries.
General
Business Plan
Our business
plan to seek to have shares of our common stock relisted on the Pink Sheets and then to complete a merger has many uncertainties
which pose risks to investors.
There is no guarantee that we will be successful
in becoming relisted on the Pink Sheets.
We intend
to seek, investigate and, if such investigation warrants, acquire an interest in business opportunities presented to us by persons
or firms which desire to seek the advantages of an issuer who has complied with the Securities Act of 1934 (the “1934 Act”).
We will not restrict our search to any specific business, industry or geographical location, and we may participate in business
ventures of virtually any nature. This discussion of our proposed business is purposefully general and is not meant to be restrictive
of our unlimited discretion to search for and enter into potential business opportunities. We anticipate that we may be able to
participate in only one potential business venture because of our lack of financial resources. We may seek a business opportunity
with entities which have recently commenced operations, or that desire to utilize the public marketplace in order to raise additional
capital in order to expand into new products or markets, to develop a new product or service, or for other corporate purposes.
All of these activities have risk to investors including dilution and management.
We expect
that the selection of a business opportunity will be complex. Due to general economic conditions, rapid technological advances
being made in some industries and shortages of available capital, we believe that there are numerous firms seeking the benefits
of an issuer who has complied with the 1934 Act. Such benefits may include facilitating or improving the terms on which additional
equity financing may be sought, providing liquidity for incentive stock options or similar benefits to key employees, providing
liquidity (subject to restrictions of applicable statutes) for all stockholders and other factors. Potentially, available business
opportunities may occur in many different industries and at various stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities extremely difficult and complex. We have, and will continue to have,
essentially no assets to provide the owners of business opportunities. However, we will be able to offer owners of acquisition
candidates the opportunity to acquire a controlling ownership interest in an issuer who has complied with the 1934 Act without
incurring the cost and time required to conduct an initial public offering.
The analysis
of new business opportunities will be undertaken by, or under the supervision of, our Board of Directors. We intend to concentrate
on identifying preliminary prospective business opportunities which may be brought to our attention through present associations
of our director, professional advisors or by our stockholders. In analyzing prospective business opportunities, we will consider
such matters as (i) available technical, financial and managerial resources; (ii) working capital and other financial requirements;
(iii) history of operations, if any, and prospects for the future; (iv) nature of present and expected competition; (v) quality,
experience and depth of management services; (vi) potential for further research, development or exploration; (vii) specific risk
factors not now foreseeable but that may be anticipated to impact the proposed activities of the company; (viii) potential for
growth or expansion; (ix) potential for profit; (x) public recognition and acceptance of products, services or trades; (xi) name
identification; and (xii) other factors that we consider relevant. As part of our investigation of the business opportunity, we
expect to meet personally with management and key personnel. To the extent possible, we intend to utilize written reports and personal
investigation to evaluate the above factors.
We will
not acquire or merge with any company for which audited financial statements cannot be obtained within a reasonable period of time
after closing of the proposed transaction.
Acquisition Interest
In implementing
a structure for a particular business acquisition, we may become a party to a merger, consolidation, reorganization, joint venture,
or licensing agreement with another company or entity. We may also acquire stock or assets of an existing business. Upon consummation
of a transaction, it is probable that our present management and stockholders will no longer be in control of us. In addition,
our sole director may, as part of the terms of the acquisition transaction, resign and be replaced by new directors without a vote
of our stockholders, or sell his stock in us. Any such sale will only be made in compliance with the securities laws of the United
States and any applicable state.
It
is anticipated that any securities issued in any such reorganization would be issued in reliance upon exemption from registration
under application federal and state securities laws. In some circumstances, as a negotiated element of the transaction, we may
agree to register all or a part of such securities immediately after the transaction is consummated or at specified times thereafter.
If such registration occurs, it will be undertaken by the surviving entity after it has successfully consummated a merger or acquisition
and is no longer considered an inactive company.
The issuance
of substantial additional securities and their potential sale into any trading market which may develop in our securities may have
a depressive effect on the value of our securities in the future. There is no assurance that such a trading market will develop.
While
the actual terms of a transaction cannot be predicted, it is expected that the parties to any business transaction will find it
desirable to avoid the creation of a taxable event and thereby structure the business transaction in a so-called “tax-free”
reorganization under Sections 368(a)(1) or 351 of the Internal Revenue Code (the “Code”). In order to obtain tax-free
treatment under the Code, it may be necessary for the owner of the acquired business to own 80% or more of the voting stock of
the surviving entity. In such event, our stockholders would retain less than 20% of the issued and outstanding shares of the surviving
entity. This would result in significant dilution in the equity of our stockholders.
As part
of our investigation, we expect to meet personally with management and key personnel, visit and inspect material facilities, obtain
independent analysis of verification of certain information provided, check references of management and key personnel, and take
other reasonable investigative measures, to the extent of our limited financial resources and management expertise. The manner
in which we participate in an opportunity will depend on the nature of the opportunity, the respective needs and desires of both
parties, and the management of the opportunity.
With
respect to any merger or acquisition, and depending upon, among other things, the target company’s assets and liabilities,
our stockholders will in all likelihood hold a substantially lesser percentage ownership interest in us following any merger or
acquisition. The percentage ownership may be subject to significant reduction in the event we acquire a target company with assets
and expectations of growth. Any merger or acquisition can be expected to have a significant dilutive effect on the percentage of
shares held by our stockholders.
