Item
1. Business.
Our Company
Flagship Global Corporation was
incorporated in the State of Nevada, United States of America, on October 17, 2007 under the name Nevada Legacy Enterprises
Corporation. Our fiscal year end is December 31. On February 4, 2010, we changed our name to NL One Corporation. On June 27,
2016, we changed our name to Flagship Global Corporation.
Flagship Global Corporation aims to become a substantial
diversified holding company by looking for merger candidates and plans to provide financial backing to and make investments
in the equity and debt securities of target companies through a variety of investment strategies including leveraged buyout,
venture capital, and growth capital. Flagship will acquire a controlling or substantial minority position in a company and
then look to maximize the value of that investment. Typically, Flagship will provide working capital to a target company to
nurture expansion, product development, or restructuring of the Company’s operations, management or ownership. Flagship
will consider making long term investments in target industry sectors and specific investment areas where we have or can
supplement our expertise through our partner and advisory relationships. Flagship may occasionally take on operational roles
in order to manage risks and achieve growth ambitions.
Company History
On May 11, 2016, Thomas DeNunzio, our control
shareholder at the time of NL One Corporation (the “Company”), entered into a Share Purchase Agreement (the “Agreement”)
with Stansbridge Limited, (“Stansbridge”), a United Kingdom company. Pursuant to the Agreement, Mr. DeNunzio transferred
to Stansbridge 40,501,000 post-split (324,008,000 (presplit)) shares of our common stock, which represented approximately 92.87%
of our issued and outstanding shares.
On May 16, 2016, Mr. Jeffrey DeNunzio resigned as our Chief Executive Officer, President, Chief Financial Officer, Chief Accounting
Officer, President, and Director. The resignation was not the result of any disagreement with us on any matter relating to our
operations, policies or practices.
On May 16, 2016, Mr. Paul Moody resigned as our Secretary.
The resignation was not the result of any disagreement with us on any matter relating to our operations, policies or practices.
On May 16, 2016, Mr. Gary Richard Brown was appointed as
Chief Executive Officer, Chief Financial Officer, President, and Director.
On May 31, 2016, the Company’s Board
of Directors and majority vote of shareholders approved a one-for-eight stock split of the Company’s issued and outstanding
common stock, par value $.0001 per share and to change the name of the Company from “NL One Corporation” to “Flagship
Global Corporation.” In addition, the board of directors and shareholders approved and voted to change our ticker symbol
from NLLN to FGCN.
On June 27, 2016, we filed a Certificate of Amendment pursuant
to NRS 78.385 and 78.390 to change our name with the Nevada Secretary of State from NL One Corporation to Flagship Global Corporation.
The effective date of the name change is June 17, 2016.
On June 27, 2016, we filed a Certificate of Change pursuant
to NRS 78.209 with Nevada Secretary of State in regards to the aforementioned 1:8 reverse stock split. The effective date of the
split is June 17, 2016.
The total outstanding shares of the Company following the
reverse stock split was 43,611,250 shares of common stock.
Following the reverse stock split Stansbridge Limited remained
and still continues to remain our largest controlling shareholder.
On March 15, 2018, we entered into a material
definitive agreement, (“Agreement”) with Stephen Moscicki and David Winduss to purchase a 57.5% majority interest
in GEM Holdings Ltd. ("GEM"), a business currently mining high grade metallurgical coal in Virginia, USA and to
establish a new Energy Division. As of filing date, the transaction has not been completed.
On March 22, 2018, Stephen Moscicki was
appointed Chairman and Chief Executive Officer to establish a new Energy Division. The effective date that Mr. Moscicki will
take office is upon completion of the Agreement. As of filing date, the transaction has not been completed.
On March 22, 2018, David Winduss was appointed Chief Financial
Officer to establish a new Energy Division. The effective date that Mr. Winduss will
take office is upon completion of the Agreement. As of filing date, the transaction has not been completed.
On March 22, 2018, James Wilson of Holman Fenwick
Willan LLP ("HFW"), the international law firm was appointed as our advisors to assist with acquisitions in the process
and to oversee all aspects of compliance responsibilities.
On March 22, 2018, The Company appointed Mike Willard of
Willard Strategies to provide US based public relations and marketing support to the “Company”.
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Table of Contents
General
The Company concluded on July 12, 2017
that it should revise its business plan to build on its experience and to develop a portfolio of businesses. The Company
intends to identify growth opportunities and talented management and where it can raise capital to aid the development of
those businesses. The Company believes its future is as a diversified conglomerate.
