What changed in this filing

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Item 1A. Risk Factors

2025-03-28 compared with 2024-03-22 · 43 added, 50 removed, 274 unchanged (25% of the section changed)

RISKS RELATED TO OUR BUSINESS AND OPERATIONS

There is substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain future financing.

Our consolidated financial statements as of December 31, 2023, have been prepared under the assumption that we will continue as a going concern for the next twelve months.

As of December 31, 2023, we had cash and cash equivalents of $10.4 million and an accumulated deficit of $75.9 million.

There is substantial doubt that our cash and cash equivalents will be sufficient for the next twelve months.

As a result of our financial condition and other factors described herein, there is substantial doubt about our ability to continue as a going concern.

Our ability to continue as a going concern will depend on our ability to restore profitability and to obtain additional funding, as to which no assurances can be given.

We continue to analyze various alternatives, including cost reduction initiatives, cash preservation actions, debt or equity financings, and other arrangements.

Our future success depends on our ability to restore profitability, raise capital, or a combination of both.

We cannot be certain that raising additional capital, whether through selling additional debt or equity securities or obtaining a line of credit or other loan, will be available to us or, if available, will be on terms acceptable to us.

If we issue additional securities to raise funds, these securities may have rights, preferences, or privileges senior to those of our common stock, and our current stockholders may experience dilution.

If we are unable to obtain funds when needed or on acceptable terms, we may be required to curtail our current development programs, cut operating costs, forgo future development and other opportunities, or even terminate our operations.

The adverse effect to our business operations from armed conflicts (such as Ukraine/Russia and Hamas/Israel) or similar political, social, regulatory, or economic tension may challenge our operational flexibility and financial performance.

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Sales and earnings could also be affected by our ability to manage the risks and uncertainties associated with changes in local legal requirements or the enforceability of laws and contractual obligations, trade protection measures, changes in tax laws, regional political instability, war, terrorist activities, severe or prolonged adverse weather conditions, natural disasters, and health epidemics or pandemics.

Prolonged period of inflationary pressure including risk of energy shortages and elevated electricity and energy prices in Europe.

The European energy crisis escalated in 2022 amid the Russia and Ukraine war with the rising cost of gas and electricity, fueling supply uncertainties and risk of energy shortage across Europe due to the lack of gas from Russia.

This resulted in decisive measures implemented by the European Union to help manage security of supply and establish new sources of gas.

Our business is heavily exposed to both gas and electricity prices used to power our operating equipment and high-temperature kilns as well as heat the office and manufacturing buildings across Denmark.

Consequently, this rising energy cost inflation has negatively impacted our profitability and reduced our competitive position compared to competitors operating outside of Europe where the energy crisis has been less pronounced.

The inflationary pressure on energy and gas prices may continue to negatively impact our business as prevailing core inflationary indicators remain above policy targets.

Increased macroeconomic uncertainty and its effects on our business operations and financial condition.

The uncertain macroeconomic environment caused by the ongoing wars, European energy crisis, and general uncertainty related to the global economy may adversely affect our results and could have a negative impact on timing, delivery and demand for our products and services.

Customers, suppliers, and partners may experience business disruptions due to unplanned market volatilities, supply chain restrictions, or lack of funding due to increased cost of capital.

As a result, our customers may modify, delay or cancel plans to purchase our products and services to help mitigate the impact from the prevailing macroeconomic uncertainty.

Global trade restrictions and geopolitical tensions could adversely impact our business and supply chain

Our business operates in a global market and is subject to risks arising from increasing trade restrictions, geopolitical tensions, and shifting regulatory frameworks.

In recent years, governments have imposed new tariffs, sanctions, and export controls, particularly in relation to advanced technologies, critical raw materials, and industrial goods.

Trade conflicts between major economies, such as the United States and China, as well as evolving sanctions on Russia, have created uncertainty in supply chains and increased the complexity of cross-border trade.

More recently, the change in administration in the U.S.

elevates the potential for trade conflict and tariffs on imports, which could potentially impact our business.

New or expanded trade restrictions, including export controls on key materials or technologies used in our products, could disrupt our supply chain, limit our ability to source critical components, and increase costs.

