This annual report on Form 10-K includes
“forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities
Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which can be identified
by the use of forward-looking terminology such as “may,” “can,” “believe,” “expect,” “intend,”
“plan,” “seek,” “anticipate,” “estimate,” “will,” or “continue” or
the negative thereof or other variations thereon or comparable terminology. All statements other than statements of historical
fact included in this annual report on Form 10-K, including without limitation, the statements under “Item 1. Business”
and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and located elsewhere
herein regarding the financial position and liquidity of the Company (defined below) are forward-looking statements. Although the
Company believes the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such
expectations will prove to have been correct. Important factors with respect to any such forward-looking statements, including
certain risks and uncertainties that could cause actual results to differ materially from the Company’s expectations (“Cautionary
Statements”), are disclosed in this annual report on Form 10-K, including, without limitation, in conjunction with the forward-looking
statements and under the caption “Risk Factors.” In addition, important factors that could cause actual results to differ
materially from those in the forward-looking statements included herein include, but are not limited to, limited working capital,
limited access to capital, changes from anticipated levels of sales, future national or regional economic and competitive conditions,
changes in relationships with customers, difficulties in developing and marketing new products, marketing existing products, customer
acceptance of existing and new products, , technological change, dependence on key personnel, availability of key component parts,
vendors, contractors, product liability, casualty to or other disruption of the production facilities, delays and disruptions in
the shipment of the Company’s products, and the ability of the Company to meet its stated business goals. All subsequent written
and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their
entirety by the Cautionary Statements. We do not undertake to update any forward-looking statements.
We do not have an operative web site upon
which our periodic reports, proxy statements and Reports on Form 8-K appear. Our reports are available on the SEC’s EDGAR system
and may be viewed at http://www.sec.gov.
Our Business
TRICCAR, Inc. formerly known as Frontier
Oilfield Services, Inc. a Nevada corporation (and collectively with its subsidiaries, “we”, “our”, “TRICCAR”,
“Frontier”, “FOSI”, or the “Company”), was organized on March 24, 1995. The accompanying consolidated
financial statements include the accounts of the Company as well as:
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Frontier Acquisition I, Inc., and its direct and indirect subsidiaries Chico Coffman Tank Trucks, Inc. (“CTT”) and Coffman Disposal, LLC; and
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Frontier Income and Growth, LLC (FIG) and its subsidiaries Trinity Disposal & Trucking, LLC and Trinity Disposal Wells, LLC.
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Frontier operates in the oilfield service
industry and was involved in the disposal of saltwater and other oilfield fluids in Texas. Frontier owned eight disposal wells
in Texas. Six of these disposal wells are located in the Barnett Shale region in north central Texas and two of these wells are
located in east Texas near the Louisiana border. All wells have either been repossessed by the lessor or were transferred.
The significant quantity of wells in the
Barnett Shale and east Texas regions combined with the presence of salt water and other fluids in the production process creates
demand for disposal services such as those services provided by Frontier.
We had three customers that represented
approximately 95% and 81% of our revenue for each of the years ended December 31, 2019 and 2018, respectively.
Recent Developments
On December 12, 2019, Frontier Oilfield
Services, Inc. entered into a Reorganization and Stock Purchase Agreement (the “Agreement”) to change its corporate
domicile from Texas to Nevada, assume the name TRICCAR, Inc. (“TRICCAR”), and to acquire 100% of the issued and outstanding
equity of TRICCAR Holdings, Inc., a Nevada Corporation (“TRICCAR Holdings”).
Pursuant to the Agreement, effective on
February 28, 2020, the parties closed the Agreement.
TRICCAR acquired 100% of the issued and
outstanding equity of TRICCAR Holdings TRICCAR issued 80,000,000 shares of stock to acquire all the issued and outstanding equity
stock of TRICCAR Holdings while TRICCAR shareholders retained 20,000,000 shares of stock.
TRICCAR’s management team and Board
of Directors resigned and were replaced by TRICCAR Holdings management team and a new five member Board of Directors. At that time,
Frontier Oilfield Services ceased operations in the oilfield services industry.
