What changed in this filing

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Item 1A. Risk Factors

2014-06-25 compared with 2013-03-22 · 116 added, 75 removed, 120 unchanged (61% of the section changed)

8 unchanged sentences

Risks Related to our Business:

We have never marketed a glucose control dietary supplement.

We intend to rely on a number of marketing and sales methods.

Our primary focus will be Internet advertising.

There can be no assurance that we will be able to launch a successful marketing campaign or that consumers will purchase our product.

Our new management team has never sold products similar to the Type2 Defense.

We may not be successful with our product launch.

There is no assurance that we will be able to generate sufficient revenues to achieve profitability.

We anticipate that we will continue to generate operating losses and negative cash flow from operations at least through the end of 2012 or longer.

We cannot be certain that we will ever achieve, or if achieved, maintain profitability.

If our revenue grows at a slower rate than we anticipate or if our marketing and operating expenses exceed our expectations or cannot be adjusted accordingly, our business, results of operation and financial condition will be materially adversely affected and we may be unable to satisfy the terms and conditions of outstanding debentures or continue operations.

We have not implemented our marketing program.

We have not yet implemented our Type2 Defense marketing program.

Our website is in the final developmental stages.

Our officer has limited experience in the sales and marketing of this type of product.

There can be no assurance that once our website becomes fully operational, revenues will be sufficient to support our ongoing operations or hire and retain qualified consultants to support our marketing program.

Our success will depend on external factors in the diabetic and nutritional supplement industries.

Type2 Defense will compete against more traditional medical treatments involve a substantial degree of risk.

Consumer receptiveness to Type2 Defense is unpredictable.

The commercial success of a Type2 Defense also depends upon:

the quality and acceptance of other competing brands and products;

creating brand awareness;

critical reviews;

the availability of alternatives;

general economic conditions;

other tangible and intangible factors.

Each of these factors is subject to change and cannot be predicted with certainty.

We may be exposed to product liability and recall claims.

We have a limited operating history upon which an evaluation of our prospects can be made.

We were incorporated in March 2007.

Our lack of operating history makes an evaluation of our business and prospects very difficult.

Our prospects must be considered speculative, considering the risks, expenses, and difficulties frequently encountered in the establishment of a new business.

We cannot be certain that our business will be successful or that we will generate significant revenues.

As of the date of this Annual Report, we have not commenced business operations involving the marketing and sale and distribution of the Type2 Defense Supplement.

We may never be successful in developing a market for the Type2 Defense Supplement and thus may never become profitable.

Therefore, our ability to operate our business successfully remains untested.

If we are successful in marketing the Type2 Defense Supplement and other similar products, we anticipate that we will retain future earnings, if any, and other cash resources for the future operation and development of our business as appropriate.

We do not currently anticipate declaring or paying any cash dividends in the foreseeable future.

Payment of any future dividends is solely at the discretion of our board of directors, which will take into account many factors including our operating results, financial conditions and anticipated cash needs.

For these reasons, we may never achieve profitability or pay dividends.

We anticipate that our ability to generate revenues in the foreseeable future will depend on the successful development and commercialization of the Type2 Defense Supplement.

If we are not successful in commercializing our lead products or are significantly delayed or limited in doing so, our business will be materially adversely affected and we may need to curtail or cease operations.

Because we are a development stage company, we have insufficient revenues to sustain our operations.

We are a development stage company that is currently developing our business.

To date, we have generated little revenues.

The success of our business operations will depend upon our ability to obtain customers and provide quality products, including the Type2 Defense, to those customers.

We are not able to predict whether we will be able to develop our business and generate revenues.

If we are not able to complete the successful development of our business plan, generate revenues and attain sustainable operations, then our business will fail.

We have incurred a net loss since inception and expect to incur net losses for the foreseeable future.

As of December 31, 2013, our net loss since inception was $4,901,721 and our net loss for fiscal year ended December 31, 2013 was $1,459,146.

We expect to incur operating and capital expenditures for the next year and, as a result, we expect significant net losses in the future.

We will need to generate significant revenues to develop our business and expand our operations.

We may not be able to generate sufficient revenues to achieve profitable operations.

We will need to raise additional capital to market our products and expand our operations.

Our failure to raise additional capital will significantly affect our ability to fund our proposed activities.

