{"url_path":"/sec/vrdr/10-k/2026/item-1a","section_key":"item-1a","section_title":"Item 1A Risk Factors**","topic":"sec","document":{"doc_type":"10-K/A","doc_date":"2026-06-03","source_url":"https://www.sec.gov/Archives/edgar/data/1506929/0001493152-26-027105-index.html","accession_number":"0001493152-26-027105","cik":"0001506929","ticker":"VRDR","issuer_name":"VERDE RESOURCES, INC.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1506929/0001493152-26-027105-index.html","primary_entity_key":"0001506929","primary_entity_name":"VERDE RESOURCES, INC."},"word_count":10801,"has_tables":true,"body_markdown":"**ITEM\n1A. Risk Factors**\n\n \n\n**Investing\nin our securities is speculative and involves a high degree of risk***. You should carefully consider the risks and uncertainties\ndescribed below, together with all of the other information contained in this Annual Report, before deciding to invest in our securities.\nIf any of the following risks materialize, our business, financial condition, results of operation and prospects will likely be materially\nand adversely affected. In that event, the market price of our Common Stock could decline, and you could lose all or part of your investment.*\n\n \n\n**Risks\nRelated to Our Business and Industry**\n\n \n\n**Our\ncurrent business has a limited operating history, and we continue to refine our business model, which makes it difficult to evaluate\nand compare our past performance with future prospects. Therefore, it is difficult to assess our ability to generate future revenue and\nearnings.**\n\n \n\nOur\ncompany has engaged in several different and varied businesses since its formation in 2010, including businesses very different from\nour current business. We have only been engaged in our current business model since 2023. Therefore, our current business model is unproven,\nand there is limited historical data on which to evaluate our company. Furthermore, we continue to refine our strategies. Therefore,\nthere is very limited and evolving or differing historical operating data on which to evaluate the results of and prospects for our current\nbusiness model.\n\n \n\nMoreover,\ngiven that our current business model is at its early stages, and particularly since under the Ergon License, Ergon is not currently\nrequired to purchase any minimum amounts of Verde 24 from us, it is impossible to know with any certainty whether our current business\nmodel will generate revenues or ultimately lead to positive cash flows or profitability. This makes evaluating an investment in our company\ndifficult.\n\n \n\n**We\nhave a history of operating losses and may never achieve cash flow positive or profitable results of operations.**\n\n \n\nWe\nhave never been profitable and have incurred significant losses and cash flow deficits. For the fiscal years ending June 30, 2025 and\n2024, we reported net losses of approximately $4.78 million and $3.19 million respectively. At June 30, 2025, we had an accumulated deficit\nof approximately $18.26 million. If we cannot generate sufficient revenues, we would expect to continue to report losses until we can\nsubstantially increase our revenues, which we may be unable to do. There is therefore a risk that we will be unable to operate our business\nin a manner that generate positive cash flow or profit, and our failure to increase our revenues, generate positive cash flow and operate\nour business profitably would damage our reputation and stock price.\n\n \n\n**We\nare dependent on third-party licensees and the inability to perform by, or loss of, these licensees would have a material adverse effect\non our business, financial condition and results of operations.**\n\n \n\nWe\nare reliant on a still developing licensing model where our licensees are responsible for producing high-quality road material products\nbased on our proprietary technologies. As such, our success depends heavily on our ability to effectively manage and maintain these relationships,\nas well as the operational technologies provided to our licensees. At the moment, we only have one such relationship with a licensee\n(namely, Ergon); however, we intend to pursue the same licensing strategy globally with strategic, in-country relationships. Any failure\nto properly manage or oversee the use of our licensed technologies by these third-party licensees could negatively impact the quality\nand consistency of the products, and in turn, our reputation and ability to operate effectively.\n\n \n\nWe\nintend to invest significantly in information and operational technologies to support our licensees and maintain operational efficiency.\nSome of these investments will involve complex, multi-year technology deployments that require specialized customization and project\nmanagement to ensure they deliver the expected value. Our new technology infrastructure will be a mix of on-premises, hybrid, and cloud\ntechnologies, supported by both third-party outsourced service providers and internal resources. Any failure to properly manage the customization\nor deployment of these technologies within this complex operating environment could lead to additional costs, delays, or an erosion of\nthe benefits realized from these investments.\n\n \n\nGiven\nthe specific nature of the technology we license, we will be reliant on third-party specialists for implementation. Failure to secure\nappropriately skilled and experienced third-party partners may increase the risk of unsuccessful implementations, delays, and higher\ncosts. If we fail to ensure that our licensees have the necessary support and technology investments at the right time, we risk losing\nour competitive advantage, reducing the quality of our products, or failing to comply with evolving laws and regulations.\n\n \n\nIn\naddition, our revenue and income potential for the licensing model is unproven and our business is continually evolving. Our success\ndepends upon the sufficient acceptance and adoption by end users of products. Currently, our products have not been introduced into the\ncommercial market at scale. We cannot predict how quickly, if at all, the potential end users will accept our products, or, if accepted,\nthe extent of the purchase of our products.\n\n \n\nWe\ntherefore can give no assurance that we will be able to successfully implement our licensing model, our strategies or develop new products.\nAccordingly, the licensing business model could expose us to significant risks, beyond those associated with operating our existing business,\nincluding difficulties with our licensees and our incurrence of unanticipated liabilities and expenses, and may materially adversely\naffect our business, prospects, liquidity, financial condition and results of operations.\n\n \n\n**We\nface revenue concentration risk due to reliance on Ergon as a single key customer.**\n\n \n\nOn\nOctober 10, 2025, we entered into the Ergon License, whereby we granted Ergon an exclusive license to use, manufacture, produce, and\nsell products containing Verde V24 in the United States, Canada, and Mexico. Ergon is our first, and currently our only, licensee for\nVerde V24 and we expect that the majority of our revenue will be generated through the Ergon License for the foreseeable future. As a\nresult, our financial stability will be significantly dependent on Ergon and any adverse changes in the relationship or business activities\nwith Ergon could have a substantial negative impact on our revenue and overall financial performance.\n\n \n\nIn\naddition, under the Ergon License, Ergon is not currently required to purchase any minimum amounts of Verde V24 from us, and may never\nbe required to do so as minimum purchase amounts can only be established by the mutual agreement of us and Ergon starting in 2027. We\nare therefore faced with the risk that we are currently unable to predict with any certainty the actual financial impact of the Ergon\nLicense on our business and results of operations.\n\n \n\nMoreover,\nshould the Ergon License be terminated or we otherwise lose the business relationship with Ergon, it could result in a material decline\nin our revenue, profitability, and cash flow, leading to increased business risk and potential financial instability. We may also be\nunable to replace Ergon with a similar relationship in a timely manner or at all, which would have a material adverse effect on our viability\nas a company as well as our results of operations and stock price.\n\n \n\n20\n\n[Table of Contents](#toc_001)\n\n \n\n**We\nwill depend upon a select number of customers for a significant portion of our revenue for the foreseeable future. Any failure or delay\nin payments by these customers would have a material adverse effect on our revenues and financial condition.