What changed in this filing

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Item 1A. Risk Factors

2018-05-17 compared with 2017-03-31 · 440 added, 432 removed, 152 unchanged (85% of the section changed)

Risk Factors.

RISKS RELATED TO JERRICK

MEDIA’S BUSINESS

Our independent

auditors have expressed substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain

future financing.

As reflected in the accompanying audited consolidated

financial statements, the Company had a net loss of approximately $7.4 million for the year ended December 31, 2016, and a working

capital deficit and accumulated deficit of approximately $3.3 million and approximately $13.3 respectively, at December 31, 2016.

These factors raise substantial doubt about the Company's ability to continue as a going concern.

The ability of the Company to continue its operations

is dependent on management’s plans, which include the raising of capital through debt and/or equity markets with some additional

funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient

to fund working capital requirements.

The Company may need to incur liabilities with certain related parties to sustain the Company’s

RISKS RELATED

TO JERRICK MEDIA’S BUSINESS

independent auditors have expressed substantial doubt about our ability to continue as a going concern, which may hinder our ability

to obtain future financing.

As reflected in the accompanying audited consolidated financial statements, the Company had a net loss

of approximately $8.8 million for the year ended December 31, 2017, and a working capital deficit and accumulated deficit of approximately

$4.0 million and approximately $22.2 respectively, at December 31, 2017.

These factors raise substantial doubt about the Company’s

ability to continue as a going concern.

The ability of the Company to continue

its operations is dependent on management’s plans, which include the raising of capital through debt and/or equity markets

with some additional funding from other traditional financing sources, including term notes, until such time that funds provided

by operations are sufficient to fund working capital requirements.

The Company may need to incur liabilities with certain related

parties to sustain the Company’s existence.

The Company will require additional funding

to finance the growth of its current and expected future operations as well as to achieve its strategic objectives.

believes its current available cash, along with anticipated revenues, may be insufficient to meet its cash needs for the near

believes its current available cash, along with anticipated revenues, may be insufficient to meet its cash needs for the near future.

There can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all.

In response to these problems, management has taken

the following actions:

In response to these problems, management

has taken the following actions:

seeking additional third party debt and/or equity financing;

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allocate sufficient resources to continue with advertising and marketing efforts.

In their report dated March 31, 2017, our independent

auditors stated that our financial statements for the period ended December 31, 2016, were prepared assuming that we would continue

as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification

of the liabilities that might be necessary should the Company be unable to continue as a going concern.

We are not profitable and

may never be profitable.

From inception through the present, we have

been dependent on raising capital to support our working capital needs.

In their report dated May 17, 2018, our independent auditors stated that our financial statements for

the period ended December 31, 2017, were prepared assuming that we would continue as a going concern, which contemplates the realization

of assets and the satisfaction of liabilities in the normal course of business.

These financial statements do not include any adjustments

relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company

be unable to continue as a going concern.

We are not profitable

and may never be profitable.

From inception through the present, we

have been dependent on raising capital to support our working capital needs.

During this same period, we have recorded net accumulated

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There can be no assurance that we will ever achieve any significant revenues or profitable

Our operating

expenses exceed our revenues and will likely continue to do so for the foreseeable future.

operating expenses exceed our revenues and will likely continue to do so for the foreseeable future.

We are in the early stage of our development

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revenues, particularly as we undertake payment of the increased costs of operating as a public company.

Our Operating

subsidiary has a limited operating history.

Our operating subsidiary has been in existence for

approximately three years.

Operating subsidiary has a limited operating history.

Our operating subsidiary has been in existence

for approximately three years.

Our limited operating history means that there is a high degree of uncertainty in our ability to:

develop and commercialize our products;

(i) develop and commercialize our products;

(ii) achieve market acceptance;

or (iii) respond to competition.

Additionally, even if

we do implement our business plan, we may not be successful.

Additionally, even

if we do implement our business plan, we may not be successful.

No assurances can be given as to exactly when, if at all, we will

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in a loss of your investment.

have assumed A significant amount

of debt and our operations may not be able to generate sufficient cash flows to meet our debt obligations, which could reduce our

financial flexibility and adversely impact our operations.

Currently the Company has considerable convertible

notes, related party notes and lines of credit outstanding with various debtors.

Our ability to make payments on such indebtedness

will depend on our ability to generate cash flow.

The Company may not generate sufficient cash flow from operations to enable

us to repay this indebtedness and to fund other liquidity needs, including capital expenditure requirements.

have assumed A significant amount of debt and our operations may not be able to generate sufficient cash flows to meet our debt

obligations, which could reduce our financial flexibility and adversely impact our operations.

Currently the Company has considerable

convertible notes, related party notes and lines of credit outstanding with various debtors.

Our ability to make payments on such

indebtedness will depend on our ability to generate cash flow.

The Company may not generate sufficient cash flow from operations

to enable us to repay this indebtedness and to fund other liquidity needs, including capital expenditure requirements.

Such indebtedness

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debt covenants to which we may agree may affect our flexibility in planning for, and reacting to, changes in the economy and in our industry.

A high level of indebtedness increases the risk that

we may default on our debt obligations.

We may not be able to generate sufficient cash flows to pay the principal or interest on

If we cannot service or refinance our indebtedness, we may have to take actions such as selling significant assets, seeking

additional equity financing (which will result in additional dilution to stockholders) or reducing or delaying capital expenditures,

any of which could have a material adverse effect on our operations and financial condition.

If we do not have sufficient funds

and are otherwise unable to arrange financing, our assets may be foreclosed upon which could have a material adverse effect on

our business, financial condition and results of operations.

need additional capital, which may be difficult to raise as a result of our limited operating history or any number of other reasons.

We expect that we will have adequate financing for

the next 6 months.

A high level of indebtedness increases

the risk that we may default on our debt obligations.

We may not be able to generate sufficient cash flows to pay the principal

or interest on our debt.

If we cannot service or refinance our indebtedness, we may have to take actions such as selling significant

assets, seeking additional equity financing (which will result in additional dilution to stockholders) or reducing or delaying

capital expenditures, any of which could have a material adverse effect on our operations and financial condition.

have sufficient funds and are otherwise unable to arrange financing, our assets may be foreclosed upon which could have a material

adverse effect on our business, financial condition and results of operations.

will need additional capital, which may be difficult to raise as a result of our limited operating history or any number of other

We expect that we will have adequate financing

for the next 6 months.

However, in the event that we exceed our expected growth, we would need to raise additional capital.

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In the event that we are not able to secure financing, we may have to scale back our growth plans or cease operations.

on our key management personnel and the loss of their services could adversely affect our business.

