What changed in this filing

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Item 1A. Risk Factors

2021-04-01 compared with 2020-03-25 · 1012 added, 768 removed, 3 unchanged (100% of the section changed)

In addition to the information set forth at the beginning of Management’s Discussion and Analysis entitled “Special Note Regarding Forward-Looking

Information”, investors should consider that there are numerous and varied risks, known and unknown, that may prevent us from achieving our goals.

If any of these risks actually occur, our business, financial condition or results of operation may

be materially and adversely affected.

In such case, the trading price of our common stock could decline and investors could lose all or part of their investment.

Risks Relating to Our Business and Industry

If the requirements of our

indebtedness are not satisfied, a default could be deemed to occur and our lenders or the holders of our notes could accelerate the payment of the outstanding indebtedness.

As of December 31, 2019, we had an outstanding aggregate of $1 million in 8% Convertible Unsecured Promissory Notes (the “2017

Notes”), which were issued to one of our accredited investor, including one of the Company’s then-directors, Dhruwa N.

Rai, and David Luci, who became a director of the Company in February 2018.

The 2017 Notes bear interest at 8% per annum and

matured in March 2020.

We have not repaid the 2017 Notes and do not currently have sufficient funds available to meet these obligations.

We recorded a net loss for the twelve months ended December 31, 2019 and December 31, 2018 and there can be no assurance that our future operations will result in net income.

For the twelve months ended December 31, 2019, and December 31, 2018, we had net revenue of $40 million and $43 million, respectively, and we had comprehensive net loss of $6.1 million and $19.4

million, respectively.

At December 31, 2019, we had stockholders’ equity of approximately $10.6 million and an accumulated deficit of approximately $40.5 million.

There can be no assurance that our future operations will result in net income.

failure to increase our revenues or improve our gross margins will harm our business.

We may not be able to sustain or increase profitability on a quarterly or annual basis in the future.

If our revenues grow more slowly than we anticipate, our

gross margins fail to improve or our operating expenses exceed our expectations, our operating results will suffer.

The fee we charge for our solutions and services may decrease, which would reduce our revenues and harm our business.

unable to sell our solutions at acceptable prices relative to our costs, or if we fail to develop and introduce new solutions on a timely basis and services from which we can derive additional revenues, our financial results will suffer.

We and our subsidiaries have limited operating histories and therefore we cannot ensure the long-term successful operation of our business or the execution of

our business plan.

Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by growing companies in new and rapidly evolving markets, such as the

technology consulting markets in which we operate.

We must meet many challenges including:

establishing and maintaining broad market acceptance of our solutions and services and converting that acceptance into direct and indirect sources of revenue;

establishing and maintaining adoption of our technology solutions in a wide variety of industries and on multiple enterprise architectures;

timely and successfully developing new solutions and services and increasing the functionality and features of existing solutions and services;

developing solutions and services that result in high degree of enterprise client satisfaction and high levels of end-customer usage;

successfully responding to competition, including competition from emerging technologies and solutions;

developing and maintaining strategic relationships to enhance the distribution, features, content and utility of our solutions and services;

identifying, attracting and retaining talented personnel at reasonable market compensation rates in the markets in which we employ.

Our business strategy may be unsuccessful and we may be unable to address the risks we face in a cost-effective manner, if at all.

If we are unable to successfully address these

risks our business will be harmed.

We face working capital constraints and may not have sufficient working capital in the long term and there is no assurance that we will be able to obtain

additional financing, which could negatively impact our business.

We have incurred significant and recurring operational losses as a result of our ongoing acquisition strategy.

As of December 31, 2019, we had outstanding cash payment obligations

related to our past acquisitions of approximately $2.5 million and which amount is currently reduced to $1 Million.

If our current cash position does not improve significantly, we will not have sufficient cash on hand to meet these obligations.

Due to our working capital constraints, we are not current in all payments to all our unsecured noteholders.

We are working with certain of our unsecured noteholders to negotiate payment terms until we are able to raise more capital.

There can be no assurance that we will be able to secure additional sources of capital or that cost savings will provide sufficient working capital.

If we continue to be unable

to pay all outstanding payments under our unsecured notes, the unpaid noteholders may take legal action against us, they may accelerate the payment of the principal under the applicable notes, and our senior secured lender may call a cross-default

under our existing credit facility, which could result in the acceleration of the obligations thereunder and have a negative impact on our revenue and financial results.

Should we be unable to raise sufficient debt or equity capital, we could be

forced to cease operations.

Our plan regarding these matters is to work to raise additional debt and/or equity financing to allow us the ability to cover our current cash flow requirements and meet our obligations as they become due.

no assurances that financing will be available or if available, that such financing will be available under favorable terms.

The economic environment, pricing pressures, and decreased employee utilization rates could negatively impact our revenues and operating results.

Spending on technology products and services is subject to fluctuations depending on many factors, including the economic environment in the markets in which our clients operate.

Reduced ERP spending in response to a challenging economic environment leads to increased pricing pressure from our clients, which may adversely impact our revenue, gross profits,

operating margins and results of operations.

In addition to the business challenges and margin pressure resulting from economic slowdown in the markets in which our clients operate and the response of our clients to such

slowdown, there is also a growing trend among consumers of ERP services towards consolidation of technology service providers in order to improve efficiency and reduce costs.

Our success in the competitive bidding process for new projects or in

retaining existing projects is dependent on our ability to fulfil client expectations relating to staffing, delivery of services and more stringent service levels.

If we fail to meet a client’s expectations in such projects, this would likely

adversely impact our business, revenues and operating margins.

In addition, even if we are successful in winning the mandates for such projects, we may experience significant pressure on our operating margins as a result of the competitive bidding

Moreover, our ability to maintain or increase pricing is restricted as clients often expect that as we do more business with them, they will receive volume discounts or lower

In addition, existing and new customers are also increasingly using third-party consultants with broad market knowledge to assist them in negotiating contractual terms.

Any inability to maintain or increase pricing on account of this

practice may also adversely impact our revenues, gross profits, operating margins and results of operations.

Uncertain global SAP consulting market conditions may continue to adversely affect demand for our services.

We rely heavily on global demand for ERP services, especially SAP consulting by customers.

Any weakness for these ERP services by global customers will adversely affect our

revenue projections and hence our profits.

SAP AG is adapting itself to the changes in the market especially towards cloud offerings.

These changes may lead to SAP losing its market share to other competitors like Oracle, Microsoft, Salesforce and

Workday among many other newer players.

With these setbacks to SAP, we may face uncertain future due to dramatic changes in the market place which in turn will affect our revenues and profits.

Our success depends largely upon our highly-skilled technology professionals and our ability to hire, attract, motivate, retain and train these personnel.

Our ability to execute projects, maintain our client relationships and acquire new clients depends largely on our ability to attract, hire, train, motivate and retain highly

skilled technology professionals, particularly project managers and other mid-level professionals.

If we cannot hire, motivate and retain personnel, our ability to bid for projects, obtain new projects and expand our business will be impaired and

our revenues could decline.

Increasing worldwide competition for skilled technology professionals and increased hiring by technology companies may affect our ability to hire and retain an adequate number of

skilled and experienced technology professionals, which may in turn have an adverse effect on our business, results of operations and financial condition.

In addition, the demands of changes in technology, evolving standards and changing client preferences may require us to redeploy and retrain our technology professionals.

are unable to redeploy and retrain our technology professionals to keep pace with continuing changes in technology, evolving standards and changing client preferences, this may adversely affect our ability to bid for and obtain new projects and may

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

We face intense competition from other service providers.

We are subject to intense competition in the industry in which we operate which may adversely affect our results of operations, financial condition and cash flows.

We operate in a

highly competitive industry, which is served by numerous global, national, regional and local firms.

Our industry has experienced rapid technological developments, changes in industry standards and customer requirements.

The principal competitive

factors in the IT markets include the range of services offered, size and scale of service provider, global reach, technical expertise, responsiveness to client needs, speed in delivery of IT solutions, quality of service and perceived value.

companies also choose to perform some or all of their back-office IT and IT-enabled operations internally.

Such competitiveness requires us to keep pace with technological developments and maintains leadership;

enhance our service offerings,

including the breadth of our services and portfolio, and address increasingly sophisticated customer requirements in a timely and cost-effective manner.

We market our service offerings to large and medium-sized organizations.

Generally, the pricing for the projects depends on the type of contract, which includes time and material

contracts, annual maintenance contracts (fixed time frame), fixed price contracts and transaction price based contracts.

The intense competition and the changes in the general economic and business conditions can put pressure on us to change our

If our competitors offer deep discounts on certain services or provide services that the marketplace considers more valuable, we may need to lower prices or offer other favorable terms in order to compete successfully.

Any broad-based

change to our prices and pricing policies could cause revenues to decline and may reduce margins and could adversely affect results of operations, financial condition and cash flows.

Some of our competitors may bundle software products and services

for promotional purposes or as a long-term pricing strategy or provide guarantees of prices and product implementations.

These practices could, over time, significantly constrain the prices that we can charge for certain services.

adapt our pricing models to reflect changes in customer use of our services or changes in customer demand, our revenues and cash flows could decrease.

Our competitors may have significantly greater financial, technical and marketing resources and greater name recognition and, therefore, may be better able to compete for new work

and skilled professionals.

Similarly, if our competitors are successful in identifying and implementing newer service enhancements in response to rapid changes in technology and customer preferences, they may be more successful at selling their

If we are unable to respond to such changes our results of operations may be harmed.

Further, a client may choose to use its own internal resources rather than engage an outside firm to perform the types of services we provide.

be certain that we will be able to sustain our current levels of profitability or growth in the face of competitive pressures, including competition for skilled technology professionals and pricing pressure from competitors employing an

on-site/offshore business model.

In addition, we may face competition from companies that increase in size or scope as the result of strategic alliances such as mergers or acquisitions.

These transactions may

include consolidation activity among hardware manufacturers, software companies and vendors and service providers.

The result of any such vertical integration may be greater integration of products and services that were once offered separately by

independent vendors.

Our access to such products and services may be reduced as a result of such an industry trend, which could adversely affect our competitive position.

These types of events could have a variety of negative effects on our

competitive position and our financial results, such as reducing our revenue, increasing our costs, lowering our gross margin percentage and requiring us to recognize impairments on our assets.

Our business could be adversely affected if we do not anticipate and respond to technology advances in our industry and our clients’ industries.

The IT and global outsourcing and SAP consulting services industries are characterized by rapid technological change, evolving industry standards, changing client preferences and

new product introductions.

Our success will depend in part on our ability to develop IT solutions that keep pace with industry developments.

We may not be successful in addressing these developments on a timely basis or at all.

products or technologies developed by others may not render our services noncompetitive or obsolete.

Our failure to address these developments could have a material adverse effect on our business, results of operations, financial condition and cash

A significant number of organizations are attempting to migrate business applications to advanced technologies.

As a result, our ability to remain competitive will be dependent on

several factors, including our ability to develop, train and hire employees with skills in advanced technologies, breadth and depth of process and technology expertise, service quality, knowledge of industry, marketing and sales capabilities.

failure to hire, train and retain employees with such skills could have a material adverse impact on our business.

Our ability to remain competitive will also be dependent on our ability to design and implement, in a timely and cost- effective

manner, effective transition strategies for clients moving to advanced architectures.

Our failure to design and implement such transition strategies in a timely and cost-effective manner could have a material adverse effect on our business, results

of operations, financial condition and cash flows.

Our operations and assets in India expose us to regulatory, economic, political and other uncertainties in India, which could harm our business.

We have an offshore presence in India where a number of our technical professionals are located.

In the past, the Indian economy has experienced many of the problems confronting

the economies of developing countries, including high inflation and varying gross domestic product growth.

Salaries and other related benefits constitute a major portion of our total operating costs.

Many of our employees based in India where our

wage costs have historically been significantly lower than wage costs in the United States and Europe for comparably skilled professionals, and this has been one of our competitive advantages.

However, wage increases in India or other countries

where we have our operations may prevent us from sustaining this competitive advantage if wages increase.

We may need to increase the levels of our employee compensation more rapidly than in the past to retain talent.

If such events occur, we may

be unable to continue to increase the efficiency and productivity of our employees and wage increases in the long term may reduce our profit margins.

Our clients may seek to reduce their dependence on India for outsourced IT services or take advantage of the services provided in countries with labor costs

similar to or lower than India.

Clients which presently outsource a significant proportion of their IT services requirements to vendors in India may, for various reasons, including in response to rising labor

costs in India and to diversify geographic risk, seek to reduce their dependence on one country.

We expect that future competition will increasingly include firms with operations in other countries, especially those countries with labor costs

similar to or lower than India, such as China, the Philippines and countries in Eastern Europe.

Since wage costs in our industry in India are increasing, our ability to compete effectively will become increasingly dependent on our reputation, the

quality of our services and our expertise in specific industries.

If labor costs in India rise at a rate that is significantly greater than labor costs in other countries, our reliance on the labor in India may reduce our profit margins and

adversely affect our ability to compete, which would, in turn, have a negative impact on our results of operations.

Our business could be materially adversely affected if we do not or are unable to protect our intellectual property or if our services are found to infringe upon

or misappropriate the intellectual property of others.

Our success depends in part upon certain methodologies and tools we use in designing, developing and implementing applications systems in providing our services.

We rely upon a

combination of nondisclosure and other contractual arrangements and intellectual property laws to protect confidential information and intellectual property rights of ours and our third parties from whom we license intellectual property.

into confidentiality agreements with our employees and limit distribution of proprietary information.

The steps we take in this regard may not be adequate to deter misappropriation of proprietary information and we may not be able to detect

unauthorized use of, protect or enforce our intellectual property rights.

At the same time, our competitors may independently develop similar technology or duplicate our products or services.

Any significant misappropriation, infringement or

devaluation of such rights could have a material adverse effect upon our business, results of operations, financial condition and cash flows.

Litigation may be required to enforce our intellectual property rights or to determine the validity and scope of the proprietary rights of others.

Any such litigation could be

time consuming and costly.

Although we believe that our services do not infringe or misappropriate on the intellectual property rights of others and that we have all rights necessary to utilize the intellectual property employed in our business,

defense against these claims, even if not meritorious, could be expensive and divert our attention and resources from operating our company.

A successful claim of intellectual property infringement against us could require us to pay a substantial

damage award, develop non-infringing technology, obtain a license or cease selling the products or services that contain the infringing technology.

Such events could have a material adverse effect on our business, financial condition, results of

operations and cash flows.

Any disruption in the supply of power, IT infrastructure and telecommunications lines to our facilities could disrupt our business process or subject us to

additional costs.

Any disruption in basic infrastructure, including the supply of power, could negatively impact our ability to provide timely or adequate services to our clients.

number of telecommunications service and other infrastructure providers to maintain communications between our various facilities and clients in India, the United States and elsewhere.

Telecommunications networks are subject to failures and periods

of service disruption, which can adversely affect our ability to maintain active voice and data communications among our facilities and with our clients.

Such disruptions may cause harm to our clients’ business.

We do not maintain business

interruption insurance and may not be covered for any claims or damages if the supply of power, IT infrastructure or telecommunications lines is disrupted.

This could disrupt our business process or subject us to additional costs, materially

adversely affecting our business, results of operations, financial condition and cash flows.

