Registration No. 333-219914

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM S-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

 

(Exact name of registrant as specified in its charter)

 (State or other jurisdiction of incorporation or organization)

 

 (Primary Standard Industrial Classification Code Number)

 (I.R.S Employer Identification Number)

6770 South Yosemite Street Unit D,

Centennial, CO 80112-1428

(Address, including zip code, and telephone number,

including area code, of registrant’s principal executive offices)

Anthony Russo

 6770 South Yosemite Street Unit D,

Centennial, CO 80112-1428

(Name, address, including zip code, and telephone number,

including area code, of agent for service

(copy to)

Dennis Brovarone, Esq.

The Hoban Law Group LLC

730 17th Street, Suite 420

Denver, CO 80202

  As soon as practicable after the effective date of this Registration Statement

  (Approximate date of commencement of proposed sale to the public)

 

 

 

 

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: [X]

 

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, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b2 of the Exchange Act.

 

Large accelerated filer	[_]	Accelerated filer	[_]
Non-accelerated filer (Do not check if a smaller reporting company)	[_]	Smaller reporting company	[X]
Emerging growth company	[X]

 

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 pursuant to Section 7(a)(2)(B) of the Securities Act.  [_]

 

 

(1) Estimated Solely for the purposes of calculating the registration fee in accordance with Rule 457(a) under the Securities Act of 1933.  The selling shareholders will offer their shares at $X.XX per share until the Company’s shares are quoted on the OTC Markets (https://www.otcmarkets.com) Bulletin Board as an OTCQB qualified security and, assuming we secure this qualification, thereafter at prevailing market prices or privately negotiated prices. We will not receive proceeds from the sale of shares from the selling shareholders.

 

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.

 

 

PROSPECTUS

 

WOWI, INC.

4,874,449 Shares of Common Stock

This prospectus relates to the offer and sale of up to 4,874,449 shares of your Common Stock (“Common Stock”) held by Selling Stockholders listed beginning on page 20 of this Prospectus (The “Selling Stockholders”), (the “Offering”). See “SELLING STOCKHOLDERS.”

 

The Selling Stockholders may sell their shares of our Common Stock (the “Shares”) at $X.XX per share until the Company’s shares are quoted on the OTC Markets (https://www.otcmarkets.com) Bulletin Board as an OTCQB qualified security and, assuming we secure this qualification, thereafter at prevailing market prices or privately negotiated prices. We will not receive proceeds from the sale of shares from the selling shareholders.. See “DETERMINATION OF OFFERING PRICE,” “SELLING STOCKHOLDERS” and “PLAN OF DISTRIBUTION.”

 

We will pay the expenses of registering these Shares. We will not receive any proceeds from the sale of Shares of Common Stock in this Offering. All of the net proceeds from the sale of the Shares will go to the Selling Stockholders.

 

Our Common Stock is quoted on OTC Pink marketplace of OTCMarkets.com under the symbol of WOWU.

 

This Prospectus is part of a registration statement that we have filed with the US Securities and Exchange Commission. Prior to filing of our registration statement, we were not a reporting company under the Securities Exchange Act of 1937, as amended. Following the effectiveness of our registration statement we will become subject to the reporting requirements under the aforesaid Act.

 

Investing in our Common Stock involves a high degree of risk. You should invest in our Common Stock only if you can afford to lose your entire investment.

 

SEE “RISK FACTORS” BEGINNING ON PAGE 4

 

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETEREMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMAL OFFENSE.

 

The information in the Prospectus is not complete and may be changed. This Prospectus is included in the registration statement that was filed by WOWI, Inc. with the Securities and Exchange Commission. The Selling Stockholders may not sell these Shares until the registration statement become effective. This Prospectus is not an offer to sell these Shares and is not soliciting an offer to buy these Shares in any State where the offer or sale is not permitted.

The date of this Prospectus is November 13, 2017

 

 

Table of Contents

 

 

Prospectus Summary		2
Risk Factors		4
Risks Related to Our Operations		4
Risks Related to Our Industry		8
Risks Related to Our Common Stock		12
Dilution		17
Market Price of and Dividends on the Company’s Common Equity and Related Stockholder Matters		18
Description of Securities		19
Selling Stockholders		20
Plan of Distribution		23
Management’s Discussion and Analysis of Financial Condition and Results of Operations		25
Description of Business		28
Description of Property		38
Legal Proceedings		38
Financial Statements
Management		39
Executive Compensation		41
Security Ownership of Certain Beneficial Owners and Management		41
Certain Relationships and Related Transactions		42
Legal Matters		44
Experts		44
Addition Information		44
Financial Statements		F-1

 

 

PROSPECTUS SUMMARY

This summary provides an overview of certain information contained elsewhere in this Prospectus and does not contain all of the information that you should consider or that may be important to you. Before making an investment decision, you should read the entire Prospectus carefully, including the “RISK FACTORS” section and the financial statements and the notes to the financial statements. In this Prospectus, the terms “the Company,” “we,” “us” and “our” refer to WOWI, INC., unless otherwise specified herein.

·

WOWI, Inc. Provides these Services to Cultivators, Growers, Extractors And Dispensaries That Operate Legally In States, And They May Adopt and Utilize the Intellectual Property, Technology And Training We offer Thereby Providing The Various State and Local Jurisdictions They Are Making Application To With the Reliable Underpinnings Of A Well Known and Respected Cultivation and Dispensary Operation, WOWI, Inc.

·

Allowing Our Customers The Capability Of Avoid The Multitude Of Costly Mistakes Generally Made By Many Start-Up Business Ventures in the Cannabis Industry, As Well as Base Their Business Operations on an Efficient Industrial Cultivation Process That Has No Singular Dependence on a “Guru” or “Master Grower,” Instead Relying On the Experience of A Team Based Culture That Has A Substantial Depth of Successful Operating Experience.

·

Our Licensees Will Become A Part Of A Larger Licensee Network That Will ‘Share’ The Sum Of Its Experience Across This Network As Managed By Us, Thereby Aggregated the Experience of a Much Larger Group All Having the Same Motivation For Which We Intend to Create A ‘Culture’ Generation Approach That Will Exclusively Serve The Whole Licensure Network. While No Assurances Can Be Provided, We Believe That This Unique Feature Provides Us with A Strong Advantage Over Others in This Space Trying to Deliver Similar Services And Will In Fact over Time Be Adopted By Our Competitors.

Through our relationship with WOWI, LLC and WOWI, CBD we intend to continue to invest in our technology and intellectual property through active participation with our growing licensure group to develop the best standard of procedures in this industry to remain a low-cost Producer while maintaining the highest levels of safety, quality, and consistency.

During the year ended September 30, 2016, we generated no revenues and incurred a net loss of $1,682,166, which included a charge of $618,000 for stock based compensation expense. During the nine  months ended June 30, 2017, we generated no revenues and incurred net losses of $X, or $X per common share. Total stockholders’ deficit at September 30, 2016 was ($1,618,245). As of June 30, 2017, we had $xxin cash. See “RISK FACTORS” and “FINANCIAL STATEMENTS.”

Our executive offices are located at 6770 South Yosemite Street Unit D, Centennial, CO 80112-1428, Telephone (720) 482-6257. Our website address is: www.worldofweedinc.com

 

 

ABOUT THE OFFERING

 

Common Stock to be Offered by Selling Shareholders		4,874,449 Shares. This number represents approximately 15% of the total number of shares Outstanding.
Number of shares outstanding before and after the Offering		32,496,057   (1)
Use of Proceeds		We will not receive any proceeds from the sale of the Common Stock.
Risk Factors		See the discussion under the caption “RISK FACTORS” and other information in this Prospectus for a discussion of factors you should carefully consider before deciding to invest in our Common Stock.

________________________

(1)	Because we are not selling of our Common Stock as part of this Offering, the number of issued and outstanding shares of our Common Stock will remain the same following this Offering.

SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS

We have made some statements in this Prospectus, including some under “RISK FACTORS,” “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS,” “DESCRIPTION OF BUSINESS” and elsewhere, which constitute forward-looking statements. These statements may discuss our future expectations or contain projections of our results of operations or financial condition or expected benefits to us resulting from acquisitions or transactions and involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievements to be materially different from any results, levels of activity, performance or achievements expressed or implied by any forward-looking statements. These factors include, among other things, those listed under “RISK FACTORS” and elsewhere in this Prospectus. In some cases, forward-looking statements can be identified by terminology such as “may,” “should,” “could,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these terms or other comparable terminology. Although we believe that the expectations reflected in forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

RISK FACTORS

An investment in our Common Stock is a risky investment. In addition to the other information contained in this Prospectus, prospective investors should carefully consider the following risk factors before purchasing shares of our Common Stock offered hereby. We believe that we have included all material risks.

 

RISKS RELATED TO OUR OPERATIONS

 

 

We have limited operational history in an emerging industry that has been legalized in some states but remains illegal in others and under federal law, making it difficult to accurately predict and forecast business operation.

 

Because we have only a limited operational history it is and will continue to be extremely difficult to make accurate predictions and forecasts on our growth and finances. This challenge is compounded by the fact we operate in technology side of the cannabis industry. There is no guarantee our services will remain attractive to potential and current clients as our industry continues to grow and develop.

 

Additionally, though our management team has varied and extensive business backgrounds and technical expertise, they, along with everyone else involved in the cannabis industry, have limited substantive prior working experience and managing operations in our industry. Because of our limited operating history and the recent development of the cannabis industry in general, it is very difficult to evaluate our business and the future prospects. We will encounter risks and difficulties and, in order to overcome these risks and difficulties, we believe we must:

 

·

Execute WOWI, Inc’s Business and Marketing strategy successfully;

·

Increase the number of clients, vendors and customer relations in the related industry;

·

Meet the expected demand with quality, timely services;

·

When appropriate, partner with affiliate marketing companies to explore the demand;

·

Leverage initial relationships with earliest customers;

·

Upgrade our product and services and continuously provide wider distribution and production; and

·

Attract, hire, motivate and retain qualified personnel.

If these objectives are not achieved our results of operations could suffer.

We are relying heavily upon the various Federal Governmental memos issued in the past (Ogden, Cole, and others) to remain acceptable to those state and Federal entities that regulate, enforce, or choose to defer enforcement of certain current regulations and that the Federal Government will not change its this attitude to those practitioners in the cannabis industry as long as they comply with their state and local jurisdictional rules and authorities.

 

 

We are dependent on enforcement of proprietary rights.

