What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2025-03-03 compared with 2024-03-04 · 84 added, 57 removed, 281 unchanged (33% of the section changed)

9 unchanged sentences

Any capital raises may cause significant dilution to our shareholders.

As of December 31, 2023, we had $28.6 million in cash and cash equivalents.

As of December 31, 2024, we had approximately $40.0 million in cash and cash equivalents.

We have experienced substantial and recurring losses from operations, which has created an accumulated deficit of $164.2 million as of December 31, 2024.

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.

We will need to raise significant additional capital (up to several hundred million dollars in total over the next 10-15 years) in order to continue our R&D activities and fund our operations through the commercialization of our nuclear fuel.

R&D costs may exceed our budget estimates, leading to financial strain and suspending our R&D activities.

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

3 unchanged sentences

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.

When we raise additional funds by issuing equity securities, our stockholders will experience dilution.

When we raise additional funds by issuing equity securities, including using our at-the-market (ATM) facility, our stockholders will experience dilution.

Sales of substantial amounts of our common stock may cause the trading price of our common stock to decline in the future.

11 unchanged sentences

government policies resulting from various political developments.

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.

If political support for the prioritization of the development of nuclear energy decreases, including due to policy changes by current or 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.

3 unchanged sentences

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.

Termination, expiration, or modification of one or more of these agreements or their agreements with others 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.

16 unchanged sentences

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.

Although our preliminary economic model concludes that our nuclear fuel technology may provide economic benefits to utilities by enabling power uprates, 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 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.

For example, if ATF is successful in extending the cycle length from 18 to 24 months and/or enabling significant power uprates in existing PWRs, this 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 up to 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 complete our 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.

While the initial feasibility study indicates the potential for Lightbridge Fuel™ to double the burnup in CANDU reactors, 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.

We may not achieve the expected benefits from our collaboration agreement with Centrus Energy Corp.

On December 7, 2023, we announced the Company's entry into a collaboration agreement with Centrus Energy Corp.

to engage in a front-end engineering and design (FEED) study to add a dedicated Lightbridge Pilot Fuel Fabrication Facility (LPFFF) at the American Centrifuge site in Piketon, Ohio.

The FEED study is intended to identify infrastructure and licensing requirements as well as the estimated cost and deployment schedule for the LPFFF.

Centrus Energy’s wholly-owned subsidiary, American Centrifuge Operating, LLC, will lead the study, which is expected to be completed in 2024.

The American Centrifuge Plant is currently the only place in the world to produce HALEU in UF6 form outside of Russia.

There can be no guarantee that the FEED study will return results that confirm the feasibility of a LPFFF and may indicate that the infrastructure and licensing requirements or the estimated cost or timelines to deploy the LPFFF would be overly onerous, too lengthy or prohibitively expensive to proceed with the deployment of the LPFFF.

If the FEED study indicates that the LPFFF cannot be completed at the American Centrifuge Plant on terms acceptable to us, it may delay our anticipated timeline for the commercialization of our fuel, which would adversely affect our business, financial condition, and results of operations.

Development of our nuclear fuel technology is dependent upon the availability of a test reactor.

Development of our nuclear fuel technology is dependent upon the availability of a test reactor and access to adequate resources and manufacturing capabilities at national laboratories.

Our fuel designs are still in the research and development stage and further research, development, and demonstration will be required in test facilities.

8 unchanged sentences

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 sufficient capacity within the ATR is not available, we may not be able to obtain sufficient data to justify regulatory approval for LTA demonstration in a large commercial PWR in a commercially feasible timeframe.

If sufficient capacity within the ATR is not available on a timely basis, we may not be able to obtain sufficient data to justify regulatory approval for LTA demonstration in a large commercial PWR in a commercially feasible timeframe.

This would likely necessitate additional loop irradiation testing in another test reactor or LTR demonstration in a large commercial PWR in addition to the ATR loop testing before LTA demonstration could commence.

3 unchanged sentences

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.

Furthermore, we currently rely on existing manufacturing equipment and capabilities at INL to demonstrate our co-extrusion fabrication process using depleted uranium and zirconium alloy and to eventually manufacture samples using enriched uranium and zirconium alloy for irradiation testing in a test reactor environment.

INL has indicated to the Company that due to resource and manufacturing equipment constraints, it may not be able to meet the Company’s preferred project timeline.

