Item 1A. Risk Factors
Various portions of this Annual Report on Form 10-K contain forward-looking statements that involve risks and uncertainties. Actual results, performance or achievements could differ materially from those anticipated in these forward-looking statements as a result of certain risk factors, including those set forth below and elsewhere in this report. These risk factors are not presented in the order of importance or probability of occurrence. For purposes of these risk factors, the term “electronic cigarettes” is deemed to include “vaporizers.”
Below is a summary of material risks, uncertainties and other factors that could have a material effect on our business and our operations:
We have a history of operating losses and our auditors have indicated that there is a substantial doubt about our ability to continue as a going concern.
We are affected by extensive laws, governmental regulations, administrative determinations, court decisions and similar other constraints, which can make compliance costly and subject us to enforcement actions by governmental agencies.
We face intense competition and our failure to compete effectively could have a material adverse effect on our business, results of operations and financial condition.
We may be unable to promote and maintain our brands.
We expect that new products and/or brands we develop will expose us to risks that may be difficult to identify until such products and/or brands are commercially available.
If we are unable to manage our anticipated future growth, our business and results of operations could suffer materially.
We are subject to significant product liability litigation.
Sales of conventional tobacco cigarettes have been declining, which could have a material adverse effect on our business.
Our patents and our ability to enforce them.
We may not be able to adequately protect our intellectual property rights in China or elsewhere, which could harm our business and competitive position.
Third parties may claim that we infringe their intellectual property and trademark rights.
Adverse publicity associated with our products or ingredients, or those of similar companies, could adversely affect our sales and revenue.
We rely on our CEO and may experience difficulty in attracting and hiring qualified new personnel in some areas of our business.
We may not be successful in maintaining the consumer brand recognition and loyalty of our products.
We are subject to significant product liability litigation.
If we are the subject of future product defect or liability suits, our business will likely fail.
If we experience product recalls, we may incur significant and unexpected costs and our business reputation could be adversely affected.
Product exchanges, returns and warranty claims may adversely affect our business.
Adverse economic conditions may adversely affect the demand for our products.
We rely, significantly, on the efforts of third party agents to generate sales of our products.
We may not be able to establish sustainable relationships with large retailers or national chains.
We may not be able to adapt to trends in our industry.
We depend on third party manufacturers for our products.
We rely on Chinese manufacturers to produce our products.
Changes in U.S. and foreign government administrative policy, including the imposition of or increases in tariffs and changes to existing trade agreements, could have a material adverse effect on us.
We may face competition from foreign importers who do not comply with government regulation.
Our results of operations could be adversely affected by currency exchange rates and currency devaluations.
We depend on our General Partner.
Rights of limited partners are significantly different than rights of shareholders of a corporation.
Our General Partner is solely responsible for our operations.
Our ability to retain our management is critical to our success and our ability to grow depends on our ability to attract additional key personnel.
The control of our General Partner may be transferred to a third party without common unitholder consent.
We have hired and will need to hire additional qualified accounting and administrative personnel in order to remediate material weaknesses in our internal control over financial accounting, and we will need to expend additional resources and efforts to establish and maintain the effectiveness of our internal control over financial reporting and our disclosure controls and procedures.
We are required to comply with certain provisions of Section 404 of the Sarbanes-Oxley Act of 2002, as amended, and if we fail to continue to comply, our business could be harmed, and the price of our securities could decline.
We are subject to cyber-security risks, including those related to customer, employee, vendor or other company data and including in connection with integration of acquired businesses and operations.
The business that we conduct outside the U.S. may be adversely affected by international risk and uncertainties.
Our CBD and hemp-derived product lines face an existential risk due to evolving federal regulation.
Many of our products contain nicotine, which is considered to be a highly addictive substance.
There is significant regulatory burden and enforcement risk related to federal oversight of our electronic nicotine and vapor products.
Bans and heightened regulatory standards for flavored e-cigarettes directly limit our market access and may have a material adverse impact on our business.
The market for electronic cigarettes and vapor products is a niche market, subject to a great deal of uncertainty and is still evolving.
The long-term health effects of electronic cigarettes and vaping products are not yet fully known, and any conclusive evidence of harm could materially harm our business.
Changes in federal and state law, particularly the November 2026 “Total THC” standard, could cause our hemp-derived products to be classified as illegal controlled substances.
Our supply of hemp-derived cannabinoids and the market for our hardware depend on complex state and federal laws, which face an existential shift in late 2026.
Our business, results of operations and financial condition could be adversely affected by increasing excise taxes and the complex requirements to collect and remit sales and excise taxes.
We may have a difficult time obtaining the various insurances that are desired to operate our business in the CBD industry, which may expose us to additional risk and financial liability.
Trading on the OTC Markets is volatile and sporadic, which could depress the market price of our common units.
Our stock price is likely to be highly volatile because of several factors, including a limited public float.
Our common units are a “penny stock” under SEC rules. It may be more difficult to resell securities classified as “penny stock.”
Our management controls a substantial number of our common units, decreasing your influence on unitholder decisions.
Units eligible for future sale may adversely affect the market.
Provisions of our partnership agreement may delay or prevent a takeover which may not be in the best interests of our unitholders.
We do not expect to pay dividends in the foreseeable future.
RISKS RELATED TO OUR BUSINESS
We are affected by extensive laws, governmental regulations, administrative determinations, court decisions and similar other constraints, which can make compliance costly and subject us to enforcement actions by governmental agencies.
The formulation, manufacturing, packaging, labeling, holding, storage, distribution, advertising and sale of our products are affected by extensive laws, governmental regulations and policies, administrative determinations, court decisions and similar constraints at the federal, state and local levels, both within the United States and in any country where we conduct business. There can be no assurance that we, or our independent distributors, will be in compliance with all of these regulations. A failure by us or our distributors to comply with these laws and regulations could lead to governmental investigations, civil and criminal prosecutions, administrative hearings and court proceedings, civil and criminal penalties, injunctions against product sales or advertising, civil and criminal liability for us and/or our principals, bad publicity, and tort claims arising out of governmental or judicial findings of fact or conclusions of law to us or our principals. In addition, the adoption of new regulations and policies or changes in the interpretations of existing regulations and policies may result in significant new compliance costs or of product sales, and may affect the marketing of our products, resulting in decreases in revenue.
We face intense competition and our failure to compete effectively could have a material adverse effect on our business, results of operations and financial condition.
