Risk factors
IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL
As of September 30, 2001, we had cash in the amount of $564. Our business plan
calls for significant expenses in connection with the development of our
EngineMax software. In addition, we anticipate that revenues from operations
will not be realized until sometime after development of our EngineMax software
is complete. Accordingly, we will require additional financing in order to
finance this development expense. We do not have any arrangements for financing
and we can provide no assurance that we will be able to obtain the required
financing when needed. Obtaining additional financing will be subject to a
number of factors, including:
- - Market conditions;
- - Investor acceptance of our business plan; and
- - Investor sentiment.
These factors may make the timing, amount, terms and conditions of additional
financing unattractive or unavailable to us. If we are not successful in
obtaining financing in the amount necessary to complete our business plan, then
we will not be able to achieve revenues and our business will fail.
BECAUSE WE HAVE ONLY RECENTLY COMMENCED BUSINESS OPERATIONS, WE FACE A HIGH RISK
OF BUSINESS FAILURE
We were incorporated in September 1999. We acquired the rights to develop our
EngineMax software and the www.EngineMax.com web site address in October 1999.
We are presently in the process of commencing development of our EngineMax
software product. We have not yet earned any revenues. Accordingly, we have no
operating history from which investors can evaluate our business. An investor
should consider the risks, expenses and uncertainties that an early stage
company like ours faces. These risks include our ability to:
- - Develop a functioning and marketable software product;
- - Develop a web site to market our EngineMax software once development is
complete;
- - Successfully market our EngineMax software once development is complete;
- - Convince potential customers to purchase licenses of our EngineMax
software;
- - Respond effectively to competitive pressures;
- - Continue to develop and upgrade our EngineMax software once development is
complete.
As noted in our financial statements that are included with this prospectus, we
are a development stage company that is currently developing a computer software
product. These conditions, as indicated in the audit report of BDO Dunwoody,
LLP, Chartered Accountants, raise substantial doubt as to our continuance as a
going concern. To date,
we have not completed the development of a viable software product and we
can provide no assurance that the product we are currently developing will
have a commercial application. The success of our business operations will
depend upon our ability to obtain further financing to complete successful
development of the program and to attain profitable operations. It is not
possible at this time for us to predict with assurance the outcome of these
matters. If we are not able to complete successful development of the program
and attain profitable operations, then our business will fail.
BECAUSE WE HAVE ONLY RECENTLY COMMENCED BUSINESS OPERATIONS, WE EXPECT TO INCUR
OPERATING LOSSES FOR THE FORESEEABLE FUTURE
We have never been profitable or made any income whatsoever. Prior to completion
of our EngineMax software, we anticipate that we will incur increased operating
expenses without realizing any revenues from sales. We therefore expect to
incur significant losses into the foreseeable future and recognize that if we
are unable to generate significant revenues from sales of licenses for our
EngineMax software, we will not be able to achieve profitability or continue
operations.
IF WE ARE UNABLE TO DEVELOP A MARKETABLE PRODUCT THEN OUR BUSINESS WILL FAIL
The EngineMax software is currently in the development stage. In order to
develop the EngineMax software into a commercial product, we will have to
complete programming of the computer code required for the EngineMax software.
In addition, we will have to finish development of the EngineMax website which
we will use for marketing and servicing the EngineMax software. Prior to
commencing commercial sales, we will have to complete testing of both the
EngineMax software and our website to ensure that the software and the website
are functioning properly and are capable of being marketed to the public. If we
are unable to develop a final software product that is capable of commercial
sale and market acceptance, we will not be able to earn any revenues. Our
failure to earn revenues will cause our business to fail.
IF MAJOR SEARCH ENGINES CHANGE THEIR SEARCH FORMAT, THEN OUR ENGINEMAX SOFTWARE
MAY NOT BE ABLE OPERATE PROPERLY AND OUR BUSINESS MAY FAIL
Our business plan is based on our ability to develop a computer software program
that is able to access major search engines and directly submit web pages. If
these major search engines restrict this access or change the manner in which
they gather information on Internet web sites, then our EngineMax software
product could be redundant or may not work properly, and we may not be able to
produce a viable product. In such a case, our business will most likely fail.
THE PUBLIC MARKET FOR OUR SECURITIES IS RELATIVELY NEW, WHICH MEANS YOU COULD
EXPERIENCE DIFFICULTY IN SELLING YOUR SHARES.
At the present time, there is a public market for our securities. Although our
securities are quoted on the NASD Over the Counter Bulletin Board, there is no
assurance that a regular
trading market will develop or that a market will be sustained, or that our
securities purchased by the public in the offering may be resold at their
original offering price or at any other price. Any market for our securities
that may develop will very likely be a limited one. In any event, due to
the fact that our securities are presently considered "penny stock" many
brokerage firms may choose not to engage in market making activities or effect
transactions in our securities. Purchasers of our securities may have
difficulties in reselling them and many banks may not grant loans using our
securities as collateral. Our securities are not eligible for listing on the
Nasdaq Stock Market at this time. We anticipate that the market price of our
common stock will be subject to wide fluctuations in response to several
factors, including:
- - actual or anticipated variations in our results of operations;
- - conditions and trends with the Internet;
- - our ability to complete the development of the EngineMax software and the
EngineMax website;
- - our ability to generate revenues from sales of the EngineMax software;
- - our ability to generate brand recognition of the EngineMax software and
acceptance by consumers;
- - increased competition from competitors who offer competing products; and
- - our financial condition.
Further, our stock price may be impacted by factors that are unrelated or
disproportionate to our operating performance. These market fluctuations, as
well as general economic, political and market conditions, such as recessions,
interest rates or international currency fluctuations may adversely affect the
market price of our common stock.
IF OUR STOCK PRICE DROPS SIGNIFICANTLY, WE MAY BECOME SUBJECT TO SECURITIES
LITIGATION THAT WOULD RESULT IN A HARMFUL DIVERSION OF OUR RESOURCES
In the past, following periods of volatility in the market price of a particular
company's stock, securities class action litigation has been brought against
that company. Any litigation arising from the volatility in the price of our
common stock could have a adverse effect upon our business, financial condition
and results of operations.
BECAUSE OUR MANAGEMENT HAS ONLY LIMITED EXPERIENCE IN THE OPERATION OF OUR
BUSINESS AND THE DEVELOPMENT AND SALE OF OUR PRODUCTS, THERE IS A RISK THAT OUR
BUSINESS MAY FAIL.
Our management has only limited experience in the business of software
development and the submission of web page information to search engines.
Potential investors should be aware that there is a substantial risk of failure
associated with inexperienced management as it encounters unfamiliar problems
related to the business. We have only a limited operating history upon which to
base any projection of the effects this risk factor will have on our operations,
and thus we cannot assure potential investors that management's inexperience,
and its inefficiencies caused thereby, will be overcome in the future.
AS OUR OFFICERS AND DIRECTORS DO NOT DEVOTE THEIR FULL BUSINESS TIME TO OUR
BUSINESS, WE MAY NOT BE ABLE TO IMPLEMENT OUR BUSINESS PLAN AND OUR BUSINESS MAY
FAIL
Our officers and directors presently devote only 50% of their business time to
the management of our business. This percentage of time may be increased or
decreased in the future, but there is no specific plan to do so at this time.
Moreover, we can provide no assurance to investors that either Mr. Rosner or Mr.
Chow will be able to devote sufficient amounts of their business time to enable
us to implement our business plan. If Mr. Rosner and Mr. Chow do not devote a
sufficient amount of their business time to the management of our business, our
business may fail.