Item
1A. Risk Factors.
An
investment in our Common Stock is highly speculative, involves a high degree of risk and should be considered only by those persons
who are able to afford a loss of their entire investment. In evaluating our business, prospective investors should carefully consider
the following risk factors in addition to the other information included in this Annual Report.
Risks
Relating to Our Business
We
have a limited operating history which may not serve as an adequate basis to judge our future prospects and results of operations.
Daniels
Corporate Advisory Company, Inc., which was incorporated on August 22, 2002, has a limited operating history upon which an evaluation
of our future performance and prospects can be made. We are an early-stage operating company with limited revenue history. Our
prospects must be considered in light of the risks, expenses, delays, problems and difficulties frequently encountered in the
establishment of a new business. As an early-stage operating company
,
Daniels Corporate Advisory faces risks and uncertainties
relating to its ability to successfully implement its business plan, which are described in more detail below.
Since
inception, as a subsidiary of INfe Human Resources, Inc., Daniels Corporate Advisory has always been an operating company, furnishing
its advisory to all phases of operations, finance and in the management of the staffing industry roll-up for its parent company
for which revenues were eliminated during consolidations.
Limited
revenues and ongoing losses.
Since
inception, Daniels Corporate Advisory has generated limited revenue. Daniels earnings potential would have been greater; however,
its focus had been in a financial advisory capacity to its parent company INfe Human Resources, which concentrated in Staffing
and Executive Placements Industries. Daniels was spun off to concentrate on its core Corporate Strategy consulting business. Daniels
has incurred consistent operating losses to date.
Our
business strategy is unproven and our prospects must be considered speculative.
Our
business strategy is unproven, and we may not be successful in addressing early stage challenges, such as establishing our position
in the market and developing effective marketing of our services. To implement our business plan, capital may be provided from
existing and possibly new consulting business revenue and through outside financing. We have not yet located additional financing
to implement our business plan in its entirety. Initial growth may be very limited and based solely on compensation from a small,
existing, consulting assignment with no guarantee of obtaining additional assignments over the next twelve months. The other potential
growth segment of our business plan, the acquisition of marketing rights for our services through the client networks of other
Business Services Companies, will only occur if we can obtain outside financing. Internally generated funds, alone, will not be
sufficient to implement this phase of our business plan.
Our
prospects must be considered speculative, considering the risks, expenses, and difficulties frequently encountered in the establishment
of a new business, specifically the risks inherent in developmental stage companies. We expect to continue to incur significant
operating and capital expenditures and, as a result, we expect significant net losses in the future. It is possible that we will
not be able to achieve profitable operations or, if profitability is achieved, that it will be maintained for any significant
period, or at all.
Our
auditors have stated we may not be able to stay in business.
Our
auditors have issued a going concern opinion, which means that there is doubt that we can continue as an ongoing business for
the next 12 months. Unless we can raise additional capital, we may not be able to achieve our objectives and may have to suspend
or cease operations. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
The
JOBS Act allows us to delay the adoption of new or revised accounting standards that have different effective dates for public
and private companies.
Since,
we have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1)
of the JOBS Act, this election allows us to delay the adoption of new or revised accounting standards that have different effective
dates for public and private companies until those standards apply to private companies. As a result of this election, our financial
statements may not be comparable to companies that comply with public company effective dates.
We
have different disclosure requirements than other public companies as an Emerging Growth Company (EGC).
Pursuant
to Section 107 of the Jumpstart Our Business Startups Act (the “JOBS Act”) which was signed into law on April 5, 2012,
we have elected to claim the exemption provided to emerging growth companies.
The
JOBS Act provides an “IPO on ramp” for “emerging growth companies” (a newly created category of issuer
under the Securities Act), which are issuers with annual gross revenues of less than $1 billion during the most recently completed
fiscal year. Emerging growth companies may take advantage of the scaled disclosure requirements that already have been available
to “smaller reporting companies” (defined by the Securities Act as companies having a public float of less than $75
million). The scaled disclosure includes a requirement to include only two, rather than three, years of audited financial statements
in the issuer’s initial public offering (“IPO”) registration statement and, during the “IPO on ramp”
period, the ability to omit the auditor’s attestation on internal control over financial reporting required by the Sarbanes-Oxley
Act of 2002.
Also
during the “IPO on ramp” period, emerging growth companies would not need to submit say-on-pay votes to their stockholders
(including say-on-pay frequency or golden parachute votes) and would face more limited executive compensation disclosure requirements
than larger companies.
We
may not be successful in the implementation of our business strategy or our business strategy may not be successful, either of
which will impede our development and growth.