System security risks and cyber-attacks could disrupt our information technology services provided to customers, and any such disruption could reduce our

expected revenue, increase our expenses, damage our reputation and adversely affect our stock price and the value of our warrants.

Security and availability of IT infrastructure is of the utmost concern for our business, and the security of critical information and infrastructure necessary for rendering

services is also one of the top priorities of our customers.

System security risks and cyber-attacks could breach the security and disrupt the availability of our IT services provided to customers.

Any such breach or disruption could allow

the misuse of our information systems, resulting in litigation and potential liability for us, the loss of existing or potential clients, damage to our reputation and diminished brand value and could have a material adverse effect on our financial

Our network and our deployed security controls could also be penetrated by a skilled computer hacker or intruder.

Further, a hacker or intruder could compromise the

confidentiality and integrity of our protected information, including personally identifiable information;

deploy malicious software or code like computer viruses, worms or Trojan horses, etc.

may exploit any security vulnerabilities, known or

unknown, of our information system;

cause disruption in the availability of our information and services;

and attack our information system through various other mediums.

We also procure software or hardware products from third party vendors that provide, manage and monitor our services.

Such products may contain known or unfamiliar manufacturing,

design or other defects which may allow a security breach or cyber-attack, if exploited by a computer hacker or intruder, or may be capable of disrupting performance of our IT services and prevent us from providing services to our clients.

In addition, we manage, store, process, transmit and have access to significant amounts of data and information that may include our proprietary and confidential information and

that of our clients.

This data may include personal information, sensitive personal information, personally identifiable information or other critical data and information, of our employees, contractors, officials, directors, end customers of our

clients or others, by which any individual may be identified or likely to be identified.

Our data security and privacy systems and procedures meet applicable regulatory standards and undergo periodic compliance audits by independent third parties

and customers.

However, if our compliance with these standards is inadequate, we may be subject to regulatory penalties and litigation, resulting in potential liability for us and an adverse impact on our business.

We are still susceptible to data security or privacy breaches, including accidental or deliberate loss and unauthorized disclosure or dissemination of such data or information.

Any breach of such data or information may lead to identity theft, impersonation, deception, fraud, misappropriation or other offenses in which such information may be used to cause harm to our business and have a material adverse effect on our

financial condition, business, results of operations and cash flows.

We must effectively manage the growth of our operations, or our company will suffer.

Our ability to successfully implement our business plan requires an effective planning and management process.

If funding is available, we intend to increase the scope of our

operations and acquire complimentary businesses.

Implementing our business plan will require significant additional funding and resources.

If we grow our operations, we will need to hire additional employees and make significant capital

If we grow our operations, it will place a significant strain on our existing management and resources.

If we grow, we will need to improve our financial and managerial controls and reporting systems and procedures, and we will need to

expand, train and manage our workforce.

Any failure to manage any of the foregoing areas efficiently and effectively would cause our business to suffer.

Our revenues are concentrated in a limited number of clients and our revenues may be significantly reduced if these clients decrease their IT spending.

Our client contracts are based on time and materials expenses.

We do not have long-term client contracts.

Our client contracts contain standard payment terms, and our clients only

pay us for services rendered.

We have limited exposure for non-payment by our clients and do not have any unresolved client debts.

While our client contracts can be terminated with little or no notice, it is uncommon for our clients to terminate an

engagement in the middle of the implementation of services.

For the twelve-month period ended December 31, 2019 and December 31, 2018, sales to five major customers accounted for approximately 48% and 39%, respectively, of our total

Consequently, if our top clients reduce or postpone their IT spending significantly, this may lower the demand for our services and negatively affect our revenues and profitability.

significant decrease in the growth of the financial services or other industry segments on which we focus may reduce the demand for our services and negatively affect our revenues, profitability and cash flows.

Our client contracts can typically be terminated without cause and with little or no notice or penalty, which could negatively impact our revenues and

profitability.

Our clients typically retain us on a non-exclusive, project-by-project basis.

Many of our client contracts can be terminated with or without cause.

Our business is dependent on

the decisions and actions of our clients, and there are a number of factors relating to our clients that are outside of our control which might lead to termination of a project or the loss of a client, including:

financial difficulties for a client;

a change in strategic priorities, resulting in a reduced level of technology spending;

a demand for price reductions; or an unwillingness to accept higher pricing due to various factors such as higher wage costs, higher cost of doing business;

a change in outsourcing strategy by moving more work to the client’s in-house technology departments or to our competitors;

the replacement by our clients of existing software with packaged software supported by licensors;

mergers and acquisitions;

consolidation of technology spending by a client, whether arising out of mergers and acquisitions, or otherwise; and

sudden ramp-downs in projects due to an uncertain economic environment.

Our inability to control the termination of client contracts could have a negative impact on our financial condition and results of operations.

Our engagements with customers are typically singular in nature and do not necessarily provide for subsequent engagements.

Our clients generally retain us on a short-term, engagement-by-engagement basis in connection with specific projects, rather than on a recurring basis under long-term contracts.

Although a substantial majority of our revenues are generated from repeat business, which we define as revenues from a client who also contributed to our revenues during the prior fiscal year, our engagements with our clients are typically for

projects that are singular in nature.

Therefore, we must seek out new engagements when our current engagements are successfully completed or terminated, and we are constantly seeking to expand our business with existing clients and secure new

clients for our services.

In addition, in order to continue expanding our business, we may need to significantly expand our sales and marketing group, which would increase our expenses and may not necessarily result in a substantial increase in

If we are unable to generate a substantial number of new engagements for projects on a continual basis, our business and results of operations would likely be adversely affected.

Our results of operations may fluctuate from quarter to quarter, which could affect our business, financial condition and results of operations.

Our results of operations may fluctuate from quarter to quarter depending upon several factors, some of which are beyond our control.

These factors include the timing and number

of client projects commenced and completed during the quarter, the number of working days in a quarter, employee hiring, attrition and utilization rates and the mix of time-and-material projects versus fixed price deliverable projects and

maintenance projects during the quarter.

Additionally, periodically our cost increases due to both the hiring of new employees and strategic investments in infrastructure in anticipation of future opportunities for revenue growth.

These and other factors could affect our business, financial condition and results of operations, and this makes the prediction of our financial results on a quarterly basis

Also, it is possible that our quarterly financial results may be below the expectations of public market analysts.

We are heavily dependent on our senior management, and a loss of a member of our senior management team could cause our stock price and the value of our warrants

If we lose members of our senior management, we may not be able to find appropriate replacements on a timely basis, and our business could be adversely affected.

operations and continued future development depend to a significant extent upon the performance and active participation of certain key individuals.

We do not currently maintain key man insurance.

If we were to lose any of our key personnel, we may

not be able to find appropriate replacements on a timely basis and our financial condition and results of operations could be materially adversely affected.

Our international sales and operations are subject to applicable laws relating to trade, export controls and foreign corrupt practices, the violation of which

could adversely affect its operations.

We must comply with all applicable international trade, customs, export controls and economic sanctions laws and regulations of the United States and other countries.

subject to the Foreign Corrupt Practices Act and other anti-bribery laws that generally bar bribes or unreasonable gifts to foreign governments or officials.

Changes in trade sanctions laws may restrict our business practices, including cessation

of business activities in sanctioned countries or with sanctioned entities, and may result in modifications to compliance programs.

Violation of these laws or regulations could result in sanctions or fines and could have a material adverse effect

on our financial condition, results of operations and cash flows.

Our income tax returns are subject to review by taxing authorities, and the final determination of our tax liability with respect to tax audits and any related

litigation could adversely affect our financial results.

Although we believe that our tax estimates are reasonable and that we prepare and submit our tax filings on a timely basis and in accordance with all applicable tax laws, the

final determination with respect to any tax audits, and any related litigation, could be materially different from our estimates or from our historical income tax provisions and accruals.

The results of an audit or litigation could have a material

effect on operating results and/or cash flows in the periods for which that determination is made.

In addition, future period earnings may be adversely impacted by litigation costs, settlements, penalties and/or interest assessments.

Failure of our customers to pay the amounts owed to us in a timely manner may adversely affect our financial condition and operating results.

We generally provide payment terms ranging from 30 to 60 days.

As a result, we generate significant accounts receivable from sales to our customers, representing approximately 84%

of current assets as of December 31, 2019 and approximately 78% of current assets as of December 31, 2018.

Accounts receivable from sales to customers were $6.4 million as of December 31, 2019 and $7.9 million as of December,31 2018.

As of December

31, 2019, the largest amount owed by a single customer was approximately 11% of total accounts receivable.

As of December 31, 2019, we had an allowance of $85,430 for doubtful accounts.

If any of our significant customers have insufficient

liquidity, we could encounter significant delays or defaults in payments owed to us by such customers, and we may need to extend our payment terms or restructure the receivables owed to us, which could have a significant adverse effect on our

financial condition.

Any deterioration in the financial condition of our customers will increase the risk of uncollectible receivables.

Global economic uncertainty could also affect our customers’ ability to pay our receivables in a timely manner

or at all or result in customers going into bankruptcy or reorganization proceedings, which could also affect our ability to collect our receivables.

If we are unable to collect our dues or receivables from or invoice our unbilled services to our clients, our results of operations and cash flows could be

adversely affected.

Our business depends on our ability to successfully obtain payments from our clients of the amounts they owe us for work performed.

We evaluate the financial condition of our

clients and usually bill and collect on relatively short cycles.

Macroeconomic conditions, such as a potential credit crisis in the global financial system, could result in financial difficulties for our clients, including limited access to the

credit markets, insolvency or bankruptcy.

Such conditions could cause clients to delay payment, request modifications of their payment terms, or default on their payment obligations to us, all of which could increase our receivables.

experience delays in the collection of, or are unable to collect, our client balances, our results of operations and cash flows could be adversely affected.

In addition, if we experience delays in billing and collection for our services, our cash

flows could be adversely affected.

Goodwill that we carry on our balance sheet could give rise to significant impairment charges in the future.

Goodwill is subject to impairment review at least annually.

Impairment testing under standards as issued by the Financial Accounting Standards Board may lead to impairment charges

in the future.

Any significant impairment charges could have a material adverse effect on our results of operations.

Our revenue and operating results may be affected by the rate of growth in the use of technology in business and the type and level of technology spending by our

Our business depends, in part, upon continued reliance on the use of technology in business by our clients and prospective clients as well as their customers and suppliers.

particular, the success of our new service offerings requires continued demand for such services and our ability to meet this demand in a cost-effective manner.

In challenging economic environments, our clients may reduce or defer their spending on

new technologies in order to focus on other priorities and prospective clients may decide not to engage our services.

Also, many companies have already invested substantial resources in their current means of conducting commerce and exchanging

information, and they may be reluctant or slow to adopt new approaches that could disrupt existing personnel, processes and infrastructures.

If the growth of technology usage in business, or our clients’ spending on such technology, declines, or if

we cannot convince our clients or potential clients to embrace new technological solutions, our revenue and operating results could be adversely affected.

Our business will suffer if we fail to anticipate and develop new services and enhance existing services in order to keep pace with rapid changes in technology

and the industries on which we focus.

The ERP services market is characterized by rapid technological changes, evolving industry standards, changing client preferences and new product and service introductions.

future success will depend on our ability to anticipate these advances and enhance our existing offerings or develop new product and service offerings to meet client needs.

We may not be successful in anticipating or responding to these advances on

a timely basis, or, if we do respond, the services or technologies we develop may not be successful in the marketplace.

We may also be unsuccessful in stimulating customer demand for new and upgraded products, or seamlessly managing new product

introductions or transitions.

Further, products, services or technologies that are developed by our competitors may render our services non-competitive or obsolete.

Our failure to address the demands of the rapidly evolving information technology

environment, particularly with respect to digital technology, the internet of things, artificial intelligence, cloud computing and storage, mobility and applications and analytics, could have a material adverse effect on our business, results of

operations and financial condition.

Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations.

We are subject to laws and regulations enacted by national, regional and local governments, including non-U.S.

In particular, we are required to comply with certain

SEC and other legal requirements.

Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly.

Those laws and regulations and their interpretation and application may also change from time to time

and those changes could have a material adverse effect on our business, investments and results of operations.

In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on

our business and results of operations.

Our international operations subject us to exposure to foreign currency fluctuations.

We have operations in three countries and as we expand our international operations, more of our customers pay us in foreign currencies.

Transactions in currencies other than U.S.

dollars subject us to fluctuations in currency exchange rates.

Accordingly, changes in exchange rates between the U.S.

dollar and other currencies could have a material adverse effect on our revenues and net income, which may in turn have a

negative impact on our business, results of operations, financial condition and cash flows.

The exchange rate between the U.S.

dollar and other currencies has changed substantially in recent years and may fluctuate in the future.

We expect that the

vast majority of our revenues will continue to be generated in U.S.

dollars for the foreseeable future and that a significant portion of our expenses, including personnel costs, as well as capital and operating expenditures, will continue to be

denominated in other currencies such as Indian Rupee.

The hedging strategies that we may implement in the future to mitigate foreign currency exchange rate risks may not reduce or completely offset our exposure to foreign exchange rate fluctuations

and may expose our business to unexpected market, operational and counterparty credit risks.

Accordingly, we may incur losses from our use of foreign exchange derivate contracts that could have a material adverse effect on our business, results of

operations and financial condition.

Acquisitions, expansions or infrastructure investments may require us to increase our level of indebtedness or issue additional equity.

As we continue to consummate additional acquisition opportunities, undertake additional expansion activities or make substantial investments in our infrastructure, our capital

needs continue to expand.

Accordingly, we may need to draw down additional borrowings under our credit facility or access public or private debt or equity markets.

There can be no assurance, however, that we will be successful in raising additional

debt or equity, or that we will be able to raise such funds on terms that we would consider acceptable.

An increase in the level of indebtedness, if any, could, among other things:

make it difficult for us to obtain financing in the future for acquisitions, working capital, capital expenditures, debt service requirements or other purposes;

limit our flexibility in planning for or reacting to changes in our business;

limit our ability to pay dividends;

make us more vulnerable in the event of a downturn in our business;

affect certain financial covenants with which we must comply in connection with our credit facilities.

Additionally, any further equity offering would dilute your ownership interest in our company.

Our earnings and financial condition may be negatively impacted by certain tax related matters.

We are subject to income taxes in the United States and numerous foreign jurisdictions.

Our provision for income taxes and cash tax liability could be adversely affected by

numerous factors, including income before taxes being lower than anticipated in countries with lower statutory tax rates and higher than anticipated in countries with higher statutory tax rates, changes in the valuation of deferred tax assets and

liabilities, changes in accounting principles or interpretations and changes in tax laws.

Certain jurisdictions, including the United States, are actively contemplating tax reform and tax policy changes.

Any of these changes could adversely impact

our results of operations and financial condition in future periods.

In addition, our income tax returns are subject to examination in the jurisdictions in which we operate.

An unfavorable outcome of one or more of these examinations may have an

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

Global health crises may adversely affect our planned operations.

Our business could be materially and adversely affected by the risks, or the public perception of the risks, related to a pandemic or other health crisis, such as the recent outbreak of novel coronavirus (COVID-19).

significant outbreak of contagious diseases in the human population could result in a widespread health crisis that could adversely affect our planned operations.

Such events could result in the complete or partial closure of one or more of our

offices or the operations of our customers which could impact our operations.