Based on the actual costs and project performance to date, we believe that the total project cost will likely exceed the previously anticipated budgets.

Our fuel designs have never been tested in an existing commercial reactor and actual fuel performance, as well as the willingness of commercial reactor operators and fuel fabricators to adopt a new design, is uncertain.

6 unchanged sentences

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

Utility companies and reactor operators may hesitate to adopt unproven fuel types due to operational or safety concerns.

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.

Safety concerns or incidents during testing, transportation, or use could damage the company’s reputation and lead to liability claims.

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 and/or cost overruns.

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.

Unforeseen engineering difficulties may arise during manufacturing or scaling production.

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

2 unchanged sentences

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.

Existing commercial nuclear infrastructure, including conversion facilities, enrichment facilities, de-conversion 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.

1 unchanged sentence

There is significant risk that some relevant entities within the nuclear power industry may be slow in making any required facility infrastructure modifications or obtaining required licenses or approvals to enable enrichment to 19.75%, de-conversion to metallic uranium, fabrication of metallic fuel rods and assemblies, shipment of fresh and irradiated metallic fuel assemblies, interim storage of fresh and irradiated fuel assemblies in spent fuel pools or dry cask storage facilities at reactor sites, or permanent disposal of spent metallic fuel at a high-level repository, or may not make the necessary modifications at all.

Disposal or recycling of our spent fuel may face scrutiny, requiring additional safeguards.

There is also a risk associated with possible negative perception of uranium enrichment greater than 5% that could potentially delay or hinder regulatory approval of our nuclear fuel designs.

9 unchanged sentences

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.

In October 2024, DOE launched a HALEU program whereby DOE is funding production of 250 metric tons of HALEU in both oxide and metallic forms in the United States over the next 10 years to facilitate establishment of a U.S.

supply chain for HALEU.

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.

4 unchanged sentences

The nuclear power industry is a highly regulated industry.

Evolving regulations may impose additional compliance costs or require design modifications.

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.

Extensive testing and performance demonstration may delay approvals or reveal deficiencies.

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.

10 unchanged sentences

Upon commercialization, a reduction or elimination of customer contracts or future customer contracts resulting from lower public support, less raw materials, lower demand, increased regulation, and increased costs could adversely affect our business model and future prospects.

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 nuclear 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 nuclear fuel fabrication process is dependent on outside suppliers of nuclear and other materials and any difficulty by us and/or a future fuel fabricator partner in obtaining these materials could be detrimental to our ability to eventually market our nuclear fuel either directly or through a future fuel fabricator partner.

Production of Lightbridge Fuel™ rods and/or fuel assemblies is dependent on the ability of the Company and/or our future fuel fabricator partners to obtain supplies of nuclear material utilized in our fuel assembly design.

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.

Fabricators will also need to obtain metal for components, particularly zirconium or its alloys.

The Company and/or our future fabricator partners will also need to obtain metal for components, particularly zirconium or its alloys.

These materials are regulated and can be difficult to obtain or may have unfavorable pricing terms.

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.

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

We rely on a limited number of suppliers for HALEU or other key source materials and/or key components and/or key equipment necessary for the development and fabrication of our nuclear fuel, which could, under certain circumstances, adversely delay our research and development activities.

30 unchanged sentences

Potential competitors could limit opportunities to license our technology.

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

Other companies may develop new nuclear fuel designs for use in the same types of reactors that we target.

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, 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.

If another company were to successfully develop a new nuclear fuel that competes with our nuclear fuel design technology, opportunities to commercialize our technology would be limited, and our business would suffer.

and international nuclear fuel suppliers (some with the support of the DOE).

Such competitor ATF designs could undermine our nuclear fuel’s economic value proposition if they extend the operating cycle length beyond 18 months.

Recently, the Nuclear Regulatory Commission (NRC) approved an increase in the burnup limit for a different manufacturer’s ATFs design, which could eventually allow that design to achieve a cycle length beyond 18 months.

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

If another company were to successfully develop a new nuclear fuel that competes with our nuclear fuel design technology, opportunities to commercialize our technology might be more limited, and our business would suffer.

Moreover, many of these other companies have substantially greater financial, technological, managerial and research and development resources and experience than we do.

These larger companies may be better able to handle the corresponding long-term financial requirements to successfully develop new nuclear fuel and bring it to market.

