{"url_path":"/sec/bnkk/10-q/2026/item-1a","section_key":"item-1a","section_title":"Item 1A Risk Factors**","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-13","source_url":"https://www.sec.gov/Archives/edgar/data/1760903/0001493152-26-022743-index.html","accession_number":"0001493152-26-022743","cik":"0001760903","ticker":"BNKK","issuer_name":"BONK, INC.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1760903/0001493152-26-022743-index.html","primary_entity_key":"0001760903","primary_entity_name":"BONK, INC."},"word_count":11062,"has_tables":true,"body_markdown":"**Item\n1A. Risk Factors**\n\n \n\n**Risks\nRelated to Our Business**\n\n \n\n**If\nwe are unable to keep up with rapid technological changes, our products may become obsolete.**\n\n \n\nThe\nmarket for our products is characterized by significant and rapid change. Although we will continue to expand our product line capabilities\nto remain competitive, research and discoveries by others may make our processes, products, or brands less attractive or even obsolete.\n\n \n\n13\n\n[Table of Contents](#sh_020)\n\n \n\n**Competition\ncould adversely affect our business.**\n\n \n\nOur\nindustry in general is competitive. It is possible that future competitors could enter our market, thereby causing us to lose market\nshare and revenues. In addition, some of our current or future competitors may have significantly greater financial, technical, marketing,\nand other resources than we do or may have more experience or advantages in the markets in which we will compete that will allow them\nto offer lower prices or higher quality products. If we do not successfully compete with these competitors, we could fail to develop\nmarket share and our future business prospects could be adversely affected.\n\n \n\n**If\nwe are unable to develop and maintain our brand and reputation for our product offerings, our business and prospects could be materially\nharmed.**\n\n \n\nOur\nbusiness and prospects depend, in part, on developing and then maintaining and strengthening our brand and reputation in the markets\nwe serve. If problems with our products cause our customers to have a negative experience or failure or delay in the delivery of our\nproducts to our customers, our brand and reputation could be diminished. If we fail to develop, promote and maintain our brand and reputation\nsuccessfully, our business and prospects could be materially harmed.\n\n \n\n**We\nare subject to government regulation, and unfavorable changes could substantially harm our business and results of operations.**\n\n \n\nWe\nare subject to general business regulations and laws as well as regulations and laws specifically governing our industries in the U.S.\nand other countries in which we operate. Uncertainty surrounding existing and future laws and regulations may impede our services and\nincrease the cost of providing such services. These regulations and laws may cover taxation, tariffs, user pricing, distribution, consumer\nprotection and the characteristics and quality of services.\n\n \n\n**We\ndepend heavily on key personnel, and turnover of key senior management could harm our business.**\n\n \n\nOur\nfuture business and results of operations depend in significant part upon the continued contributions of our senior management personnel.\nIf we lose their services or if they fail to perform in their current positions, or if we are not able to attract and retain skilled\npersonnel as needed, our business could suffer. Significant turnover in our senior management could significantly deplete our institutional\nknowledge held by our existing senior management team. We depend on the skills and abilities of these key personnel in managing the product\nacquisition, marketing and sales aspects of our business, any part of which could be harmed by turnover in the future. We may not have\nwritten employment agreements with all of our senior management. We do not have any key person insurance.\n\n \n\n**Our\nproducts may not meet health and safety standards or could become contaminated.**\n\n \n\nWe\ndo not have control over all of the third parties involved in the manufacturing of our products and their compliance with government\nhealth and safety standards. Even if our products meet these standards, they could otherwise become contaminated. A failure to meet these\nstandards or contamination could occur in our operations or those of our manufacturers, distributors or suppliers. This could result\nin expensive production interruptions, recalls and liability claims. Moreover, negative publicity could be generated from false, unfounded\nor nominal liability claims or limited recalls. Any of these failures or occurrences could negatively affect our business and financial\nperformance.\n\n \n\n**The\nsale of our products involves product liability and related risks that could expose us to significant insurance and loss expenses.**\n\n \n\nWe\nface an inherent risk of exposure to product liability claims if the use of our products results in, or is believed to have resulted\nin, illness or injury. Our products contain combinations of ingredients, and there is little long-term experience with the effect of\nthese combinations. In addition, interactions of these products with other products, prescription medicines and over-the-counter treatments\nhave not been fully explored or understood and may have unintended consequences.\n\n \n\nAny\nproduct liability claim may increase our costs and adversely affect our revenue and operating income. Moreover, liability claims arising\nfrom a serious adverse event may increase our costs through higher insurance premiums and deductibles and may make it more difficult\nto secure adequate insurance coverage in the future. In addition, our product liability insurance may fail to cover future product liability\nclaims, which, if adversely determined, could subject us to substantial monetary damages.\n\n \n\n14\n\n[Table of Contents](#sh_020)\n\n \n\n**The\nsuccess of our business will depend upon our ability to create and expand our brand awareness.**\n\n \n\nThe\nmarkets we compete in, including the wellness drink market, sexual wellness and hair growth markets we intend to compete in, are highly\ncompetitive, with many well-known brands leading the industry. Our ability to compete effectively and generate revenue will be based\nupon our ability to create and expand awareness of our products distinct from those of our competitors. It is imperative that we are\nable to convey to consumers the benefits of our products. However, advertising and packaging and labeling of such products will be limited\nby various regulations. Our success will be dependent upon our ability to convey to consumers that our products are superior to those\nof our competitors.\n\n \n\n**We\nmust develop and introduce new products to succeed.**\n\n \n\nOur\nindustry is subject to rapid change. New products are constantly introduced to the market. Our ability to remain competitive depends\nin part on our ability to enhance existing products, to develop and manufacture new products in a timely and cost-effective manner, to\naccurately predict market transitions, and to effectively market our products. Our future financial results will depend to a great extent\non the successful introduction of several new products. We cannot be certain that we will be successful in selecting, developing, manufacturing\nand marketing new products or in enhancing existing products.\n\n \n\n \n●\nThe success of new product\nintroductions depends on various factors, including, without limitation, the following: Successful sales and marketing efforts;\n\n \n●\nTimely delivery of new\nproducts;\n\n \n●\nAvailability of raw materials;\n\n \n●\nPricing of raw materials;\n\n \n●\nRegulatory allowance of\nthe products; and\n\n \n●\nCustomer acceptance of\nnew products.\n\n \n\n**Adverse\npublicity associated with our products or ingredients, or those of similar companies, could adversely affect our sales and revenue.**\n\n \n\nAdverse\npublicity concerning any actual or purported failure by us to comply with applicable laws and regulations regarding any aspect of our\nbusiness could have an adverse effect on the public perception of us. This, in turn, could negatively affect our ability to obtain financing,\nendorsers and attract distributors or retailers for our products, which would have a material adverse effect on our ability to generate\nsales and revenue.\n\n \n\nOur\ndistributors’ and customers’ perception of the safety and quality of our products or even similar products distributed by\nothers can be significantly influenced by national media attention, publicized scientific research or findings, product liability claims\nand other publicity concerning our products or similar products distributed by others. Adverse publicity, whether or not accurate, that\nassociates consumption of our products or any similar products with illness or other adverse effects, will likely diminish the public’s\nperception of our products. Claims that any products are ineffective, inappropriately labeled or have inaccurate instructions as to their\nuse, could have a material adverse effect on the market demand for our products, including reducing our sales and revenue.