The Company is engaged in the development
of bioceutical and pharmaceutical products designed to support those with common illnesses and diseases. Bioceuticals developed
and tested to date include formulae designed to support human and animal health through antivirals, calcium deficiency and bone
mass density loss; obesity and weight loss; diabetic nerve pain; blood performance; hypothyroidism; pain management; ADHD; mental
acuity; endocannabinoid support; trigeminal neuralgia; menopause relief; endocannabinoid support for seizures; cellular hydration;
persistent headache; cough; liver and kidney health; vision; and sleep. Pharmaceutical formulae include solutions that, pending
FDA approval, may be brought to market to treat or cure amyotrophic lateral sclerosis; diabetic nerve pain; appetite stimulation
for chemotherapy patients; and congenital toxoplasmosis.
As product development led to above average
success rates in creating formulae to support those with illnesses and diseases, the investors behind the Company decided to bring
these advancements to the public. On August 22, 2017, TRICCAR Holdings, Inc. was incorporated in the State of Nevada.
The Company is addressing human health
care market and animal science market with a current pipeline of products. Five of the Company’s human-use products also
have applications in animal science, primarily in the areas of performance, muscular recovery, joint care, and endocannabinoid
support and will be sold through an as yet-to-be formed animal science subsidiary.
Development and Operating Activities
Economic conditions in the oil and gas
industry are subject to volatility. The uncertain nature of these economic conditions combined with federal and state regulatory
uncertainty in the energy industry requires operators to be flexible and adept at adjusting operations and strategy to achieve
profitability. We intend to evaluate all conditions and risks affecting our operating activities and to respond to those conditions
by employing resources in areas we believe to have the most potential for success. Over the past year, significant declines in
the price of crude oil and natural gas have put economic pressure on oil producers, requiring them to seek expense reductions to
offset the decline in their revenues. The oil field service industry has been and will continue to be affected by the volatility
in oil and natural gas prices and may experience lower revenues as oil producers’ pressure oil field service providers for lower
cost service.
The Company’s business requires capital
to fund operations and growth. Management intends to conduct operations to generate sufficient capital for use in reduction of
the Company’s outstanding debt. In order to adequately fund operating activities, reduce current liabilities, and pay interest
and principal on the debt, we may need to secure additional capital from third parties or other debt or equity financing sources.
There can be no assurance that we will be able to enter into additional financing arrangements on terms that are acceptable. There
are also no assurances that we will be able to achieve profitability from our operations in the current market environment.
General Regulations
Both state and federal authorities regulate
the transportation and disposal of salt water, produced fluids and drilling fluids. The executive and legislative branches of government
at both the state and federal levels have periodically proposed the establishment of controls on salt water disposal, environmental
protection, as well as various other related programs affecting the salt water disposal business. If any further legislation is
promulgated related to the disposal of salt water, produced fluids or drilling fluids, such legislation could have a material effect
on our operations.
Federal Regulatory Actions
Federal legislation has also been introduced
which may have an effect on the use of hydraulic fracturing to increase oil and gas production, primarily in shale formations,
due to concerns related to potential contamination of drinking water supplies.
The U.S. Environmental Protection Agency
(“EPA”) has asserted federal regulatory authority pursuant to the federal Safe Drinking Water Act (“SDWA”)
over certain hydraulic fracturing activities involving the use of diesel. In addition, Congress has considered legislation to provide
for federal regulation generally of hydraulic fracturing in the United States under the SDWA and to require disclosure of the chemicals
used in the hydraulic fracturing process.
The Company’s operations are located in
areas where hydraulic fracturing is used as the primary method of establishing and developing oil and gas producing wells. These
areas are also where the majority of the Company’s revenues are generated as these producing wells also generate salt water and
other fluids as by-products of the oil and gas producing process. Any regulation inhibiting or prohibiting the use of hydraulic
fracturing may have a material adverse effect on our operations.
State Regulatory Controls
The State of Texas (where we operate) regulates
the operation and permitting associated with the transport and disposal of salt water and other produced fluids. Because we are
primarily engaged in salt water, produced fluids and drilling fluid disposal activities, our operations are subject to inspection
and permitting by authorities of the State of Texas. There have been recent regulatory and legislative proposals related to concerns
with potential water supply contamination potentially be caused by hydraulic fracturing operations.
