What changed in this filing

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Item 1A. Risk Factors

2024-01-29 compared with 2023-02-14 · 53 added, 46 removed, 441 unchanged (18% of the section changed)

13 unchanged sentences

The Company incurred net losses of $6,986,708 and $8,896,557 for the years ended October 31, 2023 and October 31, 2022, respectively.

In addition, the Company had accumulated deficits of $50,521,306 and $41,624,749 at October 31, 2022 and October 31, 2021, respectively, and had working capital positions of $303,085 and ($3,609,174) October 31, 2022 and October 31, 2021, respectively.

In addition, the Company had accumulated deficits of $57,508,014 and $50,521,306 at October 31, 2023 and October 31, 2022, respectively, accumulated stockholders (deficit) equity of ($1,241,019) and $1,888,604 at October 31, 2023 and October 31, 2022, and had a working capital position of ($1,807,926) and $303,084 at October 31, 2023 and October 31, 2022, respectively.

In their report for the fiscal year ended October 31, 2023, our auditors have expressed that there is substantial doubt as to our ability to continue as a going concern.

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As a result, any significant reduction in revenues would immediately and adversely affect the business, financial condition and operating results of the Company.

The ongoing COVID-19 outbreak and economic crisis has caused a significant disruption to the overall economy and there is no certainty as to when or how the situation will evolve, including whether or not the virus will be controlled and/or the state of our economy and business environment upon emerging from the crisis.

The adverse public health developments and economic effects of the ongoing COVID-19 outbreak in the United States have adversely affected the demand for our products and services by our customers and from patients of our customers as a result of quarantines, facility closures and social distancing measures put into effect.

These restrictions have adversely affected the Company’s sales, results of operations and financial condition.

In response to the COVID-19 outbreak, the Company (a) has accelerated its research and development activities;

(b) is seeking to raise additional debt and/or equity financing to support working capital requirements;

and (c) continues to take steps to stabilize and increase revenues from the sale of its products.

There is no assurance as to when the adverse impact to the United States and worldwide economies resulting from the COVID-19 outbreak will be eliminated, if at all, and whether any new or recurring pandemic outbreaks will occur again in the future causing a similar or worse devastating impact to the United States and worldwide economies or our business.

There is no assurance that the COVID-19 crisis will be fully resolved or if resolved, that the overall economy will resume in a manner that allows the Company to resume operations as planned.

We may not be able to generate revenues or achieve profitability in the future.

Our failure to achieve or maintain profitability could negatively impact the value of our common stock.

On June 17, 2021 we received a subpoena from the Atlanta Regional Office of the SEC and while we are complying with the subpoena, there can be no assurances as to the final outcome of the SEC’s investigation, or the impact, if any of this investigation or any proceedings on the Company’s current business, financial condition, results of operations, cash flows, or the Company’s future operations.

On June 17, 2021, Organicell received a subpoena dated June 14, 2021, from the Atlanta Regional Office of the SEC requiring the production of certain documents and communications in connection with the treatment and results of various COVID-19 patients, as discussed in the Company’s Current Reports on Form 8-K filed with the SEC during the period from May 27, 2020 through May 11, 2021.

The Company is fully cooperating with the SEC’s investigation and believes that it will be able to provide all of the information requested by the SEC.

The Company can make no assurances as to the time or resources that will need to be devoted to this investigation or its final outcome, or the impact, if any, of this investigation or any proceedings on the Company’s current business, financial condition, results of operations, cash flows, or the Company’s future operations.

We depend upon our officers and key personnel, the loss of which could seriously harm our business.

Our operating performance is substantially dependent on the continued services of our executive officers and key employees, in particular, Ian T.

Bothwell, our Interim Chief Executive Officer and Chief Financial Officer.

The unexpected loss of his services could have a material adverse effect on our business, operations, financial condition and operating results, as well as the value of our common stock.

Our operating performance is substantially dependent on the continued services of our executive officers and key employees.

The unexpected loss of any our executive officers and key employees could have a material adverse effect on our business, operations, financial condition and operating results, as well as the value of our common stock.

We may not be able to compete successfully with current and future competitors.

We have many potential competitors in the regenerative medicine industry.

We will compete, in our current and proposed businesses, with other established companies, most of which have far greater marketing and financial resources and experience than we do.

We will compete, in our current and proposed businesses, with other established companies, most of which have greater marketing and financial resources and experience than we do.

We cannot guarantee that we will be able to penetrate our intended markets and be able to compete profitably, if at all.

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If any of our suppliers were to cause a disruption in our ability to obtain products as desired and expected and/or we are not provided advance notice of such potential disruption, we may not be able to timely identify and replace our current suppliers, if at all, and as a result, we may not be able to provide products to our customers, which will have an adverse impact to our operations.

