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Item 1A. Risk Factors

2025-03-31 compared with 2024-04-01 · 235 added, 227 removed, 884 unchanged (34% of the section changed)

An investment in our common stock involves

a high degree of risk.

You should carefully consider the following risk factors, together with the other information contained in this

annual report, before purchasing our common stock.

We have listed below (not necessarily in order of importance or probability of occurrence)

what we believe to be the most significant risk factors applicable to us, but they do not constitute all of the risks that may be applicable

Any of the following factors could harm our business, financial condition, results of operations or prospects, and could result

in a partial or complete loss of your investment.

Some statements in this report, including statements in the following risk factors,

constitute forward-looking statements.

Please refer to the section titled “Cautionary Statement Regarding Forward-Looking Statements”.

investment in our common stock involves a high degree of risk.

You should carefully consider the following risk factors, together

with the other information contained in this Annual Report on Form 10-K, before purchasing our common stock.

We have listed below (not

necessarily in order of importance or probability of occurrence) what we believe to be the most significant risk factors applicable

to us, but they do not constitute all of the risks that may be applicable to us.

Any of the following factors could harm our

business, financial condition, results of operations or prospects, and could result in a partial or complete loss of your

Some statements in this report, including statements in the following risk factors, constitute forward-looking

Please refer to the section titled “Cautionary Statement Regarding Forward-Looking

Related to Our Business and Industry

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business, revenue, and operations depend on our continuing relationship with CWS.

the years ended December 31, 2023 and 2022, all revenue was derived from or directly related to contractual relationship with CWS.

we acquired the CWS Platform from Ssquared on November 1, 2023, and no longer rely on the Marketing Agreement for any revenue, CWS will

continue to be for the foreseeable future our only source of distribution of alcoholic beverages.

Additionally, because the President

of CWS is also the 100% equity owner of KBROS, we could have opportunities in the future to expand the number of our distributors or

even replace CWS with a distributor that offer terms more favorable.

These opportunities could be declined by KBROS as it is responsible

for the management of the fulfillment of sales orders that are generated by the CWS Platform.

Because of the affiliate relationship between

KBROS and CWS, KBROS would be conflicted if presented with opportunities for the CWS Platform that are against the interests of CWS and

may decline such opportunities against our interest.

While our relationship with CWS is ongoing and is expected to continue, we cannot

be certain that CWS will be willing or able to continue to distribute the products sold on the CWS Platform and although under the Management

Agreement it is KBROS’s responsibility to fulfill orders, if we could not or KBROS were not able or willing to secure a new distributor

for the CWS Platform if necessary, the lack of a distributor would have material adverse consequences on our financial condition and

In the years ended December 31, 2024 and 2023,

all revenue was derived from or directly related to contractual relationship with CWS.

Although we acquired the CWS Platform from Ssquared

on November 1, 2023, and no longer rely on the Marketing Agreement for any revenue, CWS will continue to be for the foreseeable future

our only source of distribution of alcoholic beverages.

Additionally, because the President of CWS is also the 100% equity owner of KBROS,

we could have opportunities in the future to expand the number of our distributors or even replace CWS with a distributor that offer

terms more favorable.

These opportunities could be declined by KBROS as it is responsible for the management of the fulfillment of sales

orders that are generated by the CWS Platform.

Because of the affiliate relationship between KBROS and CWS, KBROS would be conflicted

if presented with opportunities for the CWS Platform that are against the interests of CWS and may decline such opportunities against

our interest.

While our relationship with CWS is ongoing and is expected to continue, we cannot be certain that CWS will be willing or

able to continue to distribute the products sold on the CWS Platform and although under the Management Agreement it is KBROS’s

responsibility to fulfill orders, if we could not or KBROS were not able or willing to secure a new distributor for the CWS Platform

if necessary, the lack of a distributor would have material adverse consequences on our financial condition and prospects.

have a limited operating history, which may make it difficult to evaluate our business and prospects.

The Company is an early, startup stage entity

with little operating history.

The Company only has nominal cash as of the date of this Annuary Report on the Form 10-K.

The revenue and

income potential of the Company’s business and market are unproven.

The Company’s limited operating history makes an evaluation

of the Company and its prospects difficult and highly speculative.