We will
participate in a business opportunity only after the negotiation and execution of appropriate written business agreements. Although
the terms of such agreements cannot be predicted, generally we anticipate that such agreements will (i) require specific representations
and warranties by all of the parties; (ii) specify certain events of default; (iii) detail the terms of closing and the conditions
which must be satisfied by each of the parties prior to and after such closing; (iv) outline the manner of bearing costs, including
costs associated with the Company’s attorneys and accountants; (v) set forth remedies on defaults; and (vi) include miscellaneous
other terms.
As stated
above, we will not acquire or merge with any entity which cannot provide independent audited financial statements within a reasonable
period of time after closing of the proposed transaction. If such audited financial statements are not available at closing, or
within time parameters necessary to ensure our compliance within the requirements of the 1934 Act, or if the audited financial
statements provided do not conform to the representations made by that business to be acquired, the definitive closing documents
will provide that the proposed transaction
will
be voidable, at the discretion of our present management. If such transaction is voided, the definitive closing documents will
also contain a provision providing for reimbursement for our costs associated with the proposed transaction.
Competition
We believe
we are an insignificant participant among the firms which engage in the acquisition of business opportunities. There are many established
venture capital and financial concerns that have significantly greater financial and personnel resources and technical expertise
than we have. In view of our limited financial resources and limited management availability, we will continue to be at a significant
competitive disadvantage compared to our competitors.
Investment
Company Act 1940
Although
we will be subject to regulation under the Securities Act of 1933, as amended, and the 1934 Act, we believe we will not be subject
to regulation under the Investment Company Act of 1940 (the “1940 Act”) insofar as we will not be engaged in the business
of investing or trading in securities. In the event we engage in business combinations that result in us holding passive investment
interests in a number of entities, we could be subject to regulation under the 1940 Act. In such event, we would be required to
register as an investment company and incur significant registration and compliance costs. We have obtained no formal determination
from the SEC as to our status under the 1940 Act and, consequently, any violation of the 1940 Act would subject us to material
adverse consequences. We believe that, currently, we are exempt under Regulation 3a-2 of the 1940 Act.
Intellectual
Property
We have
not and do not own any intellectual property.
Employees
We presently
have no full time executive, operational or clerical staff.
Throughout
the past few years through May 28, 2021, Ms. Cortney Morris provided her services to us on a part time basis as director, Chief
Executive Officer, President, Secretary and Chief Financial Officer. She resigned in 2021.
From
May 29, 2021, Mr. David Cutler, our new controlling shareholder, was appointed as a director of ours and as our Chief Financial
Officer to provide his services to us on a part time basis.
Revenue
We did
not record any revenue during the years ended December 31, 2021 and 2020, or from January 1, 2022 through the date of this filing.
Factors Effecting Future
Performance
Our goal
is to obtain debt and, or, equity finance to meet our ongoing operating expenses and attempt have our shares of common stock relisted
on the Pink Sheets and then to merge with another entity with experienced management and opportunities for growth in return for
shares of our common stock to create value for our shareholders.
Although
there is no assurance that this series of events will be successfully completed, we believe we can successfully relist our shares
of common stock on the Pink Sheets and complete an acquisition or merger which will enable us to continue as a going concern.
Any acquisition
or merger will most likely be dilutive to our existing stockholders.
The factors
affecting our future performance are listed and explained below under the section “Risk Factors” below:
ITEM 1A. RISK FACTORS.
FORWARD
LOOKING STATEMENTS
THIS
DOCUMENT INCLUDES FORWARD-LOOKING STATEMENTS, INCLUDING, WITHOUT LIMITATION, STATEMENTS RELATING TO ATLAS’S PLANS, STRATEGIES,
OBJECTIVES, EXPECTATIONS, INTENTIONS AND ADEQUACY OF RESOURCES. THESE FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS,
UNCERTAINTIES, AND OTHER FACTORS THAT MAY CAUSE OUR COMPANY’S ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY
DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY THE FORWARD-LOOKING STATEMENTS. THESE FACTORS
INCLUDE, AMONG OTHERS, THE FOLLOWING: OUR ABILITY TO IMPLEMENT OUR BUSINESS STRATEGY; ABILITY TO OBTAIN ADDITIONAL FINANCING; ATLAS’S
LIMITED OPERATING HISTORY; UNKNOWN LIABILITIES ASSOCIATED WITH FUTURE ACQUISITIONS; ABILITY TO MANAGE GROWTH; SIGNIFICANT COMPETITION;
ABILITY TO ATTRACT AND RETAIN TALENTED EMPLOYEES; AND FUTURE GOVERNMENT REGULATIONS; AND OTHER FACTORS DESCRIBED IN THIS FILING
OR IN OTHER ATLAS FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. ATLAS IS UNDER NO OBLIGATION TO PUBLICLY UPDATE OR REVISE
ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
Our plan
of operation is to obtain debt or equity finance to meet our ongoing operating expenses and attempt to relist our shares of common
stock on the Pink Sheets and then merge with another entity with experienced management and opportunities for growth in return
for shares of our common stock to create value for our shareholders. There can be no assurance that any of the events can be successfully
completed, that our shares of common stock will be relisted on the Pink Sheets, any such business will be identified or that any
stockholder will realize any return on their shares after such a transaction has been completed. In particular, there is no assurance
that any such business will be located or that any stockholder will realize any return on their shares after such a transaction.