We are currently not engaged in any sophisticated marketing program to market our products because we lack capital and revenues to justify the expenditure.

In addition, our available funds will not fund our activities for the next twelve months.

If we fail to raise additional funds, investors may lose their entire cash investment.

If the use of the Type2 Defense Supplement harms people, we could be subject to costly and damaging product liability claims.

Product liability claims or product recalls can adversely affect our business reputation and expose us to increased scrutiny by governmental regulators.

The packaging, marketing and distribution of Type2 Defense involve an inherent risk of product liability and product recall and the resultant adverse publicity.

We may be subject to significant liability if the consumption of our Product causes injury, illness or death.

We could be required to recall our Product in the event of contamination or damage to the products.

In addition to the risks of product liability or product recall due to deficiencies caused by our production or processing operations, we may encounter the same risks if any third party tampers with our Product.

We cannot assure you that we will not be required to perform product recalls, or that product liability claims will not be asserted against us, in the future.

Any claims that may be made may create adverse publicity that would negatively affect our ability to market our products successfully.

We may be exposed to potential product liability risks that are inherent in the testing, manufacturing and marketing of diet supplements and nutrition products.

Side effects and other liability risks could give rise to viable product liability claims against us.

We have not yet obtained insurance coverage and, if we do so, we may not be able to maintain this insurance on acceptable terms.

Moreover, insurance may not provide adequate coverage against potential liabilities.

As a result, product liability claims, even if successfully defended, could have a material adverse effect on our business, financial condition and results of operations.

We, like any other retailer, distributor and manufacturer of products that are designed to be ingested, face an inherent risk of exposure to product liability or product recall claims in the event that the use of our products results in injury.

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A reduction in the credibility of our scientific support for the medicinal benefits of our products could have a material adverse effect on our operations and financial conditions.

We will be in competition with companies that are larger, more established and better capitalized than we are.

The medical supplement industry, as well as dietary supplements in general, are highly competitive, rapidly evolving and subject to constant change.

We expect that if our products establish a market niche, competition will arise from a variety of sources, from large Fortune 500 companies and to the myriad of other smaller national and regional nutraceutical companies.

Many of our potential competitors have:

greater financial, technical, personnel, promotional and marketing resources;

longer operating histories;

greater name recognition;

larger consumer bases than us.

We believe that existing industry competitors are likely to continue to expand their product offerings.

Moreover, because there are few, if any, substantial barriers to entry, we expect that new competitors are likely to offer similar products designed to treat diabetes.

We cannot be certain that we will be able to compete successfully in this extremely competitive market.

Uncertain and Costly Compliance with Government Regulation.

The manufacturing, processing, formulating, packaging, labeling, distributing, selling and advertising of Type2 Defense will be subject to regulation by one or more federal agencies.

The most active regulation has been administered by The Food and Drug Administration (hereinafter the "FDA") which regulates our products pursuant to the Federal Food, Drug and Cosmetic Act (hereinafter the "FDCA") and regulations promulgated thereunder.

In particular, the FDA regulates the safety, manufacturing, labeling and distribution of nutritional and medical supplements.

In addition, the Federal Trade Commission (hereinafter the "FTC") has overlapping jurisdiction with the FDA to regulate the labeling, promotion and advertising of dietary supplements, over the counter drugs, cosmetics and foods.

Compliance with applicable FDA and any state or local statute is critical.

Although we believe that we will be in compliance with applicable statutes, there can be no assurance that, should the FDA amend its guidelines or impose more stringent interpretations of current laws or regulations, we would be able to comply with these new guidelines.

We are unable to predict the nature of such future laws, regulations, interpretations or applications, nor can we predict what effect additional governmental regulations or administrative orders, when and if promulgated, would have on our business in the future.

These regulations could, however, require the reformation of Type2 Defense or market withdrawal.

The commercial success of the Type2 Defense Supplement products will depend upon the degree of market acceptance by consumers.

If the Type2 Defense Supplement and other products do not gain market acceptance by consumers, we may not generate sufficient product revenue and we may not ever become profitable.

The degree of market acceptance of the Type2 Defense Supplement will depend on a number of factors, including:

The quality and acceptance of other competing brands and products;

creating brand awareness;

critical reviews of the Type2 Defense Supplements;

the prevalence of any side effects;

any limitations or warnings in the product’s approved labeling;

the efficacy and potential advantages over alternative products;

the willingness of the target population to try new diet supplements and nutrition products and the availability of alternatives;

the strength of marketing and distribution support and timing of market introduction and other general economic conditions.