When entering into confidentially agreements with our employee/contractors, consultants and corporate clients we try our best to control access to and distribution of our technologies, documentation and other proprietary information. Despite efforts to protect our proprietary rights from unauthorized use of disclosure, parties may attempt to disclose, obtain or use our products, solutions or technologies. We cannot be certain that the steps we take will prevent misappropriation of our solutions or technologies. Further, this is particularly difficult in foreign countries where the laws or law enforcement may not protect its proprietary rights as fully as in the United States. As of the date of this Prospectus we are not conducting any operations outside the US and have no plans to do so except for possibly the of licensing or services deployment in Canada.

There can be no assurance that third parties will not assert claims of infringement against us.

From time to time we may be subject to claims in the ordinary course of our business, including claims of alleged infringement of the trademarks, patents and other intellectual property rights of third parties by us or our clients. Any such claims, or any resultant litigation, should it occur, could subject us to significant liability for damages and could result in the invalidation of our contractual proprietary rights. In addition, even if we were to win any such litigation, such litigation could be time-consuming and expensive to defend, and could result in the diversion of time and attention, any of which could materially or adversely affect our business, results of operations and financial condition. Any claims or litigation may also result in limitations on our ability to use such trademarks, patents and other intellectual property unless we enter into arrangement with such third parties, which may be unavailable on commercially reasonable terms.

Our success is dependent upon our ability to develop markets.

Our ability to successfully penetrate the cannabis channel as well as other target markets will determine actual operating results. While we anticipate the creation of a compelling services model for our potential clients, we may not be able to fully develop our planned service offering(s) in a manner that is predictable or profitable.  There are many factors contributing to the overall cannabis growth and opportunity. These factors are listed below. WOWI will focus on these factors to help fuel its growth. The overall U.S cannabis market is growing from its own performance dynamics. The strong, growth in demand for legal cannabis over the past years is expected to continue in the years ahead. The legal cannabis industry is among the fastest growing industries in the U.S projecting $22 billion in revenue by 2020 from $5 billion in 2015. WOWI’s growth is based upon vertical integration with a Three Phase Implementation Plan: (I.) Cultivation Operations, (II.) Infused Products, and (III.) Retail Outlets .

Competition in our industry is intense.

There are many competitors in the cannabis industry, including many who offer similar services as those offered by us. There can be no guarantee that in the future other companies won’t enter this arena by developing products that are in direct competition with us. We anticipate the presence as well as entry of other companies in this market space but acknowledges that we may not be able to establish or if established, to maintain a competitive advantage. Some of these companies may have longer operating histories, greater name recognition, larger customer bases and significantly greater financial, technical, sales and marketing resources. This may allow them to respond more quickly than us to market opportunities. It may also allow them to devote greater resources to the marketing, promotion and sale of their products and or services. These competitors may also adopt more aggressive pricing policies and make more attractive offers to existing and potential customers, employees, strategic partners, distribution channels and advertisers. Increased competition is likely to result in price reductions, reduced gross margins and a potential loss of market share.

Source: The State of Legal Marijuana Markets, 4^th Edition, by ArcView Market Research and New Frontier Data (2016)

 

 

Due to our limited financial resources, litigation could negatively impact our financial condition even after we have no caused damages to any potential claimant.

Litigation is used as a competitive tactic both by established companies seeking to protect their existing position in a market and by emerging companies attempting to gain access to a market. In such litigation, complaints may be filed on a variety of grounds, including but not limited to antitrust violations, breach of contract, trade secret, patent or copyright infringement, patent or copyright invalidity and unfair business practices. If we are forced to defend ourselves against such claims, whether or not meritorious, we are likely to incur substantial expense and diversion of management attention, and may encounter market confusion and the reluctance of licensees and distributors to commit resources to us.

 

We have limited capitalization and limited funds available for operations; we may require additional financing.

Expansion of our business will require capital expenditures. Our capital requirements will depend upon numerous factors, including the size and success of our marketing and sales network, and the demand for our products and services. If funds generated from our operations are insufficient to allow us to grow as we hope to do, we may need to raise additional funds through public or private financing. No assurance can be given that additional financing will be available or that, if available, it will be obtained on terms favorable to us. If adequate funds are not available we may have to reduce or eliminate expenditures which would have a material adverse effect on our results of operations.

 

There can be no assurances that we will have sufficient funds from operations to fully implement our business plan, If we do require additional funds to implement our business, as of the date of the Prospectus no one had committed to provide us any capital. If we are unsuccessful in raising any additional capital if and when needed or identified we will be unable to fully execute our current business strategy and are likely to be unable to sustain our operations. If adequate capital cannot be obtained under terms we can support, we will be forced to curtail or delay the expansion of our sales and marketing capabilities, which could cause our results of operations to suffer.

Our management and principal shareholders have the ability to significantly influence or control matters requiring a shareholder vote or other shareholders may not have the ability to influence corporate transactions.

Currently, our principal shareholders own a majority of our outstanding Common Stock. As a result, they have the ability to determine the outcome on all matters requiring approval of our shareholders, including the election of directors and approval of significant corporate transactions.

Our management does not have significant financial reporting experience, or significant experience in managing a public company.

This may make it difficult in establishing and maintaining acceptable internal controls on financial reporting and which also may lead to delays in filing required reports with the Securities and Exchange Commission and suspension of quotation of our securities OTCPink Marketplace, which will make it more difficult for you to sell your securities.

The OTCPink Marketplace and other national stock exchanges each limits quotations to securities of issuers that are current in their reports filed with the Securities and Exchange Commission. Because we do not have significant financial reporting experience we may experience delays in filing required reports with the Securities and Exchange Commission (The “SEC”). Because issuers whose securities are qualified for quotation on the OTCPink Marketplace or any other national exchange are required to file these reports with the SEC in a timely manner, the failure to do so many results in a suspension of trading or delisting.

 

 

 

Our management may have conflicts of interest.

Some members of our management are employed on a full-time basis by other businesses involved in a range of business activities. Consequently, there are potential inherent conflicts of interest in their acting as officers and directors of our Company. We believe that none currently exist but it is the intent of the management to keep any transactions free of conflicts of interest. Management is also working on the creation of job specific tasking as well as non-compete agreements that will be deployed as possible and as related to our existing and future team members.

 

Our current officers and directors have other interests outside of our business and contract negotiations are still in process with them.

While we are in the process of negotiating contract agreements with our non-independent officers and directors that will define these relationships in a manner that provides sufficient motivation to our officers and directors to remain an ongoing part of our business, there no assurances that these agreements will be executed. Loss of any of our members of management will have a negative impact upon our business efforts and results of operations.  (SOP’s attached for Board Members)

 

There is no assurance we can achieve profitability.

 

During our short existence we have not generated revenues from our operations and have generated a net loss of $1,682,166, which includes $618,000 in stock based compensation, through September 30, 2016. During the nine months ended June 30, 2017, we generated a net loss of $. We intend to commence operations and generate revenue during fiscal year 2018.

We are Dependent upon our management to continue our growth.

WOWI, Inc. believes it will rapidly and significantly expand operations and growth as a result of the continued expansion of the cannabis industry. There are no assurances this will occur. However, if it does occur we will need to significantly expand our administrative facilities which will continue to be required in order to address potential market opportunities. The rapid growth will place a significant strain on our management and operational and financial recourses. Our success is principally dependent on our current management personnel for the operation of our business.

To execute on its commitment, WOWI, Inc. draws on the collective experience of its management team with expertise in market research, development, corporate management, market opportunities, product growth, sales, distribution, future growth and economic trends. WOWI’s management team has been sought for opinions and expertise on the medical and recreational cannabis markets, among them:

 

·

Colorado State University

·

Colorado Department of Agriculture

·

San Luis Valley Authority, and

·

HEMP market in Colorado

The ability to provide high quality service will depend on attracting and retaining educated staff, as well as professional experiences that is relevant to our market, including for marketing, technology and general experience in this industry.

Our ability to deliver quality services depends on our ability to manage and expand our marketing, operational and distribution systems, recruit additional qualified employees and train, and manage and motivate both current and new employees. Failure to effectively manage our growth would have a material adverse effect on our business.

 

 

 

RISKS RELATED TO OUR INDUSTRY

Our business Is Dependent on State Laws Pertaining To The Cannabis Industry.

The Federal Controlled Substances Act, classifies cannabis as a Schedule I controlled substance and makes cannabis use and possession illegal on a national level. The United States Supreme Court has ruled that it is the Federal Government that has the right to regulate and criminalize cannabis, even for medical purposes, and thus federal law criminalizing the use of cannabis preempts state laws that legalize its use. As of the date of this Prospectus, 23 states and the District of Columbia allow their residents to use medical cannabis. While votes in the states of Colorado, Washington, Oregon and Alaska, as well as the District of Columbia approve ballot measures to legalize cannabis for adult use, continued expansion of such ‘recreational use’ is not well defined at this time and any continued development of the cannabis industry will be dependent upon continued new legislative authorization of cannabis at the state, and perhaps the federal level. Any number of events or occurrences could slow or halt progress all together in this space. While progress within the cannabis industry channel is currently encouraging, growth is not assured. While there appears to be ample public support for favorable legislative action, numerous factors may impact or negatively affect the legislative process(s) within the carious states we have business interests in. Any one of these factors could slow or halt use of cannabis, which would negatively impact our business up to possibly causing us to discontinue operations as a whole.

Cannabis Remains Illegal Under Federal Law.

 

Despite the development of a cannabis industry legal under state laws, state laws legalizing medicinal and adult cannabis use are in conflict with the Federal Controlled Substances Act, which classifies cannabis as a Schedule I controlled substance and makes cannabis use and possession illegal on a national level. The United States Supreme Court has ruled that it is the Federal Government that has the right to regulate and criminalize cannabis, even for medical purposes, and thus federal law criminalizing the use of cannabis preempts state laws that legalize its use. However, the previous President’s Administration effectively stated that it is not an efficient use of resources to direct federal law enforcement agencies to prosecute those lawfully abiding by state-designated laws allowing the use and distribution of medical and recreational cannabis. Yet, there is no guarantee that the curent Administration will not  change its stated policy regarding  the  low-priority enforcement of federal laws in states where cannabis has been legalized. Any such change in the Federal Government’s enforcement of federal laws could cause  significant financial damage to us and our shareholders.

As the Possession and Use Of Cannabis Is Illegal Under The Federal Controlled Substances Act, We May Be Deemed TO Be Aiding And Abetting Illegal Activities Through The Services That We Provide To Users And Advertisers. As A Result, We May Be Subject To Enforcement Actions By Law Enforcement Authorities, Which Would Materially And Adversely Affect Our Business.