Look for fundamentals
Our approach, for our chosen industries, is
to look for companies that have good earnings drivers, solid balance sheets and strong existing or likely cash-flow generation
that allow them to pay and grow dividends. Ideally, they will also have long-term contracts with customers and suppliers and have
solid management teams that can grow cash flows and dividends.
Company’s Role and oversight
The Company’s strategy involves locating
and backing management teams within specific sectors who themselves have the expertise and proven business model to create attractive
returns for us as acquirers and investors. The Company believes a conglomerate approach has a proven record of accomplishment in
the private sector with many examples of large and diverse companies, while it has fallen out of fashion to a degree in the public
sector.
Typically, acquisitions must meet certain key
criteria: cash generative, accretive to our balance sheet and earnings enhancing. However up to 15% of our resources will also
be deployed in supporting early stage riskier businesses that are highly scalable and have the potential to be global businesses.
Initially the Company aims to acquire a portfolio of businesses in the healthcare, energy, real estate, and professional services
sectors. Such a mix of businesses will provide both balance sheet strength and cash generation to acquire more businesses as well
as to build surplus funds to distribute as dividends to shareholders.
Before acquiring a business, the management
team will assemble an expert acquisition team supported by professional advisors.
The teams will be responsible for the identification
of opportunities, the review of potential targets and the formation of an acquisition proposal and post-acquisition plan. The team
will remain in place to review on a quarterly basis performance of the company post acquisition. To minimize risk to the Company,
acquisitions in each chosen sector will be made through a special purpose acquisition vehicle wholly owned by the Company. Such
a structure facilitates simple reporting as well as limits cross contamination of risk. The structure also allows for sector interests
to grow organically and if appropriate to be floated separately, or sold to another company.
Risks applicable to all businesses include
poor management and financial reporting as well as the lack of capital. In these instances, the Company shall establish from the
outset a clear business plan for each operation as well as real time financial reporting. The Company will have an emphasis during
due diligence to stress test all aspects of business and financial planning as well as rigorous competency testing of the management
team concerned.
Whether operating in the retail or business
to business market supply problems, product failure and third-party competition can all contribute to the failure of expectations
to be achieved. Alongside financial reporting the company will require robust supply chain information, competition analyses and
sufficient sales resources to deliver business targets.
Regulatory and legal risk are common to most
sectors. The Company will require all operating companies to have in place robust procedures for dealing with unforeseen issues
as well as day to day compliance including inter alia the environment, financial conduct, consumer rights and employment.
Sector specific targets
Healthcare & Technology
With an aging population healthcare therapy
albeit drug or technology based is expected to be a fast-growing sector for the foreseeable future. Technology has become increasingly
important to our lives and the Board believes it will continue to be so. The Company is particularly interested in the internet
of things where hardware, consumer goods and the online digital world cross over. The Company hopes to assemble a world class advisory
team to search out the best and most profitable opportunities across a broad range of applications but all with a strong proven
scientific basis, strong intellectual and patent assets as well as enterprising and commercial management teams.
Energy
Primarily focused on the USA the Company believes
the coal and onshore gas industry provides attractive undervalued investments following the change in direction under the new USA
White House Administration. While the coal industry in the USA has suffered a serious decline in recent years the lifting of punitive
regulation is likely to reinvigorate demand which is likely to continue to be reflected in the price of Met Coal. The Company has
identified expertise in the industry to advise on opportunities and identify targets.
Property
The Company is interested in working with Local
Government to develop under utilized land banks and where there is a shortage of supply of affordable housing. So far the company
has identified a UK based team with international experience to advise on and identify potential opportunities to create long term
returns for investors from this sector.
Professional Services
The Board of the Company believes that people
based businesses primarily in the business to business arena with relatively low overheads, minimal capital requirements and good
margins can provide attractive returns for investors. The Company believes such businesses can provide a valuable contribution
to a mixed portfolio of cash generative businesses. Having analyzed published industry data the Company believes that given an
increasingly affluent global population with increasing money to spend - coupled with the growth of the digital world - the financial
services and creative industries are two areas of substantial opportunity, particularly where technology and services overlap.
An expert team is being identified to look at potential acquisitions in these sectors.
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Table of Contents
Government Regulation
The products we may develop
will be medical devices, subject to extensive and rigorous regulation under the Federal Food, Drug and Cosmetic Act, or the FDCA,
as implemented and enforced by the FDA, as well as the laws and regulations implemented and enforced by other federal, state and
local regulatory bodies in the United States and comparable authorities in other countries. We may be required to file for and
obtain either 510(k) clearance or a pre-market approval application for those products or indications. Pursuit of FDA approval
may involve clinical trials, and can require large capital expenditures. Even if we do raise sufficient funds to pursue
FDA approval, there is no guarantee that the FDA will ultimately approve our products. At this time we have no plans to raise such
funds.