Additionally, changes in import/export regulations or retaliatory trade policies from foreign governments could affect our ability to serve certain markets or delay customer orders.

Our ability to mitigate these risks depends on the stability of global trade relations, our ability to identify alternative suppliers, and potential shifts in regulatory frameworks that could impact our industry.

There can be no assurance that future trade restrictions or geopolitical conflicts will not have a material adverse effect on our business, financial condition, and results of operations.

Prolonged period of energy market volatility and supply disruptions could negatively impact our business

The European energy crisis, which escalated in 2022 amid the Russia-Ukraine war, has largely stabilized;

however, our business remains exposed to fluctuations in energy prices and potential supply disruptions caused by geopolitical instability, regulatory changes, or natural disasters.

While natural gas and electricity prices in Europe have moderated compared to prior peaks, continued uncertainty regarding global energy markets, including potential disruptions from conflicts in the Middle East and instability affecting key shipping routes, could result in renewed price volatility and supply constraints.

Our business is heavily exposed to both gas and electricity prices used to power operating equipment and high-temperature kilns, as well as to heat office and manufacturing facilities.

Any significant increase in energy costs or supply shortages, whether due to geopolitical conflicts, new regulatory restrictions, or logistical challenges in securing energy inputs, could negatively impact profitability and reduce our competitive position compared to competitors operating in regions with lower energy costs.

Additionally, evolving energy policies, such as carbon taxes, emissions trading schemes, and government-mandated energy transition initiatives, may increase operating costs and impact the cost structure of our production processes.

While management continues to evaluate energy efficiency measures and alternative supply arrangements, there can be no assurance that future energy market volatility or supply disruptions will not have a material adverse effect on our business, financial condition, and results of operations.

Our business has been right-sized to help protect our profitability and cash flow;

however, we remain exposed to near-term market fundamentals as we rely on short lead-time products and orders that may be cancelled if customers are facing weakened end-market demand or increased uncertainty.

The resurgence of COVID-19 or similar pandemics could have a material adverse effect on our business, results of operations and financial condition in the future.

Our business could be adversely affected by a resurgence of COVID-19 or similar pandemics as evidenced by the global ramifications of the novel coronavirus first identified in Wuhan, Hubei Province, China (COVID-19).

The COVID-19 pandemic resulted in authorities worldwide implementing numerous measures to contain or mitigate the outbreak of the virus, such as travel bans and restrictions, border controls, limitations on business activity, social distancing requirements, quarantines, and shelter-in-place orders.

These measures caused business slowdowns or shutdowns in affected areas, both regionally and worldwide.

Since 2020, management has initiated several precautionary initiatives across our business in accordance with local regulations and guidelines to mitigate the spread of COVID-19 and to prepare for future pandemics.

These precautions have impacted the way we carry out our business, including additional sanitation and cleaning procedures in our production and other facilities, temperature and symptom confirmations, and remote working when required.

As evidenced during the COVID-19 pandemic, the effects of a prolonged pandemic could result in an extended negative impact on investment across industries.

In addition, COVID-19 or similar pandemics could negatively impact the financial position of our customers or those of our collaboration partners, making it difficult to collect receivables or milestone payments.

Moreover, our business and results of operations could be exposed to risks associated with uncollectible amounts or defaults on contractual payment obligations.

If we are unable to generate sufficient cash from operations due to the impacts of future pandemics, we may need to raise additional funds.

The duration and severity of any future pandemics remain uncertain as exemplified by the rapid increase in the COVID-19 pandemic in late 2021, thus there can be no assurance that it will not have an adverse effect on our liquidity and capital resources, including our ability to access capital markets in the future on terms that are favorable to us or at all.

Health crises, pandemics, and other public health emergencies could adversely affect our business, financial condition, and results of operations.

Our business could be adversely affected by the emergence or resurgence of health crises, pandemics, or other public health emergencies.

While the global impact of COVID-19 has diminished, recent years have demonstrated the significant disruptions that pandemics or widespread health emergencies can cause to supply chains, labor markets, and overall economic activity.

Authorities worldwide continue to implement measures to mitigate potential future outbreaks, including vaccination campaigns, travel restrictions, and quarantine protocols, however, new infectious diseases or resurgences of existing ones could lead to disruptions in our supply chain, temporary facility closures, labor shortages, and delays in customer orders.

