What changed in this filing

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Item 1A. Risk Factors

2024-04-01 compared with 2023-04-03 · 96 added, 201 removed, 647 unchanged (31% of the section changed)

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adverse effect on our business, including substantial losses.

and regulations affecting our industry are evolving under the Farm Bill, FDA and other regulatory authorities and changes to any regulation

may materially affect our CBD products

conjunction with the enactment of the Agriculture Improvement Act of 2018 (the “Farm Bill”), the FDA released a statement

about the status of CBD as a nutritional supplement, and the agency’s actions in the short term with regards to CBD will guide

the industry.

While our sun care products are not nutritional supplements, the statement noted that the Farm Bill explicitly preserved

the FDA’s authority to regulate products containing cannabis or cannabis-derived compounds under the Federal Food, Drug, and Cosmetic

Act and Section 351 of the Public Health Service Act.

As a company whose sun care products contain infused CBD, we will strive to meet

all FDA guidelines as the regulations evolve.

Any difficulties in compliance with future government regulation could increase our operating

costs and adversely impact our results of operations in future periods.

addition, as a result of the Farm Bill’s recent passage, we expect that there will be a constant evolution of laws and regulations

affecting the CBD industry which could affect our operations.

Local, state and federal hemp laws and regulations may be broad in scope

and subject to changing interpretations.

These changes may require us to incur substantial costs associated with legal and compliance

fees and ultimately require us to alter our business plan.

Furthermore, violations of these laws, or alleged violations, could disrupt

our business and result in a material adverse effect on our operations.

In addition, we cannot predict the nature of any future laws,

regulations, interpretations or applications, and it is possible that regulations may be enacted in the future that will be directly

applicable to our business.

do not currently believe that we are required to seek FDA approval for our sun care products, and as such we do not plan to seek FDA

If regulation evolves such that we are required to seek approval, we will endeavor to do so.

This may require us to incur substantial

costs associated with legal and compliance fees and adversely affect our results of operations.

We have recently ceased the marketing and sale of CBD products.

These regulations

could negatively affect our ability to dispose of our CBD related assets.

depend heavily on key personnel, and turnover of key senior management could harm our business.

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success of our business will depend upon our ability to create and expand our brand awareness.

sun care and CBD markets we compete in, and the skin care market we intend to compete in, are highly competitive, with many well-known

brands leading the industry.

Our ability to compete effectively and generate revenue will be based upon our ability to create and expand

awareness of our products distinct from those of our competitors.

It is imperative that we are able to convey to consumers the benefits

of our products.

However, advertising and packaging and labeling of such products will be limited by various regulations.

will be dependent upon our ability to convey to consumers that our products are superior to those of our competitors.

markets we compete in, including the wellness drink market, sexual wellness and hair growth markets we intend to compete in, are highly

competitive, with many well-known brands leading the industry.

Our ability to compete effectively and generate revenue will be based

upon our ability to create and expand awareness of our products distinct from those of our competitors.

It is imperative that we are

able to convey to consumers the benefits of our products.

However, advertising and packaging and labeling of such products will be limited

by various regulations.

Our success will be dependent upon our ability to convey to consumers that our products are superior to those

of our competitors.

must develop and introduce new products to succeed.

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success of new product introductions depends on various factors, including, without limitation, the following:

Successful sales and marketing efforts;

Timely delivery of new products;

Availability of raw materials;

Pricing of raw materials;

Regulatory allowance of the products;

Customer acceptance of new products

yet unanticipated changes in federal and state law could cause any of our current products, as well as products that we intend to launch,

containing hemp-derived CBD oil to be illegal, or could otherwise prohibit, limit or restrict any of our products containing CBD.

recently launched and commenced distribution of certain products containing hemp-derived CBD, and we currently intend to develop and

launch additional products containing hemp-derived CBD in the future.

Until 2014, when 7 U.S.

Code §5940 became federal law as part

of the Agricultural Act of 2014 (the “2014 Farm Act”), products containing oils derived from hemp, notwithstanding a minimal

or non-existing THC content, were classified as Schedule I illegal drugs.

The 2014 Farm Act expired on September 30, 2018, and was thereafter

replaced by the Farm Bill, which amended various sections of the U.S.