**\n\n \n\nUnder\nour licensing model, we currently have a single customer, Ergon, that is expected to account for the majority of our revenue. As we work\nto expand our licensing model globally, there will be a period of time in which our revenue is significantly dependent upon one or a\nsmall number of key customers. This customer concentration exposes us to a material adverse effect if any of these significant customers\nwere to significantly reduce purchases for any reason or favor competitors or new market participants, and we can provide no assurance\nthat any of these customers or any of our other customers will continue to utilize our products or our services at historic levels. Our\ncustomer concentration may also subject us to perceived or actual bargaining leverage that our key customers may have, given their importance\nto us. If our key customers seek to negotiate or renegotiate their agreements on terms less favorable to us and we accept such unfavorable\nterms, such unfavorable terms may have a material adverse effect on our business, results of operations and financial condition. Furthermore,\nindustry consolidation and company failures could decrease the number of potential significant customers for our products and services.\nThe decrease in the number of potential significant customers will increase our reliance on key customers and, due to the relative importance\nto us, may negatively impact our bargaining position and thus our profit margins. If we were to lose one of our key customers or have\na key customer cancel a key program or otherwise significantly reduce its volume of business with us or fail to pay us in full for the\ngoods or services purchased from us, our sales and profitability would be materially reduced and our business and financial condition\nwould be seriously harmed.\n\n \n\nWe\nhave recently entered into the Ergon License, from which we anticipate predominantly all of our revenue will be derived in the immediate\nfuture. The loss of the Ergon License, whether through our fault, such as by the failure of Verde V24 and the products in which it is\nincorporated to perform as desired, or for reasons outside of our control, such as material adverse changes to Ergon’s financial\ncondition, could cause a material adverse impact on our business, operating results and financial condition. Additionally, any non-payment\nor delay in payment of the receivables under the Ergon License or similar agreements we may enter into in the future or any inability\nto collect receivables under the Ergon License or similar agreements, or enforce other contractual obligations, would have a significant\nmaterial adverse effect on our revenues and financial condition.\n\n \n\n**Our\nfuture operating results are difficult to predict and may vary significantly from quarter to quarter, which may adversely affect the\nprice of our Common Stock.**\n\n \n\nOur\nlimited history in our current business model, together with our history of losses, make prediction of future operating results difficult.\nYou should not rely on any growth we may experience in the future as any indication of future growth rates or operating results. Our\nvaluation and the price of our Common Stock will likely fall in the event our operating results (notably our revenue growth, with the\ngoal of achieving cash flow positive and profitable operations) do not meet the expectations of analysts and investors. Comparisons of\nour quarterly operating results may be an unreliable indication of our future performance because they are likely to vary significantly\nbased on many factors, including:\n\n \n\n \n●\nour\nor our licensees’ inability to attract demand for and obtain acceptance of our products;\n\n \n \n \n\n \n●\nthe\nsuccess of alternative road construction materials, and the possible future introduction of new road construction materials;\n\n \n \n \n\n \n●\nour\nlicensees’ ability to design, implement and, as necessary, modifying product pricing programs;\n\n \n \n \n\n \n●\nthe\nexpansion and rate of success of our licensees’ marketing and advertising efforts;\n\n \n \n \n\n \n●\nfailure\nof parties like C-Twelve to deliver Verde V24 or provide services to us or our licensees in a cost effective and timely manner;\n\n \n \n \n\n \n●\nour\nfailure to develop, find or market new products;\n\n \n \n \n\n \n●\nthe\nsuccessful completion of current and future testing of our products;\n\n \n \n \n\n \n●\nactions\nrelating to ongoing regulatory compliance;\n\n \n \n \n\n \n●\nthe\nsize and timing of orders from end users of our products; and\n\n \n \n \n\n \n●\ngeneral\neconomic conditions as well as those specific to our licensees, end users and markets.\n\n \n\nTherefore,\nyou should expect that our results of operations will be difficult to predict, which will make an investment in our company uncertain.\n\n \n\n21\n\n[Table of Contents](#toc_001)\n\n \n\n**We\nmay not enter into an exclusive license agreement with Nature Plus Inc for the TerraZyme technology.**\n\n \n\nOn\nAugust 14, 2024, we entered into a Memorandum of Understanding (the “NPI MOU”) with Nature Plus Inc. (“NPI”)\nto formalize the collaboration on the NCAT test track project discussed in the section entitled “*Business*” above and\nexplore subsequent business opportunities arising from the successful completion of the NCAT testing. The NCAT testing involved the application\nof TerraZyme technology for the stability of subgrade and base layers, with the overarching goal of advancing road construction methodologies.\nWe agreed to jointly develop mixed designs and materials incorporating biochar with NPI, aiming to enhance performance and promote carbon\nsequestration. Under the terms of the NPI MOU, we intend to continue collaboration on future initiatives with NPI upon the successful\ncompletion of the NCAT testing, including soil stabilization and material development, carbon removal credits, certification and compliance,\nand possible exclusive rights to distribute TerraZyme. The NPI MOU is effective until December 31, 2026, or until replaced by an earlier\ndefinitive agreement. We are currently in negotiations with NPI for an exclusive worldwide license for TerraZyme.\n\n \n\nIf\nsuch a definitive license agreement for TerraZyme is not entered into, we would continue to utilize TerraZyme under the terms of the\nNPI MOU until its termination. Our other proprietary technologies, including Verde V24, operate independently and are not reliant upon\nTerraZyme for their production or performance. The TerraZyme enzyme is considered a complimentary additive that may enhance material\nperformance and potentially generate additional revenue opportunities. We view TerraZyme as an enhancement that could further diversify\nand strengthen our product portfolio within the sustainable road construction sector in North America.\n\n \n\nIt\nis important that we continue negotiations with NPI to either extend the MOU or enter into a definitive agreement or other arrangement\nthat would allow the continued use of the TerraZyme enzyme. If such negotiations are unsuccessful, we may need to identify or develop\na suitable substitute for TerraZyme. This process could require substantial time and resources and could delay our planned operational\nexpansion in North America, which could have a material adverse effect on our business, operating results, and financial condition. Additionally,\nthe inability to continue using TerraZyme could materially and adversely affect our potential product offerings and our overall operations,\nbusiness performance, and financial condition as a result.\n\n \n\n**Our\nbusiness depends on activity within the construction industry, which can be cyclical.**\n\n \n\nEconomic\nand political uncertainty can impede growth in the markets in which we operate. Demand for our products could decline if companies and\nconsumers are unable to obtain financing for construction projects or if an economic slowdown causes delays or cancellations of capital\nprojects. State and federal budget issues sometimes undermine the funding available for infrastructure spending. The lack of available\ncredit may limit the ability of states to issue bonds to finance construction projects, which could affect our business in general.\n\n \n\nWhile\nour business operations cover a wide geographic area, our earnings depend on the strength of the local economies in which we operate\ndue to the high cost of transporting our low-carbon asphalt products relative to their selling price. If economic conditions and construction\nspending decline significantly in one or more areas, our profitability will decrease.\n\n \n\nDemand\nfor our products, particularly in the infrastructure construction market, is also impacted by federal, state, and local budget and deficit\nissues, as well as demand from the private sector. Remote working trends or other factors that reduce vehicle miles driven can negatively\nimpact revenue streams that fund roadway projects. Further, delays or cancellations of projects in the construction markets may occur\nif companies and consumers are unable to obtain financing for construction projects or if consumer confidence continues to be eroded\nby economic uncertainty.