Competition in the electronic cigarette and related e-liquids industry is intense. We compete with other sellers of electronic cigarettes, most notably Lorillard, Inc., Altria Group, Inc. and Reynolds American Inc., big tobacco companies, through their electronic cigarettes business segments; the nature of our competitors is varied as the market is highly fragmented and the barriers to entry into the business are low.
We compete primarily on the basis of product quality, brand recognition, brand loyalty, service, marketing, advertising and price. We are subject to highly competitive conditions in all aspects of our business. The competitive environment and our competitive position can be significantly influenced by weak economic conditions, erosion of consumer confidence, competitors’ introduction of low-priced products or innovative products, cigarette excise taxes, higher absolute prices and larger gaps between price categories, and product regulation that diminishes the ability to differentiate tobacco products.
Our principal competitors are “big tobacco”, U.S. cigarette manufacturers of both conventional tobacco cigarettes and electronic cigarettes like Altria Group, Inc., Lorillard, Inc. and Reynolds American Inc. We compete against “big tobacco” who offers not only conventional tobacco cigarettes and electronic cigarettes but also smokeless tobacco products such as “snus” (a form of moist ground smokeless tobacco that is usually sold in sachet form that resembles small tea bags), chewing tobacco and snuff. Furthermore, we believe that “big tobacco” will devote more attention and resources to developing and offering electronic cigarettes as the market for electronic cigarettes grows. Because of their well-established sales and distribution channels, marketing expertise and significant resources, “big tobacco” is better positioned than small competitors like us to capture a larger share of the electronic cigarette market. We also compete against numerous other smaller manufacturers or importers of cigarettes. There can be no assurance that we will be able to compete successfully against any of our competitors, some of whom have far greater resources, capital, experience, market penetration, sales and distribution channels than us. If our major competitors were, for example, to significantly increase the level of price discounts offered to consumers, we could respond by offering price discounts, which could have a materially effect on our business, results of operations and financial condition.
We may be unable to promote and maintain our brands.
We believe that establishing and maintaining our brand is a critical aspect of attracting and expanding a large customer base. Promotion and enhancement of our brands will depend largely on our success in continuing to provide high quality products. If our customers and end users do not perceive our products to be of high quality, or if we introduce new products or enter into new business ventures that are not favorably received by our customers and end users, we will risk diluting our brand identities and decreasing their attractiveness to existing and potential customers.
Moreover, in order to attract and retain customers and to promote and maintain our brand equity in response to competitive pressures, we may have to increase substantially our financial commitment to creating and maintaining a distinct brand loyalty among our customers. If we incur significant expenses in an attempt to promote and maintain our brands, our business, results of operations and financial condition could be adversely affected.
We expect that new products and/or brands we develop will expose us to risks that may be difficult to identify until such products and/or brands are commercially available.
We are currently developing, and in the future will continue to develop, new products and brands, the risks of which will be difficult to ascertain until these products and/or brands are commercially available. For example, we are developing new formulations, packaging and distribution channels. Any negative events or results that may arise as we develop new products or brands may adversely affect our business, financial condition and results of operations.
If we are unable to manage our anticipated future growth, our business and results of operations could suffer materially.
Our operating results depend to a large extent on our ability to successfully manage our anticipated growth. To manage our anticipated growth, we believe we must effectively, among other things:
hire, train and manage additional employees;
expand our marketing and distribution capabilities;
increase our product development activities
add additional qualified finance and accounting personnel; and
implement and improve our administrative, financial and operational systems, procedures and controls.
If we are unable to manage our growth effectively, we may not be able to take advantage of market opportunities or develop new products, and we may fail to satisfy product requirements, maintain product quality, execute our business plan or respond to competitive pressures, any of which could have a material adverse effect on our business, results of operations and financial condition.
We are subject to significant product liability litigation.
The tobacco industry has experienced, and continues to experience, significant product liability litigation. Most tobacco liability lawsuits have been brought against manufacturers and sellers of cigarettes by individual plaintiffs, often participating on a class-action basis, for injuries allegedly caused by cigarette smoking or by exposure to cigarette smoke. However, several lawsuits have also been brought against manufacturers and sellers of smokeless products for injuries to health allegedly caused by use of smokeless products. In addition to the risks to our business, results of operations and financial condition resulting from adverse results in any such action, ongoing litigation may divert management’s attention and resources, which could have an impact on our business and operations. We cannot predict with certainty the outcome of these claims and there can be no assurance that we will not sustain in connection with such lawsuits and that such will not have a material effect on our business, results of operations and financial condition.
As a result of their relative novelty, electronic cigarette and vaporizer product manufacturers and sellers have only recently become subject to litigation. We may see increasing litigation over e-products or the regulation of our products, as the regulatory regimes surrounding these products develop.
As a result, we may face substantial costs due to increased product liability litigation relating to new regulations or other potential defects associated with e-products we sell, which could have a material adverse effect on our business, results of operations and financial condition.
Sales of conventional tobacco cigarettes have been declining, which could have a material adverse effect on our business.
The overall U.S. market for conventional tobacco cigarettes has generally been declining in terms of volume of sales, as a result of restrictions on advertising and promotions, funding of smoking prevention campaigns, increases in regulation and excise taxes, a decline in the social acceptability of smoking, and other factors, and such sales are expected to continue to decline. While the sales of electronic cigarettes have been increasing over the last several years, the electronic cigarette market is only developing and is a fraction of the size of the conventional tobacco cigarette market. A continual decline in cigarette sales may adversely affect the growth of the electronic cigarette market, which could have a material adverse effect on our business, results of operations and financial condition.
Our patents and our ability to enforce them.
We have a portfolio of issued U.S., Chinese and international patents, however we cannot provide any assurances that our patents will not be challenged and if challenged, will be upheld and deemed valid. Furthermore our efforts to enforce our patent may be costly and there can be no assurances that should we seek to prosecute and enforce our patents, that we will be victorious and even if we are victorious, we cannot provide assurances that our efforts would result in damages, licensing fees or removing the infringing products from the market. Moreover, if we are not able to retain counsel on a contingency basis, we may be unable to pursue prosecution of the infringers of our patents.
We may not be able to adequately protect our intellectual property rights in China or elsewhere, which could harm our business and competitive position.