Company is an early, startup stage entity with little operating history.

The Company only has nominal cash as of the date of this Annual Report on Form 10-K.

The revenue and income potential of the Company’s business and market are unproven.

The Company’s limited

operating history makes an evaluation of the Company and its prospects difficult and highly speculative.

There can be no assurances that:

(a) the Company will be able

to develop products or services on a timely and cost effective basis;

(b) the Company will be able to generate any increase in revenues;

(c) the Company will have adequate financing or resources to continue operating its business and to provide products and services

to customers;

(a) the Company will be able to develop products or services on a timely and cost effective basis;

(b) the Company will be

able to generate any increase in revenues;

and to provide products and services to customers;

(d) the Company will earn a profit;

(e) the Company can raise sufficient capital to support operations by attaining

profitability;

(e) the Company can raise sufficient

capital to support operations by attaining profitability;

or (f) the Company can satisfy future liabilities.

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the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements

accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets

and the satisfaction of liabilities in the normal course of business.

The Company sustained net losses of $15,747,724 and $1,842,175

during the years ended December 31, 2023 and 2022, respectively, and had cash used in operations of $9,113,855 during the year ended

December 31, 2023.

The Company requires additional capital to operate and expects losses to continue for the foreseeable future.

factors raise substantial doubts about the Company’s ability to continue as a going concern.

The Company’s ability to continue as a going

concern until it reaches profitability is dependent upon its ability to generate cash from operating activities and to raise additional

capital to fund operations.

The accompanying consolidated financial statements

have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal

course of business.

The Company sustained net losses of $22,754,178 and $15,747,724 during the years ended December 31, 2024 and 2023,

respectively, and had cash used in operations of $6,618,417 during the year ended December 31, 2024.

The Company requires additional

capital to operate and expects losses to continue for the foreseeable future.

These factors raise substantial doubts about the Company’s

ability to continue as a going concern.

The Company’s ability to continue as a going concern until it

reaches profitability is dependent upon its ability to generate cash from operating activities and to raise additional capital to fund

Management plans to raise additional capital to fund operations through debt and/or equity financings.

Company has raised funds from the IPO and an additional $16.6 million from its public offerings in October and November 2023.

failure to raise additional capital could have a negative impact on not only our financial condition but also our ability to execute our

business plan.

The Company has raised

funds from the IPO and an additional $16.6 million from its public offerings in October and November 2023.

During the year ended December

31, 2024, the Company received net proceeds of $1,543,079 from the sale of an aggregate of 1,485,575 shares of common stock pursuant to

an at-the-market public offering.

In addition, the Company received gross proceeds of $350,020 from the sale of securities pursuant to

the December Purchase Agreement, and gross proceeds of $3,000,000 from the sale of securities pursuant to Lazar Purchase Agreement.

failure to raise additional capital in future could have a negative impact on not only our financial condition but also our ability to

execute our business plan.

No assurance can be given that the Company will be successful in these efforts.

The financial statements do not include

any adjustments that might result from the outcome of this uncertainty.

The Company may not be able to obtain financing on acceptable

terms, or at all.

The financial statements do

not include any adjustments that might result from the outcome of this uncertainty.

The Company may not be able to obtain financing on

acceptable terms, or at all.

Company may need to raise additional capital to support its operations.

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Company may incur significant losses, and there can be no assurance that the Company will ever become a profitable business.

the years ended December 31, 2023 and 2022, we had net losses of $15,747,724 and $1,842,175, respectively.

It is anticipated that

the Company may continue to sustain operating losses.

Its ability to become and/or remain profitable depends in material part on success

in growing and expanding the Company’s products and services.

During the years ended December 31, 2024 and 2023, we had net

losses of $22,754,178 and $15,747,724, respectively.

It is anticipated that the Company may continue to sustain operating losses.

ability to become and/or remain profitable depends in material part on success in growing and expanding the Company’s products and

There can be no assurance that this will occur.

Unanticipated problems

and expenses often encountered in offering new and unique products or services may impact whether the Company is successful.

the Company may encounter substantial delays and unexpected expenses related to development, technological changes, marketing, insurance,

legal or regulatory requirements and changes to such requirements or other unforeseen difficulties.