Daniels
Corporate Advisory is engaged in the business of offering corporate financial consulting services and merchant banking services.
We
do not know whether we will be able to continue successfully implementing our business strategy or whether our business strategy
will ultimately be successful. In assessing our ability to meet these challenges, a potential investor should take into account
our lack of operating history, our management’s relative inexperience, the competitive conditions existing in our industry
and general economic conditions. Our growth is largely dependent on our ability to successfully implement our business strategy.
Our revenues may be adversely affected if we fail to implement our business strategy or if we divert resources to a business strategy
that ultimately proves unsuccessful.
Our
service offerings may not be accepted.
We
constantly seek to modify our service offerings to the marketplace. As is typically the case evolving service offerings, anticipation
of demand and market acceptance are subject to a high level of uncertainty. The success of our service offerings primarily depends
on the interest of our customers. In general, achieving market acceptance for our services will require substantial marketing
efforts and the expenditure of significant funds, which we may not have available, to create awareness and demand among customers.
We
have limited marketing experience, and have extremely limited financial, personnel and other resources to undertake extensive
marketing activities. Accordingly, we are uncertain as to the acceptance of any of our services or our ability to generate the
revenues necessary to remain in business.
Risks
associated with our ability to manage expansion as a result of acquisitions.
The
growth of our business depends in large part on our ability to manage expansion, control costs in our operations and consolidate
acquisitions into existing operations. This strategy will entail reviewing and potentially reorganizing acquired operations, corporate
infrastructure and system and financial controls. Unforeseen expenses, difficulties, complication and delays frequently encountered
in connection with the rapid expansion of operations could inhibit our growth and adversely affect our financial condition, results
of operations or cash flow.
Risks
associated with our inability to identify suitable acquisition candidates.
We
may be unable to identify acquisition candidates that would result in the most successful combinations or be unable to consummate
acquisitions on acceptable terms. The magnitude, timing and nature of future acquisitions will depend upon various factors, including
our success in establishing the corporate development “pilot programs” for consulting clients as a viable means of
growth acceleration, the availability of suitable acquisition candidates that have the client base suitable for cross-marketing
opportunities, the negotiation of acceptable terms, our financial capabilities, the availability of skilled employees to manage
acquired companies and general economic and business conditions.
We
may be unable to obtain financing for the acquisitions that are available to us.
We
are currently attempting to obtain financing for our corporate financial consulting and merchant banking services lines of business
as well as for acquisition opportunities which could result in material dilution to our existing stockholders. We may be unable
to obtain adequate financing for further development of our proposed services and for any acquisition for cross-marketing of services
purposes, or that, if available, such financing will be on favorable terms.
Our
future financial results are uncertain and our operating results may fluctuate, due to, among other things, consumer trends, seasonal
fluctuations and market demand.
As
a result of our short and sporadic operating history, it is difficult to accurately forecast our revenue. Further, we have little
historical financial data upon which to base planned operating expenses. We base our current and future expense levels on our
operating plans and estimates of future expenses. Our expenses are dependent in large part upon expenses associated with our proposed
marketing expenditures and related overhead expenses, and the costs of hiring and maintaining qualified personnel to carry out
our respective services. Sales and operating results are difficult to forecast because they will depend on the growth of our customer
base, changes in customer demands and consumer trends, the degree of utilization of our advertising services as well as the mix
of services and services sold. As a result, we may be unable to make accurate financial forecasts and adjust our spending in a
timely manner to compensate for any unexpected revenue shortfall. This inability could cause our net losses in a given quarter
to be greater than expected.
We
rely on the services of Arthur D. Viola.
Our
business relies on the efforts and talents of our sole officer and director, Arthur D. Viola. The loss of his services could adversely
affect the operations of our business, and could have a very negative impact on our ability to fulfill on our business plan.
If
we ever become a publicly quoted company, we may have difficulty in attracting and retaining management and outside independent
members to our board of directors as a result of their concerns relating to their increased personal exposure to lawsuits and
stockholder claims by virtue of holding these positions in a publicly quoted company.
The
directors and management of publicly quoted corporations are increasingly concerned with the extent of their personal exposure
to lawsuits and stockholder claims, as well as governmental and creditor claims which may be made against them, particularly in
view of recent changes in securities laws imposing additional duties, obligations and liabilities on management and directors.
Due to these perceived risks, directors and management are also becoming increasingly concerned with the availability of directors’
and officers’ liability insurance to pay on a timely basis the costs incurred in defending such claims. We currently do
carry limited directors’ and officers’ liability insurance. Directors’ and officers’ liability insurance
has recently become much more expensive and difficult to obtain. If we are unable to continue or provide directors’ and
officers’ liability insurance at affordable rates or at all, it may become increasingly more difficult to attract and retain
qualified outside directors to serve on our board of directors.
We
may lose potential independent board members and management candidates to other companies that have greater directors’ and
officers’ liability insurance to insure them from liability or to companies that have revenues or have received greater
funding to date which can offer more lucrative compensation packages. The fees of directors are also rising in response to their
increased duties, obligations and liabilities as well as increased exposure to such risks. As a company with limited operating
history and resources, we will have a more difficult time attracting and retaining management and outside independent directors
than a more established company due to these enhanced duties, obligations and liabilities.
We
may fail to establish and maintain strategic relationships.
We
believe that the establishment of strategic partnerships will greatly benefit the growth of our business, and we intend to seek
out and enter into strategic alliances. We may not be able to enter into these strategic partnerships on commercially reasonable
terms, or at all. Even if we enter into strategic alliances, our partners may not attract significant numbers of customers or
otherwise prove advantageous to our business. Our inability to enter into new distribution relationships or strategic alliances
could have a material and adverse effect on our business.
We
may incur significant costs to ensure compliance with U.S. corporate governance and accounting requirements.
We
may incur significant costs associated with our public company reporting requirements, costs associated with newly applicable
corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by
the SEC. We expect all of these applicable rules and regulations to increase our legal and financial compliance costs and to make
some activities more time-consuming and costly. We also expect that these applicable rules and regulations may make it more difficult
and more expensive for us to obtain director and officers liability insurance and we may be required to accept reduced policy
limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult
for us to attract and retain qualified individuals to serve on our board of directors or as executive officers. We are currently
evaluating and monitoring developments with respect to these newly applicable rules, and we cannot predict or estimate the amount
of additional costs we may incur or the timing of such costs.
Risks
Relating to Our Stock
Arthur
D. Viola owns 100,000 shares of our super voting preferred stock entitling him to the right to vote 50,000,000 shares of our common
stock in any election or event. This concentration of ownership could discourage or prevent a potential takeover of Daniels Corporate
Advisory that might otherwise result in your receiving a premium over the market price for your common stock.
Arthur
D. Viola owns 100,000 shares of our super voting preferred stock entitling him to the right to vote 50,000,000 shares of our common
stock in any election or event. This concentration of ownership and voting rights could discourage or prevent a potential takeover
of Daniels Corporate Advisory that might otherwise result in your receiving a premium over the market price for your common stock.
Mr.
Viola owns 2,454,500 shares of our common stock as well as 100,000 shares of the Daniels Corporate Advisory preferred stock which
has voting rights equal to 500 shares of the Daniels Corporate Advisory common stock for every one share of Daniels Corporate
Advisory preferred stock held, which equates to common stock voting rights of 52,454,500 shares of the Daniels Corporate Advisory
common stock which amount exceeds our current outstanding shares of common stock. The result of Mr. Viola’s the ownership
and voting rights to our common stock allows Mr. Viola to have voting control on all matters submitted to our stockholders for
approval and to be able to control our management and affairs, including extraordinary transactions such as mergers and other
changes of corporate control, and going private transactions. Additionally, this concentration of voting power could discourage
or prevent a potential takeover of Daniels Corporate Advisory that might otherwise result in your receiving a premium over the
market price for your common stock.
We
may need to raise additional capital. If we are unable to raise necessary additional capital, our business may fail or our operating
results and our stock price may be materially adversely affected.
Because
we are a newly operational company, we need to secure adequate funding. Selling additional stock, either privately or publicly,
would dilute the equity interests of our stockholders. If we borrow more money, we will have to pay interest and may also have
to agree to restrictions that limit our operating flexibility. If we are unable to obtain adequate financing, we may have to curtail
our operations and our business would fail.
Our
issuance of additional common stock in exchange for services or to repay debt would dilute your proportionate ownership and voting
rights and could have a negative impact on the market price of our common stock.
There
is no market for our shares. If we become a publicly quoted company, our common stock will most likely be thinly quoted, so you
may be unable to sell at or near bid prices or at all if you need to sell your shares to raise money or otherwise desire to liquidate
your shares.
Our
shares are not registered under the United States securities laws and are not quoted or quoted on any securities market. If our
shares become publicly traded or quoted for sale, our common stock will be sporadically or “thinly-quoted” on the
“Pink Sheets,” and possibly on the Over-the-Counter Bulletin Board, meaning that the number of persons interested
in purchasing our common stock at or near ask prices at any given time may be relatively small or nonexistent. This situation
will be attributable to a number of factors, including the fact that we are a small company which will be relatively unknown to
stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales
volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow
an unproven company such as ours or purchase or recommend the purchase of our shares until such time as we became more seasoned
and viable.
As
a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as
compared to a mature issuer which has a large and steady volume of trading activity that will generally support continuous sales
without an adverse effect on share price. It is possible that a broader or more active public trading market for our common stock
will not develop or be sustained, or that trading levels will not continue.
Pink
Quote, informally known as the “Pink Sheets,” is an electronic quotation system operated by Pink OTC Markets that
displays quotes from broker-dealers for many over-the-counter securities. These securities tend to be inactively quoted stocks,
including penny stocks and those with a narrow geographic interest. Market makers and other brokers can use Pink Quote to publish
their bid and ask quotation prices. The term Pink Sheets is also used to refer to a market tier within the current Pink Quote
system.
The
Pink Sheets is not a stock exchange. To be quoted in the Pink Sheets, companies do not need to fulfill any requirements (
e.g
.,
filing financial statements with the SEC). The companies quoted in the Pink Sheets tend to be closely held, extremely small, thinly
quoted, or bankrupt. Most do not meet the minimum U.S. listing requirements for trading on a stock exchange such as the New York
Stock Exchange. Many of these companies do not file periodic reports or audited financial statements with the SEC, making it very
difficult for investors to find reliable, unbiased information about those companies.
The
OTCBB is a quotation service for the Financial Industry Regulatory Authority (“FINRA”) market makers, and not an issuer
listing service or securities market. There are no listing requirements that must be met by an OTCBB issuer. Accordingly, there
are no financial requirements and there is no minimum bid price requirement.
OTCBB
companies are not considered to be “listed.” There are, however, certain requirements an issuer must meet in order
for its securities to be eligible for a market maker to enter a quotation on the OTCBB. In order for a security to be eligible
for quotation by a market maker on the OTCBB, the security must be registered with the Securities and Exchange Commission or other
federal regulatory authority that has proper jurisdiction and the issuer must be current in its required filings with such federal
authority.
The
stated listing requirements for the OTCBB are as follows:
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Fully
reporting with the Securities and Exchange Commission;
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Not
a black check or inactive company;
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Minimum
of 40 stockholders of record holding at least 100 shares each (note: this number is informal and has been moving up);
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Directors,
officers, and stockholders will be scrutinized for previous involvements in other OTCBB companies, in particular, blank check
companies; and
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Must
have a market maker submit a Rule 15c211 application to FINRA and agree to act as market maker for securities of company.
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Even
if our shares become publicly quoted, your shares may not be “free-trading.”
Investors
should understand that their shares of our common stock will not become “free-trading” merely because Daniels Corporate
Advisory is a publicly-quoted company. In order for the shares to become “free-trading,” the shares must be registered,
or entitled to an exemption from registration under applicable law. See “Shares Eligible for Future Sale.”
We
may need to raise additional capital. If we are unable to raise necessary additional capital, our business may fail or our operating
results and our stock price may be materially adversely affected.
Because
we are a newly operational company, we need to secure adequate funding. Selling additional stock, either privately or publicly,
would dilute the equity interests of our stockholders. If we borrow more money, we will have to pay interest and may also have
to agree to restrictions that limit our operating flexibility. If we are unable to obtain adequate financing, we may have to curtail
our operations and our business would fail.
Our
issuance of additional common stock in exchange for services or to repay debt would dilute your proportionate ownership and voting
rights and could have a negative impact on the market price of our common stock.
Our
sole director, Mr. Viola,
may generally issue shares of common stock to pay for debt or services, without further approval
by our stockholders based upon such factors as our board of directors may deem relevant at that time. It is likely that we will
issue additional securities to pay for services and reduce debt in the future. It is possible that we will issue additional shares
of common stock under circumstances we may deem appropriate at the time.
We
have never paid or declared any dividends on our common stock.
We
have never paid or declared any dividends on our common stock. Likewise, we do not anticipate paying, in the near future, dividends
or distributions on our common stock or our common stock to be sold in this offering. Any future dividends will be declared at
the discretion of our board of directors and will depend, among other things, on our earnings, our financial requirements for
future operations and growth, and other facts as we may then deem appropriate.
Our
directors have the right to authorize the issuance of shares of our preferred stock and additional shares of our common stock.
Our
sole director, Mr. Viola, within the limitations and restrictions contained in our articles of incorporation and without further
action by our stockholders, has the authority to issue shares of preferred stock from time to time in one or more series and to
fix the number of shares and the relative rights, conversion rights, voting rights, and terms of redemption, liquidation preferences
and any other preferences, special rights and qualifications of any such series. We have no intention of issuing shares of preferred
stock at the present time. Any issuance of shares of preferred stock could adversely affect the rights of holders of our common
stock.
Should
we issue additional shares of our common stock at a later time, each investor’s ownership interest in our stock would be
proportionally reduced. No investor will have any preemptive right to acquire additional shares of our common stock, or any of
our other securities.
If
our shares become publicly quoted and our shares are quoted on the Pink Sheets or the OTCBB, and we fail to remain current in
our reporting requirements, we could be removed from the OTCBB, which would limit the ability of broker-dealers to sell our securities
and the ability of stockholders to sell their securities in the secondary market.
Companies
whose shares are quoted for sale on the OTCBB and some whose shares are quoted for sale on the Pink Sheets must be reporting issuers
under Section 12 of the Exchange Act, and must be current in their reports under Section 13 of the Exchange Act, in order to maintain
price quotation privileges on the Pink Sheets and OTCBB. If our shares become publicly quoted and our shares are quoted for sale
on the OTCBB, and we fail to remain current in our reporting requirements, we could be removed from the OTCBB. As a result, the
market liquidity for our securities could be adversely affected by limiting the ability of broker-dealers to sell our securities
and the ability of stockholders to sell their securities in the secondary market.
If
our shares become publicly quoted, the market price for our common stock will most likely be particularly volatile given our status
as a relatively unknown company with a small and thinly quoted public float, limited operating history and lack of net revenues
which could lead to wide fluctuations in our share price. The price at which you purchase our common stock may not be indicative
of the price that will prevail in the trading market.
If
our shares become publicly quoted, the market for our common stock will most likely be characterized by significant price volatility
when compared to seasoned issuers, and we expect that our share price will be more volatile than a seasoned issuer for the indefinite
future. The volatility in our share price would be attributable to a number of factors. First, as noted above, the shares of our
common stock will likely be sporadically and/or thinly quoted. As a consequence of this lack of liquidity, the trading of relatively
small quantities of shares by our stockholders may disproportionately influence the price of those shares in either direction.
The price for our shares could, for example, decline precipitously in the event that a large number of shares of our common stock
are sold on the market without commensurate demand, as compared to a seasoned issuer which could better absorb those sales without
adverse impact on its share price.
Secondly,
we will most likely be a speculative or “risky” investment due to our dependence on an initial flow of corporate consulting
assignments and their implementation producing positive results to attract new clients. As a consequence of this enhanced risk,
more risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news or lack
of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case
with the stock of a seasoned issuer.
As
a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as
compared to a mature issuer which has a large and steady volume of trading activity that will generally support continuous sales
without an adverse effect on share price. It is possible that a broader or more active public trading market for our common stock
will not develop or be sustained, or that current trading levels will continue.
Shares
eligible for future sale by our current stockholders may adversely affect our stock price
.
The
sale of a significant number of shares of common stock at any particular time could be difficult to achieve at the market prices
prevailing immediately before such shares are offered. In addition, sales of substantial amounts of common stock, including shares
issued upon the exercise of outstanding options and warrants, under Securities and Exchange Commission Rule 144 or otherwise could
adversely affect the prevailing market price of our common stock and could impair our ability to raise capital at that time through
the sale of our securities.
Our
issuance of additional common stock in exchange for services or to repay debt would dilute your proportionate ownership and voting
rights and could have a negative impact on the market price of our common stock.
Our
sole director, Mr. Viola, may generally issue shares of common stock to pay for debt or services, without further approval by
our stockholders based upon such factors as Mr. Viola may deem relevant at that time. We have issued shares of our common stock
in payment for services in the past. It is likely that we will issue additional securities to pay for services and reduce debt
in the future. It is possible that we will issue additional shares of common stock under circumstances we may deem appropriate
at the time.
Anti-takeover
provisions may impede the acquisition of Daniels Corporate Advisory.
Certain
provisions of the Nevada Revised Statutes have anti-takeover effects and may inhibit a non-negotiated merger or other business
combination. These provisions are intended to encourage any person interested in acquiring Daniels Corporate Advisory to negotiate
with, and to obtain the approval of, our sole director, Mr. Viola, in connection with such a transaction. As a result, certain
of these provisions may discourage a future acquisition of Daniels Corporate Advisory, including an acquisition in which the stockholders
might otherwise receive a premium for their shares.
You
may be unable to sell your common stock at or above your purchase price, which may result in substantial losses to you.
The
following factors may add to the volatility in the price of our common stock: actual or anticipated variations in our quarterly
or annual operating results; government regulations, announcements of significant acquisitions, strategic partnerships or joint
ventures; our capital commitments; and additions or departures of our key personnel. Many of these factors are beyond our control
and may decrease the market price of our common stock, regardless of our operating performance. We cannot make any predictions
or projections as to what the prevailing market price for our common stock will be at any time, including as to whether our common
stock will sustain the current market price, or as to what effect the sale of shares or the availability of common stock for sale
at any time will have on the prevailing market price.
We
may need to raise additional capital. If we are unable to raise necessary additional capital, our business may fail or our operating
results and our stock price may be materially adversely affected.
We
may need to secure adequate funding. If we are unable to obtain adequate funding, we may not be able to successfully develop and
market our proposed products and our business will most likely fail. We do not have commitments for additional financing. To secure
additional financing, we may need to borrow money or sell more securities, which may reduce the value of our outstanding securities.
We may be unable to secure additional financing on favorable terms or at all.
Selling
additional stock, either privately or publicly, would dilute the equity interests of our stockholders. If we borrow more money,
we will have to pay interest and may also have to agree to restrictions that limit our operating flexibility. If we are unable
to obtain adequate financing, we may have to curtail business operations, which would have a material negative effect on operating
results and most likely result in a lower stock price.
If
our shares become publicly quoted, an active trading market in our shares may not be sustained.
If
our shares become publicly quoted, an active trading market in our shares may not be sustained. Factors such as those discussed
in this “Risk Factors” section may have a significant impact upon the market price of the securities to be distributed
by us. Many brokerage firms may not be willing to participate in transactions in a security if a low price develops in the trading
of the security. Even if a purchaser finds a broker willing to effect a transaction in our securities, the combination of brokerage
commissions, state transfer taxes, if any, and any other selling costs may exceed the selling price. Further, many lending institutions
will not permit the use of our securities as collateral for any loans.
If
our shares become publicly quoted, our common stock will most likely be subject to the “penny stock” rules of the
Securities and Exchange Commission, and the trading market in our common stock will be limited, which would make transactions
in our stock cumbersome and may reduce the investment value of our stock.
If
our shares become publicly quoted, our shares of common stock will most likely be “penny stocks” because they most
likely will not be registered on a national securities exchange or listed on an automated quotation system sponsored by a registered
national securities association, pursuant to Rule 3a51-1(a) under the Exchange Act. For any transaction involving a penny stock,
unless exempt, the rules require:
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That
a broker or dealer approve a person’s account for transactions in penny stocks; and
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That
the broker or dealer receives from the investor a written agreement to the transaction, setting forth the identity and quantity
of the penny stock to be purchased.
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The
broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Securities
and Exchange Commission relating to the penny stock market, which, in highlight form:
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Sets
forth the basis on which the broker or dealer made the suitability determination; and
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That
the broker or dealer received a signed, written agreement from the investor prior to the transaction.
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Generally,
brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make
it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.
Disclosure
also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the
commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the
rights and remedies available to an investor in cases of fraud in penny stock transactions. 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
market for penny stocks has suffered in recent years from patterns of fraud and abuse.
Stockholders
should be aware that, according to SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns
of fraud and abuse. Such patterns include:
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Control
of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;
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Manipulation
of prices through prearranged matching of purchases and sales and false and misleading press releases;
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Boiler
room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced salespersons;
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Excessive
and undisclosed bid-ask differential and markups by selling broker-dealers; and
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The
wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level,
along with the resulting inevitable collapse of those prices and with consequential investor losses.
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Our
management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in
a position to dictate the behavior of the market or of broker-dealers who participate in the market, if our shares become publicly
quoted, management will strive within the confines of practical limitations to prevent the described patterns from being established
with respect to our securities. The occurrence of these patterns or practices could increase the volatility of our share price.
Subscriptions
to purchase shares in this offering are irrevocable and will be immediately available for our use without any escrow.
The
execution of a subscription agreement by an investor constitutes a binding offer to purchase shares of our common stock. Once
an investor subscribes for our shares, the investor will not be able to revoke his subscription. As stated elsewhere herein, the
proceeds from the sale of our shares will not be subject to any escrow, but will be immediately available for our use. Consequently,
those investors who purchase shares earlier in the offering will be substantially more at risk than those investors who purchase
later in the offering, inasmuch as the later investors will have had the opportunity to assess the success of the offering before
making an investment. In no event will the subscribed amounts be returned to investors.
RISKS
RELATED TO OUR BUSINESS DURING SLOW ECONOMIC ACTIVITY
Our
business environment including potential real estate projects are running at an extremely slow economic pace and may continue
to do so for the foreseeable future. Our prospects must be considered within that framework and in light of the risks, expenses,
delays, problems and difficulties frequently encountered in the re-establishment of a business. As such, we face risks and uncertainties
relating to our ability to successfully implement our business plan.
OUR
AUDITORS ISSUED A GOING CONCERN OPINION WHICH MEANS WE MAY NOT BE ABLE TO ACHIEVE OUR OBJECTIVES AND MAY HAVE TO SUSPEND OR CEASE
OPERATIONS.
Our
auditors issued a going concern opinion for the fiscal years ended November 30, 2015 and November 30, 2014 This means that there
is substantial doubt that we can continue as an ongoing business without additional financing and/or generating profits. If we
cannot raise additional capital or generate sufficient revenues to operate profitably, we may have to suspend or cease operations.
If that occurs, you will lose your investment.
WE
MAY NEED TO RAISE ADDITIONAL FUNDS IN THE FUTURE FOR OUR OPERATIONS AND IF WE ARE UNABLE TO SECURE SUCH FINANCING, WE MAY NOT
BE ABLE TO SUPPORT OPERATIONS
.
Future
events, including the problems, delays, expenses and difficulties frequently encountered by growing companies, may lead to cost
and expense increases that could make our revenues insufficient to support our operations and business plans. We may seek additional
capital, including an offering of our equity securities, an offering of debt securities or obtaining financing through a bank
or other entity. We have not established a limit as to the amount of debt we may incur nor have we adopted a ratio of our equity
to a debt allowance. If we need to obtain additional financing, there is no assurance that financing will be available from any
source, that it will be available on terms acceptable to us, or that any future offering of securities will be successful.
W
e may seek additional financing which may result in the issuance of additional shares of our common stock and/or rights to acquire
additional shares of our common stock. The issuance of our common stock in connection with such financing may result in substantial
dilution to the existing holders of our common stock who do not have anti-dilution rights. Those additional issuances of our common
stock would result in a reduction of an existing holder’s percentage interest in Broadleaf Capital Partners, Inc.. Our business,
financial condition and results of operations could suffer adverse consequences if we are unable to obtain additional capital
when needed.
OUR
COMMON STOCK MAY BE AFFECTED BY LIMITED TRADING VOLUME AND MAY FLUCTUATE SIGNIFICANTLY.
There
has been a limited public market for our common stock, and an active trading market for our common stock may not develop. As a
result, this could reduce our shareholders’ ability to sell our common stock in short time periods, or possibly at all.
Our common stock has experienced, and is likely to experience in the future, significant price and volume fluctuations which could
reduce the market price of our common stock without regard to our operating performance. In addition, we believe that factors
such as quarterly fluctuations in our financial results and changes in the overall economy or the condition of the financial markets
could cause the price of our common stock to fluctuate substantially.
OUR
COMMON STOCK IS DEEMED A “PENNY STOCK,” WHICH MAY MAKE IT MORE DIFFICULT FOR INVESTORS TO RESELL THEIR SHARES DUE
TO SUITABILITY REQUIREMENTS.
The
Securities and Exchange Commission or SEC has adopted regulations which generally define “penny stock” to be an equity
security that has a market price of less than $5.00 per share, subject to specific exemptions. The market price of our common
stock on the Bulletin Board has been substantially less than $5.00 per share and therefore we are currently considered a “penny
stock” according to SEC rules. This designation requires any broker-dealer selling these securities to disclose certain
information concerning the transaction, obtain a written agreement from the purchaser and determine that the purchaser is reasonably
suitable to purchase the securities. These rules limit the ability of broker-dealers to solicit purchases of our common stock
and therefore reduce the liquidity of the public market for our shares.
NEVADA
LAW AND OUR CERTIFICATE OF INCORPORATION MAY PROTECT OUR DIRECTORS FROM CERTAIN TYPES OF LAWSUITS WHICH COULD RESULT IN LIABILITY
FOR INFE AND NEGATIVELY IMPACT OUR LIQUIDITY OR OPERATIONS.
Nevada
law provides that our officers and directors will not be liable to us or our stockholders for monetary damages for all but certain
types of conduct as officers and directors. Our Bylaws permit us broad indemnification powers to all persons against all damages
incurred in connection with our business to the fullest extent provided or allowed by law. These exculpation provisions may have
the effect of preventing stockholders from recovering damages against our officers and directors caused by their negligence, poor
judgment or other circumstances. The indemnification provisions may require us to use our limited assets to defend our officers
and directors against claims, including claims arising out of their negligence, poor judgment, or other circumstances.