Under federal law, and more specifically the Federal Controlled Substances Act, the possession, use, cultivation, and transfer of cannabis is illegal. Our business provides services to customers that are engaged in the business of possession, use, cultivation, and/or transfer of cannabis. As a result, law enforcement authorities, in their attempt to regulate the illegal use of cannabis, may seek to bring an action or actions against us, including, but limited to, a claim of aiding and abetting another’s criminal activities. The federal aiding and abetting statute provides that anyone who “commits and offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal.” 18 U.S.C §2(a). As a result of such an action, we may be forced to cease operations and our investors could lose their entire investment. Such an action would have a material negative effect on our business and operations. If the federal government decides to enforce the CSA in Colorado with respect to cannabis, persons that are charged with distributing, possessing with intent to distribute or growing cannabis could be subject to fines and/or terms of imprisonment, the maximum being life imprisonment and a $50 million fine.

Federal Enforcement Practices Could Change With Respect To Services Providers To Participants In The Cannabis Industry, Which Could Adversely Impact Us. If The Federal Government Were To Change Its Practices, Or Were To Expend Its Resources Enforcing Existing Federal Laws On Such Providers In The Cannabis Industry, Such Action Could Have A Materially Adverse Effect On Our Operations, Our Customers, Or The Sales Of Our Products Up To And Including A Complete Interruption Of Our Business.

It is possible that additional Federal or State legislation could be enacted in the future that would prohibit our clients from selling cannabis, and if such legislation were enacted, such clients may discontinue the use of our services, and our potential source of customers would be reduced causing revenues to decline. Further, additional government disruption in the cannabis industry could cause potential customers and users to be reluctant to use our services, which would be detrimental to us. We cannot predict the nature of any future laws, regulations, interpretations or applications, nor can we determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on our business.

There Are No Automated Systems For Negotiating Trades On The OTCPink Marketplace And It Is Possible For The Price Of A Stock To Go Up Or Down Significantly During A Lapse Of Time Between Placing A Market Order And Its Execution, Which May Affect Your Trades In Our Securities.

Because there are no automated systems for negotiating trades on the OTCPink Marketplace, they are conducted via telephone. In times of heavy market volume, the limitations of this process may result in a significant increase in the time it takes to execute investor orders. Therefore, when investors place market orders, an order to buy or sell a specific number of shares at the current market price, it is possible for the price of a stock to go up or down significantly during the lapse of time between placing a market order and its execution.

Our Common Stock Is Considered A “Penny Stock” So Long As It Trades Below $5.00 Per Share. This Can Adversely Affect Its Liquidity.

Our Common Stock is considered a “penny stock” and will continue to be considered a penny stock so long as it trades below $5.00 per share and as such, trading in our Common Stock will be subject to the requirements of Rule 15g-9 under the Securities Exchange Act of 1934. Under this rule, broker/dealers who recommend low-priced securities to persons other than established customers and accredited investors must satisfy special sales practice requirements. The broker/dealer must make an individualized written suitability determination for the purchaser and receive the purchaser’s written consent prior to the transaction.

SEC regulations also require additional disclosure in connection with any trades involving a “penny stock,” including the delivery, prior to any penny stock transaction, of a disclosure schedule explaining the penny stock market and its associated risks. In addition, broker-dealers must disclose commissions payable to both the broker-dealer and the registered representative and current quotations for the securities they offer. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from recommending transactions in our securities, which could severely limit the liquidity of our securities and consequently adversely affect the market price for our securities. In addition, few broker or dealers are likely to undertake these compliance activities. Other risks associated with trading in penny stocks could also be price fluctuations. And the lack of a liquid market

Any Adverse Effect On The Market Price Of Our Common Stock Could Make It Difficult For Us To Raise Additional Capital Through Sales Of Equity Securities At A Time And At A Price That We Deem Appropriate.

Sales of substantial amounts of our Common Stock, or in anticipation that such sales could occur, may materially and adversely affect prevailing market prices for our Common Stock, if and when such market develops in the future.

The Market Price Of Our Common Stock May Fluctuate Significantly In The Future.

In the OTCPink Marketplace We expect that the market price of our Common Stock may fluctuate in response to one or more of the following factors, many of which are beyond our control:

·

Competitive Pricing Pressures;

·

Our Ability To Market Our Services On A Cost-Effective And Timely Basis;

·

Our Inability To Obtain Working Capital Financing, If Needed;

·

Changing Conditions In The Market;

·

Changes In Market Valuations Of Similar Companies;

·

Stock Market Price And Volume Fluctuations Generally;

·

Regulatory Developments;

·

Fluctuations In Our Quarterly Of Key Personnel; And

·

Future Sales Of Our Common Stock Or Other Securities.

 

 

 

The price at which you purchase share of our Common Stock may not be indicative of the price that will prevail in the trading market. You may be unable to sell your shares of Common Stock at or above your purchase price, which may result in substantial losses to you and which may include the complete loss of your investment. In the past, securities class action litigation has often been brought against a company following periods of stock price volatility. We may be the target of similar litigation in the future. Securities litigation could result in substantial costs and divert management’s attention and our resources away from our business. Any of the risks described above could adversely affect our sales and profitability and also the price of our Common Stock.

Provisions Of Our Articles Of Incorporation And Bylaws May Delay Or Prevent A Take-Over That May Not Be In The Best Interests Of Our Stockholders.

Provisions of our Articles of Incorporation and Bylaws may be deemed to have anti-takeover effects, which include when and by whom special meetings of our stockholders may be called, and may delay, defer or prevent a takeover attempt.

The Requirements Of Being a Public Company May Strain Our Resources, Divert Management’s Attention and Affect Our Ability to Attract and Retain Executive Management and Qualified Board Members.

As a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, the Sarbanes- Oxley Act, The Dodd-Frank Act, and other applicable securities rules and regulations. Compliance with these rules and regulations will 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 no longer offer an “emerging growth company,” as defined in the Jumpstart our Business Startups Act, or the JOBS Act. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and operating results. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management’s attention may be diverted from other business concerns, which would adversely affect our business and operating results. We may need to hire more employees in the future or engage outside consultants, which will increase our costs and expenses.

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of Specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities my initiate legal proceedings against us and our business may be adversely affected.

 

 

 

However, for as long as we remain an “emerging growth company,” we may take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.

We would cease to be an “emerging growth company” upon the earliest of: (1) the first fiscal year following the fifth anniversary of this offering, (2) the first fiscal year after our annual gross revenues are $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 securities, or (4) as of the end of any fiscal year in which the market value of our Common Stock held by non-affiliates exceeded $700 million as of the end of the second quarter of the fiscal year.

We also expect that being a public company 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 once we put such coverages in place, which we intend to implement in the near future. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to service on our audit committee and compensations committee, and qualified executive officers.

As a result of disclosure of information in this Prospectus and in filing required of a public company, our business and financial condition will become more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and operating results could be adversely affected, 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 our management and adversely affect our business and operating results.

The Market Price For Our Common Stock Will Be Particularly Volatile Given Our Status As A Relatively Unknown Company, With A Limited Operating History And Lack Of Profits Which Could Lead To Wide Fluctuations In Our Share Price. You May Be Unable To Sell Your Common Stock At Or Above Your Purchase Price, Which May Result In Substantial Losses To You.

The market for our Common Stock and our price volatility in the future will particularly volatile when compared to the shares of larger, more established companies that trade on national securities exchange and have large public floats. The volatility in our share price will be attributable to a number of factors. (1) Our Common Stock will be, compared to the shares of such larger, more established companies, sporadically and thinly traded. As a consequence of this limited liquidity, the trading of relatively small quantities of shares by our shareholders may disproportionately influence the price of those shares in either direction. The price for our shares could decline precipitously in the event that a large number of our Common Stock are sold on the market without commensurate demand. (2) We are a speculative or “risky” investment due to our limited operating history and lack of profits to date, and uncertainty of future market acceptance for our potential products. As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discount than would be the case with the stock of a larger, more established company that trades on a national securities exchange and has a larger public float. Many of these factors are beyond our control and under federal law, and more specifically the Federal Controlled Substance Act, the possession, use, cultivation, and transfer of cannabis is illegal. Our business provides services to customers that are engaged in the business of possession, use, cultivation, and/or transfer of cannabis. As a result, law enforcement authorities, in their attempt to regulate the illegal use of cannabis, may seek to bring an action or actions against us, including, but not limited to, a claim of aiding and abetting another’s criminal activities. The federal aiding and abetting statute provides that anyone who “commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal.” 18 U.S.C §2(a). As a result of such an action, we may be forced to cease operations and our investors could lose their entire investment. Such an action would have a material negative effect on our business and operations.

 

 

 

Federal Enforcement Practices Could Change With Respect To Services Providers To Participants In The Cannabis Industry, Which Could Adversely Impact Us. If The Federal Government Were To Change Its Practices, Or Were To Expend Its Resources Enforcing Existing Federal Laws On Such Providers In The Cannabis Industry, Such Action Could Have A Materially Adverse Effect On Our Operations, Our Customers, Or The Sales Of Our Products Up To End Including A Complete Interruption Of Our Business.

It is possible that additional Federal or State legislation could be enacted in the future that would prohibit our clients from selling cannabis, and if such legislation were enacted, such clients may discontinue the use of our services, and our potential source of customers would be reduced causing revenues to decline. Further, additional government disruption in the cannabis industry could cause potential customers and users to be reluctant to use our services, which would be detrimental to us. We cannot predict the nature of any future laws, regulations, interpretations or applications, nor can we determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on our business.

RISKS RELATING TO OUR COMMON STOCK.

The price of our common stock may be volatile.

Our Common Stock is approved for quotation on the OTC Markets’ OTCPink marketplace under the symbol, “WOWU.” The OTCPink marketplace is a regulated quotation service that displays real-time quotes, last-sale prices and volume information in the over-the-counter equity securities and provides significantly less liquidity than a listing on the Nasdaq Stock Markets or other national securities exchange. OTCPink securities are traded by a community of market makers that enter quotes and trade reports. This market is limited in comparison to the national stock exchanges and any prices quoted may not be a reliable indication of the value of our Common Stock. Quotes for stocks included on the OTCPink are not listed in the financial sections of new papers as are those for the Nasdaq Stock Market or the NYSE. Therefore, prices for securities traded solely on the OTCPink may be difficult to obtain.