\n\n \n\n22\n\n[Table of Contents](#toc_001)\n\n \n\n**We\noperate in a competitive industry where many companies are larger and better capitalized than we are.**\n\n \n\nOur\nindustry is a highly fractured industry comprised of a wide range of companies, including large publicly traded companies and smaller\nprivately held companies. Many of these companies operate on a global basis, have more experience in the industry than we do, and are\nlarger and better capitalized than we are. While we are not presently aware of any direct competitors, several of the companies within\nour industry have begun to prioritize research and development of sustainable alternatives to their traditional products, and it is possible\nthat they may develop alternatives competitive with the solutions we offer. Further, we cannot eliminate the risk that, in the future,\none or more third parties may attempt to, and may potentially succeed in, reverse-engineering or otherwise replicating our proprietary\ntechnology.\n\n \n\n**Adverse\npublic policy, economic, social and political situations in any country in which we operate could lead to a number of risks including\nhealth and safety risks for our people, a fall in demand for our products, business interruption and/or restrictions on repatriation\nof earnings.**\n\n \n\nWe\nprimarily operate across North America, with additional operations in Southeast Asia. The economies of these regions in which we operate\nare broadly stable. However, they are at varying stages of development, which presents multiple risks and uncertainties that could adversely\naffect our operations and financial results. These risks and uncertainties include:\n\n \n\n \n●\n\nChanges\nin political, social or economic conditions;\n\n \n \n \n\n \n●\n\nNew\nor strengthened trade protection measures, currency controls or import or export licensing requirements;\n\n \n \n \n\n \n●\nPolitical\nunrest and currency shocks;\n\n \n \n \n\n \n●\nSocial\nactivism and civil disturbance, terrorist events or outbreak of armed conflict, among other potential causes;\n\n \n \n \n\n \n●\nLabor\nand procurement practices which contravene ethical considerations and regulatory requirements;\n\n \n \n \n\n \n●\nUnexpected\nchanges in regulatory and tax requirements; and\n\n \n \n \n\n \n●\nLockdowns\nor other restrictions due to public health emergencies, such as pandemics.\n\n \n\n**We\nand our licensees may be unable to respond in a timely and cost-effective manner to changes in consumer preferences.**\n\n \n\nThe\nroad and construction materials industry is subject to changing customer preferences. Even if we and licensees like Ergon are able to\nestablish some measure of market penetration for our products, of which no assurances can be given, a shift in customer preferences away\nfrom what we offer would result in significantly reduced revenue. Our future success depends in part on our and our licensees’\nability to anticipate and respond to changes in customer preferences. Failure to anticipate and respond to changing customer preferences\nin the products we market could lead to, among other things, lower sales of products, significant markdowns or write-offs of inventory,\nincreased product returns and lower margins. If we or our licensees are unable to anticipate and respond to changes in customer preferences,\nour results of operations in future periods will be materially adversely impacted.\n\n \n\n**We\nare dependent on certain key personnel and loss of these key personnel could have a material adverse effect on our business, financial\ncondition and results of operations.**\n\n \n\nMr.\nJack Wong, our current chief executive officer, has extensive contacts and experience in the green climate-tech industry in the United\nStates and other countries. We are heavily dependent on his abilities and services to develop and market our business. He is responsible\nfor overseeing the day-to-day operations of our operating company. However, we may not be able to retain his services for any specified\nperiod of time, and the loss of his leadership could have a material adverse effect on our business operations, financial condition,\nand results of operations. Additionally, under the terms of the Ergon License, if Mr. Wong or Mr. Eric Bava, our chief operating officer,\nwere to be removed from their respective positions with us for any reason other than for termination cause or voluntary resignation,\nErgon would have the right to terminate the Ergon License with little to no potential penalties. As we will be substantially reliant\non the Ergon License to generate the majority of our revenue for the foreseeable future, we are heavily dependent upon Mr. Wong and Mr.\nBava’s continued service.\n\n \n\nIn\naddition to Mr. Wong, we must attract, recruit, and retain a qualified workforce of technically skilled employees in the United States\nto run our operations. Our ability to effectively implement our business strategies and expand operations depends on the successful recruitment\nand retention of highly skilled and experienced management and key personnel. If we are unable to maintain a strong management team,\nour business could face significant challenges, and you could lose any investment you make in our shares.\n\n \n\n23\n\n[Table of Contents](#toc_001)\n\n \n\n**We\nmay not be able to protect our proprietary technology and may become subject to intellectual property claims or litigation.**\n\n \n\nOur\nsuccess depends, in part, on our ability to obtain and maintain intellectual property protection for our products and technologies and\nthe confidentiality of proprietary trade secrets. Our success further depends on our ability to obtain and maintain trademark protection\nfor our name and mark; to preserve our trade secrets and know-how; and to operate without infringing the intellectual property rights\nof others.\n\n \n\nWe\nface the risk that we may be unable to innovate and file new patent applications, or that if filed patent applications will result in\ngranted patents. We cannot assure you that any of our patents pending will result in issued patents, that any current or future patents\nwill not be challenged, invalidated or circumvented, that the scope of any of our patents will exclude competitors or that the patent\nrights granted to us will provide us any competitive advantage or protect our products. The intellectual property position of companies\nlike ours is generally uncertain and involves complex legal and factual considerations and, therefore, validity and enforceability of\nintellectual property cannot be predicted with certainty. Patents may be challenged, deemed unenforceable, invalidated or circumvented.\nWe will be able to protect our proprietary rights from unauthorized use by third parties only to the extent that our proprietary technologies\nare covered by valid and enforceable patents or are effectively maintained as trade secrets.\n\n \n\nIn\naddition, we face the risk our technology will be subject to claims, or be found, in the future to infringe upon the rights of others\nor be infringed upon by others. Moreover, patent applications are in some cases maintained in secrecy until patents are issued. The publication\nof discoveries in the scientific or patent literature frequently occurs substantially later than the date on which the underlying discoveries\nwere made and patent applications were filed. Because patents can take many years to issue, there may be currently pending applications\nof which we are unaware that may later result in issued patents that our products or product candidates infringe. For example, pending\napplications may exist that provide support or can be amended to provide support for a claim that results in an issued patent that our\nproduct infringes. In such a case, others may assert infringement claims against us, and should we be found to infringe upon their patents,\nor otherwise impermissibly utilize their intellectual property, we might be forced to pay damages, potentially including treble damages,\nif we are found to have willfully infringed on such parties’ patent rights. In addition to any damages we might have to pay, we\nmay be required to obtain licenses from the holders of this intellectual property. We may fail to obtain any of these licenses or intellectual\nproperty rights on commercially reasonable terms. Even if we are able to obtain a license, it may be non-exclusive, thereby giving our\ncompetitors access to the same technologies licensed to us. In that event, we may be required to expend significant time and resources\nto develop or license replacement technology. If we are unable to do so, we may be unable to develop or commercialize the affected products,\nwhich could materially harm our business and the third parties owning such intellectual property rights could seek either an injunction\nprohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties and/or other forms of compensation.