Risk Factors Dashboard

Once a year, publicly traded companies issue a comprehensive report of their business, called a 10-K. A component mandated in the 10-K is the ‘Risk Factors’ section, where companies disclose any major potential risks that they may face. This dashboard highlights all major changes and additions in new 10K reports, allowing investors to quickly identify new potential risks and opportunities.

Risk Factors - ESSI

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-Changes in blue
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ITEM 1A. RISK FACTORS

As a smaller reporting company, the Company is not required to provide the information required by this Item. However, the Company's business involves significant risks, including but not limited to: the Company's ability to continue as a going concern; dependence on a single executive officer; material weaknesses in internal control over financial reporting; the federal illegality of cannabis; regulatory uncertainty regarding the Company's payment platform; absence of revenue; default on the Robbins LLP promissory note; potential limitations on net operating loss carryforwards under Section 382; and the Company's need for additional financing. Investors should carefully consider these and other risks, uncertainties, and factors described throughout this Annual Report on Form 10-K, including under “Forward-Looking Statements,” “Business,” "Legal Proceedings," and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 1C. CYBERSECURITY

Risk Management and Strategy

The Company utilizes various processes and procedures intended to identify, assess, and manage cybersecurity risks affecting its systems, operations, data, and third-party service providers. The Company relies substantially on third-party cloud-based software, payment processors, hosting providers, communication systems, and external technology vendors in connection with its operations and platform development activities.

Cybersecurity risks considered by the Company include unauthorized access to systems or data, ransomware, phishing attempts, business interruption, payment processing disruptions, loss of confidential information, and vulnerabilities involving third-party vendors or hosted infrastructure.

The Company’s cybersecurity processes currently include periodic review of system access controls, use of third-party security features and monitoring tools where available, password and authentication controls, vendor oversight activities, data backup procedures, and periodic evaluation of technology-related operational risks. Due to the Company’s size and limited personnel, the Company relies significantly on third-party service providers and external consultants to support certain technology, hosting, payment processing, and cybersecurity-related functions.

As of the date of this Annual Report on Form 10-K, the Company is not aware of any cybersecurity incident that has materially affected, or is reasonably likely to materially affect, the Company’s business strategy, results of operations, or financial condition.

Governance

Management is responsible for assessing and managing cybersecurity risks as part of the Company’s broader operational and financial risk management activities. Cybersecurity and technology-related matters may be reviewed periodically by management and the Board of Directors, including risks associated with third-party service providers, operational systems, payment processing activities, data security, and business continuity.

Due to the Company’s limited personnel and early-stage operations, the Company does not currently maintain a dedicated internal cybersecurity department or formalized enterprise cybersecurity program. The Company intends to continue evaluating and enhancing its cybersecurity processes, policies, and oversight procedures as operations and resources expand.

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