UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC. 20549

 

FORM 10-Q

 

☒  QUARTERLY REPORT PURSUANT
TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September
30, 2019

 

OR

 

☐  TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from_______to________

 

Commission File Number: 000-55010

 

Arrestage International,
Inc.

(Exact name of registrant as specified in
its charter)

 

Nevada 3841 45-2552289
(State or other jurisdiction of

incorporation or organization)

 (Primary Standard Industrial

Classification Code Number)

 (I.R.S. Employer

Identification Number)

 

20343 N. Hayden
Road, Suite 101

Scottsdale,
Arizona 85255

(480) 710.2229

(Address, including
zip code, and telephone number, including area code, of Registrant’s principal executive offices)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports)
and (2) has been subject to such filing requirements for the past 90 days. Yes  ☒  No  ☐

 

Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or such shorter period that the registrant was
required to submit and post such files). Yes  ☒  No  ☐

 

Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
 Emerging growth company

 

If an emerging growth company, indicate
by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No ☒

 

Securities registered pursuant to
Section 12(b) of the Act:

 

Title of each class Trading Symbol(s) Name of each exchange on which registered
     
     
     

 

At September 30, 2019 there were 3,600,000 shares of the registrants
Common Stock outstanding.

 

 

 

 

 

 

ARRESTAGE
INTERNATIONAL, INC.

BALANCE
SHEET

AS
OF SEPTEMBER 30, 2019 AND DECEMBER 31, 2018

 

  September 30,

2019

  December 31,

2018

 
ASSETS      
Current
Assets
      
Cash
In Bank
  1,786   3,660 
Prepaid
Expenses
     3,246 
Total
Current Assets
  1,786   6,906 
Other
Assets
        
Trademark
License’
  50,000   50,000 
Impairment-Trademark
License
  (50,000)  (50,000)
Prepaid
Expenses
       
Total
Other Assets
      
TOTAL
ASSETS
  1,786   6,906 
         
LIABILITIES
AND EQUITY
        
Current
Liabilities
        
Accounts
Payable
  12,762   8,303 
Notes
Payable-Related Party
  204,992   150,857 
Accrued
Interest Payable
  27,381   16,046 
License
Fee Payable
  25,790   25,790 
Total
Current Liabilities
  270,925   200,996 
Total
Liabilities
  270,925   200,996 
Stockholders’
(Deficit)
        
Preferred
Stock, $0.001 par value, 5,000,000 shares of preferred shares authorized, no shares of preferred stock outstanding.
      
Common
Stock, $0.001 par value, 30,000,000 shares authorized, 3,600,000 shares issued and outstanding as of December 31, 2016 and
December 31, 2016
  3,600   3,600 
Additional
Paid-in Capital
  148,851   148,851 
Accumulated
Deficit
  (421,590)  (346,541)
Total
Stockholders’ (Deficit)
  (269,139)  (194,090)
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
  1,786   6,906 

 

The
accompanying notes are an integral part of these financial statements

 

1

 

 

ARRESTAGE
INTERNATIONAL, INC.

STATEMENT
OF OPERATIONS

 

  For the Nine Months Ended  For the Three Months Ended 
  September 30,

2019

  September 30,

2018

  September 30,

2019

  September 30,

2018

 
Revenues              
Operating Expenses                
Bank Charges  54   44   42    
Professional and Legal Fees  39,281   56,199   10,628   8,133 
Accounting and Bookkeeping Fees  23,559   19,503   7,800   5,063 
Other Expenses  820   2,497      512 
Total Operating Expenses  63,714   78,243   18,470   13,708 
Other Expenses                
Interest Expense  11,335   6,521   4,059   2,574 
Total Expenses  75,049   84,764   22,529   16,282 
Net Income (Loss)  (75,049)  (84,764)  (22,529)  (16,282)
Per Share  (0.02)  (0.02)  (0.01)  (0.00)
Weighted Average number of shares outstanding  3,600,000   3,600,000   3,600,000   3,600,000 

 

The
accompanying notes are an integral part of these financial statements

 

2

 

 

STATEMENT
OF CHANGES IN STOCKHOLDERS (DEFICIT)

For
the Nine Month Period Ended September 30, 2019

 

  Retained Earnings  AOCI  Common Stock  Additional Paid-In Capital  Total 
January 1, 2019  (346,541)        –   3,600   148,851   (194,090)
Comprehensive income:                    
Net Income (Loss)  (23,725)              (23,725)
March 31. 2018  (370,266)     3,600   148,851   (217,815)
Comprehensive income:                    
Net Income (Loss)  (28,795)              (28,795)
June 30, 2019  (399,061)      3,600   148,851   (246,610)
Comprehensive income:                    
Net Income (Loss)  (22,529)              (22,529)
September 30, 2019  (421,590)      3,600   148,851   (269,139)

 

STATEMENT
OF CHANGES IN STOCKHOLDERS (DEFICIT)

For
the Nine Month Period Ended September 30, 2018

 

  Retained Earnings  AOCI  Common Stock  Additional Paid-In Capital  Total 
January 1, 2018  (228,847)        –   3,600   148,851   (76,396)
Comprehensive income:                    
Net Income (Loss)  (36,863)              (36,863)
March 31. 2018  (265,710)      3,600   148,851   (113,259)
Comprehensive income:                    
Net Income (Loss)  (31,619)              (31,619)
June 30. 2018  (297,329)      3,600   148,851   (144,878)
Comprehensive income:                    
Net Income (Loss)  (16,282)              (16,282)
September 30,2018  (313,611)     3,600   148,851   (161,160)

 

STATEMENT
OF CHANGES IN STOCKHOLDERS (DEFICIT)

For
the Three Month Period Ended September 30, 2019

 

  Retained Earnings  AOCI  Common Stock  Additional Paid-In Capital  Total  
July 1, 2019  (399,061)        –   3,600   148,851   (246,610)
Comprehensive income:                    
Net Income (Loss)  (22,529)              (22,529)
September 30, 2019  (421,590)     3,600   148,851   (269,139)

 

The
accompanying notes are an integral part of these financial statements

 

3

 

 

ARRESTAGE
INTERNATIONAL, INC.

STATEMENTS
OF CASH FLOWS FOR THE NINE MONTHS ENDED

SEPTEMBER 30, 2019 AND SEPTEMBER 30, 2018

 

  September 30,
2019
  September 30,
2018
 
       
Cash Flows from operating activities:      
Net (Loss) $(75,049) $(84,764)
Adjustments to reconcile net (loss) to net cash used in operating activities:        
(Increase) or Decrease in Prepaid Expenses $3,246  $803 
Increase in Accounts Payable $4,459  $6,817 
Increase in accrued interest payable $11,335  $6,521 
Total Adjustments $19,040  $14,141 
Net Cash (used in) Operating Activities $(56,009) $(70,623)
Cash Flows from financing activities:        
Proceeds from (payments on) note payable-related party $54,135  $69,044 
Proceeds from sale of common stock $  $ 
Net cash provided by financing activities $54,135  $69,044 
Net increase (decrease) in cash $(1,874) $(1,579)
Cash Balance at Beginning of Period $3,660  $2,911 
Cash Balance at End of Period $1,785  $1,332 
Interest Paid  0   0 
Income taxes paid  0   0 

 

The
accompanying notes are an integral part of these financial statements

 

4

 

 

ARRESTAGE
INTERNATIONAL, INC.

 

NOTES
TO THE FINANCIAL STATEMENTS

 

September
30, 2019

 

Note
1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

This
summary of significant accounting policies of Arrestage International, Inc. (the “Company”) is presented to assist
in understanding the Company’s financial statements. The financial statements and footnotes are representations of the Company’s
management, who is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting
principles in the United States of America and have been consistently applied in the preparation of the financial statements.

 

Organization
and Description of the Business

 

The
Company was incorporated under the laws of the State of Nevada on June 15, 2011 and is in the Nutraceutical business holding formulas
for skin care products as well as brand formulas, and other intellectual property.

 

Use
of Estimates by Management

 

The
preparation of financial statements in conformity with accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

 

Cash
and Cash Equivalents

 

Cash
and cash equivalents includes cash in banks and highly liquid investments with original maturities of three months or less that
are readily convertible into cash and are not subject to significant risk from fluctuations in interest rates. As a result, the
carrying amount of cash and cash equivalents approximates fair value.

 

 Concentrations
of Credit Risk

 

The
Company places its cash and cash equivalents with major financial institutions. At September 30, 2019 and December 31, 2018 the
Company did not have any cash balances on deposit with banks which exceeded the balance insured by the FDIC, and does not believe
that it is subject to any unusual financial risk beyond the normal risk associated with
commercial banking relationships.

 

Intangible
Assets

 

Goodwill
and Intangible Assets—Intangible assets with finite useful lives are amortized while intangible assets with indefinite useful
lives are not amortized. Amortizable intangible assets are reviewed for impairment when events or changes in circumstances indicate
the carrying value may not be recoverable. Indefinite-lived intangible assets are tested annually for impairment and when events
or changes in circumstances indicate the carrying value may not be recoverable. The appropriateness of the indefinite-life classification
of non-amortizable intangible assets is also reviewed as part of the annual testing or when circumstances warrant a change to
a finite life. The Company performs its annual impairment testing as of December 31 each year, which is the last day of the Company’s
fiscal year.

 

Intangible
assets with indefinite useful lives (The Trademark License) are tested for impairment at the individual asset level by comparing
the fair value of the indefinite-lived intangible asset to its carrying amount. If the carrying amount of an indefinite-lived
intangible asset exceeds its fair value, an impairment charge is recognized to reduce the carrying amount to fair value. Fair
values of indefinite-lived intangible assets are estimated using discounted cash flow (“DCF”) models.

 

5

 

 

In
using a DCF method of establishing a fair value, management must make certain assumptions as to the likelihood of having cash
flow from operations in the future based on past performance and prospects of sales in the future. The Company has no history
of sales and no orders pending. Therefore, it is not possible to determine an appropriate level of cash receipts from operations
into the future. Based on this assumption, during 2014 management determined that the fair value of the Trademark License under
Generally Accepted Accounting Principles was zero. Accordingly, the Company has chosen to write the carrying value of the Trademark
license to zero as of December 31, 2014.

 

Fair
Value of Financial Instruments.
The Company’s financial instruments include cash, accounts receivable, employee advances,
due from related parties, prepaid expenses, development costs, deposits, accounts payable, credit cards payable, accrued expenses,
and due to related parties. The estimated fair value of these instruments approximates its carrying amount due to the short maturity
of these instruments. The carrying value of short and long-term debts approximates fair value because those financial instruments
bear interest at rates that approximate current market rates for loans with similar maturities and credit quality.

 

Recent
Accounting Pronouncements

 

The
Company does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material
effect on the accompanying financial statements.

 

Ricks
and Uncertainties

 

The
Company is subject to substantial business risks and uncertainties inherent in starting a new business. There is no assurance
that the Company will be able to complete a business combination.

 

Basis
of Presentation-Going Concern

 

The
accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United
States of America, which contemplates continuation of the Company as a going concern. However, as reflected in the accompanying
financial statements, the Company has no operations, a net loss of ($75,049) for the nine months ended September 30, 2019 as compared
to ($84,764) for the nine months ended September 30, 2018, an accumulated deficit of (269,139) and ($194,090) at September 30,
2019 and December 31, 2018 respectively. This raises substantial doubt about its ability to continue as a going concern. The ability
of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement
its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to
continue as a going concern.

 

These
financial statements are prepared on a going concern basis because the Directors, officers and significant shareholders have undertaken
to provide continuing financial support so that the Company is able to pay its debts as and when they fall due. In addition, Management’s
plans to ensure the Company continues as a going concern include the pay-down of outstanding debt of the Company and funding of
future operations using proceeds from the revenues expected to be generated from the sale of products and services within acquired
companies.

 

While
the Company looks to acquire targeted acquisitions, adverse changes in market conditions or limits on the Company’s ability
to obtain financing could limit the Company’s acquisition of such targets and the production, marketing and sale of products
and services of the targeted acquisitions. The impact of such eventualities could influence future operations of the Company.

 

6

 

 

Income
Taxes

 

The
Company records deferred taxes in accordance with Statement of Financial Accounting Standards (SFAS) ASC 740, “Accounting
for Income Taxes.” The statement requires recognition of deferred tax assets and liabilities for temporary differences between
the tax basis of assets and liabilities and the amounts at which they are carried in the financial statements, the effect of net
operating losses, based upon the enacted tax rates in effect for the year in which the differences are expected to reverse. A
valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized.

 

Deferred
income taxes arise from temporary timing differences in the recognition of income and expenses for financial reporting and tax
purposes. The Company’s deferred tax assets consist entirely of the benefit from net operating loss (NOL) carry forwards.
The net operating loss carry is severely restricted as per the Internal Revenue code if there is a change in ownership. The Company’s
deferred tax assets are offset by a valuation allowance due to the uncertainty of the realization of the net operating loss carry
forwards. Net operating loss carry forwards may be further limited by other provisions of the tax laws.

 

Earnings
per Share

 

Basic
net income (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) attributable to
common stockholders by the weighted-average number of common shares outstanding. There were no options or warrants outstanding
at September 30, 2019 nor December 31, 2018 diluted earnings per share is not shown for the periods in which the Company incurs
a loss because it would be anti-dilutive.

 

Equity-Based
Compensation

 

Pursuant
to accounting guidance related to accounting for equity-based compensation, the Company is required to recognize all share-based
payments to non-employees and employees in the financial statements based on fair values on the grant date. The Company has accounted
for issuance of shares, options, and warrants in accordance with the guidance, which requires the recognition of expense, based
on grant-date fair values, over the service period.

 

Reclassifications

 

Certain
prior period amounts have been reclassified to conform to current classifications.

 

Other

 

The
Company has selected December 31 as its fiscal year end.

 

The
Company has paid no dividends.

 

No
advertising expense has been incurred.

 

The
Company consists of one reportable business segment.

 

The
Company has not entered into any leases.

 

Note
2-Income Taxes

 

At
September 30, 2019, the Company has approximately $324,586 of operating loss carryforwards for federal income taxes that may be
applied against future taxable income. There is no provision for income taxes because the Company has historically incurred operating
losses and maintains a full valuation allowance against its net deferred tax assets.

 

The
Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. The Act reduces the US federal corporate tax rate
from 34% to 21%. The most significant impact of the legislation for the Company was a $49,000 reduction of the value of net deferred
tax assets (which represent future tax benefits) as a result of lowering the U.S. corporate income tax rate from statutory rate
of 34% to 21%.

 

7

 

 

Deferred
income taxes arise from temporary timing differences in the recognition of income and expenses for financial reporting and tax
purposes. The Company’s deferred tax assets consist entirely of the benefit from net operating loss (NOL) carry forwards.
The net operating loss carry is severely restricted as per the Internal Revenue code if there is a change in ownership. The Company’s
deferred tax assets are offset by a valuation allowance due to the uncertainty of the realization of the net operating loss carry
forwards. Net operating loss carry forwards may be further limited by other provisions of the tax laws. With few exceptions, our
income tax returns are no longer subject to Federal tax examinations by tax authorities for years before December 31, 2011.

 

The
Company is subject to federal and state income tax. No provision for tax has been made as of September 30, 2019 or December 31,
2018 as the Company has incurred operating losses since inception. The following table reconciles the Company’s statutory
tax rate to its effective tax rate as a percentage of income before income taxes under the Act:

 

The
components of the Company’s deferred income tax assets are set forth below:

 

Period Ending Estimated NOL Carry-forward  NOL Expires Estimated Tax Benefit from NOL  Valuation Allowance  Change in Valuation Allowance  Net Tax Benefit 
                  
September 30, 2019 $324,586  Various $68,163  $68,163  $15,760  $      – 
December 31, 2018 $249,537  Various $52,403  $52,403  $17,868  $ 
December 31, 2017 $164,450  Various $34,535  $34,535  $7,414  $ 
December 31, 2016 $129,147  Various $27,121  $27,121  $8,306  $ 
December 31, 2015 $89,595  Various $18,815  $18,815  $631  $ 
December 31, 2014 $86,589  Various $18,184  $18,184  $18,184  $ 

 

NOTE
3-RELATED PARTY TRANSACTIONS

 

On
June 27, 2011 the Company entered into a Multiple Advance Demand Note with The Shapiro Trust, owner of 40% of the outstanding
equity in the Company. The Note is due upon Demand and bears an interest rate of 8% per annum. As of September 30, 2019 and December
31, 2018 the principal balance on the Note was $204,992 and $150,857, respectively. As of September 30, 2019 and December 31,
2018 the accrued interest on the Note was $27,381 and $16,046, respectively. The total principal and interest due The Shapiro
Trust as of September 30, 2019 and December 31, 2018 was $232,373 and $166,903, respectively. See Note 4.

 

On
June 22, 2011 the Company entered into a Trademark License Agreement with Ann Shapiro, a beneficiary of the Shapiro Trust and
wife of one of the Company’s directors. Ms. Shapiro owns the Registered Trademark and cosmetic formulas. Under the terms
of the Agreement the Company was granted an exclusive license to sell “Arrestage Mark and Formula” in exchange for
a Royalty of $50,000 to be paid in three installments. Ms. Shapiro retains title and ownership of the Mark and Formulas. The Termination
Date of the License is 2025. See Note 3.

 

NOTE
4-TRADEMARK LICENSE

 

On
June 22, 2011 the Company entered into a Trademark License Agreement with Ann Shapiro. Ms. Shapiro owns the Registered Trademark
and cosmetic formulas. Under the terms of the Agreement the Company was granted an exclusive license to sell “Arrestage
Mark and Formula” in exchange for a Royalty of $50,000 to be paid in three installments. Ms. Shapiro retains title and ownership
of the Mark and Formulas. The Termination Date of the License is 2025.

 

8

 

 

The
Trademark License was originally recorded at a cost of $50,000 and tested for impairment in December 2014, at which time it was
determined that the fair value of the License was zero and an impairment allowance of $50,000 was recorded. See Footnote 1-Intangible
Assets.

 

  September 30, 2019  December 31, 2018 
  Gross Carrying Amount  Impairment Allowance  Gross Carrying Amount  Impairment Allowance 
              
Trademark License  50,000   (50,000)  50,000   (50,000)

 

NOTE
5-FINANCING ACTIVITIES

 

Note
Payable

 

The
Following is a summary of The Note Payable-Current

 

  September 30, 2019  December 31, 2018 
  Principal  Interest payable  Total Due Upon Demand  Principal  Interest payable  Total Due Upon Demand 
Unsecured Demand Note Payable to The Shapiro Trust, due upon demand. The Note Payable is a multiple advance demand Note with a stated interest rate of 8%.  204,992   27,381   232,373   150,857   16,046   166,903 
Current Portion  204,992   27,381   232,373   150,857   16,046   166,903 
Long Term portion                  
                         
Total  204,992   27,381   232,373   150,857   16,046   166,903 

 

Royalty
Fee Payable

 

The
following is a summary of the Royalty Fee Payable

 

A Trademark Licenses Agreement was signed June 22, 2011 which calls for to Royalty Payments of $50,000 to be paid in three installments, with no interest, on or before the 15th day of the month for which the Royalty is due.  25,790      25,790   25,790      25,790 
Current Portion  25,790      25,790   25,790      25,790 
Long Term portion                  

 

9

 

 

NOTE
6-CAPITAL STOCK and STOCKHOLDERS’ EQUITY

 

Description
of Capital Stock–The Company has two classes of authorized capital stock: Common Stock and Preferred Stock. Both were authorized
June 22, 2011 and both have a par value of $001. The holders of Common Stock are entitled to one vote per share. Rights and Preferences
for the Preferred Stock will be determined by the Board of Directors prior to issuance of any Preferred Stock.

 

There
are 30,000,000 shares of Common Stock authorized. As of September 30, 2019 and December 31, 2018 there were 3,600,000 shares of
Common Stock issued and outstanding.

 

During
the six months ended September 30, 2019, nor during the year ended December 31, 2018, the Company did not issue any shares of
common stock.

 

There
are 5,000,000 shares of Preferred Stock authorized and zero outstanding.

 

NOTE
7-COMMITMENTS AND CONTINGENCIES

 

In
March 2017 the Board of Directors of the Company authorized management to pursue certain merger and acquisition targets and to
pay certain legal, consulting, and diligence fees on behalf of these entities. Approximately $9,000 has been paid for these legal
fees and due diligence during 2017. No such fees were paid during 2018 and no such fees were paid during the nine months ended
September 30, 2019

 

NOTE
8-SUBSEQUENT EVENTS

 

The
Company has evaluated events subsequent to September 30, 2019 and the date the financial statements were available to be issued,
to assess the need for potential recognition or disclosure,
and
has determined that there have been no events that have occurred that would require adjustments to our disclosures in the financial
statements.

 

 

 

 

The
remainder of this page is intentionally left blank

 

10

 

 

Item
2.
Managements’ Discussion and Analysis
of Financial Condition and Results of Operations

 

Overview

 

Arrestage
International, Inc. (“AII”)
is a Nevada Corporation within the nutraceutical healthcare and wellness space.

 

Nutraceutical
and Topical Pain Relief

 

Arrestage
owns formulations and an exclusive license for various unique product lines and formulations for skin care products. The Company
is also exploring opportunities to acquire and/or license product lines within the topical pain relief market.

 

The
Company intends to create significant brands in the aesthetic skin care and the topical pain relief segments. The product lines
will be held in wholly, or majority, owned subsidiaries created to specialize in the various segments. For instance, skin care
products will be held in a distinct subsidiary and topical pain products will be held in another. The financial results will be
consolidated at the corporate level.

 

Arrestage
is exploring the possibility of expanding product lines through acquisitions of new products that will allow additional market
share. The Company may also perform research and development functions in-house, which could include the development or acquisition
of an entirely new product line or expansion of the current line. Management feels that the target products are on the cutting
edge of health applications and import new techniques integrating Allopathic medicine, Naturopathic medicine, and some New Age
features. Because of the relationships that have been established within the research and development planning and due diligence,
the Company in a prime position to view and explore potential products that fit within the Company’s strategy.

 

Medical
Device Equipment Rental

 

The Company plans to capitalize on current trends in the health care industry where healthcare providers
have begun renting expensive medical equipment rather than purchasing that equipment as cost saving strategy. Arrestage will establish
a medical device rental subsidiary that purchases or secures medical devices such as MRI and ultra-sound systems and various other
diagnostic equipment. Our target market will be physician groups, clinics, rural hospitals, and insurance companies. Arrestage
intends to obtain residual income from such rentals and will attempt to secure a fully secured UCC-1 position on each piece of
equipment.

 

According
to market research by IBISWorld in a March 2019 report, the United States medical equipment rental market has reached a value
of $4 billion in 2019. Over the past five years, the Medical Equipment Rental industry has
exhibited growth due to the rapid advent of high-cost equipment. As many healthcare providers have grappled with cuts in Medicare
and Medicaid reimbursements, they have implemented cost-saving strategies. In particular, many healthcare providers have rented
rather than purchased medical equipment because they can access up-to-date technologies at a lower cost. For instance, some hospitals
have rented ultrasound, remote patient monitoring and X-ray equipment, as well as other types of medical equipment that tend to
become obsolete quickly. Furthermore, the regulatory environment has promoted demand for medical equipment rentals.

 

Corporate
Governance

 

Arrestage
international has of two officers. As the Company acquires additional product lines and/or licenses, it may add additional full-time
employees. However, under the Company’s business plan, most day to day operations will be at the subsidiary level, allowing
Arrestage to minimize the number of employees and other G&A expenses at the Corporate level.

 

11

 

 

Licensing
Agreement

 

Effective
June 22, 2011 Arrestage entered into an agreement to acquire an exclusive licensing agreement from Ann Shapiro. Mrs. Ann Shapiro
is the wife of one of the BOD members Dr. Roy Shapiro, so he had direct insight on this product line. This transaction was completed
as a related party transaction with Arrestage. As part of the license agreement Arrestage agreed to pay $50,000 in three installments
of unspecified amounts and on unspecified dates in exchange for consideration received. The license agreement expires in 2025.