We depend on a limited number of third-party suppliers for the raw materials and supplies for our RAAM research and development and the manufacturing of our RAAM placental-related products, and the loss of any of these suppliers, or their inability to provide us with an adequate supply of materials, could harm our business.

We may not procure volumes sufficient to receive favorable pricing, which could impact our gross margins if we are unable to pass along price differences to our customers.

Recent global economic cost inflation trends could unfavorably impact pricing from our suppliers.

In the event of default under our outstanding indebtedness, or we are unable to pay other obligations and accounts payable when due, our creditors may file a creditors petition or force us into involuntary bankruptcy which may have an adverse impact on our business.

The Company had working capital positions of $303,085 and ($3,609,174) at October 31, 2022 and October 31, 2021, respectively.

The adverse public health developments and economic effects of the ongoing COVID-19 outbreak in the United States, have adversely affected the demand for our products and services by our customers and from patients of our customers as a result of quarantines, facility closures and social distancing measures put into effect.

These restrictions have adversely affected the Company’s sales, results of operations and financial condition.

The Company’s efforts to establish a stabilized source of sufficient revenues to cover operating costs has yet to be achieved and ultimately may prove to be unsuccessful unless additional sources of working capital through operations or debt and/or equity financings are realized.

The Company has not repaid certain outstanding indebtedness on the required due dates and the loans remain still outstanding.

Management anticipates that the Company will remain dependent, for the near future, on additional investment capital to fund ongoing operating expenses.

The Company does not have significant fixed and/or intangible assets to pledge for the purpose of borrowing additional capital.

In addition, the Company relies on short term supply agreements to obtain the supply of raw materials used in manufacturing the products it currently sells and distributes to its customers.

The Company’s current market capitalization and common stock liquidity will hinder its ability to raise equity proceeds to implement its business plan and could adversely affect the value of our securities, including the common stock.

The Company had a working capital position of

($1,587,029) and $303,084 at October 31, 2023 and October 31, 2022, respectively.

The Company’s efforts to establish

a stabilized source of sufficient revenues to cover operating costs has yet to be achieved and ultimately may prove to be

unsuccessful unless additional sources of working capital through operations or debt and/or equity financings are realized.

Management anticipates that the Company will remain dependent, for the near future, on additional investment capital to fund ongoing

operating expenses.

The Company does not have significant fixed and/or intangible assets to pledge for the purpose of borrowing

additional capital.

In addition, the Company relies on short term supply agreements to obtain the supply of raw materials used in

manufacturing the products it currently sells and distributes to its customers.

The Company’s current market capitalization

and common stock liquidity will hinder its ability to raise equity proceeds to implement its business plan and could adversely

affect the value of our securities, including the common stock.

The Company currently has $725,000 of outstanding convertible notes (“ Notes ”) which mature on September 30, 2026, unless converted into shares of our common stock by the holders of the Notes.

The terms of the Notes are such that interest is payable annually and the Company is required to file a registration statement for the equity securities issued or to be issued.

There is no assurance that the Company will make all of the required payments when due or that the Company will comply with all of the conditions of the Notes, including the requirement to meet the registration requirements.

We have borrowed and may be required to borrow funds in the future.

51 unchanged sentences

Our business could be severely impaired if and to the extent that we are unable to succeed in addressing any of these risks or other problems encountered in connection with these acquisitions, many of which cannot be presently identified, these risks and problems could disrupt our ongoing business, distract our management and employees, increase our expenses and adversely affect our results of operations.

There might be unanticipated obstacles to the execution of our business plan.

There might be unanticipated obstacles to the execution of our business plans.

The Company’s business plans may change significantly.

12 unchanged sentences

Our ability to attract and retain key personnel in a timely and cost effective manner;

The continued safety and efficacy of our products;

The amount and timing of operating costs and capital expenditures relating to the expansion of our business, operations and infrastructure;

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Due to the foregoing factors, our revenue and operating results are and will remain difficult to forecast.

Adverse global economic conditions could have a negative effect on our business, results of operations and financial condition and liquidity.

A general slowdown in the global economy, including a recession, or in a particular region or industry, an increase in trade tensions with U.S.

trading partners, inflation or a tightening of the credit markets could negatively impact our business, financial condition and liquidity.

Adverse global economic conditions have from time to time caused or exacerbated significant slowdowns in the industries and markets in which we operate, which have adversely affected our business and results of operations.

Macroeconomic weakness and uncertainty also make it more difficult for us to accurately forecast revenue, gross margin and expenses, and may make it more difficult to raise or refinance debt.