Industry groups have proposed initiatives that seek to relax existing licensing constraints, which could potentially result in conventional uranium dioxide and/or ATFs designs achieving additional cycle length extensions and/or extended power uprates in operating light water reactors.

Such initiatives, if approved by the NRC, could limit the competitive advantages and market opportunities for Lightbridge Fuel™.

Competitors may also challenge our patents, leading to costly litigation or loss of exclusivity.

If the DOE were to successfully assert that an invention claimed within our 2007 or 2008 Patent Cooperation Treaty, or PCT, patent applications was first conceived or actually reduced to practice under a contract with the DOE, then our intellectual property rights in that invention could become compromised and our business model could become significantly impeded.

17 unchanged sentences

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

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

The occurrence of cybersecurity incidents, or a deficiency in our cybersecurity or the cybersecurity of our service providers, could negatively impact our business by causing disruptions to our operations, a compromise or corruption of our confidential information, regulatory enforcement and other legal proceedings, and/or damage to our business, all of which could negatively impact our financial results.

We retain highly confidential information in our systems and databases on third-party network providers.

Although we maintain security features in our systems designed to protect proprietary information and prevent data loss and other security breaches, such measures cannot provide absolute security and our operations may be susceptible to breaches on our third-party networks, including from circumvention of security systems, denial of service attacks or other cyber-attacks, hacking, computer viruses or malware, technical malfunction, employee error, malfeasance, physical breaches, system disruptions or other disruptions.

Although we maintain security features in our systems designed to protect proprietary information and prevent data loss and other cybersecurity incidents,, such measures cannot provide absolute security and our operations may be susceptible to incidents affecting our third-party networks, including from circumvention of security systems, denial of service attacks or ransomware, hacking, computer viruses or malware, technical malfunction, employee error or noncompliance, malfeasance, physical breaches, or system disruptions.

Evolving technologies, such as the use of artificial intelligence, also pose new threats to cybersecurity.

We outsource certain functions, including IT functions, and these relationships allow for the storage and processing of our information, as well as customer, counterparty, and employee information.

While we engage in actions to reduce our exposure resulting from outsourcing, ongoing threats may result in unauthorized access, loss, exposure or destruction of data, or other cybersecurity incidents, with increased costs and other consequences, including those described below.

The third-parties with which we outsource certain of our IT functions utilize a variety of systems and cybersecurity capabilities, and such third-parties may not be successful in preventing a breach that exploits a weakness in their cybersecurity systems.

In some cases, we may not be aware of cyber incidents immediately as we rely on such third-parties to inform us of a cyber incident that could affect our information contained in their systems.

Disruptions from cybersecurity events may jeopardize the security of information, trade secrets, or confidential data stored in and transmitted through our systems or the systems of outsourcing parties.

An increasing number of websites, including those owned by several other large internet and offline companies, have disclosed breaches of their security, some of which have involved sophisticated and highly targeted attacks on portions of their websites or infrastructure.

The techniques used to obtain unauthorized access, disable, or degrade service, or sabotage systems, change frequently, may be difficult to detect for a long time, and often are not recognized until launched against a target.

Certain efforts may be state sponsored and supported by significant financial and technological resources and therefore may be even more difficult to detect.

The third-parties with which we outsource certain of our IT functions utilize a variety of systems and cybersecurity capabilities, and such third-parties may not be successful in preventing a cybersecurity incident that exploits a weakness in their cybersecurity systems.

In some cases, we may not be aware of cybersecurity incidents immediately as we rely on such third-parties to inform us of a cybersecurity incident that could affect our information contained in their systems.

Cybersecurity incidents may jeopardize the security, trade secrets, confidential data, or other information stored in and transmitted through our systems or the systems of third parties.

In addition, cybersecurity incidents may cause extended disruptions to operations and thus could impact our ability to develop products and conduct research and development.

Certain efforts may be nation-state sponsored and supported by significant financial and technological resources and therefore may be even more difficult to detect.

We, or the third-parties with whom we contract, may not anticipate these techniques or implement adequate preventive measures.

We currently expend and may be required to expend significant additional capital and other resources to protect against such security breaches or to alleviate problems caused by such breaches.

Our insurance coverage may be inadequate to compensate us for any related losses we incur and, in some cases, our insurance coverage may not cover the cyber incident at all.

