What changed in this filing

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Item 1A. Risk Factors

2020-11-12 compared with 2020-08-11 · 201 added, 11 removed, 27 unchanged (89% of the section changed)

RISK FACTORS.

Risks Due to COVID-19

The outbreak of

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addition, the COVID-19 pandemic could disrupt or otherwise negatively impact global credit markets, our operations and our efforts

to identify, review and explore alternatives for the Company, including a merger, acquisition, or a business combination.

to identify, review and explore opportunities for the Company.

The significant outbreak

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More broadly, the outbreak could potentially reduce the value of the AESE Shares

that we own and impact the shares of the Company that we may be required to issue to Sellers under the S-FDF Asset Purchase Agreement.

that we own and impact the shares of the Company that we may be required to issue to Sellers under the Asset Purchase Agreement.

The COVID-19 outbreak

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including equity or debt financing or other means.

A pandemic typically

results in social distancing, travel bans and quarantines, and this may limit access to our management, support staff, professional

advisors and our independent auditors.

These factors, in turn, may not only impact our operations, financial condition and our

overall ability to react timely to mitigate the impact of this event.

Also, it may hamper our efforts to comply with our filing

obligations with the Securities and Exchange Commission.

In addition, it could impact the ability to complete construction and

commence operations of the S-FDF business following the anticipated closing.

Social distancing,

travel bans and quarantines have limited access in certain respects to our management, support staff, professional advisors and

our independent auditors.

These factors, in turn, may not only impact our operations, financial condition and our overall ability

to react timely to mitigate the impact of this event.

Also, it may hamper our efforts to comply with our filing obligations with

the Securities and Exchange Commission.

In addition, it could impact the ability to complete construction and commence operations

of the S-FDF business.

The extent and potential

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of operations.

Risks Related to Our Business

Our freeze-dried

foods business is essentially a start-up, and does not have any meaningful history of operations.

The assets we purchased

under the Asset Purchase Agreement were of a development stage business without any major customers or history of operations upon

which to forecast future business trends.

We cannot guarantee that we will become profitable.

As a developing company, we will

need to adopt and implement a plan to increase awareness of our products, secure distribution channels, and foster and strengthen

our supply, manufacturing and distribution relationships.

It is likely our strategic priorities will need to evolve over time and

our business would be materially and adversely effected if we do not properly adapt our strategies to our changing needs and changes

in the market.

As our operations develop

and grow, we expect to experience significant increases in our working capital requirements.

These conditions raise doubt over

our ability to meet all of our obligations over the next twelve months if we are unable to obtain additional capital.

obtain additional capital and achieve profitability, given the competitive and evolving nature of the industry in which we operate,

we may be unable to sustain or increase profitability and our failure to do so would adversely affect the Company’s business,

including our ability to raise additional funds.

We have very limited

internal distribution and marketing capabilities and are only in the early stages of building our distribution network.

We have not yet launched

our freeze-dried food products commercially.

In order to be successful, we will need to establish a direct to consumer platform

and/or relationships with numerous retail outlets through which our products can be sold.

While our products have been introduced

into a limited number of potential consumers and customers on a trial basis, to date, we have not entered into any relationships

with distributors and retail outlets for the sale of our products and have not yet generated revenues through sales.

We have extremely

limited internal marketing and distribution capabilities and resources.

There can be no assurance that we will be successful in

establishing a meaningful distribution network or direct to consumer platform or that if the same is established that such network

or platform will result in profitable sales of our products.

We may need additional

financing in the future, which may not be available when needed or may be costly and dilutive.

We may require additional

financing to support our working capital needs in the future.

The amount of additional capital we may require, the timing of our

capital needs and the availability of financing to fund those needs will depend on a number of factors, including our strategic

initiatives and operating plans, the performance of our business and the market conditions for debt or equity financing.

Additionally,

the amount of capital required will depend on our ability to meet our sales goals and otherwise successfully execute our operating

Although we believe various debt and equity financing alternatives will be available to us to support our working capital

needs, financing arrangements on acceptable terms may not be available to us when needed.

Additionally, these alternatives may

require significant cash payments for interest and other costs or could be highly dilutive to our existing shareholders.

financing alternatives may not provide us with sufficient funds to meet our long-term capital requirements.

A worsening of economic

conditions or a decrease in consumer spending may adversely impact our ability to implement our business strategy.

Our success depends

to a significant extent on discretionary consumer spending, which is influenced by general economic conditions and the availability

of discretionary income.

There is no certainty regarding economic conditions in the United States, and credit and financial markets

and confidence in economic conditions could deteriorate at any time.

Accordingly, we may experience declines in revenue during

economic turmoil or during periods of uncertainty.

Any material decline in the amount of discretionary spending, leading cost-conscious

consumers to be more selective in food products purchased, could have a material adverse effect on our revenue, results of operations,

business and financial condition.

Fluctuations in

various food and supply costs, particularly related to fruit, could adversely affect our operating results.

Supplies and prices

of the ingredients that we are going to use to can be affected by a variety of factors, such as weather, seasonal fluctuations,

demand, politics and economics in the producing countries.

These factors subject

us to shortages or interruptions in product supplies, which could adversely affect our revenue and profits.

In addition, the price

of fruit, which is currently our main ingredient in our products, can be highly volatile.

The fruit of the quality we seek tends

to trade on a negotiated basis, depending on supply and demand at the time of the purchase.

An increase in pricing of any fruit

that we are going to use in our products could have a significant adverse effect on our profitability.

We cannot assure you that

we will be able to secure our fruit supply.

Our success depends

on our ability to correctly predict, identify, and interpret changes in consumer preferences and demand, to offer new products

to meet those changes, and to respond to competitive innovation.