Code, thereby removing hemp, defined as cannabis with less than

0.3% THC, from Schedule 1 status under the Controlled Substances Act, and legalizing the cultivation and sale of industrial-hemp at the

federal level, subject to compliance with certain federal requirements and state law, amongst other things.

THC is the psychoactive component

of plants in the cannabis family generally identified as marihuana or marijuana.

There is no assurance that the Farm Bill will not be

repealed or amended such that our products containing hemp-derived CBD would once again be deemed illegal under federal law.

Farm Bill delegates the authority to the states to regulate and limit the production of hemp and hemp-derived products within their territories.

Although many states have adopted laws and regulations that allow for the production and sale of hemp and hemp-derived products under

certain circumstances, no assurance can be given that such state laws may not be repealed or amended such that our intended products

containing hemp-derived CBD would once again be deemed illegal under the laws of one or more states now permitting such products, which

in turn would render such intended products illegal in those states under federal law even if the federal law is unchanged.

of either repeal of federal or of state laws and regulations, or of amendments thereto that are adverse to our intended products, we

may be restricted or limited with respect to those products that we may sell or distribute, which could adversely impact our intended

business plan with respect to such intended products.

Additionally,

the FDA has indicated its view that certain types of products containing CBD may not be permissible under the Food, Drug and Cosmetic

Act, or FDCA.

The FDA’s position is related to its approval of Epidiolex, a marijuana-derived prescription medicine to be available

in the United States.

The active ingredient in Epidiolex is CBD.

On December 20, 2018, after the passage of the Farm Bill, FDA Commissioner

Scott Gottlieb issued a statement in which he reiterated the FDA’s position that, among other things, the FDA requires a cannabis

product (hemp-derived or otherwise) that is marketed with a claim of therapeutic benefit, or with any other disease claim, to be approved

by the FDA for its intended use before it may be introduced into interstate commerce and that the FDCA prohibits introducing into interstate

commerce food products containing added CBD, and marketing products containing CBD as a dietary supplement, regardless of whether the

substances are hemp-derived.

Our CBD product offerings must comply with applicable federal and state laws and regulations, and legal

proceedings alleging violations of such laws could have a material adverse effect on our business, financial condition and results of

of hemp-derived CBD depend upon legality of cultivation, processing, marketing and sales of products derived from those plants under

CBD can only be legally produced in states that have laws and regulations that allow for such production and that comply with the Farm

Bill, apart from state laws legalizing and regulating medical and recreational cannabis or marijuana, which remains illegal under federal

law and regulations.

We purchase all of our hemp-derived CBD from licensed growers and processors in states where such production is

As described in the risk factor, possible yet unanticipated changes in federal and state law could cause any of our current products,

as well as products that we intend to launch, containing hemp-derived CBD oil to be illegal, or could otherwise prohibit, limit or restrict

any of our products containing CBD in the event of repeal or amendment of laws and regulations which are now favorable to the cannabis/hemp

industry in such states, we would be required to locate new suppliers in states with laws and regulations that qualify under the Farm

If we were to be unsuccessful in arranging new sources of supply of our raw ingredients, or if our raw ingredients were to become

legally unavailable, our intended business plan with respect to such products could be adversely impacted.

our distributors may only sell and ship our products containing hemp-derived CBD in states that have adopted laws and regulations qualifying

under the Farm Bill, a reduction in the number of states having such qualifying laws and regulations could limit, restrict or otherwise

preclude the sale of intended products containing hemp-derived CBD.

interstate shipment of hemp-derived CBD from one state to another is legal only where both states have laws and regulations that allow

for the production and sale of such products and that qualify under the Farm Bill.

Therefore, the marketing and sale of our intended

products containing hemp-derived CBD is limited by such factors and is restricted to such states.

Although we believe we may lawfully

sell any of our finished products, including those containing CBD, in a majority of states, a repeal or adverse amendment of laws and

regulations that are now favorable to the distribution, marketing and sale of finished products we intend to sell could significantly

limit, restrict or prevent us from generating revenue related to our products that contain hemp-derived CBD.