We currently expend and may be required to further expend significant additional capital and other resources to protect against or respond to cybersecurity incidents.

Our insurance coverage may be inadequate to compensate us for any related losses we incur and, in some cases, our insurance coverage may not cover the cybersecurity incident at all.

These issues are likely to become more difficult as we expand our operations.

Any breach of our security measures, or even a perceived breach of our security measures, could cause us to lose potential customers, government contracts and governmental approvals;

Any breach of our security measures, or even a perceived breach of our security measures, could cause us to lose potential customers, investors, government contracts and governmental approvals;

suffer material harm to our business, financial condition, operating results, and reputation;

11 unchanged sentences

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;

the effect of any potential acquisition on our financial and strategic positions and our reputation;

the inability to successfully integrate or benefit from acquired technologies or services;

risk that we are unable to obtain the anticipated benefits of any potential acquisition, including synergies or economies of scale;

any unanticipated costs or liabilities associated with the acquisition;

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

the 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.

the potential loss of key employees and challenges in assimilating and training new employees;

the potential failure of the due diligence processes to identify significant problems, liabilities or other shortcomings or challenges of an acquired company or assets, which could result in unexpected litigation, regulatory exposure, financial contingencies, and known and unknown liabilities;

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

the 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.

Large or costly acquisitions or investments may also diminish our capital resources and liquidity or limit our ability to engage in additional transactions for a period of time.

We may require significant financing to complete an acquisition or investment through bank loans, raising of debt, issuance of equity securities or the incurrence of debt.

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.

We cannot be assured that such financing options will be available to us on reasonable terms, or at all.

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

The foregoing risks may be magnified as the cost, size or complexity of a potential acquisition or acquired company increases, or where the acquired company’s market or business are materially different from ours, or where more than one integration is occurring simultaneously or within a concentrated period of time.

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.

47 unchanged sentences

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 (CFO), assessed the effectiveness of our internal control over financial reporting as of December 31, 2023 and concluded that we did not maintain effective internal control over financial reporting.

Material weaknesses in our internal control over financial reporting may be identified, which could adversely affect our ability to provide accurate and timely financial statements and harm investor confidence.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting.

Internal controls are designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles (GAAP).

However, internal controls have inherent limitations and may not prevent or detect misstatements, errors, or fraud.

Failure to address identified weaknesses effectively and in a timely manner could result in:

non-compliance with Section 404 of the Sarbanes-Oxley Act of 2002;

delays in filing our periodic reports with the SEC;

potential enforcement actions or penalties.

As reported on the Annual Report on Form 10-K for the year ended December 31, 2023, we previously identified a material weakness in our internal control over financial reporting and may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements of our financial statements or cause us to fail to meet our periodic reporting obligations.

Specifically, management identified a material weakness related to the design of our controls over logical access and segregation of duties, at the application control level, in certain information technology environments.

We previously identified a material weakness in our internal control over financial reporting and may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements of our financial statements or cause us to fail to meet our periodic reporting obligations.

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.

The Company’s management, under the oversight of the Audit Committee, took measures and remediated these deficiencies.

Management, including our Chief Executive Officer (CEO) and our Chief Financial Officer (CFO), assessed the effectiveness of our internal control over financial reporting as of December 31, 2024 and concluded that we remediated the material weakness in our internal control over financial reporting from the prior year.

Controls and Procedures in this Annual Report on Form 10-K for additional information about the material weakness.

Risks Related to the Ownership of Our Common Stock

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 25,000,000 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.

The Company currently has a limited number of authorized common shares available for future issuance.

As of February 27, 2025, we had 3.1 million authorized but unissued common stock shares, excluding an additional 1.1 million shares reserved under the 2020 omnibus incentive equity plan.

The board of directors has approved an increase in the Company’s authorized common stock from 25,000,000 shares to 100,000,000 shares and this issue will be voted on by the Company’s stockholders at the next stockholders annual meeting, which is expected to occur in June 2025.

If the increase in the authorized number of shares is not approved by the Company’s stockholders, the Company may not have the ability to raise capital funds that may be necessary to further develop its core business, to finance working capital requirements, to have shares available for use in connection with its stock option plans, and to pursue other corporate purposes that may be identified by the board of directors.

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

14 unchanged sentences

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

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

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 and may also expire.

14 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