Any merger or acquisition completed by us can be expected to have a significant dilutive effect on the percentage of shares held
by our current stockholders.
We believe
we are an insignificant participant among the firms which engage in the acquisition of business opportunities. There are many established
venture capital and financial concerns that have significantly greater financial and personnel resources and technical expertise
than we have. In view of our limited financial resources and limited management availability, we will continue to be at a significant
competitive disadvantage compared to our competitors.
You should
be aware that there are various risks associated with our business, including the risks discussed below. You should carefully consider
these risk factors, as well as the other information contained in this Annual Report, in evaluating our business and us.
Our business
is to seek to raise the debt and, or, equity to meet our ongoing operating expenses and attempt to relist our shares of common
stock on the Pink Sheets and to merge with another entity with experienced management and opportunities for growth in return for
shares of our common stock to create value for our shareholders. There can be no assurance that this series of events will be successfully
completed or that any stockholder will realize any return on their shares after the new business plan has been implemented.
RISK
FACTORS RELATING TO OUR COMPANY
WE
HAVE A SHAREHOLDERS’ DEFICIT, HAVE INCURRED SIGNIFICANT LOSSES AND ANTICIPATE FUTURE LOSSES
During
the year ended December 31, 2021, we incurred losses of $111,002, resulting in an accumulated deficit of $30,958,321 and a stockholders’
deficit of $152,572.
Future
losses are likely to occur as, until we have opportunities for growth in return for shares of our common stock to create value
for our shareholders as we have no sources of income to meet our operating expenses. As a result of these, among other factors,
we received from our registered independent public accountants in their report for the financial statements for the year ended
December 31, 2021, an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern.
OUR
EXISTING FINANCIAL RESOURCES ARE INSUFFICIENT TO MEET OUR ONGOING OPERATING EXPENSES
We have
no sources of income at this time and no existing cash balances to meet our ongoing operating expenses. In the short term, unless
we are able to raise additional debt and/or equity we shall be unable to meet our ongoing operating expenses. On a longer-term
basis, we intend to raise the debt and/or equity to meet our ongoing operating expenses and merge with another entity with experienced
management and opportunities for growth in return for shares of our common stock to create value for our shareholders. There can
be no assurance that this series of events will be successfully completed.
WE
INTEND TO ATTEMPT TO RELIST OUR SHARES OF COMMON STOCK ON THE PINK SHEETS
There is no guarantee that we will be successful
in becoming relisted on the Pink Sheets. If we are unable to have our shares of common stock re-listed on the Pink Sheets, it’s
unlikely that we will be able to find an entity with experienced management and opportunities for growth in return for shares of
our common stock to create values for our shareholders that will be prepared to merge with us.
WE
INTEND TO PURSUE THE ACQUISITION OF AN OPERATING BUSINESS
Our sole
strategy is to acquire an operating business. Successful implementation of this strategy depends on our ability to identify a suitable
acquisition candidate, acquire such company on acceptable terms and integrate its operations. In pursuing acquisition opportunities,
we compete with other companies with similar strategies. Competition for acquisition targets may result in increased prices of
acquisition targets and a diminished pool of companies available for acquisition. Acquisitions involve a number of other risks,
including risks of acquiring undisclosed or undesired liabilities, acquired in-process technology, stock compensation expense,
diversion of management attention, potential disputes with the seller of one or more acquired entities and possible failure to
retain key acquired personnel. Any acquired entity or assets may not perform relative to our expectations. Our ability to meet
these challenges has not been established.
SCARCITY
OF, AND COMPETITION FOR, BUSINESS OPPORTUNITIES AND COMBINATIONS
We believe
we are an insignificant participant among the firms which engage in the acquisition of business opportunities. There are many established
venture capital and financial concerns that have significantly greater financial and personnel resources and technical expertise
than we have. Nearly all such entities have significantly greater financial resources, technical expertise and managerial capabilities
than us and, consequently, we will be at a competitive disadvantage in identifying possible business opportunities and successfully
completing a business combination. Moreover, we will also compete in seeking merger or acquisition candidates with numerous other
small public companies. In view of our limited financial resources and limited management availability, we will continue to be
at a significant competitive disadvantage compared to our competitors.
WE
HAVE NOT EXECUTED ANY FORMAL AGREEMENT FOR A BUSINESS COMBINATION OR OTHER TRANSACTION AND HAVE ESTABLISHED NO STANDARDS FOR BUSINESS
COMBINATIONS
We have
not executed any formal arrangement, agreement or understanding with respect to engaging in a merger with, joint venture with or
acquisition of a private or public entity. There can be no assurance that we will be successful in identifying and evaluating suitable
business opportunities or in concluding a business combination. We have not identified any particular industry or specific business
within an industry for evaluation. There is no assurance we will be able to negotiate a business combination on terms favorable,
if at all. We have not established a
specific
length of operating history or specified level of earnings, assets, net worth or other criteria which we will require a target
business opportunity to have achieved, and without which we would not consider a business combination. Accordingly, we may enter
into a business combination with a business opportunity having no significant operating history, losses, limited or no potential
for earnings, limited assets, negative net worth or other negative characteristics.