 

“GRANT
OF LICENSE. ALS (Ann Shapiro) owns Registered Trademark of Arrestage and cosmetic formulas (“ARRESTAGE MARK &
FORMULAS”). In accordance with this Agreement, ALS grants All (Arrestage International, Inc.) an exclusive license
to sell the ARRESTAGE MARK & FORMULAS. ALS retains title and ownership of the ARRESTAGE MARK & FORMULAS.”

 

All
rights other than those specifically granted herein to Licensee are reserved to Licensor, including, without limitation, Licensors
right to continue to use the Licensed Property in any form, manner, and medium.

 

Funding
during the next twelve months will come primarily from serviceable debt financing and, if effective, capital market financing.
The Company will be reliant on such debt financing, access to capital markets, or future revenues, since the company currently
has no revenue.

 

Planned
Medical Device Rental Division

 

The
Company plans to capitalize on current trends in the health care industry where healthcare providers have begun renting expensive
medical equipment rather than purchasing that equipment as cost saving strategy. Arrestage will establish a medical device rental
subsidiary that purchases or secures medical devices such as MRI and ultra sound systems and various other diagnostic equipment.
Our target market will be physician groups, clinics, rural hospitals, and insurance companies. Arrestage intends to obtain residual
income from such rentals and would maintain a fully secured UCC-1 position on each piece of equipment. To grow this division,
Arrestage plans to aggressively market such services to help meet the expanding demand of medical systems due to the current healthcare
trends. The United States medical equipment rental market has reached a value of $4 billion in 2019. Over
the past five years, the Medical Equipment Rental industry has exhibited growth due to the rapid advent of high-cost equipment.
As many healthcare providers have grappled with cuts in Medicare and Medicaid reimbursements, they have implemented cost-saving
strategies. In particular, many healthcare providers have rented rather than purchased medical equipment because they can access
up-to-date technologies at a lower cost. For instance, some hospitals have rented ultrasound, remote patient monitoring and X-ray
equipment, as well as other types of medical equipment that tend to become obsolete quickly. Furthermore, the regulatory environment
has promoted demand for medical equipment rentals.

 

Results
of Operations

 

Nine
Months Ended September 30, 2019, compared to the Six Months Ended September 30, 2018

 

The
following table sets forth the results of our current operations for the periods indicated as a percentage of total expenses:

 

  9 months ended
September 30,
2019
  9 months ended
September 30,
2018
 
  $  % of Total Expenses  $  % of Total Expenses 
Net Sales            
Cost of Goods Sold            
Gross Profit            
Operating Expenses  63,714   85%  78,243   95%
Operating (Loss)  (63,714)  85%  (78,243)  95%
Interest (Expense)  11,335   13%  6,521   5%
Net (Loss)  (75,049)  98%  (84,764)  100%

 

12

 

 

Operating
Expenses

 

Total
operating expenses decreased approximately 19% to $63,714 for the nine months ended 
September
30, 2019, from $78,243for nine months ended September 30, 2018The
decrease in our operating expenses between the periods was mostly attributable to a decrease in legal and professional fees related
to the filing of the Company’s an S-1 Registration.

 

Interest
Expense

 

Interest
Expense increased by $4,814 to $11,335 for the nine months ended September 30, 2019 from $6,521 for the nine months ended September
30, 2018 as a result of increased borrowing to fund operations.

 

Net
Income (Loss)

 

Net
loss from continuing operations for the nine months ended September 30, 2019 was ($75,049). compared to net loss from continuing
operations of ($84,764) for the nine months ended September 30, 2018. The decrease in our net loss between the periods was mostly
attributable to a decrease in legal and professional fees related to the filing of the Company’s an S-1 Registration.

 

Seasonality

 

We
believe that our business will be characterized by minor seasonality. However, sales to any particular customer or of any particular
product can vary substantially from one quarter to the next based on such factors as industry trends, timing of promotional discounts,
domestic and international economic conditions and acquisition related activities. The Industry has historically recorded higher
branded product sales volume during the second fiscal quarter (January through March) due to increased interest in health-related
products among consumers following the holiday season.

 

Liquidity
and Capital Resources

 

Our
immediate future principal demands for liquidity are to enable the Company to continue to fund the expenses associated with maintaining
reporting requirements and becoming a trading Company and general corporate purposes. We have no history of sales and have incurred
negative operating cash flows since inception to date in 2019. To date we have borrowed approximately $205,000 from a shareholder
and Director in the form of a multiple advance 8% Demand Note.

 

Although
the Company may produce revenues within the next few operating quarters, we do not plan on our operating activities being able
to fund operations over the next four quarters. In December 2017, the Company filed an S-1 Registration with the SEC with the
plan of raising equity financing to raise capital to execute on its business plan. On October 11, 2018 the Company received a
Notice of Effectiveness from the SEC indicating that the S-1 Registration was effective as of that date. The Company has been
in conversations with Network 1 Financial Securities, a FINRA registered broker/dealer, to facilitate the filing of a Form 15(c)211
with FINRA to enable the Company to become a trading company. The Company and Network 1 has determined that the quickest route
to a trading symbol is to file a that, post effective amendment to the S-1 registering existing shares. Subsequent to acceptance
by the SEC of that amendment, the Company and Network 1 will determine the best strategy for raising additional capital through
the capital markets.

 

There
can be no assurance that required future financing can be successfully completed on a timely basis, or on terms acceptable to
us. Any future issuance of equity securities could cause dilution to our shareholders. Any incurrence of indebtedness would increase
our debt service obligations and would cause us to be subject to restrictive operating and financial covenants.

 

13

 

 

We
had negative net working capital of ($269,139) as of September 30, 2019 as compared to negative working capital of $(194,090)
as of December 31, 2018.

 

The
following is a summary of cash provided by or used in each of the indicated types of activities during the six months ended September
30, 2019 and September 30, 2018:

 

  2019  2018 
Cash provided by (used in):      
Operating activities $(56,009) $(70,623)
Financing activities $54,135  $69,044 

 

Net
cash used by operating activities of continuing operations was $(56,009) for the six months ended September 30, 2019, compared
to net cash used in operating activities of continuing operations of $(70,623) for the same period in 2018. The decrease in the
amount of cash used by our operating activities was due primarily to an decrease in professional fees related to the S-1 Registration.

 

Net
cash flows provided by financing activities was $54,135 for the six months ended September 30, 2019, compared to net cash flows
provided by financing activities of $69,044 for the same period in 2018. Net cash flows provided by financing activities was a
result of proceeds from the Multiple Advance 8% Demand Note Payable in the first six months of 2019.

 

Indebtedness

 

On
June 27, 2011 the Company entered into a Multiple Advance Demand Note with The Shapiro Trust, beneficial owner of 40% of the outstanding
equity in the Company. The Note is due upon Demand and bears an interest rate of 8% per annum. As of September 30, 2019 and December
31, 2018 the principal balance on the Note was $204,992 and $150,857, respectively. As September 30, 2019 and December 31, 2018
the accrued interest on the Note was $27,381 and $16,046, respectively. The total principal and interest due The Shapiro Trust
as of September 30, 2019 and December 31, 2018 was $232,373 and $166,903, respectively. See Note 5 to the Financial Statements.

 

On
June 22, 2011 the Company entered into a Trademark License Agreement with Ann Shapiro, a beneficiary of the Shapiro Trust and
wife of one of the Company’s directors. Mrs. Shapiro owns the Registered Trademark and cosmetic formulas. Under the terms
of the Agreement the Company was granted an exclusive license to sell “Arrestage Mark and Formula” in exchange for
a Royalty of $50,000 to be paid in three installments. Ms. Shapiro retains title and ownership of the Mark and Formulas. The Termination
Date of the License is 2025. See Note 5 to the Financial Statements.

 

Off-Balance
Sheet Arrangements

 

There
are no off-balance sheet arrangements between us and any other entity that have, or are reasonably likely to have, a current or
future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to shareholders.

 

We
have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties.
We have not entered into any derivative contracts that are indexed to our shares and classified as stockholders’ equity
or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest
in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity.

 

14

 

 

Directors
and Employees

 

The
company currently has two members of management and 5 Board Members, whom do not receive compensation. The Board of Directors
of the Company will address compensation of the Officers on a case-by-case basis into the foreseeable future as corporate needs
arise. The Board plans to maintain minimal overhead, believing that by adhering to its licensing strategy and utilizing its current
Board and Management, it can keep the Company’s headcount to ten or fewer employees in the near term.

 

On
April 19, 2019 Phillip Weisman, a member of the Board of Directors since June 2011, passed away. The Board appointed Mr. Nick
White to the Board of Directors as of August 22, 2019 to fill the seat vacated by Mr. Phillip Weisman’s death on April 19,
2019. In addition, the Board appointed Mr. John Muldoon to the Board on August 22, 2019 also. On October 21, 2019
the
Board appointed Mr. Muldoon as the Company’s Chief Executive Officer.

 

Critical
Accounting Policies

 

Our
significant accounting policies are described more fully in Note 1 to the September 30, 2019 Financial Statements which we believe
are the most critical to aid you in fully understanding and evaluating this management discussion and analysis.

 

ITEM
3. Quantitative and Qualitative Disclosures about Market Risk

 

Not
applicable

 

ITEM
4. Controls and Procedures

 

Disclosure
Controls and Procedures

 

During
the first quarter of 2018 our CEO, the Chairman of the Audit Committee of the Board of Directors, and a financial consultant began
evaluating the design and effectiveness of our “disclosure controls and procedures” (as defined under Rules 13a-15(e)
and 15d-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered by this report. Where required they
have the authority to implement appropriate disclosure controls and procedures to remedy any material weaknesses. Once the S-1
Registration is effective we will a Chief Financial Officer to implement the controls and oversee all financial activities of
the Company.

 

Changes
in Internal Control over Financial Reporting

 

There
were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of
the Exchange Act) that occurred during the quarter ended March 31, 2019, that have materially affected, or are reasonably likely
to materially affect, our internal control over financial reporting. In designing and evaluating the disclosure controls and procedures,
management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable
assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect
the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits
of possible controls and procedures relative to their costs.

 

15

 

 

PART
II OTHER INFORMATION

 

ITEM
1. Legal Proceedings

 

Presently,
there are not any material pending legal proceedings to which the Registrant is a party or as to which any of its property is
subject, and no such proceedings are known to the Registrant to be threatened or contemplated against it.

 

ITEM
1.A. Risk Factors

 

We
believe there are no changes that constitute material changes from the risk factors previously disclosed in our S-1 and S-1A previously
filed with the SEC

 

ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

During
the nine months ended September 30, 2019, the Company did not issue any equity (considered financing activities). However, the
Company did receive $54,135 in debt financing from a Board member during the nine months ended September 30, 2019.

 

ITEM
3. DEFAULTS UPON SENIOR SECURITIES

 

There
has been no default in the payment of principal and/or interest, or any other material default, with respect to any indebtedness
of the Company.

 

ITEM
4. MINE SAFETY DISCLOSURES

 

Not
Applicable

 

ITEM
5. OTHER INFORMATION

 

Cyber
Security, Data Protection and Privacy

 

Arrestage
has assessed its level of controls and procedures for cybersecurity risk. Due to the current lack of exposure within its current
business operations, Arrestage has been informed the effect of any cyber-attack would be minimum. Arrestage has not had any such
occurrence to date. The Company is informed of cyber-risk factors and will create disclosure controls and procedures when they
become relevant to its business model.

 

Based
on new Regulatory authority of the European Unions’ General Data Protection Regulation (“GDPR”) and tightening
US laws, Arrestage International must abide by and follow directives provided by such regulation.

 

For
Privacy Protection Compliance in the US, California’s SB1386 bill of 2003, implemented in 2015 as (California Electronic
Communication Privacy Act (S.B. 178) a pioneered mandatory data-breach notification across the United States, spurring
a decade of unprecedented corporate spending on information security. Europe has expanded this idea into its landmark General
Data Protection Regulation (GDPR). As such, Arrestage International, Inc., now needs to update its US privacy incident-response
playbook in many areas outlined in the GDPR’s May 2018 compliance directives.

 

Data
Protection
in the US deals with the security of the electronic transmission of personal data. While the US does not have any
centralized, formal legislation at the federal level regarding this issue, it does mandate a form of compliance through various
organizations. Again, California has taken the lead as far as State mandates (California A.B 1541, 2015), but the EU’s GDPR
creates a centralized regulatory framework that multi-nationals must now follow (as of May 25, 2018). While Arrestage International,
Inc. has acted to abide by data privacy and protection mandates, any misinterpretation or non-adherence would case regulatory
scrutiny, fees/fines, and other potential issues. Any such regulatory mandate would affect business operations and percentage
of profitability.

 

ITEM
6. EXHIBITS

 

Exhibits:

 

31.1 

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).

   
31.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Accounting Officer).
   
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer and Chief Account Officer).

 

16

 

 

SIGNATURES

 

Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.

 

 ARRESTAGE INTERNATIONAL, INC.
   
DATED: November 14, 2019By:

/s/ John Muldoon

  

Mr. John Muldoon

  

CEO

 

 

17

 

 

United
States Securities And Exchange Commission

Washington, DC 20549

 

 

 

FORM
8-K

 

 

 

CURRENT
REPORT

 

Pursuant
to Section 13 or 15(d) of

The
Securities Exchange Act of 1934

 

Date
of Report (Date of earliest event reported)

November 4, 2019 (October 21, 2019)

 

 

 

Arrestage
International, Inc.

(Exact
name of registrant as specified in its charter)

 

 

 

Nevada 001-34756 45-2552289

(State
or other jurisdiction of

incorporation)

 (Commission File Number) 

(IRS
Employer

Identification
No.)

 

20343 N. Hayden Road, Suite 101

Scottsdale, Arizona 85255

 

(480)
710-2229

(Registrant’s
telephone number, including area code)

 

 

(Former
name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):

Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging
growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if
the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities
registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading Symbol(s) Name of each exchange on which

registered

     

 

 

 

Item 5.02. Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Election of Directors

 

 Effective
October 21, 2019 Scott Miller resigned from his position as Arrestage International Inc.’s President.

 On October
21, 2015, the Board of Directors of Arrestage International, Inc. elected John Muldoon as Chief Executive Officer.  Mr. Muldoon
sits on the Company’s Board of Directors and has served as Arrestage’s Vice President of Operations since August 2019. 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Arrestage International, Inc. 
  
Date: October 28, 2019 
   
By:/s/ Rick
Gean
 
 Chief Financial Officer 

 

 

 

 

 

United
States Securities And Exchange Commission

Washington,
DC 20549

 

 

 

FORM
8-K

 

 

 

CURRENT
REPORT

 

Pursuant
to Section 13 or 15(d) of

The
Securities Exchange Act of 1934

 

Date
of Report (Date of earliest event reported)

September
18, 2019 (August 22, 2019)

 

 

 

Arrestage
International, Inc.

(Exact
name of registrant as specified in its charter)

 

 

 

Nevada 001-34756 45-2552289

(State
or other jurisdiction of

incorporation)

 (Commission File Number) 

(IRS
Employer

Identification
No.)

 

20343
N. Hayden Road, Suite 101

Scottsdale,
Arizona 85255

(480)
710-2229

(Registrant’s
telephone number, including area code)

 

 

(Former
name or former address, if changed since last report.)

 

Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2. below):

 

Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging
growth company ☒

 

If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Securities
registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading Symbol(s) Name of each exchange on which

registered

  

 

 

 

 

 

 

Item
5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.

 

Appointment
of Corporate Officer

 

The
Board of Directors of Arrestage International, Inc. has approved the appointment of Mr. Scott Miller as the Company’s President
on August 22, 2019. Mr. Miller joins Arrestage with more than 25 years of investment banking and over 15 years of experience in
private equity. With this appointment, the Company is striving to ensure a more efficient and effective organizational structure
by drawing on Mr. Miller’s experience.

 

1

 

 

SIGNATURES

 

Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.

 

Arrestage International, Inc. 
  
Date: September 18, 2019 
   
By:/s/ Rick
Gean
 
 Chief Financial Officer 

 

 

2

 

 

 

 

United
States Securities And Exchange Commission

Washington, DC 20549

 

 

 

FORM 8-K

 

 

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d)
of

The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event
reported)

September 18, 2019 (August 22, 2019)

 

 

 

Arrestage
International, Inc.

(Exact name of registrant as specified
in its charter)

 

 

 

Nevada 001-34756 45-2552289
(State
or other jurisdiction of

incorporation)

 (Commission File Number) (IRS Employer

Identification No.)

 

20343 N. Hayden Road, Suite 101

Scottsdale, Arizona
85255

(480) 710-2229

(Registrant’s telephone number,
including area code)

 

 

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):

 

☐ Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)

 

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)

 

☐ Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))

 

☐ Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging
growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Securities registered pursuant to Section
12(b) of the Act:

 

Title of each class Trading Symbol(s) Name of each exchange on which

registered

     

 

 

 

 

 

 

Item 5.02. Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

Appointment of Corporate Officer

 

The Board of Directors of Arrestage
International, Inc. has approved the appointment of Mr. John Muldoon as the Company’s Chief Operating Officer on August 22,
2019. Mr. Muldoon joins Arrestage with more than 26 years of experience providing strategic guidance and leadership to large international
companies. With this appointment, the Company is striving to ensure a more efficient and effective organizational structure by
drawing on Mr. Muldoon’s experience.

 

1

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Arrestage International, Inc.

 

Date: September 18, 2019

 

By:  /s/ Rick
Gean
 
 Chief Financial Officer 

 

 

2

 

 

 

United
States Securities And Exchange Commission

Washington,
DC 20549

 

 

 

FORM
8-K

 

 

 

CURRENT
REPORT

 

Pursuant
to Section 13 or 15(d) of

The
Securities Exchange Act of 1934

 

Date
of Report (Date of earliest event reported)

September
18, 2019 (August 22, 2019)

 

 

 

Arrestage
International, Inc.

(Exact
name of registrant as specified in its charter)

 

 

 

Nevada 001-34756 45-2552289

(State
or other jurisdiction of

incorporation)

 (Commission File Number) 

(IRS
Employer

Identification
No.)

 

20343
N. Hayden Road, Suite 101

Scottsdale,
Arizona 85255

(480)
710-2229

(Registrant’s
telephone number, including area code)

 

 

(Former
name or former address, if changed since last report.)

 

Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2. below):

 

☐  Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)

 

☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging
growth company  ☒

 

If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Securities registered pursuant to Section 12(b)
of the Act:

 

Title of each class Trading Symbol(s) Name of each exchange on which

registered

  

 

 

 

 

 

 

Item
5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.

 

Election
of Directors

 

On
August 22, 2019 the Board of Directors elected Mr. Nicholas White, Sr. as a director of the Company. Mr. White will serve on the
Board until the Company’s next Annual Meeting of Stockholders.

 

There
are currently no arrangements or understandings between Mr. White and any other person pursuant to which Mr. White was elected
as a director. There are currently no transactions in which Mr. White has an interest requiring disclosure under Item 404(a) of
Regulation S-K.

 

Also
on August 22, 2019, the Board of Directors elected Mr. John Muldoon as a director of the Company. Mr. Muldoon will serve on the
Board until the Company’s next Annual Meeting of Stockholders.

 

There
are currently no arrangements or understandings between Mr. Muldoon and any other person pursuant to which Mr. Muldoon was elected
as a director. There are currently no transactions in which Mr. Muldoon has an interest requiring disclosure under Item 404(a)
of Regulation S-K.

 

1

 

 

SIGNATURES

 

Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.

 

Arrestage
International, Inc.

 

Date:
September 18, 2019

 

By:/s/
Rick Gean
 
 Chief
Financial Officer
 

 

 

2

 

The Securities and Exchange Commission has not necessarily reviewed the information in this filing and has not determined if it is accurate and complete.
The reader should not assume that the information is accurate and complete.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM D

Notice of Exempt Offering of Securities

OMB APPROVAL
OMB Number:3235-0076
Estimated average burden
hours per response:4.00

1. Issuer’s Identity

CIK (Filer ID Number)Previous Names
XNone
Entity Type
0001666267
XCorporation
Limited Partnership
Limited Liability Company
General Partnership
Business Trust
Other (Specify)
Name of Issuer
Arrestage International, Inc.
Jurisdiction of Incorporation/Organization
ARIZONA
Year of Incorporation/Organization
Over Five Years Ago
XWithin Last Five Years (Specify Year)2011
Yet to Be Formed

2. Principal Place of Business and Contact Information

Name of Issuer
Arrestage International, Inc.
Street Address 1Street Address 2
7047 E. GREENWAY PKWY
CityState/Province/CountryZIP/PostalCodePhone Number of Issuer
SCOTTSDALEARIZONA85254480-710-2229

3. Related Persons

Last NameFirst NameMiddle Name
ShapiroKimberly
Street Address 1Street Address 2
20343 Hayden Rd #105
CityState/Province/CountryZIP/PostalCode
ScottsdaleARIZONA85255
Relationship:XExecutive OfficerDirectorPromoter

Clarification of Response (if Necessary):


Last NameFirst NameMiddle Name
CroftGaryP
Street Address 1Street Address 2
2433 Via Pacheco
CityState/Province/CountryZIP/PostalCode
Palos Verdes EstatesCALIFORNIA90274
Relationship:XExecutive OfficerDirectorPromoter

Clarification of Response (if Necessary):


Last NameFirst NameMiddle Name
NuciolaPhillip
Street Address 1Street Address 2
4610 E Garnett Circle
CityState/Province/CountryZIP/PostalCode
MesaARIZONA85206
Relationship:Executive OfficerXDirectorPromoter

Clarification of Response (if Necessary):


Last NameFirst NameMiddle Name
WeismanPhilipJ
Street Address 1Street Address 2
215 Florita St
CityState/Province/CountryZIP/PostalCode
EncinitasCALIFORNIA92024
Relationship:Executive OfficerXDirectorPromoter

Clarification of Response (if Necessary):


Last NameFirst NameMiddle Name
ShapiroRoyP
Street Address 1Street Address 2
20343 Hayden Rd #105
CityState/Province/CountryZIP/PostalCode
ScottsdaleARIZONA85255
Relationship:Executive OfficerXDirectorPromoter

Clarification of Response (if Necessary):


4. Industry Group

Agriculture
Banking & Financial Services
Commercial Banking
Insurance
Investing
Investment Banking
Pooled Investment Fund
Is the issuer registered as
an investment company under
the Investment Company
Act of 1940?
YesNo
Other Banking & Financial Services
Business Services
Energy
Coal Mining
Electric Utilities
Energy Conservation
Environmental Services
Oil & Gas
Other Energy
Health Care
Biotechnology
Health Insurance
Hospitals & Physicians
Pharmaceuticals
XOther Health Care
Manufacturing
Real Estate
Commercial
Construction
REITS & Finance
Residential
Other Real Estate
Retailing
Restaurants
Technology
Computers
Telecommunications
Other Technology
Travel
Airlines & Airports
Lodging & Conventions
Tourism & Travel Services
Other Travel
Other

5. Issuer Size

Revenue RangeORAggregate Net Asset Value Range
No RevenuesNo Aggregate Net Asset Value
X$1 – $1,000,000$1 – $5,000,000
$1,000,001 – $5,000,000$5,000,001 – $25,000,000
$5,000,001 – $25,000,000$25,000,001 – $50,000,000
$25,000,001 – $100,000,000$50,000,001 – $100,000,000
Over $100,000,000Over $100,000,000
Decline to DiscloseDecline to Disclose
Not ApplicableNot Applicable

6. Federal Exemption(s) and Exclusion(s) Claimed (select all that apply)

Rule 504(b)(1) (not (i), (ii) or (iii))
Rule 504 (b)(1)(i)
Rule 504 (b)(1)(ii)
Rule 504 (b)(1)(iii)
Rule 505
XRule 506(b)
Rule 506(c)
Securities Act Section 4(a)(5)
Investment Company Act Section 3(c)
Section 3(c)(1)Section 3(c)(9)
Section 3(c)(2)Section 3(c)(10)
Section 3(c)(3)Section 3(c)(11)
Section 3(c)(4)Section 3(c)(12)
Section 3(c)(5)Section 3(c)(13)
Section 3(c)(6)Section 3(c)(14)
Section 3(c)(7)

7. Type of Filing

XNew NoticeDate of First Sale2016-02-01First Sale Yet to Occur
Amendment

8. Duration of Offering

Does the Issuer intend this offering to last more than one year?
YesXNo

9. Type(s) of Securities Offered (select all that apply)

XEquityPooled Investment Fund Interests
DebtTenant-in-Common Securities
Option, Warrant or Other Right to Acquire Another SecurityMineral Property Securities
Security to be Acquired Upon Exercise of Option, Warrant or Other Right to Acquire SecurityOther (describe)

10. Business Combination Transaction

Is this offering being made in connection with a business combination transaction, such as a merger, acquisition or exchange offer?
YesXNo

Clarification of Response (if Necessary):

11. Minimum Investment

Minimum investment accepted from any outside investor$1,000USD

12. Sales Compensation

Recipient
Recipient CRD NumberXNone
(Associated) Broker or DealerXNone
(Associated) Broker or Dealer CRD NumberXNone
Street Address 1Street Address 2
CityState/Province/CountryZIP/Postal Code
State(s) of Solicitation (select all that apply)
Check “All States” or check individual States
All States
Foreign/non-US

13. Offering and Sales Amounts

Total Offering Amount$1,000,000USD
orIndefinite
Total Amount Sold$3,500USD
Total Remaining to be Sold$996,500USD
orIndefinite

Clarification of Response (if Necessary):

Offering a total of $1,000,000 at $1.00 per share. Company has 5,000,000 total shares authorized

14. Investors

Select if securities in the offering have been or may be sold to persons who do not qualify as accredited investors, and enter the number of such non-accredited investors who already have invested in the offering.
Regardless of whether securities in the offering have been or may be sold to persons who do not qualify as accredited investors, enter the total number of investors who already have invested in the offering:
0

15. Sales Commissions & Finder’s Fees Expenses

Provide separately the amounts of sales commissions and finders fees expenses, if any. If the amount of an expenditure is not known, provide an estimate and check the box next to the amount.

