18 unchanged sentences
If we are unable to obtain adequate capital, we could be forced to significantly curtail or cease operations.
−Removed: Our management has concl uded that our historical recurring losses from operations and negative cash flows from operations as well as our dependence on private equity and financings raise substantial doubt about our ability to continue as a going concern and our auditor has included an explanatory paragraph relating to our ability to continue as a going concern in its audit report for the fiscal year ended March 31, 2022.
+Added: Our management has concluded that our historical recurring losses from operations and negative cash flows from operations as well as our dependence on private equity and financings raise substantial doubt about our ability to continue as a going concern and our auditor has included an explanatory paragraph relating to our ability to continue as a going concern in its audit report for the fiscal year ended March 31, 2023.
Our disclosure controls and procedures and internal control over financial reporting are not effective, which may cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.
8 unchanged sentences
In response to the material weaknesses discussed above, we are working on implementing a new integrated ERP system and have hired additional accounting personnel.
−Removed: Once the ERP system in implemented in the second quarter of fiscal year 2023, we plan to engage a third-party consultant to develop a comprehensive control framework using the ERP and to document our internal controls based on the implementation of the ERP system.
+Added: Once the ERP system in implemented in the third quarter of fiscal year 2024, we plan to engage a third-party consultant to develop a comprehensive control framework using the ERP and to document our internal controls based on the implementation of the ERP system.
We have not yet remediated these material weaknesses and we believe that our disclosure controls and procedures and internal control over financial reporting continue to be ineffective.
26 unchanged sentences
We compete indirectly with major international beverage companies including but not limited to:
−Removed: The Coca-Cola Company®, PepsiCo, Inc., The Nestlé Group, Dr Pepper Snapple Group, Inc, Danone S.A., The Kraft Heinz Company, and Unilever PLC.
+Added: The Coca-Cola Company®, PepsiCo, Inc., The Nestlé Group, Dr.
+Added: Pepper Snapple Group, Inc, Danone S.A., The Kraft Heinz Company, and Unilever PLC.
These companies have established market presence in the United States and globally, and offer a variety of beverages that are competitors to our products.
25 unchanged sentences
The loss of one or more of our major customers or a decline in demand from one or more of these customers could harm our business.
−Removed: We had 3 major customers that together account for 43% (19%, 12% and 12%, respectively) of accounts receivable at March 31, 2022, and 2 customers that together account for 34% (19% and 15%, respectively) of the total revenues earned for the year ended March 31, 2022.
+Added: We had 1 major customer that together account for 11% of accounts receivable at March 31, 2023, and 2 customers that together account for 35% (18% and 17%, respectively) of the total revenues earned for the year ended March 31, 2023.
There can be no assurance that such customers will continue to order our products at the same level or at all.
38 unchanged sentences
Unusually cold or rainy weather during the summer months may have a temporary effect on the demand for our products and contribute to lower sales, which could have an adverse effect on our results of operations for such periods.
−Removed: Our business could be adversely affected by the effects of health epidemics, including the global COVID-19 pandemic.
−Removed: Our business could be materially and adversely affected by the risks, or the public perception of the risks, related to the outbreak of COVID-19.
−Removed: Although retailers which carry our products may be considered essential businesses and therefore be allowed to remain operational, they may experience significantly reduced demand.
−Removed: The risk of a pandemic, or public perception of the risk, could cause customers to avoid public places, including retail properties, and could cause temporary or long-term disruptions in our supply chains and/or delays in the delivery of our inventory to our customers.
−Removed: Further, such risks could also adversely affect retail customers' financial condition, resulting in reduced spending on our products, which are marketed as premium products.
−Removed: "Shelter-in-place" or other such orders by governmental entities could also disrupt our operations, if our employees or the employees of our sourcing partners who cannot perform their responsibilities from home, are not able to report to work.