\n\n \n\n**If\nserious adverse or undesirable side effects are identified during the development of our product candidates, we may abandon or limit\nour development or commercialization of such product candidates.**\n\n \n\nIf\nour product candidates are associated with undesirable side effects or have unexpected characteristics, we may need to abandon their\ndevelopment or limit development to certain uses or subpopulations in which the undesirable side effects or other characteristics are\nless prevalent, less severe or more acceptable from a risk-benefit perspective.\n\n \n\nIf\nwe elect or are forced to suspend or terminate any clinical trial with one of our product candidates, the commercial prospects of such\nproduct candidate will be harmed, and our ability to generate revenue from such product candidate will be delayed or eliminated. Any\nof these occurrences may harm our business, financial condition and prospects significantly.\n\n \n\n15\n\n[Table of Contents](#sh_020)\n\n \n\n**If\nwe experience delays or difficulties in the enrollment of subjects to our clinical trials, our ability to complete such trials will be\nadversely affected**\n\n \n\nIdentifying,\nscreening and enrolling patients to participate in clinical trials of our product candidates is critical to our success, and we may not\nbe able to identify, recruit, enroll and dose a sufficient number of patients with the required or desired characteristics to complete\nour clinical trials in a timely manner. The timing of our clinical trials depends on our ability to recruit patients to participate as\nwell as to subsequently dose these patients and complete required follow-up periods. In particular, because our planned clinical trials\nmay be focused on indications with relatively small patient populations, our ability to enroll eligible patients may be limited or may\nresult in slower enrollment than we anticipate.\n\n \n\nIn\naddition, we may experience enrollment delays related to increased or unforeseen legal and logistical requirements at certain clinical\ntrial sites. These delays could be caused by reviews by contractual discussions with individual clinical trial sites. Any delays in enrolling\nand/or dosing patients in our planned clinical trials could result in increased costs, delays in advancing our product candidates, delays\nin testing the effectiveness of our product candidates or in termination of the clinical trials altogether.\n\n \n\nParticipant\nenrollment may also be affected by other factors, including:\n\n \n\n \n●\ncoordination with clinical\nresearch organizations to enroll and administer the clinical trials;\n\n \n●\ncoordination and recruitment\nof collaborators and investigators at individual sites;\n\n \n●\nsize of the participant\npopulation and process for identifying participants;\n\n \n●\ndesign of the clinical\ntrial protocol;\n\n \n●\neligibility and exclusion\ncriteria;\n\n \n●\nperceived risks and benefits\nof the product candidates under study;\n\n \n●\ntime of year in which the\ntrials are initiated or conducted;\n\n \n●\nability to obtain and maintain\nsubject consents;\n\n \n●\nability to enroll participants\nin a timely manner;\n\n \n●\nrisk that enrolled subjects\nwill drop out before completion of the trials;\n\n \n●\nproximity and availability\nof clinical trial sites for prospective participants;\n\n \n●\nability to monitor subjects\nadequately during and after treatment.\n\n \n\n**It\nis uncertain whether product liability insurance will be adequate to address product liability claims, or that insurance against such\nclaims will be affordable or available on acceptable terms in the future.**\n\n \n\nClinical\nresearch involves the testing of products on human volunteers pursuant to a clinical trial protocol. Such testing involves a risk of\nliability for personal injury to or death of patients due to, among other causes, adverse side effects, improper administration of the\nnew product, or improper volunteer behavior. Claims may arise from patients, clinical trial volunteers, consumers, physicians, hospitals,\ncompanies, institutions, researchers, or others using, selling, or buying our products, as well as from governmental bodies. In addition,\nproduct liability and related risks are likely to increase over time, in particular upon the commercialization or marketing of any products\nby us or parties with which we enter into development, marketing, or distribution collaborations. Although we are contracting for general\nliability insurance in connection with our ongoing business, there can be no assurance that the amount and scope of such insurance coverage\nwill be appropriate and sufficient in the event any claims arise, that we will be able to secure additional coverage should we attempt\nto do so, or that our insurers would not contest or refuse any attempt by us to collect on such insurance policies. Furthermore, there\ncan be no assurance that suitable product liability insurance (at the clinical stage and/or commercial stage) will continue to be available\non terms acceptable to us or at all, or that, if obtained, the insurance coverage will be appropriate and sufficient to cover any potential\nclaims or liabilities.\n\n \n\n**If\nwe are unable to establish relationships with licensees or collaborators to carry out sales, marketing, and distribution functions or\nto create effective marketing, sales, and distribution capabilities, we will be unable to market our products successfully.**\n\n \n\nOur\nbusiness strategy may include out-licensing product candidates to or collaborating with larger firms with experience in marketing and\nselling pharmaceutical products. There can be no assurance that we will successfully be able to establish marketing, sales, or distribution\nrelationships with any third-party, that such relationships, if established, will be successful, or that we will be successful in gaining\nmarket acceptance for any products we might develop. To the extent that we enter into any marketing, sales, or distribution arrangements\nwith third parties, our product revenues per unit sold are expected to be lower than if we marketed, sold, and distributed our products\ndirectly, and any revenues we receive will depend upon the efforts of such third parties.\n\n \n\n16\n\n[Table of Contents](#sh_020)\n\n \n\nIf\nwe are unable to establish such third-party marketing and sales relationships, or choose not to do so, we would have to establish in-house\nmarketing and sales capabilities. To market any products directly, we would have to establish a marketing, sales, and distribution force\nthat has technical expertise and could support a distribution capability. Competition in the dietary supplement industry for technically\nproficient marketing, sales, and distribution personnel is intense and attracting and retaining such personnel may significantly increase\nour costs.\n\n \n\nThere\ncan be no assurance that we will be able to establish internal marketing, sales, or distribution capabilities or that these capabilities\nwill be sufficient to meet our needs.\n\n \n\n**Natural\ndisasters and other events beyond our control could materially adversely affect us.**\n\n \n\nNatural\ndisasters or other catastrophic events may cause damage or disruption to our operations, international commerce and the global economy,\nand thus could have a strong negative effect on us. Our business operations are subject to interruption by natural disasters, fire, power\nshortages, pandemics and other events beyond our control. Such events could make it difficult or impossible for us to deliver our services\nto our customers and could decrease demand for our services.\n\n \n\n**We\nhave a limited operating history upon which investors can evaluate our future prospects.**\n\n \n\nWe\nhave a limited operating history upon which an evaluation of its business plan or performance and prospects can be made. The business\nand prospects of the Company must be considered in the light of the potential problems, delays, uncertainties and complications encountered\nin connection with a newly established business and new industry. The risks include, but are not limited to, the possibility that we\nwill not be able to develop functional and scalable products and services, or that although functional and scalable, our products and\nservices will not be economical to market; that our competitors hold proprietary rights that preclude us from marketing such products;\nthat our competitors market a superior or equivalent product; that we are not able to upgrade and enhance our technologies and products\nto accommodate new features and expanded service offerings; or the failure to receive necessary regulatory clearances for our products.\nTo successfully introduce and market our products at a profit, we must establish brand name recognition and competitive advantages for\nour products. There are no assurances that we can successfully address these challenges. If it is unsuccessful, we and our business,\nfinancial condition and operating results could be materially and adversely affected.\n\n \n\nThe\ncurrent and future expense levels are based largely on estimates of planned operations and future revenues rather than experience. It\nis difficult to accurately forecast future revenues because our business is new and our market has not been developed. If our forecasts\nprove incorrect, the business, operating results and financial condition of the Company may be materially and adversely affected. Moreover,\nwe may be unable to adjust our spending in a timely manner to compensate for any unanticipated reduction in revenues. As a result, any\nsignificant reduction in revenues may immediately and adversely affect our business, financial condition and operating results.