We may be required to submit
a pre-market approval application to the FDA for review that is supported by extensive data, including technical, preclinical,
clinical trials, manufacturing, and labeling to demonstrate to the FDA’s satisfaction the safety and effectiveness of the
products we intend to sell. As the Company has limited resources, and is in a very early growth stage, we have not yet determined
the scope of the FDA’s statutory and regulatory requirements for approval of the products we intend to sell in the future.
Employees
We currently have no employees
with the exception of our Sole Officer and Director, Gary Richard Brown, whom does not receive any salary or have any formal employment
agreement(s) with us. Mr. Brown works less than 20 hours per month on our business plan.
It should be noted that our
Sole Officer and Director does not have any experience in the medical field and that any advancements to our technology will most
likely require the implementation of medical professionals. We have no plans to hire such medical professionals at this time. We
also do not have the funds to hire the necessary firms that could assist us in designing or creating physical prototypes of our
technologies described above.
Item
1A. Risk Factors.
The following risk factors and other
information included in this Report on Form 10-K should be carefully considered. The risks and uncertainties described below
are not the only ones we face. Additional risks and uncertainties not presently known to us or that we presently deem less significant
may also impair our business operations. If any of the events or circumstances described in the following risk factors actually
occurs, our business, operating results and financial condition could be materially adversely affected.
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Risks relating to the Company's Strategy
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Identifying and acquiring suitable target
investment opportunities
The Company has not yet made any acquisitions
and has no successful operating history upon which to evaluate its likely performance. The Company's ability to implement its acquisition
strategy (as set out in this 10-K) will be limited by its ability to identify and acquire suitable acquisitions or investments.
Suitable opportunities may not always be readily available. The Company's initial and future investments may be delayed or made
at a relatively slow rate because,
inter alia
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the Company intends to conduct detailed due diligence prior to approving acquisitions;
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the Company may conduct extensive negotiations in order to secure and facilitate an acquisition;
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it may be necessary to establish certain structures in order to facilitate an acquisition;
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competition from other investors, market conditions or other factors may mean that the Company cannot identify attractive acquisitions or such investments may not be available at the rate the Company currently anticipates;
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the Company may be unable to raise bank finance on terms the Directors consider reasonable; and/or
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the Company will need to raise further capital to make investments and/or fund the assets or businesses acquired,
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all of which may in turn have a material adverse
effect on the business, financial condition, results of operations and prospects of the Company.
The Company cannot accurately predict how long
it will take to deploy the capital available to it or at all. Precise timing will depend on, amongst other things, the availability
of suitable direct acquisitions, due diligence, negotiations with counterparties and investment structuring conditions.
In addition, the Company may face significant
competition in identifying and acquiring suitable acquisitions from other investors, including competitors who may have greater
resources. Competition in the investment market may lead to prices for acquisitions, identified by the Company as suitable, being
driven up through competing bids of potential purchasers. Accordingly, the existence and extent of such competition may have a
material adverse effect on the Company's ability to acquire acquisitions at satisfactory prices and otherwise on satisfactory terms,
thereby reducing the Company's potential profits.
Success of the strategy not guaranteed
The Company's level of profit will be reliant
upon the performance of the assets acquired and the strategy (in both its current form and as amended from time to time). The success
of the strategy depends on the Directors' ability to identify opportunities in accordance with the Company's objectives and to
interpret market data correctly. No assurance can be given that the strategy to be followed will be successful under all or any
market conditions, that the Company will be able to identify opportunities meeting the Company's criteria, that the Company will
be able to invest its capital on attractive terms or that the Company will be able to generate positive returns for Shareholders.
If the strategy is not successfully implemented, this may have a material adverse effect on the business, financial condition,
results of operations and prospects of the Company.
Acceptability of Common Stock as consideration
Although it is the Company's intention, where
appropriate, to use Common Stock to satisfy all or part of any consideration payable for acquisitions, vendors may not be prepared
to accept these shares.
Potential loss on acquisition
The Company's strategy carries inherent risks
and there can be no guarantee that any appreciation in the value of an investment or acquisition will occur or that the objectives
of the Company will be achieved. For example (i) trading difficulties may occur following investment by the Company; or (ii) the
Company may not be able to conduct a full investigation of the target prior to investment/ acquisition and adverse matters may
only come to light after an investment has been made.
Further issues of Common Stock
It may be desirable for the Company to raise
additional capital by way of further issues of Common Stock to enable the Company to progress through further stages of development.