Worldwide economic and social instability could adversely affect our revenue, financial condition, or results of operations.

Generally, worldwide economic conditions remain uncertain, particularly due to the effects of the conflict between Russia and Ukraine and potentially between Israel and Hamas, disruptions in the banking system and financial markets, lingering COVID-19 pandemic, increased inflation and rising interest rates.

The general economic and capital market conditions, both in the U.S.

and worldwide, have been volatile in the past and at times have adversely affected the Company’s access to capital and increased the cost of capital.

The capital and credit markets may not be available to support future capital raising activity on favorable terms.

If economic conditions decline, the Company’s future cost of equity or debt capital and access to the capital markets could be adversely affected.

Our vendors may experience financial difficulties or be unable to borrow money to fund their operations, which may adversely impact their ability to purchase our products or to pay for our products on a timely basis, if at all.

In addition, adverse economic conditions, such as recent supply chain disruptions and labor shortages and persistent inflation, have affected, and may continue to adversely affect our suppliers’ ability to provide our manufacturers with materials and components, which may negatively impact our business.

These economic conditions make it more difficult for us to accurately forecast and plan our future business activities.

We are in a highly competitive and evolving field and face competition from well-established tissue processors and medical device manufacturers, as well as new market entrants.

85 unchanged sentences

Failure to successfully manage these risks in the development and implementation of new lines of business or new products or services could have a material adverse effect on our business, results of operations and financial condition.

On June 17, 2021 we received a subpoena from the Atlanta Regional Office of the SEC and while we have fully complied with the subpoena, there can be no assurances as to the final outcome of the SEC’s investigation, or the impact, if any of this investigation or any proceedings on the Company’s current business, financial condition, results of operations, cash flows, or the Company’s future operations.

The Company fully cooperated with the SEC’s investigation and believes that it has provided all of the information requested by the SEC.

The Company can make no assurances as to the time or resources that will need to be devoted to this investigation in the future or its final outcome, or the impact, if any, of this investigation or any proceedings on the Company’s current business, financial condition, results of operations, cash flows, or the Company’s future operations.

Risks Related to Our Intellectual Property

50 unchanged sentences

In addition, some states have their own tissue banking regulations.

In November 2017, the FDA released four guidance documents (two final, two draft) in an effort to implement a “comprehensive policy framework” for existing laws and regulations governing regenerative medicine products, including human cells, tissues, and cellular and tissue-based products (“HCT/Ps”).

In November 2017, the FDA released two final guidance documents in an effort to implement a “comprehensive policy framework” for existing laws and regulations governing regenerative medicine products, including human cells, tissues, and cellular and tissue-based products (“ HCT/Ps ”).

These guidance documents build upon the previous regulatory framework for these products, which was completed in 2005.

The Comprehensive regenerative medicine policy framework intends to spur innovation, efficient access to potentially transformative products, while ensuring safety & efficacy.

The Comprehensive regenerative medicine policy framework intends to spur innovation, efficient access to potentially transformative products, while ensuring safety and efficacy.

The framework builds upon the FDA’s existing risk-based regulatory approach to more clearly describe what products are regulated as drugs, devices, and/or biological products.

3 unchanged sentences

The policy also delivers on important provisions of the Act.

The FDA guidance with regard to 351 HCT/Ps requiring premarket approval became effective in May 2021 (extended from November 2020 due to the COVID-19 pandemic).

The FDA guidance with regard to 351 HCT/Ps requiring premarket approval became effective in May 2021.

The guidance states that, in order to “give manufacturers time to determine if they need to submit an IND or marketing application in light of this guidance,” the FDA intends to exercise enforcement discretion (i.e., the agency may permit marketing without an approved marketing application) if the HCT/P “is intended for autologous use and its use does not raise reported safety concerns or potential significant safety concerns.” As of the date of this Annual Report, we are not aware of whether any further extension of effectiveness and enforcement of these regulations is or will be issued by the FDA.

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However, if our products are deemed by the FDA to fall within the new guidelines and we are unable to successfully challenge any such determination, our business, results of operations and financial condition may be significantly harmed.

Our ability to commence and complete clinical studies and other research and development objectives that are required by the FDA, will require that we are properly funded to assure that we can commence and proceed with the required research activities promptly and that the results are favorable.

Our ability to commence and complete clinical studies and other research and development objectives that are required by the FDA, will require that we be properly funded to assure that we can commence and proceed with the required research activities promptly and that the results are favorable.

The Company is pursuing efforts to commence and complete clinical studies as well as obtaining approval to commence additional studies for other specific indications it has identified that the use of its products will provide more favorable and desired health related benefits for patients seeking alternative treatment options than are currently available.