\n\n \n\n**Our\nproducts and manufacturing activities are subject to extensive government regulation, and failure to comply with these laws and regulations,\nas they currently exist or as modified in the future, may increase our costs, limit or eliminate our ability to sell certain products,\nsubject us or our suppliers to the risk of enforcement action, or otherwise adversely affect our business, results of operations and\nfinancial condition.**\n\n \n\nThe\nmanufacture, packaging, labeling, advertising, promotion, distribution, import, export and sale of our products are subject to regulation\nby numerous national and local governmental agencies in the United States and other countries, including but not limited to the U.S.\nFood and Drug Administration (FDA) and the Federal Trade Commission (FTC). Failure to comply with FDA regulatory requirements may result\nin, among other things, injunctions, product withdrawals, recalls, product seizures, fines, and criminal prosecutions. Any action of\nthis type by the FDA could materially adversely affect our ability to market our products successfully.\n\n \n\nThe\nmanufacture of nutritional or dietary supplements and related products in the United States requires compliance with dietary supplement\ncurrent Good Manufacturing Practice (GMP) regulations, which are based on the food-model GMP regulations, with additional requirements\nthat are specific to dietary supplements. We believe the manufacturing processes for the Safety Shot Dietary Supplement substantially\ncomplies with the applicable dietary supplement GMP requirements. Nevertheless, any FDA action determining that such processes do not\ncomply with dietary supplement GMPs could materially adversely affect our ability to manufacture and market the Sure Shot Dietary Supplement\nin the United States. In addition, the Dietary Supplement & Nonprescription Drug Consumer Protection Act requires dietary supplement\nmanufacturers and distributors to notify the FDA when they receive reports of serious adverse events associated with their products that\noccur within the United States.\n\n \n\n17\n\n[Table of Contents](#sh_020)\n\n \n\nIndividual\nU.S. states also regulate nutritional supplements. A state may seek to interpret claims or products presumptively valid under federal\nlaw as illegal under that state’s regulations, or otherwise seek to create restrictions to access under state law. For example,\nduring the 204 legislative session, several states are considering bills that would restrict the sale of muscle building and/or weight\nmanagement supplements to people over the age of 18. Government agencies, as well as legislative bodies, can change existing regulations,\nor impose new ones, or could take aggressive measures, causing or contributing to a variety of negative consequences, including:\n\n \n\n \n●\nrequirements for the reformulation\nof products to meet new standards;\n\n \n●\nthe recall or discontinuance\nof products;\n\n \n●\nadditional record-keeping\nrequirements;\n\n \n●\nexpanded documentation\nof the properties of certain or all products;\n\n \n●\nexpanded or different labeling\nor advertising for products;\n\n \n●\nexpanded adverse event\ntracking and reporting requirements; and\n\n \n●\nadditional scientific substantiation\nto support product claims.\n\n \n\nWe\ncannot predict the nature of any future laws, regulations, interpretations, or applications, nor can we determine what effect additional\ngovernmental regulations or administrative orders, when and if promulgated, could have on our business, financial condition, or results\nof operations.\n\n \n\n**We\nare subject to government regulations of the processing, formulation, packaging, labeling and advertising of our wellness and dietary\nsupplement products.**\n\n \n\nUnder\nthe Federal Food, Drug, and Cosmetic Act (the FD&C Act), companies that manufacture and distribute functional foods and dietary supplements,\nsuch as our Safety Shot Dietary Supplement, are limited in the claims that they are permitted to make about nutritional support on the\nproduct label without FDA approval. Any failure by us to adhere to the labeling requirements could lead to the FDA requiring that our\nproducts be repackaged and relabeled, which would have a material adverse effect on our business. In addition, companies are responsible\nfor the accuracy and truthfulness of, and must have adequate scientific substantiation for, any nutritional or functional claims. These\nclaims must be truthful and not misleading. Promotional claims about foods and dietary supplements also must not include statements that\nthe product can diagnose, mitigate, treat, cure or prevent a specific disease or class of disease.\n\n \n\nWe\nbelieve we are able to market our Sure Shot Dietary Supplement product in reliance on the self-affirmed Generally Recognized As Safe\n(GRAS) status of our formulation’s current ingredients. No governmental agency or other third party has made a determination as\nto whether or not the Sure Shot Dietary Supplement has achieved GRAS status. We make this determination based on independent scientific\nopinions that the individual ingredients and formulation as a whole are not harmful under their intended conditions of use. If the FDA,\nanother regulatory authority or other third party denied our self-affirmed GRAS status for the Sure Shot Dietary Supplement, we could\nface significant penalties or be required to undergo the regulatory approval process in order to market our product, and our business,\nfinancial condition and results of operations will be adversely affected. We cannot guarantee that in such a situation the Sure Shot\nDietary Supplement would be approved.\n\n \n\nThe\nprocessing, formulation, packaging, labeling and advertising of our products may also be subject to regulation by the FTC, the Environmental\nProtection Agency (EPA), and various agencies of the states and localities in which the products are sold. Any changes in the current\nregulatory environment could impose requirements that would limit our ability to market our supplement products and make bringing new\nproducts to market more expensive. In addition, the adoption of new regulations or changes in the interpretation of existing regulations\nmay result in significant compliance costs or discontinuation of product sales and may adversely affect our business, financial condition\nand results of operations.\n\n \n\n18\n\n[Table of Contents](#sh_020)\n\n \n\nWhile\nwe have positioned the Sure Shot Dietary Supplement as a dietary supplement, it is possible that the FDA or a state regulatory agency\ncould classify our product as a drug. If the Sure Shot Dietary Supplement is determined to be a drug, we would not be able to market\nit further without making significant changes to the product and labeling or going through the drug approval process, which would limit\nour ability to effectively market the product and would adversely affect our financial condition and results of operations. Additional\nclinical trials may be necessary in order to support any new drug approval for the Sure Shot Dietary Supplement, and clinical trials\ndesigned to support drug approval may be time consuming, expensive, and uncertain. If required, such additional studies may take years\nto complete, and we may never generate the necessary data or results required to obtain marketing authorization of Safety Shot Dietary\nSupplement as an over-the-counter drug product. Accordingly, there can be no assurances that any such drug approval, if required, could\nbe obtained for the Sure Shot Dietary Supplement. If the FDA or a state regulatory agency ultimately determines the Sure Shot Dietary\nSupplement is a drug rather than a dietary supplement, the agency could claim that the product is misbranded and require that we recall,\nrepackage and relabel the product and impose civil and/or criminal penalties. Any of these situations could adversely affect our business\nand operations, and any public actions taken by the FDA or other regulatory agency against us could lead to consumer complaints, civil\nlawsuits, retail customers terminating any supply agreements we may have with them, and significant reputational harms to the company.\n\n \n\n**Our\nfailure to comply with applicable laws or regulations could result in substantial monetary penalties and could adversely affect our operating\nresults.**\n\n \n\nIn\nrecent years, the marketing and labeling of functional foods and beverages and dietary supplements has brought increased risk that consumers\nwill bring class action lawsuits and that the FTC and/or state attorneys general will bring legal action concerning the truth and accuracy\nof the marketing and labeling of such products, seek removal of such products from the marketplace, and/or impose fines and penalties.