−Removed: Risks related to an epidemic, pandemic or other health crisis, such as COVID-19, could also lead to the complete or partial closure of one or more of our co-packing facilities or operations of our sourcing partners.
−Removed: The spread of COVID-19, which has caused a broad impact globally, may materially affect us economically.
−Removed: While the potential economic impact brought by, and the duration of, COVID-19 may be difficult to assess or predict, a widespread pandemic could result in significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity.
−Removed: In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect our business and the value of our common stock.
−Removed: The global outbreak of COVID-19 continues to rapidly evolve.
−Removed: The extent to which COVID-19 may impact our business, operations and financial performance will depend on future developments, including the duration of the outbreak, travel restrictions and social distancing in the United States and other countries, changes to the regulatory regimes under which we operate, the effectiveness of actions taken in United States and other countries to contain and treat the disease and whether the United States and additional countries are required to move to complete lock-down status.
−Removed: The ultimate long-term impact of COVID-19 is highly uncertain and cannot be predicted with confidence.
We rely on third parties to produce and bottle our products, which creates additional risk.
31 unchanged sentences
the loss of any of these key executive officers would be difficult to replace and may adversely affect our business.
−Removed: We are highly dependent on two executive officers, Frank Lazaran and David A.
+Added: We are highly dependent on two executive officers, Frank Chessman and David A.
Guarino, who have extensive knowledge of our business and the industry in which we operate.
We do not have "key person" life insurance policies for either of these officers.
−Removed: The loss of Frank Lazaran and/or David A.
+Added: The loss of Frank Chessman and/or David A.
Guarino could result in delays in product development, loss of any future customers and sales and diversion of management resources, which could adversely affect our operating results.
45 unchanged sentences
Improper disclosure of personal data in violation of applicable personal data protection laws could harm our reputation, cause loss of consumer confidence, subject us to government enforcement actions (including fines), or result in private litigation against us, which could result in loss of revenue, increased costs, liability for monetary damages, fines and/or criminal prosecution, all of which could negatively affect our business and operating results.
−Removed: Because we produce, market and/or sell beverages infused with hemp, as defined under the Agriculture Improvement Act of 2018, we are subject to a myriad of different laws and regulations governing the use of hemp in food and beverages and if we are unable to comply with such laws in a cost-effective manner, our business could be adversely affected.
−Removed: The production of a beverage infused with hemp, as "hemp" is defined in the Agriculture Improvement Act of 2018 (also known as the 2018 Farm Bill, Public Law 115-334), is contingent on U.S.
−Removed: Food and Drug Administration, or the FDA, and state laws, regulations, and guidance.
−Removed: While the Agriculture Improvement Act of 2018 removed hemp from Schedule I of the Controlled Substances Act, the law did not change the FDA's authorities with respect to food or drugs.
−Removed: As of the date of this annual report, the FDA has not made a determination that the use of hemp in food is safe.
−Removed: The FDA has evaluated Generally Recognized as Safe or GRAS notices for three hemp seed-derived food ingredients and determined that the agency has no questions that those ingredients are GRAS under their intended conditions of use.
−Removed: Laws and regulations governing the use of hemp in food and beverages in the United States are broad in scope;
−Removed: subject to evolving interpretations;
−Removed: and subject to enforcement by a myriad of regulatory agencies and law enforcement entities.
−Removed: Under the Agriculture Improvement Act of 2018, a state or Indian tribe that desires to have primary regulatory authority over the production of hemp in the state or territory of the Indian tribe must submit a plan to monitor and regulate hemp production to the Secretary of the United States Department of Agriculture or USDA.
−Removed: The Secretary must then approve the state or tribal plan after determining if the plan complies with the requirements set forth in the Agriculture Improvement Act of 2018.
−Removed: The Secretary may also audit the state or Indian tribe's compliance with the federally-approved plan.
−Removed: If the Secretary does not approve the state or Indian tribe's plan, then the production of hemp in that state or territory of that Indian tribe will be subject to a plan established by USDA.