In addition, it could impact economies and financial markets, resulting in an economic downturn that could impact our ability to raise capital or slow down potential

business opportunities.

International hostilities, terrorist activities, other violence or war, natural disasters, pandemics and infrastructure disruptions, could delay or reduce the

number of new service orders we receive and impair our ability to service our customers, thereby adversely affecting our business, results of operations and financial condition.

Hostilities involving acts of terrorism, violence or war, natural disasters, global health risks or pandemics or the threat or perceived potential for these events could

materially adversely affect our operations and our ability to provide services to our customers.

Such events may cause customers to delay their decisions on spending for information technology, consulting, and business process services and give

rise to sudden significant changes in regional and global economic conditions and cycles.

These events also pose significant risks to our personnel and to our and our customers’ physical facilities and operations around the world.

Additionally, by

disrupting communications and travel, giving rise to travel restrictions, and increasing the difficulty of obtaining and retaining highly-skilled and qualified personnel, these events could make it difficult or impossible for us to deliver services

to some or all of our customers.

The majority of our employees are located in India, and the vast majority of our technical professionals in the United States and Canada are Indian nationals who are able to work in the United States and Europe only

because they hold current visas and work permits.

Any inability to travel could cause us to incur additional unexpected costs and expenses or could impair our ability to retain the skilled professionals we need for our operations.

In addition, any

extended disruptions of electricity, other public utilities or network services at our facilities could also adversely affect our ability to serve our customers.

Hostilities involving the United States, Canada and India where we provide services to our customers, and other acts of terrorism, violence or war, natural disasters, global

health risks or pandemics may reduce the demand for our services and negatively affect our revenues.

If we fail to defend against any of these occurrences, we might be unable to protect our people, facilities and systems.

If these disruptions

prevent us from effectively serving our customers, our business, results of operations and financial condition could be adversely affected.

Anti-outsourcing legislation, if adopted, and negative perceptions associated with offshore outsourcing could impair our ability to service our customers and

adversely affect our business, results of operations and financial condition.

The issue of companies outsourcing services to organizations operating in other countries is a topic of political discussion in the United States, which is our largest market.

example, a number of measures aimed at limiting or restricting outsourcing by U.S.

companies have been put forward for consideration by the U.S.

Congress and in various state legislatures to address concerns over the perceived association between

offshore outsourcing and the loss of jobs domestically.

Further, the current U.S.

administration or Congress may seek to limit outsourcing by U.S.

If enacted, such measures may broaden existing restrictions on outsourcing by federal and

state government agencies and on government contracts with firms that outsource services directly or indirectly, or impact private industry with measures that include tax disincentives, fees or penalties, intellectual property transfer

restrictions, mandatory government audit requirements, and new standards that have the effect of restricting the use of certain business and/or work visas.

In the event that any of these measures become law, our ability to provide services to our

customers could be impaired, which could adversely affect our business, results of operations and financial condition.

In addition, from time to time there has been publicity about negative experiences associated with offshore outsourcing, such as domestic job loss and theft and misappropriation

of sensitive customer data, particularly involving service providers in India.

Current or prospective customers may elect to perform certain services themselves or may be discouraged from utilizing global service delivery providers due to negative

perceptions that may be associated with using global service delivery models or firms.

Any slowdown or reversal of existing industry trends toward global service delivery would seriously harm our ability to compete effectively with competitors that

provide the majority of their services from within the country in which our customers operate.

Restrictions on immigration may affect our ability to compete for and provide services to customers, which could hamper our growth and cause our revenues to

Our future success continues to depend on our ability to attract and retain employees with technical and project management skills, including those from developing countries,

especially India.

The ability of foreign nationals to work in the United States, depends on their and our ability to obtain the necessary visas and work permits for our personnel who need to travel internationally.

If we are unable to obtain such

visas or work permits, or if their issuance is delayed or if their length is shortened, we may not be able to provide services to our customers or to continue to provide services on a timely and cost-effective basis, receive revenues as early as

expected or manage our delivery centers as efficiently as we otherwise could, any of which could have a material adverse effect on our business, results of operations and financial condition.

Immigration and work permit laws and regulations in the countries in which we have customers are subject to legislative and administrative changes as well as changes in the

application of standards and enforcement.

For example, the U.S.

Congress has been actively considering various proposals that would make extensive changes to U.S.

immigration laws regarding the admission of high-skilled temporary and permanent

Further, the current U.S.

administration or Congress may seek to limit the admission of high-skilled temporary and permanent workers and has issued and may continue to issue executive orders designed to limit immigration.

provisions may increase our cost of doing business in the United States and may discourage customers from seeking our services.

Our international expansion strategy and our business, results of operations and financial condition may be materially

adversely affected if changes in immigration and work permit laws and regulations or the administration or enforcement of such laws or regulations impair our ability to staff projects with professionals who are not citizens of the country where the

work is to be performed.

Risk Factors Relating to Our Indebtedness

We have a substantial amount of indebtedness, which may limit our operating flexibility and could adversely affect our results of operations and financial

As of December 31, 2019, we had approximately $2.9 million in borrowings outstanding under our senior secured credit facility (the “Credit Facility”), which provided for up to $8

million in principal for revolving loans (the “Revolving Loans”) for general working capital purposes.

On January 23, 2019, certain subsidiaries of the Company, including Ameri100 Arizona LLC, Ameri100 Georgia, Inc., Ameri100 California, Inc.

and Ameri and Partners, Inc., as

borrowers (individually and collectively, “Borrower”) entered into a Loan and Security Agreement (the “Loan Agreement”), with North Mill Capital LLC, as lender (the “Lender”).

The Loan Agreement has an initial term of two years from the closing

date, with renewal thereafter if Lender, at its option, agrees in writing to extend the term for additional one year periods (the “Term”).

The Loan Agreement is collateralized by a first-priority security interest in all of the assets of Borrower.

In addition, (i) pursuant to a Corporate Guaranty entered into by the Company in favor of the Lender (the “Corporate Guaranty”), the Company has guaranteed the Borrower’s obligations under the Credit Facility and (ii) pursuant to a Security

Agreement entered into between the Company and Lender (the “Security Agreement”), the Company granted a first-priority security interest in all of its assets to Lender.

The Borrowers received an initial advance on January 23, 2019 in an amount of approximately $2.85 million (the “Initial Advance”).

Borrowings under the Credit Facility accrue

interest at the prime rate (as designated by Wells Fargo Bank, National Association) plus one and three quarters percentage points (1.75%), but in no event shall the interest rate be less than seven and one-quarter percent (7.25%).

Notwithstanding

anything to the contrary contained in the Loan Documents, the minimum monthly interest payable by Borrower on the Advances (as defined in the Loan Agreement) in any month shall be calculated based on an average Daily Balance (as defined in the Loan

Agreement) of Two Million Dollars ($2,000,000) for such month.

For the first year of the Term, Borrower shall pay to Lender a facility fee equal to $50,000, due in equal monthly installments, with additional facility fees due to Lender in the

event borrowings exceed certain thresholds and with additional facility fees due and payable in later years or upon later milestones.

In addition, Borrower shall pay to Lender a monthly fee (the “Servicing Fee”) in an amount equal to one-eighth

percent (.125%) of the average Daily Balance (as defined in the Loan Agreement) during each month on or before the first day of each calendar month during the Term.

The Company used approximately $2.75 million of the Initial Advance to repay all of its outstanding obligations under the Credit Facility of Sterling National Bank .

Upon payment, the Company’s obligations under the erstwhile Credit Facility were terminated.

Borrower also agreed to certain negative covenants in the Loan Agreement, including that they will not, without the prior written consent of Lender, enter into any extraordinary transactions, dispose

of assets, merge, acquire, or consolidate with or into any other business organization or restructure.

If an Event of Default (as defined in the Loan Agreement) occurs, Lender may, among other things, (i) declare all obligations immediately due and payable in full;

advancing money or extending credit to or for the benefit of Borrower;

and/or (iii) terminate the Loan Agreement as to any future liability or obligation of Lender, without affecting Lender’s right to repayment of all obligations and Lender’s

security interests.

In addition, as of December 31, 2019, we had an outstanding aggregate of $1 million in 5% Convertible Unsecured Debentures (the “Debentures”), which were issued to one of

accredited investors.

The Debentures bear interest at 5% per annum and are convertible at $0.109 per share.

In addition, as of December 31, 2019, we have an outstanding aggregate of $1 million in 8% Convertible Unsecured Promissory Notes (the “2017 Notes”), which were issued to one of

our accredited investor, including one of the Company’s then-directors, Dhruwa N.

Rai, and David Luci, who became a director of the Company in February 2018.

The 2017 Notes bear interest at 8% per annum until maturity in March 2020, with interest

being paid annually on the first, second and third anniversaries of the issuance of the 2017 Notes beginning in March 2018.

From and after an event of default and for so long as the event of default is continuing, the 2017 Notes will bear default

interest at the rate of 10% per annum.

The 2017 Notes can be prepaid by us at any time without penalty.

The 2017 Notes are convertible into shares of our common stock at a conversion price equal to $70.

The holders of the 2017 Notes have the right, at their option, at any time and

from time to time to convert, in part or in whole, the outstanding principal amount and all accrued and unpaid interest under the 2017 Notes into shares of the Company’s common stock at the then applicable conversion price.

The 2017 Notes rank junior to our secured credit facility with Sterling National Bank.

The 2017 Notes also include certain negative covenants including, without the investors’

approval, restrictions on dividends and other restricted payments and reclassification of its stock.

Our level of indebtedness and the operating restrictions imposed by such indebtedness may make it difficult to service our debt and may adversely affect our ability to obtain

additional financing, use operating cash flow in other areas of our business or otherwise adversely affect our operations.

Risks Relating to Our Securities

Our stock price may be volatile, which could result in substantial losses for investors.

The market price of our common stock may be volatile and could fluctuate widely in response to various factors, many of which are beyond our control, including the following:

technological innovations or new products and services by us or our competitors;

additions or departures of key personnel;

sales of our common stock, including management shares;

limited availability of freely-tradable “unrestricted” shares of our common stock to satisfy purchase orders and demand;

our ability to execute our business plan;

operating results that fall below expectations;

loss of any strategic relationship;

industry developments;

economic and other external factors;

our ability to manage the costs of maintaining adequate internal financial controls and procedures in connection with the acquisition of additional businesses;

period-to-period fluctuations in our financial results.

In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies.

These market fluctuations may

also significantly affect the market price of our common stock.

Our common stock may be delisted if we fail to comply with continued listing standards.

If we fail to meet any of the continued listing standards of The Nasdaq Capital Market, our common stock could be delisted from The Nasdaq Capital Market.

These continued listing standards include

specifically enumerated criteria, such as:

• a $1.00 minimum closing bid price;

• stockholders’ equity of $2.5 million;

• 500,000 shares of publicly-held common stock with a market value of at least $1 million;

• 300 round-lot stockholders;

• compliance with Nasdaq’s corporate governance requirements, as well as additional or more stringent criteria that may be applied in the exercise of Nasdaq’s discretionary authority.

If we fail to comply with Nasdaq’s continued listing standards, we may be delisted and our common stock will trade, if at all, only on the over-the-counter market, such as the OTC Bulletin Board or

OTCQX market, and then only if one or more registered broker-dealer market makers comply with quotation requirements.

In addition, delisting of our common stock could depress our stock price, substantially limit liquidity of our common stock and

materially adversely affect our ability to raise capital on terms acceptable to us, or at all.

Finally, delisting of our common stock could result in our common stock becoming a “penny stock” under the Exchange Act.

Holders of our warrants will have no rights as a common stockholder until they exercise their warrants and acquire our common stock.

Until a holder of our warrants acquires shares of our common stock upon exercise of such warrants, such holder will have no rights with respect to shares of our common stock

issuable upon exercise of the warrants.

Upon exercise of warrants by, the holder shall become entitled to exercise the rights of a common stockholder only as to matters for which the record date occurs after the exercise date.

We do not expect to pay dividends in the future.

As a result, any return on investment may be limited to the value of our common stock.

We have never paid cash dividends on our common stock and do not anticipate paying cash dividends on our common stock in the foreseeable future.

The payment of dividends on our

common stock will depend on our earnings, financial condition and other business and economic factors as our board of directors may consider relevant.

In addition, no dividends will be declared or paid or set apart for payment on our common stock

unless all accumulated accrued and unpaid dividends in respect of our Series A Preferred Stock are contemporaneously declared and paid in cash or declared and a sum of cash sufficient for the payment thereof set apart for such payment on the Series

A Preferred Stock for all past dividend periods with respect to which full dividends were not paid on the Series A Preferred Stock in cash.

If we do not pay dividends, our common stock may be less valuable because a return on your investment will

only occur if our stock price appreciates.

We currently have Series A Preferred Stock outstanding and our certificate of incorporation authorizes our board of directors to create new series of preferred

stock without further approval by our stockholders, which could adversely affect the rights of the holders of our common stock.

Our board of directors has the authority to fix and determine the relative rights and preferences of preferred stock.

Our board of directors also has the authority to issue

preferred stock without further stockholder approval.

We currently have 424,938 shares of Series A Preferred Stock outstanding.

The Series A Preferred Stock Certificate of Designation provides for (a) the payment in-kind in additional shares of

Series A Preferred of dividends for all dividend periods from April 1, 2018 through March 31, 2020 at a rate of 2% per annum of the liquidation preference (the “Adjusted Rate”);

and, commencing April 1, 2020, we will pay cash dividends per share at

a rate per annum equal to the Adjusted Rate multiplied by the liquidation preference;

provided, however, dividends for periods ending after April 1, 2020 may be paid at the election of the Company’s board of directors in-kind through the issuance

of additional shares of Series A Preferred for up to four dividend periods in any consecutive 36-month period, determined on a rolling basis.

Our Series A Preferred Stock gives its holders the preferred right to our assets upon liquidation, the

right to receive dividend payments before dividends are distributed to the holders of common stock and the right to the redemption of the shares, together with a premium, prior to the redemption of our common stock.

In addition, our board of

directors could authorize the issuance of additional series of preferred stock with such rights preferential to the rights of our common stock, including the issuance of a series of preferred stock that has greater voting power than our common

stock or that is convertible into our common stock, which could decrease the relative voting power of our common stock or result in dilution to our existing stockholders.

Because certain of our stockholders control a significant number of shares of our common stock, they may have effective control over actions requiring

stockholder approval.

A small number of our stockholders, and their respective affiliates, collectively, control the majority of our voting securities.

Accordingly, such stockholders, and their

respective affiliates, will have significant influence on the ability to control the Company and the outcome of issues submitted to our stockholders.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume

could decline.

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business.

We currently have

limited research coverage by securities and industry analysts and you should not invest in our common stock in anticipation that we will obtain additional analyst coverage.

If one or more of the analysts who covers us downgrades our stock or

publishes inaccurate or unfavorable research about our business, our stock price would likely decline.

If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our stock could decrease, which

could cause our stock price and trading volume to decline.

If the benefits of any proposed acquisition do not meet the expectations of investors, stockholders or financial analysts, the market price of our common stock

If the benefits of any proposed acquisition do not meet the expectations of investors or securities analysts, the market price of our common stock prior to the closing of the

proposed acquisition may decline.

