GZIC GZ6GTechnologies Corp (CE)

RISK FACTORS

An investment in our Common Stock involves a high degree of risk. You should carefully consider the risks described below and the other information in this prospectus before investing in our Common Stock. If any of the following risks occur, our business, operating results and financial condition could be seriously harmed. Currently, shares of our Common Stock are not publicly traded. In the event that shares of our Common Stock become publicly traded, the trading price of our Common Stock could decline due to any of these risks, and you may lose all or part of your investment. In the event our Common Stock fails to become publicly traded you may lose all or part of your investment.

RISKS RELATED TO THE OFFERING

Our existing stockholders may experience significant dilution from the sale of our common stock pursuant to the Mast Hill Fund, LP (MHFLP) Equity Purchase Agreement.

The sale of our common stock to MHFLP in accordance with the Equity Purchase Agreement may have a dilutive impact on our shareholders. As a result, the market price of our common stock could decline. Additionally, the issuance of common stock pursuant to the Loan Treaty and subsequent convertible note(s) will have a dilutive impact on our shareholders.

The perceived risk of dilution may cause our stockholders to sell their shares, which may cause a decline in the price of our common stock. Moreover, the perceived risk of dilution and the resulting downward pressure on our stock price could encourage investors to engage in short sales of our common stock. By increasing the number of shares offered for sale, material amounts of short selling could further contribute to progressive price declines in our common stock.

MHFLP may not have sufficient capital to meet our Put notices.

MHFLP may not have sufficient capital to meet our requests. Additionally, MHFLP may enter into similar arrangements with different companies and if so, the amount of available funds may be significantly less than we anticipate.

We are registering an aggregate of 50,000,000 shares of common stock to be issued under the MHFLP Equity Purchase Agreement. The sale of such shares could depress the market price of our common stock.

We are registering an aggregate of MHFLP shares of common stock under the registration statement of which this prospectus forms pursuant to the MHFLP Equity Purchase Agreement. The sale of these shares into the public market by MHFLP could depress the market price of our common stock. As of October 28, 2022, there were 54,578,693 shares of our common stock issued and outstanding.

Unless we maintain an active trading market for our securities, investors may not be able to sell their shares.

We are a reporting company, and our common shares are quoted on the OTC Market (OTCQB) under the symbol “GZIC”. However, our trading market may not be maintained. Failure to maintain an active trading market will have a generally negative effect on the price of our common stock, and you may be unable to sell your common stock or any attempted sale of such common stock may have the effect of lowering the market price and therefore your investment could be a partial or complete loss.

Since our common stock is thinly traded it is more susceptible to extreme rises or declines in price, and you may not be able to sell your shares at or above the price paid.

Since our common stock is thinly traded its trading price is likely to be highly volatile and could be subject to extreme fluctuations in response to various factors, many of which are beyond our control, including (but not necessarily limited to):

Investors may have difficulty reselling shares of our common stock, either at or above the price they paid for our stock, or even at fair market value. The stock markets often experience significant price and volume changes that are not related to the operating performance of individual companies, and because our common stock is thinly traded it is particularly susceptible to such changes. These broad market changes may cause the market price of our common stock to decline regardless of how well we perform as a company. In addition, there is a history of securities class action litigation following periods of volatility in the market price of a company’s securities. Although there is no such litigation currently pending or threatened against us, such a suit against us could result in the incursion of substantial legal fees, potential liabilities and the diversion of management’s attention and resources from our business. Moreover, and as noted below, our shares are currently traded on the OTCQB (OTC.QB tier) and, further, are subject to the penny stock regulations. Price fluctuations in such shares are particularly volatile and subject to potential manipulation by market-makers, short-sellers and option traders.

We are a start-up company with a limited operating history and may never be able to carry out our intended operations or achieve any significant revenues or profitability.  We are subject to the risks encountered by early stage companies.

Because we have a limited operating history, you should consider and evaluate our operating prospectus in light of the risks and uncertainties frequently encountered by early-stage companies in rapidly evolving markets. For us, these risks include:

These risks are described in more detail below. Our future growth will depend substantially on our ability to address these and the other risks described in this prospectus. If we do not successfully address these risks, our business would be significantly harmed, and investors may lose their entire investment.

We are a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to “smaller reporting companies,” this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.

We are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates exceeds $250 million as of the prior December 31, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the prior December 31. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.