Environmental Regulations
Our salt water and other fluids disposal
operations are subject to environmental protection regulations established by federal, state, and local agencies. We believe we
are in compliance with the applicable environmental regulations established by these agencies with jurisdiction over our operations.
Certain environmental regulations currently in effect could have a material adverse effect on our earnings or prospects for profitability
if we received a determination from one of these agencies that our operations are not in compliance. The Texas Legislature has
mandated a regulatory program for the management of hazardous wastes generated during crude oil and natural gas exploration and
production, gas processing, oil and gas waste reclamation, salt water disposal and transportation operations. The disposal of these
wastes, as governed by the Railroad Commission of Texas, is subject to the supervision of state of Texas authorities. Our disposal
operations are also subject to inspection and regulation by state and federal environmental authorities.
Business Risks
Our business volume has declined,
and our operations have lost a significant amount of money during the last two fiscal years.
Due to reductions in the volume of business
and the decision to no longer provide transportation services to our customers combined with significant debt, the Company’s operations
have not been profitable. We have made substantial changes in our operations including significant reductions in operating expenses
and employees, the closing of our salt water disposal operations in east Texas, and sales of transportation assets to raise cash
to reduce debt. There can be no assurance we will be successful in returning to profitability. If we are unable to return to profitability,
we may be required to seek the protection of the United States Bankruptcy Court and liquidate or reorganize.
Our independent auditors have issued
a report which raises the question about our ability to continue as a going concern. This report may impair our ability to raise
additional financing and adversely affect the price of our common stock.
The report of our independent auditors
contained in our financial statements for the year ended December 31, 2019 includes a paragraph that explains that we have been
experiencing financial and liquidity concerns. Per the report, these conditions raise substantial doubt about our ability to continue
as a going concern. Reports of independent auditors questioning a company’s ability to continue as a going concern are generally
viewed unfavorably by analysts and investors. This report, along with our recent financial results, may make it difficult for us
to raise additional debt or equity financing necessary to conduct our operations.
We have a significant amount of debt
and our operational losses may prevent the payment of our debt when due.
We currently have a significant amount
of debt outstanding which requires us to meet certain operating and financial covenants and on which we are required to pay interest
and repay principal. We have failed to meet the operational or financial covenants and have failed to pay interest and principal
on our debt in a timely matter and are therefore in breach of certain of our loan agreements. Our secured creditors could foreclose
on their collateral, which constitutes all of our assets. Due to our reduced business volume and operating losses, we have been
dependent upon two of our significant shareholders who have purchased our equity and provided funds to make our debt payments.
If we are unable to increase business volumes or otherwise return to profitability and we are unable to raise additional debt or
equity capital, we may default on our debt and our creditors could foreclose on our assets. We would then cease operating as a
going concern and you could potentially lose all of your investment in the Company.
Unanticipated obstacles to execution
of business plan.
Our proposed plan of operation and prospects
will depend largely upon our ability to successfully establish Company’s and products’ presence in a timely fashion, retain
and continue to hire skilled management, technical, marketing and other personnel; and attract and retain quality business partners,
medical clients, and consumer clients. There can be no assurance that we will be able to successfully implement our business plan
or develop or maintain future business relationships, or that unanticipated expenses, problems or technical difficulties which
would result in material delays in implementation will not occur.
The COVID-19 pandemic.
In December 2019, when the first indications
of SARS-CoV-2 were being reported from Wuhan, China, Management began implementing plans to incorporate work-from-home initiatives,
acquiring face masks and gloves for employees, and accumulating disinfectants such as alcohol and bleach. On January 27, 2020 the
Company formally put in place work-from-home efforts. On March 12, 2020, Nevada Governor Steve Sisolak implemented state-at-home
orders for businesses and employees which are still in effect. While our early identification of the risks of SARS-CoV-2 have protected
our employees with zero cases of COVID-19 infection to date, the global pandemic has delayed the Company’s plans to bring
11 of our products to market due to supplier and transportation limitations. Given the continued challenges of the pandemic, Management
is unable to provide a definitive date when our first bioceutical products will be made available for public purchase. The pandemic
has resulted in record unemployment in the United States which impacts consumers’ financial ability to purchase bioceuticals
and this retraction in employment and consumer confidence may have a negative short-term impact on the Company.