WE
MAY BE NEGATIVELY AFFECTED BY THE COVID-19 PANDEMIC
We have
not commenced operations as yet and consequently have not been directly impacted by the Covid-19 outbreak at this time. However,
the detrimental effect of the Covid-19 outbreak on the economy as a whole may have a detrimental impact on our ability to raise
funding and identify an entity to merge with for the foreseeable future. We are unable to predict with any certainty the ultimate
impact Covid-19 outbreak on our plans at this time.
WE
MAY BE NEGATIVELY AFFECTED BY ADVERSE GENERAL ECONOMIC CONDITIONS
Current
conditions in domestic and global economies are extremely uncertain. Adverse changes may occur as a result of softening global
economies, wavering consumer confidence caused by the threat of terrorism and war, and other factors capable of affecting economic
conditions. Such changes could have a material adverse effect on our business, financial condition, and results of operations.
BECAUSE
OUR PRINCIPAL SHAREHOLDER CONTROLS OUR ACTIVITIES, HE MAY CAUSE US TO ACT IN A MANNER THAT IS MOST BENEFICIAL TO HIMSELF AND NOT
TO OTHER SHAREHOLDERS WHICH COULD CAUSE US NOT TO TAKE ACTIONS THAT OUTSIDE INVESTORS MIGHT VIEW FAVORABLY.
Our principal shareholder
has the voting rights of, and ability to convert his one share of Series A preferred stock into, 68% of our outstanding common
stock. As a result, he effectively controls all matters requiring stockholder approval, including the election of directors, the
approval of significant corporate transactions, such as mergers and related party transaction. This insider also has the ability
to delay or perhaps even block, by his ownership of our stock, an unsolicited tender offer. This concentration of ownership could
have the effect of delaying, deterring or preventing a change in control of our company that you might view favorably.
OUR
DIRECTORS MAY HAVE CONFLICTS OF INTEREST WHICH MAY NOT BE RESOLVED FAVORABLY TO US.
Certain
conflicts of interest may exist between our directors and us. Our Directors have other business interests to which they devote
their attention and may be expected to continue to do so although management time should be devoted to our business. As a result,
conflicts of interest may arise that can be resolved only through exercise of such judgment as is consistent with fiduciary duties
to us. See "Directors and Executive Officers" (page 31 below), and "Conflicts of Interest." (page 31 below).
WE
MAY DEPEND UPON OUTSIDE ADVISORS; WHO MAY NOT BE AVAILABLE ON REASONABLE TERMS AND AS NEEDED.
To supplement
the business experience of our officers and directors, we may be required to employ accountants, technical experts, appraisers,
attorneys, or other consultants or advisors. Our Board without any input from stockholders will make the selection of any such
advisors. Furthermore, it is anticipated that such persons may be engaged on an "as needed" basis without a continuing
fiduciary or other obligation to us. In the event we consider it necessary to hire outside advisors, we may elect to hire persons
who are affiliates, if they are able to provide the required services.
WE
ARE A REPORTING COMPANY.
We are
subject to the reporting requirements under the Securities and Exchange Act of 1934, Section 13a, due to the effectiveness of our
Registration Statement on Form 10 under Section 12(g) which became effective. As a result, stockholders will have access to the
information required to be reported by publicly held companies under the
Exchange
Act and the regulations thereunder. As a result, we will be subject to legal and accounting expenses that private companies are
not subject to and this could affect our ability to generate operating income.
WE
ARE AN “EMERGING GROWTH COMPANY,” AND ANY DECISION ON OUR PART TO COMPLY ONLY WITH CERTAIN REDUCED DISCLOSURE REQUIREMENTS
APPLICABLE TO “EMERGING GROWTH COMPANIES” COULD MAKE OUR COMMON STOCK LESS ATTRACTIVE TO INVESTORS.
We are
an “emerging growth company,” as defined in the JOBS Act, and, for as long as we continue to be an “emerging
growth company,” we expect and fully intend to take advantage of exemptions from various reporting requirements applicable
to other public companies but not to “emerging growth companies,” including, but not limited to, not being required
to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations
regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding
a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
We could be an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first
fiscal year in which our annual gross revenues exceed $1.07 billion, (ii) the date that we become a “large accelerated filer”
as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates
exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which
we have issued more than $1 billion in non-convertible debt during the preceding three year periods.
In addition,
Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition
period provided in Section 7(a)2(B) of the Securities Act for complying with new or revised accounting standards. In other words,
an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise
apply to private companies. We have elected to opt in to the extended transition period for complying with the revised accounting
standards. We have elected to rely on these exemptions and reduced disclosure requirements applicable to “emerging growth
companies” and expect to continue to do so.
WE
MAY NOT BE ABLE TO MEET THE FILING AND INTERNAL CONTROL REPORTING REQUIREMENTS IMPOSED BY THE SEC WHICH MAY RESULT IN A DECLINE
IN THE PRICE OF OUR COMMON SHARES AND AN INABILITY TO OBTAIN FUTURE FINANCING.