Trading on the OTCPink Marketplace as opposed to a national securities exchange had resulted and may continue to result in a reduction in some or all of the following, each of which could have a material adverse effect on the price of our Common Stock and our company:

 

·

Liquidity of our common stock;

·

The market price of shares of our Common Stock;

·

Our ability to obtain financing to support our operations and the implementation of our business plan;

·

The number of institutional and other investors that will consider investing in shares of our Common Stock;

·

The number of market markers in shares of our common stock;

·

The availability of information concerning the trading prices and volume of shares of our Common Stock; and

·

The number of broker-dealers willing to execute trades in shares of our Common Stock.

The price and trading volume of our Common Stock have historically been volatile. For example, from July 1, 2015 until June 30, 2017, the closing market price of our Common Stock ranged from $0.80 to $5.74 per share, and the monthly trading volume varied from approximately 0 shares to 27,461 shares.

 

 

 

In addition, the market price of our Common Stock could be subject to wide fluctuations in response to:

·

Actual or anticipated fluctuations in our results of operations;

·

Announcements regarding the status of our regulatory efforts;

·

The determination that our shares of Common Stock are “penny stock” which will require brokers trading in our shares of Common Stock to adhere to more stringent rules, likely resulting in a reduced level of trading activity in the secondary trading market for our shares of common stock;

·

The sale by us of our Common Stock or preferred stock or other securities, or the anticipation of sales of such securities;

·

The trading volume of our Common Stock, particularly if such volume is light;

·

The introduction of new products of services, or product or service enhancements by us or our competitors;

·

Developments with respect to our or our competitors’ intellectual property rights or regulatory approvals or denials;

·

Announcements of significant acquisitions or other agreements by us or our competitors;

·

Sales or anticipated sales of our Common Stock by our insiders (management and directors);

·

Conditions and trends in our industry;

·

Changes in our pricing policies or the pricing policies of our competitors;

·

Changes in the estimation of the future size and growth of our markets; and

·

General economic conditions.

In addition, the stock market in general, and the OTCPink marketplace in particular, have experienced extreme price and volume fluctuations that in some cases may be unrelated or disproportionate to the operating performance of those companies. These broad market and industry factors may materially harm the market price of our Common Stock, regardless of our operating performance. In addition, this volatility could adversely affect an investor’s ability to sell shares of our common stock, and/or the available price for such shares, at any given time.

There Are No Automated Systems For Negotiating Trades On The OTCPink Marketplace And It Is Possible For The Price Of A Stock To Go Up Or Down Significantly During A Lapse Of Time Between Placing A Market Order And Its Execution, Which May Affect Your Trades In Our Securities.

Because there are no automated systems for negotiating trades on the OTCPink,Marketplace they are conducted via telephone. In times of heavy market volume, the limitations of this process may result in a significant increase in the time it takes to execute investor orders. Therefore, when investors place market orders, an order to buy or sell a specific number of shares at the current market price, it is possible for the price of a stock to go up or down significantly during the lapse of time between placing a market order and its execution.

Our Stock Will Be Considered A “Penny Stock” So Long As It Trades Below $5.00 Per Share. This Can Adversely Affect Its Liquidity.

It is anticipated that our Common Stock will be considered a “penny stock” and will continue to be considered a penny stock so long as it trades below $5.00 per share and as such, trading in our Common Stock will be subject to the requirements of Rule 15g-9 under the Securities Exchange Act of 1934. Under this rule, broker/dealers who recommend low-priced securities to persons other than established customers and accredited investors must satisfy special sales practice requirements. The broker/dealer must make an individualized written suitability determination for the purchaser and receive the purchaser’s written consent prior to the transaction.

SEC regulations also require additional disclosure in connection with any trades involving a “penny stock,” including the delivery, prior to any penny stock transaction, of a disclosure schedule explaining the penny stock market and its associated risks. In addition, broker-dealers must disclose commissions payable to both the broker-dealer and the registered representative and current quotations for the securities they offer. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from recommending transactions in our securities, which could severely limit the liquidity of our securities and consequently adversely affect the market price for our securities. In addition, few broker or dealers are likely to undertake these compliance activities. Other risks associated with trading in penny stocks could also be price fluctuations and the lack of a liquid market.

 

 

 

Any Adverse Effect On The Market Price Of Our Common Stock Could Make It Difficult For Us To Raise Additional Capital Through Sales Of Equity Securities At A Time And At A Price That We Deem Appropriate. 

Sales of substantial amounts of our Common Stock, or in anticipation that such sales could occur, may materially and adversely affect prevailing market prices for our Common Stock, if and when such market develops in the future.

The Market Price Of Our Common Stock May Fluctuate Significantly In The Future.

We expect that the market price of our Common Stock may fluctuate in response to one or more of the following factors, many of which are beyond our control:

·

Competitive Pricing Pressures:

·

Our Ability To Market Our Services On A Cost-Effective And Timely Basis;

·

Our Inability To Obtain Working Capital Financing, If Needed;

·

Changing Conditions In The Market;

·

Changes In Market Valuations Of Similar Companies;

·

Stock Market Price And Volume Fluctuations Generally;

·

Regulatory Developments;

·

Fluctuations In Our Quarterly Or Annual Operating Results;

·

Additions Or Departures Of Key Personnel; And

·

Future Sales Of Our Common Stock Or Other Securities;

The price at which you purchase shares of our Common Stock may not be indicative of the price that will prevail in the trading market. You may be unable to sell your shares of Common Stock at or above your purchase price, which may result in substantial losses to you and which may include the complete loss of your investment. In the past, securities class action litigation has often been brought against a company following periods of stock price volatility. We may be the target of similar litigation in the future. Securities litigation could result in substantial costs and divert management’s attention and our resources away from our business.

Any of the risks described above could adversely affect our sales and profitability and also the price of our Common Stock.

Provisions Of Our Articles Of Incorporation And Bylaws May Delay Or Prevent A Take-Over That May Be In The Best Interests Of Our Stockholders.

Provisions of our Articles of Incorporation and Bylaws may be deemed to have anti-takeover effects, which include when and by whom special meetings of our stockholders may be called, and may delay, defer or prevent a takeover attempt.

The Requirements of Being a Public Company May Strain Our Resources, Divert Management’s Attention And Affect Our Ability to Attract and Retain Executive Management and Qualified Board Members.

 

 

As a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, the Sarbanes-Oxley Act, the Dodd-Frank Act, and other applicable securities rules and regulations. Compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase on our systems and resources, particularly after we are no longer an “emerging growth company,” as defined in the Jumpstart our Business Startups Act, or the JOBS Act. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and operating results. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management’s attention may be diverted from other business concerns, which could adversely affect our business and operating results. We may need to hire more employees in the future or engage outside consultants, which will increase our costs and expenses.

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and proactive, regulatory authorities may initiate legal proceeding against us and our business may be adversely affected.

However, for as long as we remain an “emerging growth company,” we may take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes Oxley Act, reduced disclosure obligations regarding executive compensation and shareholder approval of any golden parachute payments not previously approved. We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.”

We would cease to be an “emerging growth company” upon the earliest of: (1) the first fiscal year following the fifth anniversary of this offering. (2) the first fiscal year after our annual gross revenues are $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 securities, or (4) as of the end of any fiscal year in which the market value of our Common Stock held by non-affiliates exceeded $700 million as of the end of the second quarter of that fiscal year.

We also expect that being a public company 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 once we put such coverages in place, which we intend to implement in the near future. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

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 we believe may result in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and operating results could be adversely affected, 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 our management and adversely affect our business and operating results.

 

 

The Market Price For Our Common Stock Will Be Particularly Volatile Given Our Status As A Relatively Unknown Company, With A Limited Operating History And Lack Of Profits Which Could Lead To Wide Fluctuations In Our Share Price. You May Be Unable To Sell Your Common Stock At Or Above Your Purchase Price, Which May Result In Substantial Losses To You.

Our price volatility in the future will be particularly volatile when compared to the shares of larger, more established companies that trade on a national securities exchange and have large public floats. The volatility in our share price will be attributable to a number of factors. (1) Our Common Stock will be, compared to the shares of such larger, more established companies, sporadically and thinly traded. As a consequence of this limited liquidity, the trading of relatively small quantities of shares by our shareholders may disproportionately influence the price of those shares in either direction. The price for our shares could decline precipitously in the vent that a large number of our Common Stock are sold on the market without commensurate demand. (2) We are a speculative or “risky” investment due to our limited operating history and lack of profits to date, and uncertainty of future market acceptance for our potential products. As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a larger, more established company that trades on a national securities exchange and has a large public float. Many of these factors are beyond our control and may decrease the market price of our Common Stock, regardless of our operating performance. We cannot make any predictions or projections as to what the prevailing market price for our Common Stock will be at any time.

Our Future Results May Vary Significantly Which May Adversely Affect The Price Of Our Common Stock.

It is possible that our quarterly revenues and operating results may vary significantly in the future and that period-to-period comparisons of our revenues and operating results are not necessarily meaningful indicators of the future. You should not rely on the results of one quarter as an indication of our future performance. It is also possible that in some future quarters, our revenues and operating results will fall below our expectations or the expectations of market analysts and investors. If we do not meet these expectations, the price of our Common Stock may decline significantly.

We Are Classified As An “Emerging Growth Company” As Well As A “Smaller Reporting Company” And We Cannot Be Certain If The Reduced Disclosure Requirements Applicable To Emerging Growth Companies And Smaller Reporting Companies Will Make Our Common Stock Less Attractive To Investors.

As a reporting company under the Exchange Act, we expect to be classified as an "emerging growth company," as defined in the JOBS Act, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our Common Stock less attractive because we may rely on these exemptions. If some investors find our Common Stock less attractive as a result, there may be a less active trading market for our Common Stock and our stock price may be more volatile.

Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933 (the “Securities Act” or “33 Act”) for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act.

WOWI, Inc., could remain an “emerging growth company” for up to five (5) years, or until the earliest of (1) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (2) the date that WOWI, Inc., becomes a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our Common Stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (3) the date on which WOWI, Inc.,  have issued more than $1 billion in non-convertible debt during the preceding three-year period.