Competition
may adversely affect us.
The
market is highly competitive. There are high barriers to entry, yet we expect that competition will intensify in the future. We
believe that numerous factors, including price, client base, brand name, and general economic trends (particularly unfavorable
economic conditions adversely affecting consumer investment), will affect our ability to compete successfully. Our competitors
include many large companies that have substantially greater market presence and financial, technical, marketing and other resources
than we do. There can be no assurance that we will have the financial resources, technical expertise or marketing and support capabilities
to compete successfully. Increased competition could result in significant price competition, which in turn could result in lower
revenues, which could materially adversely affect our potential profitability.
Overreliance
on management.
We
depend on our senior management to work effectively as a team, to execute our business strategy and business plan, and to manage
employees and consultants. Our success will be dependent on the personal efforts of key personnel. Any of our officers or employees
can terminate his or her employment relationship at any time, and the loss of the services of such individuals could have a material
adverse effect on our business and prospects. The entire senior management team has worked together for only a very short period
of time, and may not work well together as a management team.
We
will incur losses and there is no guarantee that we will ever become profitable.
We
are a relatively newly formed company. There is no guarantee that we will ever become profitable. The costs for research, product
development, machinery adaptation to create our product candidates and cannabis products and/or technologies, along with marketing
and selling expenses, and the general and administrative expenses, will be principal causes of our costs and/or potential losses.
We may never become profitable and if we do not become profitable your investment could be harmed or lost completely.
We
may need additional capital in the future in order to continue our operations.
We
are undertaking a $15,000,000 PIPE financing, which we will use for operations and growth. However, if in the future we do not
turn profitable or generate cash from operations and additional capital is needed to support operations, economic and market conditions
may make it difficult or impossible to raise additional funds through debt or equity financings. If funds are not sufficient to
support operations, we may need to pursue a financing or reduce expenditures to meet our cash requirements. If we do obtain such
financing, we cannot assure that the amount or the terms of such financing will be as attractive as we may desire, and your equity
interest in the company may be diluted considerably. If we are unable to obtain such financing when needed, or if the amount of
such financing is not sufficient, it may be necessary for us to take significant cost saving measures or generate funding in ways
that may negatively affect our business in the future. To reduce expenses, we may be forced to make personnel reductions or curtail
or discontinue development programs. To generate funds, it may be necessary to monetize future royalty streams, sell intellectual
property, divest of technology platforms or liquidate assets. However, there is no assurance that, if required, we will be able
to generate sufficient funds or reduce spending to provide the required liquidity. Long term capital requirements will depend on
numerous factors, including, but not limited to, the status of collaborative arrangements, the progress of research and development
programs and the receipt of revenues from sales of products. Our ability to achieve and/or sustain profitable operations depends
on a number of factors, many of which are beyond our control, including:
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our ability to successfully
sell our products;
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Government legislation
changes;
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our ability to successfully
develop and obtain necessary national, federal, provincial, and/or state regulatory approval(s) for some of own products;
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the success of our
partners and distributors in selling our products;
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our ability to successfully
sell future products if we choose not to partner the product;
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our ability to manufacture,
or have manufactured, products efficiently, at the appropriate commercial scale, and with the required quality, and our ability
to source and purchase from third party hemp cultivators that supplies required to produce our products;
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timing of our partners’
development, regulatory and commercialization plans;
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the demand for our
products from current and future distribution and/or wholesale and/or retails partners;
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our ability to increase
and continue to outsource our raw materials and our manufacturing capacity to allow for new product
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the level of product
competition and of price competition;
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consumer acceptance
of our current and future products;
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our ability to obtain
reimbursement for our products from third-party payers;
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our ability to develop
additional applications and line extensions for our products;
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our ability to attract
the right personnel to execute our plans;
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our ability to develop,
maintain or acquire patent positions;
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general economic
conditions in the USA, the nutritional supplements, pharmaceutical and cannabis industries.
