Risks Specific to Xtractmor
1. We have broad Discretion in the Use of the Net Proceeds From This Offering, and We May Fail to Use These Proceeds Effectively.The net proceeds from this offering will be used for payment of various outstanding payment obligations and other operating expenses of the Company, and thereafter for working capital and for other general corporate purposes. Our management will have broad discretion in the application of the net proceeds from this offeringand could spend the proceeds in ways that do not necessarily improve our results of operations or enhance the value of your investment. The failure of our management. to apply these funds effectively could result in financial losses.
2. We May Need Additional Financing to Meet Our Future Capital Requirements or Expansion Needs.We may require significant additional funds, either through additional equity or debt financings or collaborative agreements or from other sources, to implement our proposed or future business plans to expand facilities, hire additional personnel, or engage in product development or purchase additional licensing rights for other market applications, or engage personnel necessary to conduct those activities and to manage the Company successfully.In the event we are unable to obtain additional financing, we maybe unable to implement our business plan. We must overcome these and other business risks to be successful. All of our efforts may not be successful. We may never be profitable. Therefore, you could lose your entireinvestment.
3. Risk SummaryIn summary, this investment represents a very high risk investment in a start up company with no revenues, no customers (just prospective customers) and no history of operations and only limited testing of the XtractMor™ Xtractor in the target industries. While management believes that the XtractMor™ Xtractor has been adequately field tested, and has been sufficiently proven to perform in the target industries, how the technology will be received and will perform in full time commercial industrial applications remains to be seen. There is therefore NO guarantee that the investment will be successful. All investors should be financially able to withstand the loss of their entire investment.
4. Please note that Janice Dunn and Wilburn Kelly Hudson, Jr, are not currently full time with the company. As such, it is likely that the company will not make the same progress as it would if that were not the case.
Low Hop Prices Lead to a Diminished Value Proposition for Our Technology. Hop prices are high based upon historically high demand for craft beer and hoppy beers such as IPA's. If consumer beer tastes were to drastically change, craft beer fall out of favor or hop cultivation drastically increase the value of our product in the market would decrease.
6. Increased Competition From Other Equipment or Patent Infringement. Although our technology is patented, it may be possible for people to design around our patent and/or develop a completely different process to accomplish the same goal.
7. In some areas of the world our patents may also be infringed upon with enforcement difficult and costly.Increased Adoption of Hop Extracts. Rather than adding hop pellets or cones to develop flavors, brewers also have the option to add liquid hop extracts. This far only a very small minority of breweries use liquid extracts with the vast majority preferring to add the "traditional" hop pellets.
8. If Hop liquid extracts or powders were to dramatically increase in popularity our potential market would decrease.The Craft Brewery Trend Beginning Internationally Stalls Curtailing Our Long Term Growth. Although the craft beer trend in countries such as France, Italy and the U.K. appears to be mirroring the U.S. trend it is possible economic events or changes in consumer tastes could cause it to mute and not reach the same levels. Projections for long term growth would then need to be met with more increased market share and less dependence on market growth.