What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2023-03-30 compared with 2022-03-31 · 94 added, 74 removed, 244 unchanged (41% of the section changed)

7 unchanged sentences

Risks Related to Our Business

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 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.

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.

There can be no assurances as to the availability or terms upon which needed capital might be available to the Company.

These factors, among others, raise substantial doubt about our ability to continue as a going concern for the next twelve months.

If we are unable to meet our financial obligations, we could be forced to delay, reduce, or cease our operations, including substantially decrease or suspend our R&D activities, or otherwise impede our ongoing business efforts, which could have a material adverse effect on our business, operating results, financial condition, and long-term prospects, and, investors may lose their entire investment in the Company.

Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We will need to raise significant additional capital in the future to expand our operations and continue our R&D activities and we may be unable to raise such funds when needed on acceptable terms.

We will need to raise significant additional capital in the future to expand our operations and continue our R&D activities and we may be unable to raise such funds when needed on acceptable terms, or at all.

Any capital raises may cause significant dilution to our shareholders.

As of December 31, 2022, we had $28.9 million in cash and cash equivalents.

We have experienced substantial and recurring losses from operations, which has created an accumulated deficit of $144.5 million as of December 31, 2022.

We will continue to incur losses because we are in the early development stage of commercializing our nuclear fuel.

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.

2 unchanged sentences

Additional equity or debt financing, or other alternative sources of capital may not be available to us on acceptable terms, if at all.

If we are unable to meet our future financial obligations, we could be forced to delay, reduce, or cease our operations, including substantially decrease or suspend our R&D activities, or otherwise impede our ongoing business efforts, which could have a material adverse effect on our business, operating results, financial condition, and long-term prospects, and, investors may lose their entire investment in the Company.

In addition, if we are unable to demonstrate meaningful progress to further the development of our fuel products, it may be difficult for us to raise additional capital on terms acceptable to us or at all.

14 unchanged sentences

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.

Changes to, or termination of, any agreements with the U.S.

government national laboratories, or deterioration in our relationship with the U.S.

government, could adversely affect our research and development activities.

We are a party to agreements and arrangements with U.S.

national laboratories that are subject to review and approval by the DOE and which are important to our R&D activities.

Termination, expiration, or modification of one or more of these or other agreements could adversely affect our future prospects to develop our fuel and/or commercially deploy it.

In addition, deterioration in our relationship with the U.S.

national laboratories that are parties to these agreements and/or the DOE could impair or impede our ability to successfully implement these agreements, which could adversely affect our R&D activities.

Also, a COVID-19 outbreak, including the emergence and spread of variant strains of the virus or other pathogens, may affect future operations of the U.S.

national laboratories.

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

6 unchanged sentences

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

access to test loops;

access to test reactor loops and/or other test facilities;

competitive and technological advances;

7 unchanged sentences

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 nuclear fuel for large PWRs.

For example, if ATF 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 nuclear 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 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.

Additionally, we believe our metallic fuel can be used in CANDU heavy water reactors.

However, we have yet to conduct a feasibility study to confirm our fuel’s suitability for those types of reactors.

As a result, we do not yet have an economic model for CANDU-type reactors and are uncertain at this time as to potential economic benefits, if any, our metallic fuel could provide in those types of reactors.

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.

9 unchanged sentences

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 available, limiting how much fuel rod material that can be inserted into the reactor as well as its duration in the reactor.

While the ATR may have enough space for additional flow 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.

8 unchanged sentences

Our fuel designs are still in the research and development stage and, while certain testing on our fuel technologies has been completed, further testing and experiments will be required in order to achieve commercialization.

For example, our proposed metallic fuel uses a helical cruciform form to increase its surface area and shorten the distance for heat generated in the fuel rod to reach water, resulting in an improved ability to cool the fuel.

For example, our proposed metallic fuel uses a helical multi-lobe form to increase its surface area and shorten the distance for heat generated in the fuel rod to reach water, resulting in an improved ability to cool the fuel.

However, this proposed shape may also result in non-uniform distribution of heat flux that may have an adverse impact on the critical heat flux and limit power uprate capabilities of our metallic fuel.

2 unchanged sentences

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.

12 unchanged sentences

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 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.

Fabrication of full-length (approximately 12 to 14 feet) PWR metallic fuel rods for large reactors and shorter length for SMRs or CANDUs 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.

9 unchanged sentences

The nuclear power industry is a highly regulated industry.

All entities that operate nuclear facilities and transport nuclear materials are subject to the jurisdiction of the US-NRC or its counterparts around the world.

All entities that operate nuclear facilities and transport nuclear materials are subject to the jurisdiction of the NRC or its counterparts around the world.

Our fuel designs differ significantly in some aspects from the fuel used today by commercial nuclear power plants.

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.

These differences will likely result in more prolonged and extensive review by the 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 nuclear fuel, which currently has no history of commercial use.

5 unchanged sentences

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.

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 WNA.

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.

Furthermore, nuclear fuel fabrication and the use of new nuclear fuels in reactors must be licensed by the US-NRC and equivalent governmental authorities around the world.