We may not be able to further implement our business strategy unless sufficient funds are raised in this Offering. Our inability to raise additional funds could cause investors to lose their investment. Additionally, we may have to seek additional capital through the sale of additional shares or equity securities, which would result in additional dilution to our stockholders.

We may not realize sufficient proceeds from this Offering to further business development, or to provide adequate cash flow for planned business activities. As at June 30, 2022 we had $215,910 cash on hand and as of December  31, 2021, we had $759,751 cash on hand. We have generated limited revenue from our operations to date. At this rate, we expect that we will not be able to continue operations without obtaining additional funding or beginning to generate significant revenue. Accordingly, we anticipate that additional funding will be needed for general administrative expenses, business development, marketing costs and support materials.

If our resources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities or obtain a credit facility. The sale of additional equity securities could result in additional dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.

Because William Coleman Smith, our sole officer and a director currently owns 100% of our outstanding Preferred Stock, investors may find that corporate decisions influenced by William Smith are inconsistent with the best interests of other stockholders.

William Coleman Smith, our Founder, Chief Executive Officer and Chairman, currently owns 100% of the outstanding shares of our Special 2018 Series A Preferred Stock, and 100% of the issued and outstanding Special 2018 Series B Preferred Stock which authorizes 51% of all voting rights of all classes of shares. Accordingly, William Coleman Smith will have a significant influence in determining the outcome of all corporate transactions or other matters, including mergers, consolidations and the sale of all, or substantially all, of our assets, and also the power to prevent or cause a change in control. While we have no current plans with regard to any merger, consolidation or sale of substantially all of our assets, the interests of Mr. Smith may still differ from the interests of the other stockholders.

Because the Special 2018 Series A Preferred Stock issued to William Coleman Smith, provides for certain rights, preferences, powers, privileges, restrictions, qualifications and limitations, investors may find that corporate decisions influenced by William Coleman Smith are inconsistent with the best interests of other stockholders.

The Special 2018 Series A Preferred Stock has a number of rights, privileges and preferences in accordance with the Certificate of Designations, Preferences and Rights of Special 2018 Series A Convertible Preferred Stock filed by us with the Nevada Secretary of State, including the following:

These rights, preferences, powers, privileges, restrictions, qualifications and limitations, investors may find that corporate decisions influenced by William Coleman Smith are inconsistent with the best interests of other stockholders.

Because the Special 2018 Series B Preferred Stock issued to William Coleman Smith, provides for certain rights, preferences, powers, privileges, restrictions, qualifications and limitations, investors may find that corporate decisions influenced by William Coleman Smith are inconsistent with the best interests of other stockholders.

The Special 2018 Series B Preferred Stock has a number of rights, privileges and preferences in accordance with the Certificate of Designations, Preferences and Rights of Special 2018 Series B Convertible Preferred Stock filed by us with the Nevada Secretary of State, including the following:

These rights, preferences, powers, privileges, restrictions, qualifications and limitations, investors may find that corporate decisions influenced by William Coleman Smith are inconsistent with the best interests of other stockholders.

We have the ability to issue additional shares of our common stock and shares of preferred stock without asking for stockholder approval, which could cause your investment to be diluted.

Our Articles of Incorporation authorizes the Board of Directors to issue up to 500,000,000 shares of common stock and up to 10,000,001 shares of preferred stock. The power of the Board of Directors to issue shares of common stock, preferred stock or warrants or options to purchase shares of common stock is generally not subject to stockholder approval. Accordingly, any additional issuance of our common stock or preferred stock that may be convertible into common stock, may have the effect of diluting your investment. Further, any issuance of preferred stock with voting rights, including weighted voting rights, may have the effect of limiting the voting power of holders of our common stock.

There is substantial doubt about our ability to continue as a going concern.

We have no certainty of achieving or growing revenues in the future and have a working capital deficit. These factors, among others, raise substantial doubt about our ability to continue as a going concern. Our ability to generate future revenues will depend on a number of factors, many of which are beyond our control. These factors include general economic conditions, market acceptance of our marketing platform, proposed products and competitive efforts. Due to these factors, we cannot anticipate with any degree of certainty what the revenues will be in future periods. As such, our independent registered public accounting firm have expressed substantial doubt about our ability to continue as a going concern. Their opinion could materially limit our ability to raise additional funds by issuing new debt or equity securities or otherwise. You should consider our independent registered public accountant’s comments when determining if an investment in us is suitable.