 

 

WOWI recognizes that cannabis is believed to improve the quality of life of individuals suffering from certain medical conditions. Collaborating with well-respected institutions, WOWI intends to develop superior genetics, protocols, advance distribution, and to transform the industry to best serve the medical and recreational needs of the populous. WOWI, Inc., expects that it would be a “smaller reporting company.” In the event that we are still considered a “smaller reporting company,” at such time are we cease being an “emerging growth company,” the disclosure WOWI, Inc., will be required to provide in our SEC filings will increase, but will still be less than it would be if it were not considered either an “emerging growth company” or a “smaller reporting company.” Specifically, similar to “emerging growth companies,” “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC filings. Decreased disclosures in WOWI, Inc.’s SEC filings due to our status as an “emerging growth company” or “smaller reporting company” may make it harder for investors to analyze our results of operations and financial prospects. Should we cease to be an “emerging growth company” but remain a “smaller reporting company”, it would then be required to: (1) comply with new or revised US GAAP accounting standards applicable to public companies, (2) comply with new Public Company Accounting Oversight Board requirements applicable to the audits of public companies, and (3) to make additional disclosures with respect to related party transactions, namely Item 404(d).

FINRA Sales Practice Requirements May Limit a Stockholder’s Ability to Buy and Sell Our Stock. 

State Securities Laws May Limit Secondary Trading, Which May Restrict The States In Which You Can Sell The Shares Offered By This Prospectus. 

If you purchase shares of our Common Stock sold in this Offering, you may not be able to resell the shares in any state unless and until the shares of our Common Stock are qualified for secondary trading under the applicable securities laws of such state or there is confirmation that an exemption, such as listing in certain recognized securities manuals, is available for secondary trading in such state. There can be no assurance that we will be successful in registering or qualifying our Common Stock for secondary trading, or identifying an available exemption for secondary trading in our Common Stock in every state. If we fail to register or qualify, or to obtain or verify an exemption for the secondary trading of, our Common Stock in any particular state, our Common Stock could not be offered or sold to, or purchased by, a resident of that state. In the event that a significant number of states refuse to permit secondary trading in our Common Stock, the market for our Common Stock will be limited which could drive down the market price of our Common Stock and reduce the liquidity of the shares of our Common Stock and a stockholder’s ability to resell shares of our Common Stock at all or at current market prices, which could increase a stockholder’s risk of losing some or all of his investment.

Use of Proceeds 

 

MARKET PRICE OF AND DIVIDENDS ON THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Information About Our Common Stock

Our common stock is approved for quotation on the OTC Markets’ OTCPink marketplace under the symbol “WOWU.” The OTCPink marketplace is a regulated quotation service that displays real-time quotes, last-sale prices and volume information in over-the-counter equity securities. OTCPink securities are traded by a community of market makers that enter quotes and trade reports. This market is limited in comparison to the national stock exchanges and any prices quoted may not be a reliable indication of the value of our common stock.

On March 31, 2017, the closing price of our common stock reported on the OTCPink was $2.50 per share. The following table sets forth, for each of the quarterly periods indicated, the high and low sales prices of our common stock, as reported on the OTCPink. Such over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

Holders 

As of the date of this Prospectus we had 106 holders of record for our Common Shares. See “DESCRIPTION OF SECURITIES.”

We are registering the 4,874,449 shares of Common Stock held by 106 holders of our Shares in our registration statement of which this Prospectus is a part. 

Dividend Policy 

We have not paid any dividends since our incorporation and do not anticipate the payment of dividends in the foreseeable future. At present, our policy is to retain earnings, if any, to develop and market our products. The payment of dividends in the future will depend upon, among other factors, our earnings, capital requirements, and operating financial conditions. 

 

 

 

DESCRIPTION OF SECURITIES

Common Stock

There are 500,000,000 shares of Common Stock, $.001 par value, authorized, with 32,496,057 shares issued and outstanding. The holders of Common Stock are entitled to one vote for each share held on all matters submitted to a vote of shareholders. Holders of Common Stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of funds legally available therefor, subject to any preferential dividend rights of outstanding Preferred Stock, which may be authorized and issued in the future. Upon a liquidation, dissolution or winding up of our Company the holders of Common Stock are entitled to receive ratably the net assets available after the payment of all debts and other liabilities, and subject further only to the prior rights of any outstanding Preferred Stock which may be authorized and issued in the future. The holders of Common Stock have no preemptive, subscription, redemption or conversion rights. The outstanding shares of Common Stock are, and the shares offered herein will be, when issued and paid for, fully paid and non-assessable. Cumulative voting in the election of directors is not permitted and the holders of a majority of the number of outstanding shares will be in a position to control the election of directors at a general shareholder meeting and may elect all of the directors standing for election. We have no present intention to pay cash dividends to the holders of Common Stock.

 

 

 

SELLING STOCKHOLDERS 

The Selling Stockholders named in this Prospectus are offering the 4,874,449  shares of Common Stock offered through this Prospectus. The Selling Stockholders are all U.S. persons who acquired the 4,874,449  shares of Common Stock offered through this Prospectus from us in either our private placement transactions pursuant to available exemptions from registration.

 

 

 

 

 

 

 

 

 

 

 

 

Other than as disclosed hereinabove, none of the other Selling Stockholders has had a material relationship with us or any of our affiliates other than as a stockholder at any time within the past three years.

 

 

PLAN OF DISTRIBUTION

 

 

 

PLAN OF DISTRIBUTION Continued

Broker-dealers engaged by the Selling Stockholders may arrange for other broker-dealers to participate in sales in amounts to be negotiated, but in the case of an agency transaction not in excess of a customary brokerage commission, and in the case of a principal transaction a markup or markdown not in excessive amounts. Each Selling Stockholder is an underwriter, within the meaning of Section 2(a)(11) of the Securities Act. Any broker-dealers or agents that participate in the sale of the Common Stock or interests therein may also be deemed to be an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act. Any discounts, commissions, concessions or profit earned on any resale of the shares may be underwriting discounts and commissions under the Securities Act. A Selling Stockholder, who is an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act, is subject to the Prospectus delivery requirements of the Securities Act.

We are bearing all costs relating to the registration of the Common Stock. The Selling Stockholders, however, will pay any commissions or other fees payable to brokers or dealers in connection with the sale of the Common Stock. We are paying the expenses of the Offering because we believe that the registration of the resale of shares on behalf of existing shareholders may facilitate the development of a public market in our Common Stock. We have agreed to indemnify the Selling Stockholders against certain losses, claims, damages, and liabilities, including liabilities under the 33 Act.

WOWI, Inc. agrees to keep this Prospectus effective until the earlier of (1) the date on which the shares may be resold by the Selling Stockholders without registration by reason of Rule 144 under the Securities Act or any other rule of similar effect, or (2) all of the shares have been sold pursuant to this Prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale shares will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale shares may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

Under applicable rules and regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), any person engaged in the distribution of the resale shares may not simultaneously engage in market-making activities with respect to the Common Stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of shares of the Common Stock by the selling stockholders or any other person. We will make copies of this Prospectus available to the Selling Stockholders and have informed them of the need to deliver a copy of this Prospectus to each purchaser at or prior to the time of the sale.

 

 

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Some of the information in this Prospectus contains forward-looking statements that involve substantial risks and uncertainties. You can identify these statements by forward-looking words such as “May,” “will,” “expect,” “anticipate,” “believe,” “estimate” and “continue,” or similar words. You should read statements that contain these words carefully because they: 

 

WOWI, Inc. believes it is important to communicate our expectations. However, there may be events in the future that we are not able to accurately predict or over which we have no control. Our actual results and the timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under “RISK FACTORS” and “DESCRIPTION OF BUSINESS” and elsewhere in this Prospectus. See “RISK FACTORS.”

OVERVIEW

We were originally incorporated in the British Virgin Islands on September 15, 2010 as Revelation MIS, Inc.  On February 26, 2015, we merged with Jolen, Inc., a Florida corporation and changed our name to Jolen, Inc.  The Company’s original business plan was to acquire existing oil producing properties in the United States.  Our operations were limited to capital formation, organization, and development of our business plan and target customer market, and we generated no revenue.  On May 3, 2016, we acquired all assets of World of Weed, Inc., and on May 19, 2016, we changed our name to WOWI, Inc. and began to pursue a different business plan.

WOWI, Inc. and its wholly owned subsidiary, World of Weed, Inc. (Collectively, the “Company”) is an early-stage company that is in the business of licensing technology and intellectual property to operators and businesses in the legal cannabis industry nationally. We also provide packaging and labeling, lease equipment and lease of real property to such companies. Furthermore, WOWI, Inc. provides a plethora of consulting services including proper business structure and management in the ever-changing legal cannabis space. We provide these services to cultivations, growers, extractors and dispensaries that operate legally in states that have legal medicinal and/or recreational legislation. We pride ourselves on being at the cutting edge and touting quality, safety, proper structure and adherence to the legislation in each and every state.

We have not yet generated revenue but expect to generate revenues derived from licensing agreements, lessor relations, management, packaging and labeling and branding with cannabis related entities. Until we achieve sufficient revenue to carry out our business plan, we intend to continue reliance upon sale of equity and debt securities.  See “BUSINESS.”

Results of Operations

 

 

Results of Operations for the three months ended June 30, 2017 and 2016

Results of Operations for the Year ended September 30, 2016

During the year ended September 30, 2016, we generated no revenues. 

Operating expenses during the year ended September 30, 2016, were $803,136, which is entirely composed of general and administrative expense. We also incurred a charge of $618,000 for stock based compensation. Additional expenses included salaries of $122,086 and consulting fees of $20,768.

As a result, we generated a net loss of $1,682,166 during the year ended September 30, 2016 ($0.06 per share).

Liquidity and Capital Resources

 

 

Critical Accounting Policies and Estimates

Off-Balance Sheet Arrangements – We have no off-balance sheet arrangements 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 we consider material.

Critical accounting estimates – The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) . The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The following represents a summary of our critical accounting policies, defined as those policies that we believe are the most important to the portrayal of our financial condition and results of operations and that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain.

Stock-based Compensation – In the event we have stock-based compensation, we account for stock-based compensation using the fair value method following the guidance set forth in section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service.

Leases 

We follow the guidance in ASC 840 “Leases,” which requires us to evaluate the lease agreements we enter into to determine whether they represent operating or capital leases at the inception of the lease.

Inflation 

Although our operations are influenced by general economic conditions, we do not believe that inflation had a material effect on our results of operations during the nine months ended June 30, 2017 .

Recently Issued Accounting Pronouncements

Under the Jumpstart Our Business Startups Act, or the JOBS Act, we meet the definition of an “emerging growth company.” We have irrevocably elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. As a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non- emerging growth companies. 