We place substantial reliance upon the efforts and

abilities of Jeremy Frommer, our Chief Executive Officer, and our other executive officers and directors.

Though no individual

is indispensable, the loss of the services of these executive officers could have a material adverse effect on our business, operations,

revenues or prospects.

depend on our key management personnel and the loss of their services could adversely affect our business.

We place substantial reliance upon the

efforts and abilities of Jeremy Frommer, our Chief Executive Officer, and our other executive officers and directors.

individual is indispensable, the loss of the services of these executive officers could have a material adverse effect on our business,

operations, revenues or prospects.

We do not currently maintain key man life insurance on the lives of these individuals.

not adopted various corporate governance measures, and as a result stockholders may have limited protections against interested

have not adopted various corporate governance measures, and as a result stockholders may have limited protections against interested

director transactions, conflicts of interest and similar matters.

Recent Federal legislation, including the Sarbanes-Oxley

Act of 2002, has resulted in the adoption of various corporate governance measures designed to promote the integrity of corporate

management and the securities markets.

Because our securities are not yet listed on a national securities exchange, we are not

required to adopt these corporate governance measures and have not done so voluntarily in order to avoid incurring the additional

costs associated with such measures.

Among these measures is the establishment of independent committees of the Board of Directors.

However, to the extent a public market develops for our securities, such legislation will require us to make changes to our current

corporate governance practices.

Recent Federal legislation, including the

Sarbanes-Oxley Act of 2002, has resulted in the adoption of various corporate governance measures designed to promote the integrity

of corporate management and the securities markets.

Because our securities are not yet listed on a national securities exchange,

we are not required to adopt these corporate governance measures and have not done so voluntarily in order to avoid incurring the

additional costs associated with such measures.

Among these measures is the establishment of independent committees of the Board

of Directors.

However, to the extent a public market develops for our securities, such legislation will require us to make changes

to our current corporate governance practices.

Those changes may be costly and time-consuming.

Furthermore, the absence of the governance measures

referred to above with respect to our Company may leave our shareholders with more limited protection in connection with interested

director transactions, conflicts of interest and similar matters.

intense competition.

If we do not provide digital content that is useful to users, we may not remain competitive, and our potential

revenues and operating results could be adversely affected.

Our business is rapidly evolving and intensely competitive,

and is subject to changing technologies, shifting user needs, and frequent introductions of new products and services.

to compete successfully depends heavily on providing digital content that is useful and enjoyable for our users and delivering

our content through innovative technologies in the marketplace.

We have many competitors in the digital content creation

industry and media companies.

Our current and potential competitors range from large and established companies to emerging start-ups.

Established companies have longer operating histories and more established relationships with customers and users, and they can

use their experience and resources in ways that could affect our competitive position, including by making acquisitions, investing

aggressively in research and development, aggressively initiating intellectual property claims (whether or not meritorious) and

competing aggressively for advertisers and websites.

Emerging start-ups may be able to innovate and provide products and services

faster than we can.

Additionally, our operating results would suffer if

our digital content is not appropriately timed with market opportunities, or if our digital content is not effectively brought

As technology continues to develop, our competitors may be able to offer user experiences that are, or that are seen

to be, substantially similar to or better than ours.

This may force us to compete in different ways and expend significant resources

in order to remain competitive.

If our competitors are more successful than we are in developing compelling content or in attracting

and retaining users and advertisers, our revenues and operating results could be adversely affected.

competition from traditional media companies, and we may not be included in the advertising budgets of large advertisers, which

could harm our operating results.

In addition to internet companies, we face competition

from companies that offer traditional media advertising opportunities.

Most large advertisers have set advertising budgets, a very

small portion of which is allocated to Internet advertising.

We expect that large advertisers will continue to focus most of their

advertising efforts on traditional media.

If we fail to convince these companies to spend a portion of their advertising budgets

with us, or if our existing advertisers reduce the amount they spend on our programs, our operating results would be harmed.

depends on strong brands and relationships, and if we are not able to maintain our relationships and enhance our brands, our ability

to expand our base of users, advertisers and affiliates will be impaired and our business and operating results could be harmed.

We believe that maintaining and enhancing the

“Filthy Media”, “OMNI”, “Geeks”, “Longevity”, and "Potent"

critical to expanding our base of users, advertisers and affiliates.

Maintaining and enhancing our brands' profiles may require

Furthermore, the absence of the

governance measures referred to above with respect to our Company may leave our shareholders with more limited protection in connection

with interested director transactions, conflicts of interest and similar matters.

face intense competition.

If we do not provide digital content that is useful to users, we may not remain competitive, and our

potential revenues and operating results could be adversely affected.

Our business is rapidly evolving and intensely

competitive, and is subject to changing technologies, shifting user needs, and frequent introductions of new products and services.

Our ability to compete successfully depends heavily on providing digital content that is useful and enjoyable for our users and

delivering our content through innovative technologies in the marketplace.

We have many competitors in the digital

content creation industry and media companies.

Our current and potential competitors range from large and established companies

to emerging start-ups.

Established companies have longer operating histories and more established relationships with customers

and users, and they can use their experience and resources in ways that could affect our competitive position, including by making

acquisitions, investing aggressively in research and development, aggressively initiating intellectual property claims (whether

or not meritorious) and competing aggressively for advertisers and websites.

Emerging start-ups may be able to innovate and provide

products and services faster than we can.

Additionally, our operating results would

suffer if our digital content is not appropriately timed with market opportunities, or if our digital content is not effectively

brought to market.

As technology continues to develop, our competitors may be able to offer user experiences that are, or that

are seen to be, substantially similar to or better than ours.

This may force us to compete in different ways and expend significant

resources in order to remain competitive.

If our competitors are more successful than we are in developing compelling content or

in attracting and retaining users and advertisers, our revenues and operating results could be adversely affected.

face competition from traditional media companies, and we may not be included in the advertising budgets of large advertisers,

which could harm our operating results.

In addition to internet companies, we face

competition from companies that offer traditional media advertising opportunities.

Most large advertisers have set advertising

budgets, a very small portion of which is allocated to internet advertising.

We expect that large advertisers will continue to

focus most of their advertising efforts on traditional media.

If we fail to convince these companies to spend a portion of their

advertising budgets with us, or if our existing advertisers reduce the amount they spend on our programs, our operating results

would be harmed.

business depends on strong brands and relationships, and if we are not able to maintain our relationships and enhance our brands,

our ability to expand our base of users, advertisers and affiliates will be impaired and our business and operating results could

We believe that maintaining and enhancing

the “Filthy Media”, “OMNI”, “Geeks”, “Longevity”, and “Potent”

is critical to expanding our base of users, advertisers and affiliates.