You may have limited access to information regarding our business.

As of effectiveness of our registration statement of which this prospectus is a part, we will be required to file periodic reports with the SEC, which will be immediately available to the public for inspection and copying (see “Where You Can Find More Information” elsewhere in their prospectus). Except during the year that our registration statement becomes effective, these reporting obligations may be automatically suspended under Section 15(d) if we have less than 300 shareholders at the beginning of our fiscal year. We currently have fewer than 300 shareholders and if we continue to have fewer than 300 shareholders, we will be exempt from the filing requirements as required pursuant to Section 13 of the Securities Exchange Act and will not be required to file any periodic reports, including Form 10Q and 10K filings, with the SEC subsequent to the Form 10K required for the fiscal year in which our registration statement is effective. Further, disclosures in our Form 10K that we will be required to file for the fiscal year in which our registration statement is effective, is less extensive than the disclosures required of fully reporting companies. Specifically, we are not subject to disclose in our Form 10K risk factors, unresolved staff comments, or selected financial data, pursuant to Items 1A, 1B, 6, respectively. If the reports are not filed or are less extensive than those required of fully reporting companies, the investors will have reduced visibility as to the Company and its financial condition.

RISKS RELATED TO OUR BUSINESS

An information security incident, including a cybersecurity breach, could have a negative impact to the Company’s business or reputation.

The extensive information security and cybersecurity threats, which affect companies globally, pose a risk to the security and availability of these IT systems and networks, and the confidentiality, integrity, and availability of the Company’s sensitive data. The Company continually assesses these threats and makes investments to increase internal protection, detection, and response capabilities, as well as ensure the Company’s third party providers have required capabilities and controls, to address this risk. To date, the Company has not experienced any material impact to the business or operations resulting from information or cybersecurity attacks; however, because of the frequently changing attack techniques, along with the increased volume and sophistication of the attacks, there is the potential for the Company to be adversely impacted. This impact could result in reputational, competitive, operational or other business harm as well as financial costs and regulatory action. The Company maintains cybersecurity insurance in the event of an information security or cyber incident, however, the coverage may not be sufficient to cover all financial losses.

IP and Technology Risks

The extensive IP and technology risks, which affect companies globally, pose a risk to the security of our technology.  We have conducted informational presentations with our employees regarding these risks and have security measures in place to detect unauthorized intrusion into our networks and technology.

If our electronic data is compromised our business could be significantly harmed.

If our electronic data is compromised, our business could be significantly harmed.  We maintain systems and processes designed to protect this data, but notwithstanding such protective measures, there is a risk of intrusion, cyber-attacks or tampering that could compromise the integrity and privacy of this data. In addition, we provide confidential and proprietary information to our third-party business partners in certain cases where doing so is necessary to conduct our business. While we obtain assurances from those parties that they have systems and processes in place to protect such data, and where applicable, that they will take steps to assure the protections of such data by third parties, nonetheless those partners may also be subject to data intrusion or otherwise compromise the protection of such data. Any compromise of the confidential data of our customers, consumers, suppliers, partners, employees or ourselves, or failure to prevent or mitigate the loss of or damage to this data through breach of our information technology systems or other means could substantially disrupt our operations, and you could lose your entire investment.

Defects or disruptions in our services could diminish demand for our services and subject us to substantial liability.

Because our services are complex and incorporate a variety of hardware, proprietary software and third-party software, our services may have errors or defects that could result in unanticipated downtime for our subscribers and harm to our reputation and our business.

A failure to keep pace with developments in technology could impair our operations or competitive position.

Our business continues to demand the use of sophisticated systems and technology. These systems and technologies must be refined, updated and replaced with more advanced systems on a regular basis in order for us to meet our customers’ demands and expectations. If we are unable to do so on a timely basis or within reasonable cost parameters, or if we are unable to appropriately and timely train our employees to operate any of these new systems, our business could suffer.

The COVID-19 pandemic and the efforts to mitigate its impact may have an adverse effect on our business, liquidity, results of operations, financial condition and price of our securities.