There can be no assurance that the

Company will remain profitable.

If the Company sustains losses over a period of time, it may be unable to continue in business.

Unanticipated problems and expenses often encountered in offering new and unique

products or services may impact whether the Company is successful.

Furthermore, the Company may encounter substantial delays and unexpected

expenses related to development, technological changes, marketing, insurance, legal or regulatory requirements and changes to such requirements

or other unforeseen difficulties.

There can be no assurance that the Company will remain profitable.

If the Company sustains losses over

a period of time, it may be unable to continue in business.

Company’s future revenue and operating results are unpredictable and may fluctuate significantly.

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financial condition, results of operations, and reputation.

Company’s ability to import SWOL Tequila may be suspended at any time by the Mexican authorities and until registration of the

Company’s Mexican agreements is complete, the Company will not be able to enforce its authorization to use the denomination of

origin “TEQUILA” applied in their products branded under the SWOL trademark against third parties in Mexico.

March 19, 2021, the Company entered into an asset purchase agreement with Dollinger Innovations Inc., Dollinger Holdings LLC, and

Sean Dollinger pursuant to which we acquired the assets related to the online or in-person sale of original SWOL tequila and other SWOL

branded products.

The transaction included the assignment of the Shared Responsibility and Bonding Agreement by and between Dollinger

Innovations and Leticia Hermosillo Raverero relating to the production of original SWOL tequila for exclusive importation into the United States

by Dollinger Innovations or its assigns.

In connection with this assignment, on July 7, 2023, the Company, Dollinger Innovations

and the Producer signed a ratification of the agreement of assignment of rights of the Shared Responsibility and Bonding Agreement,

which requires registration with the Mexican Institute of Industrial Property.

The Company submitted documents to the Mexican Institute

of Industrial Property to obtain such registration on July 12, 2023.

June 30, 2023, pursuant to an assignment agreement, Dollinger Innovations Inc., Dollinger Holdings LLC, and Sean Dollinger assigned

their rights as distributor under the Packaging of Origin Co-Responsibility Agreement with the Producer dated July 6, 2020 to the

Subsequent to that, on July 11, 2023, the Producer and LQR House signed a Bottled at Origin Joint Responsibility Agreement,

which requires registration with the Mexican institute of Industrial Property, which was requested by the Company on July 13, 2023.

Company does not know when it will receive the completed registrations described above, and the Mexican authorities could suspend importation

into the United States of SWOL branded products at any time.

Until we obtain a completed registration, the Company will not be able

to enforce its authorization to use the denomination of origin “TEQUILA” applied in their products branded under the SWOL

trademark against third parties in Mexico.

After we obtain such registrations, the Mexican authorities could suspend such importation

of SWOL branded products only in case of cancellation of the registration, which would only happen in the following scenarios:

the parties fail to comply with the “Official Tequila Standard” as that will result in the suspension or cancellation of

the export certificates issued by the regulatory Council of Tequila, A.C.

ii) if LQR House fails to include the

“Protected Designation of Origin” in their products in the terms provided in article 302 of Mexico Federal Law for

the Protection of Industrial Property;

and iii) by termination of the validity of the authorization provided by the Producer.

event that importation of SWOL products is suspended it would have a material adverse effect on the Company’s financial results

and reputation.

demand for our products and services does not develop as expected our projected revenues and profits will be affected.

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business, liquidity, financial condition and/or results of operations.

Our business may be impacted by political,

trade or regulatory developments in the jurisdictions in which we sell our products.

Significant political, trade, or regulatory developments

in the jurisdictions in which we sell our products, such as those stemming from the change in U.S.

federal administration, are difficult

to predict and may have a material adverse effect on us.

Similarly, changes in U.S.

federal policy that affect the geopolitical landscape

could give rise to circumstances outside our control that could have negative impacts on our business operations.

For example, in March

2025, the U.S.

initially imposed a 25% tariff on imports from Canada and Mexico and imposed a 20% tariff on imports from China.

largely reversed course and goods eligible for treatment under the 2020 United States-Mexico-Canada Agreement (“USMCA”)

can enter the U.S.

tariff free until April 2, 2025.