Maintaining and enhancing our brands’

profiles may require

us to make substantial investments and these investments may not be successful.

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Media”, “OMNI”, “Geeks”, “Longevity”, and “Potent”

brands' profiles, or

if we incur excessive expenses in this effort, our business and operating results could be harmed.

We anticipate that, as our

market becomes increasingly competitive, maintaining and enhancing our brands' profiles may become increasingly difficult and

Maintaining and enhancing our brands will depend largely on our ability to be a technology leader and to continue to

provide attractive products and services, which we may not do successfully.

to manage growth in operations to maximize our potential growth and achieve our expected revenues and our failure to manage growth

will cause a disruption of our operations, resulting in the failure to generate revenue.

In order to maximize potential growth in our current

and potential markets, we believe that we must expand our marketing operations.

This expansion will place a significant strain

on our management and our operational, accounting, and information systems.

brands’

profiles, or if

we incur excessive expenses in this effort, our business and operating results could be harmed.

We anticipate that, as our market

becomes increasingly competitive, maintaining and enhancing our brands’

profiles may become increasingly difficult and expensive.

Maintaining and enhancing our brands will depend largely on our ability to be a technology leader and to continue to provide attractive

products and services, which we may not do successfully.

need to manage growth in operations to maximize our potential growth and achieve our expected revenues and our failure to manage

growth will cause a disruption of our operations, resulting in the failure to generate revenue.

In order to maximize potential growth in

our current and potential markets, we believe that we must expand our marketing operations.

This expansion will place a significant

strain on our management and our operational, accounting, and information systems.

We expect that we will need to continue to improve

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the revenues we expect.

In order to achieve the general strategies of our company

we need to maintain and search for hard-working employees who have innovative initiatives, while at the same time, keep a close

eye on any and all expanding opportunities in our marketplace.

to generate a significant portion of our revenues from advertising and affiliate sales relationships, and a reduction in spending

In order to achieve the general strategies

of our company we need to maintain and search for hard-working employees who have innovative initiatives, while at the same time,

keep a close eye on any and all expanding opportunities in our marketplace.

plan to generate a significant portion of our revenues from advertising and affiliate sales relationships, and a reduction in spending

by or loss of advertisers and general decrease in online spending could adversely harm our business.

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Our advertisers may be able to terminate prospective contracts with us at any time.

Advertisers will not continue to do business with us if their investment in advertising with us does not generate sales

leads, and ultimately customers, or if we do not deliver their advertisements in an appropriate and effective manner.

are unable to remain competitive and provide value to our advertisers, they may stop placing ads with us, which would

adversely affect our revenues and business.

In addition, expenditures by advertisers tend to be cyclical, reflecting overall

economic conditions and budgeting and buying patterns.

Our advertising and e-commerce revenues may be affected by the

strength of advertising markets and general economic conditions and may fluctuate depending on the success of our content, as

measured by the number of people visiting our websites at any given time.

macroeconomic conditions can also have a material negative impact on the demand for advertising and cause our advertisers to

reduce the amounts they spend on advertising, which could adversely affect our revenues and business.

will not continue to do business with us if their investment in advertising with us does not generate sales leads, and ultimately

customers, or if we do not deliver their advertisements in an appropriate and effective manner.

If we are unable to remain competitive

and provide value to our advertisers, they may stop placing ads with us, which would adversely affect our revenues and business.

In addition, expenditures by advertisers tend to be cyclical, reflecting overall economic conditions and budgeting and buying patterns.

Our advertising and e-commerce revenues may be affected by the strength of advertising markets and general economic conditions

and may fluctuate depending on the success of our content, as measured by the number of people visiting our websites at any given

Adverse macroeconomic conditions can also have a material negative impact on the demand for advertising and cause our

advertisers to reduce the amounts they spend on advertising, which could adversely affect our revenues and business.

breaches could harm our business.

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We believe that we take reasonable steps to protect the security, integrity and confidentiality of

the information we collect, use, store and disclose, but there is no guarantee that inadvertent (e.g., software bugs or other

technical malfunctions, employee error or malfeasance, or other factors) or unauthorized data access or use will not occur despite

Although we have not experienced any material security breaches to date, we may in the future experience attempts

to disable our systems or to breach the security of our systems.

Techniques used to obtain unauthorized access to personal information,

confidential information and/or the systems on which such information is stored and/or to sabotage systems change frequently and

generally are not recognized until launched against a target.

As a result, we may be unable to anticipate these techniques or

to implement adequate preventative measures.

If an actual or perceived security breach occurs, the

market perception of our security measures could be harmed and we could lose sales and customers and/or suffer other negative consequences

to our business.

A security breach could adversely affect the digital content experience and cause the loss or corruption of data,

which could harm our business, financial condition and operating results.

Any failure to maintain the security of our infrastructure

could result in loss of personal information and/or other confidential information, damage to our reputation and customer relationships,

early termination of our contracts and other business losses, indemnification of our customers, financial penalties, litigation,

regulatory investigations and other significant liabilities.

In the event of a major third-party security incident, we may incur

losses in excess of their insurance coverage.

Moreover, if a high profile security breach occurs

with respect to us or another digital entertainment company, our customers and potential customers may lose trust in the security

of our business model generally, which could adversely impact our ability to retain existing customers or attract new ones.

and regulations concerning data privacy and data security are continually evolving;

the information we collect, use, store and disclose, but there is no guarantee that inadvertent (e.g., software bugs or other technical

malfunctions, employee error or malfeasance, or other factors) or unauthorized data access or use will not occur despite our efforts.

Although we have not experienced any material security breaches to date, we may in the future experience attempts to disable our

systems or to breach the security of our systems.

Techniques used to obtain unauthorized access to personal information, confidential

information and/or the systems on which such information is stored and/or to sabotage systems change frequently and generally are

not recognized until launched against a target.

As a result, we may be unable to anticipate these techniques or to implement adequate

preventative measures.

If an actual or perceived security breach

occurs, the market perception of our security measures could be harmed and we could lose sales and customers and/or suffer other

negative consequences to our business.

A security breach could adversely affect the digital content experience and cause the loss

or corruption of data, which could harm our business, financial condition and operating results.

Any failure to maintain the security

of our infrastructure could result in loss of personal information and/or other confidential information, damage to our reputation

and customer relationships, early termination of our contracts and other business losses, indemnification of our customers, financial

penalties, litigation, regulatory investigations and other significant liabilities.

In the event of a major third-party security

incident, we may incur losses in excess of their insurance coverage.