Additionally, prolonged health crises could negatively impact the financial position of our customers or suppliers, increasing the risk of delayed payments, order cancellations, or defaults on contractual obligations.

Our ability to navigate future public health emergencies will depend on the severity and duration of such events, as well as the effectiveness of mitigation strategies implemented by governments, businesses, and healthcare systems.

There can be no assurance that future health crises will not have a material adverse effect on our business, financial condition, and results of operations.

Historically, we have been dependent on a few major customers for a significant portion of the Company ’ s revenue.

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While the Company has procedures to monitor and limit exposure to credit risk on its receivables, there can be no assurance such procedures will effectively limit our credit risk and avoid losses.

The impact on our business operations and financial condition if we fail to restore financial stability through improved profitability and access to adequate liquidity.

If we fail to restore financial stability through improved profitability and access to adequate liquidity, our business options and financial condition would be impacted .

Our business has undergone significant changes in the past few years to help restore financial flexibility to the Company through an enhanced capital structure, improved profitability, reduced investments, and changes to the organization.

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therefore, our business may not achieve its financial objectives in a period with increased competition or weakening market fundamentals.

Furthermore, future growth and possibly future strategic acquisitions may require public or private equity offerings or debt financings.

Furthermore, future growth and operations may require public or private equity offerings or debt financings.

Additional funds may not be available when we need them on terms that are acceptable to us, or at all.

If adequate funds are not available, we may be required to delay or reduce the scope of our plans to grow our revenues, to pass on one or more strategic acquisitions, or to scale back our business plans.

In addition, we could be forced to reduce or forgo attractive business opportunities.

If adequate funds are not available, we may be required to delay or reduce the scope of our plans to grow our revenues, to pass on one or more opportunities, or to scale back our business plans.

To the extent that we raise additional funds by issuing equity securities, our stockholders may experience significant dilution.

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Our international operations are exposed to potential adverse tax consequence.

Our international operations create a risk of potential adverse tax consequences.

Our international operations create a risk of potentially adverse tax consequences.

Taxes on income in future internationally based operations are dependent upon acceptance of our operational practices and intercompany transfer pricing by local tax authorities as being on an arm's length basis.

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This could have a material adverse effect on our operating results or cash flows in the period or periods for which that determination is made and could result in increases to our overall tax expense in subsequent periods.

Adverse impact on our business due to increased interest rates, tightening debt capital markets, and market volatility.

Our business could face adverse impacts due to increased interest rates, tightening debt capital markets, and market volatility.

Our business and capital structure are dependent upon our ability to raise financing and optimize our cash management activities through timely access to credit and loan markets at attractive terms.

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For example, the General Data Protection Regulation, which became effective in May 2018, imposes more stringent data protection requirements and provides for significantly greater penalties for noncompliance than the European Union laws that previously applied.

Additionally, California recently enacted legislation, the California Consumer Privacy Act, which became effective on January 1, 2020.

Additionally, California enacted legislation, the California Consumer Privacy Act, which became effective on January 1, 2020.

We may also be subject to additional obligations relating to personal data by contract that industry standards apply to our practices.

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however, any exercise would increase the number of shares eligible for future resale in the public market and result in substantial dilution to our stockholders.

As of December 31, 2023, we have issued pre-funded warrants to purchase a total of 3,930,008 shares of our common stock, of which none have been exercised.

Each pre-funded warrant is exercisable for $0.008 per share of common stock underlying such pre-funded warrant, which may be paid by way of a cashless exercise--meaning that the holder may not pay a cash purchase price upon exercise, but instead would receive upon such exercise the net number of shares of common stock determined according to the formula set forth in the pre-funded warrant.

As of December 31, 2024, we have issued pre-funded warrants to purchase a total of 5,299,879 shares of our common stock, consisting of 3,930,008 pre-funded warrants issued prior to 2024 and an additional 1,369,871 pre-funded warrants issued in 2024.

Of these, none have been exercised.

Each of the pre-2024 pre-funded warrants is exercisable for $0.008 per share of common stock underlying such pre-funded warrant, while the pre-funded warrants issued in 2024 are exercisable for $0.001 per share of common stock underlying such pre-funded warrant.