The market values of our common stock at the time of the proposed acquisition may vary significantly from their prices on the date the acquisition target was identified.

In addition, broad market and industry factors may materially harm the market price of our common stock irrespective of our operating performance.

The stock market in general has

experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected.

The trading prices and valuations of these stocks, and of our securities, may not be

A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to be similar to us could depress our stock price regardless of our business, prospects, financial conditions or

results of operations.

A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.

Changes in accounting principles and guidance, or their interpretation, could result in unfavorable accounting charges or effects, including changes to our

previously filed financial statements, which could cause our stock price to decline.

We prepare our consolidated financial statements in accordance with GAAP.

These principles are subject to interpretation by the SEC and various bodies formed to interpret and

create appropriate accounting principles and guidance.

A change in these principles or guidance, or in their interpretations, may have a significant effect on our reported results and retroactively affect previously reported results.

Being a public company results in additional expenses, diverts management’s attention and could also adversely affect our ability to attract and retain qualified

As a public reporting company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

These requirements generate

significant accounting, legal and financial compliance costs and make some activities more difficult, time consuming or costly and may place significant strain on our personnel and resources.

The Exchange Act requires, among other things, that we

maintain effective disclosure controls and procedures and internal control over financial reporting.

In order to establish the requisite disclosure controls and procedures and internal control over financial reporting, significant resources and

management oversight are required.

As a result, management’s attention may be diverted from other business concerns, which could have an adverse and even material effect on our business, financial condition and

results of operations.

These rules and regulations may also make it more difficult and expensive for us to obtain director and officer liability insurance.

If we are unable to obtain appropriate director and officer insurance, our ability to

recruit and retain qualified officers and directors, especially those directors who may be deemed independent, could be adversely impacted.

We are an “emerging growth company” and our election to delay adoption of new or revised accounting standards applicable to public companies may result in our

financial statements not being comparable to those of some other public companies.

As a result of this and other reduced disclosure requirements applicable to emerging growth companies, our securities may be less attractive to investors.

As a public reporting company with less than $1,070,000,000 in revenue during our last fiscal year, we qualify as an “emerging growth company” under the Jumpstart our Business

Startups Act of 2012 (the “JOBS Act”).

An emerging growth company may take advantage of certain reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies.

particular, as an emerging growth company we:

are not required to obtain an attestation and report from our auditors on our management’s assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002;

are not required to provide a detailed narrative disclosure discussing our compensation principles, objectives and elements and analyzing how those elements fit with our principles and objectives (commonly

referred to as “compensation discussion and analysis”);

are not required to obtain a non-binding advisory vote from our stockholders on executive compensation or golden parachute arrangements (commonly referred to as the “say-on-pay,” “say-on-frequency” and

“say-on-golden-parachute” votes);

are exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and CEO pay ratio disclosure;

may present only two years of audited financial statements and only two years of related Management’s Discussion & Analysis of Financial Condition and Results of Operations (“MD&A”);

are eligible to claim longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act.

We intend to take advantage of all of these reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial

accounting standards under §107 of the JOBS Act.

Our election to use the phase-in periods may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of

the phase-in periods under §107 of the JOBS Act.

Certain of these reduced reporting requirements and exemptions were already available to us due to the fact that we also qualify as a “smaller reporting company” under SEC rules.

For instance, smaller reporting companies are not required to obtain an auditor attestation and report regarding management’s assessment of internal control over financial reporting;

are not required to provide a compensation discussion and

are not required to provide a pay-for-performance graph or Chief Executive Officer pay ratio disclosure;

and may present only two years of audited financial statements and related MD&A disclosure.

Under the JOBS Act, we may take advantage of the above-described reduced reporting requirements and exemptions for up to five years after our initial sale of common equity

pursuant to a registration statement declared effective under the Securities Act of 1933, as amended (the “Securities Act”), or such earlier time that we no longer meet the definition of an emerging growth company.

In this regard, the JOBS Act

provides that we would cease to be an “emerging growth company” if we have more than $1,070,000,000 in annual revenues, have more than $700 million in market value of our common stock held by non-affiliates, or issue more than $1.0 billion in

principal amount of non-convertible debt over a three-year period.

Further, under current SEC rules we will continue to qualify as a “smaller reporting company” for so long as we have a public float (i.e., the market value of common equity held by

non-affiliates) of less than $250 million as of the last business day of our most recently completed second fiscal quarter.

We cannot predict if investors will find our securities less attractive due to our reliance on these exemptions.

Failure to establish and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on

our business, stock price and the value of our warrants.

We are required to comply with the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which require management to certify financial and other information in

our quarterly and annual reports and provide an annual management report on the effectiveness of controls over financial reporting.

We are required to disclose changes made in our internal controls and procedures on a quarterly basis, and we are

required to make internal annual assessments of our internal control over financial reporting pursuant to Section 404.

However, as an emerging growth company, our independent registered public accounting firm will not be required to formally attest

to the effectiveness of our internal control over financial reporting pursuant to Section 404 until we no longer qualify as an emerging growth company.

At such time, our independent registered public accounting firm may issue a report that is

adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating.

To comply with the requirements of being a public company, we have undertaken various actions, and may need to take additional actions, such as implementing new internal controls

and procedures and hiring additional accounting or internal audit staff.

Testing and maintaining internal control can divert our management’s attention from other matters that are important to the operation of our business.

Additionally, when

evaluating our internal control over financial reporting, we may identify material weaknesses that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404.

identify any material weaknesses in our internal control over financial reporting or are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is effective, or if our

independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting once we are no longer an emerging growth company, investors may lose confidence in the accuracy

and completeness of our financial reports and the market price of our common stock could be negatively affected, and we could become subject to investigations by the Financial Industry Regulatory Agency, the SEC or other regulatory authorities,

which could require additional financial and management resources.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) of the Exchange Act.

control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions and dispositions of our assets; providing reasonable assurance that transactions are recorded as necessary for

preparation of our financial statements in accordance with generally accepted accounting principles; providing reasonable assurance that receipts and expenditures are made in accordance with authorizations of management and our directors; and

providing reasonable assurance that unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements would be prevented or detected on a timely basis.

As a result of this assessment, our

management concluded that, as of December 31, 2019, our internal control over financial reporting was not yet effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements

for external purposes in accordance with generally accepted accounting principles.

This is largely due to the fact that we have in the past acquired a number of privately held companies as part of our growth strategy and implementing our control

procedures over all acquired subsidiaries takes time.

We are working to improve and harmonize our financial reporting controls and procedures across all of our companies.

Anti-takeover provisions contained in our certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair a takeover attempt.

The Company’s certificate of incorporation and bylaws contain provisions that could have the effect of delaying or preventing changes in control or changes in our management

without the consent of our board of directors.

These provisions include:

no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death, or removal of a director, which prevents

stockholders from being able to fill vacancies on our board of directors;

the ability of our board of directors to determine whether to issue shares of our preferred stock and to determine the price and other terms of those shares, including preferences and voting rights,

without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

limiting the liability of, and providing indemnification to, our directors and officers;

controlling the procedures for the conduct and scheduling of stockholder meetings;

advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’

meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of the Company.

Risks Related to the Proposed Amalgamation

There is no assurance when or if the amalgamation will be completed.

Any delay in completing the amalgamation may substantially reduce the intended benefits that Ameri and Jay Pharma expect to

obtain from the amalgamation.

Completion of the amalgamation is subject to the satisfaction or waiver of a number of conditions as set forth in the Amalgamation Agreement, including the approval by Ameri’s

stockholders and Jay Pharma’s shareholders, approval by NASDAQ of Ameri’s application for the listing of common stock in connection with the amalgamation, and other customary closing conditions.

There can be no assurance that Ameri and

Jay Pharma will be able to satisfy the closing conditions or that closing conditions of the amalgamation beyond their control will be satisfied or waived.

If such conditions are not satisfied or waived, the amalgamation may not occur or will be

delayed, and Ameri and Jay Pharma each may lose some or all of the intended benefits of the amalgamation.

In addition, if the Amalgamation Agreement is terminated under certain circumstances, Ameri or Jay Pharma may be required to pay a

termination fee of $ 500,000 .

Moreover, each of Ameri and Jay Pharma has incurred and expect to continue to incur significant expenses related to the amalgamation, such as legal and accounting fees, some of

which must be paid even if the amalgamation is not completed.

In addition, if the Amalgamation Agreement is terminated and Ameri’s or Jay Pharma’s board of directors determines to seek another business combination, it may not be able to find a third party willing

to provide equivalent or more attractive consideration than the consideration to be provided by each party in the amalgamation.

In such circumstances, Ameri’s board of directors may elect to, among other things, divest all or a portion of Ameri’s

business, or take the steps necessary to liquidate all of Ameri’s business and assets, and in either such case, the consideration that Ameri receives may be less attractive than the consideration to be received by Ameri pursuant to the Amalgamation

The amalgamation will substantially dilute the voting power of current Ameri stockholders.

Having a minority share position may reduce the influence that current stockholders have on the

management of Ameri.

Upon completion of the amalgamation and the transactions contemplated in the Amalgamation Agreement, the issuance of the shares Ameri common stock to Jay Pharma equity holders in the amalgamation will significantly

reduce the ownership stake and relative voting power of each share of Ameri common stock held by current Ameri stockholders.

Consequently, following the amalgamation, the ability of Ameri’s current stockholders to influence the management of

Ameri will be substantially reduced.

The announcement and pendency of the amalgamation could have an adverse effect on Ameri’s or Jay Pharma’s business, financial condition, results of operations or business

The announcement and pendency of the amalgamation could disrupt Ameri’s and/or Jay Pharma’s businesses in the following ways, among others:

Ameri’s or Jay Pharma’s current and prospective employees could experience uncertainty about their future roles within the resulting company;

and, this uncertainty might adversely affect

Ameri’s or Jay Pharma’s ability to retain, recruit and motivate key personnel;

the attention of Ameri’s or Jay Pharma’s management may be directed towards the completion of the amalgamation and other transaction-related considerations and may be diverted from the day-to-day business operations of Ameri or Jay

Pharma, as applicable, and matters related to the amalgamation may require commitments of time and resources that could otherwise have been devoted to other opportunities that might have been beneficial to Ameri or Jay Pharma, as

customers, prospective customers, suppliers, collaborators and other third parties with business relationships with Ameri or Jay Pharma may decide not to renew or may decide to seek to terminate, change or renegotiate their

relationships with Ameri or Jay Pharma as a result of the amalgamation, whether pursuant to the terms of their existing agreements with Ameri or Jay Pharma;

Should they occur, any of these matters could adversely affect the businesses of, or harm the financial condition, results of operations or business prospects of, Ameri or Jay Pharma.

During the pendency of the amalgamation, Ameri or Jay Pharma may not be able to enter into a business combination with another party and will be subject to contractual limitations on certain

actions because of restrictions in the Amalgamation Agreement.

Covenants in the Amalgamation Agreement impede the ability of Ameri or Jay Pharma to make acquisitions or complete other transactions that are not in the ordinary course of business pending completion of the

amalgamation other than the Spin-Off.

As a result, if the amalgamation is not completed, the parties may be at a disadvantage to their competitors.

In addition, while the Amalgamation Agreement is in effect and subject to limited exceptions, each

party is prohibited from soliciting, initiating, encouraging or taking actions designed to facilitate any inquiries or the making of any proposal or offer that could lead to the entering into certain extraordinary transactions with any third

party, such as a sale of assets, an acquisition, a tender offer, a amalgamation or other business combination outside the ordinary course of business.

These restrictions may prevent each of Ameri and Jay Pharma from pursuing otherwise attractive

business opportunities or other capital structure alternatives and making other changes to its business or executing certain of its business strategies prior to the completion of the amalgamation, which could be favorable to Ameri stockholders or

Jay Pharma shareholders.

Risks Related to the Business of Jay Pharma

Jay Pharma is dependent on the success of its product candidates, which are in early stages of development, and there can be no assurances that its product candidates will reach a particular stage

in clinical development, receive regulatory approval or be successfully commercialized.

Jay Pharma’s success will depend on its ability to successfully develop and commercialize its product candidates through its development programs.

Jay Pharma may never be able to develop products which receive

regulatory approval in the U.S.

Related to Our Business

are dependent on the success of our prospective product candidates, which are in early stages of development, and there can be no assurances

that any such prospects will reach a particular stage in development, receive regulatory approval or be successfully commercialized.

success will depend on our ability to successfully develop and commercialize our prospective product candidates through our development

We intend to develop at least three product candidates by undergoing the long, costly clinical-trial process for each candidate

under an Investigational New Drug Application (“IND”) and, eventually, obtaining FDA approval under a New Drug Application

(“NDA”) before proceeding to market.

In order to proceed with development of our pharmaceutical product candidates under

the NDA pathway, we must obtain the FDA’s approval of our IND application and conduct preclinical and clinical trials in compliance

with the applicable IND regulations, clinical-study protocols, and other applicable regulations and related requirements.

be able to develop products which are commercially viable or receive regulatory approval in the U.S.

or elsewhere.

There can be no assurance that the FDA or any other regulatory authority will approve these product candidates.

In the United States, the FDA regulates drugs under the Federal Food, Drug and Cosmetic Act, or “FDCA,” and implementing regulations.

There can be no assurance

that the FDA or any other regulatory authority will approve of our current or future product candidates.

the United States, the FDA regulates drugs under the Federal Food, Drug and Cosmetic Act, or “FDCA,”

and implementing regulations.

Drugs are also subject to other federal, state and local statutes and regulations.

The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources.

The process required by

the FDA before a drug or biological product may be marketed in the United States generally involves the following:

Completion of preclinical laboratory tests, animal studies, and formulation studies according to Good Laboratory Practices and other applicable regulations;

Submission to the FDA of an Investigational New Drug Application, or an “IND,” which must become effective before human clinical trials may begin in the United States;

Performance of adequate and well-controlled human clinical trials according to the FDA’s current good clinical practices, or GCPs, which sufficiently demonstrate the safety and efficacy of the proposed drug or biologic for its

intended uses;

Submission to the FDA of a New Drug Application, or an NDA, for a new drug product;

Satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the drug or biologic is to be produced to assess compliance with the FDA’s current good manufacturing practice standards, or cGMP, to

assure that the facilities, methods and controls are adequate to preserve the drug’s or biologic’s identity, strength, quality and purity;

Potential FDA audit of the nonclinical and clinical trial sites that generated the data in support of the NDA or biologics license application;

FDA review and, potentially, approval of the NDA.

The lengthy process of seeking required approvals and the continuing need for compliance with applicable statutes and regulations require the expenditure of substantial resources.

There can be no certainty that

approvals will be granted.

Jay Pharma depends substantially on the data, expertise and products of Tikun Olam, one of its collaboration partners.

Jay Pharma relies heavily on the data, expertise and products of Tikun Olam, its collaboration partner, to advance its product candidates.

Jay Pharma’s ability to successfully develop its product candidates largely

depends on the expertise and skills of its collaboration partners.

Tikun Olam has the right, under certain circumstances, to terminate its agreements with Jay Pharma.

A failure by Jay Pharma’s partners to successfully perform the applicable

services in relation to the development of its product candidates, or the termination of agreements with its partners, would have a material adverse effect on its business, results of operations and financial condition.