Moreover, if a high profile security breach

occurs with respect to us or another digital entertainment company, our customers and potential customers may lose trust in the

security of our business model generally, which could adversely impact our ability to retain existing customers or attract new

laws and regulations concerning data privacy and data security are continually evolving;

our or our platform providers’

or perceived failure to comply with these laws and regulations could harm our business.

Customers view our content online, using third-party

platforms and networks and on mobile devices.

Customers view our content online, using

third-party platforms and networks and on mobile devices.

We collect and store significant amounts of information about our customers—both

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and distracting government investigations and could result in substantial fines.

Data privacy protection laws are rapidly changing and

likely will continue to do so for the foreseeable future.

government, including the Federal Trade Commission and the Department

of Commerce, is continuing to review the need for greater regulation over the collection of personal information and information

about consumer behavior on the Internet and on mobile devices and the EU has proposed reforms to its existing data protection legal

Various government and consumer agencies worldwide have also called for new regulation and changes in industry practices.

In addition, in some cases, we are dependent upon our platform providers to solicit, collect and provide us with information regarding

our players that is necessary for compliance with these various types of regulations.

Customer interaction with our content is subject to

our privacy policy and terms of service.

If we fail to comply with our posted privacy policy or terms of service or if we fail

to comply with existing privacy-related or data protection laws and regulations, it could result in proceedings or litigation against

us by governmental authorities or others, which could result in fines or judgments against us, damage our reputation, impact our

financial condition and harm our business.

Data privacy protection laws are rapidly

changing and likely will continue to do so for the foreseeable future.

government, including the Federal Trade Commission

and the Department of Commerce, is continuing to review the need for greater regulation over the collection of personal information

and information about consumer behavior on the Internet and on mobile devices and the EU has proposed reforms to its existing data

protection legal framework.

Various government and consumer agencies worldwide have also called for new regulation and changes

in industry practices.

In addition, in some cases, we are dependent upon our platform providers to solicit, collect and provide

us with information regarding our players that is necessary for compliance with these various types of regulations.

Customer interaction with our content is

subject to our privacy policy and terms of service.

If we fail to comply with our posted privacy policy or terms of service or

if we fail to comply with existing privacy-related or data protection laws and regulations, it could result in proceedings or litigation

against us by governmental authorities or others, which could result in fines or judgments against us, damage our reputation, impact

our financial condition and harm our business.

If regulators, the media or consumers raise any concerns about our privacy and data

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our reputation, and negatively impact our financial condition and damage our business.

In the area of information security and data protection,

many jurisdictions have passed laws requiring notification when there is a security breach for personal data or requiring the adoption

of minimum information security standards that are often vaguely defined and difficult to implement.

Our security measures and

standards may not be sufficient to protect personal information and we cannot guarantee that our security measures will prevent

security breaches.

A security breach that compromises personal information could harm our reputation and result in a loss of confidence

in our products and ultimately in a loss of customers, which could adversely affect our business and impact our financial condition.

This could also subject us to liability under applicable security breach-related laws and regulations and could result in additional

compliance costs, costs related to regulatory inquiries and investigations, and an inability to conduct our business.

of our relationships with internet search websites terminate, if such websites' methodologies are modified or if we are outbid

In the area of information security and

data protection, many jurisdictions have passed laws requiring notification when there is a security breach for personal data or

requiring the adoption of minimum information security standards that are often vaguely defined and difficult to implement.

security measures and standards may not be sufficient to protect personal information and we cannot guarantee that our security

measures will prevent security breaches.

A security breach that compromises personal information could harm our reputation and

result in a loss of confidence in our products and ultimately in a loss of customers, which could adversely affect our business

and impact our financial condition.

This could also subject us to liability under applicable security breach-related laws and regulations

and could result in additional compliance costs, costs related to regulatory inquiries and investigations, and an inability to

conduct our business.

any of our relationships with internet search websites terminate, if such websites’

methodologies are modified or if we are outbid

by competitors, traffic to our websites could decline.

We depend in part on various internet search websites,

such as Google.com, Bing.com, Yahoo.com and other websites to direct a significant amount of traffic to our websites.

Search websites

typically provide two types of search results, algorithmic and purchased listings.

Algorithmic listings generally are determined

and displayed as a result of a set of unpublished formulas designed by search engine companies in their discretion.

Purchased listings

generally are displayed if particular word searches are performed on a search engine.

We rely on both algorithmic and purchased

search results, as well as advertising on other internet websites, to direct a substantial share of visitors to our websites and

to direct traffic to the advertiser customers we serve.

If these internet search websites modify or terminate their relationship

with us or we are outbid by our competitors for purchased listings, meaning that our competitors pay a higher price to be listed

above us in a list of search results, traffic to our websites could decline.

Such a decline in traffic could affect our ability

to generate advertising revenue and could reduce the desirability of advertising on our websites.

involves risks of liability claims arising from our media content, which could adversely affect our ability to generate revenue

and could increase our operating expenses.

We depend in part on various internet search

websites, such as Google.com, Bing.com, Yahoo.com and other websites to direct a significant amount of traffic to our websites.

Search websites typically provide two types of search results, algorithmic and purchased listings.

Algorithmic listings generally

are determined and displayed as a result of a set of unpublished formulas designed by search engine companies in their discretion.

Purchased listings generally are displayed if particular word searches are performed on a search engine.

We rely on both algorithmic

and purchased search results, as well as advertising on other internet websites, to direct a substantial share of visitors to our

websites and to direct traffic to the advertiser customers we serve.

If these internet search websites modify or terminate their

relationship with us or we are outbid by our competitors for purchased listings, meaning that our competitors pay a higher price

to be listed above us in a list of search results, traffic to our websites could decline.

Such a decline in traffic could affect

our ability to generate advertising revenue and could reduce the desirability of advertising on our websites.

business involves risks of liability claims arising from our media content, which could adversely affect our ability to generate

revenue and could increase our operating expenses.

As a distributor of media content, we face

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through our internet websites could require us to take steps that would substantially limit the aesthetic of our internet websites

and/or their availability in certain geographic areas, which could adversely affect our ability to generate revenue and could

increase our operating expenses.

and/or their availability in certain geographic areas, which could adversely affect our ability to generate revenue and could increase

our operating expenses.

property litigation could expose us to significant costs and liabilities and thus negatively affect our business, financial condition

and results of operations.

We may be subject to claims of infringement of third

party patents and trademarks and other violations of third party intellectual property rights.

Intellectual property disputes are

generally time-consuming and expensive to litigate or settle, and the outcome of such disputes is uncertain and difficult to predict.