Historically, tariffs have led to increased trade and political tensions.

to tariffs, other countries have implemented retaliatory tariffs on U.S.

In retaliation to the recent U.S.

imposed tariffs, China

imposed tariffs up to 15% on a wide array of U.S.

farm exports, and Canada and Mexico have stated they will impose tariffs on the U.S.

Political tensions as a result of trade policies could reduce trade volume, investment, technological exchange and other economic activities

between major international economies, resulting in a material adverse effect on global economic conditions and the stability of global

financial markets.

We import our SWOL Tequila from Mexico.

We also sell out products in Canada.

Any changes in political, trade, regulatory,

and economic conditions, including U.S.

trade policies, could have a material adverse effect on our financial condition, results of operations

or our industry.

The impact of these potential tariffs on our financial condition, results of operations or industry, if any, is subject

to a number of factors that are not yet known, including any countermeasures that the target countries may take in response to such tariffs.

In light of these uncertainties, we can provide no assurance that any mitigating actions that may become available to us, such as our

ability to pass along some or all of the costs of any tariffs to some or all of our customers, will be successful.

in the prices of supplies and raw materials could have a materially adverse effect on our business.

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may not be able to fully exploit newly acquired brands.

We intend to acquire third-party brands.

experience, not every brand deployment is successful.

We may incur significant costs acquiring and promoting new brands only to have limited

market acceptance and limited resulting sales.

If this occurs, our financial results may be negatively impacted, and we may determine

it is in the best interest of the Company to no longer support that brand.

intend to acquire third-party brands.

In our experience, not every brand deployment is successful.

We may incur significant costs acquiring

and promoting new brands only to have limited market acceptance and limited resulting sales.

If this occurs, our financial results may

be negatively impacted, and we may determine it is in the best interest of the Company to no longer support that brand.

operate in highly competitive industries, and competitive pressures could have a material adverse effect on our business.

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expensive and time consuming to prosecute or defend;

in a finding that the Company does not have certain intellectual property rights or that

such rights lack sufficient scope or strength;

in a finding that the Company does not have certain intellectual property rights or that such rights lack sufficient scope or strength;

management’s attention and resources;

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expensive and time consuming to defend;

the Company to cease making, licensing, or using services that incorporate the challenged

intellectual property;

the Company to cease making, licensing, or using services that incorporate the challenged intellectual property;

management’s attention and resources.

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timely and accurate financial statements or comply with applicable regulations could be impaired.

Our current internal controls and any new controls

that we develop may become inadequate because of changes in conditions in our business or changes in the applicable laws, regulations

and standards.

Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement,

could harm our operating results, cause us to fail to meet our reporting obligations, result in a restatement of our financial statements

for prior periods or adversely affect the results of management evaluations and independent registered public accounting firm audits of

our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed

with the SEC.

Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors

to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of

our common stock.

In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq

in the future.

current internal controls and any new controls that we develop may become inadequate because of changes in conditions in our business

or changes in the applicable laws, regulations and standards.

Any failure to develop or maintain effective controls, or any difficulties

encountered in their implementation or improvement, could harm our operating results, cause us to fail to meet our reporting obligations,

result in a restatement of our financial statements for prior periods or adversely affect the results of management evaluations and independent

registered public accounting firm audits of our internal control over financial reporting that we will eventually be required to include

in our periodic reports that will be filed with the SEC.

Ineffective disclosure controls and procedures and internal control over

financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely

have a negative effect on the trading price of our common stock.

In addition, if we are unable to continue to meet these requirements,

we may not be able to remain listed on Nasdaq in the future.

management team has limited experience managing a public company.

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limited to, the following:

access to deposits or other financial assets or the uninsured loss of deposits or other financial

access to deposits or other financial assets or the uninsured loss of deposits or other financial assets;

to enter into credit facilities or other working capital resources;

or actual breach of contractual obligations that require us to maintain letters of credit

or other credit support arrangements;

● termination

of cash management arrangements and/or delays in accessing or actual loss of funds subject

to cash management arrangements.

or actual breach of contractual obligations that require us to maintain letters of credit or other credit support arrangements;

of cash management arrangements and/or delays in accessing or actual loss of funds subject to cash management arrangements.

addition, investor concerns regarding the U.S.