In May 2017, the FASB issued ASU No. 2017-09, Scope of Modification Accounting (Topic 718) (ASU 2017-09).  ASU 2017-09 clarifies the accounting for when the terms of a share-based award are modified.  ASU 2017-09 is effective for annual reporting periods beginning after December 15, 2017, and for interim periods within those years, with early adoption permitted. We do not expect this ASU to have a significant impact on our consolidated financial statements and related disclosures.

The Financial Accounting Standards Board and other entities issued new or modifications to, or interpretations of, existing accounting guidance during 2017.  Management has carefully considered the new pronouncements that altered generally accepted accounting principles and does not believe that any other new or modified principles will have a material impact on the Company’s reported financial position or operations in the near term.

 

 

 

DESCRIPTION OF BUSINESS

 

Overview

WOWI prides itself on being at the cutting edge and touting quality, safety, proper structure and adherence to the legislation in each and every state.  WOWI, Inc.’s anticipated revenue lines are licensing technology, licensing intellectual property, packaging and labeling, leasing equipment, leasing real property, provision of consulting services, which include but are not limited to business structure, management, training and product sales.  Through strategic acquisitions, branding, business acumen and dealer education, WOWI, Inc. seeks to aggressively expand and become a nationwide household name in the cannabis space. WOWI, Inc. has supported the development of a 38 acre farm in Pueblo, CO. The farm is now completing a 10,000 square foot greenhouse, with initial cannabis production expected late 2017 to early 2018.

Our Current Business

With its anticipated core business of product development and market expansion in the growing cannabis and hemp industry, WOWI, Inc. will engage other cannabis and hemp companies in co-development, licensing, distribution, and marketing agreements that increase their market footprint and corporate valuation. As the market continues to expand rapidly, WOWI, Inc. will subsequently continue to independently pursue operations in states where cannabis is legal.  We intend to provide our experience, technology and guidance to our clients in these areas as well as those in ancillary direct businesses (such as extractions, edibles, suppliers, etc.) so that they may have better control over their overall business destiny but we will also offer a separate cultivation or dispensary license, as needed. As of the date of this Prospectus we have generated no revenues arising out of licensing arrangements since commencement of our operations. See “Description of Services, Pricing,” below.

WOWI, Inc. looks to derive its revenue through providing services and licensing technology and intellectual property to operators and businesses in the legal cannabis industry nationally. We also plan to provide packaging and labeling, lease equipment and lease real property to such companies. WOWI, Inc. further plans to provide consulting services including proper business structure and management in the ever-changing legal cannabis industry. As of the date of this Prospectus we have not yet generated revenues. There can be no assurance, even with the agreements in place that we will be successful in generating revenues or attaining any level of profitability.

 

 

Our anticipated fees will typically be based upon production capacity of grow-related operations, fixed fees for dispensary operations, space-based lease rates for real property and attachments, and types of leased equipment. Where applicable, we will bill various progress payments as we provide services and complete various project stages. Should clients not be selected to receive such a license from the State, their licensure agreement will be terminated prior to our providing full disclosure of our proprietary knowledge, manuals, and training. These fees will not include expenses that are reimbursed as a part of the license agreement.

Our primary value proposition model rests on four distinct premises, including:

 1. Our Licensees may adopt and then utilize our technology and training offered thereby providing the various state and local jurisdictions with the reliable underpinnings of a well-known, experienced and respected cultivation and dispensary operation. These services include access to:

 

2. Our Clients should be able to avoid the multitude of costly mistakes generally made by start-up business ventures in this industry as well as base their business operations on a truly industrial cultivation process that has no singular dependence on a “guru” or “master grower,” instead relying on the experience of a team based culture that has a substantial depth of successful operating experience. This aspect of our service provides access to:

 

3. Clients or pre-licensees will be able to have access to a knowledgeable second opinion source as they consider how best to enter the cannabis industry that can assist them in the general development of their various business assumptions relative to real estate, cannabis retail and grow operations, forecasting, business plan development, acquisitions and regulatory compliance. We provide access to:

 

 

WOWI, Inc., believes that by entering into agreements with us our clients will have access to a substantial experience and knowledge base as they consider their ongoing options in either the private or public market space, as we are capable of offering a unique second opinion and due diligence support structure to such strategies as they evolve. We attempt to limit our fee structure to a flat fee rather than what we consider excessive ongoing fees and expenses in the form of top line revenue sharing as well as other ancillary income generation streams that many of our competitors utilize. By doing so, we believe that over time the value of the continued aggregate learning of our licensure group will establish us as a pre-eminent leader in this nascent industry noting our fees and related expense of deployment are significantly lower than general industry practices. Through our industry relationships and licensing capabilities we will continue to invest in our technology and intellectual property through active participation with our growing licensure group with the goal to develop the best practices in the cannabis industry to remain a low cost producer while maintaining the highest levels of safety, quality, and consistency.

4. We have also developed a strong ‘stable’ of production (ingestible) partners that we introduce to our licensee clients for fulfillment of that aspect of the business. Our management has business experience in that industry segment but we do not directly operate a medically infused products business. Rather, we attempt to refer experienced, quality medically infused product businesses to our licensees to accomplish this objective.

Once a licensee is operational our ongoing support services are related to quality and control practices applicable to cultivation operations similar to those offered by other support service providers. These services include testing, service provider contractors and seed-to-sale software providers. We do not have any current arrangements wherein we are compensated related to the sale of cannabis by either the cultivation/production or dispensary licensees.

Description of Services, Pricing 

WOWI, Inc. is an early-stage company that is in the business of licensing technology and intellectual property to operators and businesses in the legal cannabis industry nationally. We also provide packaging and labeling, lease equipment and lease real property to such companies. WOWI provides a plethora of consulting services including proper business structure and management in the ever changing legal cannabis space. We provide these services to cultivators, growers, extractors and dispensaries that operate legally in states that have legal medicinal and/or recreational legislation. We pride ourselves on being at the cutting edge and touting quality, safety, proper structure and adherence to the legislation in each and every state.

WOWI’s anticipated revenue sources are:

Licensing Technology; Licensing Intellectual Property; Packaging and Labeling; Leasing Equipment; Leasing Real Property; Provision of Consulting Services (Business Structure, Management, Training); Product Sales

In the initial stages of our relationship with clients we attempt to identify and address the needs of each of our clients by identifying the following issues:

 

We intend to provide different services and activities for our clients depending upon the nature of the request from each. For example, some clients may seek  assistance with dispensary activities and development, while others desire cultivation assistance. Other clients may require both. Generally, our services include the following services:

 

 

 

We also offer other custom services upon request, including providing a senior Director of Cultivation already on WOWI. Inc’s staff for the client’s initial crop, providing clones to harvest, and access to our senior management, contractors and others to address specific issues that may arise from time to time and which may be unique to the client’s proposed operations. These custom services are provided at an additional cost, which is negotiated with the client at the inception of the relationship.

Initially, we conduct meetings at the client’s location that will include their team, as well as facilities related service providers to generate a final sketch plan design for their facility, including  access, parking, and other practical applications, as well as formulation of the business plan underpinnings and assumptions. We generally estimate two to three meetings over a period of a several months prior to the application of respective specific language and other requirements being adopted by the respective state of the client, depending upon a number of variables including but not limited to the size and scope of the proposed operation, as well as real estate investment strategies. 

We do not provide legal services, lobbying, or other local related services including on-site construction management. These will be the responsibilities of our client. We will, however (once the rules and application process are defined) become familiar with these elements and assist our client in their respective state application as part of our assistance in development of the client’s business plan. We do not provide assistance in securing funding for our clients.

 

 

Once a client’s license application has been approved by a state they applied in, another payment (equal to 20% of the fee) becomes due. Once construction of the new facility or improvements to an existing facility are initiated, we receive an additional 30% of the fee. During this time we provide additional services that would typically include:

 

Once the facility becomes operational (begins the initial growing process), and client will have completed all support as required for the successful completion and operational status of our client’s facility. After the facility is operational we collect an annual licensing fee for the life of the contract paid quarterly in arrears, plus travel costs per year that generally includes additional training and operational support as may be needed to operate the facility. As of the date of this Prospectus only 1 client has  become operational, but we expect more will reach this threshold in the near future.

 

Marketing 

We conduct our marketing efforts by providing a presence at specifically targeted industry based events. We have been able to garner a substantial presence via these marketing opportunities. Because the cannabis industry is relatively new there are very few groups and companies who can identify themselves as having real experience in this industry. We believe we are the exception as a result of our management’s experience with all aspects of the industry. See “MANAGEMENT.”

There are many factors contributing to the overall cannabis growth and opportunity. These factors are listed below. WOWI will focus on these factors to help fuel its growth. The overall U.S. cannabis market is growing from its own performance dynamics. The strong growth in demand for legal cannabis over the past years is expected to continue in the years ahead.

Revenue Growth: The legal cannabis industry is among the fastest growing industries in the U.S. projecting $22 billion in revenue by 2020 from $6.7 billion in 2016.

We are members of various industry groups and attend industry based conferences which we believe will be helpful to advancing our brand and skill sets. We will continue to seek out venues where we can enhance our presence in the industry while at the same time garner prospective client licensees. We will continue to market our licensing and related services to the Cannabis industry through participation in various trade show events, continual use of free public content through interviews with our principals such as currently provided on CNN and MSNBC, direct referrals from satisfied licensees or past clients, various web presence advertising options utilizing specific industry related web sites and google ad words, as well as other measures we may choose to deploy from time to time.

We also continue to coalesce interest and a presence within the industry through participation in various events and targeted promotion to prospective clients.

Over time we plan to continue expansion of our service offerings that we believe will be better identified as we grow and the cannabis industry matures. To this end we are already working in harmony with other consultants within the industry lacking certain experience or skill sets through licensure of specific cultivation technologies, with specific protections and non-disclosure agreement in place, noting we do not provide our operations manual of training to potential licensees until they have a state granted license in place.

Our website (worldofweedinc.com) is operational but will be upgraded over the time to become more effective in the delivery of information related to our developing business.

Growth by Acquisitions

Ultimately, our intent is to become a national or internationally branded cannabis company. However, there are numerous things that will need to occur in order to allow us to implement the final aspect of our business plan and there are no assurances that any of these developments will occur, or if they do occur, that we will be successful in fully implementing our plan. Among other things, the most important developments that need to occur include the legalization and commercialization of marijuana in the United States, and a change in the regulatory standards being imposed by the State of Colorado limiting ownership in all cannabis related businesses solely to residents of the State of Colorado, including a minimum residence requirement of two years. Until these issues are resolved, we will be unable to fully integrate all aspects of the marijuana industry under our corporate umbrella.