The existence of such disputes may require us to set-aside substantial reserves, and has the potential to significantly affect

our overall financial standing.

To the extent that claims against us are successful, they may subject us to substantial liability,

and we may have to pay substantial monetary damages, change aspects of our business model, and/or discontinue any of our services

or practices that are found to be in violation of another party's rights.

Such outcomes may severely restrict or hinder ongoing

business operations and impact the value of our business.

Successful claims against us could also result in us having to seek a

license to continue our practices.

Under such conditions, a license may or may not be offered or otherwise made available to us.

If a license is made available to us, the cost of the license may significantly increase our operating burden and expenses, potentially

resulting in a negative effect on our business, financial condition and results of operations.

Although we have been and are currently involved

in multiple areas of commerce, internet services, and high technology where there is a substantial risk of future patent litigation,

we have not obtained insurance for patent infringement losses.

If we are unsuccessful in resolving pending and future patent litigation

in a reasonable and affordable manner, it could disrupt our business and operations, including by negatively impacting areas of

commerce or putting us at a competitive disadvantage.

are unable to obtain or maintain key website addresses, our ability to operate and grow our business may be impaired.

Our website addresses, or domain names, are critical

to our business.

We may be subject to claims of infringement

of third party patents and trademarks and other violations of third party intellectual property rights.

Intellectual property disputes

are generally time-consuming and expensive to litigate or settle, and the outcome of such disputes is uncertain and difficult to

The existence of such disputes may require us to set-aside substantial reserves, and has the potential to significantly

affect our overall financial standing.

To the extent that claims against us are successful, they may subject us to substantial

liability, and we may have to pay substantial monetary damages, change aspects of our business model, and/or discontinue any of

our services or practices that are found to be in violation of another party’s rights.

Such outcomes may severely restrict or hinder

ongoing business operations and impact the value of our business.

Successful claims against us could also result in us having to

seek a license to continue our practices.

Under such conditions, a license may or may not be offered or otherwise made available

If a license is made available to us, the cost of the license may significantly increase our operating burden and expenses,

potentially resulting in a negative effect on our business, financial condition and results of operations.

Although we have been and are currently

involved in multiple areas of commerce, internet services, and high technology where there is a substantial risk of future patent

litigation, we have not obtained insurance for patent infringement losses.

If we are unsuccessful in resolving pending and future

patent litigation in a reasonable and affordable manner, it could disrupt our business and operations, including by negatively

impacting areas of commerce or putting us at a competitive disadvantage.

we are unable to obtain or maintain key website addresses, our ability to operate and grow our business may be impaired.

Our website addresses, or domain

names, are critical to our business.

We currently own more than 388 domain names.

However, the regulation of domain names is subject to change, and

it may be difficult for us to prevent third parties from acquiring domain names that are similar to ours, that infringe our trademarks

or that otherwise decrease the value of our brands.

If we are unable to obtain or maintain key domain names for the various areas

of our business, our ability to operate and grow our business may be impaired.

have difficulty scaling and adapting our existing network infrastructure to accommodate increased traffic and technology advances

However, the regulation of domain names is

subject to change, and it may be difficult for us to prevent third parties from acquiring domain names that are similar to

ours, that infringe our trademarks or that otherwise decrease the value of our brands.

If we are unable to obtain or maintain

key domain names for the various areas of our business, our ability to operate and grow our business may be impaired.

may have difficulty scaling and adapting our existing network infrastructure to accommodate increased traffic and technology advances

or changing business requirements, which could cause us to incur significant expenses and lead to the loss of users and advertisers.

To be successful, our network infrastructure has to

perform well and be reliable.

The greater the user traffic and the greater the complexity of our products and services, the more

computer power we will need.

We could incur substantial costs if we need to modify our websites or our infrastructure to adapt

to technological changes.

If we do not maintain our network infrastructure successfully, or if we experience inefficiencies and

operational failures, the quality of our products and services and our users' experience could decline.

To be successful, our network infrastructure

has to perform well and be reliable.

The greater the user traffic and the greater the complexity of our products and services,

the more computer power we will need.

We could incur substantial costs if we need to modify our websites or our infrastructure

to adapt to technological changes.

If we do not maintain our network infrastructure successfully, or if we experience inefficiencies

and operational failures, the quality of our products and services and our users’

experience could decline.

Maintaining an efficient

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some of our brands contain adult content, companies providing products and services on which we rely may refuse to do business

Many companies that provide products and services we

need are concerned that associating with us could lead to their becoming the target of negative publicity campaigns by public interest

groups and boycotts of their products and services.

As a result of these concerns, these companies may be reluctant to enter into

or continue business relationships with us.

There can be no assurance that we will be able to maintain our existing business relationships

with the companies, domestic or international, that currently provide us with services and products.

Our inability to maintain

such business relationships, or to find replacement service providers, would materially adversely affect our business, financial

condition and results of operations.

We could be forced to enter into business arrangements on terms less favorable to us than

we might otherwise obtain, which could lead to our doing business with less competitive terms, higher transaction costs and more

inefficient operations than if we were able to maintain such business relationships or find replacement service providers.

is exposed to risks associated with online commerce security and credit card fraud.

Consumer concerns over the security of transactions

conducted on the internet or the privacy of users may inhibit the growth of the internet and online commerce.

To transmit confidential

information such as customer credit card numbers securely, we rely on encryption and authentication technology.

Unanticipated events

or developments could result in a compromise or breach of the systems we use to protect customer transaction data.

Many companies that provide products and

services we need are concerned that associating with us could lead to their becoming the target of negative publicity campaigns

by public interest groups and boycotts of their products and services.

As a result of these concerns, these companies may be reluctant

to enter into or continue business relationships with us.

There can be no assurance that we will be able to maintain our existing

business relationships with the companies, domestic or international, that currently provide us with services and products.

inability to maintain such business relationships, or to find replacement service providers, would materially adversely affect

our business, financial condition and results of operations.

We could be forced to enter into business arrangements on terms less

favorable to us than we might otherwise obtain, which could lead to our doing business with less competitive terms, higher transaction

costs and more inefficient operations than if we were able to maintain such business relationships or find replacement service

business is exposed to risks associated with online commerce security and credit card fraud.

Consumer concerns over the security of

transactions conducted on the internet or the privacy of users may inhibit the growth of the internet and online commerce.

confidential information such as customer credit card numbers securely, we rely on encryption and authentication technology.

Unanticipated

events or developments could result in a compromise or breach of the systems we use to protect customer transaction data.

our servers may also be vulnerable to viruses and other attacks transmitted via the internet.