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Related to Ownership of Our Common Stock

An active trading

market for our shares may not be sustained.

Although our shares are

listed on The Nasdaq Stock Market LLC, the market for our shares has demonstrated varying levels of trading activity.

The current level

of trading may not be sustained in the future.

The lack of an active market for our shares may impair investors’ ability to sell

their shares at the time they wish to sell them or at a price that they consider reasonable, may reduce the fair market value of their

shares and may impair our ability to raise capital to continue to fund operations by selling shares and may impair our ability to acquire

additional assets by using our shares as consideration.

Our stock price may be volatile, and purchasers

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There is the potential for rapid and substantial price volatility

of our commonstock.

of our common stock.

Broad market factors may seriously harm the market price of our common stock, regardless of our actual or expected

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of new offerings or significant price reductions by us or our competitors;

● fluctuations

in stock market prices and volumes;

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in financial estimates by securities analysts;

market’s reaction to our reduced disclosure as a result of being an “emerging

growth company” under the JOBS Act;

market’s reaction to our reduced disclosure as a result of being an “emerging growth company” under the JOBS Act;

earnings or other announcements by us or our competitors;

on indebtedness, incurrence of additional indebtedness, or issuances of additional capital

on indebtedness, incurrence of additional indebtedness, or issuances of additional capital stock;

economic, legal and regulatory factors unrelated to our performance;

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seemingly unrelated to the underlying performance of the respective company.

Our common stock have experienced and may potentially experience

rapid and substantial price volatility, which may make it difficult for prospective investors to assess the value of our common stock.

The trading price of our common stock has been and is likely

to continue to be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our

Our share price is highly

During the period from August 10, 2023, to March 28, 2025 the closing price of our common stock ranged from a high of $155.97

per share to a low of $0.22 per share.

The stock market in general has experienced extreme volatility that has often been unrelated to

the operating performance of particular companies.

As a result of this volatility, you may not be able to sell your common stock at or

above the public offering price and you may lose some or all of your investment.

In addition to the risks addressed above, our

common stock may be subject to rapid and substantial price volatility.

Recently, companies with comparably small public floats and initial

public offering sizes have experienced instances of extreme stock price run-ups followed by rapid price declines, and such stock price

volatility was seemingly unrelated to the respective company’s underlying performance.

Although the specific cause of such volatility

is unclear, our anticipated public float may amplify the impact the actions taken by a few stockholders have on the price of our stock,

which may cause our stock price to deviate, potentially significantly, from a price that better reflects the underlying performance of

our business.

Our common stock may experience run-ups and declines that are seemingly unrelated to our actual or expected operating performance

and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our common

In addition, investors of shares of our common stock may experience losses, which may be material, if the price of our common stock

declines or if such investors purchase shares of our common stock prior to any price decline.

common stock may continue to be subject to rapid and substantial price volatility.

Recently, companies with comparably small public floats

and initial public offering sizes have experienced instances of extreme stock price run-ups followed by rapid price declines, and such

stock price volatility was seemingly unrelated to the respective company’s underlying performance.

Although the specific cause of

such volatility is unclear, our anticipated public float may amplify the impact the actions taken by a few stockholders have on the price

of our stock, which may cause our stock price to deviate, potentially significantly, from a price that better reflects the underlying

performance of our business.

Our common stock may experience run-ups and declines that are seemingly unrelated to our actual or expected

operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing

value of our common stock.

In addition, investors of shares of our common stock may experience losses, which may be material, if the price

of our common stock declines or if such investors purchase shares of our common stock prior to any price decline.

are currently listed on The Nasdaq Capital Market.

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occur, each of which could have a material adverse effect on our stockholders:

the liquidity of our common stock;

the market price of our common stock;

our ability to obtain financing for the continuation of our operations;

the number of institutional and general investors that will consider investing in our common stock;

the number of investors in general that will consider investing in our common stock;

the number of market makers in our common stock;

the availability of information concerning the trading prices and volume of our common stock;

liquidity of our common stock;

market price of our common stock;

ability to obtain financing for the continuation of our operations;

number of institutional and general investors that will consider investing in our common stock;

number of investors in general that will consider investing in our common stock;

number of market makers in our common stock;

availability of information concerning the trading prices and volume of our common stock;

the number of broker-dealers willing to execute trades in shares of our common stock.