We believe that patents, trademarks, trade secrets and other intellectual property we use and are developing are important to sustaining and growing our business. We utilize third party manufacturers to manufacture our products in China, where the validity, enforceability and scope of protection available under intellectual property laws are uncertain and still evolving. Implementation and enforcement of Chinese intellectual property-related laws have historically been deficient, ineffective and hampered by corruption and local protectionism. Accordingly, we may not be able to adequately protect our intellectual property in China, which could have a material adverse effect on our business, results of operations and financial condition. Furthermore, policing unauthorized use of our intellectual property in China and elsewhere is difficult and expensive, and we may need to resort to litigation to enforce or defend our intellectual property or to determine the enforceability, scope and validity of our proprietary rights or those of others. Such and an determination in any such , if any, could result in substantial costs and of resources and management attention, which could our business and competitive position.
Third parties may claim that we infringe their intellectual property and trademark rights.
Competitors in our markets may claim that we infringe their proprietary rights. Such claims, whether or not meritorious, may result in the expenditure of significant financial and managerial resources, injunctions against us or the payment of damages.
Adverse publicity associated with our products or ingredients, or those of similar companies, could adversely affect our sales and revenue.
Adverse publicity concerning any actual or purported failure by us to comply with applicable laws and regulations regarding any aspect of our business could have an adverse effect on our public perception. This, in turn, could negatively affect our ability to obtain financing, endorsers and attract distributors or retailers for our products, which would have a material adverse effect on our ability to generate sales and revenue.
Our distributors’ and customers’ perception of the safety and quality of our products or even similar products distributed by others can be significantly influenced by national media attention, publicized scientific research or findings, product liability claims and other publicity concerning our products or similar products distributed by others. Adverse publicity, whether or not accurate, that associates consumption of our products or any similar products with illness or other adverse effects, will likely diminish the public’s perception of our products. Claims that any products are ineffective, inappropriately labeled or have inaccurate instructions as to their use, could have a material adverse effect on the market demand for our products, including reducing our sales and revenue.
We rely on our CEO and may experience difficulty in attracting and hiring qualified new personnel in some areas of our business.
The loss of our CEO or any of our key employees could adversely affect our business. As a member of the tobacco industry, we may experience difficulty in identifying and hiring qualified executives and other personnel in some areas of our business. This difficulty is primarily attributable to the health and social issues associated with the tobacco industry. The loss of services of any key employees or our inability to attract, hire and retain personnel with requisite skills could restrict our ability to develop new products, enhance existing products in a timely manner, sell products or manage our business effectively. We do not carry any “key man” insurance that would provide us with proceeds in the event of the death or disability of Mr. Frija, our President, Chief Executive Officer, principal financial officer and principal accounting officer, and the sole member of our General Partner. These factors could have a material adverse effect on our business, results of operations and financial condition.
We may not be successful in maintaining the consumer brand recognition and loyalty of our products.
We compete in a market that relies on innovation and the ability to react to evolving consumer preferences. The smoke accessories industry in particular is subject to changing consumer trends, demands and preferences. Therefore, products once favored may over time become disfavored by consumers or no longer perceived as the best option. Consumers in the market have demonstrated a high degree of brand loyalty, but producers must continue to adapt their products in order to maintain their status among these customers as the market evolves. Trends within the industry change often and our failure to anticipate, identify or react to changes in these trends could, among other things, lead to reduced demand for our products. Factors that may affect consumer perception of our products include health trends and attention to health concerns associated with vaping, price-sensitivity in the presence of competitors’ products or substitute products and trends in favor of new products that are currently being researched and produced by participants in our industry.
We are subject to significant product liability litigation.
The tobacco industry has experienced, and continues to experience, significant product liability litigation. Most tobacco liability lawsuits have been brought against manufacturers and sellers of cigarettes by individual plaintiffs, often participating on a class-action basis, for injuries allegedly caused by cigarette smoking or by exposure to cigarette smoke. However, several lawsuits have also been brought against manufacturers and sellers of smokeless products for injuries to health allegedly caused by use of smokeless products. In addition to the risks to our business, results of operations and financial condition resulting from adverse results in any such action, ongoing litigation may divert management’s attention and resources, which could have an impact on our business and operations. We cannot predict with certainty the outcome of these claims and there can be no assurance that we will not sustain in connection with such lawsuits and that such will not have a material effect on our business, results of operations and financial condition.
As a result of their relative novelty, electronic cigarette and vaporizer product manufacturers and sellers have only recently become subject to litigation. We may see increasing litigation over e-products or the regulation of our products, as the regulatory regimes surrounding these products develop.
As a result, we may face substantial costs due to increased product liability litigation relating to new regulations or other potential defects associated with e-products we sell, which could have a material adverse effect on our business, results of operations and financial condition.
If we are the subject of future product defect or liability suits, our business will likely fail.
In the course of our planned operations, we may become subject to legal actions based on a claim that our products are defective in workmanship or have caused personal or other injuries. We currently maintain liability insurance, but such coverage may not be adequate to cover all potential claims. Moreover, even if we are able to maintain sufficient insurance coverage in the future, any successful claim could significantly harm our business, financial condition and results of operations.
If we experience product recalls, we may incur significant and unexpected costs and our business reputation could be adversely affected.
We may be exposed to product recalls and adverse public relations if our products are alleged to cause illness or injury, or if we are alleged to have violated governmental regulations. A product recall could result in substantial and unexpected expenditures that could exceed our product recall insurance coverage limits and harm to our reputation, which could have a material adverse effect on our business, results of operations and financial condition. In addition, a product recall may require significant management time and attention and may adversely impact on the value of our brands. Product recalls may lead to greater by federal or state regulatory agencies and increased , which could have a material effect on our business, results of operations and financial condition.
Product exchanges, returns and warranty claims may adversely affect our business.
If we are unable to maintain an acceptable degree of quality control of our products we will incur costs associated with the exchange and return of our products as well as servicing our customers for warranty claims. Any of the foregoing on a significant scale may have a material adverse effect on our business, results of operations and financial condition.
Adverse economic conditions may adversely affect the demand for our products.
Electronic cigarettes and vapor products are new to the market and may be regarded by users as a novelty item and expendable as such demand for our products may be extra sensitive to economic conditions. When economic conditions are prosperous, discretionary spending typically increases; conversely, when economic conditions are unfavorable, discretionary spending often declines. Any significant decline in economic conditions that affects consumer spending could have a material adverse effect on our business, results of operations and financial condition.