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affect our business.

Risk Factors Related to our Potent Media Brand

Risk Factors Related to our Potent Media

remains illegal under Federal law.

Our Potent Media brand is a website devoted to exploring the history of marijuana,

the cannabis culture and its effect on pop culture today.

The site keeps its user base informed on all things involving cannabis

culture including movies, tv and books and festivals, conventions and politics.

However, despite the development of a legal cannabis

industry under the laws of certain states, these state laws legalizing medical and adult cannabis use are in conflict with the

Federal Controlled Substances Act, which classifies cannabis as a schedule-I controlled substance and makes cannabis use and possession

illegal on a national level.

The United States Supreme Court has ruled that the Federal government has the right to regulate and

criminalize cannabis, even for medical purposes, and thus Federal law criminalizing the use of cannabis preempts state laws that

legalize its use.

Although the Obama Administration determined that it is not an efficient use of resources to direct Federal

law enforcement agencies to prosecute those lawfully abiding by state laws allowing the use and distribution of medical and recreational

There is no guarantee that the Trump Administration will not introduce a less favorable policy or decide to enforce

the Federal laws strongly.

Any such change in the Federal government’s enforcement of Federal laws could cause significant

financial damage to us and our shareholders.

possession and use of cannabis is illegal under the Federal Controlled Substances Act, we may be deemed to be aiding and abetting

Potent Media brand is a website devoted to exploring the history of marijuana, the cannabis culture and its effect on pop culture

The site keeps its user base informed on all things involving cannabis culture including movies, tv and books and festivals,

conventions and politics.

However, despite the development of a legal cannabis industry under the laws of certain states, these

state laws legalizing medical and adult cannabis use are in conflict with the Federal Controlled Substances Act, which classifies

cannabis as a schedule-I controlled substance and makes cannabis use and possession illegal on a national level.

The United States

Supreme Court has ruled that the Federal government has the right to regulate and criminalize cannabis, even for medical purposes,

and thus Federal law criminalizing the use of cannabis preempts state laws that legalize its use.

Although the Obama Administration

determined that it is not an efficient use of resources to direct Federal law enforcement agencies to prosecute those lawfully

abiding by state laws allowing the use and distribution of medical and recreational cannabis.

The Trump administration has made

statements implying that it could change this policy and decide to enforce the federal laws strongly, though no specific measures

have yet been implemented other than revocation of the Cole Memo and two others.

Any negative material change in the Federal government’s

policy on enforcement of these laws could potentially cause damage to the Potent brand, but should not cause significant financial

damage to the Company and/or our shareholders.

the possession and use of cannabis is illegal under the Federal Controlled Substances Act, we may be deemed to be aiding and abetting

illegal activities through the services that we provide to users.

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enforcement authorities, which would materially and adversely affect our business.

Under Federal law, and more specifically the Federal

Controlled Substances Act, the possession, use, cultivation, and transfer of cannabis is illegal.

Our business provides services

to customers that are engaged in the business of possession, use, cultivation, and/or transfer of cannabis.

As a result, law enforcement

authorities, in their attempt to regulate the illegal use of cannabis, may seek to bring an action or actions against us, including,

but not limited, to a claim of aiding and abetting another’s criminal activities.

The Federal aiding and abetting statute

provides that anyone who “commits an offense against the United States or aids, abets, counsels, commands, induces or procures

its commission, is punishable as a principal.”

As a result of such an action, we may be forced to cease

operation of our Potent Media brand.

Under Federal law, and more specifically

the Federal Controlled Substances Act, the possession, use, cultivation, and transfer of cannabis is illegal.

Our business provides

services to customers that are engaged in the business of possession, use, cultivation, and/or transfer of cannabis.

law enforcement authorities, in their attempt to regulate the illegal use of cannabis, may seek to bring an action or actions against

us, including, but not limited, to a claim of aiding and abetting another’s criminal activities.

The Federal aiding and abetting

statute provides that anyone who “commits an offense against the United States or aids, abets, counsels, commands, induces

or procures its commission, is punishable as a principal.”

As a result of such an action, we may be

forced to cease operation of our Potent Media brand.

Such an action could have a material negative effect on our business and operations.

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or the sales of our products.

It is possible that additional Federal or state legislation

could be enacted in the future that would prohibit our advertisers from selling cannabis and cannabis related products, and, if

such legislation were enacted, such advertisers may discontinue the use of our services, our potential source of customers would

be reduced, and our revenues would decline.

Further, additional government disruption in the cannabis industry could cause potential

customers and users to be reluctant use and advertise on our products, which would be detrimental to the Company.

We cannot predict

the nature of any future laws, regulations, interpretations or applications, nor can we determine what effect additional governmental

regulations or administrative policies and procedures, when and if promulgated, could have on our business.

It is possible that additional Federal

or state legislation could be enacted in the future that would prohibit our advertisers from selling cannabis and cannabis related

products, and, if such legislation were enacted, such advertisers may discontinue the use of our services, our potential source

of customers would be reduced, and our revenues would decline.

Further, additional government disruption in the cannabis industry

could cause potential customers and users to be reluctant use and advertise on our products, which would be detrimental to the

We cannot predict the nature of any future laws, regulations, interpretations or applications, nor can we determine what

effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on our

a network open to all internet users may result in legal consequences.

Our Terms and Conditions clearly state that our network

and services are only to be used by users who are over 18 years old and located where the use of cannabis is permissible under

state law and only in a manner which would be permissible under the applicable state law.

Our Terms and Conditions clearly state

that our network and services are only to be used by users who are over 13 years old.

However, it is impractical to independently

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enforcement prosecution.

Although the Obama Administration has determined that

it is not an efficient use of resources to direct Federal law enforcement agencies to prosecute those following certain state laws

allowing for the use and distribution of medical and recreational cannabis, there can be no assurance that the administration,

or future administrations, will not change its stated policy and begin enforcement of the Federal laws against us or our users.

Additionally, there can be no assurance that we will not face criminal prosecution from states where the use of cannabis is permitted

for the use of cannabis in ways which do not fall under the state law.

Finally, even if we attempt to prevent the use of our product

in states where cannabis use is not permitted under state law, use of our websites by those in such states may still occur and

state authorities may still bring an action against us for the promotion of cannabis related material by those residing in such

Although the Obama Administration has

determined that it is not an efficient use of resources to direct Federal law enforcement agencies to prosecute those

following certain state laws allowing for the use and distribution of medical and recreational cannabis, there can be no

assurance that the administration, or future administrations, will not change its stated policy and begin enforcement of the

Federal laws against us or users of our website.

