Nasdaq Noncompliance
As previously disclosed, on
November 18, 2021 the Company received a notice from the Listing Qualifications Department of the Nasdaq Stock Market LLC (“Nasdaq”),
stating that the Company is not in compliance with the Nasdaq Listing Rule 5250(c)(1) (the “Rule”), which requires listed
companies to timely file all required periodic financial reports with the Securities and Exchange Commission (the “SEC”),
because the Company did not timely file its Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 (the “Third Quarter
Form 10-Q”). On January 17, 2022, the Company submitted to Nasdaq for review a plan to regain compliance with the Rule, which the
Company subsequently updated on February 22, 2022 (the “Compliance Plan”).
On March 1, 2022, Nasdaq notified
the Company that Nasdaq has determined to grant an exception to enable the Company to regain compliance with the Rule. Pursuant to such
exception, the Company must file with the SEC, on or before May 16, 2022, the Third Quarter Form 10-Q and all other filings with the SEC
as required by the Rule.
Following the completion of
the audit and the preparation of the restatements of the Prior Period Financial Statements, the Company intends to file the Third Quarter
Form 10-Q as soon as practicable. While the Company believes that it will be able to file with the SEC by May 16, 2022 the Third Quarter
Form 10-Q, the restatements of the Prior Period Financial Statements on the applicable forms, and all other filings which the Company
is required to file with the SEC, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and the
Quarterly Report on Form 10-Q for the quarter ending March 31, 2022, no assurance is given that all such filings will be made by May 16,
2022, or that the Company will otherwise regain compliance with the Rule or maintain compliance with the other continued listing requirements
of the Nasdaq Listing Rules.
Nasdaq has notified the Company
that, if it does not file with the SEC by May 16, 2022 the Third Quarter Form 10-Q and all other filings as required by the Rule, then
Nasdaq will provide written notification that the Company’s securities will be delisted. At that time, the Company may appeal the
delisting determination to a Nasdaq Hearings Panel.
The Company expects that it
will need to submit to Nasdaq an update to the Compliance Plan to address the matters described in this Current Report on Form 8-K and
intends on doing so. If Nasdaq does not accept such update, then the Company expects that Nasdaq will provide written notification that
the Company’s securities will be delisted.
Liquidity
Since its inception, the Company
has generated only nominal revenue from customers and business activity and currently has very limited cash on hand. As a result, the
Company intends to raise additional capital through the sale of the Company’s condominium located in Miami Beach, Florida, and through
equity and debt financings. The Company and its management provide no assurance that such sale or financing transactions will be completed
on terms favorable to the Company, or at all, or that, if completed, the proceeds therefrom will be sufficient to enable the Company to
continue its development activities or sustain operations. The terms of any financing transactions that may be undertaken by the Company
may adversely affect the holdings or the rights of the Company’s stockholders.
If the Company is unable to
raise sufficient additional capital, then it will be required to more aggressively manage its cash flow by extending payables, reducing
overhead and scaling back its current business plan until sufficient additional capital is raised to support continued operations. There
is no assurance that such efforts will be successful. Furthermore, if the Company is unable to raise sufficient additional capital, then
the Company will be required to pursue other alternatives which may include selling assets, selling or merging its business, ceasing operations
or filing a petition for bankruptcy (either liquidation or reorganization) under applicable bankruptcy laws.
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Forward-Looking Statements
This Current Report on Form
8-K includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included in
this Current Report on Form 8-K are forward-looking statements, including statements regarding the Company’s ongoing review of the
Prior Period Financial Statements, the Company’s expectation regarding the preliminary estimated adjustments to the Prior Period
Financial Statements, the Company’s belief regarding its ability to file all required SEC filings by May 16, 2022, the Company’s
ability to regain compliance with the Rule or otherwise maintain compliance with the other continued listing requirements of the Nasdaq
Listing Rules, and the Company’s ability to raise sufficient additional capital to continue operations. Such forward looking statements
may be identified by, among other things, the use of forward-looking terminology such as “believe,” “expect,”
“may,” “could,” “would,” “plan,” “intend,” “estimate,” “predict,”
“potential,” “continue,” “should” or “anticipate” or the negative thereof or other variations
thereon or comparable terminology. Forward-looking statements are based on beliefs and assumptions by the Board and management, and on
information currently available to the Board and management. A number of important factors could cause actual results to differ materially
from those contained in any forward-looking statement. Potential consequences of the matters discussed in this Current Report on Form
8-K include, but are not limited to: the possibility that the Nasdaq may delist the Company’s securities; the possibility that the
Company will not be able to become current in its filings with the SEC; investigations or actions by governmental authorities or regulators
and the consequences thereof, including the imposition of civil or criminal penalties; the risk that the Company may become subject to
additional stockholder lawsuits or claims; the effect on the Company’s conclusions regarding the effectiveness of internal control
over financial reporting and disclosure controls and procedures; the possibility that the Company will be unable to raise sufficient additional
capital to continue operations; and the possibility that the Company will be required to sell assets, sell or merge its business, cease
operations or file a petition for bankruptcy. For additional factors that could cause results to differ materially from forward-looking
statements contained in this Current Report on Form 8-K, see the Risk Factors section contained in the Company’s prospectus relating
to its initial public offering, filed with the SEC. Copies of such filing are available on the SEC’s website, www.sec.gov. The Company
undertakes no obligation to update these statements for revisions or changes after the date hereof, except as required by law.