In addition to

collaboration, Jay Pharma is party to several contractual arrangements, including license agreements, with Tikun Olam and its affiliates.

The process of obtaining regulatory approvals and

the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial

time and financial resources.

The process required by the FDA before a new drug or biological product may be marketed in the United States

generally involves the following:

of preclinical laboratory tests, animal studies, and formulation studies according to Good Laboratory Practices and other applicable

to the FDA of an IND, which must become effective before human clinical trials may begin in the United States;

of adequate and well-controlled human clinical trials according to the FDA’s current good clinical practices, or GCPs, which

sufficiently demonstrate the safety and efficacy of the proposed drug or biologic for its intended uses;

to the FDA of a New Drug Application, or an NDA, for a new drug product;

completion of an FDA inspection of the manufacturing facility or facilities where the drug or biologic is to be produced to assess

compliance with the FDA’s current good manufacturing practice standards, or cGMP, to assure that the facilities, methods and

controls are adequate to preserve the drug’s or biologic’s identity, strength, quality and purity;

FDA audit of the nonclinical and clinical trial sites that generated the data in support of the NDA or biologics license application;

review and, potentially, approval of the NDA.

lengthy process of seeking required approvals and the continuing need for compliance with applicable statutes and regulations require

the expenditure of substantial resources.

There can be no certainty that approvals will be granted.

may encounter difficulties that may delay, suspend or scale back our efforts to advance additional early research programs through preclinical

development and IND application filings and into clinical development.

intend to advance early research programs through preclinical development and to file an IND application for human clinical trials

evaluating the prospective product candidates in our pipeline.

The preparation and submission of IND applications requires rigorous

and time-consuming preclinical testing, the results of which must be sufficiently documented to establish, among other things,

the toxicity, safety, manufacturing, chemistry and clinical protocol of the product candidates.

We may experience unforeseen difficulties

that could delay or otherwise prevent us from successfully executing our current development strategy.

In addition, our

ability to complete and file certain IND applications may depend on the support of our partners and the timely performance of

their obligations under relevant collaboration agreements.

If our relevant partners are not able to perform such obligations,

or if they otherwise delay the progress, we may not be able to prepare and file the intended IND applications on a timely

basis or at all.

Any delay, suspension or reduction of our efforts to pursue our preclinical and IND strategy could have a material

adverse effect on our business and cause our share price to decline.

novel coronavirus could adversely impact our business, including our current plans for product development, as well as any currently

ongoing preclinical studies and clinical trials and any future studies or other development or commercialization activities.

COVID-19 was initially reported to have surfaced in Wuhan, China in December 2019, it has spread globally, including countries

in which we are currently, or plans to, conduct preclinical or clinical studies or other development activities.

is significant uncertainty as to the likely effects of this pandemic.

As the ongoing COVID-19 pandemic continues, we will likely

experience disruptions that could severely impact our business, including, but not limited to, our current or future preclinical

studies, clinical trials, regulatory progress, or any other development or commercialization activities, including (among others):

or difficulties in enrolling patients in clinical trials;

or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff;

of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial

sites and hospital staff supporting the conduct of our clinical trials;

of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by

federal or state governments, employers and others;

in employee resources that would otherwise be focused on the conduct of our clinical trials, including because of sickness of employees

or their families or the desire of employees to avoid contact with large groups of people;

in receiving approval from local regulatory authorities to initiate our planned clinical trials;

in clinical sites receiving the supplies and materials needed to conduct our clinical trials;

in global shipping that may affect the transport of clinical trial materials, such as investigational drug product used in our clinical

in local regulations as part of a response to the COVID-19 outbreak which may require us to change the ways in which our clinical

trials are conducted, which may result in unexpected costs, or to discontinue the clinical trials altogether;

in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations

in employee resources or forced furlough of government employees;

in the timing of interactions with the FDA due to absenteeism by federal employees or by the diversion of their efforts and attention

to approval of other therapeutics or other activities related to COVID-19;

of the FDA to accept data from clinical trials in affected geographies outside the United States.

addition, the COVID-19 pandemic could disrupt our operations due to absenteeism by infected or ill members of management or other employees,

or absenteeism by members of management and other employees who elect not to come to work due to the illness affecting others in our

office or laboratory facilities, or due to quarantines.

COVID-19 could also impact members of our board of directors, resulting in absenteeism

from meetings of the directors or committees of directors, and making it more difficult to convene the quorums of the full board of directors

or our committees needed to conduct meetings for the management of our affairs.

global COVID-19 pandemic continues to rapidly evolve.

The extent to which COVID-19 may impact our business, preclinical studies and clinical

trials will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic

spread of the disease, the duration of the pandemic, travel restrictions and social distancing in the United States and other countries,

business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain

and treat the disease.

have significant and increasing liquidity needs and may require additional funding.

and development, management and administrative expenses and cash used for operations will continue to be significant and may increase

substantially in the future in connection with new and continued research and development initiatives and our pursuit of IND authorization(s)

for some or all of our product candidates, as is required to initiate clinical trials in human subjects in the United States.

need to raise additional capital to fund our operations, continue to conduct clinical trials to support potential regulatory approval

of marketing applications, and to fund commercialization of our current and future product candidates.

amount and timing of our future funding requirements will depend on many factors, including, but not limited to:

scope, number, initiation, progress, timing, costs, design, duration, delays (if any), and results of preclinical and clinical studies

for our current or future product candidates;

outcome, timing and cost of regulatory reviews, approvals or other actions to meet regulatory requirements established by the FDA,

and comparable foreign regulatory authorities;

timing and amount of revenue generated or received, including any revenue from grants or other sources;

rate of progress and cost of our clinical trials and other product development programs;

of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights associated with our current

and future product candidates;

effect of competing technological and market developments;

facilities and equipment requirements;

terms and timing of any additional collaborative, licensing, co-promotion or other arrangements that we may establish.

we expect to fund our future capital requirements from financing arrangements, we cannot assure you that any such financing arrangements

will be available to it on favorable terms, or at all.

Further, even if we can raise funds from financing arrangements, the amounts raised

may not be sufficient to meet our future capital requirements.

depend on our current key personnel and our ability to attract and retain employees.

future growth and success depends on our ability to recruit, retain, manage and motivate our employees.

We are highly dependent on our

current management and scientific personnel, including David Johnson, Avani Kanubaddi, and Dr.

Robert Wilkins.

The inability to hire

or retain experienced management personnel could adversely affect our ability to execute our business plan and harm our operating results.

Due to the specialized scientific and managerial nature of our business, we rely heavily on our ability to attract and retain qualified

scientific, technical and managerial personnel.

The competition for qualified personnel in the pharmaceutical field is intense and we

may be unable to continue to attract and retain qualified personnel necessary for the development of our business or to recruit suitable

replacement personnel.

has been limited study on the effects of medical cannabinoids, and future clinical research studies may lead to conclusions that dispute

or conflict with our understanding and belief regarding the medical benefits, viability, safety, efficacy, dosing, and social acceptance

of cannabinoids.

relating to the medical benefits, viability, safety, efficacy, and dosing of cannabinoids remains in relatively early stages.

been few clinical trials on the benefits of cannabinoids conducted by us or by others.

Future research and clinical trials may draw opposing

conclusions to statements contained in the articles, reports and studies We have relied on, or could reach different or negative conclusions

regarding the medical benefits, viability, safety, efficacy, dosing or other facts and perceptions related to cannabinoids, which could

adversely affect social acceptance of cannabinoids and the demand for our product candidates.

expect to face intense competition, often from companies with greater resources and experience than us.

pharmaceutical industry is highly competitive and subject to rapid change.

The industry continues to expand and evolve as an increasing

number of competitors and potential competitors enter the market.

Many of these competitors and potential competitors have substantially

greater financial, technological, managerial and research and development resources and experience than us.

Some of these competitors

and potential competitors have more experience than us in the development of pharmaceutical products, including validation procedures

and regulatory matters.

In addition, our future product candidates, if successfully developed, will compete with product offerings from

large and well-established companies that have greater marketing and sales experience and capabilities than us or our collaboration partners

Other companies with greater resources than we may announce similar plans in the future.

In addition, there are other non-FDA approved

CBD preparations being made available from other companies, which might attempt to compete with our future product candidates.

are unable to compete successfully, our commercial opportunities will be reduced and our business, results of operations and financial

conditions may be materially harmed.

current and future preclinical and clinical studies may be conducted outside the United States, and the FDA may not accept data from

such studies to support any NDAs we may submit after completing the applicable developmental and regulatory prerequisites.

are conducting, or may conduct, preclinical and/or clinical studies outside the United States.

For example, we have conducted preclinical

studies in Israel, and plan to conduct clinical studies for one or more product candidates in Israel or other non-U.S.

the extent we do not conduct these clinical trials under an IND, the FDA may not accept data from such trials.

Although the FDA may accept

data from clinical trials conducted outside the United States that are not conducted under an IND, the FDA’s acceptance of these

data is subject to certain conditions.

For example, the clinical trial must be well designed and conducted and performed by qualified

investigators in accordance with ethical principles and all applicable FDA regulations.

The trial population must also adequately represent

the intended U.S.

population, and the data must be applicable to the U.S.

population and U.S.

medical practice in ways that the FDA deems

clinically meaningful.

In general, the patient population for any clinical trials conducted outside of the United States must be representative

of the population for whom we intend to market the product candidate in the United States, if approved.

In addition, while these clinical

trials are subject to the applicable local laws, FDA acceptance of the data will be dependent upon our ability to verify the data and

our determination that the trials also complied with all applicable U.S.

laws and regulations.

We cannot guarantee that the FDA will

accept data from trials conducted outside of the United States.

If the FDA does not accept the data from such clinical trials, we would

likely result in the need for additional trials and the completion of additional regulatory steps, which would be costly and time-consuming

and could delay or permanently halt our development of our product candidates.

the results of preclinical studies and earlier clinical trials are not necessarily predictive of future results, we may not have favorable

results in our planned and future clinical trials.

development of therapeutic products is highly uncertain and is dependent on numerous factors, many of which are beyond our control.

candidates that appear promising in the early phases of development may fail to reach the market for several reasons including:

study results that may show the product to be less effective than desired (e.g., the study failed to meet our primary objectives)

or to have harmful or problematic side effects;

to receive the necessary regulatory approvals or a delay in receiving such approvals.

Among other things, such delays may be caused

by slow enrollment in clinical studies, length of time to achieve study endpoints, additional time requirements for data analysis

or an IND and later NDA, preparation, discussions with the FDA, an FDA request for additional preclinical or clinical data or unexpected

safety or manufacturing issues;

manufacturing

costs, pricing, or reimbursement issues or other factors that make the product not economical;

proprietary rights of others and their competing products and technologies that may prevent the product from being commercialized.

positive results from our preclinical testing of our prospective product candidates may not necessarily be predictive of the results

from planned or future clinical trials for such product candidates.

Many companies in the pharmaceutical and biotechnology industries

have suffered significant setbacks in clinical trials after achieving positive results in preclinical and early clinical development,

and we cannot be certain that we will not face similar setbacks.

These setbacks have been caused by, among other things, preclinical

findings while clinical trials were underway or safety or efficacy observations in clinical trials, including adverse events.

our interpretation of clinical data or our conclusions based on the preclinical in vitro and in vivo models may prove inaccurate, as

preclinical and clinical data can be susceptible to varying interpretations and analyses, and many companies that believed their product

candidates performed satisfactorily in preclinical studies and clinical trials nonetheless failed to obtain FDA or other regulatory approvals.

If we fail to produce positive results in our planned clinical trial for our product candidates for the treatment of GBM, or our future

clinical trials, the development timeline and regulatory approval and commercialization prospects for such product candidates, and, correspondingly,

our business and financial prospects, would be materially adversely affected.

interruptions could delay us in the process of developing our product candidates.

of our stored materials or facilities through fire, theft, or other causes could have an adverse effect on our ability to continue product

development activities and to conduct our business.

Even if we obtain insurance coverage to compensate us for such business interruptions,

such coverage may prove insufficient to fully compensate us for the damage to our business resulting from any significant property or

casualty loss.

employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and legal requirements.

are exposed to the risk of employee fraud or other misconduct.

Misconduct by employees could include intentional failures to comply with

FDA, SEC or Office of Inspector General regulations, or regulations of any other applicable regulatory authority, failure to provide

accurate information to the FDA or the SEC, comply with applicable manufacturing standards, other federal, state or foreign laws and

regulations, report information or data accurately or disclose unauthorized activities.

Employee misconduct could also involve the improper

use of confidential or protected information, including information obtained in the course of clinical trials, or illegal pre-approval

promotion of drug candidates, which could result in government investigations, enforcement actions and serious harm to our reputation.

We have adopted a Corporate Code of Conduct and Ethics and Whistleblower Policy, but employee misconduct is not always possible to identify

The precautions we take to detect and prevent these prohibited activities may not be effective in controlling unknown or unmanaged

risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance

with such laws or regulations.

If any such actions are instituted against us, and we are not successful in defending our Company or asserting

our rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions.

proprietary information, or that of our customers, suppliers and business partners, may be lost or we may suffer security breaches.

the ordinary course of our business, we expect to collect and store sensitive data, including valuable and commercially sensitive intellectual

property, clinical trial data, our proprietary business information and that of our future customers, suppliers and business partners,

and personally identifiable information of our customers, clinical trial subjects and employees, patients, in our data centers and on

our networks.

The secure processing, maintenance and transmission of this information is critical to our operations.

Despite our security

measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance

or other disruptions.

Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed,

lost or stolen.

Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under

laws that protect the privacy of personal information, regulatory penalties, disrupt our operations, damage our reputation, and cause

a loss of confidence in our products and our ability to conduct clinical trials, which could adversely affect our business and reputation

and lead to delays in gaining regulatory approvals for our future product candidates.

Although we may obtain business interruption insurance

coverage in the future, our insurance might not cover all losses from any future breaches of our systems.

of our information technology systems, including cybersecurity attacks or other data security incidents, could significantly disrupt

the operation of our business.

business depends on the use of information technologies.

Our ability to execute our business plan and to comply with regulators’

requirements with respect to data control and data integrity, depends, in part, on the uninterrupted performance of our information

technology systems, or IT systems and the IT systems supplied by third-party service providers.

Our IT systems are vulnerable

to damage from a variety of sources, including telecommunications or network failures, malicious human acts, natural disasters

and more sophisticated and targeted cyber-related attacks that pose a risk to the security of our information systems and networks

and the confidentiality, availability and integrity of data and information.

A successful cybersecurity attack or other data security

incident could result in the misappropriation and/or loss of confidential or personal information, create system interruptions,

or deploy malicious software that attacks our systems.

It is also possible that a cybersecurity attack might not be noticed for

some period of time.

In addition, sustained or repeated system failures or problems arising during the upgrade of any of our IT

systems that interrupt our ability to generate and maintain data could adversely affect our ability to operate our business.

occurrence of a cybersecurity attack or incident could result in business interruptions from the disruption of our IT systems,

or negative publicity resulting in reputational damage with our shareholders and other stakeholders and/or increased costs to

prevent, respond to or mitigate cybersecurity events.

