Item 1A. Risk Factors
Item 1A - Risk Factors.
Smaller reporting companies are not required to provide this information; however, you should be aware that an investment in the Company is highly speculative and subject to numerous risk s. You should consider the following most notable risk factors together with all the other information contained in this Annual Report and other reports or registration statements filed by us with the SEC before making an investment decision with respect to our common stock. This list is not to be considered all - inclusive.
Risks Related to our Business .
Ability to Raise Capital
We have a history of significant operating losses and may not be able to achieve sustained profitability if we are unable to increase revenue from our new products and marketing efforts. T o achieve sustained profitability, we will need to implement changes to existing business processes and improve our cost cutting efforts in addition to driving revenue growth. This history of operating losses could impede our future ability to raise capital.
Potential Loss of Intellectual Property
The Company has pledged its Intellectual Property as collateral for promissory notes payable as discussed in Note 8 of our Financial Statements in Part II, Item 8 of this Annual Report. Risk of loss of the underlying IP exists should the Company default on these promissory notes.
Education Funding
The education market is heavily dependent on support from federal, state and local governments. These government al agencies have realized budget cuts and the government appropriations process is often slow and unpredictable. Funding difficulties can negatively impact our ability to increase revenue.
International Expertise
Our attempt to enter international markets introduces political and cultural risk. As a small company, we do not have extensive experience in international business arrangements and will need to rely on certain outside expertise that can be costly.
Item 2. Propert ies .
Location.
The Company leases its principal executive offices in Boise, Idaho. On February 1, 2015, we signed a lease for our principal offices comprised of approximately 3,609 square feet for $4,511 per month for the 12 months ending January 31, 2016.
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We also lease additional warehouse space in Boise, Idaho. This warehouse space consists of approximately 2,880 square feet. Rent obligations are approximately $1,400 per month under a non-cancelable operating lease that expired June 30, 2012. The lease was extended in a fifth amendment, effective October 31, 2014, at a rate of $1,390 per month for 12 months that will expire on October 31, 2015. A sixth lease amendment was subsequently signed on April 15, 2015, to lease an additional bay from May 1, 2015, to October 31, 2015.
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