What changed in this filing

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Item 1A. Risk Factors

2022-03-31 compared with 2021-03-25 · 96 added, 79 removed, 222 unchanged (44% of the section changed)

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Our business, financial condition, and results of operations could be materially and adversely affected by any of these risks.

In that event, the trading price of our ordinary shares would likely decline, and you might lose all or part of your investment.

In that event, the trading price of our common stock would likely decline, and you might lose all or part of your investment.

This report also contains forward-looking statements that involve risks and uncertainties.

Our results could materially differ from those anticipated in these forward-looking statements, as a result of certain factors including the risks described below and elsewhere in this report and our other SEC filings.

See also “Forward-Looking Statements”.

See also “Forward-Looking Statements” above.

Risks Related to Our Business

Substantial doubt exists as to our ability to continue as a going concern.

As described in Note 1 of our accompanying consolidated financial statements, we have concluded that substantial doubt exists as to the Company’s ability to continue as a going concern.

There has been historically and continues to be substantial doubt as to our ability to continue as a going concern.

As described in Note 1.

Basis of Presentation, Summary of Significant Accounting Policies, and Nature of Operations of the Notes to the Consolidated Financial Statements included in Part II.

Financial Statements and Supplementary Data , of this Annual Report on Form 10-K, we have concluded that substantial doubt exists as to the Company’s ability to continue as a going concern.

This means that there is substantial doubt that we can continue as an ongoing business for the next twelve months.

Our financial statements have been prepared assuming we will continue as a going concern.

We have experienced substantial and recurring losses from operations, which has created an accumulated retained earnings deficit of $129.1 million as of December 31, 2020.

We have experienced substantial and recurring losses from operations, which has created an accumulated deficit of $137.0 million as of December 31, 2021.

At December 31, 2021, the Company had approximately $24.7 million in cash and had a working capital surplus of approximately $24.7 million.

The Company’s net cash used in operating activities during the year ended December 31, 2021 was approximately $11.0 million, and current projections indicate that the Company will have continued negative cash flows for the foreseeable future.

Net losses incurred for the years ended December 31, 2020 and 2019 amounted to approximately $(14.4) million, $(10.7) million, respectively.

There are inherent uncertainties in forecasting future expenditures, especially forecasting for uncertainties such as future R&D costs and other cash outflows and as well as how the COVID-19 outbreak, including the emergence and spread of variant strains of the virus, may affect future costs and operations.

Also, the cash requirements of the Company’s future planned operations to commercialize its nuclear fuel, including any additional expenditures that may result from unexpected developments, requires it to raise significant additional capital, including receiving government support.

Net losses incurred for the years ended December 31, 2021 and 2020 amounted to approximately $7.8 million and $14.4 million, respectively.

Our ability to successfully raise sufficient funds, primarily through the sale of equity securities, is uncertain and subject to general market conditions, the market for our common stock and other risks.

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Any capital raises may cause significant dilution to our shareholders.

As of December 31, 2020, we had $21.5 million in cash and equivalents.

We will need to raise significant additional capital (up to several hundred million dollars) in order to continue our R&D activities and fund our operations through commercialization of our nuclear fuel technology.

As of December 31, 2021, we had $24.7 million in cash and cash equivalents.

We will need to raise significant additional capital (up to several hundred million dollars) in order to continue our R&D activities and fund our operations through the commercialization of our nuclear fuel.

Our current plan is to maximize external funding from third party sources, including the DOE, to support the remaining development, testing and demonstration activities relating to our metallic nuclear fuel technology.

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In particular, we may be required to delay, reduce the scope of or terminate one or more of our research projects, sell rights to our nuclear fuel technology or license the rights to such technologies on terms that are less favorable to us than might otherwise be available.

We will have virtually no common shares available for issuance to raise capital to fund our general corporate overhead or cover our outside R&D costs associated with our R&D activities or pursuing other opportunities , unless the number of authorized shares of common stock is increased.

Currently, we have approximately 8.3 million authorized shares of common stock.

As of March 24, 2021, we had approximately 6.6 million shares of common stock outstanding.

