Company: SNBH
Filing Date: 2025-04-16
Form Type: 10-K
Source: 0001731122-25-000581
Chunk: 94

Company: SENTIENT BRANDS HOLDINGS INC.
Filing Date: 2025-04-16
Form: 10-K
Item: Item 1A
Chunk 94
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 issue more Common Stock, investors’ investment in the Company will be diluted. Dilution is the difference
between what you pay for your stock and the net tangible book value per share immediately after the additional shares are sold by us.
If dilution occurs, any investment in the Company’s Common Stock could seriously decline in value.

Our Common Stock is subject to risks arising
from restrictions on reliance on Rule 144 by shell companies or former shell companies.

Under a regulation of the SEC known as “Rule 144,” a person who beneficially
owns restricted securities of an issuer and who is not an affiliate of that issuer may sell them without registration under the Securities
Act provided that certain conditions have been met. One of these conditions is that such person has held the restricted securities for
a prescribed period, which would be six months for shares of a company which has never been a shell company. However, Rule 144 is unavailable
for the resale of securities issued by an issuer that is a shell company (other than a business combination related shell company) or,
unless certain conditions are met, that has been at any time previously a shell company.

The SEC defines a shell company as a company that
has (a) no or nominal operations and (b) either (i) no or nominal assets, (ii) assets consisting solely of cash and cash equivalents;
or (iii) assets consisting of any amount of cash and cash equivalents and nominal other assets.

As a result of the Closing of the Reorganization as
described in Items 1.01 and 2.01, the Company ceased being a shell company as such term is defined in Rule 12b-2 under the Exchange Act.

While we believe that as a result of the Closing of
the Reorganization, the Company ceased to be a shell company, the SEC and others whose approval is required in order for shares to be
sold under Rule 144 might take a different view.

Rule 144 is available for the resale of securities
of former shell companies if and for as long as the following conditions are met:

(i) the issuer of the securities
that was formerly a shell company has ceased to be a shell company,

(ii) the issuer of the securities
is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act,

(iii) the issuer of the securities
has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period
that the issuer was