That would be followed up by acquisition of other cannabis companies both in Colorado and elsewhere. We believe there are many synergistic cannabis operations both already in business and which will enter the industry as more states continue to adopt legalization proposals who will be interested in being acquired by our Company if and when we become a trading, reporting company. We believe this makes economic sense because we can eliminate duplication of general and administrative expense, provide a more centralized information marketing and eliminate overlapping of services offered. As of the date of this Prospectus we have not conducted any discussions with potential acquisition companies, there are no definitive agreements in place relating to our acquiring any such business and there can be no assurances that such agreements will be executed on favorable terms or at all in the future any such future consideration would be in line with all legally acceptable methods for such an acquisition in consideration of our public company status.

 

 

If we are successful, the acquisition of related, complementary businesses is expected to increase revenues and profits by providing a broader range of services in vertical markets which are consolidated under one parent, thus reducing overhead costs by streamlining operations and eliminating duplicitous efforts and costs. There are no assurances that we will increase profitability if we are successful in acquiring other synergistic companies.

Management will seek out and evaluate related, complimentary businesses for acquisition. The integrity and reputation of any potential acquisition candidate will first be thoroughly reviewed to ensure it meets with management’s standards. Once targeted as a potential acquisition candidate, we will enter into negotiations with the potential candidate and commence due diligence evaluation of each business, including its financial statements, cash flow, debt, location and other material aspects of the candidate’s business. One of the principal reasons for our filing of our registration statement of which this Prospectus is a part and the filing of an application to list our securities for trading is our intention to utilize the issuance of our securities as part of the consideration that we will pay for these proposed acquisitions. If we are successful in our attempts to acquire synergistic companies utilizing our securities as part or all of the consideration to be paid, our current shareholders will incur dilution. See “RISK FACTORS.”

In implementing a structure for a particular acquisition, we may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another corporation or entity. We may also acquire stock or assets of an existing business. On the consummation of a transaction, we do not intend that our present management and shareholders will no longer be in control of our Company. 

As part of our investigation, our officers and directors will meet personally with management and key personnel, may visit and inspect material facilities, obtain independent analysis of verification of certain information provided, check references of management and key personnel, and take other reasonable investigative measures, to the extent of our limited financial resources and management expertise. The manner in which we participate in an acquisition will depend on the nature of the opportunity, the respective needs and desires of us and other parties, the management of the acquisition candidate and our relative negotiation strength. 

We will participate in an acquisition only after the negotiation and execution of appropriate written agreements. Although the terms of such agreements cannot be predicted, generally such agreements will require some specific representations and warranties by all of the parties thereto, will specify certain events of default, will detail the terms of closing and the conditions which must be satisfied by each of the parties prior to and after such closing, will outline the manner of bearing costs, including costs associated with our attorneys and accountants, will set forth remedies on default and will include miscellaneous other terms.

Depending upon the nature of the acquisition, including the financial condition of the acquisition company, as a reporting company under the Securities Exchange Act of 1934 (the “34 Act”), it may be necessary for such acquisition candidate to provide independent audited financial statements. If so required, we will not acquire any entity which cannot provide independent audited financial statements within a reasonable period of time after closing of the proposed transaction. If such audited financial statements are not available at closing, or within time parameters necessary to insure our compliance with the requirements of the 34 Act, or if the audited financial statements provided do not conform to the representations made by the candidate to be acquired in the closing documents, the closing documents will provide that the proposed transaction will be voidable, at the discretion of our present management. If such transaction is voided, the agreement will also contain a provision providing for the acquisition entity to reimburse us for all costs associated with the proposed transaction.

Competition 

We face extreme competition from both larger, better-financed national brands as well as an ever increasing number of boutique service providers in the cannabis industry. We currently track a few such providers in this space and are continually monitoring their progress and presence in the industry while working to continue to demonstrate our unique licensing offering. We also track several public companies that are either directly in or loosely involved in the cannabis industry.

 

 

Government Regulation

While we do not generate revenues from the direct sale of cannabis products, we are engaged in assisting companies who are so engaged in various start up aspects of the cannabis industry. Marijuana is a Schedule-I controlled substance and is illegal under federal law. Even in those states in which the use of marijuana has been legalized, its use remains a violation of federal laws. 

A Schedule I controlled substance is defined as a substance that has no currently accepted medical use in the United States, a lack of safety for use under medical supervision and a high potential for abuse. The Department of Justice defines Schedule 1 controlled substances as “the most dangerous drugs of all the drug schedules with potentially severe psychological or physical dependence.” If the Federal Government decides to enforce the Controlled Substances Act in Colorado with respect to marijuana, persons that are charged with distributing, possessing with intent to distribute, or growing marijuana could be subject to fines and terms of imprisonment, the maximum being life imprisonment and a $50 million fine. Any such change in the Federal Government’s enforcement of current federal laws could cause significant financial damage to us. While we do not intend to harvest, distribute or sell cannabis, we may be irreparably harmed by a change in enforcement by the federal or state governments.

As of the date of this Prospectus, 23 states and the District of Columbia allow its citizens to use Medical Marijuana. Additionally, voters in the states of Colorado, Washington, Alaska and Oregon have all approved legalization of recreational cannabis for adult use. The state laws are in conflict with the Federal Controlled Substances Act, which makes marijuana use and possession illegal on a national level. The Obama Administration had stated that it is not an efficient use of resources to direct federal law enforcement agencies to prosecute those lawfully abiding by state-designated laws allowing the use and distribution of medical marijuana. However, there is no guarantee that the current or subsequent Administrations will not change stated policy regarding the low-priority enforcement of federal laws. Additionally, any new administration that follows could change this policy and decide to enforce the federal laws strongly. Any such change in the Federal Government’s enforcement of current federal laws could cause significant financial damage to us. While we do not intend to harvest, distribute or sell cannabis, we may be irreparably harmed by a change in enforcement by the federal or state governments.

Although cultivation and distribution of marijuana for medical use is permitted in many states, provided compliance with applicable state and local laws, rules, and regulations, marijuana is illegal under federal law. Strict enforcement of federal law regarding marijuana would likely result in the inability to proceed with our business plan and could expose us and our management to potential criminal liability and subject their properties to civil forfeiture. Though the cultivation and distribution of marijuana remains illegal under federal law, H.R. 83, enacted by Congress on December 16, 2014, provides that none of the funds made available to the DOJ pursuant to the 2015 Consolidated and Further Continuing Appropriations Act may be used to prevent states from implementing their own laws that authorize the use, distribution, possession, or cultivation of medical marijuana. However, state laws do not supersede the prohibitions set forth in the federal drug laws.

For a comprehensive and up to date perspective on this process as well as current states and territories please refer to the following link: http://www.mpp.org/states/key-marijuana-policy-reform.html 

 

 

In order to participate in either the medical or recreational sides of the marijuana industry in Colorado and elsewhere, all businesses and employees must obtain licenses from the state and, for businesses, local jurisdictions. Colorado issues four types of business licenses including cultivation, manufacturing, dispensing, and testing. In addition, all owners and employees must obtain an occupational license to be permitted to own or work in a facility. All applicants for licenses undergo a background investigation, including a criminal records check for all owners and employees.

Colorado has also enacted stringent regulations governing the facilities and operations of marijuana businesses. All facilities are required to be licensed by the state and local authorities and are subject to comprehensive security and surveillance requirements. In addition, each facility is subject to extensive regulations that govern its businesses practices, which includes mandatory seed-to-sale tracking and reporting, health and sanitary standards, packaging and labeling requirements, and product testing for potency and contaminants. 

While the current Administration has not implemented new policies with respect to enforcement, it should be anticipated that the Department of Justice will continue to enforce the Controlled Substance Act with respect to marijuana to prevent:

 

Laws and regulations affecting the medical marijuana industry are constantly changing, which could detrimentally affect our proposed operations. Local, state and federal medical marijuana laws and regulations are broad in scope and subject to evolving interpretations, which could require us to incur substantial costs associated with compliance or alter its business plan. In addition, violations of these laws, or allegations of such violations, could disrupt our business and result in a material adverse effect on its operations. It is also possible that regulations may be enacted in the future that will be directly applicable to our business. These ever changing regulations could even affect federal tax policies that may make it difficult to claim tax deductions on our returns. We cannot predict the nature of any future laws, regulations, interpretations or applications, nor can we determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on its business.

 

Since the use of marijuana is illegal under federal law, there is a compelling argument that banks cannot accept for deposit funds from businesses involved with marijuana. Consequently, businesses involved in the marijuana industry often have trouble finding a bank willing to accept their business. The inability to open bank accounts may make it difficult for our clients to operate.

 

Employees 

As of the date of this Prospectus we have three (3) employees. We have consulted with and expect to continue to use the services of independent consultants and contractors with whom our management has a pre-existing relationship to perform various professional services, particularly in the area of construction of cultivation. We expect that we will continue to use contractors to assist us with our clients. 

None of our employees are members of a union. We consider our employee labor relations to be good. 

Trademarks, Trade names, Intellectual Property 

 

 

Property 

On August 12, 2015, we moved our principal place of business to 6770 South Yosemite Street, Unit D, Centennial, Colorado 80112. Our telephone number is (720)-482-6257. This location is subleased from Ashkar Children’s LLC pursuant to a written agreement. This space consists of 900 square feet of basic office space and amenities. We pay monthly rent of $1,000 for this location and have renewed the lease through September 2017. Management believes that this space will not meet our future needs and that incurrence of additional costs may necessary to occupy a more suitable space.

Legal Proceedings

We are unaware of any pending or threatened litigation by or against us.

Industry Analysis

According to the Colorado Department of Revenue, Colorado’s marijuana industry reported $1.3 billion in recreational and medical marijuana in sales in 2016. The national regulated marijuana market is estimated to be over $22 billion by 2020.

In Colorado, the market was expanded in January 2014 to include adult use, including visitors from other states. Voters in Washington recently approved a ballot measure to legalize cannabis for adult use. Many experts predict that other states will follow Colorado and Washington in enacting legislation or approving ballot measures that expand the permitted use of cannabis.

Nationally, the industry has continued to gain ground through the addition of many states and their passing of medical and or recreational provisions for the use of cannabis. While there certainly appears to be a trend towards acceptance of cannabis, there are no assurances offered that this business will be able to sustain itself over time if the Federal Government changes its current position related to state legalized operations.

While no assurances can be provided, we believe that over the next three to five years there will be as many as thirty five to forty states adopting various types of cannabis legislation (medical and recreational) and that there will occur a certain tipping point by which the Federal Government will have to take some sort of stand on the legal status of cannabis.. We also believe that due to the strong growth in the industry as a whole at the state level, the Federal Government will eventually de-schedule cannabis, similar to the alcoholic beverage prohibition repeal in the mid 1930’s, and as motivated by its citizenry decriminalize cannabis as well as regulate it under the auspices of some existing or newly formed agency.

 

MANAGEMENT

Executive Officers, Directors and Key Personnel

The following table sets forth information regarding our executive officers and directors:

Name	Position	Age	Year First with Company
Anthony  C. Russo	CEO & Chairman	44	2015
Mike Heilman	Director, Vice President & Secretary	62	2016
Graciela Moreno	Director, Chief OperatingOfficer	33	2016
Charles Sallah	Director, Vice President	64	2016
Alex Warner	Directot	39	2016
Jose Ramirez	Director	47	2016
Michael Bayoff	Director	50	2016

BUSINESS EXPERIENCE 

 

 

Mr. Bayoff is a twenty-nine-year business professional with highly successful experience in the Sports & Entertainment and Food Industry, having worked for Ilitch Holdings his entire career. His creativity and expertise have been in the areas of marketing, advertising, sales promotion, brand management and product development across multiple areas of business have defined his career.  He is results orientated, with the strength and experience in strategy, developing and executing successful marketing programs for products and/or services utilizing television, radio, print, websites, social media and point of purchase advertising. Mr. Bayoff is a highly motivated, organized and dedicated professional with a true TEAM oriented attitude, realizing that in sports, entertainment, business and life "Together Everybody Achieves More (TEAM)”. He has directed and managed numerous departments during his professional career.  His exceptional relationships, networking capabilities, interpersonal, analytical, and strategic skills have defined his career.

Director Independence

 

Our Board is currently composed of seven members. Our Common Stock is not currently listed for trading on a national securities exchange and, as such, we are not subject to any director independence standards. However, we determined that two directors, Alex Warner and Jose Ramirez, qualify as an independent director. We evaluated independence in accordance with the rules of The New York Stock Exchange, Inc., which generally provides that a director is not independent if:

(1)

A Member of the Director’s Immediate Family Is, or in the Past Three Years Has Been, An Executive Officer of Ours;

(2)

The Director Or A Member Of The Director’s Immediate Family Has Received More Than $120,000 Per Year In Direct Compensation From Us Other Than For Service As A Director (Or For A Family Member, As A Non-Executive Employee);

(3)

The Director Or A Member Of The Director’s Immediate Family Is, Or In The Past Three Years Has Been, Employed In A Professional Capacity By Our Independent Public Accountants, Or Has Worked For Such Firm In Any Capacity On Our Audit;

(4)

The Director Or A Member Of The Director’s Immediate Family Is, Or In The Past Three Years Has Been, Employed As An Executive Officer Of A Company Where One Of Our Executive Officers Serves On The Compensation Committee; Or

(5)

The Director Or A Member Of The Director’s Immediate Family Is An Executive Officer Of A Company That Makes Payments To, Or Receives Payments From, Us In An Amount Which, In Any Twelve-Month Period During The Past Three Years, Exceeds The Greater Of $1,000,000 Or 2% Of That Other Company’s Consolidated Gross Revenues.

Once we achieves public status, of which there can be no assurance, we will insure that our committees as well as Board of Directors complies with all the requirements of a public company under the auspices of the OTC Marketplace.

 

Board Committees

 

As of the date of this Prospectus we do not have any committees of our Board of Directors. We expect to form an Audit Committee, a Compensation Committee, a Corporate Governance Committee and a Nominating Committee in the near future, prior to our becoming a public company. We have adopted charters for each proposed committee, as well as a code of ethics and expect to move forward and utilize these committees moving forward.

 

Family Relationships

 

There are no family relationships between any of our directors or executive officers.

 

Conflicts of Interest

 

Members of our management are associated with other firms involved in a range of business activities. Consequently, there are potential inherent conflicts of interest in their acting as officers and directors of our Company. Insofar as the officers and directors are engaged in other business activities, management anticipates they will devote only a minor amount of time to our affairs. See “RISK FACTORS.”

 

EXECUTIVE COMPENSATION 

Remuneration 

Following is a table containing the aggregate compensation paid to our Chief Executive Officer and Chairman of the Board during our fiscal year ended September 30, 2016. Note that no compensation arrangements have been adopted for the other directors, and future compensation liabilities and expenses may result.

SUMMARY COMPENSATION TABLE

 

*Automobile Lease payments

Salaries are established by our Board of Directors. We currently do not have a Compensation Committee but expect to have one in place in the future. All of our employees and contractors are employed or contracted pursuant to employment and service agreements.

 

Other than the compensation arrangement with Mr. Russo, no compensation agreements are currently in place for officers and directors.

 

Compensation of Directors

 

Our CEO and Chairman of the Board is currently compensated at the rate of $10,000 per month, or $120,000 per year for his services. The Company reimburses actual expenses incurred relating to managing as well as marketing our business and in some cases receive incentive payments based upon their performance and success in securing new clients for us. Any incentive payments are authorized by our Board of Directors.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Name & Address*	Number of Shares Beneficially Owned		Percentage of Outstanding Class
Anthony Russo	24,855,212 Common Shares 1 Class B Preferred			76	%
Michael Heilman	20,000 Common Shares			0.06	%
Alex Warner	20,000 Common Shares			0.06	%
Graciela Moreno	20,000 Common Shares			0.06	%
Jose Ramirez	20,000 Common Shares			0.06	%
Charles Sallah	20,000 Common Shares			0.06	%
Michael Bayoff	20,000 Common Shares			0.06	%
Officers & Directors as a Group (7 persons)	24,975,212 Common Shares			76.36	%

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

 

During the normal course of business, the Company advances funds and plans to transact future business with the following entities, all of which are majority-controlled and owned by Anthony Russo, CEO and Chairman of the Board of WOWI, Inc.:

·

WOWI, LLC – Operates a cannabis grow farm and is expected to lease equipment and property from WOWI, Inc. and utilize WOWI, Inc.’s consulting services under the consulting agreement described in the Overview portion of the “Description of Business” section . WOWI, Inc. currently advances funds to finance WOWI, LLC’s operations until WOWI, LLC begins to generate self-sufficient cash flow. Through March 31, 2017, WOWI, Inc. has advanced $78,778 to WOWI, LLC for various expenses, net of $30,000 of repayments.

·

WOWI CBD, LLC – WOWI CBD, LLC resells various cannabinoid products. WOWI, Inc. currently finances inventory purchases for the Company and WOWI CBD, LLC expects to use WOWI, Inc.’s consulting services and branding. Through March 31, 2017, the Company has advanced $9,450 to WOWI CBD, LLC for inventory purchases.

·

WOWI Real Estate Holdings I, LLC - Owns the farm and certain structures upon which WOWI, LLC operates. WOWI, Inc. occasionally advances funds to finance related projects. WOWI, Inc. has advanced total funds of $84,250 through March 31, 2017 to fund these projects.

·

ACR Management – Occasionally provides general contracting services to WOWI, Inc. and related parties. Through March 31, 2017, WOWI, Inc. advanced $3,438 to this Company, net of repayments.

All advances described above bear no interest and are due on demand to WOWI, Inc.

   

There have been no other related party transactions, or any other transactions or relationships required to be disclosed pursuant to Item 404 of Regulation S-K.

 

 

INTERESTS OF NAMED EXPERTS AND COUNSEL

 

No expert or counsel named in this Prospectus as having prepared or certified any part of this Prospectus or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the Common Stock was employed on a contingency basis, or had, or is to receive, in connection with the Offering, a substantial interest, direct or indirect, in the Company or any of its parents or subsidiaries. Nor was any such person connected with the Company or any of its parents or subsidiaries as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.

 

LEGAL MATTERS

 

The validity of the Common Stock offered hereby will be passed upon by The Hoban Law Group LLC, Denver, Colorado.

 

EXPERTS

 

The financial statements of WOWI, Inc. as of and for the years ended September 30, 2016 and 2015 included herein have been audited by BF Borgers CPA PC, independent registered public accountants, as indicated in their reports with respect thereto, and are in reliance upon the authority of said firm as experts in accounting and auditing.

DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

 

Insofar as indemnification for liabilities arising under the 33 Act may be permitted to directors, officers or persons controlling our Company pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

 

ADDITIONAL INFORMATION

 

We have filed this registration statement on Form S-1, including exhibits, with the SEC with respect to the shares being offered in this Offering. This Prospectus is part of the registration statement, but it does not contain all of the information included in the registration statement or exhibits. If and when the SEC declares our registration statement effective, we will begin filing reports pursuant to the Securities Exchange Act of 1934, as amended for further information with respect to our Common Stock, and us we refer you to the registration statement and to the exhibits and schedules to the registration statement. Statements contained in this Prospectus as to the contents of any contract or any other document referred to herein be not necessarily complete, and in each instance, we refer you to the copy of the contract or other document filed as an exhibit to the registration statement. Each of these statements is qualified in all respects by this reference. You may inspect a copy of the registration statement without charge at the SEC’s principal office in Washington, D.C., and copies of all or any part of the registration statement may be obtained from the Public Reference Section of the SEC, 100 F. St. NE, Washington, D.C. 20549, upon payment of fees prescribed by the SEC. The SEC maintains a worldwide website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address of the website is http://www.sec.gov. The SEC’s toll free investor information service can be reached at 1-800-SEC-0330.

 

 

 

		9/30/2016				9/30/2015
Equipment		$	21,800			$	-
Less: accumulated depreciation			( 1,677	)			-
Property and equipment, net		$	20,123			$	-

		Upon Issuance				9/30/2016
Current stock price		$	0.80-$2.00			$	2.00
Risk-free interest rate			0.71%-0.97	%			77	%
Expected dividend yield			0	%			0	%
Expected term (years)		2.3 to 3.3					2.3
Expected volatility		25% to 139%					24	%

October 1, 2015		$	-
Initial value of embedded derivative			175,438
Decrease in fair value			(45,445	)
September 30, 2016		$	129,993

Cash		$	18
Total identifiable assets		$	18
Note payable and accrued interest due to officer		$	290,108
Note payable executed in connection with share exchange agreement			84,000
Total identifiable liabilities		$	374,108
Net identifiable liabilities		$	(374,090	)