−Removed: USDA has not yet established such a plan.
−Removed: We anticipate that many states will seek to have primary regulatory authority over the production of hemp.
−Removed: States that seek such authority may create new laws and regulations that permit the use of hemp in food and beverages.
−Removed: Federal and state laws and regulations on hemp may address production, monitoring, manufacturing, distribution, and laboratory testing to ensure that that the hemp has a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.
−Removed: Federal laws and regulations may also address the transportation or shipment of hemp or hemp products, as the Agriculture Improvement Act of 2018 prohibits states and Indian tribes from prohibiting the transportation or shipment of hemp or hemp products produced in accordance with that law through the state or territory of the Indian tribe, as applicable.
−Removed: Because we rely on a nationwide broker-distributor-retailer network whereby brokers represent our products to distributors and retailers in turn sell our product to consumers in the fifty states and the District of Columbia, we may be subject to many different state-based regulatory regimens for hemp, all of which could require us to incur substantial costs associated with compliance requirements.
−Removed: 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, as well as adverse publicity and potential harm to our reputation.
−Removed: We and our suppliers and vendors must take significant enterprise risk management steps to ensure that there is no commingling of hemp and marihuana, as "marihuana" is defined in the federal Controlled Substances Act.
−Removed: Marihuana remains subject to the Controlled Substances Act and related regulations.
−Removed: Furthermore, if we decide to produce, market and sell beverages infused with hemp outside of the United States, we will be subject to applicable laws and regulations in those non-U.S.
−Removed: jurisdictions, which would require us to expend significant costs associated with compliance.
−Removed: In addition, it is possible that additional regulations may be enacted in the future in the United States and globally that will be directly applicable to our current and proposed product offerings infused with hemp.
−Removed: We cannot predict the nature of any future laws, regulations, interpretations, or applications, nor can we determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on our business.
−Removed: FDA's current position is that the sale of food and beverages that contain hemp-derived cannabidiol or CBD is prohibited under the Federal Food, Drug, and Cosmetic Act;
−Removed: therefore, we may be subject to federal enforcement actions which could adversely affect our business and harm our reputation and brand.
−Removed: The FDA has jurisdiction over drugs and foods that contain CBD, including CBD derived from hemp.
−Removed: Under the Federal Food, Drug and Cosmetic Act or the FDCA, it is a prohibited act to introduce or deliver for introduction into interstate commerce any food (which the FDCA defines to include beverages) that is adulterated.
−Removed: The FDCA therefore prohibits the introduction or delivery for introduction of a food that contains CBD, because the FDCA deems a food to be adulterated if it bears or contains any food additive that is unsafe and CBD is presently an unsafe food additive under the FDCA and FDA regulations.
−Removed: The FDCA also states that it is a prohibited act to introduce or deliver for introduction into interstate commerce any food to which an FDA-approved drug has been added, unless certain exceptions are met.
−Removed: The FDA has approved a drug in which CBD is an active ingredient, and the agency has stated that based on available evidence, none of the exceptions apply to CBD.
−Removed: One of the exceptions addresses whether the drug was marketed in food before the FDA approved the drug and before the institution of any substantial clinical investigations involving the drug.
−Removed: The FDA has stated that interested parties may present the agency with evidence that has bearing on the issue of whether CBD was marketed in food before the FDA approved the CBD drug in 2018 or before the institution of substantial clinical investigations involving the CBD drug.
−Removed: FDA's current position is that this provision of the FDCA also prohibits the introduction or delivery for introduction into interstate commerce of a food to which CBD has been added.
−Removed: Congress may decide to amend the FDCA to permit the use of hemp-derived CBD in food.
−Removed: The FDA may also decide to issue regulations or guidance that address the use of hemp-derived CBD in food or use its enforcement discretion with respect to hemp-derived CBD products.
−Removed: On May 31, 2019, the FDA held a public hearing, as well as providing a broader opportunity for written public comment, for stakeholders to share their experiences and challenges with CBD products, including information and views related to product safety.
−Removed: Based on this hearing, any legislative or regulatory action could take years to implement or finalize and may not include provisions that would enable our company to produce, market and/or sell hemp beverages that contain hemp-derived CBD.
−Removed: We risk becoming subject to adverse publicity and costly federal enforcement actions should we decide to produce, market and/or sell beverages infused with hemp-derived CBD in the United States.
−Removed: We may be required to expend significant resources in defending our company from such actions which could adversely affect our business and results of operations and divert the attention of management.
−Removed: We may also incur the risk of sustaining considerable damage to our reputation and brand should we become party to federal enforcement actions resulting from the production, marketing or sale of hemp-derived CBD infused beverages.
−Removed: Accordingly, if Congress amended federal laws or FDA issued regulations or guidance permitting the use of hemp-derived CBD in food or announcing the agency's decision to use its enforcement discretion with respect to hemp-derived CBD products, we and our suppliers and vendors would be required to implement significant enterprise risk management measures to ensure that there is no commingling of CBD derived from marihuana, as "marihuana" is defined in the federal Controlled Substances Act, with any future commercial supply of hemp-derived CBD that is used to produce our products.
The FDA could force the removal of our products from the U.S.
35 unchanged sentences
Because we can issue additional shares of our common stock, our stockholders may experience dilution in the future.
−Removed: We are authorized to issue up to 200,000,000 shares of our common stock and 100,000,000 shares of our preferred stock, of which 122,121,037 shares of our common stock are issued and outstanding as of July 14, 2022.
+Added: We are authorized to issue up to 13,333,333 shares of our common stock and 100,000,000 shares of our preferred stock, of which 10,395,805 shares of our common stock are issued and outstanding as of August 15, 2023.
Our board of directors has the authority to cause us to issue additional shares of our common stock and preferred stock, and to determine the rights, preferences, and privileges of shares of our preferred stock, without consent of our stockholders.
Consequently, the stockholders may experience more dilution in their ownership of our stock in the future.
−Removed: Trading on the Nasdaq Capital Market or Canadian Securities Exchange may be volatile, which could depress the market price of the shares of our common stock and make it difficult for our stockholders to resell their shares.
−Removed: The shares of our common stock are listed on the Nasdaq Capital Market and the Canadian Securities Exchange.
−Removed: Trading of our common stock may experience wide fluctuations in trading prices, due to many factors that may have little to do with our operations or business prospects.
+Added: Trading on the Nasdaq Capital Market may be volatile, which could depress the market price of the shares of our common stock and make it difficult for our stockholders to resell their shares.
+Added: The shares of our common stock are listed on the Nasdaq Capital Market.
+Added: The trading of our common stock may experience wide fluctuations in trading prices, due to many factors that may have little to do with our operations or business prospects.
This volatility could depress the market price of the shares of our common stock for reasons unrelated to operating performance.
4 unchanged sentences
As a result, our business may suffer, and we may go out of business.
−Removed: On May 10, 2022, we received a deficiency letter from the Listing Qualifications Department of The NASDAQ Stock Market (the " Staff "), notifying us that, for the last 30 consecutive business days, the closing bid price of our common stock has not been maintained at the minimum required closing bid price of at least $1.00 per share as required for continued listing on The NASDAQ Capital Market pursuant to Listing Rule 5550(a)(2) (" Minimum Bid Price Rule ").
−Removed: In accordance with NASDAQ Listing Rules, we have been given 180 calendar days, or until November 7, 2022, to regain compliance with the Minimum Bid Price Rule.
−Removed: If at any time before November 7, 2022, the closing bid price of our common stock is at least $1.00 for a minimum of 10 consecutive business days, the Staff will provide written confirmation of compliance and this matter will be closed.