We rely significantly on the efforts of third party agents to generate sales of our products.
We rely significantly on the efforts of independent distributors to purchase and distribute our products to wholesalers and retailers. No single distributor currently accounts for a material percentage of our sales and we believe that should any of these relationships terminate we would be able to find suitable replacements and do so on a timely basis. However, any loss of distributors or our ability to timely replace any given distributor could have a material adverse effect on our business, financial condition and results of operations.
We rely, in part, on the efforts of independent salespersons who sell our products to distributors and major retailers and Internet sales affiliates to generate sales of products. No single independent salesperson or Internet affiliate currently accounts for a material percentage of our sales and we believe that should any of these relationships terminate we would be able to find suitable replacements and do so on a timely basis. However, any loss of independent sales persons or Internet sales affiliates or our ability to timely replace any one of them could have a material adverse effect on our business, financial condition and results of operations.
We may not be able to establish sustainable relationships with large retailers or national chains.
We believe the best way to develop brand and product recognition and increase sales volume is to establish relationships with large retailers and national chains. We currently do not have any established relationships with large retailers and or national chains and we cannot provide any assurances that we will be successful in our efforts to establish such relationships and or if we would be able to pay the costs associated with establishing such national accounts. Our inability to develop and sustain relationships with large retailers and national chains will impede our ability to develop brand and product recognition and increase sales volume and, ultimately, require us to pursue and rely on local and more fragmented sales channels, which will have a material adverse effect on our business, results of operations and financial condition.
We may not be able to adapt to trends in our industry.
We may not be able to adapt as the electronic cigarette industry and customer demand evolves, whether attributable to regulatory constraints or requirements, a lack of financial resources or our failure to respond in a timely and/or effective manner to new technologies, customer preferences, changing market conditions or new developments in our industry. Any of the failures to adapt for the reasons cited herein or otherwise could make our products obsolete and would have a material adverse effect on our business, financial condition and results of operations.
We depend on third party manufacturers for our products.
We depend on third party manufacturers for our electronic cigarettes, vaporizers and accessories. Our customers associate certain characteristics of our products including the weight, feel, draw, unique flavor, packaging and other attributes of our products to the brands we market, distribute and sell. Any interruption in supply and/or consistency of our products may adversely impact our ability to deliver our products to our wholesalers, distributors and customers and otherwise harm our relationships and reputation with customers, and have a materially adverse effect on our business, results of operations and financial condition.
Although we believe that several alternative sources for the components, chemical constituents and manufacturing services necessary for the production of our products are available, any failure to obtain any of the foregoing would have a material adverse effect on our business, results of operations and financial condition.
We rely on Chinese manufacturers to produce our products.
Our manufacturers are based in China. Certain Chinese factories and the products they export have been the source of safety concerns and recalls, which is generally attributed to lax regulatory, quality control and safety standards. Should Chinese factories continue to draw public criticism for exporting unsafe products, whether those products relate to our products or not we may be adversely affected by the stigma associated with Chinese production, which could have a material adverse effect on our business, results of operations and financial condition.
Changes in U.S. and foreign government administrative policy, including the imposition of or increases in tariffs and changes to existing trade agreements, could have a material adverse effect on us.
As a result of changes to U.S. and foreign government administrative policy, there may be changes to existing trade agreements, greater restrictions on free trade generally, the imposition of or significant increases in tariffs on goods imported into the U.S., including tariffs on products manufactured in China, Canada, or Mexico, and adverse responses by foreign governments to U.S. trade policies, among other possible changes. The U.S. administration has implemented or increased tariffs, and it remains unclear what the U.S. administration or foreign governments will or will not do with respect to tariffs or trade agreements and policies. A trade war, other governmental action related to tariffs or trade agreements, changes in U.S. social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in the territories and countries where we currently develop and sell products, and any resulting negative sentiments toward the U.S. as a result of such changes, could have a material adverse effect on our business, financial condition, results of operations and financial condition.
We may face competition from foreign importers who do not comply with government regulation.
We may face competition from foreign sellers of electronic cigarettes that may illegally ship their products into the United States for direct delivery to customers. These market participants will not have the added cost and expense of complying with U.S. regulations and taxes and as a result will be able to offer their product at a more competitive price than us and potentially capture market share. Moreover, should we be unable to sell certain of our products during any regulatory approval process we have no assurances that we will be able to recapture those customers that we lost to our foreign domiciled competitors during any “blackout” periods, during which we are not permitted to sell our products. This competitive disadvantage may have a material adverse effect on our business, results of operations and our financial condition.
Our results of operations could be adversely affected by currency exchange rates and currency devaluations.
Our functional currency is the U.S. dollar; substantially all of our purchases and sales are currently generated in U.S. dollars. However, our manufacturers and suppliers are located in China. Fluctuations in exchange rates between our respective currencies could result in higher production and supply costs to us which would have a material adverse effect on our results of operations if we are not willing or able to pass those costs on to our customers.
We depend on our General Partner.
Our performance is directly correlated to the performance of our General Partner, which is managed by its sole member, Mr. Frija.
Rights of limited partners are significantly different than rights of shareholders of a corporation.
We are organized as a limited partnership. Members of limited partnerships, also known as limited partners, have different rights than shareholders of a corporation. Due to our structure as a limited partnership, your rights as a stakeholder are governed by our partnership agreement. For example, unlike a corporation for which stockholders are able to elect members of its board of directors, we do not have a board of directors. We are managed by our General Partner and our General Partner is managed by its sole member, Mr. Frija. Our General Partner has limited call rights to our securities; please read carefully our partnership agreement, which governs the relationship between us and our unitholders.
Our General Partner, Soleil Capital Management LLC, is solely responsible for our operations.
We are managed by our General Partner. Our General Partner does not have an operating agreement. Pursuant to Delaware law, in the absence of an operating agreement, our General Partner is managed by its members. Kevin Frija, who is our Chief Executive Officer, President, principal financial officer, principal accounting officer and a significant unitholder, is the sole member of our General Partner. Through the General Partner, Mr. Frija and Pan manages all of our operations and activities. Our common unitholders do not elect our General Partner or its members and, unlike the holders of common stock in a corporation, will have only limited voting rights on matters affecting our business and therefore limited ability to influence decisions regarding our business. Furthermore, if our common unitholders are dissatisfied with the performance of our General Partner, they will have little ability to remove our General Partner.