Any additional equity financing may be dilutive to Shareholders. There can be no assurance that such funding, if required, will
be available to the Company.
Risk
that the Company may change to a Rule 12b-2 shell status company
OTC Markets has placed a “Shell Risk” flag on
the Company. The shell risk designation indicates that a company may be a Shell Company. This designation is made at
OTC Markets’ discretion based on an analysis of the company’s key financial data. The Company plans to appeal
the flag designation with OTC Markets. The Company believes that it is not a shell company pursuant to Rule 405 of the Act
and Rule 12b-2 of the Securities Exchange Act. The Company has never been deemed a shell company since its inception October
17, 2007. We have a definitive business plan and more than nominal assets and operations including but not limited to
our Agreement with Gem Holdings, Ltd. However, there is a risk that the Commission may deem us to be a shell company. The
result of shell status would take away exemption from registration available from Rule 144, for the resales of our securities
by our shareholders since Rule 144 would not be available to us until we met certain definitive conditions outlined in Rule
144.
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Borrowings
The Company may, from time to time, be required
to raise capital (whether through the issue of debt or equity) to make acquisitions. There is no guarantee that the Company will
be able to obtain financing on appropriate terms and conditions or at all. The companies in which the Company invests may also
have borrowings or otherwise be geared or leveraged. Although such facilities may increase investment returns, they also create
greater potential for loss. This includes the risk that the borrower will be unable to service the interest repayments, or comply
with other requirements, rendering the debt repayable, and the risk that available capital will be insufficient to meet any such
required repayments. There is also the risk that existing borrowings will not be able to be refinanced or that the terms of such
refinancing will not be as favorable as the terms of existing borrowings. A number of factors (including changes in interest rates,
conditions in the banking market and general economic conditions, which are beyond the Company's control) may make it difficult
for the Company to obtain new financing on attractive terms or even at all. An inability to obtain such facilities may have a material
adverse effect on the business, financial condition, results of operations and prospects of the Company.
Tax risks
The Company may purchase investments that will
subject the Company to withholding taxes in various jurisdictions. In the event that withholding taxes are imposed with respect
to any of the Company's investments, the effect will generally be to reduce the income received by the Company on such investments.
Such withholding taxes may be imposed on income, gains, issue of securities or supporting documents, including the contracts governing
the terms of any financial instrument and such taxes may be confiscatory in nature. As well as making acquisitions in developed
markets, the Company may also make investments in jurisdictions where the tax regime is not fully developed or is not certain.
There can be no certainty that the current
taxation regime in the United States or Europe or other overseas jurisdictions within which the Company may operate will remain
in force or that the current levels of corporation taxation will remain unchanged. Any change in the tax status or tax legislation
may have a material adverse effect on the financial position of the Company.
The Company's income may be reduced by exchange
controls
The Company may from time-to-time purchase
investments that will subject the Company to exchange controls in various jurisdictions. In the event that exchange controls are
imposed with respect to any of the Company's investments, the effect will generally be to reduce the income received by the Company
on such investments.
Currency and foreign exchange risks
The Company's business will be carried out
in the future in currencies other than just the US Dollar. To the extent that there are fluctuations in exchange rates, this may
have an impact on the figures consolidated in the Company's accounts, which could have a material impact on the Company's financial
position or result of operations, as shown in the Company's accounts going forward.
The Company does not currently undertake foreign
currency hedging transactions to mitigate potential foreign currency exposure but may do so in future. The Board cannot predict
the effect of exchange rate fluctuations upon future operating results and there can be no assurance that exchange rate fluctuations
will not have a material adverse effect on the business, operating results or financial condition of the Company.
Smaller capitalization companies
The Company may invest in smaller capitalization
companies. As smaller companies do not have the financial strength, diversity and resources of larger companies, they may find
it more difficult to operate in periods of economic slowdown or recession.
Below investment grade securities
The Company may invest in bonds or other fixed
income securities, including high risk debt securities. These securities may be below investment grade and subject to uncertainties
and exposure to adverse business, financial or market conditions which could lead to the issuer's inability to make timely interest
and principal payments. The market values of these securities tend to be more sensitive to individual corporate developments and
general economic conditions than do higher rated securities.
Unquoted securities
The Company may purchase unquoted securities.
Such investments, by their nature, involve a higher degree of risk than quoted securities because unquoted securities may be more
difficult to realize than quoted securities due to the potential greater difficulty in identifying willing purchasers of the unquoted
securities.
Default and counterparty risk
A portion of the Company's assets may be invested
in debt securities of private and governmental issuers, thus exposing the Company to the credit and political risk of the issuer.