\nConversely, we may not always be able to successfully pursue our claims against others that infringe upon our technology. Thus, the proprietary\nnature of our technology or technology licensed by us may not provide adequate protection against competitors.\n\n \n\nIn\naddition to patents, we rely on trademarks to protect the recognition of our company and product in the marketplace. We also rely on\ntrade secrets, know-how, and proprietary knowledge that we seek to protect, in part, through confidentiality agreements with employees,\nconsultants and others. We cannot assure you that our proprietary information will not be shared, our confidentiality agreements will\nnot be breached, that we will have adequate remedies for any breach, or that our trade secrets will not otherwise become known to or\nindependently developed by competitors.\n\n \n\nAny\nadverse event or events related to our intellectual property could have a material adverse effect on our company and results of operations.\n\n \n\n**We\nface the risk of product liability claims that could be expensive, divert management’s attention and harm our reputation and business.**\n\n \n\nOur\nbusiness exposes us to the risk of product liability claims that are inherent in the manufacturing and marketing of road and construction\nmaterials. Any side effects, manufacturing defects, misuse or abuse associated with use of our products could result in injury or death.\nThe construction materials industry has historically been subject to litigation over product liability claims, and we face the risk that\nwe may become party to product liability suits. We may be subject to product liability claims if the use of our products may cause, or\nmerely appeared to have caused, injury or death. In addition, an injury that is caused by the activities of our licensees and suppliers,\nsuch as those who provide us with components and raw materials, may be the basis for a claim against us. Product liability claims may\nbe brought against us by customers or any party selling or otherwise coming into contact with our products, among others. If we cannot\nsuccessfully defend ourselves against product liability claims, we will incur substantial liabilities and reputational harm.\n\n \n\n**Our\nproducts may become subject to recall.**\n\n \n\nAny\nrecall or market withdrawal of our products may delay the supply of those products to our customers and may impact our reputation. We\ncan provide no assurance that we or our licensees will be successful in initiating appropriate market recall or market withdrawal efforts\nthat may be required in the future or that these efforts will have the intended effect of preventing product malfunctions and the accompanying\nproduct liability that may result. Such recalls and withdrawals may also be used by our competitors to harm our reputation, which could\nhave a material adverse effect on our business, financial condition and results of operations.\n\n \n\n**Legal\nrequirements and governmental policies concerning the environment, health and safety and other areas of the law, as well as litigation\nrelating to these matters, could affect our businesses and expose us to the risk of material environmental liabilities.**\n\n \n\nMany\nfederal, state and local laws and regulations relating to, among other matters, air emissions (including carbon dioxide and other greenhouse\ngases) and other environmental, health and safety matters will impact our business. Some of our or our licensees’ operations require\npermits, which may impose additional operating standards and are subject to modification, renewal and revocation. Our and our licensees’\noperations may from time to time involve the use of substances that are classified as toxic or hazardous within the meaning of these\nlaws and regulations. Despite efforts to remain in compliance at all times with all applicable laws and regulations, the risk of liabilities,\nparticularly environmental liabilities, is inherent in the operation of our business. These potential liabilities could result in material\ncosts, including fines or personal injury or damages claims, which could have an adverse impact on our results of operations.\n\n \n\nMoreover,\nfuture events, including changes in existing laws or regulations or enforcement policies, or further investigation or evaluation of the\npotential health hazards of our products or business activities may result in additional or unanticipated compliance and other costs.\nWe or our licensees could be required to invest in preventive or remedial action, like pollution control, which could be substantial\nor which could result in restrictions on our operations or delays in obtaining required permits or other approvals.\n\n \n\nOur\nand our licensees’ operations are subject to manufacturing, operating and handling risks associated with our products and the products\nour licensees manufacture using our products, including the related storage and transportation of hazardous substances and wastes. We\nmay be exposed to hazards, including storage tank leaks, explosions, and discharges or releases of hazardous substances. These risks\ncan subject us to potentially significant liabilities relating to personal injury, death or property damage, and may result in significant\ncivil or criminal penalties, which could damage our business and harm our results of operations.\n\n \n\n24\n\n[Table of Contents](#toc_001)\n\n \n\n**Future\nintegrations of acquisitions of or combinations with other businesses may not be as successful as previous acquisitions and combinations.**\n\n \n\nWe\nhave a successful history of business combinations and integration of these businesses into our heritage operations. However, in connection\nwith the integration of any other business that we acquire, there is a risk that we will not be able to achieve such integration in a\nsuccessful manner or on the time schedule we have projected or in a way that will achieve the level of synergies, cost savings or operating\nefficiencies we forecast from the acquisition.\n\n \n\nAny\nsignificant business acquisition or combination we might choose to undertake may require that we devote significant management attention\nand resources to preparing for and then integrating our business practices and operations. Based on our history, we believe we would\nbe successful in this integration process. Nevertheless, we may fail to realize some of the anticipated benefits of any potential acquisition\nor other business combination that we pursue in the future if the integration process takes longer or is more costly than expected. Potential\ndifficulties we may encounter in the integration process include the following:\n\n \n\n \n●\ninability\nto successfully combine operations in a manner that permits us to achieve the synergies anticipated to result from the proposed acquisition\nor business combination, which would result in the anticipated benefits of the acquisition or business combination not being realized\npartly or wholly in the time frame currently anticipated or at all;\n\n \n \n \n\n \n●\ncomplexities\nassociated with managing the combined operations;\n\n \n \n \n\n \n●\nintegration\nof personnel;\n\n \n \n \n\n \n●\ncreation\nof uniform standards, internal controls, procedures, policies and information systems;\n\n \n \n \n\n \n●\ndiscovery\nof previously unknown liabilities and unforeseen increased expenses, delays or regulatory issues associated with integrating the\nremaining operations; and\n\n \n \n \n\n \n●\nperformance\nshortfalls at business units as a result of the diversion of management attention caused by completing the remaining integration\nof the operations.\n\n \n\n**The\ninability to obtain raw materials from suppliers in a timely manner would adversely affect our and our licensees’ ability to offer\nour products.**\n\n \n\nOur\nand our licensees’ ability to offer our products depends on the ability to obtain an adequate supply of biochar from our suppliers,\nwho will also be the indirect suppliers of our licensees. Transportation delays may adversely impact our supply chain. Additionally,\nfailure by our suppliers to provide us with products that meet our required quality standards on commercially reasonable terms, potential\ncybersecurity attacks on our suppliers, and failure to comply with legal requirements for business practices, could have a material adverse\neffect on our business, financial condition, or results of operations. Furthermore, we rely heavily or, in certain cases such as in the\nUnited States, exclusively, on one supplier for biochar supply. If this supplier decides to discontinue its partnership with us and we\nare unable to replace such supplier with another qualified supplier, our business, operating results and financial condition could be\nmaterially and adversely impacted.\n\n \n\n**Asphalt\nis sensitive to supply and price volatility.