\nOur Sure Shot Dietary Supplement product is marketed with express and implied statements relating to the ingredients or health and wellness\nrelated attributes, which may increase the potential risk of regulatory scrutiny over such claims. The lack of specific regulations or\nguidance on common supplement terms and statements used in product labeling has contributed to legal challenges against many supplement\ncompanies, and plaintiffs have commenced legal actions against several nutritional supplement companies, asserting false, misleading\nand deceptive advertising and labeling claims. In addition, the FTC has instituted numerous enforcement actions against dietary supplement\ncompanies for failure to have adequate substantiation for claims made in advertising or for the use of false or misleading advertising\nclaims. Our failure to comply with applicable regulations could result insubstantial monetary penalties, which would likely have a material\nadverse effect on our financial condition or results of operations.\n\n \n\nEven\nwhen unmerited, class action lawsuits, action by the FTC or state attorneys general enforcement actions can be expensive to defend against\nand may adversely affect our reputation with existing and potential customers and consumers and our corporate and brand image, which\nwould likely have a material and adverse effect on our business, financial condition or results of operations. The number of private\nconsumer class actions relating to false or deceptive advertising against nutritional supplement companies has increased in recent years.\n\n \n\nIn\naddition, the FDA has aggressively enforced its regulations with respect to different types of product claims that may or may not be\nmade for food or dietary supplement products. These events could interrupt the marketing and sales of our Sure Shot Dietary Supplement\nproduct, severely damage our brand reputation and public image, increase our legal expenses, result in product recalls or litigation,\nand impede our ability to deliver our products in sufficient quantities or quality, which would likely result in a material adverse effect\non our business, financial condition, results of operations and cash flows.\n\n \n\n**Congress\nand/or regulatory agencies may impose additional laws or regulations or change current laws or regulations, and state attorneys general\nmay increase enforcement of existing or new laws, and compliance with new or changed governmental regulations, or any state attorney\nproceeding, could increase our costs significantly and materially and adversely affect our business, financial condition and results\nof operations.**\n\n \n\nFrom\ntime to time, Congress, the FDA, the FTC, or other federal, state, local or foreign legislative and regulatory authorities may impose\nadditional laws or regulations that apply to us, repeal laws or regulations that we consider favorable to us or impose more stringent\ninterpretations of current laws or regulations. We are not able to predict the nature of such future laws, regulations, repeals or interpretations\nor to predict the effect that additional governmental regulation, when and if it occurs, would have on our business in the future. Those\ndevelopments could require reformulation of certain products to meet new standards, recalls or discontinuance of certain products not\nable to be reformulated, additional record-keeping requirements, increased documentation of the properties of certain products, additional\nor different labeling, additional scientific substantiation, adverse event reporting or other new requirements.\n\n \n\n19\n\n[Table of Contents](#sh_020)\n\n \n\nFor\nexample, in recent years, the FDA has issued warning letters to several dietary supplement companies alleging improper and unapproved\ndrug claims regarding their products marketed for use as hangover cures or to prevent hangovers. If the FDA determines that we have disseminated\ninappropriate and unapproved drug claims for our Safety Shot Dietary Supplement, which we are positioning as a dietary supplement, we\ncould receive a warning or untitled letter, be required to modify our product claims or take other actions to satisfy the FDA. Such a\npublic warning or untitled letter from the FDA could harm our reputation and could lead to potential customer or consumer complaints\nor even civil lawsuits and other financial damages. While we would intend to vigorously defend our company and the Safety Shot product\nline in such a situation, any developments of this nature could increase our costs significantly and would likely have a material adverse\neffect on our business, financial condition and results of operations.\n\n \n\n**Our\nreliance on third parties to manufacture and supply our products, including the Sure Shot Dietary Supplement, may harm our business,\nfinancial condition and operating results.**\n\n \n\nWe\ncontract with third-party suppliers and manufacturers for the production of our products, including the Sure Shot Dietary Supplement.\nThese third-party suppliers and manufacturers produce and, in most cases, pack our products according to formulations and specifications\nthat have been developed by or in conjunction with our in-house product development team. Products manufactured by third-party suppliers\nat their facilities must also pass through quality control and assurance procedures to ensure they are manufactured in conformance with\nour specifications. We cannot assure you that our third-party contract manufacturers will continue to reliably supply products to us\nat the levels of quality, or the quantities, we require, and in compliance with our specifications or applicable laws, including under\nthe FDA’s dietary supplement GMP regulations and the FD&C Act’s food safety provisions. Should our contract manufacturers\nexperience quality issues or supply us with non-conforming products, we may need to terminate relationships or secure alternative suppliers.\nIdentifying and obtaining acceptable replacement manufacturing sources, on a timely basis or at all, for FDA-regulated functional beverages\nand dietary supplement products is challenging. Additionally, any future need to transfer our third-party manufacturing business to another\ncontract manufacturer could be expensive, time-consuming, result in delays in our production or shipping, reduce our net sales, damage\nour relationship with customers and damage our reputation in the marketplace.\n\n \n\n**We\nrely on third parties to conduct clinical trials and most nonclinical studies of our products, including the Sure Shot Dietary Supplement.\nIf these third parties do not perform as contractually required, fail to satisfy regulatory or legal requirements or miss expected deadlines,\nour product development and commercialization efforts could be delayed with material and adverse effects on our business, financial condition,\nresults of operations and prospects.**\n\n \n\nWhile\nwe recently completed a clinical trial for the Safety Shot Dietary Supplement and may sponsor clinical trials in the future for the Sure\nShot Dietary Supplement or other products, we do not independently conduct clinical trials or the majority of nonclinical studies involving\nour products or product candidates. Accordingly, while we perform certain functions internally, we currently rely on third-party contract\nresearch organizations (CROs), such as the Center for Applied Health Sciences, as well as laboratories, clinical investigators, clinical\ndata management organizations, and consultants, to help us design, conduct, supervise and monitor research involving our products and\nhuman participants. As a result, we have less control over the timing, quality and other aspects of our clinical trials than we would\nhave had we conducted them on our own. There is a limited number of third-party service providers that specialize in the wellness space\nor have the expertise required to achieve our business objectives. If any of our relationships with these third-party CROs terminate,\nwe may not be able to enter into arrangements with alternative CROs or investigators or to do so on commercially reasonable terms. Further,\nthese laboratories, investigators, CROs and consultants are not our employees and we have limited control over the amount of time and\nresources that they dedicate to our product development programs. These third parties may have contractual relationships with other entities,\nsome of which may be our competitors, which may draw time and resources from our programs. The third parties with which we contract might\nnot be diligent, careful or timely in conducting our nonclinical studies or clinical trials. If we cannot contract with acceptable third\nparties on commercially reasonable terms, or at all, or if these third parties do not carry out their contractual duties, satisfy the\nlegal and regulatory requirements for the conduct of nonclinical studies or clinical trials or meet expected deadlines for any reason,\nour product development efforts could be delayed and otherwise adversely affected.\n\n \n\nIn\nall events, we are responsible for ensuring that each of our nonclinical studies and clinical trials is conducted in accordance with\nthe general investigational plan and protocols for the relevant study or trial. For example, the FDA requires certain nonclinical studies\nto be conducted in accordance with good laboratory practices and clinical trials to be conducted in accordance with good clinical practices,\nincluding practices and requirements for designing, conducting, recording and reporting the results of nonclinical studies and clinical\ntrials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of clinical\ntrial participants are protected. Our reliance on third parties we do not control do not relieve us of these responsibilities and requirements.