In addition, many of the markets in which the Company will affect its transactions are "over-the-counter" or "interdealer"
markets. The participants in such markets are typically not subject to credit evaluation and regulatory oversight as are members
of exchange based markets. This exposes the Company to the risk that a counterparty will not settle a transaction in accordance
with its terms and conditions because of a dispute over the terms of the contract or because of a credit or liquidity problem,
thus causing the Company to suffer a loss.
Sanctions
The Company may not be able to achieve exposure
in certain markets due to Office of Foreign Asset Control ("OFAC") and United Nations sanctions and other counterparty
considerations. The Company may invest in countries that then later become subject to sanctions by the US and the Company cannot
predict which countries those will be.
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Risks Relating to Investing in Emerging Markets
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Acquisitions made in line with the Company's
investing policy may include investments in companies or projects exposed to or operating in parts of the world where fair commercial
law is less established and where markets can be volatile. The material risks, of which the Company is aware, include:
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dependence on exports and the corresponding importance of international trade;
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potentially higher rates of inflation (including hyperinflation);
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a potential risk of substantial deflation;
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difficulty in bringing legal proceedings to enforce contractual rights and the risk of the fraudulent appropriation of investments;
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the possibility of the imposition of withholding or other taxes on dividends, interest, capital gains or other income, limitations on the removal of funds or other assets of the Company, political changes, government regulation, social instability or diplomatic developments (including war) which could adversely affect the economies of such countries or the value of the Company's investments in those countries.
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Restrictions on foreign investment
Some countries prohibit or impose substantial
restrictions on investments by foreign entities such as the Company. As illustrations, certain countries require governmental approval
prior to investment by foreign persons, or limit the amount of investment by foreign persons in a particular company, or limit
the investment by foreign persons in a company to only a specific class of securities which may have less advantageous terms than
securities of the company available for purchase by nationals. Certain countries may restrict investment opportunities in issuers
or industries deemed important to national interests. The manner in which foreign investors may invest in companies in certain
countries, as well as limitations on such investments, may have an adverse impact on the operations of the Company. For example,
the Company may be required in certain of such countries to invest initially through a local broker or other entity and then have
the share purchases re-registered in the name of the Company. Re-registration may in some instances not be able to occur on a timely
basis, resulting in a delay during which the Company may be denied certain of its rights as an investor, including rights as to
dividends or to be made aware of certain corporate actions. There also may be instances where the Company places a purchase order
but is subsequently informed, at the time of re-registration, that the permissible allocation to foreign investors has been filled,
depriving the Company of the ability to make its desired investment at the time. Substantial limitations may exist in certain countries
with respect to the Company's ability to repatriate investment income, capital or the proceeds of sales of securities by foreign
investors. The Company could be adversely affected by delays in, or a refusal to grant any required governmental approval for repatriation
of capital, as well as by the application to the Company of any restriction on investments.
Risks relating to the legal systems
The laws and regulations affecting the economies
operating in the Middle East and in other emerging markets are less well established than those in the United States or Western
Europe. The Company's potential future operations in those jurisdictions will be subject to the laws and regulations promulgated
there. Laws and regulations may be supplemented or otherwise modified by undocumented practices, policies adopted and applied as
law in a non-transparent way and the exercise of powers which have not been granted to the exerciser in accordance with the provisions
of prevailing laws and regulations. Such practices, policies, and exercises of powers may not have been ruled upon by the courts
or enacted by legislative bodies and they may be subject to change without notice. Accordingly the Company will adopt a Sanctions
Compliance Policy (as amended from time to time) which will be implemented to assist the Company, its management, employees, service
providers and investors to ensure strict compliance with the economic sanctions currently imposed on such sanctioned countries
by the United States, United Nations (UN) and European Union (EU).
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Company Specific Risks
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Short operating history
The Company has a limited operating history
upon which prospective investors may base an evaluation of the likely performance of the Company.
Expansion risk
The Company intends to pursue an aggressive
growth strategy, subject to the availability of funding. Such a strategy brings with it certain risks and will place additional
demand on the Company's management, financial and operational resources. If the Company is unable to manage its growth effectively,
its business, operations or financial condition may deteriorate.
Competition in the markets in which the
Company intends to operate is expected to increase in the future
Existing and potential competitors may have
significantly greater financial, research and development, sales and marketing, personnel and other resources than the Company.
The UK is seeking to withdraw from the European
Union on 29 March 2019 and the Company may make acquisitions in the UK.
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Risk Factors Relating to Investments
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Investments in private companies by the
Company are subject to a number of risks
The Company may invest in or acquire privately
held companies. These may (i) be highly leveraged and subject to significant debt service obligations, stringent operational and
financial covenants and risks of default under financing and contractual arrangements, which may adversely affect their financial
condition; (ii) have limited operating histories and smaller market shares than larger businesses making them more vulnerable to
changes in market conditions or the activities of competitors; (iii) have limited financial resources; (iv) be more dependent on
a limited number of management and operational personnel, increasing the impact of the loss of any one or more individuals; and
(v) require additional capital. All or any of these factors may have a material adverse effect on the business, financial condition,
results of operations and prospects of the Company.
Material facts or circumstances not revealed
in the due diligence process
Prior to making or proposing any investment,
the Company will undertake legal, financial and commercial due diligence on potential acquisitions or investments to a level considered
reasonable and appropriate by the Company on a case by case basis. However, these efforts may not reveal all material facts or
circumstances that would have a material adverse effect upon the value of the investment or acquisition. In undertaking due diligence,
the Company will need to utilize its own resources and may be required to rely upon third parties to conduct certain aspects of
the due diligence process. Further, the Company may not have the ability to review all documents relating to the investee company
and assets. Any due diligence process involves subjective analysis and there can be no assurance that due diligence will reveal
all material issues related to a potential investment. Any failure to reveal all material facts or circumstances relating to a
potential investment may have a material adverse effect on the business, financial condition, results of operations and prospects
of the Company.
Aborted investments
There can be no guarantee that the Company
will successfully effect an acquisition or investment where there is an identified opportunity and, as a result, resources may
be expended on investigative work and due diligence without the acquisition or investment being completed.
Difficulties integrating acquisitions
The success of an acquisition or investment
will depend upon the ability of the Directors to integrate the investment in a timely and cost-effective manner. Any difficulties
in the integration process may result in increased expense, loss of sales and a decline in profitability. The process of integration
may require a disproportionate amount of time and attention of the Company's management, which may distract management's attention
from its day-to-day responsibilities. In addition, any interruption or deterioration in service resulting from an investment may
result in a customer's decision to stop dealing with the Company or a target. For these reasons the Company may not realize the
anticipated benefits of an investment, either at all or in a timely manner. If that happens and the Company incurs significant
costs, it could have a material adverse impact on the profits and the business of the Company. Similarly, getting added value for
an investment may prove to be difficult and limit returns.
Joint ventures
The Company or a business it acquires or in
which it invests may enter into joint ventures. There is a risk that a joint venture partner does not meet its obligations and
the Company or a business in which it invests may therefore suffer additional costs or other losses. It is also possible that the
interests of the Company or a business in which it invests and those of its joint venture partners are not aligned resulting in
project delays or additional costs and losses. The Company may have minority interests in the companies, partnerships and ventures
in which it invests and may be unable to exercise control over the operations of such companies.
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Risks Relating to the Common Stock
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Investment in shares traded on the OTC Markets
Pink Sheets is perceived to involve a higher degree of risk and be less liquid than investment in companies whose shares are listed
on the NASDAQ or NYSE. An investment in Common Stock may be difficult to realize. Prospective investors should be aware that the
value of the Common Stock may go down as well as up and that the market price of the Common Stock may not reflect the underlying
value of the Company. Investors may therefore realize less than, or lose all of, their investment.
Suitability
An investment in the Common Stock may not be
suitable for all investors. Investors are accordingly advised to consult a FINRA registered financial adviser to advise on investments
before making their decision.
Risks Related to Our Inventions
Our technologies are not
fully developed
Our
technologies are in the development stage, have not been tested, and have not been reduced into fully functioning prototypes. There
is no guarantee that products based on our current technologies will be viable, or that we will be able to develop or acquire viable
technologies.
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Table of Contents
We must obtain governmental
approvals or clearances before we can sell products based on our technologies
In order to market medical products
in the United States we must first obtain US FDA approval. We currently have not begun the process of determining the scope of
the US FDA’s statutory and regulatory requirements for approval of the products we intend to sell, and there is no guarantee
that once we initiate the process of obtaining approval by the US FDA, that we will be able to obtain such approval. We also
have not begun the process of determining the scope of regulation or obtaining approval by governmental agencies in other countries
in which we may market our products. Failure to obtain such approvals will have a negative impact on our business plans. It
should be noted however, at this time we have no tangible products to be sold.