Sales Commissions$0USD
Estimate
Finders’ Fees$0USD
Estimate

Clarification of Response (if Necessary):

Offering is being sold only by officers or directors to their network.

16. Use of Proceeds

Provide the amount of the gross proceeds of the offering that has been or is proposed to be used for payments to any of the persons required to be named as executive officers, directors or promoters in response to Item 3 above. If the amount is unknown, provide an estimate and check the box next to the amount.

$0USD
Estimate

Clarification of Response (if Necessary):

Signature and Submission

Please verify the information you have entered and review the Terms of Submission below before signing and clicking SUBMIT below to file this notice.

Terms of Submission

In submitting this notice, each issuer named above is:
  • Notifying the SEC and/or each State in which this notice is filed of the offering of
    securities described and undertaking to furnish them, upon written request, in the accordance with applicable
    law, the information furnished to offerees.*
  • Irrevocably appointing each of the Secretary of the SEC and, the Securities Administrator
    or other legally designated officer of the State in which the issuer maintains its principal
    place of business and any State in which this notice is filed, as its agents for service of
    process, and agreeing that these persons may accept service on its behalf, of any notice,
    process or pleading, and further agreeing that such service may be made by registered or
    certified mail, in any Federal or state action, administrative proceeding, or arbitration
    brought against the issuer in any place subject to the jurisdiction of the United States, if the
    action, proceeding or arbitration (a) arises out of any activity in connection with the
    offering of securities that is the subject of this notice, and (b) is founded, directly or
    indirectly, upon the provisions of: (i) the Securities Act of 1933, the Securities Exchange
    Act of 1934, the Trust Indenture Act of 1939, the Investment Company Act of 1940, or the
    Investment Advisers Act of 1940, or any rule or regulation under any of these statutes, or (ii)
    the laws of the State in which the issuer maintains its principal place of business or any State
    in which this notice is filed.
  • Certifying that, if the issuer is claiming a Regulation D exemption for the offering, the issuer is not disqualified from relying on Regulation D for one of the reasons stated in Rule 505(b)(2)(iii) or Rule 506(d).

Each Issuer identified above has read this notice, knows the contents to be true, and has duly caused this notice to be signed on its behalf by the undersigned duly authorized person.

For signature, type in the signer’s name or other letters or characters adopted or authorized as the signer’s signature.

IssuerSignatureName of SignerTitleDate
Arrestage International, Inc./s/ Gary P. CroftGary P. CroftChief Executive Officer2016-02-11

Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB number.

* This undertaking does not affect any limits Section 102(a) of the National Securities Markets
Improvement Act of 1996 (“NSMIA”) [Pub. L. No. 104-290, 110 Stat. 3416 (Oct. 11, 1996)] imposes on the ability of States to
require information. As a result, if the securities that are the subject of this Form D are “covered securities” for purposes
of NSMIA, whether in all instances or due to the nature of the offering that is the subject of this Form D, States cannot
routinely require offering materials under this undertaking or otherwise and can require offering materials only to the
extent NSMIA permits them to do so under NSMIA’s preservation of their anti-fraud authority.



As filed with the Securities and Exchange Commission on December
19, 2017

Registration No.     

 

 

UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549
 

 
FORM
S-1 

REGISTRATION STATEMENT 

UNDER 

THE SECURITIES ACT OF 1933
 

 

Arrestage International, Inc.

(Exact name of Registrant as specified in its charter)
 

Nevada
 

3841
 

45-2552289

(State or other jurisdiction of 

incorporation or organization)
 

(Primary Standard Industrial 

Classification Code Number)
 

(I.R.S. Employer 

Identification Number)

 

20343 N. Hayden Road, Suite 101

Scottsdale, Arizona 85255
(480)
710.2229

(Address, including zip code, and telephone number, including area
code, of Registrant’s principal executive
offices)
 

 

Gary Croft

President and Chief Executive Officer 

Arrestage International, Inc. 

20343 N. Hayden Road, Suite 101

Scottsdale, Arizona 85255
(480)
710.2229
 

(Name, address, including zip code, and telephone number, including
area code, of agent for service)
 


with copies to:
 

Schumacher and Associates, Inc.

7931 S. Broadway St. #314

Littleton, CO 80122

(303) 480-5037
 

Gary Croft 

Chief Executive Officer 

Arrestage International,
Inc. 

20343 N. Hayden Road, Suite
101

Scottsdale, Arizona 85255
(480)
710.2229
 

Goldman Advisor Group, LLC  

1230 E. Broomfield Street

STE. 8

Mt. Pleasant, MI 48858 

(312) 288.6798
 
Approximate date of
commencement of proposed sale to the
public: 
As soon as
practicable after this Registration Statement becomes
effective.
If
any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933 check the following
box: 
If this Form is filed to register additional
securities for an offering pursuant to Rule 462(b) under the
Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same
offering. 
If this Form is a post-effective amendment filed
pursuant to Rule 462(c) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. 
If this Form is a post-effective amendment filed
pursuant to Rule 462(d) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. 
 
Indicate
by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, smaller reporting
company, or an emerging growth company. See the definitions of
“large accelerated filer,” “accelerated
filer”, “smaller reporting company” and “emerging
growth company” in Rule 12b-2 of the Exchange Act. (Check
one):
 
Large accelerated filer
Accelerated filer
Non-accelerated
filer

(Do not check if a smaller reporting
company)
Smaller reporting company
 
 
Emerging
growth company
 
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act.
 
 
 
 

CALCULATION OF REGISTRATION FEE
 
Title of Each
Class of Securities to be Registered
 

Proposed Maximum Aggregate 
Offering Price (1)

 

 

Amount
of 
Registration Fee (2)

 

Common Stock, par
value $0.001 per share
 $4,000,000 
 $  
Total
 $  
 $  
 
 
(1)
Estimated
solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(o) under the Securities Act
of 1933, as amended. Includes offering price of shares that the
underwriters have the option to purchase to cover over-allotments,
if any. Pursuant to Rule 416 under the Securities Act of 1933, as
amended, the shares of common stock registered hereby also include
an indeterminate number of additional shares of common stock as may
from time to time become issuable by reason of stock splits, stock
dividends, recapitalizations or other similar
transactions.
 
 
(2)
Calculated
pursuant to Rule 457(o) under the Securities Act based on an
estimate of the proposed maximum aggregate offering
price.
 
 
(3)
Estimated
solely for the purposes of calculating the registration fee
pursuant to Rule 457(g) under the Securities Act.
 
The
Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states
that this Registration Statement shall thereafter become effective
in accordance with Section 8(a) of the Securities Act of 1933 or
until the Registration Statement shall become effective on such
date as the Commission, acting pursuant to said Section 8(a), may
determine.
 
 
 
 
 
2
 
 

EXPLANATORY NOTE
 
Arrestage
International, Inc. is a Nevada Corporation formed on June 15,
2011. On May 20, 2016 the Company completed a private placement
that sold 38,750 shares in compliance with Regulation D. Current
Equity shareholders converted their shares on such date to create a
single class of uniform shares. There have been 3,451,000 issued
prior to the Regulation D offering. The current issued and
outstanding shares of our common stock equals 3,600,000 and there
are a total of 30,000,000 common shares authorized by the Board of
Directors, of which 26,400,000 remain for potential future
distribution, after which there are 5,000,000 authorized preferred
shares.
 
 
 
 
 
 
 
3
 
 

This prospectus is not an offer to sell these securities and is not
soliciting an offer to buy these securities in any state or
jurisdiction where the offer or sale is not permitted.
 
Shares
of Common Stock
 
ARRESTAGE®
International,
Inc.

Shares of Common Stock
 

Two Million (2,000,000) Shares – $2.00 per Share
 
This is
a firm commitment initial public offering of shares of common stock
of Arrestage International, Inc. No public market currently exists
for our shares. We anticipate that the initial public offering
price of our shares of common stock will be between $1 and $3 per
share.
 
We will
apply to list our shares of common stock for trading on the OTCQB
under the symbol “_______.” No assurance can be
given that our application will be approved. We are an
“emerging growth company” as defined in the Jumpstart
Our Business Startups Act of 2012 and, as such, we have elected to
comply with certain reduced public company reporting requirements
for this prospectus and future filings.
 

Investing in our common stock involves a high degree of risk. See
“Risk Factors” beginning on page 19 of this
prospectus for a discussion of information that should be
considered in connection with an investment in our common
stock.
 

Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
 
 
 

Per
Share

 

 

Total

 

Public offering
price
 $2.00 
 $4,000,000 
Underwriting
discounts and commissions (1)
 $0.20 
 $400,000 
Proceeds to
Arrestage International, Inc., before expenses
 $1.80 
 $3,600,000 
 
(1) 
No commissions have
been paid to date in exchange for selling or underwriting our
shares.
 
 
 
4
 
 

A
RRESTAGE®
International,
Inc.
 
 
 
 
 

Arrestage Skin Care Products
 

Arrestage has licensed a line of skin care products that combines
the expertise of herbalists, chemists, and dermatologists to create
products that are customized for each client’s skincare
concerns. 
 

Arrestage only uses all-natural ingredients and components in their
skin care products. All products are monitored closely, with high
freshness, purity, and potency that result from Arrestage’s
micro-batching processes. Over time, as the original customized
formula no longer has the desired results, Arrestage will provide
the client with custom “boosters” to enhance the
original formula’s results.
 
 
5
 
 

TABLE OF CONTENTS
 
 
 
PROSPECTUS
SUMMARY
 
 

9
 
RISK
FACTORS
 
 

17
 
USE
OF PROCEEDS
 
 

42
 
CAPITALIZATION
 
 

45
 
DILUTION
 
 

46
 
PRINCIPAL
STOCKHOLDERS
 
 

48
 
DESCRIPTION
OF CAPITAL STOCK
 
 

50
 
SHARES
ELIGIBLE FOR FUTURE SALE
 
 

50
 
MATERIAL
U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S.
HOLDERS
 
 

60
 
LEGAL
MATTERS
 
 

65
 
EXPERTS
 
 

65
 
WHERE
YOU CAN FIND MORE INFORMATION
 
 

66
 
DIVIDEND
POLICY
 
 

70
 
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 
 

71
 
BUSINESS
 
 

84
 
MANAGEMENT
 
 

89
 
EXECUTIVE
AND DIRECTOR COMPENSATION
 
 

95
 
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
 
 

99
 
CORPORATE
CONVERSION
 
 

 
UNDERWRITING
 
 

109
 
FINANCIAL
STATEMENTS OF ARRESTAGE INTERNATIONAL, INC.
 
 

F-1
 
 
 
 
6
 
 
We have
not authorized anyone to provide you with any information other
than that contained in this prospectus, any amendment or supplement
to this prospectus or in any free writing prospectus we may
authorize to be delivered or made available to you. The
underwriters and we take no responsibility for, and can provide no
assurance as to the reliability of, any other information that
others may give you. We are offering to sell shares of our common
stock and seeking offers to buy shares of our common stock only in
jurisdictions where offers and sales are permitted. The information
in this prospectus is complete and accurate only as of the date on
the front cover of this prospectus, regardless of the time of
delivery of this prospectus or any sale of shares of our common
stock.
 
For investors outside the United
States: 
  We have not, and the underwriters
have not, done anything that would permit this offering or
possession or distribution of this prospectus in any jurisdiction
where action for that purpose is required, other than in the U.S.
Persons outside the U.S. who come into possession of this
prospectus must inform themselves about, and observe any
restrictions relating to, the offering of the shares of common
stock and the distribution of this prospectus outside the
U.S.
 
 
 
 
 
 
7
 
 

MARKET DATA AND FORECASTS
 
Unless
otherwise indicated, information in this prospectus concerning
economic conditions, our industry, our markets and our competitive
position is based on a variety of sources, including information
from independent industry analysts and publications, as well as our
own estimates and research. Our estimates are derived from industry
and general publications, studies and surveys conducted by
third-parties, as well as data from our own internal research.
Industry publications, studies and surveys generally state that
they have been obtained from sources believed to be
reliable.
 

ORGANIZATIONAL FACTS
 
On June
15, 2011, we formed Arrestage International, Inc. in the state of
Nevada for the purpose of conducting business within the
nutraceutical and medical sectors in perpetuity. The first
organizational meeting was held on June 20, 2011 where the articles
of incorporation and bylaws were adopted. In the same meeting the
stock specimen certificate and the annual meeting set for June
6th each
fiscal year. The registered agent is Nevada Commercial Registered
Agents, LC with offices located at 4231 Dant Blvd, Reno, NV
89509.
 

FINANCIAL STATEMENT PRESENTATION
 
The
financial statements as of December 31, 2015 and 2016, are those of
Arrestage International, Inc. and will be presented below in
tabular form with corresponding notes. They have been
professionally prepared by the Company and audited by Schumacher
and Associates, Inc.
 

TRADEMARKS AND TRADENAMES
 
This
prospectus includes our trademarks such as Arrestage International,
Inc.  ARRESTAGE®
International, Inc.
which are each protected under
applicable intellectual property laws and are the property of
Arrestage International, Inc. Solely for convenience, trademarks,
service marks and tradenames referred to in this prospectus may
appear without the®, TM or SM symbols,
but such references are not intended to indicate, in any way, that
we will not assert, to the fullest extent under applicable law, our
rights or the right of the applicable licensor to these trademarks,
service marks and tradenames. This prospectus may also contain
trademarks, service marks, tradenames and copyrights of other
companies, which are the property of their respective owners. The
most recent renewals of registration to the marks to Arrestage
International, Inc.’s trademarks were filed on December of
2017 with the United State’s Patent and Trademark
Office.
 

ABOUT THIS PROSPECTUS
 
Except
where the context otherwise requires or where otherwise indicated,
the terms “Arrestage,” “Arrestage
International,” “AII,” “we,”
“us,” “our,” “our company” and
“our business” refer to Arrestage International,
Inc.
 
 
8
 
 

PROSPECTUS SUMMARY
 

This summary highlights certain information about us and this
offering contained elsewhere in this prospectus. Because it is only
a summary, it does not contain all the information that you should
consider before investing in shares of our common stock and it is
qualified in its entirety by, and should be read in conjunction
with, the more detailed information appearing elsewhere in this
prospectus. Before you decide to invest in our common stock, you
should read the entire prospectus carefully, including “Risk
Factors” beginning in our prospectus and our financial
statements and the accompanying notes included in this
prospectus.
 

Market for Securities
 
       Currently
these securities are not offered on a stock exchange or any
exchange traded entity.
 

Company Overview
 
We are
a Company within the healthcare space. Specifically, we are in the
Nutraceutical business that holds formulations on skin care
products as well as brand formulas, and other intellectual
property. In addition, we are seeking to perform roll-up
transactions, to include a finance company that purchases and
securitizes medical devises for periodic rental to end users.
Arrestage plans to acquire and maintain secured UCC-1 on the
machines it purchases and provides full service plans and warranty
options, and other companies within the wellness
sector.
 
ARRESTAGE INTERNATIONAL, INC.
(“AII” or the “Company”) a Nevada
corporation, plans to develop an international licensing program
whereby we plan to provide turnkey assistance with operations and
support for distributors in the Skin Care and Anti-Aging arena,
using our brand, custom formulas, trademark, internet presence and
proprietary marketing protocols. In addition to this, we plan to
continue to develop these aspects of the business and potentially
acquire complimentary products and services. Arrestage
International intends to create a significant brand in the
aesthetic skincare marketplace. The officers and directors of AII
all have created, or participated in the marketing and development
of branded products in this space. AII will generate a licensing
fee of 5-8% (or a higher rate the market may bear) of all revenues
generated by future licensees.
 
AII
plans to license full use of all intellectual property and formulas
of its licensed products, in all geographical regions and channels
of distribution. Arrestage is working on Research and Development
of future products by working towards other possible acquisitions.
AII plans to set itself apart from its competitors by providing
clinically based sales materials that attract a more sophisticated
consumer which may enable the licensee to increase their sales
revenues with higher margins. Licensees will have access to the
luminary panel, clinical and marketing training protocols, and
collateral materials. Arrestage International plans to address an
ever-increasing world demand for western culturally influenced
aesthetic skin topical products, in addition to the increasing
demand in US domestic and other western markets. AII seeks to
license distribution organizations, in the US and Internationally,
to market its proprietary brand of aesthetic dermal formulations
and additional products that it may potentially
acquire.
 
 
9
 
 
The
initial products have gone through clinical and behavioral testing
and several reformulations to achieve the high acceptance status
that they now hold. The size of the aesthetic topical world market
is approximately $7.4 billion. Morningstar estimates a continued
growth rate of 11% CAGR from 2016-2020. Due to the high margins,
the major aesthetic device makers are attempting to enter this
market as distributors. This may be a beneficial circumstance as it
may enhance the valuation of AII and widen future exit
possibilities.
 

Medical Device Rental Division
 
 The Company
plans to establish a medical device rental program that purchases
or secures medical devices such as MRI systems and various other
diagnostic equipment. Our target market will be physician groups,
clinics, rural hospitals, and insurance companies. Arrestage
intends to obtain residual income from such rentals and would
maintain a fully secured UCC-1 position on each piece of equipment.
To grow this division, Arrestage plans to aggressively market such
services in this coming year. This function will help meet the
expanding demand of medical systems due to the current healthcare
trends. The United States market, the largest in the world, has
reached a value of $133 billion by 2016, and is expected to reach
278 billion by 2021 worldwide. (2A) To
date the Company has accumulated a strong market presence within
this lucrative sector of secured structured medical
lending.
 

Market Opportunity
 
       
Medical Equipment Rental is
an industry that is expanding due to many factors in the health
care industry. Professionally, many smaller businesses have found
it much more cost effective to rent expensive equipment that they
would normally have to refer patients to a larger facility to use.
Rentals are creating greater accessibility to medical equipment in
many places where there are not larger facilities close by. Rural
areas that only have local access to small healthcare facilities
could see specialized equipment that would not usually be
available. Many medical professions that deal with varying, rare
health issues, such as emergency clinics, pediatrics, physical
therapists, and oncologists, in small or medium-sized facilities
could have much more reliable access to this specialized equipment.
Also, it is more convenient for patients to receive care and
testing all in one location, and it streamlines the process of
receiving test results when equipment can be found in house.
Lastly, for larger medical facilities renting is beneficial for
very specialized equipment that can be too expensive to purchase.
Rentals allow the use of specialized equipment without undue
burdens on a facility’s budget. Due to the constantly
changing advances in medical technology many places do not have
consistent access to the most helpful equipment. If rented,
adjustments in technology would be much more feasible for tight
facility budgets, and more locations could use the latest
technology in the healthcare market.
 
● 
The global medical
equipment rental market was recorded at US$33417.4 million in 2013
and, at a CAGR of 5.8% during the forecast period of 2014 to 2020,
will reach a value of US$49,112.8 million by 2020
(1A).
 
 
10
 
 
As
demonstrated in the graphics below, the need for long-term medical
equipment is rising. Geriatric and diabetic populations are two
areas where our services could be used, and that need is
rising.
 
 
 
11
 
 
Nutraceuticals is an industry that is
rapidly growing, and it is unique because it requires the
overlapping of two industries that are highly relied upon in
today’s society: food and pharmaceuticals. Nutraceuticals are
natural, bioactive chemical compounds that have health-promoting,
disease-preventing or general medicinal properties. This category
encompasses vitamins, minerals, herbal supplements, and certain
animal products. This industry is becoming more popular to
consumers both because greater self-awareness and diet education,
but also because it incorporates preventative and curative care
into everyday life through food, beverages, and supplements. The
governmental support for this industry is positive worldwide, and
in the United States some health insurances reimburse consumers for
medical foods. This industry is largely dominated by a few
companies, with the 5 top companies holding over 50% of the market
as of 2014. North America is expected to continue to lead this
industry over this period (North America held 39.6% market share in
2014). The Asia Pacific region held the second largest market share
in 2014 with a significant growth rate. (source 2A)
 
● 
The global
nutraceuticals market was valued at US$165.62 billion in 2014 and
is expected to reach US$278.96 billion by 2021, growing at a CAGR
of 7.3% from 2015 to 2021. (2A)
● 
Revenue-functional
food segment held the largest share in the global nutraceuticals
market, accounting for 31.0% market share in 2014 and is expected
to grow at a CAGR of 7.1% from 2015 to 2021. Functional beverage is
2nd and
expected to grow at a CAGR of 7.4 % from 2015-2021.
(2A)
 
 
 
 
12
 
 
Top companies are
Cargill, Archer Daniels Midland Company, Royal DSM N.V, BASF SE,
Nestle S.A., General Mills, Inc., etc. (2A)
The WHO predicts
that by 2020 over 65 million people will have dementia and that the
prevalence of other neurodegenerative brain diseases, like
Alzheimer’s, is also increasing. (2B)
It is estimated
that over 100 million people globally are effected by ‘gut
health’ problems, and the prevalence is rising.
(2B)
Cardiovascular
disease (CVD) is significant. It is the number one cause of death
globally. The risk of contracting CVD is associated with lifestyle
choices including a poor diet. (2B)
The WHO estimate
that 347 million people worldwide have diabetes. (2B)
Sales are predicted
to reach US$250 billion by 2018. (2B)
 

SOURCES
 
(1A)-
http://www.transparencymarketresearch.com/medical-equipment-rental.html
(1B)-see
scan attached in email
(1C)-
https://www.census.gov/prod/2014pubs/p25-1140.pdf
(1D)-
http://care.diabetesjournals.org/content/24/11/1936#T3
(2A)-
http://www.prnewswire.com/news-releases/nutraceuticals-market-to-surpass-us278-billion-globally-by-2021-propelled-by-soaring-demand-for-functional-foods-and-beverages-transparency-market-research-531577541.html

(2B)-
https://www.kpmg.com/ID/en/industry/CM/Documents/neutraceuticals-the-future-of-intelligent-food.pdf
 

Forward looking Statements
: This prospectus contains
statements that express our opinions, expectations, beliefs, plans,
objectives, assumptions or projections regarding future events or
future results, in contrast with statements that reflect historical
facts. Many of these statements are contained under the headings
“Prospectus Summary,” “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” and “Business.” In some cases, we
have identified such forward-looking statements with typical
conditional words such as “anticipate,”
“intend,” “believe,”
“estimate,” “plan,” “seek,”
“project” or “expect,” “may,”
“will,” “would,” “could” or
“should,” the negative of these terms or other
comparable terminology.
 