**\n\n \n\nAsphalt\ncompetition is often based primarily on price due to potentially volatile input costs and lower barriers to entry, which is highly sensitive\nto changes in supply and demand. Prices fluctuate significantly in response to relatively minor changes in supply and demand, general\neconomic conditions and other market conditions, which we cannot control. When asphalt producers increase production capacity or more\nasphalt is imported into the market, an oversupply of asphalt in the market may occur if supply exceeds demand. In that case, asphalt\nprices generally decline, making traditional asphalt products cheaper and more competitive with our low-carbon solutions, which could\nhave a material adverse effect on our business, results of operation, and financial condition. Further, we cannot be assured that prices\nfor our low-carbon asphalt products sold will not decline in the future or that such decline will not have a material adverse effect\non our asphalt product line.\n\n \n\n**We\nare subject to the many risks of doing business internationally, including but not limited to the difficulty of enforcing liabilities\nin foreign jurisdictions.**\n\n \n\nWe\nare a Nevada corporation and, as such, are subject to the jurisdiction of the State of Nevada and the courts of the United States for\npurposes of any lawsuit, action or proceeding by investors. An investor would have the ability to effect service of process in any action\nagainst the Company within the United States. In addition, we are registered as a foreign corporation doing business in Malaysia, and\nas such, are subject to the local laws of Malaysia governing an investors’ ability to bring actions in foreign courts and enforce\nliabilities against a U.S. issuer, or any person, based on U.S. federal securities laws.\n\n \n\n**We\nwill need to raise capital to satisfy our capital needs and grow our company. Future capital needs will require us to sell additional\nequity or debt securities that will dilute or subordinate the rights of our common stockholders, and our inability to raise capital when\nneeded could cause our business to fail.**\n\n \n\nTo\ndevelop our business as currently planned, we will need to raise additional capital. Moreover, our costs and expenses may be even greater\nthan currently anticipated, and there may be investments or expenses that are presently unforeseen. In any case, we may be unable to\nraise sufficient capital to fund these costs and achieve significant revenue generation. Moreover, our future capital requirements are\nalso difficult to predict with precision, and our actual capital requirements may differ substantially from those we currently anticipate.\n\n \n\n25\n\n[Table of Contents](#toc_001)\n\n \n\nAs\na result, we will need to seek equity or debt financing to finance a large portion of our future capital requirements. Such financing\nmight not be available to us when needed or on terms that are acceptable, or at all. We will likely issue additional equity securities\nand may issue debt securities or otherwise incur debt in the future to fund our business plan. If we issue equity or convertible debt\nsecurities to raise additional funds, our existing stockholders will experience dilution, and the new equity (including preferred equity)\nor debt securities or other indebtedness may have rights, preferences, and privileges senior to those of our existing stockholders. If\nwe incur additional debt, it may increase our leverage relative to our earnings or to our equity capitalization, requiring us to pay\nadditional interest expenses.\n\n \n\nOur\nability to obtain the necessary capital in the form of equity or debt to carry out our business plan is subject to several risks, including\ngeneral economic and market conditions, as well as investor sentiment regarding our business. These factors may make the timing, amount,\nterms and conditions of any such financing unattractive or unavailable to us. The prevailing macroeconomic environment may increase our\ncost of financing or make it more difficult to raise additional capital on favorable terms, if at all. If we are unable to raise sufficient\ncapital, we may have to significantly reduce our spending and/or delay or cancel our planned activities.\n\n \n\nWe\nmay also seek to raise additional funds through collaborations and licensing arrangements. These arrangements, even if we are able to\nsecure them, may require us to relinquish some rights to our technologies, or to grant licenses on terms that are not favorable to us.\n\n \n\nAs\na result of the foregoing, we might not be able to obtain any financing, and we might not have sufficient capital to conduct our business\nas projected, both of which could mean that we would be forced to curtail or discontinue our operations. If we cannot raise additional\ncapital when we need or want to, our stock price, operations and prospects could be negatively affected, and our business could fail.\n\n \n\n**Failure\nto comply with the U.S. Foreign Corrupt Practices Act could subject us to penalties and other adverse consequences.**\n\n \n\nWe\nare subject to the U.S. Foreign Corrupt Practices Act, which generally prohibits U.S. companies from engaging in bribery or other prohibited\npayments to foreign officials for the purpose of obtaining or retaining business. In addition, we are required to maintain records that\naccurately and fairly represent our transactions and have an adequate system of internal accounting controls. Foreign companies, including\nsome that may compete with us, are not subject to these prohibitions, and therefore may have a competitive advantage over us. If our\nemployees or other agents are found to have engaged in such practices, we could suffer severe penalties and other consequences that may\nhave a material adverse effect on our business, financial condition and results of operations.\n\n \n\n**Changes\nin U.S. climate policy may adversely affect the demand for our solutions and our business prospects.**\n\n \n\nThe\nongoing impacts of climate change have intensified focus on environmental issues globally. In response, the prior U.S. presidential administration\nimplemented several climate-related initiatives, including: (i) having the U.S. rejoin the Paris Agreement in 2021, (ii) announcing a\ntarget to reduce U.S. greenhouse gas emissions by 50% to 52% by 2030, and passing the Inflation Reduction Act of 2022, which included\nnearly $370 billion in climate-related provisions that provide funding, programs, and incentives to accelerate the U.S.’s transition\nto a clean energy economy. In contrast, the current administration has signaled a shift in federal policy, with a reduced emphasis on\nclimate change initiatives, environmental regulations, and support for clean energy adoption.\n\n \n\nOur\nproducts are designed to serve as carbon-negative alternatives to traditionally carbon intensive products. A diminished federal focus\non climate-related policies and incentives could reduce interest among our target licensees end-users in adopting our solutions, particularly\nif our products are perceived as more expensive or politically unfavorable compared to conventional alternatives. This shift in market\ndynamics could materially and adversely effect our business, financial condition and results of operations.\n\n \n\n**If\nwe fail to continue developing and improving upon our sustainable products, we may fall behind our competitors and our financial performance\nmay be adversely impacted.**\n\n \n\nWe\noperate in a competitive industry where the participants continuously develop innovative new products and solutions that enable their\ncustomers to work more efficiently, reduce their environmental footprint and realize greater cost savings. This is especially so in relation\nto changing customer preferences and demands for high-performance sustainability solutions with enhanced emissions and/or circularity\nprofiles, including those with greater recycled content and/or innovations to existing products, that help them to deliver on their own\nclimate or emissions-related commitments. Failure to continue leveraging innovation and other sustainability initiatives may allow other\nindustry participants to develop their own technologies as alternatives to our solutions, potentially resulting in early obsolescence\nof our solutions or our licensees, including Ergon, choosing to purchase such alternatives instead of our solutions, which would have\na material adverse effect on our business, financial condition and results of operations.\n\n \n\n**We\ncontract with third parties for the manufacture of our low-carbon asphalt products and expect to continue to do so for additional years.\nThis reliance on third parties increases the risk that we will not have sufficient quality and quantities of products or such quantities\nat an acceptable cost, which could delay, prevent or impair our business development.