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We
intend to launch our first products in late 2020 and as a company, we have limited sales experience.
We
intend to begin marketing our products in late Fall 2020, and although we have highly qualified personnel with specialized expertise,
as a company, we have limited experience commercializing products. In order to commercialize the products business, we have to
build our sales, marketing, distribution, managerial and other nontechnical capabilities and make arrangements with third parties
to perform these services when needed. We have to hire sales representatives to fill and manage sales territories. To the extent
we are relying on third parties to commercialize our business, we may receive less revenues or incur more expenses than if we had
commercialized the products ourselves. In addition, we may have limited control over the sales efforts of any third parties involved
in our commercialization efforts. If we are unable to successfully implement our commercial plans and drive adoption by patients
and physicians of our products through our sales, marketing and commercialization efforts, or if our partners fail to successfully
commercialize our products, then we may not be able to generate sustainable revenues from product sales which will have a material
adverse effect on our business and future product opportunities. Similarly, we may not be successful in establishing the necessary
commercial infrastructure, including sales representatives, wholesale distributors, legal and regulatory affairs teams. The establishment
and development of commercialization capabilities to market our products has been and will continue to be expensive and time consuming.
As
we continue to develop these capabilities, we will have to compete with other companies to recruit, hire, train and retain sales
and marketing personnel. If we have underestimated the necessary sales and marketing capabilities or have not established the necessary
infrastructure to support successful commercialization, or if our efforts to do so take more time and expense than anticipated,
our ability to market and sell our products may be adversely affected.
United
States Government regulation and enforcement may adversely affect the implementation of products that contain extracts of cannabis
and/or cannabis adult use laws and regulations may negatively impact our revenues and profits.
Although
legislation in the United States continues to evolve, there are currently 44 states in the United States, plus the District of
Columbia that have laws and/or regulations that recognize in one form or another legitimate medical uses for cannabis and consumer
use of cannabis in connection with medical treatment. Eleven states have laws and/or regulations that allow cannabis use by adults
for nonmedical purposes, often referred to as “recreational use”. More states are considering permitting cannabis use.
Around the world there are countries that are enacting medical and/or adult use cannabis regulations almost weekly.
Conversely,
under the Controlled Substance Act (the “CSA”), the policy and regulations of the federal government and its agencies
is that cannabis containing THC (“CCTHC”) has no medical benefit and a range of activities including cultivation and
use of CCTHC for personal use is prohibited. Until Congress amends the CSA with respect to CCTHC or there is an outcome of the
current lawsuit against the unconstitutional application of CCTHC in the CSA, there is a risk that federal authorities may enforce
current federal law, and we may be deemed to be facilitating the selling or distribution of drug paraphernalia in violation of
federal law. Active enforcement of the current federal regulatory position on cannabis may thus indirectly and adversely affect
revenues and profits of the Company. The risk of strict enforcement of the CSA in light of congressional activity, judicial holdings
and stated federal policy remains uncertain. The DOJ (Department of Justice) has not historically devoted resources to prosecuting
individuals whose conduct is limited to possession of small amounts of marijuana for use on private property but relied on state
and local law enforcement to address marijuana activity. In the event the DOJ reverses stated policy and begins strict enforcement
of the CSA in states that have laws legalizing medical marijuana and recreational marijuana in small amounts, there may be a direct
and adverse impact to our revenue and profits.
TRICCAR
operates under the assumption that the strain of cannabis commonly referred to as marijuana is and will remain a federally illegal
drug for the foreseeable future. Our efforts to secure licenses from the Drug Enforcement Administration, which would allow the
Company to conduct marijuana research, may not be awarded, thus preventing us from pursing commercialization of eleven of our formulae.
We assume the current status of marijuana as an illegal substance at the federal level will not change in the foreseeable future
and these eleven formulae, which require FDA approval, may not receive such approval.