These warrants may be exercised through a cashless exercise mechanism, meaning that the holder may not pay a cash purchase price upon exercise, but instead would receive upon such exercise the net number of shares of common stock determined according to the formula set forth in the pre-funded warrant.

Accordingly, we will not receive a significant amount, or potentially any, additional funds upon the exercise of the pre-funded warrants.

To the extent such pre-funded warrants are exercised, additional shares of common stock will be issued for nominal or no additional consideration, which will result in substantial dilution to the then-existing holders of our common stock and will increase the number of shares eligible for resale in the public market.

Sales of substantial numbers of such shares in the public market could adversely affect the market price of the common stock, causing our stock price to decline.

Sales of substantial numbers of such shares in the public market could adversely affect the market price of our common stock, causing our stock price to decline.

Provisions in our articles of incorporation and bylaws could discourage a change in control or an acquisition of us by a third party, even if the acquisition would be favorable to you, thereby adversely affecting existing stockholders.

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Consequently, such regulations may deter broker-dealers from recommending or selling our common stock, which may further affect its liquidity.

If securities analysts do not publish research or reports about our business or if they downgrade us or our sector, the price of our common stock could decline.

The trading market for our common stock will depend in part on research and reports that industry or financial analysts publish about us or our business.

Furthermore, if one or more of the analysts who cover us downgrades us, the industry in which we operate, or the stock of any of our competitors, the price of our common stock may decline.

If one or more of these analysts ceases coverage altogether, we could lose visibility, which could also lead to a decline in the price of our common stock.

The market price of our common stock has been and may continue to be volatile.

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litigation or public concern about the safety of our products;

the effect of macroeconomic uncertainty, COVID-19, or other pandemics.

the effect of macroeconomic uncertainty, global supply chain disruptions, or public health crises.

The realization of any of these risks and other factors beyond our control could cause the market price of our common stock to decline significantly.

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Price volatility may be worse if the trading volume of our common stock is low.

If securities analysts do not publish research or reports about our business or if they downgrade us or our sector, the price of our common stock could decline.

The trading market for our common stock will depend in part on research and reports that industry or financial analysts publish about us or our business.

Furthermore, if one or more of the analysts who cover us downgrades us, the industry in which we operate, or the stock of any of our competitors, the price of our common stock may decline.

If one or more of these analysts ceases coverage altogether, we could lose visibility, which could also lead to a decline in the price of our common stock.

Future sales of our common stock, or the perception that future sales may occur, may cause the market price of our common stock to decline.

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The Company is considered a “ smaller reporting company ” and is exempt from certain disclosure requirements, which could make our common stock less attractive to potential investors.

As a “smaller reporting company” (as defined in Rule 12b-2 of the Securities Exchange Act of 1934 (the “Exchange Act”), we are not required and may not include a Compensation Discussion and Analysis section in our proxy statements, provide only three years of business information, provide fewer years of selected financial data;

and have other “scaled” disclosure requirements that are less comprehensive than issuers that are not “smaller reporting companies,” which could make our stock less attractive to potential investors and could make it more difficult for stockholders to sell their shares.

As a “smaller reporting company” (as defined in Rule 12b-2 of the Securities Exchange Act of 1934 (the “Exchange Act”)), we are not required and may not include a Compensation Discussion and Analysis section in our proxy statements, provide only three years of business information, provide fewer years of selected financial data and have other “scaled” disclosure requirements that are less comprehensive than issuers that are not “smaller reporting companies,” which could make our stock less attractive to potential investors and could make it more difficult for stockholders to sell their shares.

We have no current plan to pay dividends on our common stock, and investors may lose the entire amount of their investment.

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As a public company, we expect to continue to incur significant legal, accounting, and other expenses.

In addition, the Sarbanes-Oxley Act, as well as rules subsequently implemented by the SEC, have imposed various requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls as well as mandating certain corporate governance practices.

In addition, the Sarbanes-Oxley Act, along with rules subsequently implemented by the SEC, have imposed various requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls as well as mandating certain corporate governance practices.

Our management and other personnel will continue to devote a substantial amount of time and financial resources to these compliance initiatives.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors