Tucson Tamale Company

The Company’s business plans, the pro forma financial projections, and any related materials provided to potential investors contain, or incorporate by reference, statements that may be deemed to be “forward-looking” within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934.  Although the Company believes expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved.  Factors that may cause actual results to differ include general economic conditions, and other conditions that might affect operating expenses.  The Company’s actual results could differ materially from those set forth in the forward-looking statements.  Other risk factors that might cause such a difference are discussed above.

The Company may never receive a future equity financing or elect to convert the Securities upon such future financing. In addition, the Company may never undergo a liquidity event such as a sale of the Company or an IPO. If neither the conversion of the Securities nor a liquidity event occurs, the Purchasers could be left holding the Securities in perpetuity. The Securities have numerous transfer restrictions and will likely be highly illiquid, with no secondary market on which to sell them. The Securities are not equity interests, have no ownership rights, have no rights to the Company’s assets or profits and have no voting rights or ability to direct the Company or its actions.

The Company operates in a regulated environment in the United States by the federal, state and local governments. Additionally, the Company produces and distributes ingestible products and therefore is highly regulated by the FDA and USDA and other federal and state regulatory agencies.  The regulations adopted by these authorities govern many parts of the Company’s expected operations, including food processing, transportation of food, distributor relations and sales. The Company could be subject regulatory agency review and compliance, which could be very burdensome.

The Company’s business is also routinely subject to new or amended laws and regulations with which the Company must comply. While operating the business, the Company may be subject to claims that the Company has not complied with existing laws and regulations, which could result in claims, fines and/or penalties which could adversely impact the Company. There can be no assurance that the Company will not incur material costs or liability in connection with compliance with applicable regulatory requirements, or that such regulation will not interfere with the Company’s proposed business and any products the Company produces in the future.

The Company depends on its suppliers to provide safe and pure ingredients. In addition, the Company depends on its employees, distributors, and retailers to follow safe production and handling procedures for its products.  Problems and shortcomings in these areas could lead to unsafe product and product safety recalls which could damage the Company’s reputation and ability to compete in the marketplace.

Any defects in the products we manufacture, whether caused by a raw produce, cooked products, manufacturing process may result in returns, claims, delayed shipments to customers or reduced or cancelled customer orders. If these defects occur, we will incur additional costs and if in large quantity or too frequent, we may sustain loss of business, loss of reputation and may incur liability

The retailers we work with operate on semi annual or annual reviews and we are not guaranteed shelf space for an extended period of time. If unforeseen events happen that delay or cancel a review for a specific year or month, it could be up to a year before the next opportunity to present to that retailer again. If products do not perform well at a specific retailer, it can be hard to gain back shelf space if that shelf space is lost

An increase in the cost of raw materials or energy could affect the Company’s profitability. Commodity and other price changes may result in unexpected increases in the cost of raw materials and other packaging materials used by the Company. The Company may also be adversely affected by shortages of raw materials or packaging materials. In addition, energy cost increases could result in higher transportation, freight and other operating costs. The Company may not be able to increase its prices to offset these increased costs without suffering reduced volume, sales and operating profit, and this could have an adverse effect on your investment.

We operate in competitive markets and our future success will be largely dependent on our ability to provide quality products and services at competitive prices. The organic and natural products market is intensely competitive and sensitive to national and regional economic conditions. Demand for the products that we distribute may be adversely affected by consumer spending, which may be adversely impacted by economic conditions such as consumer confidence in future economic and business conditions, interest and tax rates, employment levels, salary and wage levels and weather patterns affecting food production. Although purchasing food is a necessity, a decrease in consumer spending in natural food space could cause our sales to decrease, which could have a material adverse effect on our financial condition and results of operations.