In addition, the unauthorized dissemination of sensitive personal information

or proprietary or confidential information could expose us or other third-parties to regulatory fines or penalties, litigation

and potential liability, or otherwise harm our business.

breaches, loss of data and other disruptions could compromise sensitive information related to our business, prevent it from accessing

critical information or expose it to liability, which could adversely affect our business and its reputation.

the ordinary course of our business, we expect to collect and store sensitive data, including legally protected patient health

information, credit card information, personally identifiable information about our employees, intellectual property, and

proprietary business information.

We expect to manage and maintain its applications and data utilizing on-site systems.

applications and data encompass a wide variety of business-critical information including research and development information,

commercial information and business and financial information.

secure processing, storage, maintenance and transmission of this critical information is vital to our operations and business

strategy, and we devote significant resources to protecting such information.

Although we take measures to protect sensitive

information from unauthorized access or disclosure, our information technology and infrastructure may be vulnerable to attacks

by hackers, or viruses, breaches or interruptions due to employee error, malfeasance or other disruptions, or lapses in compliance

with privacy and security mandates.

Any such virus, breach or interruption could compromise our networks and the information stored

there could be accessed by unauthorized parties, publicly disclosed, lost or stolen.

In the future, any such access, disclosure

or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal

information, such as the Health Insurance Portability and Accountability Act and European Union General Data Protection Regulation,

government enforcement actions and regulatory penalties.

Unauthorized access, loss or dissemination could also disrupt our operations,

including our ability to process samples, provide test results, share and monitor safety data, bill payors or patients, provide

customer support services, conduct research and development activities, process and prepare company financial information, manage

various general and administrative aspects of our business and may damage our reputation, any of which could adversely affect

our business, financial condition and results of operations.

operating results may vary significantly in future periods.

are in the early stages of product development and expects to focus substantial efforts for, at least, the next several years on preclinical

and clinical trials and other research and development activities.

We have not obtained regulatory approval for any product candidates.

Our revenues, expenses and operating results are likely to fluctuate significantly in the future.

We expect to incur substantial additional

operating expenses over the next several years as our research, development, and preclinical and clinical study activities increase.

Our financial results are unpredictable and may fluctuate, for among other reasons, due to:

scope, number, progress, duration, endpoints, cost, results, and timing of our preclinical testing and clinical studies of current

or potential future product candidates

ability to obtain additional funding to develop product candidates;

in the commencement, enrollment and timing of clinical studies.

high portion of our costs are predetermined on an annual basis, due in part to our significant research and development costs.

small declines in revenue could disproportionately affect financial results in a quarter.

Related to Regulatory Matters

prospective products will be subject to the various federal and state laws and regulations relating to health and safety.

are in the process of developing investigational new drugs for which we intend to pursue FDA approval via the New Drug Application (“NDA”)

In these product candidates, cannabinoid(s) will be the active pharmaceutical ingredient.

connection with our development and future commercialization (if applicable) of the above-described prospective products, we and each

contemplated product candidate are subject to the Federal Food Drug and Cosmetic Act (FDCA).

The FDCA is intended to assure the consumer,

in part, that drugs and devices are safe and effective for their intended uses and that all labeling and packaging is truthful, informative,

and not deceptive.

The FDCA and FDA regulations define the term “drug,”

in part, by reference to its intended use, as “articles

intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease”

and “articles (other than food)

intended to affect the structure or any function of the body of man or other animals.”

Therefore, almost any ingested or topical

or injectable product that, through its label or labeling (including internet websites, promotional pamphlets, and other marketing material),

that is claimed to be beneficial for such uses will be regulated by FDA as a drug.

The definition also includes components of drugs,

such as active pharmaceutical ingredients.

Drugs must generally either receive premarket approval by FDA through the NDA process or conform

to a “monograph”

for a particular drug category, as established by FDA’s Over-the-Counter (OTC) Drug Review.

FDA does not award premarket approval for our product candidates through the NDA process, this could have a material adverse effect on

our business, financial condition and results of operations.

trials are expensive, time-consuming, uncertain and susceptible to change, delay or termination.

The results of clinical trials are open

to differing interpretations.

currently have two potential product candidates that are in preclinical development as an investigational

combination therapy for GBM and other forms of cancer and intends to pursue preclinical and clinical development for other prospective

candidates as well, including, but not limited to, a candidate targeting radiodermatitis.

After completing the requisite preclinical

testing, IND submission, internal review board (“IRB”) review, and any other applicable early-development obligations,

we must conduct extensive clinical trials to demonstrate the safety and efficacy of the product candidates.

Clinical testing is

expensive, time consuming, and uncertain as to outcome.

We cannot guarantee that any clinical trials will be conducted as planned

or completed on schedule, or at all.

Failures in connection with one or more clinical trials can occur at any stage of testing.

agencies may analyze or interpret the results of clinical trials differently than us.

Even if the results of our clinical trials are

favorable, the clinical trials for a number of our product candidates are expected to continue for several years and may take significantly

longer to complete.

Events that may prevent successful or timely completion of clinical development include:

in reaching a consensus with regulatory authorities on trial design;

in reaching agreement on acceptable terms with prospective contract research organization (“CRO”) and clinical trial

in opening clinical trial sites or obtaining required IRB or independent ethics committee approval at each clinical trial site;

or perceived lack of effectiveness of any product candidate during clinical trials;

of serious or unexpected toxicities or side effects experienced by trial participants or other safety issues, such as drug interactions,

including those which cause confounding changes to the levels of other concomitant medications;

than expected rates of subject recruitment and enrollment rates in clinical trials;

in retaining subjects for the entire duration of applicable clinical studies (as study subjects may withdraw at any time due to adverse

side effects from the therapy, insufficient efficacy, fatigue with the clinical trial process or for any other reason;

or inability in manufacturing or obtaining sufficient quantities of materials for use in clinical trials due to regulatory and manufacturing

of or changes in our manufacturing process or product candidate formulation;

in obtaining regulatory authorization s, such as INDs and any others that must be obtained, maintained, and/or satisfied to commence

a clinical trial, including “clinical holds”

or delays requiring suspension or termination of a trial by a regulatory

agency, such as the FDA, before or after a trial is commenced;

in applicable regulatory policies and regulation, including changes to requirements imposed on the extent, nature or timing of studies;

or failure in reaching agreement on acceptable terms in clinical trial contracts or protocols with prospective clinical trial sites;

regarding proper dosing;

or failure to supply product for use in clinical trials which conforms to regulatory specification;

results from ongoing pre-clinical studies and clinical trials;

of our CROs, or other third-party contractors to comply with all contractual requirements or to perform their services in a timely

or acceptable manner;

by us, our employees, our CROs or their employees to comply with all applicable FDA or other regulatory requirements relating to

the conduct of clinical trials;

conflicts with participating clinicians and clinical institutions;

to design appropriate clinical trial protocols;

concerns with cannabinoid products, generally, and the potential for abuse;

data to support regulatory approval;

or unwillingness of medical investigators to follow our clinical protocols;

in maintaining contact with patients during or after treatment, which may result in incomplete data.

of the foregoing could have a material adverse effect on our business, financial condition and results of operations.

failure by us to comply with existing regulations could harm our reputation and operating results.

are subject to extensive regulation by U.S.

federal and state and foreign governments in each of the U.S., European and Canadian markets,

in which we plan to sell our product candidates.

We must adhere to all regulatory requirements, including FDA’s Good Laboratory

Practice (“GLP”), GCP, and GMP requirements, pharmacovigilance requirements, advertising and promotion restrictions, reporting

and recordkeeping requirements, and their European equivalents.

If we or our suppliers fail to comply with applicable regulations, including

FDA pre-or post-approval requirements, then the FDA or other foreign regulatory authorities could sanction our Company.

Even if a drug

is approved by the FDA or other competent authorities, regulatory authorities may impose significant restrictions on a product’s

indicated uses or marketing or impose ongoing requirements for potentially costly post-marketing trials.

Any of our product candidates

which may be approved in the U.S.

will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage,

distribution, import, export, advertising, promotion, sampling, recordkeeping and submission of safety and other post-market information,

including both federal and state requirements.

In addition, manufacturers and manufacturers’

facilities are required to comply

with extensive FDA requirements, including ensuring that quality control and manufacturing procedures conform to GMP.

As such, we and

our contract manufacturers (in the event contract manufacturers are appointed in the future) are subject to continual review and periodic

inspections to assess compliance with GMP.

Accordingly, we and others with whom we work will have to spend time, money and effort in

all areas of regulatory compliance, including manufacturing, production, quality control and quality assurance.

We will also be required

to report certain adverse reactions and production problems, if any, to the FDA, and to comply with requirements concerning advertising

and promotion for our products.

Promotional communications with respect to prescription drugs are subject to a variety of legal and regulatory

restrictions and must be consistent with the information in the product’s approved label.

Similar restrictions and requirements

exist in the European Union and other markets where we operate.

a regulatory agency discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency,

or problems with the facility where the product is manufactured, or disagrees with the promotion, marketing or labeling of the product,

it may impose restrictions on that product or on us, including requiring withdrawal of the product from the market.

If we fail to comply

with applicable regulatory requirements, a regulatory agency or enforcement authority may:

warning letters;

civil or criminal penalties;

regulatory approval;

any of our ongoing clinical trials;

to approve pending applications or supplements to approved applications submitted by us;

restrictions on our operations, including by requiring us to enter in to a Corporate Integrity Agreement or closing our contract

manufacturers’

facilities, if any;

or detain products or require a product recall.

may be subject to federal, state and foreign healthcare laws and regulations and implementation of or changes to such healthcare laws

and regulations could adversely affect our business and results of operations.

we successfully complete the requisite preclinical and clinical testing, make the required regulatory submissions and obtain any corresponding

authorizations or licenses (as applicable), fulfill all other applicable development-related regulatory obligations, and, eventually,

obtain FDA approval to market one or more of our current or future product candidates in the United States, we may be subject to certain

healthcare laws and regulations.

In both the U.S.

and certain foreign jurisdictions, there have been a number of legislative and regulatory

proposals to change the healthcare system in ways that could impact our ability to sell our future product candidates.

If we are found

to be in violation of any of these laws or any other federal, state or foreign regulations, we may be subject to administrative, civil

and/or criminal penalties, damages, fines, individual imprisonment, exclusion from federal health care programs and the restructuring

of our operations.

Any of these could have a material adverse effect on our business and financial results.

Since many of these laws

have not been fully interpreted by the courts, there is an increased risk that we may be found in violation of one or more of their provisions.

Any action against us for violation of these laws, even if we are ultimately successful in our defense, will cause us to incur significant

legal expenses and divert our management’s attention away from the operation of our business.

In addition, in many foreign countries,

particularly the countries of the European Union, the pricing of prescription drugs is subject to government control.

some foreign countries, the proposed pricing for a drug must be approved before it may be lawfully marketed.

The requirements governing

drug pricing vary widely from country to country.

For example, some European Union jurisdictions operate positive and negative list systems

under which products may only be marketed once a reimbursement price has been agreed.

To obtain reimbursement or pricing approval, some

of these countries may require the completion of clinical trials that compare the cost effectiveness of a particular product candidate

to currently available therapies.

Other member states allow companies to fix their own prices for medicines but monitor and control company

Such differences in national pricing regimes may create price differentials between European Union member states.

be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable

reimbursement and pricing arrangements for any of our products.

Historically, products launched in the European Union do not follow price

structures of the U.S.

In the European Union, the downward pressure on healthcare costs in general, particularly prescription medicines,

has become intense.

As a result, barriers to entry of new products are becoming increasingly high and patients are unlikely to use a

drug product that is not reimbursed by their government.

may face competition from lower-priced products in foreign countries that have placed price controls on pharmaceutical products.

the importation of foreign products may compete with any future product that we may market, which could negatively impact our profitability.

in the U.S., we expect that the 2010 Affordable Care Act (“ACA”), as well as other healthcare reform measures that may be

adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we may receive

for any approved product.

There have been judicial challenges to certain aspects of the ACA and numerous legislative attempts to repeal

and/or replace the ACA in whole or in part, and we expect there will be additional challenges and amendments to the ACA in the future.

At this time, the full effect that the ACA will have on our business in the future remains unclear.

An expansion in the government’s

role in the U.S.

healthcare industry may cause general downward pressure on the prices of prescription drug products, lower reimbursements

or any other product for which we obtain regulatory approval, reduce product utilization and adversely affect our business and results

of operations.

Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments

from private payors.

The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate

revenue, attain profitability, or commercialize any of our future product candidates for which we may receive regulatory approval.

is a high rate of failure for drug candidates proceeding through clinical trials.

have no products on the market, and our new potential cannabinoid-based drug product candidates are currently either in preclinical development

or the research and discovery phase.

Accordingly, none of our prospective products or investigational candidates have ever been tested

in a human subject.

Our ability to achieve and sustain profitability with respect to our product candidates in which cannabinoids are

featured as the active pharmaceutical ingredient depends on obtaining regulatory approvals for and, if approved, successfully commercializing

our product candidates, either alone or with third parties.

Before obtaining regulatory approval for the commercial distribution of our

product candidates, we or an existing or future collaborator must conduct extensive preclinical tests and clinical trials to demonstrate

the safety, purity and potency of our product candidates.

there is a high rate of failure for drug candidates proceeding through clinical trials.

We may suffer significant setbacks in our clinical

trials similar to the experience of a number of other companies in the pharmaceutical and biotechnology industries, even after receiving

promising results in earlier trials.

Further, even if we view the results of a clinical trial to be positive, the FDA or other regulatory

authorities may disagree with our interpretation of the data.

In the event that we obtain negative results from clinical trials for product

candidates or other problems related to potential chemistry, manufacturing and control issues or other hurdles occur and our future product

candidates are not approved, we may not be able to generate sufficient revenue or obtain financing to continue our operations, our ability

to execute on our current business plan may be materially impaired, and our reputation in the industry and in the investment community

might be significantly damaged.

In addition, our inability to properly design, commence and complete clinical trials may negatively impact

the timing and results of our clinical trials and ability to seek approvals for our drug candidates.

testing, marketing and manufacturing of any new drug product for use in the United States will require approval from the FDA.

predict with any certainty the amount of time necessary to obtain such FDA approval and whether any such approval will ultimately be

Preclinical and clinical trials may reveal that one or more products are ineffective or unsafe, in which event further development

of such products could be seriously delayed or terminated.

Moreover, obtaining approval for certain products may require testing on human

subjects of substances whose effects on humans are not fully understood or documented.

Delays in obtaining FDA or any other necessary

regulatory approvals of any proposed drug and failure to receive such approvals would have an adverse effect on the drug’s potential

commercial success and on our business, prospects, financial condition and results of operations.

In addition, it is possible that a

proposed drug may be found to be ineffective or unsafe due to conditions or facts that arise after development has been completed and

regulatory approvals have been obtained.

In this event, we may be required to withdraw such proposed drug from the market.