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price for the shares 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.

If research analysts do not

establish and maintain adequate research coverage or if one or more of the analysts who covers us downgrades our common stock or publishes

inaccurate or unfavorable research about our business, the market price for our common stock would likely decline.

If one or more of these

analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets,

which, in turn, could cause the market price or trading volume for our common stock to decline.

have never paid cash dividends on our stock and do not intend to pay dividends for the foreseeable future.

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.

If research analysts

do not establish and maintain adequate research coverage or if one or more of the analysts who covers us downgrades our common stock

or publishes inaccurate or unfavorable research about our business, the market price for our common stock would likely decline.

or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial

markets, which, in turn, could cause the market price or trading volume for our common stock to decline.

We have never paid cash dividends on our

stock and do not intend to pay cash dividends for the foreseeable future.

We have paid no cash dividends on any class of

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restrictions, restrictions imposed by applicable law and other factors our Board deems relevant.

Raising additional capital may cause dilution

to our stockholders, or restrict our operations.

Until such time, if ever, as we can generate substantial

product revenues, we expect to finance our cash needs through a combination of equity and/or debt financing and collaborations, licensing

agreements or other strategic arrangements.

To the extent that we raise additional capital through the sale of equity or convertible debt

securities, your ownership interest will be diluted, and the terms of such securities may include liquidation or other preferences that

adversely affect your rights as a stockholder.

To the extent that we raise additional capital

through debt financing, it would result in increased fixed payment obligations and a portion of our operating cash flows, if any, being

dedicated to the payment of principal and interest on such indebtedness.

In addition, debt financing may involve agreements that include

restrictive covenants that impose operating restrictions, such as restrictions on the incurrence of additional debt, the making of certain

capital expenditures or the declaration of dividends.

additional capital may cause dilution to our stockholders, or restrict our operations.

such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity

and/or debt financing and collaborations, licensing agreements or other strategic arrangements.

To the extent that we raise additional

capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of such securities

may include liquidation or other preferences that adversely affect your rights as a stockholder.

the extent that we raise additional capital through debt financing, it would result in increased fixed payment obligations and a portion

of our operating cash flows, if any, being dedicated to the payment of principal and interest on such indebtedness.

In addition, debt

financing may involve agreements that include restrictive covenants that impose operating restrictions, such as restrictions on the incurrence

of additional debt, the making of certain capital expenditures or the declaration of dividends.

We may issue additional debt and equity

securities, which are senior to our common stock as to distributions and in liquidation, which could materially adversely affect the market

price of our common stock.

In the future, we may attempt to increase our

capital resources by entering into additional debt or debt-like financing that is secured by all or up to all of our assets, or issuing

debt or equity securities, which could include issuances of commercial paper, medium-term notes, senior notes, subordinated notes or shares.

In the event of our liquidation, our lenders and holders of our debt securities would receive a distribution of our available assets before

distribution to our stockholders.

In addition, any additional preferred stock, if issued by our company, may have a preference with respect

to distributions and upon liquidation, which could further limit our ability to make distributions to our stockholders.

Because our decision

to incur debt and issue securities in our future offerings will depend on market conditions and other factors beyond our control, we cannot

predict or estimate the amount, timing or nature of our future offerings and debt financing.

securities, which are senior to our common stock as to distributions and in liquidation, which could materially adversely affect the

market price of our common stock.

the future, we may attempt to increase our capital resources by entering into additional debt or debt-like financing that is secured

by all or up to all of our assets, or issuing debt or equity securities, which could include issuances of commercial paper, medium-term

notes, senior notes, subordinated notes or shares.

In the event of our liquidation, our lenders and holders of our debt securities would

receive a distribution of our available assets before distribution to our stockholders.

In addition, any additional preferred stock,

if issued by our company, may have a preference with respect to distributions and upon liquidation, which could further limit our ability

to make distributions to our stockholders.

Because our decision to incur debt and issue securities in our future offerings will depend

on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings

and debt financing.

Further, market conditions could require us to

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the value of your common stock and diluting your interest in our company.