\nAny adverse development or delay in our nonclinical studies or clinical trials could have a material and adverse effect on our business,\nfinancial condition, results of operations and prospects.\n\n \n\n20\n\n[Table of Contents](#sh_020)\n\n \n\nFurther,\nshould the FDA determine that the Sure Shot Dietary Supplement is a drug rather than a dietary supplement and require us to secure new\ndrug approval or another form of marketing authorization for the Sure Shot Dietary Supplement, there can be no assurance that the nonclinical\nand clinical data we have generated to date would be sufficient to meet applicable regulatory standards for demonstrating substantial\nevidence of effectiveness. “Substantial evidence” represents the evidentiary threshold in the FD&C Act for the efficacy\nof new drugs, and it requires at least one adequate and well-controlled clinical investigation to establish effectiveness. Because we\nhave positioned the Sure Shot Dietary Supplement as a dietary supplement, our recently completed clinical trial may not meet FDA’s\nexpectations for a well-controlled clinical investigation adequate to support a potential drug approval.\n\n \n\n**We\nmay not meet our product development and commercialization milestones.**\n\n \n\nWe\nhave established milestones, based upon our expectations regarding our technologies at that time, which we use to assess our progress\ntoward developing our products. These milestones relate to technology and design improvements as well as dates for achieving development\ngoals. If our products exhibit technical defects or are unable to meet cost or performance goals, our commercialization schedule could\nbe delayed, and potential purchasers of our initial commercial products may decline to purchase such products or may opt to pursue alternative\nproducts.\n\n \n\nWe\nmay also experience shortages of equipment due to manufacturing difficulties. Multiple suppliers provide the components used in manufacturing\nour products. Our manufacturing operations could be disrupted by fire, earthquake or other natural disaster, a labor-related disruption,\nfailure in supply or other logistical channels, electrical outages or other reasons. If there were a disruption to manufacturing facilities,\nwe would be unable to manufacture until we have restored and re-qualified our manufacturing capability or developed alternative manufacturing\nfacilities.\n\n \n\n**Our\noperations in international markets involve inherent risks that we may not be able to control.**\n\n \n\nOur\nbusiness plan includes the marketing and sale of our proposed products in international markets. Accordingly, our results could be materially\nand adversely affected by a variety of uncontrollable and changing factors relating to international business operations, including:\n\n \n\n \n●\nMacroeconomic conditions\nadversely affecting geographies where we intend to do business;\n\n \n●\nForeign currency exchange\nrates;\n\n \n●\nPolitical or social unrest\nor economic instability in a specific country or region;\n\n \n●\nHigher costs of doing business\nin foreign countries;\n\n \n●\nInfringement claims on\nforeign patents, copyrights or trademark rights;\n\n \n●\nDifficulties in staffing\nand managing operations across disparate geographic areas;\n\n \n●\nDifficulties associated\nwith enforcing agreements and intellectual property rights through foreign legal systems;\n\n \n●\nTrade protection measures\nand other regulatory requirements, which affect our ability to import or export our products from or to various countries;\n\n \n●\nAdverse tax consequences;\n\n \n●\nUnexpected changes in legal\nand regulatory requirements;\n\n \n●\nMilitary conflict, terrorist\nactivities, natural disasters and medical epidemics; and\n\n \n●\nOur ability to recruit\nand retain channel partners in foreign jurisdictions.\n\n \n\n21\n\n[Table of Contents](#sh_020)\n\n \n\n**Compliance\nwith new and existing laws and governmental regulations could increase our costs significantly and adversely affect our results of operations.**\n\n \n\nThe\nprocessing, formulation, safety, manufacturing, packaging, labeling, advertising and distribution of our products are subject to federal\nlaws and regulation by one or more federal agencies, including the FDA, the FTC, the CPSC, the USDA, and the EPA. These activities are\nalso regulated by various state, local and international laws and agencies of the states and localities in which our products are sold.\nGovernment regulations may prevent or delay the introduction, or require the reformulation, of our products, which could result in lost\nrevenues and increased costs to us. For instance, the FDA regulates, among other things, the composition, safety, manufacture, labeling\nand marketing of dietary ingredients and dietary supplements (including vitamins, minerals, herbs, and other dietary ingredients for\nhuman use). Dietary supplements and dietary ingredients that do not comply with FDA’s regulations and/or the DSHEA will be deemed\nadulterated or misbranded. Manufacturers and distributors of dietary supplements and dietary ingredients are prohibited from marketing\nproducts that are adulterated or misbranded, and the FDA may take enforcement action against any adulterated or misbranded dietary supplement\non the market. The FDA has broad enforcement powers. If we violate applicable regulatory requirements, the FDA may bring enforcement\nactions against us, which could have a material adverse effect on our business, prospects, financial condition, and results of operations.\nThe FDA may not accept the evidence of safety for any new dietary ingredient that we may wish to market, may determine that a particular\ndietary supplement or ingredient presents an unacceptable health risk based on the required submission of serious adverse events or other\ninformation, and may determine that a particular claim(such as reducing Blood Alcohol Content) or statement of nutritional value that\nwe use to support the marketing of a dietary supplement is an impermissible drug claim or is not substantiated. Any of these actions\ncould prevent us from marketing particular dietary supplement products or making certain claims or statements with respect to those products.\nThe FDA could also require us to remove a particular product from the market. Any future recall or removal would result in additional\ncosts to us, including lost revenues from any products that we are required to remove from the market, any of which could be material.\nAny product recalls or removals could also lead to an increased risk of litigation and liability, substantial costs, and reduced growth\nprospects.\n\n \n\nAdditional\nor more stringent laws and regulations of dietary supplements and other products have been considered from time to time. These developments\ncould require reformulation of some products to meet new standards, recalls or discontinuance of some products not able to be reformulated,\nadditional record-keeping requirements, increased documentation of the properties of some products, additional or different labeling,\nadditional scientific substantiation, or other new requirements. Any of these developments could increase our costs significantly. In\naddition, regulators’ evolving interpretation of existing laws could have similar effects.\n\n \n\n**International\ntrade disputes, including U.S. trade tariffs and retaliatory tariffs, could adversely impact our business.**\n\n \n\nInternational\ntrade disputes, including threatened or implemented tariffs by the United States and threatened or implemented tariffs by foreign countries\nin retaliation, could adversely impact our business. Many of our tenants sell imported goods and tariffs or other trade restrictions\ncould increase costs for these tenants. To the extent our tenants are unable to pass these costs on to their customers, our tenants could\nbe adversely impacted. In addition, international trade disputes, including those related to tariffs, could result in inflationary pressures\nthat directly impact our costs, such as costs for steel, lumber and other materials applicable to our redevelopment projects. Trade disputes\ncould also adversely impact global supply chains which could further increase costs for us and our tenants or delay delivery of key inventories\nand supplies.\n\n \n\n**Significant\npolitical, trade, regulatory developments, and other circumstances beyond our control, could have a material adverse effect on our financial\ncondition or results of operations.**\n\n \n\nSignificant\npolitical, trade, or regulatory developments in the jurisdictions in which we sell our products, such as those stemming from the change\nin U.S. federal administration, are difficult to predict and may have a material adverse effect on us. Similarly, changes in U.S. federal\npolicy that affect the geopolitical landscape could give rise to circumstances outside our control that could have negative impacts on\nour business operations. For example, during the prior Trump administration, increased tariffs were implemented on goods imported into\nthe U.S., particularly from China, Canada, and Mexico. On February 1, 2025, the U.S. imposed a 25% tariff on imports from Canada and\nMexico, which were subsequently suspended for a period of one month, and a 10% additional tariff on imports from China. Historically,\ntariffs have led to increased trade and political tensions, between not only the U.S. and China, but also between the U.S. and other\ncountries in the international community. In response to tariffs, other countries have implemented retaliatory tariffs on U.S. goods.