Any such repeal or adverse

amendment of now favorable laws and regulations could have an adverse impact on our business plan with respect to such products.

to recent expansion into the CBD industry, we may have a difficult time obtaining the various insurances that are desired to operate

our business, which may expose us to additional risk and financial liability.

that is otherwise readily available, such as general liability, and directors and officer’s insurance, may become more difficult

for us to find, and more expensive, due to our launch of products containing hemp-derived CBD.

There are no guarantees that we will be

able to find such insurances in the future, or that the cost will be affordable to us.

If we are forced to go without such insurances,

it may prevent us from entering into certain business sectors, may inhibit our growth, and may expose us to additional risk and financial

sales and marketing efforts;

delivery of new products;

of raw materials;

allowance of the products;

acceptance of new products

publicity associated with our products or ingredients, or those of similar companies, could adversely affect our sales and revenue.

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of these occurrences may harm our business, financial condition and prospects significantly.

regard to our lead product candidates, unforeseen side effects could arise either during clinical development or, if approved, after

products have been marketed.

This could cause regulatory approvals for, or market acceptance of our products harder and costlier to obtain.

results of our planned or any future clinical trials may show that the side effects are unacceptable or intolerable, which could interrupt,

delay or halt clinical trials, and result in delay of, or failure to obtain, marketing approval from the FDA or EMA and other regulatory

authorities, or result in marketing approval from the FDA or EMA and other regulatory authorities with restrictive label warnings.

any product receives marketing approval and we or others later identify undesirable or unacceptable side effects caused by the use of

the products:

authorities may withdraw their approval of the product, which would force us to remove products from the market;

authorities may require the addition of labeling statements, specific warnings, a contraindication, or field alerts to physicians

and pharmacies;

may be required to change instructions regarding the way the product is administered, conduct additional clinical trials or change

the labeling of the product;

may be subject to limitations on how we may promote the product;

of the product may decrease significantly;

may be subject to litigation or product liability claims;

reputation may suffer.

of these events could prevent us or our potential future collaborators from achieving or maintaining market acceptance of our products

and/or could substantially increase commercialization costs and expenses, which in turn could delay or prevent us from generating significant

revenues from the sale of those products.

we experience delays or difficulties in the enrollment of subjects to our clinical trials, our receipt of necessary regulatory approvals

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claims or liabilities.

the market opportunities for our current and potential future drug candidates are smaller than we believe they are, our ability to generate

product revenues may be adversely affected and our business may suffer.

understanding of the number of people who suffer from dermatitis or eczema, whom our products may have the potential to treat, is based

upon estimates.

These estimates may prove to be incorrect, and new studies may demonstrate or suggest a lower estimated incidence or

prevalence of this condition.

The number of patients in the U.S.

or elsewhere may turn out to be lower than expected, may not be otherwise

amenable to treatment, or treatment-amenable patients may become increasingly difficult to identify and access, all of which would adversely

affect our business prospects and financial condition.

In particular, the treatable population for our products may further be reduced

if our estimates of addressable populations are erroneous or sub-populations of patients do not derive benefit from those products.

we are unable to establish relationships with licensees or collaborators to carry out sales, marketing, and distribution functions or

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these capabilities will be sufficient to meet our needs.

success of our non-OTC product candidates will depend on the acceptance of these products by physicians, payers, and patients.

commercial success of our non-OTC product candidates will depend on the acceptance of these products by physicians, payers, and patients.

non-OTC product candidate that we may develop may not gain market acceptance among physicians and patients.

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adverse effect on our business plan.

Our supply chain and the development

of our product candidates, including that of our subsidiaries, could be, and have been, disrupted and materially adversely affected by

the recent outbreak of COVID-19.

As a result of measures imposed by the governments in affected regions, businesses and schools have been

suspended due to quarantines intended to contain this outbreak.

We are still assessing our business plans and the impact COVID-19 may

have on our supply chain and ability to conduct our clinical trials, but there can be no assurance that this analysis will enable us to

avoid part or all of any impact from the spread of COVID-19 or its consequences, including downturns in business sentiment generally.

The extent to which the COVID-19 pandemic and global efforts to contain its spread will impact our operations will depend on future developments,

which are highly uncertain and cannot be predicted at this time, and include the duration, severity and scope of the pandemic and the

actions taken to contain or treat the COVID-19 pandemic.