Additionally, there can be no assurance that we will not face

criminal prosecution from states where the use of cannabis is permitted for the use of cannabis in ways which do not fall

under the state law.

Finally, even if we attempt to prevent the use of our website or digital communities in states where

cannabis use is not permitted under state law, use of our websites by those in such states may still occur and state

authorities may still bring an action against us for the promotion of cannabis related material by those residing in such

Related to FILTHY MEDIA

in laws regulating adult content could materially adversely affect our business, financial condition and results of operations.

Our brand, Filthy Media, presents content related to

culture of erotic art.

Regulation, investigations and prosecutions of adult content could prevent us from making such content available

in certain jurisdictions and may otherwise have a material adverse effect on our business, financial condition and results of operations.

Government officials may also place additional restrictions on adult content affecting the way people interact on the internet.

The governments of some countries, such as China and India, have sought to limit the influence of other cultures by restricting

the distribution of products deemed to represent foreign or “immoral”

Regulation aimed at limiting minors’

access to adult content both in the United States and abroad could also increase our cost of operations and introduce technological

challenges by requiring development and implementation of age verification systems.

government officials could amend or construe

and seek to enforce more broadly or aggressively the adult content recordkeeping and labeling requirements set forth in 18 U.S.C.

Our brand, Filthy Media, presents content

related to culture of erotic art.

Regulation, investigations and prosecutions of adult content could prevent us from making such

content available in certain jurisdictions and may otherwise have a material adverse effect on our business, financial condition

and results of operations.

Government officials may also place additional restrictions on adult content affecting the way people

interact on the internet.

The governments of some countries, such as China and India, have sought to limit the influence of other

cultures by restricting the distribution of products deemed to represent foreign or “immoral”

aimed at limiting minors’

access to adult content both in the United States and abroad could also increase our cost of operations

and introduce technological challenges by requiring development and implementation of age verification systems.

officials could amend or construe and seek to enforce more broadly or aggressively the adult content recordkeeping and labeling

requirements set forth in 18 U.S.C.

Section 2257 and its implementing regulations in a manner that is unfavorable to our business.

Court rulings may place additional

restrictions on adult content affecting how people interact on the internet, such as mandatory web labeling.

Court rulings may place additional restrictions on adult content affecting how people interact on the internet, such as mandatory

web labeling.

RISKS RELATED TO OUR COMMON STOCK

The price of our Common Stock

may be subject to wide fluctuations .

Even though we have our shares quoted on the OTCQB,

a consistently active trading market for our Common Stock may not exist.

You may not be able to sell your shares quickly

or at the current market price if trading in our stock is not active.

You may lose all or a part of your investment.

market price of our Common Stock may be highly volatile and subject to wide fluctuations in response to a variety of factors and

risks, many of which are beyond our control.

In addition to the risks noted elsewhere in this prospectus, some of the

other factors affecting our stock price may include:

price of our Common Stock may be subject to wide fluctuations .

Even though we have our shares quoted on

the OTCQB, a consistently active trading market for our Common Stock may not exist.

You may not be able to sell your

shares quickly or at the current market price if trading in our stock is not active.

You may lose all or a part of your

The market price of our Common Stock may be highly volatile and subject to wide fluctuations in response

to a variety of factors and risks, many of which are beyond our control.

In addition to the risks noted elsewhere in

this prospectus, some of the other factors affecting our stock price may include:

variations in our operating results;

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future sales of our Common Stock.

For these reasons, comparing our operating results

on a period-to-period basis may not be meaningful, and you should not rely on past results as an indication of future performance.

For these reasons, comparing our operating

results on a period-to-period basis may not be meaningful, and you should not rely on past results as an indication of future performance.

the past, following periods of volatility in the market price of a public company’s securities, securities class action litigation

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our share value.

Our Articles of Incorporation authorize the issuance of 300,000,000 shares of Common Stock, and

20,000,000 shares of preferred stock.

Currently the Company has issued 33,414 shares of Series A Preferred, 8,063 shares of Series

B Preferred and 914,557 of Series D Convertible Preferred Stock (the “Series D Preferred”).

Additionally, the Company

has issued warrants to purchase 14,986,667 shares of our common stock at a weighted average exercise price of $0.36.

As of December

1, 2016, the Series A Preferred, Series B Preferred and Series D Preferred, are convertible into 25,382,880 shares of the Company’s

common stock, subject to adjustment.

Assuming all of the Company’s currently outstanding preferred stock be converted and

all outstanding warrants be exercised, the Company would have to issue an additional 40,369,547 shares of common stock representing

54% of our current issued and outstanding common stock.

The future issuance of this Common Stock would result in substantial dilution

in the percentage of our Common Stock held by our then existing shareholders.

We may value any Common Stock issued in the future

on an arbitrary basis.

The issuance of Common Stock for future services or acquisitions or other corporate actions may have the

effect of diluting the value of the shares held by our investors, and might have an adverse effect on any trading market for

our Common Stock.

OUR COMMON SHARES ARE SUBJECT TO THE “PENNY

RULES OF THE SEC AND THE TRADING MARKET IN OUR SECURITIES IS LIMITED, WHICH MAKES TRANSACTIONS IN OUR STOCK CUMBERSOME

AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK.

The Securities and Exchange Commission has adopted

Rule 15g-9 which establishes the definition of a “penny stock,”

for the purposes relevant to us, as any equity security

that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain

For any transaction involving a penny stock, unless

exempt, the rules require:

Our Articles of Incorporation

authorize the issuance of 300,000,000 shares of Common Stock, and 20,000,000 shares of preferred stock.

Currently the Company

has issued 31,581 shares of Series A Preferred, 8,063 shares of Series B Preferred and 0 of Series D Convertible Preferred

Stock (the “Series D Preferred”).

Additionally, the Company has issued warrants to purchase 46,211,279 shares of

our common stock at a weighted average exercise price of $0.25.

As of May 15, 2018, the Series A Preferred, Series B

Preferred and Series D Preferred, are convertible into 233,496 shares of the Company’s common stock, subject to

In addition, the Company has convertible notes outstanding that convert into 23,282,046 shares of the

Company’s common stock at conversion rates between $0.20 - $0.30.

Assuming all of the Company’s currently

outstanding preferred stock be converted and all outstanding warrants be exercised, the Company would have to issue an

additional 190,769,997 shares of common stock representing 175% of our current issued and outstanding common stock.

future issuance of this Common Stock would result in substantial dilution in the percentage of our Common Stock held by our

then existing shareholders.

We may value any Common Stock issued in the future on an arbitrary basis.