Our ability to retain our management is critical to our success and our ability to grow depends on our ability to attract additional key personnel.
Our success depends on our ability to attract and retain managers, executive officers and qualified personnel. We anticipate that it will be necessary for us to attract and retain key personnel in order to develop our business and pursue our growth strategy. The market for qualified managers is extremely competitive and as such our inability to attract and retain key personnel would adversely affect in the short term, our continuity of operations and in the long term our profitability.
The control of our General Partner may be transferred to a third party without common unitholder consent.
Our General Partner may transfer its General Partner interest to a third party in a merger or consolidation without the consent of our common unitholders. Furthermore, at any time, the members of our General Partner may sell or transfer all or part of their limited liability company interests in our General Partner without the approval of the common unitholders, subject to certain restrictions as described elsewhere in this annual report. A new general partner and/or owner could have different business objectives and/or philosophies then our current business objectives and/or philosophies, employ individuals who are less experienced in our current business, be unsuccessful in identifying new opportunities in our current area of business or have a track record that is not as successful as VPR Brand’s track record. If any of the foregoing were to occur, we could experience difficulty in operating our business, and the value of our business, our results of operations and our financial condition could materially suffer.
We have hired and will need to hire additional qualified accounting and administrative personnel in order to remediate material weaknesses in our internal control over financial accounting, and we will need to expend additional resources and efforts to establish and maintain the effectiveness of our internal control over financial reporting and our disclosure controls and procedures.
As a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”). Our management is required to evaluate and disclose its assessment of the effectiveness of our internal control over financial reporting as of each year-end, including disclosing any “material weakness” in our internal control over financial reporting. A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. As a result of its assessment, management has determined that there were material weaknesses due to the lack of segregation of duties and sufficient internal controls (including technology-based general controls) that encompass our Company as a whole with respect to entity and transactions level controls in order to ensure complete documentation of complex and non-routine transactions and adequate financial reporting. If we continue to experience material in our internal controls or to maintain or implement required new or controls, such circumstances could cause us to to meet our periodic reporting obligations or result in material in our financial statements, or affect the results of periodic management evaluations and, if required, annual auditor attestation reports. Due to these material , management concluded that, as of December 31, 2025, our internal control over financial reporting was not . Management also concluded that our disclosure controls and procedures were not as of December 31, 2025. Although the number of employees has grown as a result of the hiring of additional accounting and information technology staff, we cannot you that we will have sufficient resources to these material . These have the potential to impact our financial reporting process and our financial reports. We will need to hire additional qualified accounting and administrative personnel in order to these material .
We are required to comply with certain provisions of Section 404 of the Sarbanes-Oxley and if we fail to continue to comply, our business could be harmed, and the price of our securities could decline.
Rules adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act require an annual assessment of internal control over financial reporting, and for certain issuers an attestation of this assessment by the issuer’s independent registered public accounting firm. The standards that must be met for management to assess the internal control over financial reporting as effective are evolving and complex, and require significant documentation, testing, and possible remediation to meet the detailed standards. We expect to incur significant expenses and to devote resources to Section 404 compliance on an ongoing basis. It is difficult for us to predict how long it will take or costly it will be to complete the assessment of the effectiveness of our internal control over financial reporting for each year and to remediate any deficiencies in our internal control over financial reporting. As a result, we may not be able to complete the assessment and remediation process on a timely basis. In the event that our Chief Executive Officer or principal financial officer determines that our internal control over financial reporting is not effective as defined under Section 404, we cannot predict how regulators will react or how the market prices of our securities will be affected; however, we believe that there is a risk that investor confidence and the market value of our securities may be affected.
We are subject to cyber-security risks, including those related to customer, employee, vendor or other company data and including in connection with integration of acquired businesses and operations.
We use information technologies to securely manage operations and various business functions. We rely on various technologies, some of which are managed by third parties, to process, transmit and store electronic information, and to manage or support a variety of business processes and activities, including reporting on our business and interacting with customers, vendors and employees. In addition, we collect and store certain data, including proprietary business information, and may have access to confidential or personal information that is subject to privacy and security laws, regulations and customer-imposed controls. Our systems are subject to repeated attempts by third parties to access information or to disrupt our systems. Despite our security design and controls, and those of our third-party providers, we may become subject to system damage, disruptions or shutdowns due to any number of causes, including cyber-attacks, breaches, employee error or malfeasance, power outages, computer viruses, telecommunication or utility failures, systems , service providers, natural or other events. It is possible for such to remain for an extended period. We may face other and risks as we upgrade and standardize our information technology systems as part of our integration of acquired businesses and operations. We have contingency plans in place to prevent or mitigate the impact of these events, however, these events could result in operational or the of sensitive data, and depending on their nature and scope, could lead to the compromise of confidential information, use of our systems and networks, and of data, products, production and operational and exposure to liability. Such or and the resulting repercussions, including reputational and legal or proceedings, may affect our results of operations, cash flows and financial condition, and the trading price of our common stock.
This risk is enhanced in certain jurisdictions with stringent data privacy laws. For example, the California Consumer Privacy Act of 2018 (“CCPA”) provides certain data privacy rights for consumers and certain operational requirements for businesses. The CCPA includes a statutory damages framework and private rights of action against businesses that fail to comply with certain CCPA terms or implement reasonable security procedures and practices to prevent data breaches. The CCPA went into effect in January 2020.
The business that we conduct outside the U.S. may be adversely affected by international risk and uncertainties.
Although our operations are based in the United States, we conduct business outside of the United States and expect to continue to do so in the future. Any business that we conduct outside of the United States is subject to additional risks that may have a material adverse effect on our ability to continue conducting business in certain international markets, including, without limitation:
Potentially reduced protection for intellectual property rights;
Unexpected changes in tariffs, trade barriers and regulatory requirements;
Economic weakness, including inflation or political instability, in particular foreign economies and markets;
Business interruptions resulting from geo-political actions, including war and terrorism or natural disasters, including earthquakes, hurricanes, typhoons, floods and fires; and
Failure to comply with Office of Foreign Asset Control rules and regulations and the Foreign Corrupt Practices Act (“FCPA”).
These factors or any combination of these factors may adversely affect our revenue or our overall financial performance.
