ITEM 1A.
RISK FACTORS
Risks related to our business and operations:
The operation of the Downtown Manhattan Heliport was our main source of revenue. While we are now providing financial advisory services, if we are unable to find additional financial advisory customers or alternative revenue streams we may cease operating.
On March 4, 2025, the Company was notified by NYCEDC that NYCEDC will be terminating the Concession Agreement effective March 29, 2025. Pursuant to the termination the Company vacated and ceased use of the Heliport on March 29, 2025. While we have commenced providing financial advisory services, if we are unsuccessful in growing our financial advisory business or identifying and obtaining alternative revenue streams other than our financial advisory business, we may cease operations.
Any additional losses of key employees and our sole executive officer and director may prevent us from winding up the business in an orderly way.
Our growth and future success depends on our ability to retain our employees and our sole executive officer and director we currently have and to hire additional members of management and directors.
If we are deemed to be an investment company under the 1940 Act, we may be required to institute burdensome compliance requirements and our activities may be restricted. In such an event, our business would likely be materially and adversely affected.
If we are deemed to be an investment company under the 1940 Act, then our activities may be restricted or complicated, including through:
restrictions on the nature of our investments;
restrictions on our issuance of securities;
a requirement to register as an investment company;
adoption of a specific form of corporate structure and changes in corporate governance;
the hiring of a chief compliance officer, and adoption and implementation of various policies and requirements; and
compliance with additional reporting, record-keeping, voting, proxy and disclosure requirements, together with other rules and regulations.
In order not to be regulated as an investment company under the 1940 Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading of "securities" and that our activities do not include investing, reinvesting, owning, holding or trading "investment securities" constituting more than 40% of our assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis.
We have been subject to environmental laws that could have imposed significant costs on us and the continued liability for failure to comply with such laws could have subjected us to sanctions and material fines and expenses.
We were subject to a variety of federal, state and local environmental laws and regulations, including those governing the discharge of pollutants into the air or water, the management and disposal of hazardous substances and wastes and the responsibility to investigate and clean-up contaminated sites that are or were owned, leased, operated or used by us or our predecessors. Some of these laws and regulations required us to obtain permits, which contained terms and conditions that imposed limitations on our ability to emit and discharge hazardous materials into the environment and may have been periodically subject to modification, renewal and revocation by issuing authorities. Fines and penalties may be imposed for past non-compliance with applicable environmental laws and regulations, the failure to have required permits or the failure to comply with the terms and conditions of such permits. We intended to comply with all laws and regulations, however, from time to time, our operations may have not been in full compliance with the terms and conditions of our permits. We periodically reviewed our procedures and policies for compliance with environmental laws and requirements. We believe that our operations were in material compliance with applicable environmental laws, requirements and permits and any lapses in compliance were not expected to result in us incurring material liability or cost to achieve compliance. However, there can be no assurance that our operations were in material compliance with applicable environmental laws and requirements. Historically, the costs of achieving and maintaining compliance with environmental laws, requirements and permits have not been material; however, the operation of our business entailed risks in these areas and a past failure by us to comply with applicable environmental laws, regulations or permits could result in civil or criminal fines, penalties, enforcement actions, third party claims for property damage and personal injury, requirements to clean up property or to pay for the costs of cleanup and/or regulatory or judicial orders enjoining or curtailing operations or requiring corrective measures.
Our internal control over financial reporting has inherent limitations, and even effective controls may not prevent or detect all errors or instances of fraud.
We maintain a system of internal control over financial reporting designed to provide reasonable assurance regarding the accuracy and reliability of our financial statements. However, internal controls have inherent limitations, including the possibility of human error, judgment lapses, and resource constraints. Additionally, controls may be circumvented through collusion or by individuals acting outside established procedures. As a result, we cannot guarantee that our internal controls will prevent or detect all misstatements, whether due to error or fraud.
If our internal control over financial reporting fails to operate effectively, we could experience errors in our financial statements, delays in financial reporting, or the need to restate previously issued financial information. Any such outcomes could harm our reputation, result in regulatory scrutiny, or negatively affect investor confidence in our company.
Risks related to our securities:
There is no active market for our common stock, which makes our common stock less liquid.
To date, trading of our common stock has been sporadic and nominal in volume. In addition, there are only a limited number of broker-dealers trading our common stock. As a result, there is little, if any, liquidity in our common stock. We can provide no assurance that an active trading market will ever develop.
Our common stock is subject to the penny stock rules, which makes our common stock less liquid.
The SEC has adopted a set of rules called the “penny stock rules” that regulate broker-dealers with respect to trading in securities with a bid price of less than $5.00. These rules do not apply to securities registered on certain national securities exchanges (including the Nasdaq Stock Market), provided that current price and volume information regarding transactions in such securities is provided by the exchange. Our stock is not listed on such an exchange and we have no expectation that our common stock will be listed on such an exchange in the future. The penny stock rules require a broker-dealer to deliver to the customer a standardized risk disclosure document prepared by the SEC that provides information about penny stocks and the nature and level of risks in the penny stock market. Additionally, the broker-dealer must provide the customer with other information. The penny stock rules also require that, prior to a transaction in a penny stock, the broker-dealer must determine in writing that the penny stock is a suitable investment for the purchaser. The broker-dealer must also receive the purchaser’s written agreement to the transaction. These disclosure requirements have the effect of reducing the level of trading activity in the secondary market for a stock such as ours that is subject to the penny stock rules.
Our management team currently has the ability to influence stockholder votes.
As of December 31, 2025, our executive officer, director and their family members and associates, collectively, are entitled to vote 299,412 shares, or 29.6% of the 1,010,514 shares of our outstanding shares of common stock. Accordingly, and because there is no cumulative voting for directors, our executive officer and director is currently in a position to influence the election of all of our Board of Directors. The management of our company is controlled by our Board of Directors, which is currently comprised of one director and executive officer.
General risk factors:
Potential additional financings, the granting of additional stock options and any anti-dilution provisions in potential future derivative securities could further dilute our existing stockholders.
As of December 31, 2025, there were 1,010,514 shares of our common stock outstanding. If all of our outstanding and currently exercisable options were exercised, there would be 1,050,510 shares outstanding, an increase of approximately 4.0%. Any further issuances due to additional equity financings, or the granting of additional options could further dilute our existing stockholders, which could cause the value of our common stock to decline.
Our Board of Director ’ s right to issue shares of preferred stock could adversely impact the rights of holders of our common stock.
Our Board of Director currently has the right to authorize the issuance of up to 333,306 shares of one or more series of our preferred stock with such voting, dividend and other rights as our director determines. Such action can be taken by our Board of Director without the approval of our shareholders. Accordingly, the holders of any new series of preferred stock could be granted voting rights that reduce the voting power of the holders of our common stock. For example, the preferred holders could be granted the right to vote on a merger as a separate class even if the merger would not have an adverse effect on their rights. This right, if granted, would give such preferred holders a veto with respect to any merger proposal. Alternatively, such preferred holders could be granted a large number of votes per share while voting as a single class with the holders of our common stock, thereby diluting the voting power of the holders of our common stock. In addition, the holders of any new series of preferred stock could be given the option to redeem their shares for cash in the event of a merger. This would make acquiring us less attractive to a potential buyer. Thus, our Board of Director could authorize the issuance of shares of the new series of preferred stock in order to defeat a proposal for the acquisition of our company that a majority of the holders of our common stock otherwise favor.