**\n\n \n\nWe\nrely, and expect to continue to rely, on third-party manufacturers for the production of low-carbon asphalt products. All of our asphalt\nproducts are manufactured by third parties, therefore our ability to increase production going forward will depend upon the experience,\ncertification levels, and large-scale production capabilities of those third parties’ manufacturers. This reliance on third parties\nincreases the risk that we will not have sufficient quality and quantities of products or such quantities at an acceptable cost, which\ncould delay, prevent or impair our business development.\n\n \n\n**A\nnumber of our projects/contracts are complex, spanning multiple parties, years and/or products, and our future financial results may\nbe adversely affected if we incorrectly forecast project budgets, deliver projects that do not meet contracted standards, or fail to\ndeliver on time.**\n\n \n\nAcross\nour business lines, we will enter into contracts for complex, multi-year projects that comprise multiple product lines and as such we\nwill be exposed to inherent risks related to forecasting and budgeting, project management and delivery, and quality control. If we fail\nto manage these risks effectively, we could suffer severe consequences that may have a material adverse effect on our business, financial\ncondition and results of operations. In addition, any failure to manage these risks may also impact our licensees’ ability to bid\nfor and/or win future projects or contracts, which could reduce our profitability and damage our reputation among our licensees or potential\nlicensees.\n\n \n\n26\n\n[Table of Contents](#toc_001)\n\n \n\n**Changes\nin interest rates could negatively impact our results of operations, stockholders’ equity (deficit) and fair value of net assets.**\n\n \n\nInterest\nrates can fluctuate for a number of reasons, including changes in the fiscal and monetary policies of the federal government and its\nagencies, such as the Federal Reserve. Federal Reserve policies directly and indirectly influence the yield on our interest-earning assets\nand the cost of our interest-bearing liabilities. The availability of derivative financial instruments (such as options and interest\nrate and foreign currency swaps) from acceptable counterparties of the types and in the quantities needed could also affect our ability\nto effectively manage the risks related to our investment funding. Our strategies and efforts to manage our exposures to these risks\nmay not be effective in the future, which could negatively impact our results of operations and the price of our Common Stock.\n\n \n\n**We\nmay be exposed to risks relating to management’s conclusion that our disclosure controls and procedures and internal controls over\nfinancial reporting are ineffective.**\n\n \n\nWe\ndo not have an independent audit committee and our Board of Directors may be unable to fulfill the functions of such a committee, which\nmay compromise the management of our business. Our Board of Directors currently functions as our audit committee and is comprised of\nfour directors, only one of whom is considered to be “independent” in accordance with the requirements of Rule 10A-3 under\nthe Securities Exchange Act of 1934 or the Nasdaq Rules. An independent audit committee plays a crucial role in the corporate governance\nprocess, assessment of the Company’s processes relating to its risks and control environment, oversight of financial reporting,\nand evaluation of internal and independent audit processes. The lack of an independent audit committee may prevent the Board of Directors\nfrom being independent in its judgments and decisions and its ability to pursue the committee’s responsibilities, which could compromise\nthe management of our business.\n\n \n\n**We\nhave identified material weaknesses in our internal control over financial reporting. If we are unable to remediate these weaknesses\nor otherwise fail to maintain proper and effective internal controls, our ability to produce timely and accurate financial statements\ncould be impaired, which could adversely affect our operating results, our ability to operate our business, our stock price and access\nto the capital markets.**\n\n \n\nAs\na public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such\ninternal controls. In addition, we are required to furnish a report by management on the effectiveness of our internal control over financial\nreporting, pursuant to the rules and regulations of the SEC regarding compliance with Section 404 of the Sarbanes-Oxley Act. The process\nof designing, implementing and testing the internal control over financial reporting required to comply with this obligation is time\nconsuming, costly and complicated. We have identified material weaknesses in our internal control over financial reporting relating to\nsegregation of duties, formalized processes and documentation, regulatory reporting, the lack of an internal audit function, and the\nlack of an established audit committee. These material weaknesses have led to a conclusion that our internal control over financial reporting\nand disclosure controls and procedures were not effective as of June 30, 2025. Our inability to remediate these material weaknesses,\nour discovery of additional control deficiencies or material weaknesses in internal control, and our inability to achieve and maintain\neffective disclosure controls and procedures and internal control over financial reporting could adversely affect our results of operations,\nour stock price and investor confidence in our Company.\n\n \n\nOur\nmanagement intends to take action to begin remediating these material weaknesses we have identified in our internal control over financial\nreporting; however, certain remedial actions have not started or have only recently been undertaken. We cannot be certain as to when\nremediation may be fully completed. In addition, we could in the future identify additional internal control deficiencies that could\nrise to the level of a material weakness or uncover other errors in financial reporting. During the course of our evaluation, we may\nidentify areas requiring improvement and may be required to design additional enhanced processes and controls to address issues identified\nthrough this review. In addition, there can be no assurance that such remediation efforts will be successful, that our internal control\nover financial reporting will be effective as a result of these efforts or that any such future deficiencies identified may not be material\nweaknesses that would be required to be reported in future periods.\n\n \n\nIf\nwe fail to remediate these material weaknesses and maintain effective disclosure controls and procedures or internal control over financial\nreporting, we may not be able to rely on the integrity of our financial results, which could result in inaccurate or late reporting of\nour financial results, as well as delays or the inability to meet our future reporting obligations or to comply with SEC rules and regulations.\nAs a result, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our Common\nStock could decline. We could also become subject to investigations by the stock exchange on which our Common Stock is listed, the SEC\nor other regulatory authorities, which could require additional financial and management resources. Failure to remedy any material weakness\nin our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies,\ncould also restrict our future access to the capital markets.\n\n \n\nTo\nremediate the identified material weaknesses, management has begun implementing a number of measures, including enhancing segregation\nof duties through the addition of accounting and finance personnel, formalizing internal control policies and procedures, improving documentation\nand review processes related to regulatory reporting, and taking steps to establish an independent audit committee and internal audit\nfunction. We may also engage third-party consultants to assist in the design and implementation of effective internal controls. While\nwe believe these actions will improve our internal control environment, these remediation efforts will require time and resources, and\nthere can be no assurance that they will be fully effective or completed in a timely manner.\n\n \n\nFailure\nto have effective internal control over financial reporting and disclosure controls and procedures can impair our ability to produce\naccurate financial statements on a timely basis and could lead to a restatement of our financial statements. If, as a result of the ineffectiveness\nof our internal control over financial reporting and disclosure controls and procedures, we cannot provide reliable financial statements,\nour business decision processes may be adversely affected, our business and results of operations could be harmed, investors could lose\nconfidence in our reported financial information and our ability to obtain additional financing, or additional financing on favorable\nterms, could be adversely affected.