Even if a potential Type2 Defense Supplement or product displays a favorable efficacy, market acceptance of the product will not be known until well after it is launched.

Our efforts to educate the consumer about the benefits of the Type2 Defense Supplement may never be successful and, in any event, would require the expenditure of significant resources, which resources we currently do not have and may never be successful in raising.

If we are not successful in building market acceptance for the Type2 Defense Supplement and other products, we may never generate sufficient revenue or achieve or maintain profitability.

We have never marketed a glucose control dietary supplement and may not be successful with our product launch.

We intend to rely on a number of marketing and sales methods.

Our primary focus will be Internet advertising.

There can be no assurance that we will be able to launch a successful marketing campaign or that consumers will purchase our product.

Our new management team has never sold products similar to the Type2 Defense.

There is no assurance that we will be able to generate sufficient revenues to achieve profitability.

We anticipate that we will continue to generate operating losses and negative cash flow from operations at least through the end of August 2014 or longer.

We cannot be certain that we will ever achieve, or if achieved, maintain profitability.

Adverse changes or interruptions in our relationships with third parties could affect our business operations and reduce our revenues.

Our business is substantially dependent on our relationship with Natural Solution Labs with regards to contractual relations, which terms could affect development and marketing of our Type2 Defense Supplement and inventory and reduce our potential revenues.

As of the date of this Annual Report, we have not actively received any services or products from Natural Solution Labs.

In the event our relations with Natural Solution Labs should fail, we do not have a third-party back-up source which will provide the necessary supplemental and/or nutritional components to us.

The relationship we have with Natural Solution Labs is freely terminable upon notice.

This arrangement is not exclusive.

We cannot assure you that our arrangements with Natural Solution Labs or future third parties will remain in effect or that Natural Social Labs or any of these third parties will continue to supply us and our agents with the same level of access to inventory in the future.

If access to inventory is affected, or our ability to obtain inventory on favorable economic terms is diminished, it may reduce our revenues.

Our failure to establish and maintain representative relationships for any reason could negatively impact our websites and reduce our revenues.

We are relatively a new entrant into the diet supplements and nutrition products industry without profitable operating history.

Since inception, our activities were limited to organizational efforts and obtaining working capital and developing and marketing our Nutra-Animal products.

Subsequently, and as a result, there is limited information regarding potential revenue generation relating to the Type2 Defense Supplement products.

The business of diet supplements and nutrition products is subject to many risks and our potential profitability depends upon factors beyond our control.

Our potential profitability is dependent upon many factors and risks beyond our control, including, but not limited to:

(i) unanticipated termination of any relations with third-party suppliers, including Natural Solution Labs;

(ii) acceptance of Type2 Defense Supplement and nutrition products in the marketplace;

(iii) potential product liability suits;

(iv) delays in transportation and delivery of the components for manufacturing the Type2 Defense Supplement to us;

and (v) government permit restrictions and regulation restrictions.

We fact intense competition in the market for diet supplements and nutrient products and if we are unable to compete successfully, our business will suffer.

We face competition from other diet supplements and nutrition product companies and biotechnology companies.

Numerous nutriceutical companies have publicly announced their development and marketing of products for the diet supplement industry similar to the Type2 Defense Supplement and product line.

These nutriceutical companies have substantially greater financial and other resources and development capabilities than we do and have substantially greater experience in undertaking manufacturing and marketing and distribution of diet supplements and nutrition products.

In addition, our competitors may succeed in developing and commercializing products that are more effective than those that we propose to market.

The existence of these products and other products of which we are not aware or products that may be developed in the future may adversely affect the marketability of the Type2 Defense products by rendering them less competitive or obsolete .

If we are unable to establish sales, marketing and distribution capabilities, or to enter into agreements with third parties to do so, we will be unable to successfully market and sell future drug products.

We have no experience with marketing, sales and distribution of drug products and have only recently established pre-commercial capability in those areas.

Other than use of the Intent, if we are unable to establish capabilities to sell, market and distribute our products, either by developing our own capabilities or entering into agreements with others, we will not be able to successfully sell our Type2 Defense Supplements and other products.

In that event, we will not be able to generate significant revenues.