\nPolitical tensions as a result of trade policies could reduce trade volume, investment, technological exchange, and other economic activities\nbetween major international economies, resulting in a material adverse effect on global economic conditions and the stability of global\nfinancial markets. Any changes in political, trade, regulatory, and economic conditions, including, but not limited to, U.S. and China\ntrade policies, could have a material adverse effect on our financial condition or results of operations.\n\n \n\n22\n\n[Table of Contents](#sh_020)\n\n \n\n**Regulatory\nchanges or actions may alter the nature of an investment in us or restrict the use of cryptocurrencies in a manner that adversely affects\nour business, prospects, or operations.**\n\n \n\nAs\ncryptocurrencies have grown in both popularity and market size, governments around the world have reacted differently to cryptocurrencies;\ncertain governments have deemed them illegal, and others have allowed their use and trade without restriction, while some jurisdictions,\nsuch as the United States, subject the mining, ownership and exchange of cryptocurrencies to extensive, and in some cases overlapping,\nunclear and evolving regulatory requirements.\n\n \n\nIn\nJanuary 2025, U.S. President Donald Trump issued an executive order forming a presidential working group to establish a clear regulatory\nframework for digital assets, and leaders in both houses of the U.S. Congress have announced a bicameral working group with the objective\nof passing legislation to provide regulatory clarity for the industry. Committees in both houses of the U.S. Congress have held hearings\nto ensure fair access to financial services, including for companies operating in the digital asset space. Additionally, President Trump\nand members of the U.S. Congress announced that they are studying the possibility of creating a national strategic digital asset reserve\nto include Bitcoin, and at least twelve states have introduced legislation to create strategic Bitcoin reserves.\n\n \n\nWhile\nthese ongoing regulatory developments appear to be positive, and we anticipate greater regulatory certainty in the future, given the\ndifficulty of predicting the outcomes of ongoing and future regulatory actions and legislative developments, it is possible that future\ndevelopments could have a material adverse effect on our business, prospects, or operations.\n\n \n\n**Our\nbusiness, operations, financial position and timelines, could be materially adversely affected by the continuing military action in Ukraine\nand the war between Israel and Hamas.**\n\n \n\nAs\na result of the military action commenced in February 2022 by the Russian Federation and Belarus in Ukraine and the war between Israel\nand Hamas commenced in October 2023, and related economic sanctions imposed or that may in the future be imposed by certain governments,\nour financial position and operations may be materially and adversely affected. As our ability to continue to operate will be dependent\non raising debt and equity finance, any adverse impact to those markets as a result of these conflicts, including due to increased market\nvolatility, decreased availability in third-party financing and/or a deterioration in the terms on which it is available (if at all),\ncould negatively impact our business, results of operations, cash flows, financial condition, and/or prospects. The extent of any potential\nimpact is not yet determinable, however.\n\n \n\n**Risks\nRelated to our Financial Position and Capital Needs**\n\n \n\n**Our\naccountant has indicated doubt about our ability to continue as a going concern.**\n\n \n\nAs\nof March 31, 2026, and December 31, 2025, the Company had $728,907 and $2,278,340 in cash, accumulated deficit of $185,320,822 and $183,492,179\nand cash flow used in operations of $1,941,692 and $25,275,375, respectively. The Company has incurred and expects to continue to incur\nsignificant costs in pursuit of its expansion and development plans. These conditions raise doubt about the Company’s ability to\ncontinue as a going concern and accordingly our auditors have included a going concern opinion in our annual report.\n\n \n\nIn\nconnection with certain public and private offerings (the “Financing”), the Company offered warrants as part of the Financing\npackages. During the year ended December 31, 2024, the Warrant Holders exercised a total of 2,996,127 warrants for shares of common stock\nfor a total exercise price of $3,962,714 and during the year ended December 31, 2023, the Warrant Holders exercised a total of 10,266,845\nwarrants for shares of common stock for a total exercise price of $8,887,837. At December 31, 2024, the Company has 18,803,334 warrants\noutstanding at an average exercise price of $2.09. The Company expects, although there can be no assurance, that a majority of the outstanding\nwarrants will be exercised in the near future.\n\n \n\nThe\nCompany also holds 2,623,342 shares of SRM Entertainment, Inc. (Nasdaq: SRM) valued at $0.63 per share (as of December 31, 2024) and\nthese shares are considered trading shares and are held as marketable securities on the balance sheet. These shares are not covered by\nan effective registration statement but may be sold subject to Rule 144.\n\n \n\n23\n\n[Table of Contents](#sh_020)\n\n \n\nAt\nDecember 31, 2024, the Company had $348,816 in cash and the Company recognizes that it may need to raise additional capital in order\nto continue to execute its business plan in the future. There is no assurance that the Warrant Holders will exercise their warrants or\nadditional financing will be available if needed or that the Company will be able to obtain financing on terms acceptable to it or whether\nthe Company will become profitable and generate positive operating cash flow. If the Company is unable to obtain revenue producing contracts\nor financing or if the revenue or financing it does obtain is insufficient to cover any operating losses it may incur, it may be forced\nto substantially curtail its operations or seek other business opportunities through strategic alliances, acquisitions or other arrangements\nthat may dilute the interests of existing stockholders.\n\n \n\n**Raising\nadditional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our\ntechnologies or other assets.**\n\n \n\nWe\nmay seek additional capital through a combination of private and public equity offerings, debt financings, strategic partnerships and\nalliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities,\nexisting ownership interests will be diluted and the terms of such financings may include liquidation or other preferences that adversely\naffect the rights of existing stockholders. Debt financings may be coupled with an equity component, such as warrants to purchase shares,\nwhich could also result in dilution of our existing stockholders’ ownership. The incurrence of indebtedness would result in increased\nfixed payment obligations and could also result in certain restrictive covenants, such as limitations on our ability to incur additional\ndebt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely\nimpact our ability to conduct our business and may result in liens being placed on our assets and intellectual property. If we were to\ndefault on such indebtedness, we could lose such assets and intellectual property.\n\n \n\n**Our\npotential for rapid growth and our entry into new markets make it difficult for us to evaluate our current and future business prospects,\nand we may be unable to effectively manage any growth associated with these new markets, which may increase the risk of your investment\nand could harm our business, financial condition, results of operations and cash flow**.\n\n \n\nOur\nproliferation into new markets may place a significant strain on our resources and increase demands on our executive management, personnel\nand systems, and our operational, administrative and financial resources may be inadequate. We may also not be able to effectively manage\nany expanded operations or achieve planned growth on a timely or profitable basis, particularly if the number of customers using our\ntechnology significantly increases or their demands and needs change as our business expands. If we are unable to manage expanded operations\neffectively, we may experience operating inefficiencies, the quality of our products and services could deteriorate, and our business\nand results of operations could be materially adversely affected.\n\n \n\n**Changes\nin tax laws and unanticipated tax liabilities could adversely affect our effective income tax rate and ability to achieve profitability.**\n\n \n\nOur\neffective income tax rate in the future could be adversely affected by a number of factors including changes in the mix of earnings in\ncountries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities and changes in tax laws.