Important factors
related to forward-looking statements may include, among others,
assumptions regarding:
 
our
ability to achieve and sustain profitability;
 
market
acceptance of our product line;
 
our
ability to successfully commercialize our products;
 
our
ability to compete effectively in selling our products and
services;
 

 
13
 
 
our
ability to expand, manage and maintain our direct sales and
marketing organizations;
 
our
actual financial results may vary significantly from forecasts and
from period to period;
 
our
ability to successfully develop new products, improve or enhance
existing products or acquire complementary products, technologies,
services or businesses;
 
our
ability to obtain and maintain intellectual property of sufficient
scope to adequately protect our products;
 
market
risks regarding consolidation in the healthcare and nutraceutical
industry;
 
our
ability to effectively manage our anticipated growth;
 
the
regulatory requirements applicable to us and our
competitors;
 
our
reliance on third party manufacturers and sole- or single-source
suppliers;
 
our
ability to efficiently manage our supply chain
processes;
 
the
regulatory and legal risks, and certain operating risks, that our
international operations subject us to;
 
the
fact that product quality issues or product defects may harm our
business; and
 
any
product liability claims.
 
Forward-looking
statements are not a guarantee of performance, and you should not
place undue reliance on such statements. We have based
forward-looking statements largely on our current expectations and
projections about future events. Forward-looking statements are
subject to many uncertainties and other variable circumstances,
including those discussed elsewhere in this prospectus under the
headings “Risk Factors” and “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations,” many of which are outside of our control, that
could cause our actual results and experience to differ materially
from any forward-looking statement. Given these risks and
uncertainties, you are cautioned not to place undue reliance on
these forward-looking statements. The forward-looking statements
included in this prospectus are made only as of the date hereof. We
do not undertake, and specifically decline, any obligation to
update any such statements or to publicly announce the results of
any revisions to any of such statements to reflect future events or
developments, except as required by law.
 
 
14
 
 

Nutraceutical Division Strengths
 
Our
Strategy
  
Our
strategy is to promote, market and sell our existing product line,
and expand by development and acquisition, a more inclusive product
line. By maintaining our cost-effective structure and leveraging
our vast network of in-house and freelance notable experts in the
field we feel we will be able to penetrate the market place in an
expedited manner. Our partnerships are far reaching within the
medical and entertainment fields. By leveraging those contacts we
will be able to showcase products with endorsements from known
persons and entities.
 
Exclusive focus on a large,
growing market. 
  The size of the aesthetic
topical world market is rapidly growing. Morningstar estimates a
continued growth rate of 11% CAGR from 2016-2020. Due to the high
margins, the major aesthetic device makers are attempting to enter
this market as distributors. This may be a beneficial circumstance
as it may enhance the valuation of AII and widen future exit
possibilities.
 
Pursue opportunities to
enhance our product offerings. 
  We intend to
continue to expand applications of our nutraceutical products and
vigorously protect those innovations through patent enforcement and
applications. We may also opportunistically pursue the licensing or
acquisition of complementary products and technologies to
strengthen our market position or improve product
margins.
 
Expand our sales
organization to support growth. 
  We intend
to expand our highly-trained direct sales organization and broaden
our relationships with distributor partners to increase sales and
drive revenues. We intend to expand this sales initiative to new
regional markets and then worldwide distribution and product
placement.
 
Acquire new product
line. 
  We are exploring the possibility of
expanding our product line through acquisitions of new products
that will allow additional market share. We may also perform
research and development functions in-house, which could include
the development or acquisition of an entirely new product line or
expansion of the current line. The target products are on the
cutting edge of health applications and import new techniques
integrating Allopathic medicine, Naturopathic medicine, and some
New Age features. Because of the relationship we have built within
our research and development planning and due diligence, we are in
a prime position to view and explore potential products that fit
within our Company. Further, we have the personnel to determine
viability of the marketing and sales of such products. If such
products fit within the Company framework, we can quickly add such
by acquisition.
 
Price effective ownership
of current product lines.
We have been able to acquire a
developed line of formulas that have previously been produced.
Thereby, the cost to bring these products to market is much less
than full development, formulation, and production of a line of
skin care nutraceuticals.
 
Highly experienced
management and medical advisory team. 
  We
have assembled a senior management team and medical advisory board
with significant experience in the healthcare industry. Our
leadership team has a long track record in introducing our products
to the healthcare market in the field nutraceuticals. Members of
our management team also have experience in product development,
launching new products into the healthcare market and securitizing
and renting medical devices and technology to hospitals and private
healthcare practices through direct sales organizations,
distributors and manufacturers. We also collaborate with a network
of leading medical advisors in the design and use of our
products.
 
 
 
15
 
 
Extensive product support
network. 
  In addition to the product line we
offer, we also provide a support network for clinicians and
therapists, which includes site planning and preparation, system
deployment and installation, a national and global network of
medical physicists for system commissioning and calibration, a
dedicated service network, a dedicated clinical applications and
education network and service, and live customer support. We
believe that by offering these dedicated and tailored services we
have enhanced our brand and gained market presence.
 
Relationships with the
medical community. 
  The board members,
acting on behalf of Arrestage, are all actively involved in
scientific, medical, and commercial organizations and communities.
We have on our management team and Board of Directors, well
respected doctors and entrepreneurs with a medical background. We
anticipate that we will be able to leverage our involvement in this
community to increase awareness of the benefits of radiation
therapy and increase sales of our products.
 

Medical Device Rental Division- Strengths
 

Our Strategy
 
Our
goal is to be a leading medical device procurement and finance
company providing real time solutions for the hospitals, insurance
companies, health care clinics, and medical malpractice law firms.
The key elements of our strategy include:
 
Leveraging pre-existing
relationships, we will be able to scale the business quickly via
new business acquisition along with factoring commercial paper from
our partners.
Arrestage will seek to acquire commercial
paper from firms we currently have a relationship. In addition, we
will grow our existing rental program with expansion to new markets
and additional facilities. Since our principals have a long track
record of procuring such transactions, the length of time to scale
such business will be minimal.
 
Drive adoption and
awareness of our Companies products to specialists, physicians, and
administrators.
  We intend to educate
specialists, physicians, on the need for having our devices in
house as opposed to outsourcing these services. We believe that
increased awareness of the benefits having these services in house
will maintain patient loyalty and drive revenue. Additionally, we
believe that our products will allow specialists to treat patients
without having to refer them to specialists for treatment and will
allow for faster in-house diagnosis of a patients
issues.
 
Provide new technology
products and services. 
  Since acquiring our
current technology, we have developed optional add-on technology
products and service options which have enhanced the operational
capabilities of our desirable device technologies. We believe
continued product offerings will keep us relevant to all of our
clients’ needs.
 
Expand our sales
organization to support growth. 
  We intend
to expand our highly-trained direct sales organization and broaden
our relationships with distributor partners to increase sales and
drive revenues.
 
Residuals of our currently
owned products.
 We intend to hold a secured
position on our technology, thus will be able to maintain a secured
payment stream. In addition, the residual value of our products
will provide back end liquidity and additional rental opportunities
after the current client has relinquished the
machines.
 
 
16
 
 

Risk Factors – Company
 
Investing in our
common stock involves substantial risk, and our ability to
successfully operate our business is subject to numerous risks,
including those that are generally associated with our industry.
Any of the risks set forth in this prospectus under the heading
“Risk Factors” may limit our ability to successfully
execute our business strategy. You should carefully consider all
the information set forth in this prospectus and, in particular,
should evaluate the specific risks set forth in this prospectus
under the heading “Risk Factors” in deciding whether to
invest in our common stock. The following is a summary of some of
the principal risks we face:
 

Undercapitalization; Need for Additional Funding
 
AII
believes the proceeds from offering contemplated herein, assuming
Two Million “(2,000,000)” Shares are sold in this
Offering “($4,000,000)”, will be sufficient to attain
AII’s financing goals for the next twelve months. Additionally,
executive management has not nor will in the near term draw a
salary or executive compensation package. Without realizing all or
a significant portion of the maximum Offering proceeds, AII may not
be able to implement its business plan and may have to seek
alternative sources of funding. AII can also give no assurance
that, even if the shares are completely sold, no additional capital
will be needed eventually. Further, no assurance can be given as to
how much additional working capital will be required or that
additional financing can be obtained, or if obtainable, that the
terms will be satisfactory to AII, or that such financing would not
result in a substantial dilution of shareholder’s
interest.
 

Participation is Subject to Risks of Investing in Micro
Capitalization Companies
 
AII
believes that certain micro capitalization companies have
significant potential for growth, although such companies generally
have limited product lines, markets, market shares and financial
resources. The securities of such companies, if traded in the
public market, may trade less frequently and in more limited volume
than those of more established companies. Additionally, in recent
years, the stock market has experienced a high degree of price and
volume volatility for the securities of micro capitalization
companies. In particular, micro capitalization companies that trade
in the over-the-counter markets have experienced wide price
fluctuations not necessarily related to the operating performance
of such companies.
 
There
may not be adequate Liquidity for Investors to Sell Shares of the
Company at Market Price.
 
Investors in the
common Stock may not be able to realize the listed Market Price due
to a potential lack of liquidity within the Market on which AII
will be eventually offered.
 
 
17
 
 

Specific Risk Factors- Nutraceutical
 Division
 

High Production of Products will create a considerable amount of
inventory.
 
In
order to produce our products at affordable prices, we will have to
produce through high volume automated processes. We do not know
whether we will be able to contract efficient, automated, low-cost
assembly capability and processes that will enable us to meet the
quality, price, and production standards, or production volumes
required to successfully mass market our product. Even if we are
successful in developing our high-volume production capabilities
and processes, we do not know whether we will do so in time to meet
our product commercialization schedules or to satisfy the
requirements of customers. Our failure to develop such processes
and capabilities could have a material adverse effect on our
business, results of operations and financial
condition.
 

Underproduction could lead to undercapitalization of Market
demand.
 
We may
not meet our product development and commercialization milestones.
We have several development programs that are in the pre-commercial
stage. The success of each formulation development program is
highly dependent on our correct interpretation of commercial market
requirements, and our translation of those requirements into
applicable product specifications and appropriate development
milestones. If we have misinterpreted market requirements, or if
the requirements of the market change, we may develop a product
that does not meet the cost and performance requirements for a
successful commercial product. In addition, if we do not meet the
required development milestones, our commercialization schedules
could be delayed, which could result in potential adverse effects
on our business.
 
Competitive
Landscape.
 
Significant
competition for topical aesthetic products may develop or may
develop more slowly than we anticipate which would significantly
harm our revenues and may cause us to be unable to recover the
losses we have incurred and expect to incur in the development of
our products. Significant markets may never develop our product
technology or they may develop more slowly than we anticipate. Any
such delay or failure would significantly harm our revenues and we
may be unable to recover the losses we have incurred and expect to
continue to incur in the development and marketing of our products.
If this were to occur, we may never achieve profitability and our
business could fail. Topical products represent an emerging market,
and whether or not end-users will want to use them may be affected
by many factors, some of which are beyond our control,
including:
 
 
the emergence of
more competitive technologies and products, including other
products that could render our products obsolete;
 
 
the future cost of
components that may affect our delivery systems;
 
 
the regulatory
requirements of agencies, including the development of uniform
codes and standards that may result in higher costs;
 
 
government support
for preventive medicine may wane;
 
 
the assembling and
supply costs may escalate to levels that would restrict our
marketing efforts;
 
 
the perceptions of
consumers regarding the safety of our products;
 
 
the willingness of
consumers to try new technologies;
 
 
the continued
development and improvement of existing technologies that we may
not be able to access or license; and
 
 
the future cost of
components used in existing products.
 
 
18
 
 

Production could be stifled if production technology
changes
 
Base
components used in our formulation may eventually not be readily
available on a cost-effective basis, in which case our products may
be unable to compete with existing topical and cosmetic products
and our revenues and results of operations would be materially
adversely affected. If our customers, including retail distributors
are not able to purchase our products at a cost-effective basis or
are unable to purchase them at locations convenient to them, our
products may be unable to compete with existing products and our
revenues and results of operations would be materially adversely
affected. Significant growth in the use of topical types of
products, may require the development of a larger than expected
infrastructure to deliver products to our distributors. There is no
guarantee that such an infrastructure will be developed on a timely
basis or at all.
 
Even if
our products are readily available, if the effective price is such
that it costs more to use our products than to use products
provided through other manufacturers, we may be unable to compete
successfully with our competition.
 
Governmental
Policies Could Affect our Revenue or Profitability
 
Changes
in government policies and regulations could hurt the market for
our products. The OTC topical
and cosmetic market is in a phase where it is currently subject to
limited industry-specific government regulations in the United
States relating to matters such as design, storage, testing of
these products. However, given that their production is subject to
government regulation, we may expect to encounter more industry
specific government regulations in the future in the jurisdictions
and markets in which we operate. To the extent that there may be
implementation of further regulations, delays in gaining such
regulatory approval, may hinder our development and our growth may
be constrained.
 

The future worldwide demand for our current products and our future
products is uncertain. Our current products and our future products
may not be accepted by hospitals, physicians or patients, and may
not become commercially successful.
 
Clinicians may not
perceive the benefits of our products and may be reluctant or
unwilling to adopt our products as a treatment option. While we
believe that our products are a better alternative to other
treatments of certain skin conditions, clinicians or physicians who
are accustomed to using other modalities to treat patients may be
reluctant to adopt broad use of our products.
 
We must
grow markets for our products through education and awareness
programs. While studies have been done, there may be more to
perform, and certain there will be with new projects. The process
of marketing the results of the studies is subject to a peer-review
process. Peer reviewers may not consider the results of studies of
our products and any future products sufficiently novel or worthy
of publication. Failure to have studies of our product accepted may
affect adoption of our products.
 
 
19
 
  

In Certain Cases, We May need to Artificially
Divide Market Share
 
In
order to develop certain market share, we may enter into agreements
with customers and partners that require us to provide shared
intellectual property rights in certain situations, and there can
be no assurance that any future relationships that we enter into
will not require us to share some of our intellectual property. Any
change in the strategies of a potential partner could have a
material adverse effect on our business and our future
prospects.
 

Finally, in some
cases, our relationships may be governed by a non-binding
memorandum of understanding or a letter of intent. We cannot assure
you that we will be able to successfully negotiate and execute
definitive agreements with any of these partners, and failure to do
so may effectively terminate the relevant relationship. We may also
enter into relationships with third-party distributors to supply us
with parts when we experience a shortfall in production or to sell
them our excess capacity, even though they also indirectly compete
with us. In addition, our third-party distributors may require us
to provide volume price discounts and other allowances, or
customize our products, either of which could reduce the potential
profitability of these relationships.
 
Reliance
on Third Party Suppliers Could be a Barrier
 
We rely
upon third party suppliers to supply key materials and components
for our products. A supplier’s
failure to supply materials or components in a timely manner, or to
supply materials and components that meet our quality, quantity or
cost requirements, or our inability to obtain substitute sources
for these materials and components in a timely manner or on terms
acceptable to us, may harm our ability to manufacture our products
cost-effectively or at all, and our revenues and gross margins
might suffer.
 

We may be unable to attract and retain highly qualified personnel,
which could adversely and materially affect our competitive
position.
 
Our
future success depends on our ability to attract and retain our
executive officers and other key employees. We may be unable to
attract or retain qualified management and other key personnel in
the future due to the intense competition for qualified personnel
among companies in the medical device business and related
industries, particularly in the Phoenix, Arizona area where we are
headquartered. The medical device and nutraceutical industries has
experienced a high rate of turnover of management personnel in
recent years. Consequently, we could have difficulty attracting or
retaining experienced personnel and may be required to spend
significant time and expend significant financial resources in our
employee recruitment and retention efforts. Many of the other
medical device companies with which we compete for qualified
personnel have greater financial and other resources and risk
profiles different from ours. They also may provide more diverse
opportunities and better chances for career advancement. Some of
these characteristics may be more appealing to high quality
candidates than that which we may offer. If we are unable to
attract and retain the necessary personnel to accomplish our
business objectives, we may have difficulty implementing our
business strategy and achieving our business
objectives.
 
 
20
 
 

If we fail to properly manage our anticipated growth, our business
could suffer.
 
Our
strategy involves substantial growth. If we experience periods of
rapid growth and expansion, our limited personnel, operational
infrastructure and other resources could be significantly strained.
In particular, the possible internalization of manufacturing, and
anticipated expansion of our direct sales force in the U.S. will
require significant management, financial and other supporting
resources. In addition, in order to manage expanding operations, we
will need to continue to improve our operational and management
controls, reporting and information technology systems and
financial internal control procedures. If we are unable to manage
our growth effectively, it may be difficult for us to execute our
business strategy and our operating results and business could
suffer. Any failure by us to manage our growth effectively could
have an adverse effect on our ability to achieve our
goals.
 

We may be unable to retain and develop our U.S. sales force and
non-U.S. distributors, which would adversely affect our ability to
meet our revenue targets and other goals. Further, Foreign Markets
May Create a Need for Separate Potentially Costly
Analysis
 
As we
launch products, increase current sales efforts and expand into new
geographies, we will need to retain, grow and develop our direct
sales personnel, distributors and agents. There is significant
competition for sales personnel experienced in relevant medical
device sales. Upon completion of training, sales representatives
typically require lead time in the field to develop or expand their
network of accounts and achieve the productivity levels we expect
them to reach in any individual territory. If we are unable to
attract, motivate, develop, and retain a sufficient number of
qualified sales personnel, or if the sales representatives do not
achieve the productivity levels expected, our revenue will not grow
as expected, and our financial performance will
suffer.
 
In
addition, we may not succeed in entering into and maintaining
productive arrangements with an adequate number of distributors
outside of the U.S. that are sufficiently committed to selling our
products in international markets. The establishment and
maintenance of a distribution network is expensive and time
consuming. Even if we engage and maintain suitable relationships
with an adequate number of distributors, they may not generate
revenue as quickly as we expect them to, commit the necessary
resources to effectively market and sell our products, or
ultimately succeed in selling our products. Moreover, if our sales
force and distributors are unable to attract and retain new
customers, we may be unable to achieve our expected growth, and our
business could suffer.
 
Furthermore, some
of our distributors may market or sell the products of our
competitors. In these cases, the competitors may have the ability
to influence the products that our distributors choose to market
and sell, for example, by offering higher commission payments, or
by convincing the distributors to terminate their relationships
with us, carry fewer of our products or reduce their sales and
marketing efforts for our products. Any of the foregoing would
hinder our ability to meet our revenue targets and other
goals.
 
 
21
 
 

Our future success depends on our ability to develop, receive
regulatory approval for, and introduce new products or product
enhancements that will be accepted by the market in a timely
manner, and if we do not do so, our results of operations will
suffer.
 
It is
important to our business that we continue to build a pipeline of
product offerings for the treatment skin conditions and cosmetic
improvements to remain competitive. Consequently, our success will
depend in part on our ability to develop or acquire, and introduce
new products. However, we may be unable to successfully maintain
our regulatory clearance for existing products, or develop, obtain
and maintain regulatory clearance or approval for product
enhancements, or new products, or these products may not be
accepted by clinicians who financially support many of the
procedures performed with our products.
 
If we
do not develop new products or product enhancements in time to meet
market demand, if there is insufficient demand for these products
or enhancements, or if competitors introduce new products with
enhanced functionalities that are superior to those of ours, then
our results of operations will suffer.
 

If we acquire other companies or
businesses, we will be subject to risks that could hurt our
operations in the future
.
 
We may
in the future acquire complementary businesses, products or
technologies. Any acquisition may not produce the revenues,
earnings or business synergies anticipated, and any acquired
business, product or technology might not perform as expected. Our
management could spend a significant amount of time, effort and
money in identifying, pursuing and completing acquisitions. If we
complete an acquisition, we may encounter significant difficulties
and incur substantial expenses in integrating the operations and
personnel of the acquired company into our operations. In
particular, we may lose the services of key employees of the
acquired company, and we may make changes in management that impair
the acquired company’s relationships with employees, vendors
and customers. Additionally, we may acquire development-stage
companies that are not yet profitable and require continued
investment, which could decrease our future earnings or increase
our futures losses. Any of these outcomes could prevent us from
realizing the anticipated benefits of an acquisition.
 
To pay
for an acquisition, we might use equity or cash. Alternatively, we
might borrow money from a bank or other lender. If we use equity,
our stockholders would experience dilution of their ownership
interests. If we use cash or debt financing, our financial
liquidity would be reduced.
 
Any
acquisition could result in recording significant amounts of
goodwill or other intangible assets, some of which could result in
significant quarterly amortization expense. Moreover, if we
determine during annual reviews or otherwise that an intangible
asset has been impaired, we may need to write off some or all of
its carrying value, resulting in large charges to expense.
Amortization charges and write-downs or write-offs of intangibles
would decrease our future earnings or increase our future
losses.
 
 
22
 
 

Product liability claims could damage our reputation and adversely
affect our business.
 
The
design, manufacture and marketing of our products each carry an
inherent risk of product liability claims and other damage claims.
In addition to the exposure we may have for defective products,
clinicians may misuse our products or use improper techniques,
regardless of how well trained, potentially leading to injury and
an increased risk of product liability. A product liability or
other damages claim, product recall or product misuse could require
us to spend significant time and money in litigation, regardless of
the ultimate outcome, or to pay significant damages and could
seriously harm our business.
 
Future
Acquisitions Could Create Synergistic Issues
 
We
intend to acquire technologies or companies in the future, and
these acquisitions could disrupt our business and dilute our
shareholders’ interests. We intend to acquire other companies
(and may acquire additional technologies) in the future and we
cannot provide assurances that we will be able to successfully
integrate their operations or that the cost savings we anticipate
will be fully realized. Entering into an acquisition or investment
entails many risks, any of which could materially harm our
business, including:
 
 
diversion of
management’s attention from other business
concerns;
 
 
failure to
effectively assimilate the acquired technology, employees or other
assets of the company into our business;
 
 
the loss of key
employees from either our current business or the acquired
business;
 
 
assumption of
significant liabilities of the acquisitions.
 
If we
complete acquisitions, we may dilute the ownership of current
shareholders. In addition, achieving the expected returns and cost
savings from acquisitions will depend in part upon our ability to
integrate the products and services, technologies, research and
development programs, operations, sales and marketing functions,
finance, accounting and administrative functions, and other
personnel of these businesses into our business in an efficient and
effective manner. We cannot ensure that we will be able to do so or
that the acquired businesses will perform at anticipated levels. If
we are unable to successfully integrate acquired businesses, our
anticipated revenues may be lower and our operational costs may be
higher.
 
Reliance
on Outsourcing for Some Production Could Slow Growth
 
We have
no capacity for producing our product on a large-scale basis. We
are reliant on licensed laboratories to contract manufacture them.
Should they be unable to achieve our required levels of production
in a timely manner, then profitability may be
affected.
 