RISKS RELATED TO REGULATION AND MARKET
Our business is primarily involved in the sale of products that contain nicotine and/or hemp-derived cannabinoids, which are subject to rapidly evolving, regulation and federal enforcement that may have a material adverse effect on our business.
Our operations depend on the sale of ENDS and products containing hemp-derived cannabinoids (such as CBD). This industry faces extreme regulatory scrutiny from the FDA, the DOJ and various state and local agencies.
The FDA has established a stringent premarket authorization framework. While we have submitted PMTAs for our products, the FDA has historically issued Marketing Denial Orders (MDOs) for the vast majority of flavored ENDS products. On March 9, 2026, the FDA issued new draft guidance, “Flavored ENDS Premarket Applications – Considerations Related to Youth Risk,” which reinforces a “heightened evidentiary burden” for non-tobacco flavors. To obtain authorization for flavored products, we must now demonstrate not only adult benefit but also the efficacy of advanced Device Access Restrictions (“DARs”), such as biometric age-gating or geofencing. We cannot guarantee that our technology will meet these new standards or that the FDA will grant Marketing Granted Orders (“MGOs”) for our portfolio.
Furthermore, following the establishment of the Federal Multi-Agency Task Force in 2025, enforcement against unauthorized products—particularly flavored disposables—has accelerated. The task force has the authority to seek permanent injunctions, seizures, and civil money penalties. If our products are deemed unauthorized, we may be forced to remove them from the market immediately, leading to a total loss of revenue for those product lines.
Our CBD and hemp-derived product lines face an existential risk due to evolving federal regulation.
The Continuing Appropriations and Extensions Act, 2026, signed into law in late 2025, fundamentally redefines “hemp” by moving to a “Total THC” standard (including Delta-8, Delta-10, and THCA) and imposing a strict cap of 0.4 milligrams of total THC per container for finished consumer products.
This law is set to take full effect on November 12, 2026. We anticipate that many of our current hemp-derived offerings will exceed these limits and become classified as Schedule I controlled substances under the CSA. The transition to this new standard may require us to discontinue up to 10% of our hemp-related product portfolio by late 2026, which would have a significant material adverse impact on our results of operations and financial condition.
Many of our products contain nicotine, which is considered to be a highly addictive substance.
Many of our products contain nicotine, a chemical found in cigarettes, e-cigarettes, certain other vapor products and other tobacco products, which is considered to be highly addictive. The Family Smoking Prevention and Tobacco Control Act empowers the FDA to regulate the amount of nicotine found in vapor products, but may not require the reduction of nicotine yields of a vapor product to zero. Any FDA regulation may require us to reformulate, recall and or discontinue certain of the products we may sell from time to time, which may have a material adverse effect on our ability to market our products and have a material adverse effect on our business, financial condition, results of operations, cash flows and or future prospects.
Significant increases in state and local regulation of our products have been proposed or enacted and are likely to continue to be proposed or enacted in numerous jurisdictions.
There has been increasing activity on the state and local levels with respect to scrutiny of e-products. State and local governmental bodies across the U.S. have indicated e-products may become subject to new laws and regulations at the state and local levels. Further, some states and cities, have enacted regulations that require obtaining a tobacco retail license in order to sell electronic cigarettes and vaporizer products. Many states and some cities have passed laws restricting the sale of electronic cigarettes and vaporizer products to minors. If one or more states from which we generate or anticipate generating significant sales of e-products bring actions to prevent us from selling our e-products unless we obtain certain licenses, approvals or permits, and if we are not able to obtain the necessary licenses, approvals or permits for financial reasons or otherwise and/or any such license, approval or permit is determined to be overly burdensome to us, then we may be required to cease sales and distribution of our products to those states, which could have a material adverse effect on our business, results of operations and financial condition.
Certain states and cities have already restricted the use of electronic cigarettes and vaporizer products in smoke-free venues. Additional city, state or federal regulators, municipalities, local governments and private industry may enact rules and regulations restricting the use of electronic cigarettes and vaporizer products in those same places where cigarettes cannot be smoked. Because of these restrictions, our customers may reduce or otherwise cease using our e-products, which could have a material adverse effect on our business, results of operations and financial condition.
There is significant regulatory burden and enforcement risk related to federal oversight of our electronic nicotine and vapor products.
Our products, including e-cigarettes, e-liquids, and vaporizers, are subject to the Tobacco Control Act. While the 2010 Sottera decision initially permitted the FDA to regulate tobacco-derived nicotine, March 2022 legislation expanded this authority to include nicotine from any source, including synthetic nicotine. Consequently, all our nicotine-containing products are “Deemed Tobacco Products” subject to FDA registration, ingredient reporting, and premarket authorization requirements.
Furthermore, we are now subject to the PACT Act, which was amended to apply to electronic nicotine delivery systems. The PACT Act requires us to comply with complex registration, labeling, and tax collection rules. Because the U.S. Postal Service generally prohibits the mailing of these products to consumers, our distribution channels are constrained and our shipping costs have increased.
Failure to comply with these evolving requirements—including the federal minimum age of 21 for all tobacco sales—could result in significant financial penalties, criminal convictions, or the forced removal of our products from the market. The anticipated costs of maintaining compliance with these and future FDA regulations, such as potential good manufacturing practice standards, could significantly increase our operating expenses and harm our competitive position.
Bans and heightened regulatory standards for flavored e-cigarettes directly limit our market access and may have a material adverse impact on our business.
The market for flavored ENDS is subject to aggressive federal, state, and local restrictions. While the FDA initiated an enforcement policy against flavored cartridges in 2020, regulatory pressure has since intensified. On March 9, 2026, the FDA issued new draft guidance, “Flavored ENDS Premarket Applications – Considerations Related to Youth Risk,” which reinforces a “heightened evidentiary burden” for any non-tobacco flavored products. To maintain or obtain marketing authorization, we must now demonstrate the efficacy of advanced DARs, such as biometric age-gating, to prevent youth access. We cannot guarantee that our products will meet these new technical standards or receive MGOs.
Furthermore, following the 2025 establishment of the Federal Multi-Agency Task Force, enforcement against unauthorized flavored products—particularly disposables—has accelerated. This task force has the authority to seek permanent injunctions and product seizures, which could lead to an immediate loss of revenue for those product lines.
State-level restrictions also continue to expand. For example, the State of California’s ban on flavored tobacco products, which became effective in 2025, has already restricted our access to one of the largest U.S. markets. As more states and municipalities adopt similar or more restrictive measures, our ability to sell our flavored product portfolio will be materially harmed.