To the extent

that our success will depend on any regulatory approvals from government authorities outside of the United States that perform roles

similar to that of the FDA, uncertainties similar to those stated above will also exist.

adverse events or other safety risks could require us to abandon development and preclude, delay or limit approval of our prospective

products or current or future product candidates, limit the scope of any approved label or market acceptance, or cause the recall or

loss of marketing approval of products that are already marketed.

any of our prospective products or current or future product candidates, prior to or after any approval for commercial sale, cause serious

or unexpected side effects, or are associated with other safety risks such as misuse, abuse or diversion, a number of potentially significant

negative consequences could result, including:

authorities may interrupt, delay or halt clinical trials;

authorities may deny regulatory approval of our future product candidates;

authorities may require certain labeling statements, such as warnings or contraindications or limitations on the indications for

use, and/or impose restrictions on distribution in the form of a Risk Evaluation and Mitigation Strategy (“REMS”) in

connection with approval or post-approval;

authorities may withdraw their approval, require more onerous labeling statements, impose a more restrictive REMS, or require it

to recall any product that is approved;

may be required to change the way the product is administered or conduct additional clinical trials;

relationships with our collaboration partners may suffer;

could be sued and held liable for harm caused to patients;

reputation may suffer.

The reputational risk is heightened with respect to those of our future product candidates that are being

developed for pediatric indications.

may voluntarily suspend or terminate our clinical trials if at any time we believe that the product candidates present an unacceptable

risk to participants, or if preliminary data demonstrates that our future product candidates are unlikely to receive regulatory approval

or unlikely to be successfully commercialized.

completing preclinical testing and obtaining the requisite regulatory authorizations, as applicable, we may voluntarily suspend or terminate

our clinical trials for any number of reasons, including if we believe that a product’s use, or a person’s exposure to it,

may cause adverse health consequences or death.

In addition, regulatory agencies, IRBs or data safety monitoring boards may at any time

recommend the temporary or permanent discontinuation of our clinical trials or request that we cease using investigators in the clinical

trials if they believe that the clinical trials are not being conducted in accordance with applicable regulatory requirements, or that

they present an unacceptable safety risk to participants.

Although we have never been asked by a regulatory agency, IRB or data safety

monitoring board to temporarily or permanently discontinue a clinical trial, if we elect or are forced to suspend or terminate a clinical

trial of any of our future product candidates, the commercial prospects for that product will be harmed and our ability to generate product

revenue from that product may be delayed or eliminated.

Furthermore, any of these events may result in labeling statements such as warnings

or contraindications.

In addition, such events or labeling could prevent us or our partners from achieving or maintaining market acceptance

of the affected product and could substantially increase the costs of commercializing our future product candidates and impair our ability

to generate revenue from the commercialization of these products either by us or by our collaboration partners.

success of our prospective product candidates and future approved products, if any, especially those containing hemp-derived CBD, is

subject to a number of constantly-evolving state and federal laws, regulations, and enforcement policies pertaining to hemp-derived CBD

and/or cannabis more generally.

Agriculture Improvement Act of 2018, or the “2018 Farm Bill,”

was signed into law on December 20, 2018.

This 2018 Farm Bill

expressly excluded “hemp”

from the federal Controlled Substances Act of 1970 and the Controlled Substances Import and Export

Act’s, as amended (the “CSA”)’s definition of marijuana and, accordingly, declassified substances derived from

or containing any part(s) of the cannabis plant containing not more than 0.3% THC on a dry-weight basis from Schedule I.

In effect, the

2018 Farm Bill legalized the cultivation and commercial sale of hemp in the United States, subject to applicable state laws and regulations

and applicable FDCA provisions, including any implementing regulations, as interpreted and enforced by the FDA.

state, federal, and international hemp and CBD laws and regulations are broad in scope and subject to evolving interpretations, which

could require us to incur substantial costs associated with compliance requirements.

In addition, violations of these laws, or allegations

of such violations, could disrupt our business and result in a material adverse effect on our operations.

In addition, it is possible

that regulations may be enacted in the future that will be directly applicable to our proposed business regarding cannabinoid production.

It is also possible that the federal government will begin strictly enforcing existing laws, which may limit the legal uses of the hemp

plant and its derivatives and extracts, such as cannabinoids.

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 activities in the cannabis industry.

addition, the 2018 Farm Bill did not alter the FDA’s authority to regulate products containing cannabis or cannabis-derived compounds,

including cannabinoids, under the FDCA.

Hemp products, including cannabinoids, that qualify as drugs, food, dietary supplements, veterinary

products, and cosmetics, for example, are subject to regulation by the FDA.

Following passage of the 2018 Farm Bill, the FDA reaffirmed

its enforcement authority and reiterated the requirement that a product containing CBD or other cannabinoid(s) (hemp-derived or otherwise)

that is marketed with a claim of therapeutic benefit implicitly or explicitly attributed to, or based on, the presence of the cannabinoid

as an ingredient, or any other health/medical claim, must be approved by the FDA for its intended use(s) before it may be introduced

into interstate commerce.

Our prospective product candidates are currently intended for development under an IND and, eventually, approval

under an NDA, which will mean that, if approved, we can market such products with claims about their proven medical benefits for the

applicable indications for use to the extent consistent with the product’s NDA.

we believe that the 2018 Farm Bill and analogous state legislation has reduced the amount of DEA oversight of hemp-derived cannabinoids,

this is a rapidly evolving area of U.S.

law and substantial uncertainty remains as to the future of federal and state regulation of cannabinoid

In addition, the FDA has approved only one natural cannabis-based drug product, which contains only hemp-derived CBD.

can be no assurance that our product candidates containing cannabinoids (as the active drug ingredient(s)) will be similarly approved

for commercialization in the United States at any time in the near or distant future.

Any regulations the FDA issues relating to the

sale, marketing, and/or other activities involving cannabinoid or certain cannabinoid-containing products could have a material adverse

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

the uncertainty surrounding future state regulations and the continuing barriers that still exist for cannabinoids in certain product

categories due to FDA regulation, it is unknown what impact the removal of hemp from the CSA, and any resulting commercialization of

hemp products, may have on our business.

associated with compliance with numerous laws and regulations could impact our financial results.

In addition, we could become subject

to increased enforcement and/or litigation risks associated with the CBD industry.

manufacture, labeling and distribution of products containing CBD or other cannabinoids is governed by various federal, state and local

To the extent we are able to successfully commercialize any of our currently contemplated product candidates via the FDA’s

NDA approval pathway, the presence of cannabinoids as active or inactive ingredients, as applicable, may give rise to heightened regulatory

scrutiny and greater risk of consumer litigation, either of which could further restrict the permissible scope of our marketing claims

about such products or our ability to sell them in the United States at all.

The shifting compliance environment and the need to build

and maintain robust systems to comply with different hemp or CBD-related regulations in jurisdictions may increase costs and/or the risk

that we may violate one or more applicable regulatory requirements.

If our operations, or any of our activities or prospective products,

are found to be in violation of any such laws or any other governmental regulations that apply to the manufacture, distribution, or sale

of prescription drug products, generally, and to products containing hemp or CBD, we may be subject to penalties, including, without

limitation, civil and criminal penalties, damages, fines, the curtailment or restructuring of our operations, any of which could adversely

affect our ability to operate our business or our financial results.

to comply with any applicable FDA requirements, relating to CBD or otherwise, may result in, among other things, injunctions, product

withdrawals, recalls, product seizures, fines and criminal prosecutions.

Our advertising is also subject to regulation by the FTC under

the Federal Trade Commission Act.

Additionally, analogous state advertising and labeling laws are often enforced by state attorneys general,

and any state or federal enforcement action based on potentially misleading or deceptive advertising is often followed by costly class-action

complaints under state consumer-protection laws.

FDA, on its own and in collaboration with the FTC, has issued numerous warning letters to companies offering for sale of topical, oral,

and other types of products containing CBD, which were not approved under the FDA’s NDA process, in response to their making unsubstantiated

claims on product webpages, online stores, and social media websites about the products’

purported therapeutic or other drug-like

benefits in connection with CBD or other cannabinoids.

The FDA deemed that companies “used these online platforms to make unfounded,

egregious claims about their products’

ability to limit, treat or cure cancer, neurodegenerative conditions, autoimmune diseases,

opioid use disorder, and other serious diseases, without sufficient evidence and the legally required FDA approval.”

agency has continuously demonstrated its commitment to taking action against companies making medical claims about products containing

CBD (as the active ingredient), as selling unapproved products with unsubstantiated therapeutic claims can put patients and consumers

The FDA does not believe CBD has been shown to be safe and effective for any therapeutic use, except as used in Epidiolex, the

only new drug containing CBD that has been approved by FDA under the NDA process, which was approved for the treatment of seizures associated

with Lennox-Gastaut syndrome or Dravet syndrome in patients 2 years of age and older.

The agency’s principal concern with CBD products

on the market that are unlawfully claiming to treat serious medical conditions is that deceptive marketing of unproven treatments may

keep some patients from accessing appropriate, recognized therapies to treat serious and even fatal diseases.

Additionally, because they

are not evaluated by the FDA, there may be other ingredients that are not disclosed, which may be harmful.

FDA has pledged to continue to monitor the marketplace and take enforcement action as-needed to protect the public against companies

illegally selling products containing CBD as the active ingredient, claiming to prevent, diagnose, treat, or cure serious diseases, such

as cancer, Alzheimer’s disease, psychiatric disorders and diabetes;

illegally selling cannabis and cannabis-derived products that

can put consumers at risk;

and marketing and distributing such products in violation of the FDA’s authorities.

public perception of hemp and cannabinoid-related businesses, misconceptions about the nature of our business and regulatory uncertainties

could have a material adverse effect on our business, financial condition, and results of operations.

believe the cannabinoid industry is highly dependent upon consumer perception regarding the safety, efficacy, quality, and legality

of cannabinoid, whether derived from hemp or marijuana.

Consumer perception of cannabinoid products can be significantly influenced

by scientific research or findings, regulatory investigations, litigation, media attention, and other publicity regarding the

consumption of cannabinoid products.

There can be no assurance that future scientific research, findings, regulatory proceedings,

litigation, media attention, or other research findings or publicity will be favorable to the cannabinoid market or any particular

product, or consistent with earlier publicity.

Our dependence upon consumer perceptions means that adverse scientific research

reports, findings, regulatory proceedings, litigation, media attention, or other publicity relating to cannabinoid products, generally

or any particular cannabinoid products or derivatives, in particular, regardless of merit or accuracy, could have a material adverse

effect on our business, the demand for our product candidates or any products for which we obtain regulatory approval in the future.

Such adverse publicity or other negative media attention could arise even if the adverse effects reportedly associated with such

products resulted from consumers’

failure to consume such products appropriately or as directed.

Any adverse publicity or

other similar occurrences affecting consumer perception may have a material adverse impact on our reputation, perception of our

product candidates, our ability to obtain the necessary regulatory approvals for our product candidates, and the commercial viability

of the products for which regulatory approval is obtained in the future, if any.

management will be required to devote a substantial time to comply with public company regulations .

a public company, we incur significant legal, accounting and other expenses that we did not incur as a private company.

The Sarbanes-Oxley

Act of 2002 (the “Sarbanes-Oxley Act”), the Dodd-Frank Wall Street Reform and Consumer Protection Act as well as rules

implemented by the SEC and Nasdaq, impose various requirements on public companies, including those related to corporate governance

Our management and other personnel must devote a substantial amount of time to these requirements.

Moreover, these

rules and regulations increase our legal and financial compliance costs and make some activities more time consuming and costly.

Sarbanes-Oxley Act requires, among other things, that we maintain effective internal control over financial reporting and disclosure

controls and procedures.

In particular, we must perform system and process evaluation and testing of our internal control over

financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required

by Section 404 of the Sarbanes-Oxley Act.

Our compliance with these requirements will require that we incur substantial accounting

and related expenses and expend significant management efforts.

We will likely need to hire additional accounting and financial

staff to satisfy the ongoing requirements of Section 404 of the Sarbanes-Oxley Act.

The costs of hiring such staff may be material

and there can be no assurance that such staff will be immediately available to us.

Moreover, if we are not able to comply with

the requirements of Section 404 of the Sarbanes-Oxley Act, or if we identify deficiencies in our internal control over financial

reporting that are deemed to be material weaknesses, investors could lose confidence in the accuracy and completeness of our financial

reports, the market price of our common stock could decline and we could be subject to sanctions or investigations by Nasdaq,

the SEC or other regulatory authorities, which could require additional financial and management resources.

have identified a material weakness in our internal control over financial reporting.

If we are unable to remediate the material

weakness, or if we experience additional material weaknesses in the future, our business may be harmed.

management is responsible for establishing and maintaining adequate internal control over financial reporting and for evaluating

and reporting on the effectiveness of our system of internal control.

Internal control over financial reporting is a process used

to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements

for external purposes in accordance with generally accepted accounting principles in the United States.

As a public company, we

are required to comply with the Sarbanes-Oxley Act and other rules that govern public companies.

In particular, we are required

to certify our compliance with Section 404 of the Sarbanes-Oxley Act, which requires us to furnish annually a report by management

on the effectiveness of our internal control over financial reporting.

management performed an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2020

and concluded our internal control over financial reporting was not effective as of December 31, 2020 due to the material weakness

related to segregation of duties.

Specifically, due to the small size of our Company, we do not maintain sufficient segregation

of duties to ensure the processing, review and authorization of all transactions including non-routine transactions.

the process of remediating our material weaknesses and designing an effective internal control environment.

efforts place a significant burden on management and add increased pressure to our financial resources and processes.

unable to successfully remediate our existing material weakness or any additional material weaknesses in our internal control

over financial reporting that may be identified in the future in a timely manner, the accuracy and timing of our financial reporting

may be adversely affected;

our liquidity, our access to capital markets, the perceptions of our creditworthiness may be adversely

we may be unable to maintain or regain compliance with applicable securities laws, the listing requirements of the Nasdaq

Stock Market;

we may be subject to regulatory investigations and penalties;

investors may lose confidence in our financial reporting;

our reputation may be harmed;

and our stock price may decline.

Related to Our Intellectual Property

may not be able to adequately protect or enforce our intellectual property rights, which could harm our competitive position .

currently hold full or limited rights to several patents as an in-licensee covering the use of CBD including with current cancer treatments,

both broadly, as well as for specific cancer types.

Our success will depend, in part, on our ability to obtain additional patents, protect

our trade secrets and operate without infringing on the proprietary rights of others.

We rely upon a combination of patents, trade secret

protection (i.e., know-how), and confidentiality agreements to protect the intellectual property of our future product candidates.

strengths of patents in the pharmaceutical field involve complex legal and scientific questions and can be uncertain.

Where appropriate,

we seek patent protection for certain aspects of our products and technology.

Filing, prosecuting and defending patents globally can

be prohibitively expensive.

policy is to look to patent technologies with commercial potential in jurisdictions with significant commercial opportunities.

patent protection may not be available for some of the products or technology we are developing.

If we must spend significant time and

money protecting, defending or enforcing our patents, designing around patents held by others or licensing, potentially for large fees,

patents or other proprietary rights held by others, our business, results of operations and financial condition may be harmed.

not develop additional proprietary products that are patentable.

patent positions of pharmaceutical products are complex and uncertain.

The scope and extent of patent protection for our future product

candidates are particularly uncertain.

Our future product candidates will be based on medicinal chemistry instead of cannabis plants.

While we have sought patent protection, where appropriate, directed to, among other things, composition-of-matter for our specific formulations,

their methods of use, and methods of manufacture, we do not have and will not be able to obtain composition of matter protection on these

previously known CBD derivatives per se.

Although we have sought, and will continue to seek, patent protection in the U.S., Europe and

other countries for our proprietary technologies, future product candidates, their methods of use, and methods of manufacture, any or

all of them may not be subject to effective patent protection.