\nWe regularly assess all of these matters to determine the adequacy of our tax provision which is subject to discretion. If our assessments\nare incorrect, it could have an adverse effect on our business and financial condition. There can be no assurance that income tax laws\nand administrative policies with respect to the income tax consequences generally applicable to us or to our subsidiaries will not be\nchanged in a manner which adversely affects our shareholders.\n\n \n\n**Risks\nRelated to our Intellectual Property**\n\n \n\n**We\nmay incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights.**\n\n \n\nA\nthird party may sue us or one of our strategic collaborators for infringing its intellectual property rights. Likewise, we may need to\nresort to litigation to enforce licensed rights or to determine the scope and validity of third-party intellectual property rights.\n\n \n\nThe\ncost to us of any litigation or other proceeding relating to intellectual property rights, even if resolved in our favor, could be substantial,\nand the litigation would divert our efforts. Some of our competitors may be able to sustain the costs of complex patent litigation more\neffectively than we can because they have substantially greater resources. If we do not prevail in this type of litigation, we or our\nstrategic collaborators may be required to pay monetary damages; stop commercial activities relating to the affected products or services;\nobtain a license in order to continue manufacturing or marketing the affected products or services; or attempt to compete in the market\nwith a substantially similar product.\n\n \n\n24\n\n[Table of Contents](#sh_020)\n\n \n\nUncertainties\nresulting from the initiation and continuation of any litigation could limit our ability to continue some of our operations. In addition,\na court may require that we pay expenses or damages, and litigation could disrupt our commercial activities.\n\n \n\n**Any\ninability to protect our intellectual property rights could reduce the value of our products and brands, which could adversely affect\nour financial condition, results of operations and business.**\n\n \n\nOur\nbusiness is partly dependent upon our trademarks, trade secrets, copyrights and other intellectual property rights. Effective intellectual\nproperty rights protection, however, may not be available under the laws of every country in which we and our sub-licensees may operate.\nThere is a risk of certain valuable trade secrets, beyond what is described publicly in patents, being exposed to potential infringers.\nRegardless of our technology being protected by patents or otherwise, there is a risk that other companies may employ the technology\nwithout authorization and without recompensing us.\n\n \n\nThe\nefforts we have taken to protect our proprietary rights may not be sufficient or effective. Any significant impairment of our intellectual\nproperty rights could harm our business or our ability to compete. In addition, protecting our intellectual property rights is costly\nand time consuming. There is a risk that we may have insufficient resources to counter adequately such infringements through negotiation\nor the use of legal remedies. It may not be practicable or cost effective for us to fully protect our intellectual property rights in\nsome countries or jurisdictions. If we are unable to successfully identify and stop unauthorized use of our intellectual property, we\ncould lose potential revenue and experience increased operational and enforcement costs, which could adversely affect our financial condition,\nresults of operations and business.\n\n \n\n**The\nintellectual property behind our products may include unpublished know-how as well as existing and pending intellectual property protection.\nAll intellectual property protection eventually expires, and unpublished know-how is dependent on key individuals**.\n\n \n\nThe\ncommercialization of our licensed products is partially dependent upon know-how and trade secrets held by certain individuals working\nwith and for us. Because the expertise runs deep in these few individuals, if something were to happen to any or all of them, the ability\nto properly manufacture our products without compromising quality and performance could be diminished greatly.\n\n \n\nKnowledge\npublished in the form of any future intellectual property has finite protection, as all patents and trademarks have a limited life and\nan expiration date. While continuous efforts will be made to apply for patents and trademarks if appropriate, there is no guarantee that\nadditional patents or trademarks will be granted. The expiration of patents and trademarks relating to our products may hinder our ability\nto sub-license or sell our products for a long period of time without the development of a more complex licensing strategy.\n\n \n\n**If\nwe are not able to adequately protect our intellectual property, then we may not be able to compete effectively, and we may not be profitable.**\n\n \n\nOur\nexisting proprietary rights may not afford remedies and protections necessary to prevent infringement, reformulation, theft, misappropriation\nand other improper use of our products by competitors. We own the formulations contained in our products and we consider these product\nformulations to be our critical proprietary property, which must be protected from competitors. Although trade secret, trademark, copyright\nand patent laws generally provide a certain level of protection, and we attempt to protect ourselves through contracts with manufacturers\nof our products, we may not be successful in enforcing our rights. In addition, enforcement of our proprietary rights may require lengthy\nand expensive litigation. We have attempted to protect some of the trade names and trademarks used for our products by registering them\nwith the U.S. Patent and Trademark Office, but we must rely on common law trademark rights to protect our unregistered trademarks. Common\nlaw trademark rights do not provide the same remedies as are granted to federally registered trademarks, and the rights of a common law\ntrademark are limited to the geographic area in which the trademark is actually used. Our inability to protect our intellectual property\ncould have a material adverse impact on our ability to compete and could make it difficult for us to achieve a profit.\n\n \n\n25\n\n[Table of Contents](#sh_020)\n\n \n\n**Risks\nRelated to Our Securities and Other Risks**\n\n \n\n**We\nare an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth\ncompanies will make our common stock less attractive to investors.**\n\n \n\nWe\nare an “emerging growth company” as defined in the JOBS Act, and we intend to take advantage of certain exemptions from various\nreporting requirements that are applicable to other public companies that are not “emerging growth companies” including,\nbut not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and\nreduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We cannot predict whether\ninvestors will find our common stock less attractive if we rely on these exemptions. If some investors find our common stockless attractive\nas a result, there may be a less active trading market for our common stock and our stock price may be more volatile.\n\n \n\n**The\nrequirements of being a public company may strain our resources and distract our management, which could make it difficult to manage\nour business, particularly after we are no longer an “emerging growth company.”**\n\n \n\nWe\nare required to comply with various regulatory and reporting requirements, including those required by the SEC. Complying with these\nreporting and other regulatory requirements is time-consuming and results in increased costs to us and could have a negative effect on\nour results of operations, financial condition or business. As a public company, we are subject to the reporting requirements of the\nSecurities Exchange Act of 1934 (as amended, the “Exchange Act”) and the requirements of the Sarbanes-Oxley Act. These requirements\nmay place a strain on our systems and resources.\n\n \n\nThe\nExchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley\nAct requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting. To maintain\nand improve the effectiveness of our disclosure controls and procedures, we will need to commit significant resources, hire additional\nstaff and provide additional management oversight. We will be implementing additional procedures and processes for the purpose of addressing\nthe standards and requirements applicable to public companies. Sustaining our growth also will require us to commit additional management,\noperational and financial resources to identify new professionals to join our firm and to maintain appropriate operational and financial\nsystems to adequately support expansion. These activities may divert management’s attention from other business concerns, which\ncould have a material adverse effect on our results of operations, financial condition or business.