 
23
 
 
Delays
in Market Viability Could Prove Costly
 
Any
failures or delays in our testing of our products could negatively
affect our customer relationships and increase our assembling
costs. We intend to regularly test our products during the
manufacturing process and prior to initiating any type of marketing
campaign. Delays in our tests could harm our competitive position
and impair our ability to sell our newly developed or existing
product formulations. Our testing may encounter problems and delays
for a number of reasons, including the failure of our formulation,
the failure of the components of others, the failure to combine
these properly, operator error and the failure to maintain and
service the test prototypes properly. Many of these potential
problems and delays will be beyond our control. Such field test
failures may also negatively affect our relationships with
customers, requiring us to extend the formulation and testing
process longer than anticipated before undertaking commercial
sales.
 
Competitive
Landscape
 
The
world anti-aging products market stands enthused by the growing
need for appearance-enhancing and age-defying skin cosmetics among
the aging population according to a new report by Global Industry
Analysts. In addition to changes in lifestyles by modern consumers
to increase their chances of longevity, changing practices in
personal grooming is resulting in more time and money being spent
on external grooming to minimize visible effects of
aging.
 
This is
leading to increased demand for products, such as, skin lotions,
toners, wrinkle-removal creams, skin whiteners, luxury topical skin
care products, concealers, and cover-ups. The growing acceptance of
vitamins and antioxidants as effective anti-aging nutrients is
expected to prod the growth of anti-aging drugs and
pharmaceuticals. With younger consumers becoming more proactive
about their skin maintenance regime, women aged between 25 years to
30 years are increasingly beginning to use anti-aging creams,
thereby resulting in expanded market opportunities. Manufacturers
are additionally adding fuel to the trend by unveiling new
promotional mother-daughter packages, which are designed to
discreetly inculcate adherence to anti-aging treatment regimens as
early as possible. Growing wariness over harsh chemicals is
expected to lead to increased demand for anti-aging products with
organic, natural, herbal and botanical extracts as active
ingredients according to the report. Anti-aging products, which
include natural ingredients such as chamomile, copper, gold,
minerals and amino acids, are expected to score huge gains in the
marketplace in the upcoming years. Driven by the desire to stay
young and healthy, sales of dietary supplements, vitamins, and
minerals are forecast to rise in the upcoming years.
 
The
trend towards combining the use of both pharmaceuticals and dietary
supplements in the pursuit of well-being is resulting in these
products shifting image from being just healthcare enhancers to
beauty enhancers. As stated by the recent report published by
Global Industry Analysts, Inc., the United States, and Europe
dominate the world market for anti-aging products, with a combined
share of 62.8% estimated in the year 2007. Global growth is
expected to stem from the anti-aging cosmeceuticals market, has
grown at a CAGR of 9.8% over the years 2001 through 2010. Sales of
anti-aging cosmeceuticals in Asia-Pacific and Latin America, the
two fast growing markets worldwide, rose by U.S. $1.0 billion
between the period, 2007 to 2010. The U.S. dominates the world
anti-aging drugs & pharmaceuticals market, followed closely by
Europe. Global sales in this market, rose by a strong 30.9% between
the period, 2007 to 2010. Leading global, and regional players
operating in the industry include Chanel SA, Christian Dior, Avon,
L’Oréal SA, Revlon, Beiersdorf, Elizabeth Arden Inc., Estee
Lauder, GlaxoSmithKline, Johnson & Johnson, Mary Kay, Procter
& Gamble, Alberto Culver, Robanda International, Clarins,
Shiseido, Valeant Pharmaceuticals International, and Unilever,
among others. The report titled “Anti-Aging Products: A Global
Strategic Business Report” published by Global Industry Analysts,
Inc., provides a comprehensive review of market trends, drivers,
issues, challenges, consumer demographics, purchasing trends,
marketing strategies, competition, players, and products. Richly
annotated with authoritative, and unbiased commentaries, and
hard-to-find statistical facts, the report provides unequivocal
views on future potential while throwing light on the prevailing
climate in key regional markets.
 
 
24
 
 
Product
markets analyzed in the report include Anti-Aging Drugs &
Pharmaceuticals, Anti-Aging Vitamins, Supplements, & Minerals,
Anti-Aging Cosmeceuticals (Skin Care Cosmeceuticals (Face Care
Cosmeceuticals, Body Care Cosmeceuticals, and Sun Protection
Cosmeceuticals), Hair Care Cosmeceuticals, and Hair Growth
Cosmeceuticals). Latest demand patterns in product markets are
quantified across major geographic market verticals including the
United States, Canada, Japan, France, Germany, United Kingdom,
Italy, Spain, and Russia, Asia-Pacific, Middle East/Africa, and
Latin America. Also provided in the report is an enumeration of
recent mergers, acquisitions, and other strategic industry
activities.
 
The
Company anticipates that it will face additional competition from
new entrants that may offer significant performance, price,
creative or other advantages over those offered by the Company.
Many of these competitors have greater name recognition and
resources than the Company.
 
Additionally,
potential competitors with established market shares and greater
financial resources may introduce competing products. Thus, there
can be no assurance that AII will be able to compete successfully
in the future or that competition will not have a material adverse
effect on AII’s results of operations.
 
While
there is an expansive market that continues to grow to feed the
need of medical practices to access these medical devices, this
also opens up the risk of greater competition as other
company’s also look to build their services. This increase in
need is largely due to the speed at which technology develops and
the rate at which we are enhancing medical care and treatment
options.
 

Specific Risks – Medical Device Rental Division
 

If End Users of Our Rental Products do not make timely payments or
are unable to receive payment from third-party payors, our revenues
will be negatively impacted.
 

     
With any structured financial
business, especially the rental business, mandating timely
receivables is paramount to business success. Thereby, our ability
to make timely collections and the ability of our end users to make
timely payments is essential to our business success. If our end
users are not able to collect from third party payors, or unable to
utilize our technology in a fashion that is economically viable,
our business will take a substantial downturn and the service of
the payment for utilization of our technology will not be
sustainable without additional funding.
 
 
25
 
 

If third-party payors do not provide coverage and adequate
reimbursement for the use of our products, our revenue will be
negatively impacted.
 
In the
U.S., the commercial success of our rental of existing products and
any rental of future products rental will depend, in part, on the
extent to which governmental payors at the federal and state
levels, including Medicare and Medicaid, private health insurers
and other third-party payors provide coverage for and establish
adequate reimbursement levels for procedures using our products.
The existence of coverage and adequate reimbursement for our
products and related procedures by government and private payors is
critical to market acceptance of our existing and future products.
Neither hospitals nor physicians are likely to use our products if
they do not receive adequate reimbursement payments for the
procedures using our products.
 
Some
private payors in the U.S. may base their reimbursement policies on
the coverage decisions determined by the Centers for Medicare and
Medicaid Services, which administers the Medicare program. Others
may adopt different coverage or reimbursement policies for
procedures performed using our products, while some governmental
programs, such as Medicaid, have reimbursement policies that vary
from state to state, some of which may not pay for our products in
an amount that supports our selling price, if at all. A Medicare
national or local coverage decision denying coverage for any of the
procedures performed with our products could result in private and
other third-party payors also denying coverage. Medicare (part B)
and a number of private insurers in the U.S. currently cover and
pay for both non-melanoma skin cancer and keloid treatments using
the SRT-100. A withdrawal, or even contemplation of a withdrawal,
by Centers for Medicare and Medicaid Services, or CMS, Medicaid or
private payors of reimbursements, or any other unfavorable coverage
or reimbursement decisions by government programs or private
payors, could have a material adverse effect on our
business.
 
If
sufficient coverage and reimbursement are not available for our
current or future products the demand for our products and,
consequently, our revenues will be adversely affected.
 

We may be unable to retain and develop our sales force, which would
adversely affect our ability to meet our revenue targets and other
goals.
 
While
we have an organic sales and service team, as we plan to offer
rental products, increase current sales efforts and expand into new
geographies, we will need to retain, grow and develop our direct
sales personnel, distributors and agents. There is significant
competition for sales personnel experienced in relevant medical
device sales. In addition, the training process is lengthy because
it requires significant education for new sales representatives to
achieve an acceptable level of clinical competency with our
products. Upon completion of training, sales representatives
typically require lead time in the field to develop or expand their
network of accounts and achieve the productivity levels we expect
them to reach in any individual territory. If we are unable to
attract, motivate, develop, and retain a sufficient number of
qualified sales personnel, or if the sales representatives do not
achieve the productivity levels expected, our revenue will not grow
as expected, and our financial performance will
suffer.
 
 
26
 
 
Furthermore, some
of our distributors may market or sell the products of our
competitors. In these cases, the competitors may have the ability
to influence the products that our distributors choose to market
and sell, for example, by offering higher commission payments, or
by convincing the distributors to terminate their relationships
with us, carry fewer of our products or reduce their sales and
marketing efforts for our products. Any of the foregoing would
hinder our ability to meet our revenue targets and other
goals.
 
We
are in a highly competitive market segment, which is subject to
rapid technological change. If our competitors are able to offer
rental products and market those that are more effective, less
costly, easier to use or otherwise more attractive than any of our
products, our business will be adversely impacted.
 
The
medical device industry is highly competitive and subject to
technological change. In the arena for technology and products for
use discovery and screening, there may be technological change that
makes current products less attractive. While we believe our
offered products currently have certain competitive advantages over
the products offered by these competitors, our success depends, in
part, upon our ability to maintain this competitive position. If
these competitors offer new products, or expand their operations,
we may be unable to maintain our competitive advantages over these
competitors.
 
Furthermore, new
competitors, including companies larger than us, may enter the
market in the future and may offer products with similar or
alternative functionalities. These companies may enjoy several
advantages relative to us, including:
 
greater financial
and human resources for product development, sales and
marketing;
 
greater name
recognition;
 
long-established
relationships with physicians and hospitals;
 
the
ability to offer rebates or bundle multiple product offerings to
offer greater discounts or incentives;
 
more
established distribution channels and sales and marketing
capabilities; and
 
greater experience
in and resources for conducting research and development, clinical
studies, manufacturing, preparing regulatory submissions, obtaining
regulatory clearance or approval for products and marketing cleared
products.
 
 
27
 
 
Hospitals,
physicians and investors may not view our products as competitive
with other products that are marketed and offered by competitors,
including much larger and more established companies. Our
competitors may offer competing products more rapidly than us or
develop more effective, more convenient or less expensive products
or technologies that render our technology or products less
competitive. If our existing or new competitors are more successful
than us in any of these matters, our business may be
harmed.
 

Our products may become obsolete prior to the end of their
anticipated useful lives, and we may be required to dispose of
inventory or write off the value or accelerate the depreciation of
these assets, each which would materially and adversely impact our
results of operations.
 
We will
focus on offering products, from our current formulations, that
have been widely accepted. While we believe this provides a
competitive edge, it also results in the risk that our products may
decay into a competitively weaker position prior to the end of
their anticipated useful lives. If we introduce new products or
next-generation products prior to the end of the useful life of a
prior generation, we may be required to write down the value of
these assets, each of which would materially and adversely impact
our results of operations.
 

If we are unable to make scheduled interest or principal payments
on our present or future debt obligations, our operations could be
adversely affected.
 
Our
ability to make scheduled payments on our debt obligations depends
on numerous factors, including the amount of cash balances and
actual and projected financial and operating performance. These
amounts and performance are subject to certain financial and
business factors, as well as prevailing economic and competitive
conditions, some of which may be beyond our control. We may be
unable to maintain a level of cash balances or cash flows from
operating activities sufficient to permit ourselves to pay the
principal and interest on existing or future indebtedness. If cash
flows and capital resources are insufficient to fund debt service
obligations, we may be forced to reduce or delay capital
expenditures, sell assets or operations, seek additional capital or
restructure or refinance our indebtedness. We may be unable to take
any of these actions, and even if able, these actions may be
insufficient to permit us to meet scheduled debt service
obligations.
 

We are subject to various federal, state and foreign healthcare
laws and regulations, and a finding of failure to comply with these
laws and regulations could have a material adverse effect on our
business.
 
Our
operations are, and will continue to be, directly and indirectly
affected by various federal and state healthcare laws. Many of the
specific regulatory risks have been discussed in depth below and
within this document including: Federal “Sunshine” (42
U.S. Code §1320a-7h) law and Federal Health Insurance
Portability and Accountability Act of 1996, or HIPAA. Any violation
or change in these regulatory schemes would affect operations,
potentially in a negative way.
 
 
28
 
 

We or our affiliates are required to comply with medical device
reporting requirements and must report certain malfunctions,
deaths, and serious injuries associated with our products, which
can result in voluntary corrective actions or agency enforcement
actions.
 
Under
the U.S. Food and Drug Administration medical device reporting
regulations (21 CFR 803), medical device manufacturers are required
to submit information to the U.S. Food and Drug Administration when
they receive a report or become aware that a device has or may have
caused or contributed to a death or serious injury or has or may
have a malfunction that would likely cause or contribute to death
or serious injury if the malfunction were to recur. All
manufacturers placing medical devices on the market in the European
Economic Area are legally bound to report any serious or
potentially serious incidents involving devices they produce or
sell (MEDDEV 2.12-1) to the Competent Authority in whose
jurisdiction the incident occurred through the European Vigilance
process.
 
If an
event subject to medical device reporting requirements occurs, we
or our affiliates will need to comply with the reporting
requirements, which would adversely affect our reputation and
subject us to actions by regulatory authorities, such as ordering
recalls, imposing fines, or seizing the affected products.
Furthermore, any corrective action, whether voluntary or
involuntary, will require the dedication of time and capital and
will distract management from operating our business. Any of the
foregoing would further harm our reputation and financial
results.
 

Corporate Management Risks
 

If we fail to develop or maintain an effective system of internal
controls, we may not be able to accurately report our financial
results or prevent fraud.
 
Effective internal
controls are necessary for us to provide reliable financial reports
and effectively prevent fraud. If we cannot provide reliable
financial reports or prevent fraud, our reputation and operating
results would be harmed. Our efforts to continue to develop and
maintain internal controls may not be successful, and we may be
unable to maintain adequate controls over our financial processes
and reporting in the future, including compliance with the
obligations under Section 404 of the Sarbanes-Oxley Act of 2002.
Any failure to develop or maintain effective controls, or
difficulties encountered in our implementation or other effective
improvement of our internal controls, could harm our operating
results.
 

Reliance upon Key Personnel and Necessity of Additional
Personnel
 
AII is
largely dependent upon the personal efforts and abilities of
existing management, especially Gary Croft (Chief Executive Officer
and Director), Kimberly Shapiro (Vice-Chairman and Director), and
Phillip Nuciola (President of Capital Markets).
The success
of AII will also be largely dependent upon the ability of AII to
continue to attract quality management and employees to help
operate AII as its operations may grow.
 
 
29
 
 

Control by Existing Management
 
Currently,
officers, directors and founders of AII, as a group directly or
indirectly own approximately 3,451,000 restricted shares of Common
Stock in AII which is 95.86% of the 3,600,000 shares of Common
Stock issued pre-offering or approximately 62% of 5,600,000 shares
of common stock issued post-offering including the sale of all
2,000,000 Shares pursuant to this Offering (e.g. does not take into
account possible payments for acquisitions or other products,
services or intellectual property or processes.)
 
As a
result, officers, directors and founders of AII as a group could
exercise substantial control over all matters requiring stockholder
approval, including the election of directors and approval of
significant corporate transactions. This concentration of ownership
limits the power to exercise control by the minority shareholders
who will have purchased their stock in this Offering.
 

Specific Risks Related to our Regulatory Environment
 

We are subject to various federal, state and foreign healthcare
laws and regulations, and a finding of failure to comply with these
laws and regulations could have a material adverse effect on our
business.
 
Our
operations are, and will continue to be, directly and indirectly
affected by various federal, state and foreign healthcare laws,
including, but not limited to, those described below.
 
Federal
Anti-Kickback Statute (42 U.S. Code §1320a-7b), which
prohibits any person or entity from knowingly and willfully
offering, paying, soliciting or receiving any remuneration,
directly or indirectly, in cash or in kind, in return for or to
induce the referring, ordering, leasing, purchasing or arranging
for or recommending the referring, ordering, purchasing or leasing
of any good, facility, item or service, for which payment may be
made, in whole or in part, under federal healthcare programs, such
as the Medicare and Medicaid programs.

Federal
civil and criminal false claims laws and civil monetary penalty
laws, which prohibit, among other things, persons or entities from
knowingly presenting, or causing to be presented, a false or
fraudulent claim to, or the knowing use of false records or
statements to obtain payment from, or approval by, the federal
government. Suits filed under the False Claims Act, known as
“qui tam” actions, can be brought by any individual on
behalf of the government and such individuals, commonly known as
“whistleblowers,” may share in any amounts paid by the
entity to the government in fines or settlement. When an entity is
determined to have violated the False Claims Act (31 U.S. Code
§3729-3733), it may be required to pay up to three times the
actual damages sustained by the government, plus civil penalties
for each separate false claim.
 
Federal
Health Insurance Portability and Accountability Act of 1996, or
HIPAA, statute, which, among other things, created federal criminal
laws that prohibit knowingly and willfully executing, or attempting
to execute, a scheme or artifice to defraud any healthcare benefit
program and knowingly and willfully falsifying, concealing or
covering up a material fact or making any materially false,
fictitious or fraudulent statements in connection with the delivery
of or payment for healthcare benefits, items or services.
Additionally, HIPAA, as amended by the Health Information
Technology for Economic and Clinical Health Act of 2009, and
applicable implementing regulations, impose certain requirements
relating to the privacy, security and transmission of individually
identifiable health information without appropriate authorization
on entities subject to the law, such as health plans,
clearinghouses, and healthcare providers and their business
associates. Internationally, substantially every jurisdiction in
which we operate has established its own data security and privacy
legal framework with which we must comply, including the Data
Protection Directive 95/46/EC and national implementation of the
Directive in the member states of the European
Union.
 
 
30
 
 

The off-label use or misuse of our products may harm our image in
the marketplace, result in injuries that lead to costly product
liability suits, or result in costly investigations and regulatory
agency sanctions under certain circumstances.
 
If the
U.S. Food and Drug Administration determines that our promotional
materials or training constitute promotion of an off-label or other
improper use, it could request that we modify our training or
promotional materials, or subject us to regulatory or enforcement
actions, including the issuance of an untitled letter, a warning
letter, injunction, seizure, civil fine or criminal penalties. It
is also possible that other federal, state or foreign enforcement
authorities might take action if they consider our business
activities to constitute promotion of an off-label use, which could
result in significant penalties, including, but not limited to,
criminal, civil or administrative penalties, damages, fines,
disgorgement, exclusion from participation in government healthcare
programs, and the curtailment of our operations. Any of these
events could significantly harm our business and results of
operations.
 
These
regulations or codes may limit our ability to affectively market
our products, or we could run afoul of the requirements imposed by
these regulations, causing reputational harm, imposing potentially
substantial costs, and adversely affecting our operations as a
result.
 

Healthcare policy changes, including recent federal legislation to
reform the U.S. healthcare system, may have a material adverse
effect on our business.
 
In
March 2010, President Obama signed the Patient Protection and
Affordable Care Act, as amended by the Health Care and Education
Reconciliation Act. This Act includes, among other things, a
deductible 2.3% excise tax on any entity that manufactures or
imports medical devices offered for sale in the U.S., with limited
exceptions, effective January 1, 2013. This excise tax imposed a
significant increase in the tax burden on the medical device
industry, and if our efforts to offset the excise tax are
unsuccessful, the increased tax burden could have an adverse effect
on our results of operations and cash flows. However, this excise
tax has recently been suspended for 2016 and 2017. Other elements
of this Act, including comparative effectiveness research, an
independent payment advisory board, payment system reforms
including shared savings pilots and other provisions, may
significantly affect the payment for, and the availability of,
healthcare services and may result in fundamental changes to
federal healthcare reimbursement programs, any of which may
materially affect numerous aspects of our business.
 
 
31
 
 
Other
healthcare reform measures may result in more rigorous coverage
criteria and in additional downward pressure on the reimbursement
received for procedures utilizing our products. In addition, other
legislative changes have been proposed and adopted since the Act
discussed above was enacted that may adversely affect our revenues.
These changes include aggregate reductions to Medicare payments to
providers of up to 2% per fiscal year effective April 2013 which,
due to subsequent legislative amendments to the statute, will stay
in effect through 2024 unless additional Congressional action is
taken. Additionally, in January 2013, President Obama signed into
law the American Taxpayer Relief Act of 2012, which, among other
things, reduced Medicare payments to several providers, and
increased the statute of limitations period for the government to
recover overpayments to providers from three to five years. These
new laws may result in additional reductions in Medicare and other
healthcare funding, which could have a material adverse effect on
our business and financial operations. Any reduction in
reimbursement from Medicare or other government programs may result
in a similar reduction in payments from private payors. The
implementation of cost containment measures or other healthcare
reforms may cause our suppliers to sustain loses or make them
unable to provide new machines or products in a timely
manner.
 

Specific Risks Related to our Intellectual Property
 

If our anticipated patents and other intellectual property rights
do not adequately protect our products, we may lose market share to
competitors and be unable to operate our business
profitably.
 
Our
success depends significantly on our ability to protect our
proprietary rights to the technologies used in our products. We
rely on the formulations which we have acquired, as well as a
combination of copyright, trade secret and trademark laws, and
nondisclosure, confidentiality and other contractual restrictions
to protect our proprietary technology. However, these legal means
afford only limited protection and may not adequately protect our
rights or permit us to gain or keep any competitive advantage. For
example, any future pending applications may be unsuccessful. The
U.S. Patent and Trademark Office may deny or require significant
narrowing of claims in our pending patent applications or future
patent applications, and patents issued as a result of these patent
applications, if any, may not provide us with significant
commercial protection or be issued in a form that is advantageous
to us. We could also incur substantial costs in proceedings before
the U.S. Patent and Trademark Office. These proceedings could
result in adverse decisions as to the priority of our inventions
and the narrowing or invalidation of claims in our patents. Third
parties may successfully challenge our issued patents and those
that may be issued in the future, which would render these patents
invalidated or unenforceable, and which could limit our ability to
stop competitors from marketing and selling related products. In
addition, our pending patent applications include claims to aspects
of products and procedures that are not currently protected by
issued patents, and third parties may successfully patent those
aspects before us or otherwise challenge our rights to these
aspects.
 
 
32
 
 
In the
event a competitor infringes upon one of our patents or other
intellectual property rights, enforcing those patents and rights
may be difficult and time consuming. Even if successful, litigation
to defend our patents against challenges or to enforce our
intellectual property rights could be expensive and time consuming
and could divert management’s attention from managing our
business. Moreover, we may not have sufficient resources to defend
our patents against challenges or to enforce our intellectual
property rights, any of which would adversely affect our ability to
compete and our business operations as a result. 
 

If our trademarks or trade names are not adequately protected, then
we may be unable to build name recognition in our markets of
interest and our business may be adversely affected.
 
Our
registered or unregistered trademarks or trade names may be
challenged, infringed, circumvented or declared generic or
determined to infringe other marks. We may be unable to protect our
rights to these trademarks and trade names, which we need to build
name recognition by potential partners or customers in markets of
interest. If our trademarks are challenged, infringed upon,
circumvented, or declared generic or infringing, or if we are
unable to establish name recognition based on our trademarks and
trade names, then we may be unable to compete effectively and our
business may be adversely affected.
 

Adverse outcomes in litigation or similar proceedings could
adversely impact our business.
 
We may
in the future be, named as a party to litigation or other similar
legal proceedings. Adverse outcomes in any or all of these
proceedings could result in monetary damages or injunctive relief
that could adversely affect our ability to continue conducting our
business. While our management has verified there are no
proceedings currently pending against us such matters are subject
to inherent uncertainties and management’s view of these
matters may change in the future. If an unfavorable final outcome
in any such matter becomes probable and reasonably estimable, our
financial condition could be materially and adversely
affected.
 

Risks Related to this Offering and Ownership of our Common
Stock
 

There has been no public market for our common stock prior to this
offering, and an active trading market for our common stock may not
develop after this offering. As a result, you may be unable to
resell your common stock at or above the price paid under this
offering, or at all.
 