After taking into account the 0.6 million shares reserved for issuance upon the exercise of outstanding options and warrants, 0.2 million reserved for RSU issuances and 0.4 million reserved for the conversion of preferred stock and payment of preferred stock accrued dividends, we have approximately 0.5 million shares available for future issuance.

For all practical purposes, the 8.3 million authorized shares of our common stock have been fully utilized, restricting our ability to issue any more shares.

In May 2021 at the annual shareholder meeting, we will solicit the approval of our shareholders to amend our articles of incorporation to increase the number of authorized shares of common stock to 13,500,000;

however, we might not receive the requisite shareholder approval.

If the number of authorized shares of common stock is not increased, we will have virtually no shares available for issuance to raise capital to fund our general corporate overhead or cover our outside R&D activities associated with developing our fuel.

Any delays in securing this approval, or the failure to secure shareholder approval to amend our articles of incorporation to increase the number of authorized shares of common, may prevent us from executing a capital raising transaction, which may force us to cease our operations and liquidate the Company.

We are dependent upon significant U.S.

government funding and political support for nuclear power in order to complete our fuel development efforts and commercialize our nuclear fuel technology.

Our recently extended projected fuel development timeline (15-20 years) is dependent upon significant funding from the U.S.

Our projected fuel development timeline is dependent upon significant funding from the U.S.

government to not only support our ongoing R&D efforts, but to provide confidence to our investors and reduce the need to raise funds through the issuance of additional dilutive equity securities.

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government policies resulting from various political developments.

If political support for the prioritization of the development of nuclear energy decreases, including by reason of the new presidential administration, it may affect our ability to secure government funding which would adversely affect our business, fuel development timeline, financial condition, and results of operations.

If political support for the prioritization of the development of nuclear energy decreases, including due to policy changes by the Biden administration and future administrations and changing congressional funding priorities, it may affect our ability to secure government funding which would adversely affect our business, fuel development timeline, financial condition, and results of operations.

The amount of time and funding needed to bring our nuclear fuel to market may greatly exceed our projections.

The development of our nuclear fuel will take a significant amount of time and funding, and any shortfall in R&D funding levels or a delay in achieving fuel development milestones, or uncertainty in regulatory licensing timelines could result in significant delays and cost overruns.

We cannot at this stage accurately predict the amount of funding or the time required to successfully manufacture and sell our fuel in the future.

We cannot at this stage accurately predict the amount of funding or the time required to successfully manufacture and sell our nuclear fuel in the future.

However, our best estimate at this time is that our metallic fuel development program is expected to take 15-20 years and cost several hundred million U.S.

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The actual cost and time required to commercialize our fuel technology may vary significantly depending on, among other things, the results of our research and product development efforts;

the cost of developing or licensing our fuel;

the cost of developing or licensing our nuclear fuel;

changes in the focus and direction of our research and product development programs;

access to test loops;

competitive and technological advances;

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fuel manufacturing process;

availability of metallic high assay low enriched uranium (HALEU), and marketing and other costs associated with commercialization of these technologies.

availability of metallic high assay low enriched uranium, and marketing and other costs associated with commercialization of these technologies.

Because of this uncertainty, even if financing is available to us, we may need significantly more capital than anticipated, which may not be available on terms acceptable to us or at all, and the expected revenues and other expected benefits from our nuclear fuel technology may be delayed or never realized.

Our current economic model for selling our fuel may prove to be inaccurate and subject to competition and our nuclear fuel technology products may not be cost effective.

Although our preliminary economic model concludes that our fuel technology may provide a significant payback to utilities, it is based upon a number of assumptions that may not prove to be accurate.

Our current economic model for selling our nuclear fuel may prove to be inaccurate and subject to competition and our nuclear fuel technology products may not be cost effective.

Although our preliminary economic model concludes that our nuclear fuel technology may provide a significant payback to utilities, it is based upon a number of assumptions that may not prove to be accurate.

If our model is inaccurate, our nuclear fuel product may not provide nuclear utility customers with sufficient economic incentive to switch from existing nuclear fuels, and we could lose or fail to develop customers.

For example, if ATF fuel is successful in extending the cycle length from 18 to 24 months in existing PWRs, it could severely weaken or undermine the anticipated economic value of our fuel for large PWRs.

Separately, our economic model for SMRs is in the development stage and its viability is subject to favorable wholesale power prices in the markets in which our fuel may be used, the necessary upfront capital investment to enable a 30% power uprate in future SMRs using our fuel and the future costs of uranium metallization and fabrication of our fuel rods and fuel assemblies at commercial scale, all of which are inherently unpredictable.

Separately, our economic model for SMRs is in the development stage and its viability is subject to favorable wholesale power prices in the markets in which our nuclear fuel may be used, the necessary upfront capital investment to enable a 30% power uprate in future SMRs using our nuclear fuel and the future costs of uranium metallization and fabrication of our fuel rods and fuel assemblies at commercial scale, all of which are inherently unpredictable.

A failure of our current and future economic models, or a failure to find a strategic alternative, such as a potential business combination partner, would adversely affect our business, financial condition, and results of operations and may result in the failure of the Company.

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We had intended to conduct further testing of our fuel designs at the Halden research reactor located in Halden, Norway.

However, the Halden research reactor, which became operational in 1958, was shut down in June 2018 and will not reopen, so it will not be available for further testing of our fuel designs.

However, the Halden research reactor, which became operational in 1958, was shut down in June 2018 and will not reopen.

The Company has identified alternative options to generate the irradiation data we need to support regulatory licensing of our LTA operation in a commercial reactor but pursuing such alternatives to the Halden research reactor may significantly delay further testing of our fuel designs.

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These reactors are limited in terms of technical capabilities, operating cycles, and prior reservations for similar research and development services.

While the ATR has enough space for four loops where fuel rods can be irradiated, the reactor currently has only one such loop, limiting how much fuel rod material that can be inserted into the reactor as well as its duration in the reactor.

While the ATR has enough space for four loops where fuel rods can be irradiated, the reactor currently has only one such loop available, limiting how much fuel rod material that can be inserted into the reactor as well as its duration in the reactor.

If new loops are not added to the ATR, loop irradiation testing in the ATR may not provide sufficient data to justify regulatory approval for LTA testing in a large commercial PWR in a commercially feasible timeframe.

This would likely necessitate an extra fuel development step of LTR testing in a large commercial PWR in addition to the ATR loop testing before LTA testing could commence.

Funding for any improvement of capabilities or continued operations of these reactors is subject to the priorities of the US government, as well as the appropriation of funding by the US Congress, and cannot be predicted or assured.

Funding for any improvement of capabilities or continued operations of these reactors is subject to the priorities of the U.S.

government, as well as the appropriation of funding by the U.S.

Congress, and cannot be assured.

Changes in these factors are outside of the Company’s control and could cause significant delays and/or cost increases in our R&D programs.

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Furthermore, the fuel technology has yet to be sufficiently demonstrated in operating conditions equivalent to those found in an existing commercial reactor.

Until we are able to successfully demonstrate operation of our fuel designs in commercial reactor conditions, we cannot confirm the ability of our fuel to perform as expected, including its ability to enable a power uprate, a longer operating cycle, or other anticipated performance and safety benefits.

Until we are able to successfully demonstrate operation of our fuel designs in commercial reactor conditions, we cannot confirm the ability of our nuclear fuel to perform as expected, including its ability to enable a power uprate, a longer operating cycle, or other anticipated performance and safety benefits.

In addition, there is also a risk that suitable testing or manufacturing facilities may not be available to us on a timely basis or at a reasonable cost, which could cause development program schedule delays.

There is also a risk that fuel fabricators that manufacture and supply commercial nuclear fuel assemblies to nuclear utility customers may not enter into a commercial arrangement with us relating to our metallic nuclear fuel designs.

A failure to enter into a commercial arrangement with one or more of existing nuclear fuel fabricators could adversely affect our business, financial condition, and results of operations and may result in the failure of the Company.

If our fuel designs do not perform as anticipated in commercial reactor conditions, we will not realize revenues from licensing or other use of our fuel designs.