As directed
by Section 404 of the Sarbanes-Oxley Act, as amended by SEC Release No. 33-8934 on June 26, 2008, the SEC adopted rules requiring
each public company to include a report of management on the company’s internal controls over financial reporting in its
annual reports. In addition, the independent registered public accounting firm auditing a company’s financial statements
may have to also attest to and report on management’s assessment of the effectiveness of the company’s internal controls
over financial reporting. We may be required to include a report of management on its internal control over financial reporting.
The internal control report must include a statement:
- Of management’s
responsibility for establishing and maintaining adequate internal control over its financial reporting;
- Of management’s
assessment of the effectiveness of its internal control over financial reporting as of year-end; and
- Of the
framework used by management to evaluate the effectiveness of our internal control over financial reporting.
Furthermore,
our independent registered public accounting firm may be required to file its attestation on whether it believes that we have maintained,
in all material respects, effective internal control over financial reporting.
REPORTING
REQUIREMENTS UNDER THE EXCHANGE ACT AND COMPLIANCE WITH THE SARBANES-OXLEY ACT OF 2002, INCLUDING ESTABLISHING AND MAINTAINING
ACCEPTABLE INTERNAL CONTROLS OVER FINANCIAL REPORTING, ARE COSTLY AND MAY INCREASE SUBSTANTIALLY.
The rules
and regulations of the SEC require a public company to prepare and file periodic reports under the Exchange Act, which will require
that the Company engage legal, accounting, auditing and other professional services. The engagement of such services is costly.
Additionally, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) requires, among other things, that we design,
implement and maintain adequate internal controls and procedures over financial reporting. The costs of complying with the Sarbanes-Oxley
Act and the limited technically qualified personnel we have, may make it difficult for us to design, implement and maintain adequate
internal controls over financial reporting. In the event that we fail to maintain an effective system of internal controls or discover
material weaknesses in our internal controls, we may not be able to produce reliable financial reports or report fraud, which may
harm our overall financial condition and result in loss of investor confidence and a decline in our share price.
As a
public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act
of 2010 and other applicable securities rules and regulations. Despite recent reforms made possible by the JOBS Act, compliance
with these rules and regulations will nonetheless increase our legal and financial compliance costs, make some activities more
difficult, time-consuming or costly and increase demand on our systems and resources, particularly after we are no longer an “emerging
growth company.” The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with
respect to our business and operating results.
We are
working with our legal, accounting and financial advisors to identify those areas in which changes should be made to our financial
and management control systems to manage our growth and our obligations as a public company. These areas include corporate governance,
corporate control, disclosure controls and procedures and financial reporting and accounting systems. We have made, and will continue
to make, changes in these and other areas. However, we anticipate that the expenses that will be required in order to adequately
prepare for being a public company could be material. We estimate that the aggregate cost of increased legal services; accounting
and audit functions; personnel, such as a chief financial officer familiar with the obligations of public company reporting; consultants
to design and implement internal controls; and financial printing alone will be a few hundred thousand dollars per year and could
be several hundred thousand dollars per year. In addition, if and when we retain independent directors and/or additional members
of senior management, we may incur additional expenses related to director compensation and/or premiums for directors’ and
officers’ liability insurance, the costs of which we cannot estimate at this time. We may also incur additional expenses
associated with investor relations and similar functions, the cost of which we also cannot estimate at this time. However, these
additional expenses individually, or in the aggregate, may also be material.
In addition,
being a public company could make it more difficult or more costly for us to obtain certain types of insurance, including directors’
and officers’ liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially
higher costs to obtain the same or similar coverage. The impact of these events could also make it more difficult for us to attract
and retain qualified persons to serve on our board of directors, our board committees or as executive officers.
The increased
costs associated with operating as a public company may decrease our net income or increase our net loss and may cause us to reduce
costs in other areas of our business or increase the prices of our products or services to offset the effect of such increased
costs. Additionally, if these requirements divert our management’s attention from other business concerns, they could have
a material adverse effect on our business, financial condition and results of operations.
THE
JOBS ACT ALLOWS US TO DELAY THE ADOPTION OF NEW OR REVISED ACCOUNTING STANDARDS THAT HAVE DIFFERENT EFFECTIVE DATES FOR PUBLIC
AND PRIVATE COMPANIES.
Since
we have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1)
of the JOBS Act, this election allows us to delay the adoption of new or revised accounting standards that have different effective
dates for public and private companies until those standards apply to private companies. As a result of this election, our financial
statements may not be comparable to companies that comply with public company effective dates.
WE
HAVE A MATERIAL WEAKNESS IN OUR CONTROLS AND PROCEDURES
We have
conducted an evaluation of our internal control over financial reporting based on the framework in “Internal Control Integrated
Framework” issued by the Committee of Sponsoring Organizations for the Treadway Commission (“COSO”) and published
in 2013, and subsequent guidance prepared by COSO specifically for smaller public companies. Based on that evaluation, management
concluded that our internal control over financial reporting was not sufficient as of December 31, 2021 for the reasons discussed
below:
A significant
deficiency is a deficiency, or combination of deficiencies in internal control over financial reporting, that adversely affects
the entity’s ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally
accepted accounting principles such that there is more than a remote likelihood that a misstatement of the entity’s financial
statements that is more than inconsequential will not be prevented or detected by the entity’s internal control.