We cannot guarantee that we will be able to hire the qualified sales and marketing personnel we need.

We may not be able to enter into any marketing or distribution agreements with third-party providers on acceptable terms, if at all.

We have limited marketing and sales capabilities.

Our future success depends, to a great extent, on our ability to successfully market the Type2 Defense Supplements.

We currently have limited sales and marketing capabilities.

Consequently, we will need to identify and successfully target particular market segments in which we believe we will have the most success.

These efforts will require a substantial, but unknown, amount of effort and resources.

We cannot assure you that any marketing and sales efforts undertaken by us will be successful or will result in any significant sales.

Unauthorized use of our intellectual property may affect our market share and profitability.

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Further we may not have the financial resources available to protect our intellectual property.

Uncertain and costly compliance with government regulation.

The manufacturing, processing, formulating, packaging, labeling, distributing, selling and advertising of Type2 Defense will be subject to regulation by one or more federal agencies.

In particular, the FDA regulates the safety, manufacturing, labeling and distribution of nutritional and medical supplements.

Compliance with applicable FDA and any state or local statute is critical.

These regulations could, however, require the reformation of Type2 Defense or market withdrawal.

Protecting and defending against intellectual property claims may have a material adverse effect on our business.

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Our failure to raise additional capital will significantly affect our ability to fund our proposed activities.

Launching our Product will require additional capital.

Launching our Type2 Defense Supplement and other products will require additional capital.

There is no commitment in place to secure this additional financing.

Any equity financing may be dilutive to shareholders, and debt financing, if available, would increase expenses and may involve restrictive covenants.

The Company will be required to raise additional capital, at times and in amounts, which are uncertain, especially under the current capital market conditions.

Under these circumstances, if the Company is unable to acquire additional capital or is required to raise it on terms that are less satisfactory than desired, it may have a material adverse effect on its financial condition and you will lose your investment.

We have a limited operating history upon which an evaluation of our prospects can be made.

We have no experience in selling the Type 2 Defense diabetic treatment program.

Our lack of operating history in this field makes an evaluation of our business and prospects very difficult.

Our prospects must be considered speculative, considering the risks, expenses, and difficulties frequently encountered in the establishment of a new business.

We cannot be certain that our business will be successful or that we will generate significant revenues and become profitable.

Because we are a development stage, we have limited revenues to sustain our operations.

We are a development stage company that is currently developing our business.

To date, we have not generated any revenues from operations.

The success of our business operations will depend on our ability to obtain clients and provide quality products to those clients.

We are not able to predict if we will be able to develop our business and generate significant revenues.

If we are not able to complete the successful development of our business plan, generate significant revenues and attain sustainable operations, then our business will fail.

We have incurred a net loss for the year ended December 31, 2012, and expect to incur net losses for the foreseeable future.

As of December 31, 2012, our net loss for the year ended December 31, 2012 was $399,078.

We expect to incur operating and capital expenditures for the next year and, as a result, we expect significant net losses in the future.

We will need to generate significant revenues to achieve and maintain profitability.

We may not be able to generate sufficient revenues to achieve profitable operations in which case operations may terminate.

Our products and processes can expose us to product liability claims.

Product liability claims or product recalls can adversely affect our business reputation and expose us to increased scrutiny by governmental regulators.

The packaging, marketing and distribution of Type2 Defense involve an inherent risk of product liability and product recall and the resultant adverse publicity.

We may be subject to significant liability if the consumption of our Product causes injury, illness or death.

We could be required to recall our Product in the event of contamination or damage to the products.

We cannot assure you that we will not be required to perform product recalls, or that product liability claims will not be asserted against us, in the future.

Any claims that may be made may create adverse publicity that would negatively affect our ability to market our products successfully.

We will be required to raise additional capital, at times and in amounts, which are uncertain, especially under the current capital market conditions.

Under these circumstances, if we are unable to acquire additional capital or required to raise it on terms that are less satisfactory than desired, it may have a material adverse effect on our financial condition and you will lose your investment.

Our officer and directors are engaged in other activities that could conflict with our interests.

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We do not presently own any interests in real estate.

Our executive, administrative and operating offices are located at 1250 NE Loop 410, Suite 200, San Antonio, TX 78209.

We are in the process of acquiring suitable executive, administrative and operating offices.

Legal Proceedings.

2 unchanged sentences

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