Existing commercial nuclear infrastructure in many countries is limited to uranium material in dioxide form with enrichments limited to 5%.

Our fuel will be in a metallic form and will be enriched to higher levels, which will require modifications to existing commercial nuclear infrastructure and could impede commercialization of our technology.

Existing commercial nuclear infrastructure, including conversion facilities, enrichment facilities, fabrication facilities, fuel storage facilities, fuel handling procedures, fuel operation at reactor sites, used fuel storage facilities and shipping containers, were designed and are currently licensed to handle uranium in oxide form with enrichment up to 5% of the isotope Uranium 235.

Our nuclear fuel will be in a metallic form and will be enriched to higher levels, which will require modifications to existing commercial nuclear infrastructure and could impede commercialization of our technology.

Existing commercial nuclear infrastructure, including conversion facilities, enrichment facilities, fabrication facilities, fuel storage facilities, fuel handling procedures, fuel operation at reactor sites, used fuel storage facilities and shipping containers, were in most cases designed and are currently licensed to handle uranium in oxide form with enrichment up to 5% of the isotope Uranium 235.

Our fuel designs are expected to use uranium metal with uranium enrichment levels up to 19.75% and would therefore require certain modifications to existing commercial nuclear infrastructure to enable commercial nuclear facilities to handle our fuels.

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Our co-extrusion fabrication technology involves co-extrusion of a composite solid fuel rod from a metallic matrix containing uranium and zirconium alloy.

Fabrication of full-length (approximately 3.5 to 4.5 meters) PWR metallic fuel rods for large reactors and shorter length for SMRs has yet to be sufficiently demonstrated for our uranium-zirconium fuel.

There is a risk that the fuel fabrication process utilized to date to our metallic fuel rods may not be feasibly adapted to the fabrication of full-length metallic fuel rods usable in commercial reactors.

The cost of production of our fuel could be prohibitively expensive.

In order for our metallic fuel to succeed, we will need to be able to produce our fuel at a price that is economically viable.

We have received estimates that production of our fuel could be achieved at a commercial scale for approximately $5,000 to $10,000 per kilogram using known metallization/de-conversion technologies.

To bring the cost of production further down, we estimate that it would require a new government-funded research and development program that could take 15-20 years and cost several billion dollars.

There can be no assurance that we will be able to produce our fuel at a price that is economically feasible or that future research efforts will lower the cost of production.

If we are unable to produce our fuel at a price that is economically viable, the market for our fuel may never develop and our current business model will fail.

We serve the nuclear power industry, which is highly regulated.

Fabrication of full-length (approximately 12 to 14 feet) PWR metallic fuel rods for large reactors and shorter length for SMRs has yet to be sufficiently demonstrated for our uranium-zirconium fuel.

There is a risk that the fuel fabrication process utilized to date to produce our metallic fuel rods may not be feasibly adapted to the fabrication of full-length metallic fuel rods usable in commercial reactors.

The cost of production of our nuclear fuel could be prohibitively expensive.

In order for our metallic fuel to succeed, we will need to be able to produce our nuclear fuel at a price that is economically viable.

We have received estimates that production of our nuclear fuel could be achieved at a commercial scale for approximately $5,000 to $10,000 per kilogram using known metallization/de-conversion technologies.

To bring the cost of metallization/de-conversion further down, we estimate that it would require a new government-funded research and development program that could take 15-20 years or longer and cost several billion dollars.

There can be no assurance that we will be able to produce our nuclear fuel at a price that is economically feasible or that future research efforts will lower the cost of production.

If we are unable to produce our nuclear fuel at a price that is economically viable, the market for our nuclear fuel may never develop and our current business model will fail.

We are part of the nuclear power industry, which is highly regulated.

Our fuel designs differ from fuels currently licensed and used by commercial nuclear power plants.

The regulatory licensing and approval process for nuclear power plants to use our fuels may be delayed and made more costly, and industry acceptance of our fuels may be hampered.