We have not researched
the availability of governmental and private reimbursement systems on our planned business
Governmental
and private medical reimbursement systems play an important role in the health care field. Failure of a product to qualify
for reimbursement may limit the usage or desirability of such product. Because our business is in the very early growth stage and
we have very limited resources, we have not examined the effect of government or private reimbursement systems on our planned business,
or the steps necessary to qualify our planned products for reimbursement. Failure to qualify our products for governmental
and private reimbursement may have a material adverse effect on our business.
Impracticability of exhaustive
investigation
Our lack of financial resources
may make it impracticable to conduct a complete and exhaustive investigation and analysis of technologies before we commit our
capital or other resources thereto. Management decisions, therefore, will likely be made without detailed feasibility studies,
independent analysis, market surveys and the like which, if we had more funds available to us, would be desirable.
Lack of diversification
Our lack of financial resources
may prevent diversification of our technologies. The inability to diversify our activities into several unrelated areas may subject
us to economic fluctuations within a particular business, industry or market segment, and therefore increase risks associated with
our operations.
We cannot assure the safety
or effectiveness of our future products
To obtain and maintain
required regulatory approvals and secure the confidence of physicians and others whose acceptance is needed for our medical products,
we will need to demonstrate that our products are safe and effective. We cannot assure that our products will be deemed safe and
effective. Our planned products have not been developed, used or tested, therefore, we cannot predict their safety and effectiveness.
Our patent applications
and proprietary rights may not provide us with significant competitive advantage
Our success may depend heavily
on our ability to obtain and retain patent protection for our product candidates, to preserve our trade secrets and to operate
without infringing the proprietary rights of third parties.
We may file patent applications in the US and in other countries. Claims in the pending patent applications may not issue
as patents, and issued patents may not provide us with meaningful competitive advantages. In addition, challenges may be instituted
against the validity or enforceability of any patent owned or licensed by us. Furthermore, others may independently develop
similar or superior technologies, duplicate our technologies or design around the patented aspects of our technologies. Our inability
to obtain and retain patent protection and to otherwise protect our intellectual property would be materially adverse to our business.
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Even if we obtain
patent protection, our proposed products may infringe on third party patents
Conducting an
infringement analysis to determine if our proposed products will infringe on third party intellectual property
rights is
expensive
, and we have not had the funds to pursue such infringement analyses. As a result we do not know if any of
our proposed products would infringe upon prior or future patents owned by others. In the event that our products
would infringe on third party intellectual property rights we may be forced to acquire licenses for technology potentially
useful or necessary to our business. These licenses may not be available on terms acceptable to us, if at all. Moreover,
patents issued to or licensed by us may be infringed by others. The cost of litigation involving patents, whether brought by
or against us, can be substantial, and can result in adverse determinations to us, including declaration of our future
patents as invalid. In the event that we are unable to secure necessary licenses from third parties, or in the
event that we are forced to engage in patent litigation, we may be forced to abandon our business plan and cease
operations.
We may not be able to
compete successfully against our competitors
We are engaged in rapidly evolving
and highly competitive fields. Competition from biotechnology companies, medical device manufacturers, electronics developers,
and other competitors is intense. Academic institutions, hospitals, governmental agencies, and other public and private research organizations
are also conducting research and seeking patent protection and may develop competing products or technologies on their own
or through joint ventures. These and other competitors’ technological advances could render our products noncompetitive
or obsolete. We may be unable to respond to technological advances through the development and introduction of new products. Moreover,
many of our existing and potential competitors have substantially greater financial, marketing, sales, distribution, manufacturing
and technological resources than our Company. These competitors may be in the process of seeking FDA or other regulatory approvals
or clearances, or patent protection, for competitive products. Our competitors could, therefore, commercialize competing products
in advance of our products.
We may rely on consultants
for certain strategic activities, which results in less control over such activities
We may rely upon consultants
and advisors to assist in formulating research and development strategies, testing and manufacturing, and marketing-related
issues. We have less control over the activities of our consultants which may reflect negatively in the time and effort devoted
to such activities. Consultants and advisors may be employed outside of our Company and may have commitments or consulting or
advisory contracts with other entities that could conflict with their service to our Company.
We may be exposed to large
product liability claims
Our business exposes us to potential
liability risks that are inherent in the testing, manufacturing, and marketing of medical and other electronic and fiber optic
products. The use of our proposed products in clinical trials may expose us to product liability claims and possible
adverse publicity. These risks also exist with respect to our proposed products, if any, that receive regulatory approval
for commercial sale. We do not have Product Liability Insurance coverage. Any product liability claim brought against us,
with or without merit, could result in the increase in the inability to secure coverage in the future. A product liability or other judgment
against our Company would have a material adverse effect upon our financial condition.
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Lack of funds limit our ability to begin actual research
and development to further our provisional patents.