The issuance of Common

Stock for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares

held by our investors, and might have an adverse effect on any trading market for our Common Stock.

OUR COMMON SHARES ARE SUBJECT TO

THE “PENNY STOCK”

RULES OF THE SEC AND THE TRADING MARKET IN OUR SECURITIES IS LIMITED, WHICH MAKES TRANSACTIONS IN

OUR STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK.

The Securities and Exchange Commission

has adopted Rule 15g-9 which establishes the definition of a “penny stock,”

for the purposes relevant to us, as any

equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject

to certain exceptions.

For any transaction involving a penny stock,

unless exempt, the rules require:

that a broker or dealer approve a person’s account for transactions in penny stocks;

the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person’s account for transactions

in penny stocks, the broker or dealer must:

(a) obtain financial information and investment experience objectives of the person;

and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient

knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any

transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in

highlight form:

(a) sets forth the basis on which the broker or dealer made the suitability determination, and (b) that the broker

or dealer received a signed, written agreement from the investor prior to the transaction.

Generally, brokers may be less willing

to execute transactions in securities subject to the “penny stock”

This may make it more difficult for investors

to dispose of our Common shares and cause a decline in the market value of our stock.

Disclosure also has to be made about the risks of investing

in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and

the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases

of fraud in penny stock transactions.

Finally, monthly statements have to be sent disclosing recent price information for the penny

stock held in the account and information on the limited market in penny stocks.

LIABILITY OF DIRECTORS FOR BREACH OF DUTY OF

CARE IS LIMITED.

According to Nevada law (NRS 78.138(7)), all Nevada

corporations limit the liability of directors and officers, including acts not in good faith.

In order to approve a person’s account

for transactions in penny stocks, the broker or dealer must:

(a) obtain financial information and investment experience objectives

of the person;

and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the

person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny

The broker or dealer must also deliver,

prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market,

which, in highlight form:

(a) sets forth the basis on which the broker or dealer made the suitability determination, and (b) that

the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Generally, brokers may be

less willing to execute transactions in securities subject to the “penny stock”

This may make it more difficult

for investors to dispose of our Common shares and cause a decline in the market value of our stock.

Disclosure also has to be made about the

risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both

the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available

to an investor in cases of fraud in penny stock transactions.

Finally, monthly statements have to be sent disclosing recent price

information for the penny stock held in the account and information on the limited market in penny stocks.

LIABILITY OF DIRECTORS FOR BREACH

OF DUTY OF CARE IS LIMITED.

According to Nevada law (NRS 78.138(7)),

all Nevada corporations limit the liability of directors and officers, including acts not in good faith.

Our stockholders’

recover damages for fiduciary breaches may be reduced by this statute.

In addition, we are obligated to indemnify our directors

and officers regarding stockholder suits which they successfully defend (NRS 78.7502).

BECAUSE WE DO NOT INTEND TO PAY ANY CASH DIVIDENDS

ON OUR COMMON STOCK, OUR STOCKHOLDERS WILL NOT BE ABLE TO RECEIVE A RETURN ON THEIR SHARES UNLESS THEY SELL THEM.

We intend to retain any future earnings to finance

the development and expansion of our business.

We do not anticipate paying any cash dividends on our Common Stock in the foreseeable

Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them.

is no assurance that stockholders will be able to sell shares when desired.

WE MAY ISSUE ADDITIONAL SHARES OF PREFERRED STOCK

IN THE FUTURE THAT MAY ADVERSELY IMPACT YOUR RIGHTS AS HOLDERS OF OUR COMMON STOCK.

ability to recover damages for fiduciary breaches may be reduced by this statute.

In addition, we are obligated to indemnify our

directors and officers regarding stockholder suits which they successfully defend (NRS 78.7502).

BECAUSE WE DO NOT INTEND TO PAY ANY

CASH DIVIDENDS ON OUR COMMON STOCK, OUR STOCKHOLDERS WILL NOT BE ABLE TO RECEIVE A RETURN ON THEIR SHARES UNLESS THEY SELL THEM.

We intend to retain any future earnings

to finance the development and expansion of our business.

We do not anticipate paying any cash dividends on our Common Stock in

the foreseeable future.

Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they

There is no assurance that stockholders will be able to sell shares when desired.

WE MAY ISSUE ADDITIONAL SHARES OF

PREFERRED STOCK IN THE FUTURE THAT MAY ADVERSELY IMPACT YOUR RIGHTS AS HOLDERS OF OUR COMMON STOCK.

Our articles of incorporation authorize

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outstanding shares of common stock.

Currently, the Company has issued 33,414 shares of Series A Preferred, 8,063

shares of Series B Preferred and 914,557 shares of Series D Preferred stock outstanding.

As of December 8, 2016, our

outstanding preferred stock is convertible into 25,382,880 shares of the Company’s Common Stock.

Our board of directors

will have the authority to fix and determine the relative rights and preferences of preferred shares, as well as the

authority to issue additional shares, without further stockholder approval.

As a result, our board of directors could

authorize the issuance of a series of preferred stock that would grant to holders preferred rights to our assets upon

liquidation, the right to receive dividends before dividends are declared to holders of our Common Stock, and the right to

the redemption of such preferred shares, together with a premium, prior to the redemption of the Common Stock.

To the extent

that we do issue such additional shares of preferred stock, your rights as holders of Common Stock could be impaired thereby,

including, without limitation, dilution of your ownership interests in us.

In addition, shares of preferred stock could be

issued with terms calculated to delay or prevent a change in control or make removal of management more difficult, which may

not be in your interest as a holder of Common Stock.

Currently, the Company has issued 31,581 shares of Series A Preferred, 8,063 shares of Series

B Preferred and 0 shares of Series D Preferred stock outstanding.

As of May 15, 2018, our outstanding preferred stock is convertible

into 233,496 shares of the Company’s Common Stock.

Our board of directors will have the authority to fix and determine the

relative rights and preferences of preferred shares, as well as the authority to issue additional shares, without further stockholder

As a result, our board of directors could authorize the issuance of a series of preferred stock that would grant to holders

preferred rights to our assets upon liquidation, the right to receive dividends before dividends are declared to holders of our

Common Stock, and the right to the redemption of such preferred shares, together with a premium, prior to the redemption of the

Common Stock.

To the extent that we do issue such additional shares of preferred stock, your rights as holders of Common Stock

could be impaired thereby, including, without limitation, dilution of your ownership interests in us.

In addition, shares of preferred

stock could be issued with terms calculated to delay or prevent a change in control or make removal of management more difficult,

which may not be in your interest as a holder of Common Stock.

Unresolved Staff Comments.

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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