The regulatory licensing and approval process for nuclear power plants to operate with our nuclear fuels may be delayed and made more costly, and industry acceptance of our nuclear fuels may be hampered.

The nuclear power industry is a highly regulated industry.

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These differences will likely result in more prolonged and extensive review by the US-NRC and its counterparts around the world that could cause fuel development program delays and delays in commercialization.

Entities within the nuclear industry may be hesitant to be the first to use our fuel, which has little or no history of successful commercial use.

Furthermore, our fuel development timeline relies on the relevant nuclear regulator to accept and approve technical information and documentation about our fuel that is generated during the research and development program.

Entities within the nuclear industry may be hesitant to be the first to use our nuclear fuel, which currently has no history of commercial use.

Furthermore, our fuel development timeline relies on the relevant nuclear regulator to accept and approve technical information and documentation about our nuclear fuel that is generated during the fuel qualification program.

There is a risk that regulators may require additional information regarding the fuel’s behavior or performance which necessitates additional, unplanned analytical and/or experimental work which could cause program schedule delays and require more research and development funding.

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Nuclear power faces strong opposition from certain competitive energy sources, individuals, and organizations.

The accident that occurred at the Fukushima nuclear power plant in Japan beginning on March 11, 2011 increased public opposition to nuclear power in some countries, resulting in a slowdown in, or, in some cases, a complete halt to new construction of nuclear power plants, an early shut down of existing power plants, or a dampening of the favorable regulatory climate needed to introduce new nuclear technologies.

In addition, the Fukushima accident appears to have shrunk the projected size of the global nuclear power market in 2025-2030 as reflected in the most recent reference case projections published by the World Nuclear Association.

The accident that occurred at the Fukushima nuclear power plant in Japan beginning on March 11, 2011 increased public opposition to nuclear power in some countries, resulting in a slowdown in or, in some cases, a complete halt to new construction of nuclear power plants, early shut down of existing power plants, or dampening of the favorable regulatory climate needed to introduce new nuclear technologies.

As a result of the Fukushima accident, some countries that were considering launching new domestic nuclear power programs have delayed or cancelled preparatory activities they were planning to undertake as part of such programs.

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In many countries, the licensing process includes public hearings in which opponents of the use of nuclear power might be able to cause the issuance of required licenses to be delayed or denied.

Our nuclear fuel fabrication process is dependent on outside suppliers of nuclear and other materials and any difficulty by a fuel fabricator in obtaining these materials could be detrimental to our ability to eventually market our fuel through a fuel fabricator.

Production of fuel assemblies using our nuclear fuel designs is dependent on the ability of fuel fabricators to obtain supplies of nuclear material utilized in our fuel assembly design.

Our proposed fuel products require HALEU in metallic form, enriched between 5% and 19.75% in the isotope uranium-235 (U-235), with presently no commercial supply of HALEU available in the U.S.

Our proposed nuclear fuel products require HALEU in metallic form, enriched between 5% and 19.75% in the isotope uranium-235, with presently no commercial supply of HALEU available in the U.S.

Currently HALEU can only be sourced in limited quantities from the DOE.

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Any difficulties in obtaining these materials by fuel fabricators could have a material adverse effect on their ability to market fuel based on our technology.

Labor shortages and supply chain disruptions could prevent us from meeting our R&D timelines and have a negative impact on our financial results.

Shipping delays exist worldwide, as there is much greater demand for shipping and reduced capacity due to the ongoing COVID-19 pandemic and related travel and health restrictions.

Additionally, certain material and equipment prices are expected to remain at historically high levels in 2022 due to inflationary cost pressures and global transportation complexities.

We may experience supply chain disruptions related to third-party vendors negatively impacted by the availability of qualified labor, restrictions on employees’ ability to work, facility closures, disruptions to ports and other shipping infrastructure, border closures and other travel or health-related restrictions.

These disruptions may impact our supply chain and delay the development of our nuclear fuel technology, which could negatively impact our financial results and our ability to execute timely on our R&D strategy, should they persist.

If the price of non-nuclear energy sources falls, whether as the result of government policy or otherwise, there could be an adverse impact on nuclear energy, which would have a material adverse effect on our operations.

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If prices of non-nuclear energy sources fall, it could limit the deployment of new build nuclear power plants in such markets.

This could reduce the size of the potential markets for our fuel technology.

This could reduce the size of the potential markets for our nuclear fuel technology.

In addition, the U.S.

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We may be adversely affected by uncertainty in the global financial markets and by a potential worldwide economic downturn caused by the COVID-19 outbreak or future pandemics.

Our future results may be adversely affected by the worldwide economic downturn, continued volatility or further deterioration in the debt and equity capital markets, inflation, deflation, or other adverse economic conditions that may negatively affect us.

At present, it is likely that we will require additional capital in the near future in order to fund our operations.

Due to the above listed factors, we cannot be certain that additional funding will be available on terms that are acceptable to us, or at all.

The recent outbreak of Covid-19 in the United States and globally has resulted in the United States and other countries halting or sharply curtailing the movement of people, goods and services.

All of this has caused extended shutdowns of businesses and the prolonged economic impact remains uncertain.

At this point, we have experienced and may continue to experience a reduction of our research and development expenses and an increase in our general and administrative expenses.

Other than such changes, we believe the conditions will have not a material adverse effect on our business, but given the rapidly changing developments we cannot accurately predict what effects these conditions will have on our financial position, results of operations and liquidity, including our research and development activities, which will depend on, among other factors, the ultimate geographic spread of the virus, the duration of the outbreak and travel restrictions and business closures imposed by the United States and various other governments.

Our future results may be adversely affected by the worldwide economic downturn resulting from the COVID-19 pandemic, continued volatility or further deterioration in the debt and equity capital markets, inflation, deflation, or other adverse economic conditions that may negatively affect us.

The outbreak of COVID-19 in the United States and globally resulted in the United States and other countries halting or sharply curtailing the movement of people, goods, and services.

These measures caused extended shutdowns of businesses and the prolonged economic impact remains uncertain.

We experienced and may continue to experience a reduction of our R&D expenses and an increase in our general and administrative expenses.

Other than such changes, we believe the conditions have not had a material adverse effect on our business, but given the rapidly changing developments, we cannot accurately predict what effects these conditions will have on our financial position, results of operations and liquidity, including our R&D activities, which will depend on, among other factors, the ultimate geographic spread of the virus and its variants, the duration of the outbreak and travel restrictions and business closures imposed by the United States and various other governments.

COVID-19 may have a material adverse effect on our ability to obtain financing, which is needed to generate sufficient cash flows to conduct our businesses activities in the future.

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Goldman or any of our management team would have an adverse effect on the Company.

Our success depends upon certain members of our senior management, including Seth Grae, our Chief Executive Officer, Mr.

Andrey Mushakov, our Executive Vice President - Nuclear Operations, and Larry Goldman, our Chief Financial Officer.

Grae’s and Mr.

Our success depends upon certain members of our senior management, including Seth Grae, our Chief Executive Officer, Andrey Mushakov, our Executive Vice President - Nuclear Operations, and Larry Goldman, our Chief Financial Officer.

Grae’s and Dr.

Mushakov’s knowledge of the nuclear power industry, their network of key contacts within that industry and in governments and, in particular, their expertise in the potential markets for our technologies, are critical to the implementation of our business model.

Mushakov, or Mr.

Mushakov, and Mr.

Goldman are likely to be significant factors in our future growth and success.

The loss of services by either Mr.

The loss of services by any of Mr.

Mushakov, or Mr.

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Competition for these skilled professionals is intense.

If we are unable to adequately anticipate our needs for certain key competences and implement human resource solutions to recruit or improve these competences, our business, results of operations and financial condition would suffer.

If we are unable to adequately anticipate our needs for certain key competencies and implement human resource solutions to recruit or improve these competencies, our business, results of operations and financial condition would suffer.

In addition, a loss of the service of any of our existing skilled employees or contractors could have a significant negative effect on our ability to operate.

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Other companies may develop new nuclear fuel designs that can be used in the same types of reactors as those that we target.