The pandemic involving the novel strain of coronavirus, or COVID-19, and the measures taken to combat it, may have certain and adverse effects on our business. Public health authorities and governments at local, national and international levels have announced various measures to respond to this pandemic. Some measures that directly or indirectly impact our business include:

We have encouraged our contractors and consultants to work remotely when possible and we also have enacted our business continuity plans, including implementing procedures requiring employees to work remotely where possible which may make maintaining our normal level of corporate operations, quality controls and internal controls difficult. Moreover, the COVID-19 pandemic has caused temporary or long-term disruptions in our supply chains and/or delays in the delivery of our inventory. Further, the COVID-19 pandemic and mitigation efforts have also adversely affected our customers’ financial condition, resulting in delayed spending in the venues we serve. 

Because of the pandemic, large gatherings, such as in sports venues, concert halls, and at university campuses, have been prohibited, and the need for our Company’s services have been delayed.

As events are rapidly changing, we do not know how long the COVID-19 pandemic and the measures that have been introduced to respond to it will disrupt our operations or the full extent of that disruption.  Further, once we are able to restart normal business hours and operations doing so may take time and will involve costs and uncertainty. We also cannot predict how long the effects of COVID-19 and the efforts to contain it will continue to impact our business after the pandemic is under control. Governments could take additional restrictive measures to combat the pandemic that could further impact our business or the economy in the geographies in which we operate.

Our Officers and Directors have limited experience running public companies past the start-up phase.

Although Mr. Smith has over 25 years of experience in running businesses, he lacks experience in running a public company; if you invest in our Company, we may not be able to stay compliant under the rules and regulations of the Securities and Exchange Commission, and you could lose your entire investment.

Our independent Directors have limited experience running public companies.

The Company appointed two independent Directors on August 6, 2021, and although they collectively have over 50 years of successful business management, neither have run a public company, and so lack the experience that independent directors in other companies may have; if you invest in our Company, these independent directors may have different ideas about running the Company and a conflict could arise between our Officer and Director Cole Smith, and you could lose your entire investment.

Key management personnel may leave us, which could adversely affect the ability of us to continue operations.

We are entirely dependent on the efforts of our sole officer and member of the board of directors William Coleman Smith, because of the time and effort that he devotes to our Company. We risk the loss of Mr. Smith, who provides day-to-day operational leadership as well as visionary leadership. He is in charge of overseeing all development strategies, supervising any/all future personnel, including the sales team, and any consultants or contractors that the Company engages to assist in developing its marketing plan. The loss of him, or other key personnel in the future, could have a material adverse effect on our business, financial condition and results of operations. We will seek “key person” life insurance on its key executives; however, we cannot be sure we will be able to obtain such insurance or that we will be able to afford the insurance.  Even if we can obtain key person life insurance on acceptable terms, the proceeds of the insurance may not be sufficient to truly replace the loss of the “key person”. Our success will depend on the performance of Mr. Smith, and the ability to retain, as well as attract and motivate other personnel to drive growth.

Our Directors and Executive Officers are Directors and Executive Officers of our subsidiary.

Our Directors and Executive Officers are Directors and Executive Officers of Green Zebra Media, our subsidiary. Mr. Smith is the sole director, and officer of Green Zebra Media, holding the positions of Chairman of the Board, Chief Executive Officer and Director; the interests of Green Zebra Media may require substantial dedication at times and may be detrimental to the business of the Company.  Further, Mr. Smith is Chairman of the Board, Chief Executive Officer and Director of ELOC Holding Corp; the interests of ELOC Holding may require substantial dedication at times and may be detrimental to the business of the Company.

Our Executive Officers and Directors have additional business activities and as such are not devoting all of their time to us, which may result in periodic interruptions, or business failure.

Although we do not feel there is a conflict of interest, our Founder, William Coleman Smith, is the President of our subsidiary Green Zebra Media and must balance his time between running the public company, GZ6G Technologies Corp, and the subsidiary, Green Zebra Media. While there are no set minimum hours that he is obligated to work on each of the businesses mentioned above, he spends at least 25 hours on GZ6G Technologies Corp. a week, and at least 25 hours a week on Green Zebra Media. Our operations may be such that decisions need to occur at times when Mr. Smith is unavailable, which may lead to the periodic interruption in the implementation of our business plan. Such delays could have a significant negative effect on the success of the business.

Our Independent Directors have outside interests and full-time jobs and as such may not be able to devote the amount of time necessary to successfully perform their duties as independent directors, which may result in periodic interruptions, or business failure.

Although we do not feel there is a conflict of interest, our Independent Directors will continue to work outside of the Company.  While there are no set minimum hours that they are obligated to work on the business of our Company, our operations may be such that decisions need to occur at times when they are unavailable, which may lead to the periodic interruption in the implementation of our business plan. Such delays could have a significant negative effect on the success of the business.