Our subsidiary SRM, was materially adversely affected by COVID-19 and its impact

on the amusement park industry.

SRM’s sales to amusement parks materially decreased during 2021 and 2020.

SRM’s revenue for

the fiscal year ended December 31, 2019 was $7,046,073 and were reduced to $2,958,199 for the fiscal year ended December 31, 2020 and

further reduced to $2,876,273 for the year ended December 31, 2021, which was a result of the closing of amusement and theme parks in

2020 as a result of the COVID-19 pandemic.

We generated $6,196,743 in revenues for the year ended December 31, 2022 compared to $2,876,273

revenues for the year ended December 31, 2021.

The large increase is due to the Company having more nominal-like operations during 2022.

In 2021 and 2020, Covid had a negative impact on the revenues of the Company with the closure of amusement and theme parks which were

not fully open until the end of 2021.

supply chain and the development of our product candidates, including that of our subsidiaries, could be, and have been, disrupted and

materially adversely affected by the recent outbreak of COVID-19.

As a result of measures imposed by the governments in affected regions,

businesses and schools have been suspended due to quarantines intended to contain this outbreak.

We are still assessing our business

plans and the impact COVID-19 may have on our supply chain and ability to conduct our clinical trials, but there can be no assurance

that this analysis will enable us to avoid part or all of any impact from the spread of COVID-19 or its consequences, including downturns

in business sentiment generally.

The extent to which the COVID-19 pandemic and global efforts to contain its spread will impact our operations

will depend on future developments, which are highly uncertain and cannot be predicted at this time, and include the duration, severity

and scope of the pandemic and the actions taken to contain or treat the COVID-19 pandemic.

disasters and other events beyond our control could materially adversely affect us.

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ability to recruit and retain channel partners in foreign jurisdictions.

Related to SRM Spin-Off

may be unable to achieve some or all of the expected benefits of the Spin-Off, and the Spin-Off may adversely affect our business.

we believe that separating SRM into a stand-alone, publicly traded company (the “Spin-off”) provided financial, operational

and other benefits to us and our stockholders, we cannot provide assurance that we will achieve the full strategic and financial benefits

expected from the Spin-Off.

The Spin-off resulted in us being a smaller, less diversified company, making us more vulnerable to changing

market and economic conditions.

Our business is now more concentrated in health and wellness products, and we have greater exposure to

legal, regulatory, political and other risks relating to the health and wellness industry.

In addition, as a smaller company, our ability

to absorb costs may be negatively impacted, and we may be unable to obtain financing, insurance, goods or services at prices or on terms

that are as favorable as those obtained by us prior to the Spin-off.

Any of these factors could have a material adverse effect on our

business, financial condition, results of operations, cash flows, business prospects and the trading price of our common stock.

ability to meet our capital needs may be harmed by the lo ss of revenue from SRM.

Spin-off resulted in the Company’s equity interest in SRM being reduced to approximately 45% and the Company is no longer able

to consolidate the operations of SRM and the Company in its financial statements.

This will result in a significant reduction of the

Company’s revenues as approximately 98% of the Company’s revenues in the year ended December 31, 2022 were derived from the

SRM business.

The loss of revenue from SRM could harm our ability to meet our capital needs.

After the spin-off, we expect to obtain

any additional funds needed in excess of the amounts generated by our operating activities through the capital markets or bank financing,

and not from revenue derived by SRM.

Further, we cannot guarantee you that we will be able to obtain capital market financing or credit

on favorable terms, or at all, in the future.

We cannot assure you that our ability to meet our capital needs will not be harmed by the

loss of revenue from SRM.

Related to our Financial Position and Capital Needs

accountant has indicated doubt about our ability to continue as a going concern.

As of December 31, 2022, the Company

had $1,931,068 in cash, accumulated deficit of $50,597,674 and cash flow used in operations of $6,395,942.

The Company has incurred and

expects to continue to incur significant costs in pursuit of its expansion and development plans.

These conditions raise doubt about the

Company’s ability to continue as a going concern and accordingly our auditors have included a going concern opinion in our annual

Management has taken certain action and continues to implement changes designed to improve the Company’s financial results

and operating cash flows.