These nuclear fuel designs include, but are not limited to, the ATF currently being developed and tested by several U.S.

and international nuclear fuel suppliers, with the support of the DOE, which could undermine our fuel’s economic value proposition if ATF is proven to extend the operating cycle length from 18 to 24 months.

These nuclear fuel designs include, but are not limited to, the ATFs currently being developed and tested by several U.S.

and international nuclear fuel suppliers, with the support of the DOE, which could undermine our nuclear fuel’s economic value proposition if ATFs are proven to extend the operating cycle length from 18 to 24 months.

Some of these companies have existing long-term commercial contracts with nuclear power utilities that we do not have.

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Even if issued, patents may be challenged, narrowed, invalidated, or circumvented, which could limit our ability to stop competitors from marketing similar products or limit the length of term of patent protection we may have for our products.

Changes in either patent laws or in interpretations of patent laws in the United States and other countries may diminish the value of our intellectual property or narrow the scope of our patent protection, which could in turn adversely affect our business, financial condition, and results of operations.

Changes in patent laws or in interpretations of patent laws in the United States and other countries may diminish the value of our intellectual property or narrow the scope of our patent protection, which could in turn adversely affect our business, financial condition, and results of operations.

We intend to apply for additional patents for our nuclear fuel technologies as we deem appropriate.

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We also rely on trade secrets to protect some of our technology, especially where it is believed that patent protection is undesirable for the Company or unobtainable.

We generally require our employees, consultants, advisors, and collaborators to execute appropriate agreements with us recently regarding the safeguarding of confidential information.

We generally require our employees, consultants, advisors, and collaborators to execute appropriate agreements with us regarding the safeguarding of confidential information.

If any of these agreements are violated, or if any of our employees, consultants, advisors or collaborators unintentionally or willfully disclose our proprietary information to competitors, we may not be able to fully perfect our rights to the technologies in question, and in some instances, we may not have an appropriate remedy available for the damages that we may incur as a result of any such violation.

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Applicable Russian intellectual property law may be inadequate to protect some of our intellectual property, which could have a material adverse effect on our business.

Intellectual property rights are evolving in Russia, and are trending towards international norms, but are by no means fully developed.

Intellectual property rights are evolving in Russia, and are trending towards international norms, but are still developing.

We have worked closely with employees in Russia and other Russian contractors and entities to develop some of our material intellectual property.

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Our worldwide rights in some of this intellectual property, therefore, may be affected by Russian intellectual property laws.

If the application of Russian laws to some of our intellectual property rights proves inadequate, then we may not be able to fully avail ourselves of all of our intellectual property, and our business model may be impeded.

If the application of Russian laws to some of our intellectual property rights proves inadequate, or if the rights of foreign holders of intellectual property in Russia adversely change as a result of hostilities between Russia and other countries or otherwise, then we may not be able to fully avail ourselves of all of our intellectual property, and our business model may be impeded.

The laws of certain foreign jurisdictions do not protect intellectual property rights to the same extent as the laws of the United States, and many companies have encountered significant challenges in protecting and defending such rights in such foreign jurisdictions.

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we may be unable to secure such financing.

We believe that a variety of competing alternative technologies may be in development by other companies that could result in lower manufacturing costs and/or higher fuel performance than those expected for our fuel products.

A variety of competing alternative technologies may be in development by other companies that could result in lower manufacturing costs and/or higher fuel performance than those expected for our fuel products.

Our development efforts may be rendered obsolete by the technological advances of others, and other technologies may prove more advantageous for commercialization.

We may acquire other companies or technologies, which could divert our managements’ attention, result in dilution to our stockholders and otherwise disrupt our operations and adversely affect our operating results.

We may in the future seek to acquire or invest in businesses, applications and services or technologies that we believe could complement or expand our Company, enhance our technical capabilities or otherwise offer growth opportunities.

The pursuit of potential acquisitions may divert the attention of management and cause us to incur various expenses in identifying, investigating and pursuing suitable acquisitions, whether or not they are consummated.

If we acquire additional businesses, we may not be able to integrate the acquired personnel, operations and technologies successfully, or effectively manage the combined business following the acquisition.

