Bimergen Energy Corp 10-K

ITEM 1A. RISK FACTORS Our future operating results are highly uncertain. Before deciding to invest in us or to maintain or increase your investment, you should carefully consider the risks described below, in addition to the other information contained in this annual report. If any of these risks actually occur, our business, financial condition or results of operations could be seriously harmed. In that event, the market price for our common stock could decline and you may lose all or part of your investment. Risks Related to Our Company We have discontinued our involvement in future medical procedures due to our cash position During the fourth quarter of 2018, the decision was made to discontinue our involvement in future medical procedures due to our cash position, which also hampers our ability to pay back existing debt to Peter Dalrymple, a director and shareholder (see Note 6—Notes Payable). We have not funded any procedures in 2021 and have no plans to do so in the future. The service revenue we previously earned has resulted in longer settlement times, which has created a slowdown in cash collections. Additionally, our efforts to establish a market for the Quad Video Halo has not met our expectations and we have cut back its development and operations. If we are unable to access additional capital in the near future, these recent developments could have a material negative impact on our financial performance and could have a material adverse effect on our results of operations and financial condition. Management has determined that certain factors raise substantial doubt about our ability to continue as a going concern, and our continued existence is dependent upon our ability to successfully execute our business plan. The financial statements included with this report are presented under the assumption that we will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable length of time. Management has determined that certain factors raise substantial doubt about our ability to continue as a going concern, including our net loss of $140,365 for the year ended December 31, 2021 and our accumulated deficit of $20,278,547 at year-end. We are not generating sufficient operating cash flows to support continuing operations. Our ability to continue as a going concern is dependent upon our ability to successfully execute our business plan, obtain additional financing and achieve a level of cash flows from operations adequate to support our cost structure. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. We are dependent on key personnel . We depend to a large extent on the services of certain key management personnel, including our executive officers and other key consultants, the loss of any of which could have a material adverse effect on our operations. We may experience potential fluctuations in results of operations. Our future revenues may be affected by a variety of factors, many of which are outside our control. We have no control on how long it takes our remaining cases to settle, making it difficult to forecast cash flow. As a result of our limited operating history and the discontinuation of our previous business plan, it is difficult to forecast revenues or earnings accurately, which may fluctuate significantly from quarter to quarter. 7 Table of Contents We have a history of significant operating losses and will need to increase operating expenses in the future if we decide to grow our business. Since our inception in 1998, until commencement of our spine injury diagnostic operations in August 2009, our expenses substantially exceeded our revenue, resulting in continuing losses and an accumulated deficit of $20,278,547 as of December 31, 2021. During the fourth quarter of 2018, we chose to discontinue our involvement in future medical procedures due to our cash position. Presently, we are trying to limit all operating expenses as much as possible. If in the future we decide to increase our service development, marketing efforts and/or brand building activities, we will need to increase our operating expenses and our general and administrative functions to support such growth in operations. No such growth in operations is presently planned. We will need to generate significant revenues to achieve our business plan. Our continued existence is dependent upon our ability to successfully execute our business plan, as well as our ability to increase revenue and obtain additional capital from borrowing and selling securities, as needed, to fund our operations. There is no assurance that additional capital can be obtained or that it can be obtained on terms that are favorable to us and our existing stockholders. Any expectation of future profitability is likely dependent upon our ability to consummate a merger with a target company, of which there can be no assurances. We may incur significant expenses as a result of being a publicly traded company, which may negatively impact our financial performance. We may incur significant legal, accounting and other expenses as a result of being a publicly traded company. The Sarbanes-Oxley Act of 2002, as well as related rules implemented by the SEC, has required changes in corporate governance practices of public companies. We expect that compliance with these laws, rules and regulations, including compliance with Section 404 of the Sarbanes-Oxley Act of 2002 as discussed in the following risk factor, may substantially increase our expenses, including our legal and accounting costs, and make some activities more time-consuming and costly. As a result, there may be a substantial increase in legal, accounting and certain other expenses in the future, which would negatively impact our financial performance and could have a material adverse effect on our results of operations and financial condition. Our internal control over financial reporting may not be considered effective, which could result in a loss of investor confidence in our financial reports and in turn could have an adverse effect on our stock price. Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, with our annual reports, we are required to furnish a report by our management on our internal control over financial reporting. Such report will contain, among other matters, an assessment of the effectiveness of our internal control over financial reporting as of the end of the year, including a statement as to whether or not our internal control over financial reporting is effective. This assessment must include disclosure of any material weaknesses in our internal control over financial reporting identified by management. If we are unable to assert that our internal control is effective, investors could be adversely affected. Our QVH business model is unproven. Our QVH business model depends upon our ability to implement and successfully execute our business and marketing strategy, which includes our ability to find healthcare providers to whom we can sell or lease QVH units, and from whom we may obtain referrals. If we are unable to find and form relationships with such healthcare providers, our business will likely fail. We have been contacted in connection with various merger and acquisition opportunities and may choose to enter into a merger and/or acquisition transaction in the future. We have been contacted by parties seeking to merge and/or acquire us. While we have not entered into any definitive agreements or understandings to merge with or acquire any entity, in the event that we do enter into a merger and/or acquisition with a separate company in the future, our majority shareholders will likely change and new shares of common stock could be issued, resulting in substantial dilution to our then current shareholders. As a result, our new majority shareholders will likely change the composition of our board of directors and replace our current management. The new management will likely change our business focus and we can make no assurances that our new management will be able to properly manage our direction or that this change in our business focus will be successful. If we do enter into a merger or acquisition, and our new management fails to properly manage and direct our operations, we may be forced to scale back or abandon our operations, which will cause the value of our common stock to decline or become worthless. We have not entered into any binding merger or acquisition agreements as of the date of this filing. 8 Table of Contents Since we have not yet selected a particular target industry or target business with which to complete a business combination, we are unable to ascertain the merits or risks associated with any particular business or industry. Since we have not yet identified a particular industry or prospective target business, there is no basis for investors to evaluate the possible merits or risks of the target business which we may ultimately acquire (or which may acquire us). If we complete a business combination with a financially unstable company or an entity in its development stage, we may be affected by numerous risks inherent in the operations of those entities. Although our management intends to evaluate the risks inherent in a particular industry or target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors. There can be no assurance that any prospective business combination will benefit shareholders or prove to be more favorable to shareholders than any other investment that may be made by shareholders and investors. Our officers and directors may allocate time to other business activities, thereby causing conflicts of interest as to how much time to devote to our affairs. This could have a negative impact on the Company ’ s ability to consummate a business combination in a timely manner, if at all. Our officers and directors are not required to commit full time to our affairs, which may result in a conflict of interest in allocating time between our business and other businesses. Management is also engaged in other business endeavors and is not obligated to contribute any specific number of hours per week to our affairs. If management’s other business affairs require them to devote more time to such affairs, it could limit their ability to devote time to our affairs or present the Company as a viable business opportunity and could have a negative impact on our ability to consummate a business combination. Furthermore, we do not have an employment agreement with any members of management. The Company may be unable to obtain additional financing, if and when required, to complete a business combination or to fund the operations and growth of the business combination target, which could compel the Company to restructure a potential business combination transaction or to entirely abandon a particular business combination. The Company has not yet identified any prospective target business. If we require funds for a particular business combination because of the size of the business combination or otherwise, or if we require funds for any other purpose, we will be required to seek additional financing, which may or may not be available a terms and conditions satisfactory to the Company, if at all. To the extent that additional financing proves to be unavailable when and if needed to consummate a particular business combination, we would be compelled to restructure the transaction or abandon that particular business combination and seek an alternative target business candidate. In addition, if we consummate a business combination, we may require additional financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. The Company’s officers, directors or stockholders are not required to provide any financing to us in connection with or after a business combination. It is probable that the Company will only be able to enter into one business combination, which will cause us to be solely dependent on such single business and a limited number of products or services. If and when the Company is able to enter into a business combination transaction, it is probable that transaction will be with a single operating business. Accordingly, the prospects for the Company’s success may be: ● solely dependent upon the performance of a single operating business, or ● dependent upon the development or market acceptance of a single or limited number of products or services. In this case, the Company will not be able to diversify the Company’s operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry. 9 Table of Contents The Company has limited resources and there is significant competition for business combination opportunities. Therefore, the Company may not be able to enter into or consummate an attractive business combination. The Company expects to encounter intense competition from other entities having a business objective similar to the Company’s, including venture capital funds, leveraged buyout funds and operating businesses competing for acquisitions. Many of these entities are well established and have extensive experience in identifying and effecting business combinations directly or through affiliates. Many of these competitors possess greater technical, human and other resources than the Company does and the Company’s financial resources are limited when contrasted with those of many of these competitors. While the Company believes that there are numerous potential target businesses that it could acquire, the Company’s ability to compete in acquiring certain sizable target businesses will be limited by the Company’s limited financial resources and the fact that the Company will use its common stock to acquire an operating business. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. If the Company is deemed to be an investment company, the Company may be required to institute burdensome compliance requirements and the Company ’ s activities may be restricted, which may make it difficult for the Company to enter into a business combination Although we are subject to the reporting requirements of the Exchange Act, management believes we will not be subject to regulation under the Investment Company Act of 1940, since we will not be engaged in the business of investing or trading in securities. If we engage in business transactions which will result in our holding passive investment interests in a number of entities, we could be subject to regulations under the Investment Company Act. If so, we would be required to register as an investment company and could be expected to incur significant registration and compliance costs. We have received no formal determination from the SEC as to our status under the Investment Company Act, and, consequently, violation of the Investment Company Act could subject us to material adverse consequences. Only one of four of our directors is independent, so actions taken and expenses incurred by our officers and directors on behalf of us will generally not be subject to independent review. Only one of the four members of our board of directors is independent. While the Company anticipates that all actions taken by our director on the Company’s behalf will be in the Company’s and its stockholders’ best interests, if actions are taken, or expenses are incurred that are actually not in the Company’s and its stockholders best interests, it could have a material adverse effect on our business and plan of operation and the price of our stock held by the public stockholders. Risks Related to Our Common Stock We may issue a large number of shares of common stock in the future, including without limitation in a strategic business transaction, which could cause substantial dilution to all stockholders. We may seek to raise equity or equity-related capital in the future. Additionally, we are presently seeking to enter into a strategic business transaction with another company. Either event is expected to result in us issuing a large number of shares of common stock. Any issuance of shares of our common stock will dilute the percentage ownership interest of all stockholders and may further dilute the book value per share of our common stock. This dilution could be substantial, depending on the size of any such transaction. We do not anticipate paying any cash dividends. We have never paid cash dividends on our common stock and do not anticipate doing so for the foreseeable future. The payment of dividends, if any, is within the discretion of our board of directors and is dependent on our revenues and earnings, if any, capital requirements, general financial condition, and other relevant factors. We presently intend to retain all earnings, if any, to implement our business strategy. The market for our stock is limited and our stock price may be volatile. There is a limited market for our common stock and a stockholder may not be able to liquidate his or her shares regardless of the necessity of doing so. The prices of our shares are highly volatile. This could have an adverse effect on developing and sustaining the market for our securities. We cannot assure you that the market price of our common stock will not fluctuate or decline significantly. In addition, the stock markets in general can experience considerable price and volume fluctuations. 10 Table of Contents The trading price of our common stock entails additional regulatory requirements, which may negatively affect such trading price. Generally, the Securities and Exchange Commission generally defines a “penny stock” as any equity security that is quoted over-the-counter, such as on the OTC Bulletin Board (which is a facility of FINRA) or OTC Link LLC (which is owned by OTC Markets Group, Inc., formerly known as Pink OTC Markets Inc.) that has a market price of less than $5.00 per share. The trading price of our common stock is below $5.00 per share. As a result of this price level, our common stock is considered a penny stock and trading in our common stock is subject to the requirements of certain rules promulgated under the Securities Exchange Act of 1934. These rules require additional disclosure by broker-dealers in connection with any trades generally involving penny stocks subject to certain exceptions. Such rules require the delivery, before any penny stock transaction, of a disclosure schedule explaining the penny stock market and the risks associated therewith and impose various sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and accredited investors (generally institutions). For these types of transactions, the broker-dealer must determine the suitability of the penny stock for the purchaser and receive the purchaser’s written consent to the transaction before sale. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our common stock. As a consequence, the market liquidity of our common stock could be severely affected or limited by these regulatory requirements. ITEM 1B. UNRESOLVED STAFF COMMENTS Not Applicable.