\n\n \n\n27\n\n[Table of Contents](#toc_001)\n\n \n\n**If\nwe fail to maintain effective internal controls over financial reporting, the price of our Common Stock may be adversely affected.**\n\n \n\nWe\nare required to establish and maintain appropriate internal controls over financial reporting. Failure to establish those controls, or\nany failure of those controls once established, could adversely impact our public disclosures regarding our business, financial condition\nor results of operations. Any failure of these controls could also prevent us from maintaining accurate accounting records and discovering\naccounting errors and financial fraud.\n\n \n\n**We\ndo not carry business interruption insurance so we could incur unrecoverable losses if our business is interrupted.**\n\n \n\nWe\nare subject to risk inherent to our business, including equipment failure, theft, natural disasters, industrial accidents, labor disturbances,\nbusiness interruptions, property damage, product liability, personal injury and death. We do not carry any business interruption insurance\nor third-party liability insurance or other insurance to cover risks associated with our business. As a result, if we suffer losses,\ndamages or liabilities, including those caused by natural disasters or other events beyond our control and we are unable to make a claim\nagainst a third party, we will be required to bear all such losses from our own funds, which could have a material adverse effect on\nour business, financial condition and results of operations.\n\n \n\n**If\nwe are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.**\n\n \n\nWe\nrely on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain our competitive position.\nHowever, trade secrets are difficult to protect. We limit disclosure of such trade secrets where possible but we also seek to protect\nthese trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who do have access to them,\nsuch as our employees, contract manufacturers, consultants, advisors and other third parties. Despite these efforts, any of these parties\nmay breach the agreements and may unintentionally or willfully disclose our proprietary information, including our trade secrets, and\nwe may not be able to obtain adequate remedies for such breaches. Enforcing a claim that a party illegally disclosed or misappropriated\na trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside\nthe United States are less willing or unwilling to protect trade secrets. Moreover, if any of our trade secrets were to be lawfully obtained\nor independently developed by a competitor, we would have no right to prevent them, or those to whom they communicate it, from using\nthat technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by\na competitor, our competitive position would be harmed.\n\n \n\n**Delays\nor interruptions in shipping products of our businesses could affect our operations.**\n\n \n\nWe\nrely on third-parties to manage the distribution and transportation logistics of our products. Transportation logistics play an important\nrole in allowing us to supply products to our customers. Any significant delays, disruptions or the non-availability of our transportation\nsupport system could negatively affect our operations. Transportation operations are subject to capacity constraints, high fuel costs\nand various hazards, including extreme weather conditions and slowdowns due to labor strikes and other work stoppages. If there are material\nchanges in the availability or cost of transportation or distribution services, we may not be able to arrange alternative and timely\nmeans to transport our products at a reasonable cost, which could lead to interruptions or slowdowns in our businesses or increases in\nour costs.\n\n \n\n28\n\n[Table of Contents](#toc_001)\n\n \n\n**Risks\nRelated to Our Common Stock**\n\n \n\n**Our\nCommon Stock qualifies as a “penny stock.” The rules imposed on the sale of the shares may affect your ability to resell\nany shares you may purchase, if at all.**\n\n \n\nOur\nshares are defined as a “penny stock” under the Securities and Exchange Act of 1934, and rules of the Commission. The Exchange\nAct and such penny stock rules generally impose additional sales practice and disclosure requirements on broker-dealers who sell our\nsecurities to persons other than certain accredited investors who are, generally, institutions with assets in excess of $5,000,000 or\nindividuals with net worth in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 jointly with spouse, or in transactions\nnot recommended by the broker-dealer. For transactions covered by the penny stock rules, a broker-dealer must make a suitability determination\nfor each purchaser and receive the purchaser’s written agreement prior to the sale. In addition, the broker-dealer must make certain\nmandated disclosures in penny stock transactions, including the actual sale or purchase price and actual bid and offer quotations, the\ncompensation to be received by the broker-dealer and certain associated persons, and deliver certain disclosures required by the Commission.\nConsequently, the penny stock rules may affect the ability of broker-dealers to make a market in or trade our Common Stock and may also\naffect your ability to resell any shares you may purchase.\n\n \n\n**Market\nfor penny stock has suffered in recent years from patterns of fraud and abuse**\n\n \n\nStockholders\nshould be aware that, according to SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of\nfraud and abuse. Such patterns include:\n\n \n\n \n●\nControl\nof the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;\n\n \n \n \n\n \n●\nManipulation\nof prices through prearranged matching of purchases and sales and false and misleading press releases;\n\n \n \n \n\n \n●\nBoiler\nroom practices involving high-pressure sales tactics and unrealistic price projections by inexperienced salespersons;\n\n \n \n \n\n \n●\nExcessive\nand undisclosed bid-ask differential and markups by selling broker-dealers; and,\n\n \n \n \n\n \n●\nThe\nwholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along\nwith the resulting inevitable collapse of those prices and with consequential investor losses.\n\n \n\nOur\nmanagement is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position\nto dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines\nof practical limitations to prevent the described patterns from being established with respect to our securities. The occurrence of these\npatterns or practices could increase the volatility of our share price.\n\n \n\n**An\nactive market for our Common Stock may never develop, and we are under no obligation to seek out a more active market for our Common\nStock.**\n\n \n\nIf\nthere is a thin trading market or “float” for our Common Stock, the market price for our Common Stock may fluctuate significantly\nmore than the stock market as a whole. Without a large float, our Common Stock would be less liquid than the stock of companies with\nbroader public ownership and, as a result, the trading prices of our Common Stock may be more volatile. In addition, in the absence of\nan active public trading market, investors may be unable to liquidate their investment in us. Furthermore, the stock market is subject\nto significant price and volume fluctuations, and the price of our Common Stock could fluctuate widely in response to several factors,\nincluding, but not limited to:\n\n \n\n \n●\nour\nquarterly or annual operating results;\n\n \n \n \n\n \n●\nchanges\nin our earnings estimates or the failure to accurately forecast and appropriately plan our expenses;\n\n \n \n \n\n \n●\nfailure\nto achieve our growth expectations;\n\n \n \n \n\n \n●\nfailure\nto attract customers and retain them;\n\n \n \n \n\n \n●\nthe\neffect of increased or variable competition on our business;\n\n \n \n \n\n \n●\nadditions\nor departures of key or qualified personnel;\n\n \n \n \n\n \n●\nfailure\nto adequately protect our intellectual property;\n\n \n \n \n\n \n●\ncosts\nassociated with defending claims, including intellectual property infringement claims and related judgments or settlements;\n\n \n \n \n\n \n●\nchanges\nin governmental or other regulations affecting our business;\n\n \n \n \n\n \n●\nour\ncompliance with governmental or other regulations affecting our business; and\n\n \n \n \n\n \n●\nchanges\nin global or regional industry, general market, or economic conditions.\n\n \n\nThe\nstock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the quoted prices\nof the securities of many companies, including companies in our industry. The changes may not be possible to predict and often appear\nto occur without regard to specific operating performance. The price of our Common Stock could fluctuate based upon factors that have\nlittle or nothing to do with our Company and these fluctuations could materially reduce our stock price.