We also may not achieve the anticipated benefits from the acquired business due to a number of factors, including:

inability to integrate or benefit from acquired technologies or services in a profitable manner;

unanticipated costs or liabilities associated with the acquisition;

difficulty integrating the accounting systems, operations and personnel of the acquired business;

diversion of management’s attention from other business concerns;

adverse effects to our existing business relationships with business partners as a result of the acquisition;

the potential loss of key employees;

use of resources that are needed in other parts of our business;

use of substantial portions of our available cash to consummate the acquisition.

In addition, a significant portion of the purchase price of companies we acquire may be allocated to acquired goodwill and other intangible assets, which must be assessed for impairment at least annually.

In the future, if our acquisitions do not yield expected returns, we may be required to take charges to our operating results based on this impairment assessment process, which could adversely affect our results of operations.

Acquisitions could also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect our operating results.

In addition, if an acquired business fails to meet our expectations, our operating results, business and financial position may suffer.

Risks Related to the Ownership of Our Common Stock

We have issued preferred stock with rights senior to our common stock.

Approximately 3.4 million shares of our Series A and Series B preferred stock were issued and outstanding at December 31, 2020.

We can issue additional shares of preferred stock in one or more series and can set the terms of the preferred stock without seeking any further approval from the holders of our common stock.

We may issue preferred stock with rights senior to our common stock.

We can issue preferred stock in one or more series and can set the terms of the preferred stock without seeking any further approval from the holders of our common stock.

Any preferred stock that we issue may rank ahead of our common stock in terms of dividend priority or liquidation premiums, may have greater voting rights than our common stock, and may have consent rights over certain fundamental transactions.

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The stock market may experience extreme volatility that is often unrelated to the performance of particular companies.

These market fluctuations may cause our stock price to fall regardless of its performance.

Our inability to comply with the listing requirements of the Nasdaq Capital Market will result in our common stock being delisted, which could affect its market price and liquidity and reduce our ability to raise capital.

These market fluctuations may cause our stock price to fall regardless of the Company’s performance.

If we are unable to comply with the listing requirements of the Nasdaq Capital Market, it would result in our common stock being delisted, which could affect its market price and liquidity and reduce our ability to raise capital.

If we fail to maintain compliance with, or otherwise fail to comply with, all applicable continued requirements, Nasdaq may determine to delist our common stock, which could substantially decrease trading in our common stock and adversely affect the market liquidity of our common stock and cause the market price of our common stock to decline.

In addition, our ability to raise additional capital, including through future at-the-market offerings and other offerings utilizing short-form registration statements on Form S-3, would be substantially impaired.

The issuance of additional stock in connection with financings, acquisitions, investments, our stock incentive plans or otherwise will dilute all other stockholders.

Our amended and restated certificate of incorporation authorizes the Company to issue up to 13,500,000 shares of common stock and up to 10,000,000 shares of preferred stock with such rights and preferences as may be determined by our board of directors.

Subject to compliance with applicable rules and regulations, we may seek to expand the number of authorized common shares, and issue shares of common stock or securities convertible into our common stock from time to time in connection with a financing, acquisition, investment, our stock incentive plans or otherwise.

Any such issuance could result in substantial dilution to our existing stockholders and cause the trading price of our common stock to decline.

Shareholder activism could cause us to incur significant expense, hinder execution of our business strategy and impact our stock price.

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Our stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any shareholder activism.

We have identified a material weakness in our internal control over financial reporting.

Management, including our Chief Executive Officer and our Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2020 and concluded that we did not maintain effective internal control over financial reporting.

Specifically, management identified a material weakness relating to the amortization of patent costs—see Part II.

Item 9A, Controls and Procedures , below.

While certain actions have been taken to implement a remediation plan to address this material weakness and to enhance our internal control over financial reporting, if this material weakness is not remediated, it could adversely affect our ability to report our financial condition and results of operations in a timely and accurate manner, which could negatively affect investor confidence in our Company, and, as a result, the value of our common stock could be adversely affected.

UNRESOLVED STAFF COMMENTS

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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