We cannot begin actual research and development of a prototype until
we receive the necessary funds to accomplish this goal. We have no source or anticipated source of any funds that will allow us
to be able to fund the operations we set out to conduct in the future.
Our inability to fund
our capital expenditure requirements may adversely affect our growth and profitability
Our success is dependent upon
our ability to raise capital from outside sources. In the future we may be unable to obtain the necessary financing on a timely
basis and on acceptable terms, and our failure to do so may adversely affect our financial position, competitive position, growth,
and profitability. Our ability to obtain acceptable financing at any time may depend on a number of factors, including: our financial
condition and results of operations, the condition of the economy, and conditions in relevant financial markets in the United
States and elsewhere in the world.
There is doubt about our
ability to continue as a going concern
Our auditor’s report expresses
an opinion that considerable doubt exists as to whether we can continue as an ongoing business. Our sole officer and director,
Gary Richard Brown, may be reluctant or unable to loan or advance additional capital to the Company. We believe that if we do not
raise additional capital, we may be required to suspend or cease the implementation of our business plans. You may be investing
in a company that will not have the funds necessary to continue to deploy its business strategies. As the Company has been
issued an opinion by its auditors that substantial doubt exists as to whether the Company can continue as a going concern, it may
be more difficult for the Company to attract investors.
Our sole officer and director
Gary Richard Brown works on a part-time basis. As a result, we may be unable to develop our business and manage our
public reporting requirements.
Our operations depend on the
efforts of our sole officer and director Gary Richard Brown. Mr. Brown currently devotes approximately 15 hours per week each to
our operations. Because of this, we may be unable to develop and manage our business. If we lose Gary Richard Brown
the Company may, consequently, be forced to terminate operations and go out of business.
Risks related to our common
stock
The market price for our
common stock may be volatile
The market price for our common
stock is likely to be highly volatile and subject to wide fluctuations in response to factors including the following: actual
or anticipated fluctuations in our quarterly operating results, announcements of new products by us or our competitors, changes
in financial estimates by securities analysts, announcements by our competitors of significant acquisitions, strategic partnerships,
joint ventures or capital commitments, additions or departures of key personnel, potential litigation, or conditions in the market.
In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are not related
to the operating performance of particular companies. These market fluctuations may also materially and adversely affect
the market price of our common stock.
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Shareholders could experience
substantial dilution
We may seek funding through
the issuance of convertible notes and warrants, private placements, convertible debentures, and other issuances of our capital
stock. If we issue additional shares of our capital stock, our shareholders will experience dilution in their respective
percentage ownership in the Company.
We have no present intention
to pay dividends
We have never paid dividends
or made other cash distributions on our common stock, and we do not expect to declare or pay any dividends in the foreseeable future.
We intend to retain any future earnings for working capital and to finance current operations and expansion of our business.
A large portion
of common stock is controlled by a single shareholder.
As of the date of this report
approximately 83.77% of our common stock is held by a single shareholder. As a result our majority shareholder is able to substantially
influence the outcome of shareholder votes on various matters, including the election of directors and extraordinary corporate
transactions, including business combinations.
Our board of directors can change the voting power of
our common shares without shareholder approval.
Article X of our Company’s Bylaws permits our board
of directors to amend our bylaws. The board of directors can change the voting power of our Company’s common shares without
shareholder approval. This may cause you to lose some or all of your investment due to the fact that shareholders’ voting
power can be changed or altered. This also means that the Company may face difficulty in acquiring future investments. It may also
impact the personal ownership of shares as the voting power can be changed or altered at any time if designated by the Company’s
board of Directors.
Our Common Stock’s
small public float and lack of liquidity could adversely affect investors.
The ratios of ownership
of our common stock reduce the public float and liquidity of our common stock. Because less than 50% of our common stock
is in the public float, investors have limited ability to affect corporate decisions. Additionally, reduced liquidity can
have a negative impact on the market price of our common stock and make it difficult or impossible for investors to sell their
shares.
Our common stock is
considered a "penny stock" and may be difficult to sell
Our shares as penny stocks are
covered by section 15(g) of the Securities Exchange Act of 1934 which imposes additional sales practice requirements on broker/dealers
who sell the Company’s securities including the delivery of a standardized disclosure document; disclosure and confirmation
of quotation prices; disclosure of compensation the broker/dealer receives; and, furnishing of monthly account statements. For
sales of our securities, the broker/dealer must make a special suitability determination and receive from its customer a written
agreement prior to making a sale. The imposition of these additional sales practices could adversely affect your ability to
dispose of our stock.