The Company has only a limited history upon which an evaluation of its prospects and future performance can be made. The Company’s proposed operations are subject to all business risks associated with new enterprises. The likelihood of the Company’s success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the expansion of a business, operation in a competitive industry, and the continued development of advertising, promotions and a corresponding customer base. There is a possibility that the Company could sustain losses in the future. There can be no assurances that The Company will even operate profitably.
In the early stages of development the Company’s business will be significantly dependent on the Company’s management team. The loss of any of these individuals could have a material adverse effect on the Company.
CUSTOMER BASE & MARKET ACCEPTANCE
While the Company believes it can further develop the existing customer base, and develop a new customer base through the marketing and promotion of the website and model units, the inability of the Company to further develop such a customer base could have a material adverse effect on the Company. Although the Company believes that its real estate management project will offer advantages over competitive companies and locations, no assurance can be given that The Company’s product will attain a degree of market acceptance on a sustained basis or that it will generate revenues sufficient for sustained profitable operations.
While some real estate managment opportunities do exist, Management believes that The Company is demographically well positioned, top quality and unique in nature. The expertise of Management combined with the innovative nature of its marketing approach, set the Company apart from its competitors. However, there is the possibility that new competitors could seize upon The Company's business model and produce competing products or services with similar focus. Likewise, these new competitors could be better capitalized than The Company which could give them a significant advantage. There is the possibility that the competitors could capture significant market share of The Company's intended market.
The Company’s operating results may fluctuate significantly from period to period as a result of a variety of factors, including purchasing patterns of customers, competitive pricing, terms on debt service and principal reduction payments, and general economic conditions. There is no assurance that the Company will be successful in marketing its product, or that the revenues from the sale of this product will be significant. Consequently, the Company’s revenues may vary by quarter, and the Company’s operating results may experience fluctuations.
RISKS OF BORROWING
If the Company incurs indebtedness, a portion of its cash flow shall be dedicated to the payment of principal and interest on such indebtedness. Typical loan agreements also might contain restrictive covenants, which may impair the Company’s operating flexibility. Such loan agreements would also provide for default under certain circumstances, such as failure to meet certain financial covenants. A default under a loan agreement could result in the loan becoming immediately due and payable and, if unpaid, a judgment in favor of such lender which would be senior to the rights of members of the Company. A judgment creditor would have the right to foreclose on any of the Company’s assets resulting in a material adverse effect on the Company’s business, operating results or financial condition.
The Company’s business plans may change significantly. Many of the Company’s potential business endeavors are capital intensive and may be subject to statutory or regulatory requirements. Management believes that the Company’s chosen activities and strategies are achievable in light of current economic and legal conditions with the skills, background, and knowledge of the Company’s principals and advisors. Management reserves the right to make significant modifications to the Company’s stated strategies depending on future events.
PROPRIETARY RIGHTS & TRADE SECRETS
In certain cases, the Company may rely on trade secrets to protect intellectual property, proprietary technology and processes, which the Company has acquired, developed or may develop in the future. There can be no assurances that secrecy obligations will be honored or that others will not independently develop similar or superior products or technology. The protection of intellectual property and/or proprietary technology through claims of trade secret status has been the subject of increasing claims and litigation by various companies both in order to protect proprietary rights as well as for competitive reasons even where proprietary claims are unsubstantiated. The prosecution of proprietary claims or the defense of such claims is costly and uncertain given the uncertainty and rapid development of the principles of law pertaining to this area. The Company, in common with other firms, may also be subject to claims by other parties with regard to the use of intellectual property, technology information and data, which may be deemed proprietary to others.
The financial success of the Company may be sensitive to adverse changes in general economic conditions in the United States, such as recession, inflation, unemployment, and interest rates. Such changing conditions could reduce demand in the marketplace for the Company’s products. Management believes that the impending growth of the market, mainstream market acceptance of The Company will insulate the Company from excessive reduced demand. Nevertheless, The Company has no control over these changes.
Management has prepared projections regarding The Company’s anticipated financial performance. The Company’s projections are hypothetical and based upon a presumed financial performance of the Company, the addition of a sophisticated and well funded marketing plan, and other factors influencing the business of The Company. The projections are based on Management’s best estimate of the probable results of operations of the Company, based on present circumstances, and have not been reviewed by The Company’s yet to be determined independent accountants. These projections are based on several assumptions, set forth therein, which Management believes are reasonable. Some assumptions upon which the projections are based, however, invariably will not materialize due to the inevitable occurrence of unanticipated events and circumstances beyond Management’s control. Therefore, actual results of operations will vary from the projections, and such variances may be material. Assumptions regarding future changes in sales and revenues are necessarily speculative in nature. In addition, projections do not and cannot take into account such factors as general economic conditions, unforeseen regulatory changes, the entry into The Company’s market of additional competitors, the terms and conditions of future capitalization, and other risks inherent to the Company’s business. While Management believes that the projections accurately reflect possible future results of The Company’s operations, those results cannot be guaranteed.