A material
weakness is a deficiency or a combination of deficiencies in internal control over financial reporting such that there is a reasonable
possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely
basis.
Management
identified the following material weakness and significant deficiencies in its assessment of the effectiveness of internal control
over financial reporting as of December 31, 2021:
| ● | Lack
of a functioning audit committee and lack of a majority of outside directors on our board of directors, resulting in ineffective
oversight in the establishment and monitoring of required internal controls and procedures;. |
| ● | Inadequate
segregation of duties consistent with control objectives; |
| ● | Insufficient
written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP
and SEC disclosure requirements; and |
| ● | Ineffective
controls over period end financial disclosure and reporting processes. |
The management
of the Company believes that these material weaknesses will remain until such time that the Company has the resources to increase
the number of personnel committed to the performance of its financial duties that such weaknesses can be specifically addressed.
This will include, but not limited to, the following:
- Hiring
of additional personnel to adequately segregate financial reporting duties.
- The
retention of outside consultants to review our controls and procedures.
IF
WE PURSUE OUR OBJECTIVES OF EXPANDING OUR OPERATIONS THROUGH ACQUISITIONS, WE MAY BE UNABLE TO SUCCESSFULLY MANAGE THOSE ACQUISITIONS.
In connection with our anticipated acquisitions
and new market expansion, we may face risks commonly encountered with growth through acquisitions and expansions. These risks include
the incurrence of higher than anticipated capital expenditures and operating expenses, the adverse impact on our ongoing business
resulting from greater attention of management to the acquired businesses or new market operations and difficulties encountered
in integrating the operations and personnel of the acquired business. There can be no assurance that we will be successful in overcoming
these risks or any other problems encountered with acquisitions or expansions. To the
extent the Company does not successfully avoid
or overcome the risks or problems related to its acquisitions or expansions, the Company's results of operations and financial
condition could be adversely affected.
To the extent that the Company expands
into new markets or through acquisition, it will need to employ or consult with personnel that are knowledgeable in such markets.
In addition, the success of any particular acquisition may be significantly dependent on retaining key members of the acquired
company's existing management. There can be no assurance that the Company will be able to employ or retain the necessary personnel,
that the Company will be able to successfully implement its management process and culture with local management or that the Company's
expansion efforts will be successful.
WE
ARE DEPENDENT ON THE EFFORTS OF OUR MANAGEMENT TEAM TO CONTINUE OUR OPERATIONS.
The
Company's future success depends on the continued services of its executive and senior officers, Redgie
Green and David Cutler. The loss of the services of one or more key personnel could have a material adverse effect
upon the Company's operations. The Company's success also depends on its ability to attract and retain qualified personnel.
There can be no assurances that the Company will be successful in attracting and retaining such personnel.
WE
HAVE AGREED TO INDEMNIFICATION OF OFFICERS AND DIRECTORS AS IS PROVIDED BY FLORIDA STATUTES.
Florida
General Corporation Laws provide for the indemnification of our directors, officers, employees, and agents, under certain circumstances,
against attorney’s fees and other expenses incurred by them in any litigation to which they become a party arising from their
association with or activities on our behalf. We will also bear the expenses of such litigation for any of our directors, officers,
employees, or agents, upon such person’s promise to repay us therefore if it is ultimately determined that any such person
shall not have been entitled to indemnification. This indemnification policy could result in substantial expenditures by us that
we will be unable to recoup.
OUR
DIRECTORS’ LIABILITY TO US AND STOCKHOLDERS IS LIMITED.
Florida
General Corporation Laws exclude personal liability of our directors and our stockholders for monetary damages for breach of fiduciary
duty except in certain specified circumstances. Accordingly, we will have a much more limited right of action against our directors
that otherwise would be the case. This provision does not affect the liability of any director under federal or applicable state
securities laws.
We have
no full-time employees which may impede our ability to carry on our business. Our officers are independent consultants who devote
up to 10 hours per week to Company business. The lack of full-time employees may very well prevent the Company’s operations
from being efficient, and may impair the business progress and growth, which is a risk to any investor.
RISKS
RELATED TO OUR SECURITIES
THERE
IS A VERY LIMITED TRADING MARKET FOR OUR COMMON STOCK AND INVESTORS ARE NOT ASSURED OF THE OPPORTUNITY TO SELL THEIR STOCK, SHOULD
THEY DESIRE TO DO SO.
Our common stock can only be traded in the
expert market as of the date of this report. We believe this is due to there being no broker dealers willing to quote our
stock. We intend to seek approval for our shares of common stock to be traded on the Pink Sheets again. There is no guarantee that
we will be successful in becoming relisted on the Pink Sheets again. However, that stock has traded in very limited quantities
in the past. We believe a significant factor in the limited market is our limited capitalization and liquidity, results of operation
and the characterization of our stock as a “penny stock.” We hope to remedy our financial condition and results of
operation in the future. This, in turn, may assist us in obtaining listing of our stock on the OTC-QB, Nasdaq or NYSE American
Exchange.
However, there is no assurance that any of
these objectives will be met or that the market will ever increase to a point where investors could sell their stock at a desirable
price, should they desire to do so.