The market for electronic cigarettes and vapor products is a niche market, subject to a great deal of uncertainty and is still evolving.
Electronic cigarettes and vapor products, having recently been introduced to market, are still at an early stage of development, represent a niche market and are evolving rapidly and are characterized by an increasing number of market entrants. Our future sales and any future profits are substantially dependent upon the widespread acceptance and use of electronic cigarettes. Rapid growth in the use of, and interest in, electronic cigarettes is relatively recent, and may not continue on a lasting basis. The demand and market acceptance for these products is subject to a high level of uncertainty. Therefore, we are subject to all of the business risks associated with a new enterprise in a niche market, including risks of unforeseen capital requirements, failure of widespread market acceptance of electronic cigarettes and vapor products, in general or, specifically our products, failure to establish business relationships and competitive disadvantages as against larger and more established competitors.
The long-term health effects of electronic cigarettes and vaping products are not yet fully known, and any conclusive evidence of harm could materially harm our business.
Because electronic cigarettes and vapor products have been developed and commercialized only recently, the medical profession has not yet had a sufficient period of time to fully realize the long-term health effects attributable to electronic cigarette and vapor product use.
While the 2019 outbreak of lung injuries was largely linked by the CDC to vitamin E acetate in THC-containing products, there is a growing body of medical research regarding the potential for other long-term respiratory and cardiovascular risks associated with the chronic inhalation of vaporized substances.
We also face risks related to the materials used in our devices. Potential health concerns regarding the leaching of heavy metals or other toxins from heating elements and device components could lead to product liability claims, regulatory recalls, or a general decline in consumer acceptance of vaporizing hardware. If the medical profession were to determine conclusively that electronic cigarette or vapor product usage poses long-term health risks, demand for our products, could decline, which could have a material adverse effect on our business, results of operations and financial condition.
Changes in federal and state law, particularly the November 2026 “Total THC” standard, could cause our hemp-derived products to be classified as illegal controlled substances.
We distribute products containing hemp-derived cannabinoids and provide hardware for use with such products. While the 2018 Farm Act previously legalized hemp with less than 0.3% Delta-9 THC, the Continuing Appropriations and Extensions Act, 2026, has fundamentally altered this framework. Effective November 12, 2026, federal law will apply a “Total THC” standard (including Delta-8, Delta-10, and THCA) and impose a strict cap of 0.4 milligrams of total THC per container.
We anticipate that a significant portion of our current hemp-derived portfolio, which may comprise up to 10% of our hemp-related offerings, will exceed these new limits. Unless this legislation is amended, these products will be reclassified as Schedule I controlled substances under the CSA. Such a reclassification would require us to discontinue these product lines, potentially leading to criminal prosecution or a forced cessation of certain operations, which would have a material adverse impact on our results of operations and financial condition.
Furthermore, we are affected by laws related to cannabis and marijuana. Because marijuana remains a Schedule I controlled substance under federal law, any perception that we are involved in the marijuana industry—or the use of our hardware with such substances—could result in negative press, the loss of business partners, or federal enforcement actions.
Our supply of hemp-derived cannabinoids and the market for our hardware depend on complex state and federal laws, which face an existential shift in late 2026.
Hemp-derived CBD can only be legally produced and transported in states that comply with federal standards. While we currently purchase all of our hemp-derived CBD from licensed growers and processors, the legal landscape is shifting due to the Continuing Appropriations and Extensions Act, 2026. Effective November 12, 2026, federal law will transition to a “Total THC” standard with a strict limit of 0.4 milligrams per container.
This federal change may render many of our and our suppliers’ products illegal as Schedule I controlled substances, regardless of their status under previous state laws or the 2018 Farm Act. If our current suppliers are unable to re-formulate their processes to meet these new “Total THC” caps, or if raw ingredients become legally unavailable, our business operations—including the sale of our cannabis vape hardware intended for use with these substances—would be materially and adversely impacted. Furthermore, any reduction in the number of states maintaining qualifying laws under this new federal standard could restrict our ability to distribute products across state lines.
Our business, results of operations and financial condition could be adversely affected by increasing excise taxes and the complex requirements to collect and remit sales and excise taxes.
The sale of ENDS, components, and related hardware is increasingly subject to federal, state, and local excise taxes similar to those levied against conventional cigarettes. As of March 2026, more than 32 states and the District of Columbia had implemented such taxes, and we expect this number to continue to increase. These taxes significantly increase the cost of our products to the consumer, which may reduce demand and have a material adverse effect on our results of operations.
Furthermore, the PACT Act now applies to ENDS and related vapor products, imposing strict registration, reporting, and tax compliance obligations. We are required to establish and maintain sophisticated systems to track, collect, and remit these taxes for both internet and traditional sales. The requirement to comply with these diverse and often conflicting state and local tax laws—including the obligation to remit sales taxes in jurisdictions like New York, Hawaii, and North Carolina—increases our administrative costs and may require us to increase our prices. Any failure to accurately track or remit these taxes could result in significant financial penalties, litigation, or the loss of our ability to sell products in certain jurisdictions.
Additionally, many jurisdictions are contemplating or have implemented legislation that categorizes cannabis vape hardware and lighters as subject to tobacco or nicotine-related excise taxes. Continued increases in tax rates or the expansion of tax categories to include our hardware products will likely harm our net profit margins and overall financial condition.
We may have a difficult time obtaining the various insurances that are desired to operate our business in the CBD industry, which may expose us to additional risk and financial liability.
Insurance that is otherwise readily available, such as general liability, and directors and officer’s insurance, may become more difficult for us to find, and more expensive, due to our recent launch of certain products containing hemp-derived CBD. Additionally, the Continuing Appropriations and Extensions Act, 2026, which imposes a strict 0.4 mg “Total THC” cap per container effective November 12, 2026, has caused many insurance carriers to re-evaluate their exposure to the hemp industry. If our hemp-derived products are deemed to exceed these new federal limits, they may be classified as Schedule I controlled substances, which could lead to the immediate cancellation of our insurance policies or the denial of claims. There are no guarantees that we will be able to maintain affordable insurance in the future, or that the cost will be affordable to us. If we are forced to go without such insurances, it may prevent us from entering into certain retail agreements or certain business sectors, it may inhibit our growth, and may expose us to additional risk and financial liabilities.
RISKS RELATING TO OUR COMMON UNITS
Trading on the OTC Markets is volatile and sporadic, which could depress the market price of our common units.
Our common units are quoted on the OTCQB tier of the OTC Markets. Trading in securities quoted on the OTC Markets is often thin and characterized by wide fluctuations in trading prices, due to many factors, some of which may have little to do with our operations or business prospects. This volatility could depress the market price of our common units for reasons unrelated to operating performance. Moreover, the OTC Markets is not a stock exchange, and trading of securities on the OTC Markets is often more sporadic than the trading of securities listed on a quotation system like Nasdaq Capital Market or a stock exchange like the NYSE American.
Our stock price is likely to be highly volatile because of several factors, including a limited public float.
The market price of our common units has been volatile in the past and the market price of our common units is likely to be highly volatile in the future. You may not be able to resell our common units following periods of volatility because of the market’s adverse reaction to volatility.
Other factors that could cause such volatility may include, among other things:
actual or anticipated fluctuations in our operating results;
the absence of securities analysts covering us and distributing research and recommendations about us;
we may have a low trading volume for a number of reasons, including that a large portion of our stock is closely held;
overall stock market fluctuations;
announcements concerning our business or those of our competitors;
actual or perceived limitations on our ability to raise capital when we require it, and to raise such capital on favorable terms;
conditions or trends in the industry;
litigation;
changes in market valuations of other similar companies;
future sales of common units;
departure of key personnel or failure to hire key personnel; and
general market conditions.
Any of these factors could have a significant and adverse impact on the market price of our common units and/or warrants. In addition, the stock market in general has at times experienced extreme volatility and rapid decline that has often been unrelated or disproportionate to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common units and/or warrants, regardless of our actual operating performance.
Our common units are a “penny stock” under SEC rules. It may be more difficult to resell securities classified as “penny stock.”
Our common units is a “penny stock” under applicable SEC rules (generally defined as non-exchange traded stock with a per-share price below $5.00). Unless we successfully list our common units on a national securities exchange, or attain and maintain a per-unit price above $5.00, these rules impose additional sales practice requirements on broker-dealers that recommend the purchase or sale of penny stocks to persons other than those who qualify as “established customers” or “accredited investors.” For example, broker-dealers must determine the appropriateness for non-qualifying persons of investments in penny stocks. Broker-dealers must also provide, prior to a transaction in a penny stock not otherwise exempt from the rules, a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, disclose the compensation of the broker-dealer and its salesperson in the transaction, furnish monthly account statements showing the market value of each penny stock held in the customer’s account, provide a special written determination that the penny stock is a suitable investment for the purchaser, and receive the purchaser’s written agreement to the transaction.
Legal remedies available to an investor in “penny stocks” may include the following:
If a “penny stock” is sold to the investor in violation of the requirements listed above, or other federal or states securities laws, the investor may be able to cancel the purchase and receive a refund of the investment.
If a “penny stock” is sold to the investor in a fraudulent manner, the investor may be able to sue the persons and firms that committed the fraud for damages.
These requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject to the penny stock rules. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our securities, which could severely limit the market price and liquidity of our securities. These requirements may restrict the ability of broker-dealers to sell our common units and may affect your ability to resell our common units.
Many brokerage firms will discourage or refrain from recommending investments in penny stocks. Most institutional investors will not invest in penny stocks. In addition, many individual investors will not invest in penny stocks due, among other reasons, to the increased financial risk generally associated with these investments.
For these reasons, penny stocks may have a limited market and, consequently, limited liquidity. We can give no assurance at what time, if ever, our common units will no longer be classified as a “penny stock” in the future.
Our management controls a substantial number of our common units, decreasing your influence on unitholder decisions.
Our management, including Mr. Frija, own 27,361,271 units, or approximately 29.8% of our outstanding common units. Mr. Frija serves as our Chief Executive Officer, President, principal financial and accounting officer and is the sole member of our General Partner. As a result, our management as a group could have a significant influence in delaying, deferring or preventing any potential change in control of our company; they will be able to strongly influence the actions of our General Partner even if they were to cease being directors or officers of our company and can effectively control the outcome of actions brought to our unitholders for approval. Such a high level of ownership may adversely affect the exercise of your voting and other unitholder rights.
Units eligible for future sale may adversely affect the market.
From time to time, certain of our unitholders may be eligible to sell all or some of their common units by means of ordinary brokerage transactions in the open market pursuant to Rule 144 promulgated under the Securities Act, subject to certain limitations. In general, pursuant to Rule 144, non-affiliate unitholders may sell freely after six months, subject only to the current public information requirement. Affiliates may sell after six months, subject to the Rule 144 volume, manner of sale (for equity securities), current public information, and notice requirements. Of the 91,746,806 common units outstanding as of March 31, 2026, approximately 46,288,573 units are tradable without restriction. Given the limited trading of our common units, resale of even a small number of our common units pursuant to Rule 144 or an effective registration statement may adversely affect the market price of our common units.
Provisions of our partnership agreement, as amended, may delay or prevent a takeover which may not be in the best interests of our unitholders.
Provisions of our partnership agreement may be deemed to have anti-takeover effects. Pursuant to Section 5.6 of the partnership agreement, the General Partner of the Company may, without the approval of our limited partners, issue additional securities for any partnership purpose at any time and from time to time for such consideration and on such terms and conditions as the General Partner shall determine in its sole discretion, all without the approval of any limited partners, and that each additional interest authorized to be issued by the Company may be issued in one or more classes, or one of more series of any such classes, with such designations, preferences, rights, powers and duties as shall be fixed by the General Partner in its sole discretion. Pursuant to Section 13.1 of the partnership agreement, the General Partner may, without the approval of any partner, any unitholder or any other person, amend any provision of the partnership agreement to reflect any amendment expressly permitted in the partnership agreement to be made by the General Partner acting along, therefore including the creation of a new class of Company securities with dividends, liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of the holders of our common units.
We do not expect to pay dividends in the foreseeable future.
We do not intend to declare dividends for the foreseeable future, as we anticipate that we will reinvest any future earnings in the development and growth of our business. Therefore, investors will not receive any funds unless they sell their common units, and unitholders may be unable to sell their units on favorable terms. We cannot assure you of a positive return on investment or that you will not lose the entire amount of your investment in our common units.