46 unchanged sentences

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Our Interim Chief Executive Officer and Chief Financial Officer noted the following material weaknesses that have caused management to conclude that, as of October 31, 2022, our disclosure controls and procedures, and our internal control over financial reporting, were not effective at the reasonable assurance level in that:

Our Chief Executive Officer and Chief Financial Officer noted the following material weaknesses that have caused management to conclude that, as of October 31, 2023, our disclosure controls and procedures, and our internal control over financial reporting, were not effective at the reasonable assurance level in that:

Due to our small number of employees and resources, we have limited segregation of duties, as a result of which there is insufficient independent review of duties performed.

7 unchanged sentences

Risks Relating to Ownership of Our Common Stock

Two of our stockholders, Skycrest and Greyt, control 51% of the combined voting power of our capital stock regardless of the number of shares of common stock outstanding and accordingly, have the ability to control the election of our directors and the outcome of matters submitted to our stockholders.

Two of our stockholders, Skycrest and Greyt hold our Series C Preferred Shares, which accord them 51% of the combined voting power of our capital stock, regardless of the number of shares of common stock outstanding.

Two of our stockholders control 51% of the combined voting power of our capital stock regardless of the number of shares of common stock outstanding and accordingly, have the ability to control the election of our directors and the outcome of matters submitted to our stockholders.

Two of our stockholders, Skycrest Holdings, LLC (“ Skycrest ”) and Greyt Ventures LLC (” Greyt ”) hold our Series C Preferred Shares, which accord them 51% of the combined voting power of our capital stock, regardless of the number of shares of common stock outstanding.

Accordingly, Skycrest and Greyt have the ability to control the election of our directors and influence the outcome of issues submitted to our stockholders.

5 unchanged sentences

As a result, our Board of Directors could authorize the issuance of a new series of preferred stock (in addition to the Series C Preferred Shares) that would grant to holders the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stock and the right to the redemption of the shares, together with a premium, prior to the redemption of our common stock.

In addition, our Board of Directors could authorize the issuance of a new series of preferred stock, subject to the consent of the holders of the stock Series C Preferred Shares that has even greater voting power than the Series C Preferred Shares, to our common stock or that is convertible into our common stock, which could decrease the relative voting power of our common stock or result in dilution to our existing stockholders.

In addition, our Board of Directors could authorize the issuance of a new series of preferred stock, subject to the consent of the holders of the Series C Preferred Shares that has even greater voting power than the Series C Preferred Shares, to our common stock or that is convertible into our common stock, which could decrease the relative voting power of our common stock or result in dilution to our existing stockholders.

Although we have no present intention to issue any new additional shares of preferred stock or to create any additional series of preferred stock, we may issue such shares in the future.

28 unchanged sentences

Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

The Financial Industry Regulatory Authority (“FINRA”) sales practice requirements may also limit a shareholder’s ability to buy and sell our common stock.

FINRA sales practice requirements may also limit a shareholder’s ability to buy and sell our common stock.

In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer.

14 unchanged sentences

Litigation initiated against us, whether or not successful, could result in substantial costs and diversion of our management’s attention and resources, which could harm our business and financial condition.

We must obtain approval from FINRA if we wish to reduce our authorized shares of common stock and/or to effectuate a reverse split of the issued and outstanding shares of the common stock, of which the impact to the trading price of our common stock and/or the liquidity for trading our common stock may be adverse to current stockholders and may not result in desired benefits to the Company.

The Company currently has 2,500,000,000 authorized shares of common stock and 1,463,957,717 shares issued and outstanding.

In addition, there are 408,800,000 shares reserved for issuance upon the exercise of outstanding warrants.

The Company expects that it will continue to issue common stock in the future in connection with debt and/or equity financings, transactions with third parties, performance incentives and as compensation to its employees and consultants.

The Company believes that a reverse split would bring value to the issued and outstanding shares of the Company by limiting dilution of operating results by an excessive number of shares overhanging the market.

The Company’s ability to effectuate a reverse split will require approval from FINRA.

FINRA has previously informed the Company that it will not approve and process announcements for company-related actions such as a reverse split if the Company is delinquent in its Exchange Act reports with the SEC and until a Notification Form is submitted.

If completed, and the reverse split does not bring value to the current stockholders and/or our ability to attract prospective investors, including possible adverse impact to the trading price of our common stock and/or the liquidity for trading our common stock, it would likely have a material adverse effect on the market price of our common stock and on our ability to raise additional capital.

If securities analysts do not initiate coverage or continue to cover our common stock or publish unfavorable research or reports about our business, this may have a negative impact on the market price of our common stock.

21 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