Our current cash flow and access to capital compared to the fees being earned by our CEO and CFO may adversely affect our future performance and operations.

Mr. Smith’s employment agreements provide for payments of $30,000 per month. A company controlled by Mr. Smith, ELOC Holdings Corp. also has a contract with the Company for management fees of $10,000 per month. Currently, amounts charged by ELOC Holdings Corp. are being accrued and deferred until such time that we are in a position, as determined in the sole discretion of the Company’s Board of Directors, to begin making any such payments. However, should we begin generating meaningful revenue or raising funds hereunder, our Board of Directors may determine that such payments should be used to pay currently accrued and deferred salary. Any such decision would negatively affect our cash flows and would adversely affect us.

We have established a global command center staffed by wireless and IT engineers and support technicians managing physical hardware and software in the cloud in order to support client needs.

The command center offers digital leaders scale and agility, to speed the launch of wireless, digital services and data analytics services, and seamlessly connect customers to world class experiences.   Our wireless IT network managed services and data center initiative for clients and partners will monitor Wireless IT networks and dispatch technicians as necessary to ensure continuous functionality of our Wi-Fi networks. If we are unable to maintain this global command center, we will be unable to provide the full-service support to our client base and our business could fail.

We have a short operating history in Digital Media and we may not be able to attract and keep sponsors as quickly as larger digital media companies can.

The Company has a short operating history in the Digital Media space of working with national and regional sponsors for Wi-Fi networks, and it may take a longer time to attract, and retain, sponsors than it would for a larger digital media company.

We are partly dependent on our partner network company, Lumen Technologies Corp (F/K/A CenturyLink), and its infrastructure.

GZ6G has an approved five-year written Master Service Agreement (MSA) vendor agreement with Lumen Technologies Corp (Lumen) (F/K/A CenturyLink) wherein GZ6G will provide enterprise level smart technology sales and marketing support to help Lumen enterprise sales teams nationally.  

The Agreement is non-exclusive with GZ6G acting as a supplier of software, license to use the software, service of the software, packaging and shipping the software, and installation of the software, as well as hosting services for the software.

The Agreement was entered into on June 15, 2018, for a five-year term, automatically renewable in one-year terms, unless terminated by either party, with a one hundred eighty (180) day notice prior to the completion of the current term.  Termination may be for convenience or for cause.

Due to existing relationships Lumen has with Venues, Stadiums, and Smart City target markets we are partly dependent on Lumen for introduction and exposure into those target markets.  If Lumen decides it wants to sever its relationship with us, it could damage our business, as we may not be able to form the relationships and cultivate partnerships on our own, and it would be detrimental to revenue growth.

We may not be able to hire sufficient support personnel.

We will need to hire personnel on a continuous basis for IT support, installation and network management for the Wi-Fi networks. If it is difficult to hire enough appropriate personnel, the Company may need to hire contract workers or acquire an IT staff to install and manage Wi-Fi networks. The Company will also need to hire sales personnel to address sponsors.  If we are unable to hire the appropriate support personnel, our business plan will be damaged, and our business could fail.

GZ6G Technologies will need to raise capital for product development.

We will need future funding to implement our business plan. If the Company is unsuccessful in raising sufficient funding, our business plan may not progress as planned, and our business could fail.

If we are unable to engage the number of experienced staff to run our global command center, our business may fail.

If we cannot engage the experienced staff to run our global command center and service our clients, our business may fail, and you could lose all of your investment.

We have a rapidly evolving business model and our proposed product and services could fail to attract or retain clients or generate revenue.

We have a rapidly evolving business model and are regularly exploring the development of our offerings to our proposed target venue.  This is due to the increasing speeds of internet channels and broadbands that frequently update their product information requirements, policies, merchandising strategies and integration specifications causing retailers and manufacturers to have to stay constantly up to speed and revise their online business strategies, product listings and attributes, and business rules, which can be resource-intensive and time-consuming.  GZ6G will need to maintain its position in keeping up, and surpassing, other Internet companies with regard to speed and technology. If the product and services we introduce fail to engage venues, we may fail to acquire or retain enough business or generate sufficient revenue or other value to justify our investment, and our business may be materially and adversely affected. Our ability to retain or increase our client base and revenue will depend heavily on our ability to innovate and to create successful technology and marketing tools so that the client is convinced of our necessity.