Federal
regulation and enforcement may adversely affect the implementation of adult use/medical cannabis laws and regulations may negatively
impact our revenues and profits. Even in states where marijuana use is state sanctioned, state laws are in conflict with the federal
Controlled Substances Act, which makes marijuana use and possession illegal on a national level. Both the Obama and Trump administrations
have effectively stated that it is not an efficient use of resources to direct law federal law enforcement agencies to prosecute
those lawfully abiding by state designated laws allowing the use and distribution of medical cannabis. In May 2017, Congress unveiled
their new budget bill and as such, lawmakers included a provision, known as the Rohrabacher Farr amendment, which allows states
to carry on with crafting their own medical marijuana policies without fear of federal intervention. This bill was passed and as
a result, no federal monies have been approved or appropriated to be used to enforce federal law in these cannabis program participating
states. Investors should understand that there is no guarantee that the Trump administration will not attempt to change this again
in the future. Additionally, any new administration that follows could change this policy and decide to enforce the federal laws
strongly. Any such change in the federal government’s enforcement of current federal laws could cause significant financial
damage to the Company and its shareholders. Though we anticipate 20% of our product sales revenue may be related to extracts of
industrial hemp and/or marijuana, we may be irreparably harmed by a change in enforcement by the federal or state governments.
In
the United States, variations in state and local regulation and enforcement in states that have legalized medical/adult use cannabis
that may restrict cannabis-related activities, including activities related to adult use/medical cannabis may negatively impact
our revenues and profits.
Although
we intend to operate within the letter of the law and work with the Drug Enforcement Administration and Food & Drug Administration
where required, certain of our products, such as products containing cannabidiol and intended for use in certain geographic areas,
may not be deemed legal for consumption in the United States. Individual state laws do not always conform to the federal standard
or to other states laws and courts have historically ruled that federal law trumps state law in regard to cannabis regulation.
Prospective customers may be deterred from doing business with a company with significant nationwide online presence because of
fears of federal or state enforcement of laws prohibiting possession and sale of medical or adult use cannabis.
Commercialization
of our products will require significant resources, and if we do not achieve the sales expected, we may lose the substantial investment
made in our products.
We
have made and are continuing to make substantial expenditures commercializing our products. We are devoting substantial resources
to building our manufacturing and extraction equipment for cannabis and other products as well as continued investment in commercial
supply inventories to support commercialization, including our inclusion of sale, operational and scientific managers. We have
and expect to continue to devote substantial resources to establish and maintain a marketing capability for our products. If we
are unsuccessful in our commercialization efforts and do not achieve the sales levels of our products that we expect, we may be
unable to recover the large investment we have made in research, development, manufacturing, inventory and marketing efforts, and
our business and financial condition could be materially adversely affected.
We
will rely on third parties to perform many necessary services for our products, including services related to the distribution,
invoicing, storage and transportation of our products, broadband, customer support, and cloud-based and site-based computer servers
and services.
We
intend to retain and partner with third-party service providers to perform a variety of functions related to the sale and distribution
of our products, key aspects of which are out of our direct control. If these third-party service providers fail to comply with
applicable laws and regulations, fail to meet expected deadlines, or otherwise do not carry out their contractual duties to us,
or encounter physical damage or natural disaster at their facilities, our ability to deliver product to meet commercial demand
would be significantly impaired. In addition, we may utilize third parties to perform various other services for us relating to
sample accountability and regulatory monitoring, including adverse event reporting, safety database management and other product
maintenance services. If the quality or accuracy of the data maintained by these service providers is insufficient, our ability
to continue to market our products could be jeopardized or we could be subject to regulatory sanctions. We do not currently have
the internal capacity to perform these important commercial functions, and we may not be able to maintain commercial arrangements
for these services on reasonable terms.
The
failure of any of our third-party distributors and/or retailers to market, distribute and sell our products as planned may result
in us not meeting revenue and profit targets.
If
one or more of these distributors and/or retailers fail to pursue the development or marketing of the products as planned, our
revenues and profits may not reach expectations or may decline. The success of the marketing organizations of our partners, as
well as the level of priority assigned to the marketing of the products by these entities, which may differ from our priorities,
may determine the success of the product sales. Competition in this market could also force us to reduce the prices of our products
below currently planned levels, which could adversely affect our revenues and future profitability.