If any of our products is approved and marketed for an indication for

which we do not have an issued patent, our ability to use our patents to prevent a competitor from commercializing a non-branded version

of our commercial products for that non-patented indication could be significantly impaired or even eliminated.

of information related to our future product candidates by us or others may prevent us from obtaining or enforcing patents relating to

these products and product candidates.

Furthermore, others may independently develop similar products, may duplicate our products, or

may design around our patent rights.

In addition, any of our issued patents may be opposed and/or declared invalid or unenforceable.

If we fail to adequately protect our intellectual property, we may face competition from companies who attempt to create a generic product

to compete with our future product candidates.

We may also face competition from companies who develop a substantially similar product

to our future product candidates that is not covered by any of our patents.

companies have encountered significant problems in protecting, defending and enforcing intellectual property rights in foreign jurisdictions.

The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other

intellectual property rights, particularly those relating to pharmaceuticals, which could make it difficult for us to stop the infringement

of our patents or marketing of competing products in violation of our proprietary rights generally.

Proceedings to enforce our patent

rights in foreign jurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our business.

success depends on our ability to obtain additional intellectual property and operate without infringing the proprietary rights of others.

Infringement claims by third parties may result in liability for damages or prevent or delay our developmental and commercialization

success and ability to compete depend in part on our ability to obtain additional patents, protect our trade secrets, and operate without

infringing on the proprietary rights of others.

If we fail to adequately protect our intellectual property, we may face competition from

companies who develop a substantially similar product to our future product candidates that is not covered by any of our intellectual

Many companies have encountered significant problems in protecting, defending, and enforcing intellectual property rights in

foreign jurisdictions.

The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement

of patents and other intellectual property rights, particularly those relating to pharmaceuticals, which could make it difficult for

us to stop the infringement of our intellectual property and other proprietary rights.

There is also a substantial amount of litigation,

both within and outside the U.S., involving patient and other intellectual property rights in the pharmaceutical industry.

time to time, be notified of claims that we are infringing upon the proprietary rights of third parties, and we cannot provide assurances

that other companies will not, in the future, pursue such infringement claims against it, our commercial partners, or any third-party

proprietary technologies we have licensed.

may be unsuccessful in licensing additional intellectual property to develop new product candidates.

may in the future seek to in-license additional intellectual property that we believe could complement or expand our product candidates

or otherwise offer growth opportunities.

The pursuit of such licenses may cause us to incur various expenses in identifying, investigating

and pursuing suitable intellectual property.

If we acquire additional intellectual property to develop new therapeutic product candidates,

we may not be able to realize anticipated cost savings or synergies.

third parties claim that intellectual property used by us infringes upon their intellectual property, our operating profits could be

adversely affected.

is a substantial amount of litigation, both within and outside the U.S., involving patent and other intellectual property rights in the

pharmaceutical industry.

We may, from time to time, be notified of claims that we are infringing upon patents, trademarks, copyrights

or other intellectual property rights owned by third parties, and we cannot provide assurances that other companies will not, in the

future, pursue such infringement claims against us, our commercial partners or any third-party proprietary technologies we have licensed.

If we were found to infringe upon a patent or other intellectual property right, or if we failed to obtain or renew a license under a

patent or other intellectual property right from a third party, or if a third party that we were licensing technologies from was found

to infringe upon a patent or other intellectual property rights of another third party, we may be required to pay damages, including

damages of up to three times the damages found or assessed, if the infringement is found to be willful, suspend the manufacture of certain

products or reengineer or rebrand our products, if feasible, or we may be unable to enter certain new product markets.

Any such claims

could also be expensive and time-consuming to defend and divert management’s attention and resources.

Our competitive position

could suffer as a result.

In addition, if we have declined or failed to enter into a valid non-disclosure or assignment agreement for

any reason, we may not own the invention or our intellectual property, and our products may not be adequately protected.

Thus, we cannot

guarantee that any of our future product candidates, or our commercialization thereof, does not and will not infringe any third party’s

intellectual property.

we are not able to adequately prevent disclosure of trade secrets and other proprietary information, the value of our technology and

products could be significantly diminished.

rely on trade secrets to protect our proprietary technologies, especially where it does not believe patent protection is appropriate

or obtainable.

However, trade secrets are difficult to protect.

We rely in part on confidentiality agreements with our current and former

employees, consultants, outside scientific collaborators, sponsored researchers, contract manufacturers, vendors and other advisors to

protect our trade secrets and other proprietary information.

These agreements may not effectively prevent disclosure of confidential

information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information.

we cannot guarantee that we have executed these agreements with each party that may have or have had access to our trade secrets.

party with whom we or they have executed such an agreement may breach that agreement and disclose our proprietary information, including

our trade secrets, and we may not be able to obtain adequate remedies for such breaches.

a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome

is unpredictable.

In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets.

If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent

them, or those to whom they disclose such trade secrets, from using that technology or information to compete with us.

If any of our

trade secrets were to be disclosed to or independently developed by a competitor or other third-party, our competitive position would

Related to the Ownership of Our Common Stock

may not obtain the requisite votes at our special meeting to ratify our reverse stock split.

On January 21, 2021,

we received a stockholder litigation demand letter from the law firm of Purcell Julie & Lefkowitz LLP, on behalf of James

Self, a purported stockholder of our Company.

The letter demands that we (i) deem ineffective the December 30, 2020 amendment

to our Amended and Restated Certificate of Incorporation in which we effected a one-for-four reverse stock split of our common

stock (the “2020 Reverse Stock Split”) due to the manner in which non-votes by brokers were tabulated, (ii) seek appropriate

relief for damages allegedly suffered by the company and its stockholders or seek a valid stockholder approval of the amendment

and reverse stock split, and (iii) adopt adequate internal controls to prevent a recurrence of the alleged misconduct.

that the amendment was ineffective or that there were any inadequate internal controls related to the same.

However, to eliminate

any questions about the amendment, we intend to seek to ratify the amendment at a special stockholders’

meeting pursuant

to Section 204 of the Delaware General Corporation Law.

This special stockholders’

meeting is scheduled to occur on May 14, 2021.

March 19, 2021, in response to the stockholder demand letter, we filed a preliminary proxy statement on Schedule 14A, which

provided notice of a special meeting of stockholders and sought the ratification of the filing and effectiveness of the certificate

of amendment to our amended and restated certificate of incorporation filed with the Secretary of State of the State of Delaware

on December 30, 2020 to effect the 2020 Reverse Stock Split.

Should we fail to obtain the requisite votes to ratify

the 2020 Reverse Stock Split, the 2020 Reverse Stock Split will deemed to be invalid, and we will not have a requisite

amount of authorized shares of common stock.

market price of our common stock may be subject to significant fluctuations and volatility, and our stockholders may be unable to resell

their shares at a profit and incur losses.

market price our common stock could be subject to significant fluctuation.

Market prices for securities of life sciences and biopharma

companies in particular have historically been particularly volatile and have shown extreme price and volume fluctuations that have often

been unrelated or disproportionate to the operating performance of those companies.

Broad market and industry factors, as well as general

economic, political and market conditions such as recessions or interest rate changes, may seriously affect the market price of our common

stock, regardless of our actual operating performance.

Some of the factors that may cause the market price of our common stock to fluctuate

react negatively to the effect on our business and prospects;

announcement of new products, new developments, services or technological innovations by us or our competitors;

or anticipated quarterly increases or decreases in revenue, gross margin or earnings, and changes in our business, operations or

announcements

relating to strategic relationships, mergers, acquisitions, partnerships, collaborations, joint ventures, capital commitments,

or other events by us or our competitors;

or trends in the life sciences and biopharma industries;

in the economic performance or market valuations of other life sciences and biopharma companies;

market conditions or domestic or international macroeconomic and geopolitical factors unrelated to our performance or financial condition;

of our common stock by stockholders, including executives and directors;

and limitations in trading volumes of our common stock;

in the market prices and trading volumes of companies in the life sciences and biopharma industries;

ability to finance our business;

to secure resources and the necessary personnel to pursue our plans;

to meet external expectations or management guidance;

in our capital structure or dividend policy, future issuances of securities, sales or distributions of large blocks of common stock

by stockholders;

cash position;

announcements

and events surrounding financing efforts, including debt and equity securities;

research reports, recommendation and changes in recommendations, price targets, and withdrawals of coverage;

and additions of key personnel;

and litigation related to intellectual properties, proprietary rights, and contractual obligations;

investigations

by regulators into our operations or those of our competitors;

in applicable laws, rules, regulations, or accounting practices and other dynamics;

events or factors, many of which may be out of our control.

the past, following periods of volatility in the overall market and the market prices of particular companies’

securities, securities

class action litigations have often been instituted against these companies.

Litigation of this type, if instituted against us, could

result in substantial costs and a diversion of our management’s attention and resources.

Any adverse determination in any such

litigation or any amounts paid to settle any such actual or threatened litigation could require that we make significant payments.

the COVID-19 pandemic has resulted in significant financial market volatility and uncertainty in recent months.

A continuation or worsening

of the levels of market disruption and volatility seen in the recent past could have an adverse effect on our ability to access capital,

on our business, results of operations and financial condition, and on the market price of our common stock.

may issue additional equity securities in the future, which may result in dilution to existing investors.

the extent we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution.

time to time, sell additional equity securities in one or more transactions at prices and in a manner we determine.

If we sell additional

equity securities, existing stockholders may be materially diluted.

New investors could gain rights superior to existing stockholders,

such as liquidation and other preferences.

In addition, the number of shares available for future grant under our equity compensation

plans may be increased in the future.

Also, the exercise or conversion of outstanding options or warrants to purchase shares of capital

stock may result in dilution to our stockholders upon any such exercise or conversion.

stockholders could attempt to influence changes within our Company which could adversely affect our operations, financial condition and

the value of our common stock.

stockholders may from time to time seek to acquire a controlling stake in our Company, engage in proxy solicitations, advance stockholder

proposals or otherwise attempt to effect changes.

Campaigns by stockholders to effect changes at publicly-traded companies are sometimes

led by investors seeking to increase short-term stockholder value through actions such as financial restructuring, increased debt, special

dividends, stock repurchases or sales of assets or the entire company.

Responding to proxy contests and other actions by activist stockholders

can be costly and time-consuming and could disrupt our operations and divert the attention of our board of directors and senior management

from the operation of our business.

These actions could adversely affect our operations, financial condition and the value of our common

securities analysts do not publish research or reports about our business, or if they publish negative evaluations, the price of our

common stock could decline.

trading market for our common stock will rely in part on the availability of research and reports that third-party industry or financial

analysts publish about our Company.

There are many large, publicly traded companies active in the life sciences and biopharma industries,

which may mean it will be less likely that we receive widespread analyst coverage.

Furthermore, if one or more of the analysts who do

cover us downgrade our stock, our stock price would likely decline.

If one or more of these analysts cease coverage of our Company, we

could lose visibility in the market, which in turn could cause our stock price to decline.

may be required to take write-downs or write-offs, restructuring and impairment or other charges in connection with the Offer that could

have a significant negative effect on our financial condition, results of operations and stock price, which could cause you to lose some

or all of your investment.

Ameri and Jay Pharma conducted due diligence on each other prior to the completion of the Offer, there can be no assurances that their

diligence revealed all material issues that may be present in the other company’s business, that all material issues through a

customary amount of due diligence will be uncovered, or that factors outside of our control will not later arise.

As a result, we may

be forced to write-down or write-off assets, restructure operations, or incur impairment or other charges that could result in losses.

Even if due diligence successfully identifies certain risks, unexpected risks may arise, and previously known risks may materialize in

a manner not consistent with each company’s preliminary risk analysis.

Even though these charges may be non-cash items and not

have an immediate impact on liquidity, the fact that we report charges of this nature could contribute to negative market perceptions

about our securities.

In addition, charges of this nature may make future financing difficult to obtain on favorable terms or at all.

Anti-takeover

provisions under Delaware corporate law may make it difficult for our stockholders to replace or remove our board of directors and could

deter or delay third parties from acquiring our Company, which may be beneficial to our stockholders.

our Amended and Restated Certificate of Incorporation, we are subject to the anti-takeover provisions of the Delaware General Corporation

Law (“DGCL”), including Section 203 of the DGCL.

Under these provisions, if anyone becomes an “interested stockholder,”

we may not enter into a “business combination”

with that person for three (3) years without special approval, which could

discourage a third party from making a takeover offer and could delay or prevent a change of control.

For purposes of Section 203 of

the DGCL, “interested stockholder”

means, generally, someone owning fifteen percent (15%) or more of our outstanding voting

stock or an affiliate of ours that owned fifteen percent (15%) or more of our outstanding voting stock during the past three (3) years,

subject to certain exceptions as described in Section 203 of the DGCL.

do not anticipate paying any cash dividends in the foreseeable future.

current expectation is that we will retain our future earnings, if any, to fund the development and growth of our business.

capital appreciation, if any, of our common stock will be our stockholders’

sole source of gain, if any, for the foreseeable future.

the event that we fail to satisfy any of the listing requirements of NASDAQ, our common stock may be delisted, which could affect our

market price and liquidity.

common stock is listed on NASDAQ.

For continued listing on NASDAQ, we will be required to comply with the continued listing requirements,

including the minimum market capitalization standard, the corporate governance requirements and the minimum closing bid price requirement,

among other requirements.

In the event that we fail to satisfy any of the listing requirements of NASDAQ, our common stock may be delisted.

If we are unable to list on NASDAQ, we would likely be more difficult to trade in or obtain accurate quotations as to the market price

of our common stock.

If our common stock is delisted from trading on NASDAQ, and we are not able to list our common stock on another

exchange or to have it quoted on NASDAQ, our securities could be quoted on the OTC Bulletin Board or on the “pink sheets.”

As a result, we could face significant adverse consequences including:

limited availability of market quotations for our securities;

determination that our common stock is a “penny stock”

which will require brokers trading in our common stock to adhere

to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

limited amount of news and analyst coverage for our Company;

decreased ability to issue additional securities (including pursuant to short-form registration statements on Form S-3 or obtain

additional financing in the future).

active trading market for our common stock may not develop.

listing of our common stock on NASDAQ does not assure that a meaningful, consistent and liquid trading market exists.

If an active market

for our common stock does not develop, it may be difficult for investors to sell their shares without depressing the market price for

the shares or at all.

may acquire businesses or products, or form strategic alliances, in the future, and may not realize the benefits of such acquisitions.

may acquire additional businesses or products, form strategic alliances, or create joint ventures with third parties that we believe

will complement or augment our existing business.

If we acquire businesses with promising markets or technologies, we may not be able

to realize the benefit of acquiring such businesses if we are unable to successfully integrate them with our existing operations and

company culture.

We may encounter numerous difficulties in developing, manufacturing, and marketing any new products resulting from a

strategic alliance or acquisition that delay or prevent us from realizing their expected benefits or enhancing our business.

no assurance that, following any such acquisition, we will achieve the synergies expected in order to justify the transaction, which

could result in a material adverse effect on our business and prospects.

Unresolved Staff Comments

principal corporate office is located at 4851 Tamiami Trail N, Suite 200 Naples, FL 34013.

The Company believes our office is

in good condition and is sufficient to conduct our operations.

Our principal corporate office is held under a month-to-month

operating lease.

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