Consumer preferences

for food and beverage products change continually and rapidly.

Our success depends on our ability to predict, identify, and interpret

the tastes and dietary habits of consumers and to offer products that appeal to consumer preferences, including with respect to

health and wellness.

If we do not offer products that appeal to consumers, our sales and market share will decrease, which could

materially and adversely affect our product sales, financial condition, and operating results.

We must distinguish

between short-term trends and long-term changes in consumer preferences.

If we do not accurately predict which shifts in consumer

preferences will be long-term, or if we fail to introduce new and improved products to satisfy those preferences, our sales could

Our business depends

substantially on the continuing efforts of our senior management and other key personnel, and our business may be severely disrupted

if we lose their services.

Our future success

heavily depends on the continued service of our senior management and other key employees.

If one or more of our senior executives

is unable or unwilling to continue to work for us in his or her present position, we may have to spend a considerable amount of

time and resources searching, recruiting, and integrating a replacement into our operations, which would substantially divert management’s

attention from our business and severely disrupt our business.

This may also adversely affect our ability to execute our business

Our senior management’s

limited experience managing a publicly traded company may divert management’s attention from operations and harm our business.

Our senior management

team has relatively limited experience managing a publicly traded company and complying with federal securities laws, including

compliance with recently adopted disclosure requirements on a timely basis.

Our management will be required to design and implement

appropriate programs and policies in responding to increased legal, regulatory compliance and reporting requirements, and any failure

to do so could lead to the imposition of fines and penalties and harm our business.

We may be unable

to attract and retain qualified, experienced, highly skilled personnel, which could adversely affect the implementation of our

business plan.

Our success depends

to a significant degree upon our ability to attract, retain and motivate skilled and qualified personnel.

As we become a more mature

company in the future, we may find recruiting and retention efforts more challenging.

If we do not succeed in attracting, hiring

and integrating excellent personnel, we may be unable to grow effectively.

The loss of any key employee, including members of our

senior management team, and our inability to attract highly skilled personnel with sufficient experience in our industries could

harm our business.

Our ability to maintain

and expand our distribution network and attract consumers, distributors, retailers and brokers will depend on a number of factors,

some of which are outside our control.

Some of these factors

the level of demand for our brands and products types;

our ability to price our products at levels competitive with those of competing products;

our ability to deliver products in the quantity and at the time ordered by consumers, distributors,

retailers and brokers.

We may not be able

to successfully manage all or any of these factors in any of our current or prospective geographic areas of distribution.

Our inability

to achieve success with regards to any of these factors in a geographic distribution area will have a material adverse effect on

our relationships in that particular geographic area, thus limiting our ability to maintain or expand our market, which will likely

adversely affect our revenues and financial results.

If we do not adequately

manage our inventory levels, our operating results could be adversely affected.

We will need to maintain

adequate inventory levels to be able to deliver products on a timely basis.

Our inventory supply depends on our ability to correctly

estimate demand for our products.

Our ability to estimate demand for our products is imprecise, particularly for new products.

If we materially underestimate demand for our products or are unable to maintain sufficient inventory of raw materials, we might

not be able to satisfy demand on a short-term basis.

If we overestimate demand for our products, we may end up with too much inventory,

resulting in higher storage costs and increased trade spend.

If we fail to manage our inventory to meet demand, we could damage

our relationships with our customers and retailers and could delay or lose sales opportunities, which would unfavorably impact

our future sales and adversely affect our operating results.

Risks Related to Our Industry

The challenges of

competing with other freeze-dried fruit businesses may result in reductions in our revenue and operating margins.

We will compete with

many companies on the basis of taste, quality and price of product offered, and customer service.

Our success depends, in part,

upon the popularity of our products and our ability to develop new items that appeal to a broad range of consumers.

Shifts in consumer

preferences away from products like ours, our inability to develop new items that appeal to a broad range of consumers, or changes

in our offerings that eliminate products popular with some consumers could harm our business.

We compete with other manufacturers

of freeze-dried fruit, frozen fruits, convenience foods, health foods and packaged goods.

Many of our competitors or potential

competitors have substantially greater financial and other resources than we do, which may allow them to react to changes in the

market quicker than we can.

In addition, aggressive pricing by our competitors or the entrance of new competitors into our markets,

could reduce our revenue and operating margins.

We also compete with other employers in our markets for workers and may become

subject to higher labor costs as a result of such competition.

Concerns over food

safety and public health may affect our operations by increasing our costs and negatively impacting demand for our products.

We could be adversely

affected by diminishing confidence in the safety and quality of certain food products or ingredients.

As a result, we may elect

or be required to incur additional costs aimed at increasing consumer confidence in the safety of our products.

Our success depends

on our ability to maintain the quality of our existing and new products.

Product quality issues, real or imagined, or allegations

of product contamination, even if false or unfounded, could tarnish the image of our brands and may cause consumers to choose other

Product liability

exposure may expose us to significant liability.

We may face an inherent

business risk of exposure to product liability and other claims and lawsuits in the event that the development or use of our technology

or prospective products is alleged to have resulted in adverse effects.

We may not be able to avoid significant liability exposure.

Although we believe our insurance coverage to be adequate, we may not have sufficient insurance coverage, and we may not be able

to obtain sufficient coverage at a reasonable cost.

An inability to obtain product liability insurance at acceptable cost or to

otherwise protect against potential product liability claims could prevent or inhibit the commercialization of our products.

product liability claim could hurt our financial performance.

Even if we ultimately avoid financial liability for this type of

exposure, we may incur significant costs in defending ourselves that could hurt our financial performance and condition.

UNREGISTERED SALES OF EQUITY

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

What changed 10-Q

Item 1A. Risk Factors