Prior
to this offering, there has been no public market for our common
stock, and an active trading market for our common stock may not
develop or be sustained after this offering. Also, the initial
public offering price for our common stock will be determined by
management and may bear no relationship to the market price for our
common stock after the offering. Furthermore, the market price of
our common stock may decline below the initial public offering
price. As a result of any of the foregoing, you may be unable to
resell your common stock at or above the price you paid under this
offering, or at all, and you may lose part or all of your
investment in our common stock.
 

We have never declared or paid cash dividends on our common stock
and do not anticipate paying dividends in the foreseeable future.
As a result, you must rely on price appreciation of our common
stock for a return on your investment in the foreseeable
future.
 
 
33
 
 
We have
never declared or paid cash dividends on our common stock. We
currently expect to retain our funds and future earnings to support
the operation, growth and development of our business. We do not
anticipate paying any cash dividends on our common stock in the
foreseeable future, except for those related to the corporate
conversion. As a result, a return on your investment in the near
future will occur only if our share price appreciates. Our share
price may not appreciate in value after this offering or maintain
the price at which you purchased our common stock pursuant to this
offering, and in either case, you would not realize a return on
investment or could lose all or part of your investment in our
common stock.
 
Furthermore, any
future determination to declare cash dividends will be made at the
discretion of our board of directors and will be subject to
compliance with applicable laws and covenants under any future
credit facilities, which may restrict or limit our ability to pay
dividends.
 

The price of our common stock may be volatile, and you could lose
all or part of your investment.
 
Stock
markets have experienced extreme volatility that has often been
unrelated to the operating performance of particular companies.
These broad market fluctuations may adversely affect the trading
price of our common stock. In addition, limited trading volume of
our stock may contribute to its future volatility. Price declines
in our common stock could result from general market and economic
conditions, some of which are beyond our control, and a variety of
other factors, including any of the risk factors described in this
prospectus. These broad market and industry factors may harm the
market price of our common stock, regardless of our operating
performance, and could cause you to lose all or part of your
investment in our common stock since you might be unable to sell
your shares at or above the price you paid in this offering.
Factors that could cause fluctuations in the market price of our
common stock include the following:
 
price
and volume fluctuations in the overall stock market from time to
time;
 
volatility in the
market prices and trading volumes of medical device company
stocks;
 
changes in
operating performance and stock market valuations of other medical
device companies generally, or those in our industry in
particular;
 
sales
of shares of our common stock by us or our
stockholders;
 
 
34
 
 
failure of
securities analysts to initiate or maintain coverage of us, changes
in financial estimates by securities analysts who follow our
company, or our failure to meet these estimates or the expectations
of investors;
 
the
financial projections we may provide to the public, any changes in
those projections or our failure to meet those
projections;
 
rumors
and market speculation involving us or other companies in our
industry;
 
actual
or anticipated changes in our results of operations or fluctuations
in our results of operations;
 
actual
or anticipated developments in our business, our competitors’
businesses or the competitive landscape generally;
 
litigation
involving us, our industry or both, or investigations by regulators
into our operations or those of our competitors;
 
developments or
disputes concerning our intellectual property or other proprietary
rights;
 
announced or
completed acquisitions of businesses or technologies by us or our
competitors;
 
new
laws or regulations or new interpretations of existing laws or
regulations applicable to our business;
 
changes in
accounting standards, policies, guidelines, interpretations or
principles;
 
any
significant change in our management; and
 
general economic
conditions and slow or negative growth of our markets.
 
 
35
 
 
In
addition, in the past, following periods of volatility in the
overall market and the market price of a particular company’s
securities, securities class action litigation has often been
instituted against these companies. This litigation, if instituted
against us, could result in substantial costs and a diversion of
our management’s attention and resources.
 

Substantial future sales of our common stock in the public market,
or the perception that these sales may occur, could cause the price
of our common stock to decline, even if our business is doing
well.
 
Sales
of our common stock in the public market after this offering, or
the perception that these sales may occur, could cause the market
price of our common stock to decline, even if our business is doing
well. All common stock sold in this offering, other than shares
acquired by our affiliates, will be freely transferable without
restriction or additional registration under the Securities Act of
1933. All of the remaining common stock outstanding after this
offering will be available for sale upon the expiration of the
360-day lock-up period pursuant to Rule 144 and Rule 701 under the
Securities Act. See “Shares eligible for future sale”
and “Underwriting” for a detailed description of the
lock-up and Securities Act of 1933 restrictions. Any or all of our
common stock may be released prior to expiration of the lock-up
period at the discretion of the underwriter. To the extent this
common stock is released before the expiration of the lock-up
period and sold into the market, the market price of our common
stock could decline.
 

Our executive officers, directors and principal stockholders may
exert control over us and may exercise influence over matters
subject to stockholder approval.
 
Our
executive officers and directors, and significant shareholders
together with their respective affiliates, beneficially owned
approximately 95.86% of our outstanding common stock as of December
31, 2016, and upon completion of this offering, that same group
will beneficially own approximately 61.36% of our outstanding
Common stock after all 2 million shares offered herein are sold.
Accordingly, these stockholders, if they act together, may exercise
substantial influence over matters requiring stockholder approval,
including the election of directors and approval of corporate
transactions, such as a merger. This concentration of ownership
could have the effect of delaying or preventing a change in control
or otherwise discourage a potential acquirer from attempting to
obtain control over us, which in turn could have a material adverse
effect on the market value of our common stock. For information
regarding the ownership of our common stock by our executive
officers and directors and their affiliates, please see the section
entitled “Security ownership of certain beneficial owners and
management.”
 

Our management will have broad discretion over the use and
investment of the net proceeds received in this offering and might
not apply the proceeds in ways that increase the value of your
investment in our common stock.
 
Our
management will have broad discretion over the use and investment
of the net proceeds received from this offering, and you will be
relying on, and may not agree with, the judgment of management
regarding the application of these net proceeds. Management intends
to use the net proceeds received from this offering as described in
the section entitled “Use of Proceeds.” The failure by
management to apply these funds effectively may result in financial
losses that could have a material adverse effect on our business
and cause the price of our common stock to decline. Management may
invest the net proceeds received from this offering in a manner
that does not produce income or increase value, which could have a
material adverse effect on our business and cause the price of our
common stock to decline.
 
 
36
 
 

If securities or industry analysts do not publish research or
publish unfavorable or inaccurate research about our business, our
common stock share price and trading volume could
decline.
 
The
trading market for our common stock will depend, in part, on the
research and reports that securities or industry analysts publish
about us or our business. We may be unable to attract or sustain
coverage by well-regarded securities and industry analysts. If
either none or only a limited number of securities or industry
analysts cover us or our business, or if these securities or
industry analysts are not widely respected within the general
investment community, the trading price for our common stock would
be materially and negatively impacted. In the event we obtain
securities or industry analyst coverage, if one or more of the
analysts who cover us or our business downgrade our common stock or
publish inaccurate or unfavorable research about us or our
business, the price of our common stock would likely decline. If
one or more of these analysts cease coverage of us or our business,
or fail to publish reports on us or our business regularly, demand
for our common stock could decrease, which might cause the price of
our common stock and trading volume to decline.
 

Public company requirements may strain our resources and divert
management’s attention, which could adversely impact our
ability to execute our strategy and harm operating
results.
 
As a
public company, we will be subject to the reporting requirements of
the Securities Exchange Act of 1934, the Sarbanes-Oxley Act, the
Dodd-Frank Act, the listing requirements of the NYSE MKT and other
applicable securities rules and regulations, although the company
plans to list on the OTCQB, it will adhere to the NYSE market
guidelines for future growth possibilities. Despite recent reforms
made possible by the Jumpstart Our Business Startups Act,
compliance with these rules and regulations will nonetheless
increase our legal and financial compliance costs, make some
activities more difficult, time-consuming or costly and increase
demand on our systems and resources, particularly after we are no
longer an “emerging growth company.” The Securities
Exchange Act of 1934 requires, among other things, that we file
annual, quarterly, and current reports with respect to our business
and operating results.
 
While
the members of our board of directors and our executive officers
have substantial experience relevant to our business and experience
with operations as a public company upon which you can base your
prediction of our future success or failure in complying with
public company requirements, the compliance costs and requirements
may stretch the management team’s ability to focus on current
business operations as opposed to a private company.
 
Furthermore, as a
result of disclosure of information in this prospectus and in
filings required of a public company, our business and financial
condition will become more visible, which may result in threatened
or actual litigation, including by competitors and other third
parties. If these claims are successful, our business and operating
results could be harmed, and even if the claims do not result in
litigation or are resolved in our favor, these claims, and the time
and resources necessary to resolve them, could divert the resources
of management and adversely affect our business, brand and
reputation and results of operations.
 
 
37
 
 
Our new
public company status and these new rules and regulations will make
it more expensive for us to obtain director and officer liability
insurance, and we may be required to accept reduced coverage or
incur substantially higher costs to obtain coverage. These factors
could also make it more difficult for us to attract and retain
qualified members of the board of directors, particularly to serve
on the audit committee and compensation committee, and qualified
executive officers.
 

Our certificate of incorporation, our bylaws and Nevada law contain
provisions that could discourage another company from acquiring us
and may prevent attempts by our stockholders to replace or remove
our current management.
 
Provisions of
Nevada law (where we are incorporated), our certificate of
incorporation and bylaws may discourage, delay or prevent a merger
or acquisition that stockholders may consider favorable, including
transactions in which you might otherwise receive a premium for
your stock. In addition, these provisions may frustrate or prevent
any attempts by our stockholders to replace or remove our current
management by making it more difficult for stockholders to replace
or remove our board of directors.
 

If we fail to maintain proper and effective internal controls, our
ability to produce accurate and timely financial statements could
be impaired and investors’ views of us or our business could
be harmed, resulting in the decrease in value of our common
stock.
 
As a
public company, we will be required to maintain internal control
over financial reporting and to report any material weaknesses in
our internal controls. In addition, beginning with our annual
report on Form 10-K for our fiscal year ending December 31, 2017 to
be filed in 2018, we will be required to furnish a report by
management on the effectiveness of our internal control over
financial reporting pursuant to Section 404 of the Sarbanes-Oxley
Act. We are in the process of designing, implementing and testing
the internal control over financial reporting required to comply
with this obligation, which process is time-consuming, costly and
complicated. In addition, our independent registered public
accounting firm will be required to attest to the effectiveness of
our internal control over financial reporting beginning with our
annual report on Form 10-K following the date on which we are no
longer an emerging growth company, which may be up to five full
years following the date of this offering. Our compliance with
Section 404 of the Sarbanes-Oxley Act will require us to incur
substantial accounting expense and expend significant management
efforts. If we are unable to comply with the requirements of
Section 404 in a timely manner, or we or our independent registered
public accounting firm identify deficiencies in our internal
control over financial reporting that are deemed to be material
weaknesses, the market price of our common stock could decline and
we could be subject to sanctions.
 
 
38
 
 
Our
ability to implement our business plan successfully and comply with
Section 404 requires us to be able to prepare timely and accurate
financial statements. We expect that we will need to continue to
improve existing, and implement new, operational and financial
systems, procedures and controls to manage our business
effectively. Any delay in the implementation of, or disruption in
the transition to, new or enhanced systems, procedures or controls,
may cause our operations to suffer and we may be unable to conclude
that our internal control over financial reporting is effective and
to obtain an unqualified report on internal controls from our
auditors when required under Section 404 of the Sarbanes-Oxley Act.
Moreover, we may not implement and maintain adequate controls over
our financial processes and reporting in the future. Even if we
were to conclude, and, when required, our auditors were to concur,
that our internal control over financial reporting provided
reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles, because of our inherent limitations, internal control
over financial reporting may not prevent or detect fraud or
misstatements or omissions.
 

FINRA (“Financial Industry Regulatory Authority”) sales
practice requirements may limit a stockholder’s ability to
buy and sell our stock
 
In
addition to the “penny stock” rules described below, FINRA has
adopted rules that require that in recommending an investment to a
customer, a broker-dealer must have reasonable grounds for
believing that the investment is suitable for that customer. Prior
to recommending speculative low priced securities to their
non-institutional customers, broker-dealers must make reasonable
efforts to obtain information about the customer’s financial
status, tax status, investment objectives and other information.
Under interpretations of these rules, FINRA believes that there is
a high probability that speculative low priced securities will not
be suitable for at least some customers. FINRA requirements make it
more difficult for broker-dealers to recommend that their customers
buy our common stock, which may have the effect of reducing the
level of trading activity in our common stock. As a result, fewer
broker-dealers may be willing to make a market in our common stock,
reducing a stockholder’s ability to resell shares of our common
stock.
 

Our common stock is a penny stock. Trading of our common stock may
be restricted by SEC penny stock regulations and FINRA sales
practice requirements, which may limit a stockholder’s ability to
buy and sell our stock.
 
If and
until a liquid trading market does develop for our common stock, it
is likely we will be subject to the regulations applicable to
“Penny Stock.” The regulations of the SEC promulgated under the
Exchange Act that require additional disclosure relating to the
market for penny stocks in connection with trades in any stock
defined as a penny stock. The SEC regulations define penny stocks
to be any non-NASDAQ equity security that has a market price of
less than $5.00 per share, subject to certain exceptions. Unless an
exception is available, those regulations require the broker-dealer
to deliver, prior to any transaction involving a penny stock, a
standardized risk disclosure schedule prepared by the SEC, to
provide the customer with current bid and offer quotations for the
penny stock, the compensation of the broker-dealer and its
salesperson in the transaction, monthly account statements showing
the market value of each penny stock held in the customer’s
account, to make 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. These disclosure
requirements may have the effect of reducing the level of trading
activity, if any, in the secondary market for a stock that becomes
subject to the penny stock rules. Consequently, these penny stock
rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage market
investor interest in and limit the marketability of our common
stock.
 
 
39
 
 
In
addition to the “penny stock” rules promulgated by the Securities
and Exchange Commission, FINRA has adopted rules that require that
in recommending an investment to a customer, a broker-dealer must
have reasonable grounds for believing that the investment is
suitable for that customer. Prior to recommending speculative low
priced securities to their non-institutional customers,
broker-dealers must make reasonable efforts to obtain information
about the customer’s financial status, tax status, investment
objectives and other information. Under interpretations of these
rules, FINRA believes that there is a high probability that
speculative low priced securities will not be suitable for at least
some customers. FINRA requirements make it more difficult for
broker-dealers to recommend that their customers buy our common
stock, which may limit your ability to buy and sell our common
stock.
 
New
Regulation Could Affect Our Business Negatively
 
Our
business may become subject to additional future product
certification regulations, which may impair our ability to market
our products. We cannot assure you that our products will continue
to meet potentially changing standards. The failure to comply with
changing requirements could result in the recall of our products or
in civil or criminal penalties.
 
Shareholder
Mandates Would Alter the Company Status
 
In the
future our Articles of Incorporation and corporate structure could
be changed by the vote of a majority of our shareholders. This may
also impact the taxation of the company as well as the tax of any
dividends or stock payments authorized to shareholders of record.
Further, the company may become a target of a takeover and the
results of which may not be predictable and as beneficial as other
alternatives to our current shareholders.
 

Emerging Growth Company Status
 
We are
an “emerging growth company” as defined in the
Jumpstart Our Business Startups Act of 2012, or the JOBS Act, which
permits us to elect not to be subject to certain disclosure and
other requirements that otherwise would have been applicable to us
had we not been an “emerging growth company.” These
provisions include:
 
reduced disclosure
about our executive compensation arrangements;
 
no
non-binding advisory votes on executive compensation or golden
parachute arrangements; and
 
exemption from the
auditor attestation requirement in the assessment of our internal
control over financial reporting.
 

 
40
 
 
We may
take advantage of these exemptions for up to five years or such
earlier time as we are no longer an “Emerging Growth Company.” We will
qualify as an “Emerging
Growth Company”
until the earliest of (1) the last day
of our fiscal year following the fifth anniversary of the date of
completion of this offering, (2) the last day of our fiscal year in
which we have annual gross revenue of $1.0 billion or more, (3) the
date on which we have, during the previous three-year period,
issued more than $1.0 billion in non-convertible debt and (4) the
last day of the fiscal year in which we become a “large
accelerated filer” as defined in Rule 12b-2 under the
Securities Exchange Act of 1934, as amended, or the Exchange Act.
Under this definition, we will be an “Emerging Growth Company” upon
completion of this offering and could remain an “Emerging Growth Company” until as
late as December 31, 2021.
 
In
addition, the JOBS Act provides that an emerging growth company can
take advantage of an extended transition period for complying with
new or revised accounting standards. This allows an emerging growth
company to delay the adoption of certain accounting standards until
those standards would otherwise apply to private companies. We have
irrevocably elected not to avail ourselves of this exemption from
new or revised accounting standards and, therefore, we will be
subject to the same new or revised accounting standards as other
public companies that are not emerging growth
companies.
 

Proceeds Applied to General Corporate Purposes – Management
Discretion
 
The
proceeds of this Offering are for working capital and general
corporate purposes. Therefore, the application of the net proceeds
of this offering is substantially within the discretion of the
management. Investors will be relying on AII’s management and
business judgment based solely on limited information. No assurance
can be given that the application of the net proceeds of this
Offering will result in AII achieving its financial and strategic
objectives.
 
 
41
 
 
USE
OF PROCEEDS
 
We
estimate, based upon an assumed initial public offering price of
$2.00 per share, which is
the price range per share estimate set forth on the cover page of
this prospectus, we will receive net proceeds from this offering of
approximately $3,600,000 (2,000,000 shares sold), after deducting
estimated underwriting discounts and commissions and estimated
offering expenses payable by us.
 
The
principal purposes of this offering are to obtain additional
capital to support our operations, create a public market for our
common stock and to facilitate future access to the public equity
markets. We currently expect to use the net proceeds of this
offering primarily to fund the commercialization and continued
development of the products we currently hold in the Nutraceuticals
markets and to acquire additional products that have been
researched. We have not yet determined which if any acquisitions
will be made. In addition, we will use the proceeds to build our
sales team within that market. Further, we plan on using the
proceeds to acquire commercial paper within our medical device
division. Below are some of the ways we may utilize the
funds:
 
Expansion of our
sales and marketing activities, including hiring new sales
representatives and a director of marketing within both
divisions;
 
Research and
development for new products and improvements to existing
products;
 
Potential
acquisition within our nutraceutical division;
Potential
acquisition of commercial paper and new machines within our medical
device division;
 
The
remainder for working capital and other general corporate
purposes.
 
In
addition, we may also use a portion of our net proceeds to acquire
and invest in complementary products, technologies, services or
businesses. The Company is exploring the possibility of reducing
its reliance on third party manufacturers by bringing certain
manufacturing, service and research and development functions
in-house, which could include the acquisition of equipment and
other fixed assets or the acquisition or lease of a manufacturing
facility. However, we currently have no agreements or commitments
to complete any such transactions nor are we involved in
negotiations to do so.
 
Our
expected use of net proceeds from this offering represents our
current intentions based upon our plans and business condition. As
of the date of this prospectus, we cannot predict with certainty
all of the particular uses for the net proceeds to be received upon
the completion of this offering or the amounts that we will
actually spend on the uses set forth above. The amounts and timing
of our actual use of the net proceeds will vary depending on
numerous factors, including the factors described under the heading
“Risk Factors” in this prospectus. As a result,
management will have broad discretion in its application of the net
proceeds, and investors will be relying on our judgment in such
application.
 
 
42
 
 
Pending
use of the net proceeds from this offering, we may invest in short-
and intermediate-term interest-bearing obligations,
investment-grade instruments, certificates of deposit or direct or
guaranteed obligations of the U.S. government.
 

Net proceeds from this Offering
 
In the
offering contemplated herein, if all 2,000,000 shares are sold,
proceeds of $4,000,000 dollars will be raised. The costs identified
herein are estimated to be approximately Ten Percent (10%) of the
total offering, or $400,000, resulting in net proceeds to the
Company of approximately $3,600,000.
 
The
allocations set forth in the table below are the estimates of
management as to how the net proceeds of this Offering will
generally be allocated. There is no assurance that the estimates
set forth below will correspond with the actual expenditures of AII
during the next twelve months or thereafter, or that the results of
this Offering and the allocations set forth below will be
sufficient to maintain AII’s operations following this
Offering.
 
 
 


OFFERING AND USE OF PROCEEDS

 

 
 

 

 

 
 


Offering at $2.00 per
share

 

Total
Proceeds
  4,000,000 
 
    
Offering
Expenses
  (400,000)
 
    
Net
Proceeds to the Company
  3,600,000 
 
    

USE OF PROCEEDS
    
Corporate
Development
  792,000 
Sales
and Marketing
  900,000 
Research
and Development
  1,188,000 
General
Working Capital
  720,000 
 
    
Total
Use of Proceeds
  3,600,000 
 
 
43
 
 

Determination of Offering Price
 

We intend to register the Shares underlying the Shares (and the
Shares underlying the Class “A”) offered in this
offering and register our company as a fully reporting issuer,
however, we may fail to do so.
 
After
we complete this filing we intend to hire transfer agents,
accountants, and consultants to assist us in the process of
registering the common stock and potentially offer warrants, with
the OTC marketplace. This process is time consuming, complicated
and expensive. We may not be able to secure effectiveness before
the Commission. If we do not successfully gain effectiveness for
this Registration Statement, the common stock may not become liquid
until such time as Rule 144 of the Securities Act is applicable. As
such, investors may find it difficult to liquidate their investment
or resell their securities. Additionally, if these shares are not
successfully registered, no public market would exist for the
shares.
 

Arbitrary Offering Price
 
The
offering price of $2.00 per Unit was arbitrarily determined by AII
and is unrelated to specific investment criteria, such as the
assets or past results of AII’s operations. In determining
the Offering price, AII considered such factors as the prospects,
if any, of similar companies, the previous experience of
management, AII’s anticipated results of operations, and the
likelihood of acceptance of this Offering. Please review any
financial or other information contained in this offering with
qualified persons to determine its suitability as an investment
before purchasing any shares in this offering.
 

Compliance with Federal and State Securities Laws
 
This
Offering has not been registered under the Securities Act in
reliance upon an exemption provided pursuant to Regulation D, Rule
506. Further, the securities will be sold pursuant to transactional
exemptions from registration in the various states in which they
are being offered. There can be no assurance that the Offering
presently qualifies or will continue to qualify under such
exemptions due to, among other things, the adequacy or accuracy of
disclosure concerning AII and its business made in connection with
the applicable securities laws or regulations. However, AII does
not believe this Offering presently is or will be in violation of
any such laws or regulations. If and to the extent suits for
rescission are brought and successfully concluded for failure to
register the securities, assets of AII could be adversely affected,
thus jeopardizing the ability of AII to operate successfully.
Further, the expenditure of AII’s capital in defending an action by
investors or by federal or state authorities, even where AII is
ultimately successful, could have a material adverse effect on
AII’s business prospect.
 
The
common stock outstanding prior to the offering is based on
3,600,000 shares outstanding as of December 31, 2016, and excludes
the following as of such date:
 
 
44
 
 

Capitalization
 
The
following table sets forth our cash and cash equivalents and our
capitalization as of December 31, 2016:
 
 
on an actual basis;
and
 
 
on a pro forma as
adjusted basis to additionally give effect to issuance of 2,000,000
shares of our common stock in this offering at an assumed initial
public offering price of $2.00 per share (the offering price range
per share estimate set forth on the cover of this prospectus after
deducting estimated underwriting discounts and commissions and
estimated offering expenses payable by us.
 
You
should read the following information together with the information
contained under the “Management’s Discussion and
Analysis of Financial Condition and Results of Operations”
and our financial statements and the accompanying notes appearing
elsewhere in this prospectus.
 