We
will depend on a large number of customers for the majority of our revenue, and the loss of these customers could substantially
reduce our revenue and impact our liquidity.
The
loss of any customers or reduction in our business activities, whether due to recalls, changes in consumer tastes, economic changes,
or natural disasters such as floods, earthquakes or pandemics such as COVID-19 could cause our revenues to decrease significantly
and increase our continuing losses from operations. If our products are not successful and we cannot broaden our customer base,
we may face financial challenges. Additionally, if we are unable to negotiate favorable business terms with these customers in
the future, our revenues and gross profits may be insufficient to allow us to achieve and/or sustain profitability or continue
operations.
If
we cannot develop and market our products as rapidly or cost effectively as competitors, we may never be able to achieve profitable
operations.
Our
success depends, in part, upon maintaining a competitive position in the development of products.
If
we cannot maintain competitive products and technologies, our current and potential distribution partners may choose to adopt the
products of our competitors. We face competition with respect to our products from major nutraceutical and pharmaceutical companies
and smaller firms worldwide. Our competitors may develop products that are safer, more effective, have fewer side effects, or are
less costly than our products. Some of our competitors have significantly greater financial resources and expertise in research
and development, manufacturing, and marketing and distribution than we do.
If
we cannot access ingredients for our products due to environmental factors such as drought, hurricane, tornado, flooding, or other
natural disasters or acts of war, or the presence of pandemics, including novel coronavirus, we may not be able to manufacture
our products thus resulting in lack of sales.
Our
success depends, in part, upon maintaining a list of ingredient manufacturers from around the world, including China, for the manufacture
of products. If we cannot obtain ingredients due to environmental factors, natural disasters, acts of war, or pandemics, we may
not be able to manufacture enough products for sale in order to meet our financial goals.
Others
may bring infringement claims against us, which could be time consuming and expensive to defend.
While
we do not believe we infringe on any patents, third parties may claim that the manufacture, use or sale of our products, or use
of our technologies, infringe their patent rights. As with any litigation where claims may be asserted, we may have to seek licenses,
defend infringement actions or challenge the validity of those patents in the patent office or the courts. If these are not resolved
favorably, we may not be able to continue to develop and commercialize our product candidates. Even if we were able to obtain rights
to a third party’s intellectual property, these rights may be nonexclusive, thereby giving our competitors potential access
to the same intellectual property. If we are found liable for infringement or are not able to have these patents declared invalid
or unenforceable, we may be liable for significant monetary damages, encounter significant delays in bringing products to market
or be precluded from participating in the manufacture, use or sale of products or methods of drug delivery covered by patents of
others. Any litigation could be costly and time consuming and could divert the attention of our management and key personnel from
our business operations. We may not have identified, or be able to identify in the future, U.S. or foreign patents that pose a
risk of potential infringement claims. Ultimately, we may be unable to commercialize some of our product candidates as a result
of patent infringement claims, which could potentially harm our business.
If
we do not have adequate insurance for product liability, then we may be subject to significant expenses relating to these claims.
Our
business entails the risk of product liability.
Although
we have not experienced any material claims to date, any such claims could have a material adverse impact on our business. Insurance
coverage is expensive and may be difficult to obtain and may not be available in the future on acceptable terms, or at all. We
shall maintain product liability insurance and evaluate our insurance requirements on an ongoing basis. If we are subject to a
product liability claim, our product liability insurance may not reimburse us, or may not be sufficient to reimburse us, for any
expenses or losses that may have been suffered. A successful product liability claim against us, if not covered by, or if in excess
of our product liability insurance, may require us to make significant compensation payments, which would be reflected as expenses
on our statement of operations. Adverse claim experience for our products or insurance industry trends may make it difficult for
us to obtain product liability insurance or we may be forced to pay very high premiums, and there can be no assurance that insurance
coverage will continue to be available on commercially reasonable terms or at all. Additionally, if the coverage limits of the
product liability insurance are not adequate, a claim brought against us, whether covered by insurance or not, could have a material
adverse effect on our business, results of operations, financial condition and cash flows.
If
we make any acquisitions, we will incur a variety of costs and might never successfully integrate the acquired product or business
into ours.