The actions involve certain cost-saving initiatives and growing strategies, including (a) engage in very limited

activities without incurring any liabilities that must be satisfied in cash;

and (b) offer noncash consideration and seek for equity lines

as a means of financing its operations.

Additionally, the Company’s plan includes certain scheduled research and development activities

and related clinical trials which may be deferred as needed.

If the Company is unable to obtain revenue producing contracts or financing

or if the revenue or financing it does obtain is insufficient to cover any operating losses it may incur, it may substantially curtail

its operations or seek other business opportunities through strategic alliances, acquisitions or other arrangements that may dilute the

interests of existing stockholders.

of December 31, 2023 and 2022, the Company had $3,833,349 and $1,931,068 in cash, accumulated deficit of $65,480,715 and $50,597,674

and cash flow used in operations of $10,515,314 and $6,395,942, respectively.

The Company has incurred and expects to continue to incur

significant costs in pursuit of its expansion and development plans.

These conditions raise doubt about the Company’s ability to

continue as a going concern and accordingly our auditors have included a going concern opinion in our annual report.

connection with certain public and private offerings (the “Financing”), the Company offered warrants as part of the Financing

During the year ended December 31, 2023, the Warrant Holders exercised a total of 10,266,845 warrants for shares of common

stock for a total exercise price of $8,887,837.

At December 12, 2023, the Company has 15,758,126 warrants outstanding at an average exercise

price of $1.45.

The Company expects, although there can be no assurance, that a majority of the outstanding warrants will be exercised

in the near future.

addition to the unexercised warrants, the Company also holds 1,200,821 shares of Chijet Motor Company, Inc.

CJET) valued at

$0.45 per share (as of March 27, 2024).

These shares are considered trading shares and are held as marketable securities on the balance

The Company also holds 3,650,048 shares of SRM Entertainment, Inc.

SRM) valued at $1.41 per share (as of March 27, 2024)

and are held as investment in affiliate and are accounted for using the Equity Method.

These shares are not covered by an effective

registration statement but may be sold subject to Rule 144.

December 31, 2023, the Company had $3,833,349 in cash and the Company recognizes that it may need to raise additional capital in order

to continue to execute its business plan in the future.

There is no assurance that the Warrant Holders will exercise their warrants or

additional financing will be available if needed or that the Company will be able to obtain financing on terms acceptable to it or whether

the Company will become profitable and generate positive operating cash flow.

If the Company is unable to obtain revenue producing contracts

or financing or if the revenue or financing it does obtain is insufficient to cover any operating losses it may incur, it may be forced

to substantially curtail its operations or seek other business opportunities through strategic alliances, acquisitions or other arrangements

that may dilute the interests of existing stockholders.

additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our

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broker-dealers who recommend such securities to persons other than institutional accredited investors must:

Make a special written suitability determination for the purchaser;

Receive the purchaser’s prior written agreement to the

Provide the purchaser with risk disclosure documents which

identify certain risks associated with investing in “penny stocks” and which describe the market for these “penny stocks”

as well as a purchaser’s legal remedies;

Obtain a signed and dated acknowledgment from the purchaser

demonstrating that the purchaser has actually received the required risk disclosure document before a transaction in a “penny stock”

can be completed.

a special written suitability determination for the purchaser;

the purchaser’s prior written agreement to the transaction;

the purchaser with risk disclosure documents which identify certain risks associated with investing in “penny stocks”

and which describe the market for these “penny stocks” as well as a purchaser’s legal remedies;

a signed and dated acknowledgment from the purchaser demonstrating that the purchaser has actually received the required risk disclosure

document before a transaction in a “penny stock” can be completed.

our common stock is not currently subject to these rules, it were to become subject to such rules, broker-dealers may find it difficult

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our securities may be depressed, and you may find it more difficult to sell your securities.

UNRESOLVED STAFF COMMENTS

principal executive office is located in leased premises of approximately 6,908 square feet at 1061 E.

Indiantown Rd., Ste.

110, Jupiter,

We believe that these facilities are adequate for our needs, including providing the space and infrastructure to accommodate

our development work based on our current operating plan.

We do not own any real estate.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors