Item 1. Business.
Overview
Daniels Corporate
Advisory has established a permanent capital and talent base upon which to provide the corporate strategy consulting services noted
below. A variety of methods to support this two-pronged effort include the issuance of additional shares of the parent and the
subsidiary housing the incubating client. This can be achieved through private placement and/or issuance of Convertible Preferred
Stock and loans from senior officers and other direct management or investment participants. A sustained flow of Strategy Assignments
is expected through the networking of senior executives and board and advisory board additions. This may include the purchase of
rights to provide financial strategy packages to clients of other financial/business services companies. While rights agreements
of this nature are not typical, senior management, drawing on personal contacts and those of credentialed members of its Corporate
Strategy Advisory Board believes that offering to provide a very select cost-effective service that with our permanent in-house
professionals will augment other financial services already being offered by the financial/business services firm entering into
the rights agreement is an acceptable additional option for accelerating the growth of Daniels. However, there is no assurance
that has time goes by a financial/business service business client may decide to enter our business and there is no provision in
our agreement to prevent that from happening. However, our senior management believes that our success with the ultimate client,
- the client of a financial/business services firm contracting with us for our strategy services, will determine whether Daniels
Corporate Advisory retains the client or not.
The services incorporated
into corporate strategy advisory and implementation to help formulate a path for the acceleration of corporate development (growth)
for the ultimate (end user) client include market analysis, deal negotiation and structure, determination of optimum finance alternatives,
the creation of joint-ventures, marketing agreements, new product/creation additions and acquisitions. Daniels has a loosely organized
cadre of highly-qualified, independent contractors/consultants available to perform the necessary services to achieve the optimum
corporate strategy for a client.
Daniels is developing
direct methods for obtaining clients, namely creating brand advertising in industry niches of interest and subsequent referral
by a stockholder or partner. Name brand recognition will be refined and expanded with bigger budget dollars after one or two successful
corporate strategy assignments have been completed.
The “specialty” services
that have been perfected through success will be publicizing on our and the client’s website for worldwide recognition.
As our presence
in the market place becomes more visible, through publication on client websites of our successes in our initial corporate strategy
consulting assignments added financing options with more competitive firms are expected to materialize for the benefit of all our
clients. Capital companies and high-net worth (accredited) individuals may contact us to see if they may participate directly in
subsequent assignments.
Recent Business Developments
The Company is operating
through the corporate strategy segment of its business. It is attempting to build its own critical mass by creation of start-up
subsidiaries it believes have promise/potential. The stated goal is for the parent (DCAC) company to consolidate the critical mass
of subsidiaries to meet the financial requirements for up-listing to a major Stock Exchange.
Senior management
and our advisory board are developing a corporate strategy platform for a specific client.
The Company conducts
on-going networking and business development in corporate strategy through its chairman, on a chairman to chairman basis, through
the networks of its Advisory Board Members and its expanded, independent contractor consulting team. A full range of disciplines
are offered to the mini-cap public and private company through personalized relationship networking to keep initial marketing costs
at a minimum. Disciplines being offered are operational strategies, market-planning, senior oversight management and financial
alternatives consulting on optimum paths for the client to take. This could include but not be limited to external growth alternatives
requiring advisory on M & A, levered transactions, capital structure, bridge loans, and equity financing.
Business Strategy - Current Operational
Strategy & Current Client Projects:
Daniels creates
and implements corporate strategy alternatives for the mini-cap public or private company client. The addition of new business
opportunities and the location of professional talent for implementation is anticipated through the full-time efforts of our senior
management. These efforts are to be expanded in the US and in Foreign capitals by an expanding advisory board and through the networks
of independent consultants. Principals of the respective client company will open their networks to augment professional access
for specialties the Daniels corporate strategy consultants believe are needed in a jointly-venture, (jointly-controlled) undertaking
created for the client’s optimum growth.
Daniels may provide
the client with multiple corporate strategies /opportunities including joint-ventures, marketing opportunity agreements and/or
potential acquisitions structured in LBO format. One or a combination of these strategies would allow the client to enter new market
niches or expand further into existing ones.
The Goal
:
Within twenty-four months from commencement of a Corporate Strategy Assignment, financial results, aided by all participating players,
should be forthcoming and recorded in SEC Filings. At the same time, a senior management team and Board expanded with highly-credible
interim (or permanent) professionals (directors) will be provided in order to successfully navigate the listing process of a major
Stock Exchange. While Daniels believes this process should be successful in the above-noted, time period, there is some uncertainty
in the process which is dependent upon any past issues the listing committee of a specific exchange may deem necessary to be addressed
prior to uplifting.
A similar effort
will be provided to tailor an optimum growth program for the private company client, whether it chooses to remain private or to
become a public company through alternative merger opportunities.
OPTIMUM GROWTH STRATEGY:
Twelve to Twenty-Four Month Horizons
for Daniels’ Objectives:
Daniels’ believes
that the validity of its corporate strategy model will be proven further through the success of several of its client/incubation/subsidiary
deals. The Company plans to use its publicly traded common stock, in a variety of securities packages, including anti-dilutive
Convertible Preferred Stock, to finance a subsidiary start-up, initially for generic sales/profits growth. Subsequent growth options
noted above will be applied as external growth becomes a secondary goal. This method of two stage (generic and then external) growth
is designed to leave existing client management with commanding equity and operating control positions. Eventually, an optimum
exit strategy will be developed for the subsidiary, one that returns a significant return on corporate (parent) capital. The choices
of optimum exit strategies could include bringing a subsidiary public, directly, or merging it with a public company operating
in one of the more profitable niches of the specific market designated for expansion. The same corporate strategy model can/will
be applied to any independent mini-cap public client.
We believe our business
model to be scalable. Based upon the potential success of the initial corporate strategy consulting assignments creating our uplifting
to a major Stock Exchange, Daniels may entertain the creation of a franchising plan for key US Cities and Foreign Capitals or Finance
Centers.
Sales and Marketing
Daniels senior management
will concentrate its efforts to expand its corporate strategy and financial advisory services and related specialties in the mini-cap
segment of the private and public markets, where Daniels believes it will be effective. Marketing efforts will increase through
social and print media efforts and will be in addition to those methods already mentioned herein.
Daniels objective
is to create and help manage implementation of accelerated expansion strategies and in so doing, aid in the creation of financing
alternatives to accomplish client goals.
Competition
Existing and new
competitors will continue to improve their services and introduce new services with competitive price and performance characteristics.
In periods of reduced
demand for our services, we can either choose to maintain market share by reducing our prices to meet competition or maintain prices
and choose only those assignments with new clients, that have pressing goals to be met, that offer Daniels optimum potential for
profits and growth.
The “collective”
corporate financial services, including merchant banking/private equity, are very competitive and fragmented in the Company’s
market niche. There are limited barriers to entry and new competitors frequently enter the market. A significant number of our
competitors possess substantially greater resources. We are and will continue to offer equity compensation to our team of Advisory
Board Members, and independent strategy consultants in order to keep a stable, cohesive team of professionals, which is necessary
and key to the creation of operating and capital solutions in a timely fashion.
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 through 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 or subsidiary/spin-off 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 or subsidiary/spin-offs 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.
Our short and
sporadic operating history makes it 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 have a
very negative impact on our ability to fulfill on our business plan.
We may have difficulty in
attracting and retaining management and outside independent members to our board of directors because 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 vote 66 2/3 percent of the common stock shares in any common stock vote. This concentration
of ownership could discourage or prevent a potential takeover of Daniels Corporate Advisory that might otherwise result in our
stockholders receiving a premium over the market price for their common stock.
Mr. Viola owns 31,185,000
shares of our common stock as well as 100,000 shares of the Daniels Corporate Advisory Super-Voting preferred stock which has voting
rights equal to 66 2/3 percent of the votes in any Common Stock Election. Mr. Viola’s ownership and voting rights in 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 our stockholders receiving a premium over the market price for their
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 our stockholders’ proportionate ownership and voting
rights and could have a negative impact on the market price of our common stock.
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 blank 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,
they 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 our stockholders’ 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, 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 currently have no intention of issuing additional shares of preferred
stock. Any additional 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, 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, 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 stockholders 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 several 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 if 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. Because 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.
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.
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.
Our stockholders may be unable to sell their
common stock at or above their purchase price, which may result in substantial losses.
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 be negatively impacted 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 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. 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.
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.
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. 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.
NEVADA LAW AND OUR CERTIFICATE OF
INCORPORATION MAY PROTECT OUR DIRECTORS FROM CERTAIN TYPES OF LAWSUITS WHICH COULD RESULT IN LIABILITY FOR DANIELS 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.
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. 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.