Enforcing legal liability against certain

members of our Board and our senior management might be difficult.

Although we are organized under the laws of the

State of Nevada and investors are able to effect service of process in the United States upon us, some of the members of our board

of directors and some members of our senior management reside outside of the United States and all or a substantial portion of their

assets are located outside the United States.

As a result, it may not be possible to serve process on these directors and certain

members of our senior management in the United States or to enforce court judgments obtained in the United States against these

individuals based on the civil liability provisions of the U.S.

legal liability against certain members of our Board and our senior management might be difficult.

Although we are organized under the laws

of the State of Nevada and investors are able to effect service of process in the United States upon us, some of the members of

our Board of Directors and some members of our senior management reside outside of the United States and all or a substantial portion

of their assets are located outside the United States.

As a result, it may not be possible to serve process on these directors and

certain members of our senior management in the United States or to enforce court judgments obtained in the United States against

these individuals based on the civil liability provisions of the U.S.

federal or state securities laws.

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emerging growth companies, including but not limited to:

being required to comply with the auditor attestation requirements of Section 404 of

the Sarbanes-Oxley Act;

permitted to comply with reduced disclosure obligations regarding executive compensation

in our periodic reports and proxy statements;

exempt from the requirement to hold a non-binding advisory vote on executive compensation

and stockholder approval of any golden parachute payments not previously approved.

being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act;

permitted to comply with reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements;

exempt from the requirement to hold a non-binding advisory vote on executive compensation and stockholder approval of any golden

parachute payments not previously approved.

addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition

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issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that:

a public float of less than $250 million as of the last business day of its most

recently completed second fiscal quarter, computed by multiplying the aggregate worldwide

number of shares of its voting and non-voting common equity held by non-affiliates by the

price at which the common equity was last sold, or the average of the bid and asked prices

of common equity, in the principal market for the common equity;

the case of an initial registration statement under the Securities Act or the Exchange Act

for shares of its common equity, had a public float of less than $250 million as of

a date within 30 days of the date of the filing of the registration statement, computed

by multiplying the aggregate worldwide number of such shares held by non-affiliates before

the registration plus, in the case of a Securities Act registration statement, the number

of such shares included in the registration statement by the estimated public offering price

of the shares;

the case of an issuer whose public float as calculated under paragraph (1) or (2) of

this definition was zero or whose public float was less than $700 million, had annual

revenues of less than $100 million during the most recently completed fiscal year for

which audited financial statements are available.

a public float of less than $250 million as of the last business day of its most recently completed second fiscal quarter,

computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates

by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal

market for the common equity;

the case of an initial registration statement under the Securities Act or the Exchange Act for shares of its common equity,

had a public float of less than $250 million as of a date within 30 days of the date of the filing of the registration

statement, computed by multiplying the aggregate worldwide number of such shares held by non-affiliates before the registration plus,

in the case of a Securities Act registration statement, the number of such shares included in the registration statement by the estimated

public offering price of the shares;

the case of an issuer whose public float as calculated under paragraph (1) or (2) of this definition was zero or whose

public float was less than $700 million, had annual revenues of less than $100 million during the most recently completed

fiscal year for which audited financial statements are available.

As a smaller reporting company, we will not be

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price requirements.

Future sales of substantial amounts of our

common stock or securities convertible into or exchangeable or exercisable for shares of common stock, either by us or by our existing

Future sales of substantial amounts of

our common stock or securities convertible into or exchangeable or exercisable for shares of common stock, either by us or by our existing

stockholders, or the possibility that such sales could occur, could adversely affect the market price of our common stock.

1 unchanged sentence

our common stock or securities convertible into or exchangeable or exercisable for shares of common stock, shares held by our existing

stockholders or shares issued upon exercise of our outstanding stock options or warrants, or the perception by the market that these sales

could occur, could lower the market price of our common stock or make it difficult for us to raise additional capital.

stockholders or shares issued upon exercise of our outstanding stock options or warrants, or the perception by the market that these

sales could occur, could lower the market price of our common stock or make it difficult for us to raise additional capital.

share buyback program that was approved by the Board in September 2023 could affect our stock price and increase its volatility, and

13 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