Summary Balance Sheet
 
 
 


As of December 31, 2016

 


  
 


 Actual

 

 


Pro Forma-

2,000,000 shares

 


Balance sheet data: 
 

 

 

 

 

 

Cash
and cash equivalents
  6,568 
  3,606,568 
Working capital (deficit) (2)
  -41,880 
  3,558,120 
Total
assets
  15,068 
  3,615,068 
Total
liabilities
  48,448 
  48,448 
Stockholders
(deficit)
    
    
Common
stock, $0.001 par value – 30,000,000 shares
authorized, 3,600,000 shares issued and outstanding at December 31,
2016.
  3,600 
  5,600 
 Additional
Paid In Capital
  148,851 
  4,146,851 
 Accumulated
Deficit
  -185,831 
  -585,831 
 
    
    
Total
stockholders’ (deficit)
  -33,380 
  3,566,620 
Total
stockholders’ (deficit) and Liabilities
  15,068 
  3,615,068 
 
    
    

Preferred Stock, $0.001 par value, 5,000,000 shares of preferred
shares authorized, no shares of preferred stock issued and
outstanding
    
    
 
 
45
 
 
The
table set forth above is based on 3,600,000 shares of our common
stock outstanding as of December 31, 2016.
 
Each
$1.00 increase (decrease) in the assumed initial public offering
price of $2.00 per share, which is the estimated price set forth on
the cover of this prospectus, would increase (decrease) each of
cash and cash equivalents, working capital, total assets and total
stockholders’ (deficit) equity by approximately $1,800,000
assuming the shares offered by us are sold as set forth on the
cover of this prospectus, remains the same, and after deducting
underwriting discounts and commissions and estimated offering
expenses payable by us.
 
We may
also increase or decrease the number of shares we are offering.
Each increase (decrease) of 1.0 million shares in the number of
shares offered by us would increase (decrease) each of cash and
cash equivalents, working capital, total assets and total
stockholders’ (deficit) equity by approximately $1.8 million,
assuming that the assumed initial public offering price remains the
same, and after deducting underwriting discounts and commissions
and estimated offering expenses payable by us. The pro forma as
adjusted information discussed above is illustrative only and will
adjust based on the actual initial public offering price and other
terms of this offering determined at pricing.
 

Items 6 and 7
 

Dilution
 
In many
cases, the present owners of each of the Company’s issued and
outstanding securities acquired such securities at a cost less than
that which the investors in this offering will pay. Upon the sale
of the shares offered hereby, the investors in this offering will
experience an immediate and substantial dilution. Therefore, the
investors in this offering will bear a substantial portion of the
risk of loss. Additionally, sales of securities of the Company or
use of stock for payment in the future could result in further
dilution.
 
If you
invest in our common stock, your ownership interest will be diluted
to the extent of the difference between the initial public offering
price in this offering per share of our common stock and the pro
forma as adjusted net tangible book value per share of our common
stock after the consummation of this offering. Net tangible book
value per share represents the book value of our total tangible
assets less the book value of our total liabilities divided by the
number of shares of common stock then issued and outstanding. As of
December 31, 2016, our net tangible book value was $(41,880) or
$(0.01163) per share of common stock, which represents the amount
of our total tangible assets less total liabilities, divided by
3,600,000 shares outstanding at December 31, 2016.
 
 
46
 
 
After
giving effect to our sale of common stock in this offering at the
initial public offering price of $2.00 per share (the midpoint of
the price range set forth on the cover page of this prospectus),
and after deducting estimated underwriting discounts and
commissions and estimated offering expenses payable by us, our pro
forma as adjusted net tangible book value as of December 31, 2016
would have been $3,558,120, or $0.64 per share based 5,600,000
shares of common stock issued and outstanding after the Offering.
This represents an immediate and substantial dilution of $1.36 per
share, or 68.23%, to new investors purchasing common stock in this
offering. The following table illustrates this dilution per
share:
 
 


Net Tangible Book Value

 

 
 


 As of December 31, 2016

 

 


 Pro Forma December 31, 2016 (assuming 2,000,000 shares
sold)

 

Tangible
Assets
  6,568 
  3,606,568 
Liabilities
  48,448 
  48,448 
Net
Tangible Book Value
  (41,880)
  3,558,120 
Shares
Outstanding
  3,600,000 
  5,600,000 
Per
Share value
  (0.01163)
 $0.64 
Offering
Price
    
 $2.00 
Immediate
Dilution
    
 $1.36 
Dilution
as a Percentage
    
  68.23%
 
Each
$1.00 increase (decrease) in the assumed initial public offering
price of $2.00 per share, which is the estimated price set forth on
the cover of this prospectus, would increase (decrease) each of
cash and cash equivalents, working capital, total assets and total
stockholders’ (deficit) equity by approximately $1,800,000
assuming the shares offered by us are sold as set forth on the
cover of this prospectus, remains the same, and after deducting
underwriting discounts and commissions and estimated offering
expenses payable by us.
 
We may
also increase or decrease the number of shares we are offering.
Each increase (decrease) of 1.0 million shares in the number of
shares offered by us would increase (decrease) each of cash and
cash equivalents, working capital, total assets and total
stockholders’ (deficit) equity by approximately $1.8 million,
assuming that the assumed initial public offering price remains the
same, and after deducting underwriting discounts and commissions
and estimated offering expenses payable by us. The pro forma as
adjusted information discussed above is illustrative only and will
adjust based on the actual initial public offering price and other
terms of this offering determined at pricing.
 
The
following table summarizes, on a pro forma as adjusted basis as of
December 31, 2016, the differences between the number of shares of
common stock purchased from us, the total price and the average
price per share paid by existing stockholders and by the new
investors in this offering, before deducting estimated underwriting
discounts and commissions and estimated offering expenses payable
by us, at an assumed initial public offering price of $2.00 per
share (the midpoint of the price range set forth on the cover page
of this prospectus).
 
 
 


 Shares Purchased

 

 


 Total Consideration

 

   
 
 


 Number

 

 


As a %

 

 


 Amount

 

 


as a %

 

 


Avg. Price per share

 

Existing
Shareholders
  3,600,000 
  64.29%
 152,451
  3.59%
 $0.041 
New
Investors in this Offering
  2,000,000 
  35.71%
  4,000,000 
  96.41%
 $2.000 
Total
  5,600,000 
  100.00%
  4,148,750 
  100.00%
 $0.741 
 
The
discussion and tables above are based on 3,600,000 shares of our
common stock outstanding as of December 31, 2016
 
47
 

 

PRINCIPAL STOCKHOLDERS
 
The
following table sets forth information as of December 31, 2016
regarding the beneficial ownership of our common stock, giving
effect to the Offering contemplated herein:
 
each
person or group known by us to beneficially own our outstanding
shares of common stock;
 
each
of our named executive officers; with special notation to anyone
owning over 5% of our common stock;
 
each
of our directors; and
 
all of
our current executive officers and directors as a
group.
 
Beneficial
ownership for the purposes of the following table is determined in
accordance with the rules and regulations of the SEC. These rules
generally provide that a person is the beneficial owner of
securities if such person has or shares the power to vote or direct
the voting of securities, or to dispose or direct the disposition
of securities or has the right to acquire such powers within 60
days. For purposes of calculating each person’s percentage
ownership, common stock issuable pursuant to options exercisable
within 60 days are included as outstanding and beneficially owned
for that person or group, but are not deemed outstanding for the
purposes of computing the percentage ownership of any other person.
Except as disclosed in the footnotes to this table and subject to
applicable community property laws, we believe that each beneficial
owner identified in the table possesses sole voting and investment
power over all common stock shown as beneficially owned by the
beneficial owner.
 
The
percentage of beneficial ownership is based on 3,600,000 shares of
common stock outstanding prior to this offering after giving effect
to our private placement offering, shares of common stock to be
outstanding after the completion of this offering, assuming no
exercise of the underwriters’ option to purchase additional
shares of our common stock and shares of common stock to be
outstanding after the completion of this offering, assuming
exercise of the underwriters’ option to purchase additional
shares of our common stock in full.
 
The
address for each beneficial owner is c/o Arrestage International,
Inc., Arrestage International, Inc.,
20343 N. Hayden Road, Suite 101, Scottsdale, Arizona 85255,

(480) 710.2229.
 
 
 
48
 
 

Principal Shareholders
 
 


Prior to Offering

 

 

After this offering (1)

 

 


 Number 

 

 

 

 

 


Number 

 

 

 

 


Name
 


 of shares

 

 


AS a %

 

 


of shares

 

 


AS a %

 


5% Shareholders
 

 

 

 

 

 

 

 

 

 

 

 


The Shapiro Trust
(2)
  1,443,000 
  40.08%
  1,443,000 
  25.77%

Crestrock Advisors
(3)
  1,143,000 
  31.75%
  1,143,000 
  20.41%

The Demitra Trust
  300,000 
  8.33%
  300,000 
  5.36%

Plum Mountain Trust
  300,000 
  8.33%
  300,000 
  5.36%

Total 5% Shareholders
  3,186,000 
  88.50%
  3,186,000 
  56.89%

Officers and Directors
    
    
    
    

Gary Croft
  100,000 
  2.78%
  100,000 
  1.79%

Greg Washington
  50,000 
  1.39%
  50,000 
  0.89%

Kimberly Shapiro
  50,000 
  1.39%
  50,000 
  0.89%

Phillip Weisman
  50,000 
  1.39%
  50,000 
  0.89%

Total Officers and Directors
  250,000 
  6.94%
  250,000 
  4.46%

Total for 5% Shareholders and Officers and Directors
  3,436,000 
  95.44%
  3,436,000 
  61.36%

All Other Shareholders
  164,000 
  4.56%
  2,164,000 
  38.64%

Total Shareholders
  3,600,000 
  100.00%
  5,600,000 
  100.00%
 

(1)
 

after the Offering contemplated herein
 

(2)
 

Roy Shapiro, as director, is also a beneficiary of The Shapiro
Trust
 

(3)
 

Directors Roy Shapiro and Phillip Nuciola, are principals of
CrestRock Advisors
 
 
49
 
 

Item 8. Plan of Distribution/ Underwriters
 

PLAN OF DISTRIBUTION
 
Arestage
plans on utilizing the OTCQB market to list shares to the public.
No exchange traded calls, puts, or warrants will be available at
the outset of the offering.
 
Arrestage
has not been previously required to file reports pursuant to
Section 13(a) or 15(d) of the Exchange Act. The prospects
accompanying these securities defined and highlight all material
risks relating to its issue.
 
Securities
may be offered through the selling efforts of brokers or dealers,
however, the company has no current plan of distribution or any
such agreement currently in place. Thereby, the brokers or dealers
participating in the offering, (if any), are currently
unknown.
 
No
commissions or finder’s fees of any kind have been paid to
any person or entity, and although no such arrangement is expected,
any such future arrangement will be disclosed by
amendment.
 
Rather,
Arrestage plans to offer securities to the public on the OTCQB
exchange marketplace, and utilize passive market making
transactions as permitted by Rule 103, of Regulation M. Such
passive market making will express the direction of the
company’s basic plan for grants, highlight basic goals
attained, and explain the growth potential within the Sector in
general. Arrestage will create share demand by generally expressing
its corporate narrative and promised Board members involvement in
its personal network.
 
As and
if Arrestage determines it to be in the best long term interests of
the Company and its shareholders to engage Brokers or Dealers, such
information will be immediately updated via amendment as
required.
 
Item 9.
Description of Securities to be Registered.
 

DESCRIPTION OF CAPITAL STOCK
 

The following description summarizes important terms of our capital
stock. For a complete description, you should refer to our
certificate of incorporation and bylaws, as well as the relevant
portions of the Nevada General Corporation Law chapter 78, or the
NRS (Nevada Revised Statutes).
 

Description of Capital Stock
 

The Company has two classes of authorized capital stock: Common
Stock and Preferred Stock. Both were authorized June 22, 2011and
both have a par value of $0.001. The holders of Common Stock are
entitled to one vote per share. Rights and Preferences for the
Preferred Stock will be determined by the Board of Directors prior
to issuance of any Preferred Stock.
 
 
50
 
 

Common stock
 
All
right fully defined in corporate bylaws attached hereto as
exhibit.
 
General .  Our
certificate of incorporation authorizes the issuance of up to
30,000,000 shares of our common stock. There were 3,600,000 shares
of our common stock outstanding, as of December 31, 2016. Following
the issuance of shares contemplated herein 5,600,000 shares of
common stock will be outstanding.
 

Voting rights 
  
 
(a)  Except as
otherwise provided by law, the Article of Incorporation, or the
Corporate Bylaws, any corporate action, the affirmative vote of the
majority of shares entitled to vote on that matter and represented
either in person or by proxy at a meeting of Stockholders at which
a quorum is present, shall be the act of the Stockholders of the
Corporation.
 
(b)
Except as otherwise provided by statute, the Certificate of
Incorporation, or the Corporate Bylaws, at each meeting of
Stockholders, each Stockholder of the Corporation entitles to vote
thereat, shall be the act of the Stockholders of the
Corporation.
 
(c)
Where appropriate communication facilities are reasonably
available, any or all Stockholders shall have the right to
participate in any Stockholders’ meeting, by means of
conference telephone or any means of communications by which all
persons participating in the meeting are able to hear each
other.
 

Dividend rights
 
Dividends
may be declared and paid out of any funds available therefore, as
often, in such amounts, and at such time or times as the Board of
Directors may determine and shares may be issued pro rata and
without consideration to the Corporation’s Stockholders or to
the Stockholders of one or more classes or series.
 
 
51
 
 

Other matters 
 
Upon
our liquidation, dissolution or winding up, the holders of common
stock are entitled to share ratably in the net assets legally
available for distribution to stockholders after the payment of all
of our debts and other liabilities, subject to any liquidation
preference granted to holders of any outstanding preferred stock.
Holders of common stock will have no preemptive or conversion
rights or other subscription rights, and no redemption or sinking
fund provisions will be applicable to our common stock. All
outstanding shares of common stock are, and the shares of common
stock to be outstanding upon completion of this offering will be,
fully paid and non-assessable.
 

Annual Meetings
 
The
annual meeting of the Stockholders of the Corporation shall be held
at the time fixed, from time to time, by the
Directors.
 

Special Meetings
 
Special
meetings of the Stockholders may be called by the Board of
Directors or such person or persons authorized by the Board of
Directors and shall be held within or without the State of
Nevada.
 

Election, qualification,
 
(a) 
The first Board of
Directors and all subsequent Boards of the Corporation shall
consist of not less than 1 nor more than 10, unless and until
otherwise determined by vote of a majority of the entire Board of
Directors. The Board of Directors or Stockholders all have the
power, in the interim between annual and special meetings of the
Stockholders, to increase or decrease the number of Directors of
the Corporation. A Director need not be a Stockholder of the
Corporation unless the Certificate of Incorporation of the
Corporation or the Bylaws so require.
 
(b) 
Except as may
otherwise be provided herein or in the Articles of Incorporation,
the members of the Board of Directors of the Corporation shall be
elected at the first annual Stockholders’ meeting and at each
annual meeting thereafter, unless their terms are staggered in the
Articles of Incorporation of the Corporation or these Bylaws, by a
plurality of the votes cast at a meeting of Stockholders, by the
holders of shares entitled to vote in the election.
 
 
(c) 
The first Board of
Directors shall hold office until the first meeting of Stockholders
and until their successors have been duly elected and qualified or
until there is a decrease in the number of Directors. Thereinafter,
Directors will be elected at the annual meeting of Stockholders and
shall hold office until the annual meeting of the Stockholders next
succeeding his election, unless their terms are staggered in the
Articles of Incorporation of the Corporation (so long as at least
one – fourth in number of Directors of the Corporation are
elected at each annual Stockholders’ meeting) or these
Bylaws, or until his prior death, resignation or removal. Any
Director may resign at any time upon written or verbal notice of
such resignation of the Corporation.
 
 
52
 
 
(d) 
All Directors of
the Corporation shall have equal voting power unless the Articles
of Incorporation of the Corporation provide that the voting power
of the individual Directors of classes of Directors are greater
than or less than that of any other individual Directors or classes
of Directors, and the different voting powers may be stated in the
Articles of Incorporation or may be dependent upon any fact or
event that may be ascertained outside the Articles of Incorporation
if the manner in which the fact or event may operate on those
voting powers is stated in the Articles of Incorporation. If the
Articles of Incorporation provide that any Directors have voting
power greater than or less than other Directors of the Corporation,
every reference in these Bylaws to a majority or other proportion
of Directors shall be deemed to refer to a majority or other
proportion of the voting power of all the Directors of classes of
Directors, as may be required by the Articles of
Incorporation.
 

Removal
 
Unless
otherwise provided for by the Articles of Incorporation, one or
more or all the Directors of the Corporation may be removed with or
without cause at any time by a vote of two-thirds of the
Stockholders entitled to vote thereon, at a special meeting of the
Stockholders called for that purpose, unless the Articles of
Incorporation provide that Directors may only be removed for cause,
provided however, such Director shall not be removed if the
Corporation states in its Articles of Incorporation that its
Directors shall be elected by cumulative voting and there are a
sufficient number of shares cast against his or her removal, which
if cumulatively voted at an election of Directors would be
sufficient to elect him or her. If a Director was elected by a
voting group of Stockholders, only the Stockholders of that voting
group may participate in the vote to remove that
Director.
 

Other matters.
 
 
 Upon
our liquidation, dissolution or winding up, the holders of common
stock are entitled to share ratably in the net assets legally
available for distribution to stockholders after the payment of all
of our debts and other liabilities, subject to any liquidation
preference granted to holders of any outstanding preferred stock.
Holders of common stock will have no preemptive or conversion
rights or other subscription rights, and no redemption or sinking
fund provisions will be applicable to our common stock. All
outstanding shares of common stock are, and the shares of common
stock to be outstanding upon completion of this offering will be,
fully paid and nonassessable.
 

Preferred stock
 
Our
certificate of incorporation authorizes the issuance of up to
5,000,000 shares of our Preferred Stock. As of December 31, 2016,
no shares of preferred stock were outstanding. Our certificate of
incorporation permits our board of directors to issue preferred
stock from time to time in one or more classes or series. The board
also may fix the relative rights and preferences of those shares,
including dividend rights, conversion rights, voting rights,
redemption rights, terms of sinking funds, liquidation preferences,
the number of shares constituting any class or series and the
designation of the class or series. Terms selected by our board of
directors in the future could decrease the amount of earnings and
assets available for distribution to holders of common stock or
adversely affect the rights and powers, including voting rights, of
the holders of common stock without any further vote or action by
the stockholders. As a result, the rights of holders of our common
stock will be subject to, and may be adversely affected by, the
rights of the holders of any preferred stock that may be issued by
us in the future, which could have the effect of decreasing the
market price of our common stock.
 
 
53
 
 

Anti-takeover effects of provisions of our certificate of
incorporation and bylaws and Nevada Law
 
The
provisions of the NRS and our certificate of incorporation and
bylaws could have the effect of discouraging others from attempting
an unsolicited offer to acquire our company. Such provisions may
also have the effect of preventing changes in our management. It is
possible that these provisions could make it more difficult to
accomplish transactions that stockholders may otherwise deem to be
in their best interests. According to the NRS, Directors
may resist a change or potential
change in control of the corporation if the directors by a majority
vote of a quorum determine that the change or potential change is
opposed to or not in the best interest of the
corporation:
 

      (a) Upon consideration of the
interests of the corporation’s stockholders or any of the
matters set forth in subsection 4 of 
NRS 78.138; or
 

      (b) Because the amount or
nature of the indebtedness and other obligations to which the
corporation or any successor to the property of either may become
subject, in connection with the change or potential change,
provides reasonable grounds within a reasonable time.
 

Annual Meetings
The
annual meeting of the Stockholders of the Corporation shall be held
at the time fixed, from time to time, by the
Directors.
 

Special Meetings
Special
meetings of the Stockholders may be called by the Board of
Directors or such person or persons authorized by the Board of
Directors and shall be held within or without the State of
Nevada.
  

Election, qualification,
 
(e) 
The first Board of
Directors and all subsequent Boards of the Corporation shall
consist of not less than 1 nor more than 10, unless and until
otherwise determined by vote of a majority of the entire Board of
Directors. The Board of Directors or Stockholders all have the
power, in the interim between annual and special meetings of the
Stockholders, to increase or decrease the number of Directors of
the Corporation. A Director need not be a Stockholder of the
Corporation unless the Certificate of Incorporation of the
Corporation or these Bylaws so require.
 
(f) 
Except as may
otherwise be provided herein or in the Articles of Incorporation,
the members of the Board of Directors of the Corporation shall be
elected at the first annual Stockholders’ meeting and at each
annual meeting thereafter, unless their terms are staggered in the
Articles of Incorporation of the Corporation or these Bylaws, by a
plurality of the votes cast at a meeting of Stockholders, by the
holders of shares entitled to vote in the election.
 
 
54
 
 
(g) 
The first Board of
Directors shall hold office until the first meeting of Stockholders
and until their successors have been duly elected and qualified or
until there is a decrease in the number of Directors. Thereinafter,
Directors will be elected at the annual meeting of Stockholders and
shall hold office until the annual meeting of the Stockholders next
succeeding his election, unless their terms are staggered in the
Articles of Incorporation of the Corporation (so long as at least
one – fourth in number of Directors of the Corporation are
elected at each annual Stockholders’ meeting) or the Bylaws,
or until his prior death, resignation or removal. Any Director may
resign at any time upon written or verbal notice of such
resignation of the Corporation.
 
(h) 
All Directors of
the Corporation shall have equal voting power unless the Articles
of Incorporation of the Corporation provide that the voting power
of the individual Directors of classes of Directors are greater
than or less than that of any other individual Directors or classes
of Directors, and the different voting powers may be stated in the
Articles of Incorporation or may be dependent upon any fact or
event that may be ascertained outside the Articles of Incorporation
if the manner in which the fact or event may operate on those
voting powers is stated in the Articles of Incorporation. If the
Articles of Incorporation provide that any Directors have voting
power greater than or less than other Directors of the Corporation,
every reference in the Bylaws to a majority or other proportion of
Directors shall be deemed to refer to a majority or other
proportion of the voting power of all the Directors of classes of
Directors, as may be required by the Articles of
Incorporation.
 

Removal
 
Unless
otherwise provided for by the Articles of Incorporation, one or
more or all the Directors of the Corporation may be removed with or
without cause at any time by a vote of two-thirds of the
Stockholders entitled to vote thereon, at a special meeting of the
Stockholders called for that purpose, unless the Articles of
Incorporation provide that Directors may only be removed for cause,
provided however, such Director shall not be removed if the
Corporation states in its Articles of Incorporation that its
Directors shall be elected by cumulative voting and there are a
sufficient number of shares cast against his or her removal, which
if cumulatively voted at an election of Directors would be
sufficient to elect him or her. If a Director was elected by a
voting group of Stockholders, only the Stockholders of that voting
group may participate in the vote to remove that
Director.
 

Limitation of liability and indemnification
Our
certificate of incorporation provides that no director will be
personally liable for monetary damages for breach of any fiduciary
duty as a director, except with respect to liability:
 
for
any breach of the director’s duty of loyalty to us or our
stockholders;
 
 
55
 
 
for
acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law;
 
Sections under the
NRS that account for liability due to intention misconduct, per the
regulations listed below infra.
 
for
any transaction from which the director derived any improper
personal benefit.
  

NRS 78.138  Directors and officers: Exercise of
powers; performance of duties; presumptions and considerations;
liability to corporation and stockholders.
 
1.  Directors
and officers shall exercise their powers in good faith and with a
view to the interests of the corporation.
2.  In
performing their respective duties, directors and officers are
entitled to rely on information, opinions, reports, books of
account or statements, including financial statements and other
financial data, that are prepared or presented by:
 

     (a) One or more directors, officers
or employees of the corporation reasonably believed to be reliable
and competent in the matters prepared or presented;

     (b) Counsel, public accountants,
financial advisers, valuation advisers, investment bankers or other
persons as to matters reasonably believed to be within the
preparer’s or presenter’s professional or expert
competence; or

    (c) A committee on which the director or
officer relying thereon does not serve, established in accordance
with 
NRS
78.125
, as to matters within
the committee’s designated authority and matters on which the
committee is reasonably believed to merit confidence, but a
director or officer is not entitled to rely on such information,
opinions, reports, books of account or statements if the director
or officer has knowledge concerning the matter in question that
would cause reliance thereon to be unwarranted.
 