If we are unable to maintain favorable terms with our venues, our expected gross profit may be adversely affected.

The success of our business depends in part on our ability to retain and increase the number of venues who contract us to serve multiple facets of their wireless internet, digital marketing and IoT.  This includes developing a custom digital marketing platform for their company, managing and optimizing their wireless networks. Digital marketing support includes banner and social media advertisements and advertorials, website and shopping portal purchase engagements.  The success of our business model is based on the premise that a venue will find our product services so comprehensive, they will contract us to do all of these services with us, instead of finding separate service providers for each facet of their wireless and marketing plan.

If our technical and support teams do not meet the needs and expectations of our venues, our business could suffer.

Our business will depend on the effectiveness of our personnel to carry out efficiently and accurately all aspects of a venue’s wireless network platform and marketing plan.  Our success depends on our teams to possess the core capabilities and skill sets that help our venues execute on targeted audiences.

Our business is competitive. Competition presents an ongoing threat to the success of our business.

Our success depends on successfully servicing our venues; we will compete with companies who have access to greater amounts of capital, and who have established relationships with a larger base of venues.  Because of their size and bargaining power, our competitors may be able to offer their services at lower prices than us in the initial stages of our development. As a result, our operations may be significantly and negatively impacted by our larger, more established competitors.

We cannot assure you that we will be able to manage the growth of our Company effectively.

We plan to experience average growth in demand for our product and services once we are able to launch our proposed platform. We expect our number of venues to increase once we launch our marketing plan, and we expect our growth to continue for the foreseeable future. The growth and expansion of our product offerings could place significant demands on our management and our operational and financial resources. We will need to manage multiple relations with our marketing team, technical support team, and our design engineers. To effectively manage our growth, we will need to continually implement operational plans and strategies, improve and expand our infrastructure of people and information systems, and train and manage our team.

Our business will depend on our ability to maintain and scale the network infrastructure necessary to operate our network application; and any significant disruption in service of our information data center or applications could result in a loss of venues.

Venues will access the platform we have created for them through our servers to manage their wireless networks within the venue. Our reputation and ability to acquire, retain and serve our venues will be dependent upon the reliable performance of our proprietary network IoT platform and our servers. Issues within our internal servers, or IoT platform, whether due to system failures, computer viruses or physical or electronic break-ins, could affect the security or availability of our IoT platform, and prevent our venues from accessing their product management.

We may not be able to adequately protect our intellectual property rights or may be accused of infringing intellectual property rights of third parties.

We will regard our client lists and any intellectual property we may acquire, i.e., patents, trademarks, service marks, copyrights, and similar intellectual property that would be critical to our success, and we will rely on trademark, copyright and confidentiality and/or license agreements to protect our proprietary rights. Effective intellectual property protection may not be available in every area in which our products are made available. Furthermore, regulations governing domain names may not protect our trademarks and similar proprietary rights. We may be unable to prevent third parties from acquiring and using domain names that are similar to, infringe upon or diminish the value of our patents and other proprietary rights. We may be unable to prevent third parties from using and registering our trademarks, or trademarks that are similar to, or diminish the value of our trademark.

We will be subject to payments-related risks.

We plan to accept payments using wire transfer, checks, PayPal, credit card and debit card. As we offer new payment options to consumers, we may be subject to additional regulations, compliance requirements and fraud. For certain payment methods, including credit and debit cards, we will pay interchange and other fees, which may increase over time and raise our operating costs and lower profitability. We will rely on third parties to provide payment-processing services, including the processing of credit cards and debit cards and it could disrupt our business if these companies become unwilling or unable to provide these services to us. We will also be subject to payment card association operating rules, certification requirements and rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply. If we fail to comply with these rules or requirements, we may be subject to fines and higher transaction fees and lose our ability to accept credit and debit card payments from consumers or facilitate other types of online payments, and our business and operating results could be adversely affected.

RISKS RELATING TO OUR COMMON STOCK

Our stock price may be volatile.

The market price of our Common Stock is likely to be highly volatile and could fluctuate widely in price in response to various potential factors, many of which will be beyond our control, including the following:

In addition, the securities markets have from time-to-time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our Common Stock.

As a public company, we will incur substantial expenses.