SINCE
WE HAVE NOT PAID ANY DIVIDENDS ON OUR COMMON STOCK AND DO NOT INTEND TO DO SO IN THE FORESEEABLE FUTURE, A PURCHASER OF OUR COMMON
STOCK WILL ONLY REALIZE AN ECONOMIC GAIN ON HIS OR HER INVESTMENT FROM AN APPRECIATION, IF ANY, IN THE MARKET PRICE OF OUR COMMON
STOCK.
We
have never paid, and have no intentions in the foreseeable future to pay, any cash dividends on our common stock. Therefore an
investor in our common stock, in all likelihood, will only realize a profit on his investment if the market price of our common
stock increases in value.
IF
WE FAIL TO MAINTAIN AN EFFECTIVE SYSTEM OF INTERNAL CONTROLS, WE MAY NOT BE ABLE TO ACCURATELY REPORT OUR FINANCIAL RESULTS. AS
A RESULT, CURRENT AND POTENTIAL STOCKHOLDERS COULD LOSE CONFIDENCE IN OUR FINANCIAL REPORTING, WHICH COULD HARM OUR BUSINESS AND
THE TRADING PRICE OF OUR COMMON STOCK.
We
are subject to reporting obligations under the U.S. securities laws. The Securities and Exchange Commission as required by Section
404(a) of the Sarbanes-Oxley Act of 2002, adopted rules requiring every public company to include a management report on such
company’s internal controls over financial reporting in its annual report, which contains management’s assessment
of the effectiveness of the company’s internal controls over financial reporting. Since our election to be treated as an
emerging growth company we are exempt from Section 404(b) which is an independent registered public accounting firm attesting
to and reporting on management’s assessment of the effectiveness of the company’s internal controls over financial
reporting. These applicable requirements may first apply to our annual report on Form 10-KSB for the fiscal year ending December
31, 2002. Our management may conclude that our internal controls over our financial reporting are not effective. Moreover, even
if our management concludes that our internal controls over financial reporting are effective, our independent registered public
accounting firm may still decline to attest to our management’s assessment or may issue a report that is qualified if they
are not satisfied with our controls or the level at which our controls are documented, designed, operated or reviewed, or if it
interprets the relevant requirements differently from us.
Our
reporting obligations as a public company will place a significant strain on our management, operational and financial resources
and systems for the foreseeable future. If we fail to timely achieve and maintain the adequacy of our internal controls, we may
not be able to conclude that we have effective internal controls over financial reporting at a reasonable assurance level. Moreover,
effective internal controls over financial reporting are necessary for us to produce reliable financial reports and are important
to help prevent fraud. As a result, our failure to achieve and maintain effective internal controls over financial reporting could
result in the loss of investor confidence in the reliability of our financial statements, which in turn could harm our business
and negatively impact the trading price of our common stock. Furthermore, we anticipate that we will incur considerable costs
and use significant management time and other resources in an effort to comply with Section 404(a) and other requirements of the
Sarbanes-Oxley Act. As of the date of this prospectus we do not have an estimate of the costs to the company of compliance with
the Act.
We
are preparing for compliance with Section 404(a) by strengthening, assessing and testing our system of internal controls to provide
the basis for our report. The process of strengthening our internal controls and complying with Section 404(a) is expensive and
time consuming, and requires significant management attention. We cannot be certain that these measures will ensure that we will
maintain adequate controls over our financial processes and reporting in the future. Furthermore, as we rapidly grow our business,
our internal controls will become more complex and will require significantly more resources to ensure our internal controls overall
remain effective. Failure to implement required new or improved controls, or difficulties encountered in their implementation,
could harm our operating results or cause us to fail to meet our reporting obligations. If we or our auditors discover a material
weakness, the disclosure of that fact, even if quickly remedied, could reduce the market’s confidence in our financial statements
and harm our stock price.
INVESTORS
IN OUR SECURITIES MAY SUFFER DILUTION.
The
issuance of shares of our common stock, or shares of our common stock underlying warrants, options or preferred stock will dilute
the equity interest of existing stockholders who do not have anti-dilution rights and could have a significant adverse effect
on the market price of our common stock. The sale of our common stock acquired at a discount could have a negative impact on the
market price of our common stock and could increase the volatility in the market price of our common stock. We may seek additional
financing which may result in the issuance of additional shares of our common stock and/or rights to acquire additional shares
of our common stock. The issuance of our common stock in connection with such financing may result in substantial dilution to
the existing holders of our common stock who do not have anti-dilution rights. Those additional issuances of our common stock
would result in a reduction of an existing holder’s percentage interest in Daniels Corporate Advisory, Inc.. Our business,
financial condition and results of operations could suffer adverse consequences if we are unable to obtain additional capital
when needed.