REDUCTION
OF PERCENTAGE SHARE OWNERSHIP FOLLOWING BUSINESS COMBINATION AND DILUTION TO STOCKHOLDERS
Our primary
plan of operation is based upon a business combination with a private concern which, in all likelihood, would result in us issuing
securities to stockholders of such private company. The issuance of previously authorized and unissued shares of our common stock
would result in reduction in percentage of shares owned by present and prospective stockholders and may result in a change in control
or management. In addition, any merger or acquisition can be expected to have a significant dilutive effect on the percentage of
the shares held our stockholders.
THE
REGULATION OF PENNY STOCKS BY SEC AND NASD MAY HAVE AN EFFECT ON THE TRADABILITY OF OUR SECURITIES.
Shares of our common stock can only be traded
in the expert market as of the date of this report. We believe this is due to there being no broker dealers willing to quote
our stock. We intend to seek approval for our shares of common stock to be traded on the Pink Sheets again.
There is no guarantee that we will be successful in becoming relisted on the Pink
Sheets. Even if we are successful in getting our stock relisted, our shares are subject to a Securities and Exchange Commission
rule that imposes special sales practice requirements upon broker-dealers who sell such securities to persons other than established
customers or accredited investors. For purposes of the rule, the phrase "accredited investors" means, in general terms,
institutions with assets in excess of $5,000,000, or individuals having a net worth in excess of $1,000,000 or having an annual
income that exceeds $200,000 (or that, when combined with a spouse's income, exceeds $300,000).
For transactions
covered by the rule, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser's
written agreement to the transaction prior to the sale. Consequently, the rule may affect the ability of broker-dealers to sell
our securities and also may affect the ability of purchasers in this offering to sell their securities in any market that might
develop therefore.
In addition,
the Securities and Exchange Commission has adopted a number of rules to regulate "penny stocks." Such rules include Rules
3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities and Exchange Act of 1934, as amended. Because
our securities constitute "penny stocks" within the meaning of the rules, the rules would apply to us and to our securities.
The rules may further affect the ability of owners of Shares to sell our securities in any market that might develop for them.
Shareholders
should be aware that, according to Securities and Exchange Commission, the market for penny stocks has suffered in recent years
from patterns of fraud and abuse. Such patterns include (i) control of the market for the security by one or a few broker-dealers
that are often related to the promoter or issuer; (ii) manipulation of prices through prearranged matching of purchases and sales
and false and misleading press releases; (iii) "boiler room" practices involving high-pressure sales tactics and unrealistic
price projections by inexperienced sales persons; (iv) excessive and undisclosed bid-ask differentials and markups by selling broker-dealers;
and (v) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired
consequent 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 shares
of our common stock may be thinly-traded on the Pink Sheets, meaning that the number of persons interested in purchasing our shares
of common stock at or near ask prices at any given time may be relatively small or non-existent. This situation is attributable
to a number of factors, including the fact that we are a small company which is relatively unknown to stock analysts, stock brokers,
institutional investors and others in the investment community that generate or influence sales volume, and that even if we came
to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven, early stage company
such as ours or purchase or recommend the purchase of our shares of common stock until such time as we became more seasoned and
viable.
As a
consequence, there may be periods of several days or more when trading activity in our shares of common stock is minimal or non-existent,
as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous
sales without an adverse effect on Securities price.
OUR
STOCK IS GOING TO BE CLASSIFIED UNDER THE “SHELL” STATUS OF RULE 144(i) AND WILL NOT BE TRADEABLE EXCEPT UNDER LIMITED
CIRCUMSTANCES.
Shares of our common stock can only be traded
in the expert market as of the date of this report. We believe this is due to there being no broker dealers willing to quote
our stock. We intend to seek approval for our shares of common stock to be traded on the Pink Sheets again.
There is no guarantee that we will be successful in becoming relisted on the Pink
Sheets. Even if we are successful in getting our stock relisted, until and unless the Company meets certain criteria under Rule
144(i), our shares will not be tradeable for 1 year after we are no longer a “shell” defined as having minimal operations,
and cash assets only, unless we file and pursue to effectiveness an Offering Statement on Form 1-A or a Registration Statement
on Form S-1. We also must remain current in our SEC filings under Section 13(a) of the Securities Exchange Act.
OUR
STOCK WILL IN ALL LIKELIHOOD BE THINLY TRADED AND AS A RESULT YOU MAY BE UNABLE TO SELL AT OR NEAR ASK PRICES OR AT ALL IF YOU
NEED TO LIQUIDATE YOUR SHARES.
Shares of our common stock can only be traded
in the expert market as of the date of this report. We believe this is due to there being no broker dealers willing to quote
our stock. We intend to seek approval for our shares of common stock to be traded on the Pink Sheets again.
There is no guarantee that we will be successful in becoming relisted on the Pink
Sheets. Even if we are successful in getting our stock relisted, we cannot give you any assurance that a broader or more active
public trading market for our shares of common stock will develop or be sustained, or that any trading levels will be sustained.
Due to these conditions, we can give investors no assurance that they will be able to sell their shares of common stock at or near
ask prices or at all if you need money or otherwise desire to liquidate your shares of common stock of our Company.