3.  Directors
and officers, in deciding upon matters of business, are presumed to
act in good faith, on an informed basis and with a view to the
interests of the corporation.
 
4.  Directors
and officers, in exercising their respective powers with a view to
the interests of the corporation, may consider:

      (a) The interests of the
corporation’s employees, suppliers, creditors and
customers;

      (b) The economy of the State
and Nation;

      (c) The interests of the
community and of society; and

      (d) The long-term as well as
short-term interests of the corporation and its stockholders,
including the possibility that these interests may be best served
by the continued independence of the corporation.
 
5.  Directors
and officers are not required to consider the effect of a proposed
corporate action upon any particular group having an interest in
the corporation as a dominant factor.
 

6.  The
provisions of subsections 4 and 5 do not create or authorize any
causes of action against the corporation or its directors or
officers.

     
 
56
 
 
 
7.  Except
as otherwise provided in:
 

NRS 35.230
90.66091.250452.200452.270668.045 and 694A.030,
or unless the articles of
incorporation or an amendment thereto, in each case filed on or
after October 1, 2003, provide for greater individual liability, a
director or officer is not individually liable to the corporation
or its stockholders or creditors for any damages as a result of any
act or failure to act in his or her capacity as a director or
officer unless it is proven that:
 

      (a) The director’s or
officer’s act or failure to act constituted a breach of his
or her fiduciary duties as a director or officer; and
 

      (b) The breach of those duties
involved intentional misconduct, fraud or a knowing violation of
law.

      (Added to NRS
by 
1991, 1184;
1993,
951
1999,
1580
2001,
3171
2003,
3084
)
 

Listing
We have
not applied to list our common stock on any exchange yet; however,
plan on registering shares on the OTCQB market place, during the
time our S-1 filing is taking place.
 


Transfer agent and registrar

The
transfer agent and registrar for our common stock will be V Stock
Transfer Agent, 18 Lafayette Place, Woodmere, NY
11598.
 

SHARES ELIGIBLE FOR FUTURE SALE
 
Based
upon the number of shares outstanding as of December 31, 2016 we
will have 5,600,000 shares of common stock outstanding upon the
closing of the offering contemplated herein. All the shares of our
common stock sold in this offering are freely tradable without
restriction or further registration under the Securities Act,
except for any such shares which may be held or acquired by our
“affiliates,” as that term is defined in Rule 144
promulgated under the Securities Act, which shares will be subject
to the volume limitations and other restrictions of Rule 144
described below. The remaining shares of common stock will be
“restricted securities,” as that term is defined in
Rule 144. These restricted securities will be eligible for public
sale only if they are registered under the Securities Act, or if
they qualify for an exemption from registration, for example, under
Rule 144.
 
 
 
57
 
 

Rule 144
 
In
general, under Rule 144 as in effect on the date of this
prospectus, a person who is not one of our affiliates at any time
during the three months preceding a sale, and who has beneficially
owned shares of our common stock for at least six months, would be
entitled to sell an unlimited number of shares of our common stock
provided current public information about us is available and,
after owning such shares for at least one year, would be entitled
to sell an unlimited number of shares of our common stock without
restriction. Our affiliates who have beneficially owned restricted
securities within the meaning of Rule 144 for at least six months
would be entitled to sell within any three-month period a number of
shares that does not exceed the greater of:
 
1% of
the number of shares of our common stock then outstanding;
or
 
the
average weekly trading volume of our common stock on the during the
four calendar weeks preceding the filing of a notice on Form 144
with respect to the sale.
 
Sales
under Rule 144 by our affiliates are also subject to manner of sale
provisions and notice requirements and to the availability of
current public information about us.
 

Rule 701
 
Rule
701 generally allows a member who acquired shares of our common
stock pursuant to a written compensatory plan or contract and who
is not deemed to have been an affiliate of our company during the
immediately preceding 90 days to sell these shares in reliance upon
Rule 144, but without being required to comply with the public
information, holding period, volume limitation or notice provisions
of Rule 144. Rule 701 also permits affiliates of our company to
sell their Rule 701 shares under Rule 144 without complying with
the holding period requirements of Rule 144. All holders of Rule
701 shares, however, are required by that rule to wait until 90
days after the date of this prospectus before selling those shares
pursuant to Rule 701.
 

Options
 
Following the date
of this prospectus, we may file one or more registration statements
on Form S-8 under the Securities Act to register the issuance of
additional shares of common stock under any stock plans approved in
the future. These registration statements will become effective
upon filing. All of the shares issued or to be issued upon the
exercise of stock options or settlement of other awards under our
stock plans are or will be eligible for resale in the public market
without restrictions, subject to Rule 144 limitations applicable to
affiliates and the lock-up agreements described below.
 

Lock-up agreements
 

Notwithstanding the foregoing, all of the holders of equity prior
to this offering are obligated, subject to limited exceptions, not
to dispose of or hedge any of their common stock or securities
convertible into or exchangeable for shares of common stock during
the 360-day lock-up period after the date of this prospectus
without the prior written consent of the Board and disclosure to
all shareholders in accord with this offering and shareholder
rights provisions of Nevada law.
 
 
58
 
 

Warrants
 
As of
the date of this Offering Document there are no outstanding
warrants or Stock Incentive Plan warrants outstanding nor
planned.
 

Options
 
As of
the date of this Offering Document there are no outstanding options
or Stock Incentive Plan options outstanding nor
planned.
 

Registration Rights
 
As of
the date of this Offering Document we have no registration rights
agreements pending or planned.
 

Anti-Takeover Provisions
 

Certificate of Incorporation and Amended and Restated
Bylaws
 
Because
our stockholders do not have cumulative voting rights, our
stockholders holding a majority of the voting power of our shares
of common stock outstanding will be able to elect all of our
directors. Our amended and restated certificate of incorporation
and amended and restated bylaws to be effective upon the closing of
this offering will provide that all stockholder actions must be
effected at a duly called meeting of stockholders and not by
consent in writing. A special meeting of stockholders may be called
only by a majority of our board of directors, the chair of our
board of directors, or our chief executive officer.
 
Further, our
amended and restated certificate of incorporation will provide
that, unless we consent in writing to the selection of an
alternative forum, the Court of Chancery of the State of Nevada
will be the sole and exclusive forum for: (i) any derivative
action or proceeding brought on behalf of us; (ii) any action
asserting a claim of breach of a fiduciary duty owed by any of our
directors, officers or other employees or agents to us or our
stockholders; (iii) any action asserting a claim against us
arising pursuant to any provision of the Nevada Corporation Law or
our amended and restated certificate of incorporation or amended
and restated bylaws; or (iv) any action asserting a claim
against us governed by the internal affairs doctrine. The
enforceability of similar choice of forum provisions in other
companies’ certificates of incorporation has been challenged
in legal proceedings, and it is possible that, in connection with
any action, a court could find the choice of forum provisions
contained in our amended and restated certificate of incorporation
to be inapplicable or unenforceable in such action.
 
 
59
 
 
The
foregoing provisions will make it more difficult for our existing
stockholders to replace our board of directors as well as for
another party to obtain control of our Company by replacing our
board of directors. Since our board of directors has the power to
retain and discharge our officers, these provisions could also make
it more difficult for existing stockholders or another party to
effect a change in management. In addition, the authorization of
undesignated preferred stock makes it possible for our board of
directors to issue preferred stock with voting or other rights or
preferences that could impede the success of any attempt to change
the control of our Company.
 
These
provisions are intended to enhance the likelihood of continued
stability in the composition of our board of directors and its
policies and to discourage certain types of transactions that may
involve an actual or threatened acquisition of our Company. These
provisions are also designed to reduce our vulnerability to an
unsolicited acquisition proposal and to discourage certain tactics
that may be used in proxy rights. However, these provisions could
have the effect of discouraging others from making tender offers
for our shares and may have the effect of deterring hostile
takeovers or delaying changes in control of our Company or our
management. As a consequence, these provisions also may inhibit
fluctuations in the market price of our stock that could result
from actual or rumored takeover attempts.
 

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S.
HOLDERS
 
The
following discussion is a summary of the material U.S. federal
income tax consequences to Non-U.S. Holders (as defined below) of
the purchase, ownership and disposition of our common stock issued
pursuant to this offering, but does not purport to be a complete
analysis of all potential tax effects. The effects of other U.S.
federal tax laws, such as estate and gift tax laws, and any
applicable state, local or non-U.S. tax laws are not discussed.
This discussion is based on the U.S. Internal Revenue Code of 1986,
as amended, or the Code, Treasury Regulations promulgated
thereunder, judicial decisions, and published rulings and
administrative pronouncements of the U.S. Internal Revenue Service,
or the IRS, in each case in effect as of the date hereof. These
authorities may change or be subject to differing interpretations.
Any such change or differing interpretation may be applied
retroactively in a manner that could adversely affect a Non-U.S.
Holder of our common stock. We have not sought and will not seek
any rulings from the IRS regarding the matters discussed below.
There can be no assurance the IRS or a court will not take a
contrary position to that discussed below regarding the tax
consequences of the purchase, ownership and disposition of our
common stock.
 
This
discussion is limited to Non-U.S. Holders that hold our common
stock as a “capital asset” within the meaning of
Section 1221 of the Code (generally, property held for
investment). This discussion does not address all U.S. federal
income tax consequences relevant to a Non-U.S. Holder’s
particular circumstances, including the impact of the Medicare
contribution tax on net investment income. In addition, it does not
address consequences relevant to Non-U.S. Holders subject to
special rules, including, without limitation:
 
U.S.
expatriates and former citizens or long-term residents of the
United States;
 
persons
subject to the alternative minimum tax;
 
 
 
60
 
 
 
persons
holding our common stock as part of a hedge, straddle or other risk
reduction strategy or as part of a conversion transaction or other
integrated investment;
 
banks,
insurance companies, and other financial institutions;
 
brokers,
dealers or traders in securities;
 
“controlled
foreign corporations,” “passive foreign investment
companies,” and corporations that accumulate earnings to
avoid U.S. federal income tax;
 
partnerships
or other entities or arrangements treated as partnerships for U.S.
federal income tax purposes (and investors therein);
 
tax-exempt
organizations or governmental organizations;
 
persons
deemed to sell our common stock under the constructive sale
provisions of the Code;
 
persons
who hold or receive our common stock pursuant to the exercise of
any employee stock option or otherwise as compensation;
and
 
tax-qualified
retirement plans.
 
If an
entity treated as a partnership for U.S. federal income tax
purposes holds our common stock, the tax treatment of a partner in
the partnership will depend on the status of the partner, the
activities of the partnership and certain determinations made at
the partner level. Accordingly, partnerships holding our common
stock and the partners in such partnerships should consult their
tax advisors regarding the U.S. federal income tax consequences to
them.
 
THIS
DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TAX
ADVICE. INVESTORS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR
PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE
PURCHASE, OWNERSHIP AND DISPOSITION OF OUR COMMON STOCK ARISING
UNDER THE U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER THE LAWS OF
ANY STATE, LOCAL OR NON-U.S. TAXING JURISDICTION OR UNDER ANY
APPLICABLE INCOME TAX TREATY.
 

Definition of a Non-U.S. Holder
 
For
purposes of this discussion, a “Non-U.S. Holder” is any
beneficial owner of our common stock that is neither a “U.S.
person” nor an entity treated as a partnership for U.S.
federal income tax purposes. A U.S. person is any person that, for
U.S. federal income tax purposes, is or is treated as any of the
following:
 
 
61
 
 
an
individual who is a citizen or resident of the United
States;
 
a
corporation created or organized under the laws of the United
States, any state thereof, or the District of
Columbia;
 
an
estate, the income of which is subject to U.S. federal income tax
regardless of its source; or
 
a trust
that (1) is subject to the primary supervision of a U.S. court
and the control of one or more “United States persons”
(within the meaning of Section 7701(a)(30) of the Code), or
(2) has a valid election in effect to be treated as a United
States person for U.S. federal income tax purposes.
 

Distributions
 
As
described in the section of this prospectus entitled
“Dividend Policy,” we do not anticipate declaring or
paying dividends to holders of our common stock in the foreseeable
future. However, if we do make distributions of cash or property on
our common stock, such distributions will constitute dividends for
U.S. federal income tax purposes to the extent paid from our
current or accumulated earnings and profits, as determined under
U.S. federal income tax principles. Amounts not treated as
dividends for U.S. federal income tax purposes will constitute a
return of capital and first be applied against and reduce a
Non-U.S. Holder’s adjusted tax basis in its common stock, but
not below zero. Any excess will be treated as capital gain and will
be treated as described below under “—Sale or Other
Taxable Disposition.”
 
Subject
to the discussion below on effectively connected income, dividends
paid to a Non-U.S. Holder of our common stock will be subject to
U.S. federal withholding tax at a rate of 30% of the gross amount
of the dividends (or such lower rate specified by an applicable
income tax treaty, provided the Non-U.S. Holder furnishes a valid
IRS Form W-8BEN or W-8BEN-E (or other applicable documentation)
certifying qualification for the lower treaty rate). If a Non-U.S.
Holder holds the stock through a financial institution or other
intermediary, the Non-U.S. Holder will be required to provide
appropriate documentation to the intermediary, which then will be
required to provide certification to the applicable withholding
agent, either directly or through other intermediaries. A Non-U.S.
Holder that does not timely furnish the required documentation, but
that qualifies for a reduced treaty rate, may obtain a refund of
any excess amounts withheld by timely filing an appropriate claim
for refund with the IRS. Non-U.S. Holders should consult their tax
advisors regarding their entitlement to benefits under any
applicable income tax treaty.
 
If
dividends paid to a Non-U.S. Holder are effectively connected with
the Non-U.S. Holder’s conduct of a trade or business within
the United States (and, if required by an applicable income tax
treaty, the Non-U.S. Holder maintains a permanent establishment in
the United States to which such dividends are attributable), the
Non-U.S. Holder will be exempt from the U.S. federal withholding
tax described above. To claim the exemption, the Non-U.S. Holder
must furnish to the applicable withholding agent a valid IRS Form
W-8ECI, certifying that the dividends are effectively connected
with the Non-U.S. Holder’s conduct of a trade or business
within the United States.
 
 
62
 
 
Any
such effectively connected dividends will be subject to U.S.
federal income tax on a net income basis at the regular graduated
rates. A Non-U.S. Holder that is a corporation also may be subject
to a branch profits tax at a rate of 30% (or such lower rate
specified by an applicable income tax treaty) on such effectively
connected dividends, as adjusted for certain items. Non-U.S.
Holders should consult their tax advisors regarding any applicable
tax treaties that may provide for different rules.
 

Sale or Other Taxable Disposition
 
A
Non-U.S. Holder will not be subject to U.S. federal income tax on
any gain realized upon the sale or other taxable disposition of our
common stock unless:
 
the
gain is effectively connected with the Non-U.S. Holder’s
conduct of a trade or business within the United States (and, if
required by an applicable income tax treaty, the Non-U.S. Holder
maintains a permanent establishment in the United States to which
such gain is attributable);
 
the
Non-U.S. Holder is a nonresident alien individual present in the
United States for 183 days or more during the taxable year of the
disposition and certain other requirements are met; or
 
our
common stock constitutes a U.S. real property interest, or USRPI,
by reason of our status as a U.S. real property holding
corporation, or USRPHC, for U.S. federal income tax
purposes.
 
Gain
described in the first bullet point above generally will be subject
to U.S. federal income tax on a net income basis at the regular
graduated rates. A Non-U.S. Holder that is a corporation also may
be subject to a branch profits tax at a rate of 30% (or such lower
rate specified by an applicable income tax treaty) on such
effectively connected gain, as adjusted for certain
items.
 
Gain
described in the second bullet point above will be subject to U.S.
federal income tax at a rate of 30% (or such lower rate specified
by an applicable income tax treaty), which may be offset by U.S.
source capital losses of the Non-U.S. Holder (even though the
individual is not considered a resident of the United States),
provided the Non-U.S. Holder has timely filed U.S. federal income
tax returns with respect to such losses.
 
 
63
 
 
With
respect to the third bullet point above, we believe we currently
are not, and do not anticipate becoming, a USRPHC. Because the
determination of whether we are a USRPHC depends, however, on the
fair market value of our USRPIs relative to the fair market value
of our non-U.S. real property interests and our other business
assets, there can be no assurance we currently are not a USRPHC or
will not become one in the future. Even if we are or were to become
a USRPHC, gain arising from the sale or other taxable disposition
by a Non-U.S. Holder of our common stock will not be subject to
U.S. federal income tax if our common stock is “regularly
traded,” as defined by applicable Treasury Regulations, on an
established securities market, and such Non-U.S. Holder owned,
actually or constructively, 5% or less of our common stock
throughout the shorter of the five-year period ending on the date
of the sale or other taxable disposition or the Non-U.S.
Holder’s holding period.
 
Non-U.S. Holders
should consult their tax advisors regarding potentially applicable
income tax treaties that may provide for different
rules.
 

Information Reporting and Backup Withholding
 
Payments of
dividends on our common stock will not be subject to backup
withholding, provided the applicable withholding agent does not
have actual knowledge or reason to know the holder is a United
States person and the holder either certifies its non-U.S. status,
such as by furnishing a valid IRS Form
W-8BEN, W-8BEN-E or W-8ECI, or otherwise establishes an
exemption. However, information returns are required to be filed
with the IRS in connection with any dividends on our common stock
paid to the Non-U.S. Holder, regardless of whether any tax was
actually withheld. In addition, proceeds of the sale or other
taxable disposition of our common stock within the United States or
conducted through certain U.S.-related brokers generally will not
be subject to backup withholding or information reporting, if the
applicable withholding agent receives the certification described
above and does not have actual knowledge or reason to know that
such holder is a United States person, or the holder otherwise
establishes an exemption. Proceeds of a disposition of our common
stock conducted through a non-U.S. office of a non-U.S. broker
generally will not be subject to backup withholding or information
reporting.
 
Copies
of information returns that are filed with the IRS may also be made
available under the provisions of an applicable treaty or agreement
to the tax authorities of the country in which the Non-U.S. Holder
resides or is established.
 
Backup
withholding is not an additional tax. Any amounts withheld under
the backup withholding rules may be allowed as a refund or a credit
against a Non-U.S. Holder’s U.S. federal income tax
liability, provided the required information is timely furnished to
the IRS.
 
 
64
 
 

Additional Withholding Tax on Payments Made to Foreign
Accounts
 
Withholding taxes
may be imposed under Sections 1471 to 1474 of the Code (such
Sections commonly referred to as the Foreign Account Tax Compliance
Act, or FATCA) on certain types of payments made to non-U.S.
financial institutions and certain other non-U.S. entities.
Specifically, a 30% withholding tax may be imposed on dividends on,
or gross proceeds from the sale or other disposition of, our common
stock paid to a “foreign financial institution” or a
“non-financial foreign entity” (each as defined in the
Code), unless (1) the foreign financial institution undertakes
certain diligence and reporting obligations, (2) the
non-financial foreign entity either certifies it does not have any
“substantial United States owners” (as defined in the
Code) or furnishes identifying information regarding each
substantial United States owner, or (3) the foreign financial
institution or non-financial foreign entity otherwise qualifies for
an exemption from these rules. Foreign financial institutions
located in jurisdictions that have an intergovernmental agreement
with the United States governing FATCA may be subject to different
rules.
 
Under
the applicable Treasury Regulations, withholding under FATCA
generally applies to payments of dividends on our common stock and
will apply to payments of gross proceeds from the sale or other
disposition of such stock on or after January 1,
2017.
 
Prospective
investors should consult their tax advisors regarding the potential
application of withholding under FATCA to their investment in our
common stock.
 

Item 10. Interest of Named Experts and Counsel
 

LEGAL MATTERS
 
The
validity of the issuance of our common stock offered in this
prospectus will be passed upon for us by the law office of Erica
Loren Jozwiak, Esq. in connection with this offering.
 

EXPERTS
 
The
audited financial statements in this prospectus and elsewhere in
the registration statement have been so included in reliance upon
the Audit report of Schumacher & Associates, Inc. CPA,

7931 S Broadway #314
Littleton, Colorado a member of the
Public Company Accounting Oversight Board (PCAOB), upon the
authority of said firm as experts in accounting and
auditing.
 
 
 
65
 
 

WHERE YOU CAN FIND MORE INFORMATION
 
We have
filed with the SEC a registration statement on Form S-1 under
the Securities Act with respect to the common stock offered hereby.
This prospectus, which constitutes a part of the registration
statement, does not contain all of the information set forth in the
registration statement or the exhibits and schedules filed
therewith. For further information with respect to Arrestage
International, Inc. and the shares of common stock offered hereby,
reference is made to the registration statement and the exhibits
and schedules filed therewith. Statements contained in this
prospectus regarding the contents of any contract or any other
document that is filed as an exhibit to the registration statement
are not necessarily complete, and each such statement is qualified
in all respects by reference to the full text of such contract or
other document filed as an exhibit to the registration statement. A
copy of the registration statement and the exhibits and schedules
filed therewith may be inspected without charge at the public
reference room maintained by the SEC, located at 100 F
Street N.E., Room 1580, Washington, D.C. 20549, and
copies of all or any part of the registration statement may be
obtained from such offices upon the payment of the fees prescribed
by the SEC. Please call the SEC at 1-800-SEC-0330 for further
information about the public reference room. The SEC also maintains
a website that contains reports, proxy and information statements
and other information regarding registrants that file
electronically with the SEC. The address is
www.sec.gov.
 

Corporate Information
 
Arrestage
International, Inc., a Nevada Corporation, was formed on June 15,
2011, to develop an international licensing program whereby we will
provide turnkey assistance with operations and support for
distributors in the Skin Care and Anti-Aging arena, using our
brand, custom formulas, trademark, Internet presence and
proprietary marketing protocols. In addition to this, we plan to
continue to develop these aspects of the business and potentially
acquire complimentary products and services. Arrestage
International intends to create a significant brand in the
aesthetic skincare marketplace. The officers and directors of AII
all have created, or participated in the marketing and development
of branded products in this space.
 
The
company intends to include a medical device rental program that
plans to be Rolled up in to Arrestage. Arrestage plans to utilize
this division purchase or secure medical devices such as MRI
systems and various other diagnostic equipment. We plan our target
market to be physician groups, clinics, rural hospitals, and
insurance companies. Arrestage intends to obtain residual income
from such rentals and would maintain a fully secured UCC-1 position
on each piece of equipment.
 
Our
principal executive offices are located at 20343 N. Hayden Road,
STE 101, Scottsdale, Arizona 85255 and our telephone number is
(480) 710.2229. Our website is located at  www.arrestageinternational.com .
Our website, and the information on our website, is neither part of
this prospectus nor incorporated by reference herein.
 
You may
also request a copy of these filings, at no cost to you, by writing
us at the following address:
 

Arrestage International, Inc.

20343 N. Hayden Road, Suite 101

Scottsdale, Arizona 85255
 
 
66
 
 

Summary historical financial data
 
The
tables below summarize our financial information for the periods
indicated. We derived the financial information for the years ended
December 31, 2016 and 2015 from our audited financial statements
included elsewhere in this prospectus. You should read the
following information together with the more detailed information
contained in “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” and our
financial statements and the accompanying notes. Our historical
results are not necessarily indicative of the results to be
expected in any future period.
 

Balance Sheets
 
 
 


September 30,

 

 


December 31,

 

 


December 31,

 

 
 


2017 (unaudited)

 

 


2016

 

 


2015

 

 

ASSETS

 

 
 

 

 

 

 

 

 

 

 

Current
Assets
 

 

 

 

 

 

 

 

 

Cash
in Bank
 $1,199 
 $6,568 
 $290 
 
    
    
    
Total
Current Assets