Upon declared effectiveness of this Registration Statement by the SEC, we will become subject to the information and reporting requirements of the U.S. securities laws. The U.S. securities laws require, among other things, review, audit, and public reporting of our financial results, business activities, and other matters. Recent SEC regulation, including regulation enacted as a result of the Sarbanes-Oxley Act of 2002, has also substantially increased the accounting, legal, and other costs related to becoming and remaining an SEC reporting company. If we do not have current information about our Company available to market makers, they will not be able to trade our stock. The public company costs of preparing and filing annual and quarterly reports, and other information with the SEC and furnishing audited reports to stockholders, will cause our expenses to be higher than they would be if we were privately-held. In addition, we are incurring substantial expenses in connection with the preparation of this Registration Statement. These increased costs may be material and may include the hiring of additional employees and/or the retention of additional advisors and professionals. Our failure to comply with the federal securities laws could result in private or governmental legal action against us and/or our Officers and Director, which could have a detrimental effect on our business and finances, the value of our stock, and the ability of stockholders to resell their stock.

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

The Financial Industry Regulatory Authority (“FINRA”) has adopted rules that relate to the application of the SEC’s penny stock rules in trading our securities and require that a broker/dealer have reasonable grounds for believing that the investment is suitable for that investor prior to recommending the investment. Prior to recommending speculative, low priced securities to their non-institutional investors, broker/dealers must make reasonable efforts to obtain information about the investor’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative, low priced securities will not be suitable for at least some investors. The FINRA requirements make it more difficult for broker/dealers to recommend that their customers buy our Common Stock, which may have the effect of reducing the level of trading activity and liquidity of our Common Stock. Further, many brokers charge higher transactional fees for penny stock transactions. As a result, fewer broker/dealers may be willing to make a market in our Common Stock, reducing a shareholder’s ability to resell shares of our Common Stock.

We may be exposed to potential risks resulting from new requirements under section 404 of the Sarbanes-Oxley Act of 2002.

In addition to the costs of compliance with having our shares listed on the OTCBB and/or OTC Markets, there are substantial penalties that could be imposed upon us if we fail to comply with all regulatory requirements. In particular, under Section 404 of the Sarbanes-Oxley Act of 2002, as a smaller reporting company, our management will be required to provide a report on the effectiveness of our internal controls over financial reporting, beginning with our second annual report, and we will not be required to provide an auditor’s attestation regarding such report. We have not assessed the effectiveness of our disclosure controls and procedures or our internal controls over financial reporting, and we expect to incur additional expenses and diversion of management’s time as a result of performing the system and process evaluation, testing and remediation required in order to comply with the management certification requirements. Additionally, investors should be aware of the risk that management may assess and render the Company’s internal controls ineffective, which could have a material adverse effect on the Company’s financial condition or result of operations.

Our Common Stock is currently deemed to be “penny stock”, which makes it more difficult for investors to sell their shares.

Our Common Stock is currently subject to the “penny stock” rules adopted under section 15(g) of the Exchange Act. The penny stock rules apply to companies whose common stock is not listed on the NASDAQ Stock Market or other national securities exchange and trades at less than $5.00 per share. These rules require, among other things, that brokers who trade penny stock to persons other than “established customers” complete certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances. Many brokers have decided not to trade penny stocks because of the requirements of the penny stock rules and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited. If the Company remains subject to the penny stock rules for any significant period, it could have an adverse effect on the market, if any, for our securities. If our securities are subject to the penny stock rules, investors will find it more difficult to dispose of our securities.

The elimination of monetary liability against our existing and future directors, officers and employees under Nevada law and the existence of indemnification rights our existing and future directors, officers and employees may result in substantial expenditures us and may discourage lawsuits against our directors, officers and employees.

Our Certificate of Incorporation contains specific provisions that eliminate the liability of directors for monetary damages to us and our stockholders. Further, we are prepared to give such indemnification to our existing and future directors and officers to the extent provided by Nevada law. We may also have contractual indemnification obligations under any employment agreements we may have with our officers and directors. The foregoing indemnification obligations could result in us incurring substantial expenditures to cover the cost of settlement or damage awards against directors and officers, which we may be unable to recoup. These provisions and resultant costs may also discourage us from bringing a lawsuit against existing and future directors and officers for breaches of their fiduciary duties and may similarly discourage the filing of derivative litigation by our stockholders against us existing and future directors and officers even though such actions, if successful, might otherwise benefit us and our stockholders.