RULE
144 SALES IN THE FUTURE MAY HAVE A DEPRESSIVE EFFECT ON OUR STOCK PRICE.
Shares of our common stock can only be traded
in the expert market as of the date of this report. We believe this is due to there being no broker dealers willing to quote
our stock. We intend to seek approval for our shares of common stock to be traded on the Pink Sheets again.
There is no guarantee that we will be successful in becoming relisted on the Pink
Sheets. Even if we are successful in getting our stock relisted, all of the outstanding shares of common stock held by our present
officers, directors, and affiliate stockholders are "restricted securities" within the meaning of Rule 144 under the
Securities Act of 1933, as amended. As restricted shares, these shares may be resold only pursuant to an effective registration
statement or under the requirements of Rule 144 or other applicable exemptions from registration under the Act and as required
under applicable state securities laws. Rule 144 provides in essence that a person who has held restricted securities for one year
may, under certain conditions, sell every three months, in brokerage transactions, a number of shares that does not exceed the
greater of 1.0% of a company's outstanding common stock or the average weekly trading volume during the four calendar weeks prior
to the sale. There is no limit on the amount of restricted securities that may be sold by a nonaffiliate after the owner has held
the restricted securities for a period of two years. A sale under Rule 144 or under any other exemption from the Act, may have
a depressive effect upon the price of the common stock in any market that may develop.
RULE
144 MAY NOT BE AVAILABLE FOR RESALES DUE TO THE FACT THAT THE COMPANY IS AND HAS BEEN A SHELL.
The availability
of Rule 144 for resales of shares issued while the company is a shell company or thereafter is restricted even after the expiration
of that one-year period. Rule 144(i)(2) provides that the Rule 144 exemption is available to a shareholder of any public company
that was a shell company only if the company is current in all of its periodic reports required to be filed with the SEC during
the 12 months before the date of the shareholder’s resale. This condition to the availability of Rule 144 must be satisfied
regardless of the time that has elapsed since the public company ceased to be a shell company and regardless of when the shares
were issued. The SEC has made it clear that this condition must be satisfied even regarding shares issued by the public company
long after it
ceases
to be a shell company. If this condition is not satisfied at the time a shareholder wishes to sell (because, for example, the company
did not timely file a Form 10-Q), Rule 144 will not be available; and in the absence of a resale registration covering the sale,
the shareholder would not be able to sell into the market.
THE
PRICE OF OUR COMMON STOCK COULD BE HIGHLY VOLATILE.
Shares of our common stock can only be traded
in the expert market as of the date of this report. We believe this is due to there being no broker dealers willing to quote
our stock. We intend to seek approval for our shares of common stock to be traded on the Pink Sheets again.
There is no guarantee that we will be successful in becoming relisted on the Pink
Sheets. Even if we are successful in getting our stock relisted, it is likely that our common stock will be subject to price volatility,
low volumes of trades and large spreads in bid and ask prices quoted by market makers. Due to the low volume of shares traded on
any trading day, persons buying or selling in relatively small quantities may easily influence prices of our common stock. This
low volume of trades could also cause the price of our stock to fluctuate greatly, with large percentage changes in price occurring
in any trading day session. Holders of our common stock may also not be able to readily liquidate their investment or may be forced
to sell at depressed prices due to low volume trading. If high spreads between the bid and ask prices of our common stock exist
at the time of a purchase, the stock would have to appreciate substantially on a relative percentage basis for an investor to recoup
their investment. Broad market fluctuations and general economic and political conditions may also adversely affect the market
price of our common stock. No assurance can be given that an active market in our common stock will be sustained. If an active
market does not continue, holders of our common stock may be unable to readily sell the shares they hold or may not be able to
sell their shares at all.
LOSS
OF CONTROL BY OUR PRESENT MANAGEMENT AND STOCKHOLDERS MAY OCCUR UPON ISSUANCE OF ADDITIONAL SHARES.
We may
issue further shares as consideration for the cash or assets or services out of our authorized but unissued common stock that would,
upon issuance, represent a majority of our voting power and equity. The result of such an issuance would be those new stockholders
and management would control us, and persons unknown could replace our management at this time. Such an occurrence would result
in a greatly reduced percentage of ownership of us by our current shareholders.
IF
THE REGISTRATION OF OUR COMMON STOCK IS REVOKED IN THE FUTURE, OUR BUSINESS OPPORTUNITIES WILL CEASE TO EXIST.
In the
event our securities registration was to be revoked, we would not have the ability to raise money through the issuance of shares
and would lose the ability to continue the business plan set out in this filing. Common stock issued and outstanding at that time
would no longer be tradable.
WE
DO NOT ANTICIPATE PAYING CASH DIVIDENDS ON OUR COMMON STOCK.
We do
not anticipate paying any cash dividends on our common stock in the foreseeable future.
WE
MAY BE UNSUCCESSFUL IN FINDING A MERGER THAT CAN BE ACCOMPLISHED WITH POSITIVE LONG-TERM RESULTS.
The business
of selecting and entering into a merger is fraught with all kinds of issues. For instance, the business may need capital
that is never achieved, the management is not capable of carrying the business forward successfully, the business plan is ill conceived,
and not executed, or competitive factors cause business failure. There are many other factors in addition to these, as may
have been discussed above in “Risk Factors” which could cause our company to fail and the investors capital will be
at risk.