−Removed: In the event we do not regain compliance, we may be eligible for additional time to regain compliance of up to an additional 180 calendar days.
−Removed: To qualify, we will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the Minimum Bid Price Rule, and will need to provide written notice of our intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary.
−Removed: We are currently evaluating various alternative courses of action to regain compliance with the Minimum Bid Price Rule.
−Removed: However, there can be no assurance that we will regain compliance or maintain the listing of our common stock on the NASDAQ Capital Market.
−Removed: If we do not regain compliance with the Minimum Bid Price Rule by November 7, 2022 or any extension period, the Staff will provide written notification to our company that our common stock is subject to delisting.
−Removed: At that time, we may appeal the Staff's delisting determination to a Hearings Panel (the " Panel ").
−Removed: We would remain listed pending the Panel's decision.
−Removed: There can be no assurance that, if we do appeal a delisting determination by the Staff to the Panel, such appeal would be successful.
+Added: On April 13, 2023, the Company received a deficiency letter from the Listing Qualifications Department (the "Staff") of The Nasdaq Stock Market LLC ("Nasdaq"), notifying the Company that for the last 30 consecutive business days, the Company's minimum Market Value of Listed Securities ("MVLS") was below the minimum of $35 million required for continued listing on the Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(b)(2) (the "Market Value Standard").
+Added: The Staff also noted that the Company does not meet the requirements under Nasdaq Listing Rules 5550(b)(1) Equity Standard and 5550(b)(3) and Net Income Standard.
+Added: In accordance with Nasdaq Listing Rule 5810(c)(3)(C), the Company has been given 180 calendar days, or until October 10, 2023, to regain compliance with the Market Value Standard.
+Added: To regain compliance with the Market Value Standard, the MVLS for the Company's common stock must be at least $35 million for a minimum of 10 consecutive business days at any time during this 180-day period.
+Added: If the Company regains compliance with the Market Value Standard, the Staff will provide the Company with written confirmation and will close the matter.
+Added: If the Company does not regain compliance with the Market Value Standard by October 10, 2023, Nasdaq will provide notice that the Company's securities are subject to delisting from the Nasdaq Capital Market.
+Added: At that time, the Company may appeal the Staff's delisting determination to a Hearings Panel (the "Panel").
+Added: There can be no assurance that, if the Company does appeal a delisting determination by the Staff to the Panel, such appeal would be successful.
+Added: The Company intends to monitor the MLVS between now and October 10, 2023, and may, if appropriate, evaluate available options to resolve the deficiency under the Market Value Standard and regain compliance with the Market Value Standard.
+Added: The Company may also try to comply with another Nasdaq listing criteria, such as the ones under Nasdaq Listing Rule 5550(b)(1) Equity Standard.
+Added: However, there can be no assurance that the Company will be able to regain or maintain compliance with Nasdaq listing criteria.
+Added: On July 18, 2023, The Company received a deficiency letter (the “Letter”) from the Nasdaq, notifying the Company that since the Company had not yet filed its Form 10-K for the year ended March 31, 2023 (the “Form 10-K”), it no longer complies with the Nasdaq’s Listing Rule 5250(c)(1) (the “Rule”) relating to the Company’s obligation to file periodic financial reports for continued listing.
+Added: The Letter stated that the Company has 60 calendar days to submit a plan (the “Plan”) to regain compliance and if the Nasdaq accepts the Plan, the Nasdaq can grant an exception of up to 180 calendar days from the Form 10-K’s due date, or until January 10, 2024, to regain compliance.
+Added: The Letter requested that the Company submit the Plan no later than September 18, 2023.
+Added: If the Nasdaq does not accept the Plan, the Company will have the opportunity to appeal that decision to the Nasdaq Hearings Panel.
Because we do not intend to pay any cash dividends on the shares of our common stock in the near future, our stockholders will not be able to receive a return on their shares unless they sell them.
7 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.