\n\n \n\nAs\nan “emerging growth company” as defined in the JOBS Act, we intend to take advantage of certain temporary exemptions from\nvarious reporting requirements including, but not limited to, not being required to comply with the auditor attestation requirements\nof Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in our periodic reports\nand proxy statements. We may also delay adoption of new or revised accounting pronouncements applicable to public companies until such\npronouncements are made applicable to private companies, as permitted by the JOBS Act.\n\n \n\n**We\nhave broad discretion in the use of the net proceeds from any offerings and may not use them effectively.**\n\n \n\nOur\nmanagement will have broad discretion in the application of the net proceeds from any offerings and may spend or invest these proceeds\nin a way with which our stockholders disagree. The failure by our management to apply these funds effectively could harm our business\nand financial condition. Pending their use, we may invest the net proceeds from any offering in a manner that does not produce income\nor that loses value.\n\n \n\n**Our\nmanagement has limited experience in managing the day-to-day operations of a public company and, as a result, we may incur additional\nexpenses associated with the management of our Company.**\n\n \n\nWe\nonly became a public company in October 2020. The management team is responsible for the operations and reporting of the Company. The\nrequirements of operating as a public company are many and sometimes difficult to navigate. This may require us to obtain outside assistance\nfrom legal, accounting, investor relations, or other professionals that could be more costly than planned. If we lack cash resources\nto cover these costs of being a public company in the future, our failure to comply with reporting requirements and other provisions\nof securities laws could negatively affect our stock price and adversely affect our potential results of operations, cashflow and financial\ncondition after we commence operations.\n\n \n\n26\n\n[Table of Contents](#sh_020)\n\n \n\n**Compliance\nwith changing corporate governance regulations and public disclosures may result in additional risks and exposures.**\n\n \n\nChanging\nlaws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and\nnew regulations from the SEC, have created uncertainty for public companies such as ours. These laws, regulations, and standards are\nsubject to varying interpretations in many cases, and as a result, their application in practice may evolve over time as new guidance\nis provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs\nnecessitated by ongoing revisions to disclosure and governance practices. As a result, our efforts to comply with evolving laws, regulations,\nand standards have resulted in, and are likely to continue to result in, increased expense and significant management time and attention.\n\n \n\n**Certain\nof our stockholders hold a significant percentage of our outstanding voting securities, which could reduce the ability of minority stockholders\nto effect certain corporate actions.**\n\n \n\nAt\nMarch 25, 2025, our officers and directors are the beneficial owners of approximately 14.7% our issued and outstanding voting securities.\nAs a result, they possess significant influence over our elections and votes. As a result, their ownership and control may have the effect\nof facilitating and expediting a future change in control, merger, consolidation, takeover or other business combination, or encouraging\na potential acquirer to make a tender offer. Their ownership and control may also have the effect of delaying, impeding, or preventing\na future change in control, merger, consolidation, takeover or other business combination, or discouraging a potential acquirer from\nmaking a tender offer.\n\n \n\n**If\nsecurities or industry analysts publish inaccurate or unfavorable research about our business, our stock price could decline.**\n\n \n\nThe\ntrading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about\nus or our business. Once our common stock is quoted, if one or more of the analysts who cover us downgrade our common stock or publish\ninaccurate or unfavorable research about our business, our common stock price would likely decline.\n\n \n\n**We\ndo not intend to pay dividends for the foreseeable future.**\n\n \n\nWe\ncurrently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare\nor pay any dividends on our common stock in the foreseeable future.\n\n \n\n**Our\nSecond Amended and Restated Certificate of Incorporation contains an exclusive forum provision for certain claims, which could limit\nour stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees**.\n\n \n\nOur\nSecond Amended and Restated Certificate of Incorporation provides that, unless we consent in writing to the selection of an alternative\nforum, New York shall be the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Company, (b)\nany action asserting a claim for breach of a fiduciary duty owed by any director, officer, employee, or agent of the Company to the Company\nor the Company’s shareholders or (c) any action asserting a claim governed by the internal affairs doctrine, in each case subject\nto said court having personal jurisdiction over the indispensable parties named as defendants therein. This provision may limit a shareholder’s\nability to bring a claim in a judicial forum that it finds favorable for disputes with the company and its directors, officers, or other\nemployees and may discourage lawsuits with respect to such claims. This provision does not apply to actions arising under the Exchange\nAct or Securities Act.\n\n \n\n27\n\n[Table of Contents](#sh_020)\n\n \n\n**Our\nissuance of additional common stock or preferred stock may cause our common stock price to\ndecline, which may negatively impact your investment.**\n\n \n\nIssuances\nof a substantial number of additional shares of our common or preferred stock, or the perception that such issuances could occur, may\ncause prevailing market prices for our common stock to decline. In addition, our board of directors is authorized to issue additional\nseries of shares of preferred stock without any action on the part of our stockholders. Our board of directors also has the power, without\nstockholder approval, to set the terms of any such series of shares of preferred stock that may be issued, including voting rights, conversion\nrights, dividend rights, preferences over our common stock with respect to dividends or if we liquidate, dissolve or wind up our business\nand other terms. If we issue cumulative preferred stock in the future that has preference over our common stock with respect to the payment\nof dividends or upon our liquidation, dissolution or winding up, or if we issue preferred stock with voting rights that dilute the voting\npower of our common stock, the market price of our common stock could decrease.\n\n \n\n**Anti-takeover\nprovisions in the Company’s charter and bylaws may prevent or frustrate attempts by stockholders to change the board of directors\nor current management and could make a third-party acquisition of the Company difficult.**\n\n \n\nThe\nCompany’s certificate of incorporation and bylaws contain provisions that may discourage, delay or prevent a merger, acquisition\nor other change in control that stockholders may consider favorable, including transactions in which stockholders might otherwise receive\na premium for their shares. Furthermore, the Board of Directors has the ability to increase the size of the Board and fill newly created\nvacancies without stockholder approval. These provisions could limit the price that investors might be willing to pay in the future for\nshares of the Company’s common stock.\n\n \n\n**Our\ncommon stock may become subject to the SEC’s penny stock rules and accordingly, broker-dealers may experience difficulty in completing\ncustomer transactions and trading activity in our securities may be adversely affected.**\n\n \n\nThe\nSEC has adopted regulations, which generally define “penny stock” to be an equity security that has a market price of less\nthan $5.00 per share, subject to specific exemptions. The market price of our common stock is less than $5.00 per share and therefore\nwould be a “penny stock” according to SEC rules, unless we are listed on a national securities exchange. Under these rules,\nbroker-dealers who recommend such securities to persons other than institutional accredited investors must:\n\n \n\n \n●\nMake a special written\nsuitability determination for the purchaser;\n\n \n●\nReceive the purchaser’s\nprior written agreement to the transaction;\n\n \n●\nProvide the purchaser with\nrisk disclosure documents which identify certain risks associated with investing in “penny stocks” and which describe\nthe market for these “penny stocks” as well as a purchaser’s legal remedies; and\n\n \n●\nObtain\na signed and dated acknowledgment from the purchaser demonstrating that the purchaser has actually received the required risk disclosure\ndocument before a transaction in a “penny stock” can be completed.\n\n \n\nAlthough\nour common stock is not currently subject to these rules, it were to become subject to such rules, broker-dealers may find it difficult\nto effectuate customer transactions and trading activity in our securities may be adversely affected. As a result, the market price of\nour securities may be depressed, and you may find it more difficult to sell your securities.\n\n \n\n28\n\n[Table of Contents](#sh_020)"}