We
might attempt to acquire products or businesses that we believe are a strategic complement to our business model.
We
might encounter operating difficulties and expenditures relating to integrating an acquired product or business. These acquisitions
might require significant management attention that would otherwise be available for ongoing development of our business. In addition,
we might never realize the anticipated benefits of any acquisition. We might also make dilutive issuances of equity securities,
incur debt or experience a decrease in cash available for our operations, or incur contingent liabilities and/or amortization expenses
relating to goodwill and other intangible assets, in connection with future acquisitions.
Our
business could be harmed if we fail to comply with regulatory requirements and, as a result, are subject to sanctions.
If
we, or companies with whom we are developing technologies or who are manufacturing products on our behalf, fail to comply with
applicable regulatory requirements, the companies, and we, may be subject to sanctions, including the following:
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product seizures,
quarantines or recalls;
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refusals to permit
products to be imported into or exported out of the applicable regulatory jurisdiction;
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total or partial
suspension of production;
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withdrawals of previously
approved marketing applications; or
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Risks
Related to our Common Stock
Future
conversions or exercises by holders of options could dilute our common stock.
Purchasers
of our common stock will experience dilution of their investment upon creation and exercise of the employee stock option program,
employee stock grants, and other stock options or issued common shares used to conduct the normal course of business, including
but not limited to, acquisitions, partnerships, property leases or purchases, and investments.
Sales
of our common stock by our officers and directors may lower the market price of our common stock.
Our
officers and directors shall beneficially own a significant aggregate of shares of our outstanding common stock. If our officers
and directors, or other stockholders, sell a substantial amount of our common stock, it could cause the market price of our common
stock to decrease.
We
do not expect to pay dividends in the foreseeable future.
We
intend to retain any earnings in the foreseeable future for our continued growth and, thus, do not expect to declare or pay any
cash dividends in the foreseeable future.
The
Company currently intends to retain its earnings for future growth and, therefore, does not anticipate declaring any dividends
in the foreseeable future. The Company would expect that determinations to pay dividends on its shares would be based primarily
upon the financial condition, results of operations, regulatory and business capital requirements, any restrictions contained in
financing or other agreements binding upon the Company, and other factors that the board of directors deems relevant.
Antitakeover
effects of certain certificate of incorporation and bylaw provisions could discourage, delay or prevent a change in control.
Our
certificate of incorporation and bylaws could discourage, delay or prevent persons from acquiring or attempting to acquire us.
Our certificate of incorporation authorizes our board of directors, without action of our stockholders, to designate and issue
preferred stock in one or more series, with such rights, preferences and privileges as the board of directors shall determine.
In addition, our bylaws grant our board of directors the authority to adopt, amend or repeal all or any of our bylaws, subject
to the power of the stockholders to change or repeal the bylaws. In addition, our bylaws limit who may call meetings of our stockholders.
Our
President and Chief Executive Officer and Chief Financial Officer, through their ownership of 27,500,000 shares of Class B common
stock represents 550,000,000 votes which, while providing additional protection against takeovers, could be viewed negatively due
to voting control held in the hands of two individuals. Our establishment of Class B shares with twenty-to-one voting rights was
designed to ensure the Company can operate according to our business plan without interference from persons or firms that may seek
a hostile takeover of the Company. The high concentration of voting shares in the hands of two key executives could result in business
decisions being made that are not supported by voting members of the Board of Directors which could lead to negative financial
results.
Dependence
upon Management and Key Personnel
The
Company is, and will be, heavily dependent on the skill, acumen and services of the management of the Company. The loss of the
services of any or all of these individuals or any other key individuals for any substantial length of time would materially and
adversely affect the Company’s results of operation and financial position. (See “Management”).
Reorganization
effects on GAAP
As
a result of the Reorganization Agreement and the change in business and operations of the Company, a discussion of the past financial
results of the Company, formally known as Frontier Oilfield Services, Inc., is not pertinent, and, under generally accepted accounting
principles in the United States the historical financial results of TRICCAR Holdings, Inc., the acquired company for accounting
purposes, prior to the Reorganization Agreement are considered the historical financial results of the Company.