\n\n \n\n29\n\n[Table of Contents](#toc_001)\n\n \n\n**The\nmarket price for our Common Stock may be volatile and will fluctuate.**\n\n \n\nThe\nmarket price for shares of our Common Stock may be volatile and subject to wide fluctuations in response to numerous factors, many of\nwhich are beyond our control, including the following: (i) a decrease in the demand for market analysis or market insight products and\nservices; (ii) the liquidity of our Common Stock or lack thereof; (iii) significant acquisitions or business combinations, strategic\npartnerships, joint ventures, or capital commitments by or involving us or our competitors; (iv) news reports relating to trends, concerns,\ntechnological or competitive developments, regulatory changes, and other related issues in our industry or target markets; (v) revenue\nand earnings performance can significantly impact investor confidence and influence share price movements; (vi) leadership transitions\nor high-profile personnel changes may create uncertainty among investors and impact share price stability; and (vii) rapid advancements\nor disruptions in technology within our industry could affect market perceptions of our company’s ability to innovate and compete,\nleading to share price volatility. Financial markets often experience significant price and volume fluctuations that affect the market\nprices of equity securities of public entities and that are, in many cases, unrelated to the operating performance, underlying asset\nvalues or prospects of such entities. Accordingly, the market price of our shares of Common Stock may decline even if our operating results,\nunderlying asset values or prospects have not changed.\n\n \n\nWe\nwill be unable and are unlikely to pay dividends for the foreseeable future.\n\n \n\nTo\ndate, we have not paid, nor do we intend to pay in the foreseeable future, dividends on our Common Stock, even if we become profitable.\nEarnings, if any, are expected to be used to advance our activities and for general corporate purposes, rather than to make distributions\nto stockholders. Prospective investors will likely need to rely on an increase in the price of Company stock to profit from his or her\ninvestment. There are no guarantees that any market for our Common Stock will ever develop or that the price of our stock will ever increase.\n\n \n\nSince\nwe are not in a financial position to pay dividends on our Common Stock and future dividends are not presently being contemplated, investors\nare advised that return on investment in our Common Stock is restricted to an appreciation in the share price. The potential or likelihood\nof an increase in share price is questionable at best.\n\n \n\n**Our\nfuture results may vary significantly which may adversely affect the price of our Common Stock.**\n\n \n\nIt\nis possible that our quarterly revenues and operating results may vary significantly in the future and that period-to-period comparisons\nof our revenues and operating results are not necessarily meaningful indicators of the future. You should not rely on the results of\none quarter as an indication of our future performance. It is also possible that in some future quarters, our revenues and operating\nresults will fall below our expectations or the expectations of market analysts and investors. If we do not meet these expectations,\nthe price of our Common Stock may decline significantly.\n\n \n\n**We\nare a “smaller reporting company” under the JOBS Act, and we cannot be certain if the reduced disclosure requirements applicable\nto smaller reporting companies will make our Common Stock less attractive to investors.**\n\n \n\nWe\nare a “smaller reporting company” as defined in the JOBS Act, and we may take advantage of certain exemptions from various\nreporting requirements that are applicable to other public companies that are not “smaller reporting companies” including,\nbut not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act,\nreduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the\nrequirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments\nnot previously approved.\n\n \n\nWe\nmay continue to be a smaller reporting company. We may take advantage of certain of the scaled disclosures available to smaller reporting\ncompanies and will be able to take advantage of these scaled disclosures for so long as (i) the market value of our Common Stock held\nby non-affiliates is equal to or less than $250 million as of the last business day of the most recently completed second fiscal quarter,\nand (ii) our annual revenues is equal to or less than $100 million during the most recently completed fiscal year and the market value\nof our Common Stock held by non-affiliates is equal to or less than $700 million as of the last business day of the most recently completed\nsecond fiscal quarter.\n\n \n\nWe\ncannot predict if investors will find our Common Stock less attractive because we may rely on these exemptions. If some investors find\nour Common Stock less attractive as a result, there may be a less active trading market for our Common Stock and our stock price may\nbe more volatile. In addition, taking advantage of reduced disclosure obligations may make comparison of our financial statements with\nother public companies difficult or impossible. If investors are unable to compare our business with other companies in our industry,\nwe may not be able to raise additional capital as and when we need it, which may materially and adversely affect our financial condition\nand results of operations.\n\n \n\n**If\nsecurities or industry analysts do not publish research or reports about our business, or if they publish a negative report regarding\nour Common Stock, the price of our Common Stock and trading volume could decline.**\n\n \n\nAny\ntrading market for our Common Stock may depend in part on the research and reports that industry or securities analysts publish about\nus or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade us, the price\nof our Common Stock would likely decline. If one or more of these analysts cease coverage of our Company or fail to regularly publish\nreports on us, we could lose visibility in the financial markets, which could cause the price of our Common Stock and the trading volume\nto decline.\n\n \n\n30\n\n[Table of Contents](#toc_001)\n\n \n\n**An\ninvestment in our company may involve tax implications, and you are encouraged to consult your own advisors as neither we nor any related\nparty is offering any tax assurances or guidance regarding our company or your investment.**\n\n \n\nAn\ninvestment in our company generally involves complex federal, state and local income tax considerations. Neither the Internal Revenue\nService nor any State or local taxing authority has reviewed the transactions described herein and may take different positions than\nthe ones contemplated by management. You are strongly urged to consult your own tax and other advisors prior to investing, as neither\nwe nor any of our officers, directors or related parties is offering you tax or similar advice, nor are any such persons making any representations\nand warrants regarding such matters.\n\n \n\n**Unanticipated\nchanges in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect\nour financial condition and results of operations.**\n\n \n\nWe\nwill be subject to income taxes in the United States, and our domestic tax liabilities will be subject to the allocation of expenses\nin differing jurisdictions. Our future effective tax rates could be subject to volatility or adversely affected by a number of factors,\nincluding:\n\n \n\n \n●\nchanges\nin the valuation of our deferred tax assets and liabilities;\n\n \n \n \n\n \n●\nexpected\ntiming and amount of the release of any tax valuation allowances;\n\n \n \n \n\n \n●\ntax\neffects of stock-based compensation;\n\n \n \n \n\n \n●\ncosts\nrelated to intercompany restructurings; or\n\n \n \n \n\n \n●\nchanges\nin tax laws, regulations or interpretations thereof.\n\n \n\nIn\naddition, we may be subject to audits of our income, sales and other transaction taxes by federal, state and local authorities. Outcomes\nfrom these audits could have an adverse effect on our financial condition and results of operations.\n\n \n\n**Anti-takeover\nprovisions in Nevada law could discourage, delay or prevent a change in control of our company and may affect the trading price of our\nCommon Stock.**\n\n \n\nSome\nof the provisions of Nevada law may have the effect of delaying, deferring or discouraging another person from acquiring control of our\ncompany or removing our incumbent officers and directors. These provisions are expected to discourage certain types of coercive takeover\npractices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first\nnegotiate with our board of directors. We believe that the benefits of increased protection against an unfriendly or unsolicited proposal\nto acquire or restructure us outweigh the disadvantages of discouraging such proposals."}