FHWY As a result of our substantial debt burden, we have been unable to attract necessary investment dollars to negotiate settlements of our indebtedness or to conduct operations. Third parties performing marketing, production and fulfillment services have been unwilling to enter into agreements directly with us. These factors raise substantial doubt about the Company's ability to continue as a going concern.
In order to conduct operations, we were forced to pursue a partner to produce and market the FITT Energy Shot. Under the terms of the Operating Agreement with FITT, they perform the majority of the operating functions for the Company, including among other things, selling, marketing, producing and distributing the FITT Energy Shot, and will pay all costs and expenses involved with performing these services. For its part, FITT will pay the Company a royalty of $0.05 for each bottle sold of the FITT Energy Shot. In connection with the Operating Agreement, the Company issued to FITT 5,000,000 of its common shares effective August 12, 2010, which shares were fully vested as of the date of issuance. While FITT indicated it would use the shares as an inducement to attract investment dollars from interested investors, it is not required to do so. FITT will process and record in its books all sales, costs and operating expenses connected with its performance of services in connection with the Operating Agreement, and all cash, inventory and other assets resulting from either invested dollars or from FITT's operations will be the property of FITT. While FITT will enjoy the benefit of any profits earned through its performance of the operating services, it will also bear the responsibility of any losses as well as raising capital.