Furthermore, nuclear fuel fabrication and the use of new nuclear fuels in reactors must be licensed by the NRC and equivalent governmental authorities around the world.

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.

7 unchanged sentences

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.

Shipping delays exist worldwide, as there is much greater demand for shipping and reduced capacity.

Additionally, certain material and equipment prices are expected to remain at historically high levels in 2023 due to inflationary cost pressures and global transportation complexities.

9 unchanged sentences

Additionally, the availability of subsidies and other incentives from utilities or government agencies to install alternative renewable energy sources may negatively impact our potential customers’ desire to purchase our products and services, or may be utilized by our existing or new competitors to develop a competing business model or products or services that may be potentially more attractive to customers than ours, any of which could have a material adverse effect on our results of operations or financial condition.

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 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.

We rely upon certain members of our senior management, including Seth Grae, Andrey Mushakov, and Larry Goldman and the loss of any of Mr.

Mushakov, or Mr.

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

We rely upon our senior management and other highly skilled personnel, and if we are not successful in retaining or attracting highly qualified personnel, we may not be able to successfully implement our business strategy.

Our success depends, in significant part, upon 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’s knowledge of the nuclear power industry, their networks 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 strategy.

Mushakov, and Mr.

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

Our success also depends on our ability to attract, motivate, develop, and retain a sufficient number of other highly skilled personnel, including consultants, managers, and nuclear engineers.

Competition for employees and consultants in the nuclear industry is intense, partially as a result of a recent resurgence in the nuclear industry after decades of relative decline, and we may not be successful in attracting and retaining such personnel.

For example, a senior nuclear engineer recently resigned from the Company and became a consultant to the Company.

The Company may be unsuccessful in finding a replacement for this senior nuclear engineer on comparable terms.

In addition, while we intend to partner with other entities in developing and commercializing our nuclear fuel technology, such other entities may also have difficulty in attracting and retaining nuclear engineers and other personnel and may not have adequate resources to dedicate to our joint projects.

The loss of services by any of Mr.

Mushakov, or Mr.

Goldman could have a material adverse effect on our business, results of operations or financial condition.

Also, we rely heavily on other members of our management team and our inability to hire, retain, and motivate adequate numbers of consultants and managers could adversely affect our ability to meet customer needs and to continue the development of our fuel designs.

Goldman, or the inability of us or our partners to retain or attract highly skilled personnel, could delay or suspend development and commercialization of our nuclear fuel technology, adversely affect our ability to meet customer needs, or increase our expenses, any of which could have a material adverse effect on our business, results of operations or financial condition.

Competition for highly qualified technical personnel is intense in our industry.

13 unchanged sentences

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.

and international nuclear fuel suppliers, some 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.

6 unchanged sentences

court agreed, the DOE could gain an ownership interest in such an invention outside of the Russian Federation and our intellectual property rights in that claimed invention could become compromised and our business model may then be significantly impeded.

If we are unable to obtain or maintain intellectual property rights and trade secrets relating to our technology, the commercial value of our technology may be adversely affected, which could in turn adversely affect our business, financial condition, and results of operations.

Our success and ability to compete depends in part upon our ability to obtain protection in the United States and other countries for our nuclear fuel designs by establishing and maintaining intellectual property rights relating to or incorporated into our fuel technologies and products.

We own a variety of patents and patent applications in the United States, as well as corresponding patents and patent applications in several other jurisdictions.

We have not obtained patent protection in each market in which we plan to compete.

We do not know how successful we would be should we choose to assert our patents against suspected infringers.

Our pending and future patent applications may not issue as patents or, if issued, may not issue in a form that will be advantageous to us.

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 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.

We may, however, fail to apply for patents on important technologies or products in a timely fashion, if at all.

Our existing patents and any future patents we obtain may not be sufficiently broad to prevent others from practicing our technologies or from developing competing products and technologies.

In addition, in general the patent positions of energy technology companies are highly uncertain and involve complex legal and factual questions for which important legal principles remain unresolved.

As a result, the validity and enforceability of our patents cannot be predicted with certainty.

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 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.

Enforcement of claims that a third party has illegally obtained and is using trade secrets is expensive, time consuming and uncertain.

In addition, non-U.S.

courts are sometimes less willing than U.S.

courts to protect trade secrets.

If our competitors independently develop equivalent knowledge, methods, and know-how, we would not be able to assert our trade secrets against them and our business could be harmed.

If we infringe or are alleged to infringe intellectual property rights of third parties, our business, financial condition, and results of operations could be adversely affected.

13 unchanged sentences

Patent litigation and other proceedings may also absorb significant management time.

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 still developing.

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

Some of our earlier intellectual property rights originate from our patent filings in Russia.

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, 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.

The legal systems of certain countries, particularly developing countries, do not favor the enforcement of patents and other intellectual property protection, which could make it difficult for us to stop the infringement of our patents.

Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our business.

We are exposed to risks related to cybersecurity and protection of confidential information.

37 unchanged sentences

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

We own a variety of patents and patent applications in the United States, as well as corresponding patents and patent applications in several other jurisdictions.

We have not obtained patent protection in each market in which we plan to compete.

We do not know how successful we would be should we choose to assert our patents against suspected infringers.

Our pending and future patent applications may not issue as patents or, if issued, may not issue in a form that will be advantageous to us.

Additionally, sanctions or other restrictions on payments made to Russia imposed by the United States government in response to Russia’s invasion of Ukraine may make it more difficult for us to maintain patent protection in certain foreign jurisdictions.

Certain of our patents are maintained by the Eurasian Patent Office and the Russian patent office, Rospatent.

Each of the Eurasian Patent Office and Rospatent use the Russian Central Bank to process patent annuity payments.

Office of Foreign Assets Control (OFAC) has identified the Russian Central Bank as a sanctioned entity.

Paying a Russian firm or agent to make payments that will be processed by the Russian Central Bank could be deemed an act of evading or avoiding sanctions.

On May 5, 2022, OFAC published General License 31, which created an exemption to such sanctions for payments made to maintain intellectual property rights.

However, there can be no assurance that this exemption will be made permanent, and if it is rescinded, we may be unable to make the required annuity or other maintenance payments with respect to our Russian and Eurasian patents.

If we are unable to make the required annuity or other maintenance payments, there can be no assurance that our Russian and Eurasian patents will continue to receive adequate protection in the applicable jurisdictions, which could have a material adverse effect on our patent portfolio.

Further, in response to the sanctions imposed by OFAC, the Russian government issued a decree in March 2022 stating that patent holders associated with foreign states that commit “unfriendly actions against Russian legal entities and individuals” will be entitled to no renumeration from the unsanctioned use of such patent holders’ intellectual property.

While the impact of this decree has yet to be determined, it may significantly undermine intellectual property protection in Russia.

Because of this significant uncertainty with respect to the treatment of foreign owned patents maintained in Russia, there can be no assurance that we will be able to maintain adequate protection of our Russian patents.

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

We may, however, fail to apply for patents on important technologies or products in a timely fashion, if at all.

Our existing patents and any future patents we obtain may not be sufficiently broad to prevent others from practicing our technologies or from developing competing products and technologies.

As a result, the validity and enforceability of our patents cannot be predicted with certainty.

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 regarding the safeguarding of confidential information.

Enforcement of claims that a third party has illegally obtained and is using trade secrets is expensive, time consuming and uncertain.

In addition, courts outside the U.S.

are sometimes less willing than U.S.

courts to protect trade secrets.

If our competitors independently develop equivalent knowledge, methods, and know-how, we would not be able to assert our trade secrets against them and our business could be harmed.

Applicable Russian intellectual property law may not protect some of our intellectual property, which could have a material adverse effect on our business.

Intellectual property rights have been 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.

Some of our earlier intellectual property rights originate from our patent filings in Russia.

Our worldwide rights in some of this intellectual property, therefore, may be affected by Russian intellectual property laws, including laws adopted in response to international sanctions against Russia or otherwise.

In particular, in response to the sanctions imposed by OFAC as a result of Russia’s invasion of Ukraine, the Russian government issued a decree in March 2022 stating that patent holders associated with foreign states that commit “unfriendly actions against Russian legal entities and individuals” will be entitled to no renumeration from the unsanctioned use of such patent holders’ intellectual property.

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, we may not be able to fully avail ourselves of all of our intellectual property, and our business model may be impeded.

Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our business.

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, 2022 and concluded that we did not maintain effective internal control over financial reporting.

Specifically, management identified a material weakness relating to recording accounts payable invoices.

Item 9A, Controls and Procedures, below for additional information about the material weakness.

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.

Risks Related to the Ownership of Our Common Stock

22 unchanged sentences

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

Our ability to utilize our net operating loss carryforwards to offset future taxable income will be limited.

Our ability to fully utilize our existing net operating losses (NOLs) generated after the tax year 2017 will be limited and the use of our NOLs generated prior to the 2018 tax year are severely limited, due to ownership changes in prior years as defined under Section 382 of the Internal Revenue Code.

An “ownership change” is generally defined as a greater than 50% change in equity ownership by value over a rolling three-year period.

Future NOLs generated will be limited if (i) we undergo an “ownership change” as described under Section 382, (ii) we do not reach profitability or are only marginally profitable, or (iii) there are changes in U.S.

government laws and regulations.

We did not perform a complete Section 382 study to determine the limitation on prior year NOLs, due to the long timeline for developing our nuclear fuel to commercialization to generate taxable income.

Further, based on the results of our phase I Section 382 study, it’s likely our NOLs generated prior to the 2018 tax year will expire unused given the 20-year carry forward period for these NOLs.

Future ownership changes, some of which may be beyond our control, as well as differences and fluctuations in the value of our equity securities may adversely affect our ability to utilize our current and future NOLs and could reduce our flexibility to raise capital in future equity financings or other transactions, or we may decide to pursue transactions even if they would result in an ownership change and impair our ability to use our NOLs.

We also may decide to pursue transactions even if they would result in an ownership change and impair our ability to use our NOLs.

In addition, any changes to tax rules and regulations or the interpretation of tax rules and regulations could negatively impact our ability to recognize any potential benefits from our NOLs or net unrealized built-in losses.

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

10 unchanged sentences

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