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Item 1A. Risk Factors

2022-03-24 compared with 2021-03-24 · 283 added, 335 removed, 101 unchanged (86% of the section changed)

RISK FACTORS.

in our securities involves a high degree of risk.

Our business is subject to numerous risks.

We caution you that the following

important factors, among others, could cause our actual results to differ materially from those expressed in statements made by

us or on our behalf in filings with the SEC, press releases or communications with investors and others.

Any or all of our statements

in this annual report and in any other public statements we make may turn out to be wrong.

They can be affected by inaccurate

assumptions or by known or unknown risks and uncertainties.

The factors mentioned in the discussion below will be important in

determining future results.

Consequently, actual future results may vary materially from those anticipated in this annual report

or our other public statements.

You should carefully consider the risks described below, as well as the other information in this

annual report, including our financial statements and the related notes and “Management’s Discussion and Analysis

of Financial Condition and Results of Operations,”

before deciding whether to invest in our securities.

The occurrence of

any of the events or developments described below could harm our financial condition, results of operations, business and prospects.

In such an event, the market price of our securities could decline, and you could lose all or part of your investment.

risks and uncertainties not presently known to us or that we currently deem immaterial also may have similar adverse effects on

Our business is subject to numerous

We caution you that the following important factors, among others, could cause our actual results to differ materially from those

expressed in statements made by us or on our behalf in filings with the SEC, press releases or communications with investors and others.

Any or all of our statements in this annual report and in any other public statements we make may turn out to be wrong.

They can be affected

by inaccurate assumptions or by known or unknown risks and uncertainties.

The factors mentioned in the discussion below will be important

in determining future results.

Consequently, actual future results may vary materially from those anticipated in this annual report or

our other public statements.

The occurrence of any of the events or developments described below could harm our financial condition,

results of operations, business and prospects.

In such an event, the market price of our common stock could decline.

risks and uncertainties not presently known to us or that we currently deem immaterial also may have similar adverse effects on us.

Related to Our Business

are not currently profitable and may never become profitable.

have incurred losses in every reporting period since we commenced business operations in 2010 and expect to continue to incur

significant losses for the foreseeable future.

Our net loss applicable to common stockholders for the years ended December

31, 2020 and 2019 were $7,009,414, and $6,320,849, respectively.

have incurred losses in every reporting period since we commenced business operations in 2010 and expect to continue to incur significant

losses for the foreseeable future.

Our net loss applicable to common stockholders for the years ended December 31, 2021 and 2020 were

$7,488,172 and $7,009,414, respectively.

As of December 31, 2021, our accumulated deficit was $40,593,180.

There is no assurance that any revenues we generate will be sufficient for us to become profitable or to maintain profitability.

Our revenues for the years ended December 31, 2020 and December 31, 2019 were $807,488 and $402,446, respectively, and our operating

expenses for those periods were $5,914,299 and $6,211,830, respectively.

Our current revenues are not sufficient to fund

our operations.

We cannot predict when, if ever, we might achieve profitability and we are not certain that we will be able to

sustain profitability, if achieved.

If we fail to achieve or maintain profitability, the market price of our securities is likely

to be adversely affected.

There is no assurance that

any revenues we generate will be sufficient for us to become profitable or to maintain profitability.

Our revenues for the years ended

December 31, 2021 and December 31, 2020 were $1,651,765 and $807,488, respectively, and our operating expenses for those periods were

$9,571,185 and $5,914,299, respectively.

Our current revenues are not sufficient to fund our operations.

We cannot predict when, if ever,

we might achieve profitability and we are not certain that we will be able to sustain profitability, if achieved.

If we fail to achieve

or maintain profitability, the market price of our securities is likely to be adversely affected.

will require additional financing to continue our operations, and there is no assurance that we will be able to obtain such financing

on acceptable terms, or at all.

January 2021, we completed a public offering of shares of our Common Stock resulting in net cash proceeds to us

of approximately $4,532,444.

We will need to raise additional amounts to fund our operations, maintain compliance with

the NASDAQ listing requirements and implement our business plan.

There is no assurance as to the amount and availability of any

required future financing or the terms thereof.

Such financing, if in the form of equity, may be highly dilutive to our existing

stockholders and may otherwise include onerous terms.

If in the form of debt, such financing may include covenants and repayment

obligations which may be difficult to meet and that could adversely affect our business operations.

There is also significant

uncertainty from the affect that the novel coronavirus may have on the availability and type of financing.

To the extent that

funds are not available to us, we may be required to delay, limit or terminate our business operations and lose our NASDAQ listing.

As of December 31, 2021, we

had cash of $11,447,047.

We will need to raise additional financings to fund our operations, maintain compliance with the

NASDAQ listing requirements and implement our business plan.

There is no assurance as to the amount and availability of any required

future financing or the terms thereof.

Such financing, if in the form of equity, may be highly dilutive to our existing stockholders

and may otherwise include onerous terms.

If in the form of debt, such financing may include covenants and repayment obligations which

may be difficult to meet and that could adversely affect our business operations.

To the extent that funds are not available to us, we

may be required to delay, limit or terminate our business operations and may lose our NASDAQ listing.

operating history makes evaluation of our business difficult.

are continuing to develop our technologies and to implement our business plan.

Our ability to implement a successful business

plan remains unproven, and there is no assurance that we will ever generate sufficient revenues to sustain our business.

Our operating

history, together with the other risks discussed in this “Risk Factors”

section, may make it difficult for you to

evaluate our business in connection with making a decision about whether to invest in our securities.

Our ability to implement a successful business plan remains

unproven, and there is no assurance that we will ever generate sufficient revenues to sustain our business.

Our operating history, together

with the other risks discussed in this “Risk Factors” section, may make it difficult for you to evaluate our business in

connection with making a decision about whether to invest in our securities.

face the risks normally associated with a new business.

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in connection with conducting new operations and efforts to develop and commercialize technologies.

These uncertainties include

developing our technologies and our brand name, raising capital to meet our working capital requirements and developing a customer

base, among others.

If we are not effective in addressing these risks, we will not be able to operate profitably in the future,

and we may not have adequate working capital to meet our obligations as they become due.

These uncertainties include developing

our technologies and our brand name, raising capital to meet our working capital requirements and developing a customer base, among others.

If we are not effective in addressing these risks, we will not be able to operate profitably in the future, and we may not have adequate

working capital to meet our obligations as they become due.

business may be adversely affected by a global economic downturn.

economic downturn generally could cause a drop in government spending and business investment, which could have a material adverse

effect on our business.

Further, as a result of the current global economic situation, there may be a disruption or delay in performance

by our third-party contractors and suppliers.

If such third parties are unable to adequately satisfy their contractual commitments

to us in a timely manner, our business could be adversely affected.

economic downturn generally could cause a drop in government spending and business investment, which could have a material adverse effect

on our business.

Further, as a result of the current global economic and geopolitical situation, there may be a disruption or

delay in performance by our third-party contractors and suppliers.

If such third parties are unable to adequately satisfy their contractual

commitments to us in a timely manner, our business could be adversely affected.

could incur significant damages if we are unable to adequately discharge our contractual obligations.

failure to comply with contract requirements or to meet our clients’

performance expectations on a contract could materially

and adversely affect our financial performance and our reputation.

This, in turn, would impact our ability to compete for new

clients and contracts.

Our failure to meet contractual obligations could also result in substantial actual and consequential damages

under the terms of such contracts.

In addition, some of our contracts require us to indemnify clients for our failure to meet

performance standards and/or contain liquidated damages provisions and financial penalties related to performance failures.

we do have liability insurance, the policy limits may not be adequate to provide protection against all such potential liabilities.

of our clients may terminate our contracts prior to completion, which could result in revenue shortfalls and reduce profitability

or cause losses on contracts.

small number of our contracts with clients contain initial or base periods of one or more years, as well as option periods typically

covering more than one-half of the contract’s initial duration.

However, such clients are under no obligation to exercise

the option to extend the contract term.

The profitability of some of our contracts could be adversely impacted if such options

are not exercised and the contract term is not extended accordingly.

Additionally, our contracts contain provisions permitting

a client to terminate the contract on short notice, with or without cause.

The unexpected termination of significant contracts

could result in significant revenue shortfalls.

If revenue shortfalls occur and are not offset by corresponding reductions in

expenses, our business could be adversely affected.

We cannot anticipate if, when or to what extent a client might terminate its

contracts with us.

failure to comply with contract requirements or to meet our clients’ performance expectations on a contract could materially and

adversely affect our financial performance and our reputation.

This, in turn, would impact our ability to compete for new clients and

Our failure to meet contractual obligations could also result in substantial actual and consequential damages under the terms

of such contracts.

In addition, some of our contracts require us to indemnify clients for our failure to meet performance standards and/or

contain liquidated damages provisions and financial penalties related to performance failures.

Although we do have liability insurance,

the policy limits may not be adequate to provide protection against all such potential liabilities.

of our clients may terminate our contracts prior to completion, which could result in revenue shortfalls and reduce profitability or

cause losses on contracts.

contracts with clients contain initial or base periods of one or more years, as well as option periods typically covering more than one-half

of the contract’s initial duration.

However, such clients are under no obligation to exercise the option to extend the contract

The profitability of some of our contracts could be adversely impacted if such options are not exercised and the contract term

is not extended accordingly.

Additionally, our contracts contain provisions permitting a client to terminate the contract on short notice,

with or without cause.

The unexpected termination of significant contracts could result in significant revenue shortfalls.

shortfalls occur and are not offset by corresponding reductions in expenses, our business could be adversely affected.

We cannot anticipate

if, when or to what extent a client might terminate its contracts with us.

may not be able to effectively control and manage our growth, which would negatively impact our operations.

have operated our current line of business for approximately ten years, and we expect to grow in the near future as our

business develops and becomes further established.

If our business grows as we anticipate, it will be necessary for us

to manage our expansion in an orderly fashion.

Any significant growth in our activities or in the market for our services will

require extension of our managerial, operational, marketing and other resources.

Future growth will also impose significant additional

responsibilities upon the members of management to identify, recruit, maintain, integrate, and motivate new employees.

to manage growth effectively may lead to operational inefficiencies that will have a negative effect on our profitability.

Additionally,

if our growth comes at the expense of providing quality service and generating reasonable profits, our ability to successfully

bid for contracts and our profitability will be adversely affected.

We cannot assure investors that we will be able to effectively

manage any future growth we may experience.

have operated our current line of business for approximately eleven years, and we expect to grow in the near future as our business develops

and becomes further established.

If our business grows as we anticipate, it will be necessary for us to manage our expansion in an orderly

Any significant growth in our activities or in the market for our services will require extension of our managerial, operational,

marketing and other resources.

Future growth will also impose significant additional responsibilities upon the members of management

to identify, recruit, maintain, integrate, and motivate new employees.

Our failure to manage growth effectively may lead to operational

inefficiencies that will have a negative effect on our profitability.

Additionally, if our growth comes at the expense of providing quality

service and generating reasonable profits, our ability to successfully bid for contracts and our profitability will be adversely affected.

We cannot assure investors that we will be able to effectively manage any future growth we may experience.

to obtain adequate insurance coverage could put us at risk for uninsured losses.

or all of our customers may require insurance as a requirement to conduct business with us.

we currently have liability insurance, we may be unable to obtain or maintain adequate liability insurance on acceptable terms,

if at all, and there is a risk that our insurance will not provide adequate coverage against our potential losses.

we currently have product liability insurance, we may be unable to obtain or maintain adequate liability insurance on acceptable

terms, if at all, and there is a risk that our insurance will not provide adequate coverage against our potential losses.

Additionally,

there are certain types of losses that may not be insurable at a cost that we can afford, and insurance may not be available at

any cost with respect to certain losses.

Claims or losses in excess of any insurance coverage we may obtain, or the lack of insurance

coverage, could put us at risk of loss for any uninsured loss, which would have a material adverse effect on our business and

financial condition.

are dependent on our President and Chief Executive Officer and other key personnel, and the loss of any of these individuals could

harm our business.

depend on Mark Ruport, our President and Chief Executive Officer, as well as key scientific and other personnel.

The loss of any

of these individuals could harm our business and significantly delay or prevent the achievement of our business objectives.

addition, our delivery of services will be labor-intensive:

when we are awarded a contract, we may need to quickly hire project

leaders and project management personnel.

The additional staff may also create a concurrent demand for increased administrative

The success of our business will require that we attract, develop, motivate and retain:

there are certain types of losses that may not be insurable at a cost that we can afford, and insurance may not be available at any cost

with respect to certain losses.

Claims or losses in excess of any insurance coverage we may obtain, or the lack of insurance coverage,

could put us at risk of loss for any uninsured loss, which would have a material adverse effect on our business and financial condition.

are dependent on key personnel, and the loss of any of these individuals could harm our business.

depend on key scientific and other personnel.

The loss of any of these individuals

could harm our business and significantly delay or prevent the achievement of our business objectives.

In addition, our delivery of services

will be labor-intensive:

when we are awarded a contract, we may need to quickly hire project leaders and project management personnel.

The additional staff may also create a concurrent demand for increased administrative personnel.

The success of our business will require

that we attract, develop, motivate and retain:

and innovative executive officers;

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experienced and technically proficient individuals are in great demand and are likely to remain a limited resource.

unable to continue to attract and retain desirable executive officers, senior managers, and technology professionals.

Our inability

to hire sufficient personnel on a timely basis or the loss of significant numbers of executive officers and senior managers could

adversely affect our business.

We may be unable

to continue to attract and retain desirable executive officers, senior managers, and technology professionals.

Our inability to hire

sufficient personnel on a timely basis or the loss of significant numbers of executive officers and senior managers could adversely affect

our business.

may be dependent on cash flow and payments from customers in order to meet our expense obligations.

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progression of contracts;

rate of customer adoption of our new subscription pricing program;

commencement, completion or termination of contracts during any particular quarter;

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term of awarded contracts and potential acquisitions.

in the volume of activity and the number of contracts commenced, completed or terminated during any quarter may cause significant

variations in our cash flow from operations because a significant portion of our expenses are fixed.

Fixed expenses include, rent,

payroll, insurance, employee benefits, taxes and other administrative costs and overhead.

Moreover, we expect to incur significant

operating expenses during the start-up and early stages of large contracts and typically do not receive corresponding payments

in that same quarter.

in the volume of activity and the number of contracts commenced, completed or terminated during any quarter may cause significant variations

in our cash flow from operations because a significant portion of our expenses are fixed.

Fixed expenses include, rent, payroll, insurance,

employee benefits, taxes and other administrative costs and overhead.

Moreover, we expect to incur significant operating expenses during

the start-up and early stages of large contracts and typically do not receive corresponding payments in that same quarter.

may make acquisitions in the future that we are unable to effectively manage given our limited resources.

may choose to grow our business by acquiring other entities.

We may be unable to manage businesses that we have acquired or to

integrate them successfully without incurring substantial expenses, delays or other problems that could negatively impact our

results of operations.

We may be unable to manage businesses that we have acquired or to integrate

them successfully without incurring substantial expenses, delays or other problems that could negatively impact our results of operations.

Moreover, business combinations involve additional risks, including:

of management’s attention;

of key personnel;

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to existing stockholders and our earnings per share.

client dissatisfaction or performance problems with an acquired firm could materially and adversely affect our reputation as a

client dissatisfaction or performance problems with an acquired firm could materially and adversely affect our reputation as a whole.

Further, the acquired businesses may not achieve the revenues and earnings that we anticipated.

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of our activities involve developing products or processes that are based upon new, rapidly evolving technologies.

to commercialize or further develop these technologies could fail for a variety of reasons, both within and outside of our control.

The ability to commercialize

or further develop these technologies could fail for a variety of reasons, both within and outside of our control.

may be unable to protect our intellectual property rights.

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To do so, we will be required

to prosecute patent applications and maintain patents, obtain new patents and pursue trade secret and other intellectual property

We filed forty-four foreign and U.S.

patent applications pertaining to our IPQA®

technology and rapid qualification

of additive manufacturing for metal parts.

We have been awarded thirteen U.S.

patents and one foreign patent.

the efforts we have taken to protect our proprietary rights may not be sufficient or effective.

There can be no assurance that

our program for protection of intellectual property and proprietary technology will be sufficient to protect our intellectual

property and proprietary technology from competitors.

Our business is also subject to the risk that our issued patents will not

provide us with significant competitive advantages if, for example, a competitor was to independently develop or obtain similar

or superior technologies.

In addition, our issued patents may be challenged or infringed upon by third parties.

The enforcement

of intellectual property rights is subject to considerable uncertainty and can be expensive and time-consuming.

Patent reform

laws and court decisions interpreting such laws, may create additional uncertainty around our ability to obtain and enforce patent

Any significant impairment of our intellectual property rights could harm our business and our ability to compete.

The unauthorized use of our intellectual property could make it more expensive to do business and harm our operating results.

to prosecute patent applications and maintain patents, obtain new patents and pursue trade secret and other intellectual property protection.

There can be no assurance that our program for protection of intellectual property

and proprietary technology will be sufficient to protect our intellectual property and proprietary technology from competitors.

is also subject to the risk that our issued patents will not provide us with significant competitive advantages if, for example, a competitor

was to independently develop or obtain similar or superior technologies.

In addition, our issued patents may be challenged or infringed

upon by third parties.

The enforcement of intellectual property rights is subject to considerable uncertainty and can be expensive and

time-consuming.

Patent reform laws and court decisions interpreting such laws, may create additional uncertainty around our ability to

obtain and enforce patent protection.

Any significant impairment of our intellectual property rights could harm our business and our

ability to compete.

The unauthorized use of our intellectual property could make it more expensive to do business and harm our operating

Proprietary trade secrets and unpatented know-how are also very important to our business;

however, trade secrets are difficult

Our employees, consultants, contractors, outside scientific collaborators and other advisors may unintentionally or

willfully disclose our confidential information to competitors, and confidentiality agreements may not provide an adequate remedy

in the event of unauthorized disclosure of confidential or proprietary information.

Our employees, consultants, contractors, outside scientific collaborators and other advisors may unintentionally or willfully

disclose our confidential information to competitors, and confidentiality agreements may not provide an adequate remedy in the event

of unauthorized disclosure of confidential or proprietary information.

may be sued by third parties who claim that we have infringed their intellectual property rights.

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the trade secrets of others.

Any litigation or claims against us, whether or not valid, could result in substantial costs, and

could place a significant strain on our financial and human resources.

In addition, if successful, such claims could cause us

to pay substantial damages.

Furthermore, because of the substantial amount of discovery required in connection with intellectual

property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this

type of litigation.

Any litigation or claims against us, whether or not valid, could result in substantial costs, and could

place a significant strain on our financial and human resources.

In addition, if successful, such claims could cause us to pay substantial

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there

is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.

bylaws contain provisions indemnifying our officers and directors against all costs, charges, and expenses incurred by them.

bylaws contain provisions with respect to the indemnification of our officers and directors against all costs, charges

and expenses actually and reasonably incurred by an officer or director paid to settle an action or satisfy a judgment in a civil,

criminal or administrative action or proceeding to which he is made a party by reason of being or having been one of our directors

To the extent that our directors’

and officers’

insurance policy does not provide reimbursement for such

costs, charges, expenses and other amounts, we may incur substantial expenses in satisfying our indemnification obligations.

bylaws contain provisions with respect to the indemnification of our officers and directors against all costs, charges and expenses actually

and reasonably incurred by an officer or director paid to settle an action or satisfy a judgment in a civil, criminal or administrative

action or proceeding to which he or she is made a party by reason of being or having been one of our directors or officers.

the extent that our directors’ and officers’ insurance policy does not provide reimbursement for such costs, charges, expenses

and other amounts, we may incur substantial expenses in satisfying our indemnification obligations.

operating costs could be significantly higher than we expect, and this could reduce our future profitability.

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have become increasingly dependent on digital technologies to conduct day-to-day operations.

At the same time, cyber incidents,

including deliberate attacks or unintentional events, have increased.

A cyber-attack could include gaining unauthorized access

to digital systems for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption

or result in denial of service on websites.

We depend on digital technology, including information systems and related infrastructure,

to process and record financial and operating data, and communicate with our employees and business partners.

Our technologies,

systems, networks, and those of our business partners may become the target of cyber-attacks or information security breaches

that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of proprietary and other information,

or other disruption of our business operations.

Although to-date we have not experienced any losses relating to cyber-attacks,

there is no assurance that we will not suffer such losses in the future.

As cyber threats continue to evolve, we may be required

to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate

any information security vulnerabilities.

results of operations may be negatively impacted by the coronavirus outbreak.

outbreak of the novel coronavirus (COVID-19) has evolved into a global pandemic.

The extent to which the coronavirus impacts our

business and operating results will depend on future developments that are highly uncertain and cannot be accurately predicted,

including new information that may emerge concerning the coronavirus and the actions that contain the coronavirus or treat its

impact, among others.

spread of the coronavirus, which has caused a broad impact globally, including restrictions on travel and quarantine policies

put in place by businesses and governments, may have a material economic effect on our business.

To-date, the outbreak has not

had a material adverse impact on our operations, though we have experienced delays in certain customer purchase orders.

the Company believes that such purchase orders will ultimately be realized, it is impossible to predict the timing.

future impact of the outbreak is highly uncertain and cannot be predicted and there is no assurance that the outbreak will not

have a material adverse impact on the future results of the Company.

Additionally, the coronavirus has already caused, and is

likely to result in further, significant disruption of global financial markets, which may reduce our ability to access capital

either at all or on favorable terms.

At the same time, cyber incidents, including

deliberate attacks or unintentional events, have increased.

A cyber-attack could include gaining unauthorized access to digital systems

for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption or result in denial

of service on websites.

We depend on digital technology, including information systems and related infrastructure, to process and record

financial and operating data, and communicate with our employees and business partners.

Our technologies, systems, networks, and those

of our business partners may become the target of cyber-attacks or information security breaches that could result in the unauthorized

release, gathering, monitoring, misuse, loss or destruction of proprietary and other information, or other disruption of our business

Although to-date we have not experienced any losses relating to cyber-attacks, there is no assurance that we will not suffer

such losses in the future.

As cyber threats continue to evolve, we may be required to expend significant additional resources to continue

to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities.

results of operations may be negatively impacted by the COVID-19 pandemic.

spread of the coronavirus, which has caused a broad impact globally, including restrictions on travel and quarantine policies put in

place by businesses and governments, may have a material economic effect on our business.

Additionally, the coronavirus may result in disruption of financial

markets, which may reduce our ability to access capital either at all or on favorable terms.

Related to Our Securities

price of our securities could be subject to volatility related or unrelated to our operations, which could result in substantial

losses for our stockholders.

January 1, 2020 and December 31, 2020, the trading price of our common stock has ranged from a low of $2.02 to a high of $10.30

and could be subject to wide fluctuations in the future in response to various factors, some of which are beyond our control.

The trading price of the warrants that we issued in our 2017 public offering could be subject to similar fluctuations as

a result of such factors.

These factors include those discussed previously in this “Risk Factors”

section and others,

price of our securities is subject to volatility related or unrelated to our operations, which could result in substantial losses

for our stockholders.

January 1, 2021 and December 31, 2021, the trading price of our common stock has ranged from a low of $1.77 to a high of $7.64 and could

be subject to wide fluctuations in the future in response to various factors, some of which are beyond our control.

factors include those discussed previously in this “Risk Factors” section and others, such as:

or failures in the commercialization of our current or future products and services;

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announcements

by us or our competitors of new products and services, significant contracts, commercial relationships, acquisitions or capital

by us or our competitors of new products and services, significant contracts, commercial relationships, acquisitions or capital commitments;

developments with respect to our intellectual property rights;

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economic conditions in the United States and abroad.

addition, the stock market, in general, may experience broad market fluctuations, which may adversely affect the market price

or liquidity of our securities.

addition, the stock market, in general, may experience broad market fluctuations, which may adversely affect the market price or liquidity

of our securities.

could be subject to securities class action litigation.

sudden decline in the market price of our securities could trigger securities class action lawsuits against us.

If any of our

stockholders were to bring such a lawsuit against us, we could incur substantial costs defending the lawsuit and the time and

attention of our management would be diverted from our business and operations.

We also could be subject to damages claims if

we are found to be at fault in connection with a decline in our market price of our securities.

If any of our stockholders

were to bring such a lawsuit against us, we could incur substantial costs defending the lawsuit and the time and attention of our management

would be diverted from our business and operations.

We also could be subject to damages claims if we are found to be at fault in connection

with a decline in our market price of our securities.

Historically,

there has been a limited trading market in our common stock,

and you may therefore have difficulty selling your securities at a price that you determine is satisfactory.

there has been a limited trading market in our common stock, and you may therefore have difficulty selling your securities at a price

that you determine is satisfactory.

common stock is listed on The Nasdaq Capital Market.

Historically, there has been a limited trading market for our common stock.

There is no assurance that our common stock will actively trade in the public market at or above a price that you consider acceptable.

If an active market for our common stock is not maintained, it may be difficult for you to sell your shares of common stock when

you wish to sell them or at a price that you consider satisfactory.

An inactive trading market may also impair our ability to

raise capital to continue to fund operations by selling securities and may impair our ability to acquire other companies or technologies

by using our securities as consideration.

is no assurance that our common stock will actively trade in the public market at or above a price that you consider acceptable.

active market for our common stock is not maintained, it may be difficult for you to sell your shares of common stock when you wish to

sell them or at a price that you consider satisfactory.

An inactive trading market may also impair our ability to raise capital to continue

to fund operations by selling securities and may impair our ability to acquire other companies or technologies by using our securities

as consideration.

is no assurance that we will satisfy the continued listing requirements of The NASDAQ Capital Market.

cannot assure you that we will be able to continue to satisfy the continued listing requirements of The Nasdaq Capital Market.

For example, there is no assurance that we will be able to satisfy all of the quantitative continued listing requirements, including

the minimum stockholders’

equity requirement of at least $2,500,000 for continued listing on The Nasdaq Capital Market,

there is no assurance that our common stock will continue to have a bid price of at least $1.00 per share, which is the minimum bid

price under such continued listing requirements, or that we will be able to satisfy other quantitative continued listing requirements,

including the minimum stockholders’ equity requirement of at least $2,500,000 for continued listing on The Nasdaq Capital Market,

which we have previously failed to satisfy.

If we fail to satisfy a Nasdaq requirement for continued listing, Nasdaq could provide

notice that our common stock will become subject to delisting.

In such event, Nasdaq rules would permit us to appeal the decision

to reject our proposed compliance plan or any delisting determination to a Nasdaq Hearings Panel.

If our securities are de-listed

from The Nasdaq Capital Market, our stockholders could incur material adverse consequences such as reduced liquidity for their

securities and reduced market prices for their securities.

Following such de-listing, we could encounter increased difficulty

in issuing additional securities at an attractive price, or at all, in order to fund our operations.

If we fail to satisfy a Nasdaq requirement for continued listing, Nasdaq could provide notice

that our common stock will become subject to delisting.

In such event, Nasdaq rules would permit us to appeal the decision to reject

our proposed compliance plan or any delisting determination to a Nasdaq Hearings Panel.

If our securities are de-listed from The Nasdaq

Capital Market, our stockholders could incur material adverse consequences such as reduced liquidity for their securities and reduced

market prices for their securities.

Following such de-listing, we could encounter increased difficulty in issuing additional securities

at an attractive price, or at all, in order to fund our operations.

may experience additional dilution as a result of future equity offerings.

order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible

into or exchangeable for our common stock.

The price per share at which we sell additional shares of our common stock, or securities

convertible or exchangeable into common stock, in future transactions may be lower than the price per share that you paid for

our common stock.

have broad discretion in the use of the net proceeds of our recent public offering and may not use them effectively.

order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible into

or exchangeable for our common stock.

The price per share at which we sell additional shares of our common stock, or securities convertible

or exchangeable into common stock, in future transactions may be lower than the price per share that you paid for our common stock.

have broad discretion in the use of the net proceeds of our securities offerings and may not use them effectively.

intend to use our cash for the development of our products and services.

Our management has broad discretion in the use of cash

and will have the right to use our cash in ways that differ substantially from our current plans.

Management may spend our cash

in ways that do not improve our results of operations or enhance the value of our securities.

The failure by management to apply

funds effectively could result in financial losses that could have a material and adverse effect on our business and cause the

market price of our securities to decline.

Our management has broad discretion in the use of cash and will

have the right to use our cash in ways that differ substantially from our current plans.

Management may spend our cash in ways that do

not improve our results of operations or enhance the value of our securities.

The failure by management to apply funds effectively could

result in financial losses that could have a material and adverse effect on our business and cause the market price of our securities

do not intend to pay dividends on our common stock, and your ability to achieve a return on your investment will depend on appreciation

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currently intend to invest our future earnings, if any, to fund our growth and not to pay any cash dividends on our common stock.

Since we do not intend to pay dividends, your ability to receive a return on your investment will depend on any future appreciation

in the market price of our securities.

we do not intend to pay dividends, your ability to receive a return on your investment will depend on any future appreciation in the

market price of our securities.

There is no assurance that our securities will appreciate in price.

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us or our securities, the market price of our securities and their trading volume could decline.

we do not obtain and maintain research coverage by securities and industry analysts, the market price for our securities may be

adversely affected.

The market price of our securities also may decline if any analyst who covers us issues an adverse or erroneous

opinion regarding us, our business model, our intellectual property or our performance.

If one or more analysts cease coverage

of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the market

price of our securities and their trading volume to decline and possibly adversely affect our ability to engage in future financings.

we do not obtain and maintain research coverage by securities and industry analysts, the market price for our securities may be adversely

The market price of our securities also may decline if any analyst who covers us issues an adverse or erroneous opinion regarding

us, our business model, our intellectual property or our performance.

If one or more analysts cease coverage of us or fail to regularly

publish reports on us, we could lose visibility in the financial markets, which could cause the market price of our securities and their

trading volume to decline and possibly adversely affect our ability to engage in future financings.

of a substantial number of shares of our common stock in the public market could cause our stock price to fall.

of a substantial number of shares of our common stock in the public market could occur at any time.

These sales, or the perception

in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common

As of December 31, 2020, we had 5,995,320 outstanding shares of common stock.

On January 12, 2021, we closed a public

offering in which we issued an additional 1,711,783 shares of our common stock.

Sales of a large number of the shares such

as described in the preceding sentence or upon exercise of our outstanding warrants and stock options, or the perception

that a large number of shares may be sold, could have a material adverse effect on the trading price of our common stock.

These sales, or the perception in

the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock.

of December 31, 2021, we had 10,498,802 outstanding shares of common stock.

Future sales of a large number of our shares or upon exercise

of our outstanding warrants and stock options, or the perception that a large number of shares may be sold, could have a material adverse

effect on the trading price of our common stock.

will incur significant costs to ensure compliance with U.S.

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incur significant costs associated with our public company reporting requirements and with applicable U.S.

and Nasdaq corporate

governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the SEC and

These applicable rules and regulations also make it more difficult and more expensive for us to obtain director

and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher

costs to obtain the same or similar coverage.

As a result, it may be difficult for us to attract and retain qualified individuals

to serve on our board of directors or as executive officers.

and Nasdaq corporate governance

requirements, including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the SEC and Nasdaq.

These applicable

rules and regulations also make it more difficult and more expensive for us to obtain director and officer liability insurance and we

may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.

As a result, it may be difficult for us to attract and retain qualified individuals to serve on our board of directors or as executive

we fail to maintain effective internal control over financial reporting, the market price of our securities may be adversely affected.

a public reporting company, we are required to establish and maintain effective internal control over financial reporting.

to establish such internal control, or any failure of such internal control once established, could adversely impact our public

disclosures regarding our business, financial condition or results of operations.

Any failure of our internal control over financial

reporting could also prevent us from maintaining accurate accounting records and discovering accounting errors and financial frauds.

adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 require annual assessment of our internal control

over financial reporting.

The standards that must be met for management to assess the internal control over financial reporting

as effective are complex, and require significant documentation, testing and possible remediation to meet the detailed standards.

We may encounter problems or delays in completing activities necessary to make an assessment of our internal control over financial

If we cannot assess our internal control over financial reporting as effective, investor confidence and share value

may be negatively impacted.

In addition, management’s assessment of internal control over financial reporting may identify

weaknesses and conditions that need to be addressed in our internal control over financial reporting or other matters that may

raise concerns for investors.

Any actual or perceived weaknesses and conditions that need to be addressed in our internal control

over financial reporting (including those weaknesses identified in our periodic reports), or disclosure of management’s

assessment of our internal control over financial reporting may have an adverse impact on the price of our securities.

in our articles of incorporation and bylaws could discourage a takeover that stockholders may consider favorable and may lead

to entrenchment of management.

articles of incorporation and bylaws contain provisions that could delay or prevent changes in control or changes in our management

without the consent of our board of directors.

establish such internal control, or any failure of such internal control once established, could adversely impact our public disclosures

regarding our business, financial condition or results of operations.

Any failure of our internal control over financial reporting could

also prevent us from maintaining accurate accounting records and discovering accounting errors and financial frauds.

adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 require annual assessment of our internal control over financial

The standards that must be met for management to assess the internal control over financial reporting as effective are complex,

and require significant documentation, testing and possible remediation to meet the detailed standards.

We may encounter problems or

delays in completing activities necessary to make an assessment of our internal control over financial reporting.

If we cannot assess

our internal control over financial reporting as effective, investor confidence and share value may be negatively impacted.

management’s assessment of internal control over financial reporting may identify weaknesses and conditions that need to be addressed

in our internal control over financial reporting or other matters that may raise concerns for investors.

Any actual or perceived weaknesses

and conditions that need to be addressed in our internal control over financial reporting (including those weaknesses identified in our

periodic reports), or disclosure of management’s assessment of our internal control over financial reporting may have an adverse

impact on the price of our securities.

in our articles of incorporation and bylaws could discourage a takeover that stockholders may consider favorable and may lead to entrenchment

of management.

articles of incorporation and bylaws contain provisions that could delay or prevent changes in control or changes in our management without

the consent of our board of directors.

These provisions include the following:

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exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors

or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board

of directors;

ability of our board of directors to authorize the issuance of additional shares of preferred stock and to determine the terms

of those shares, including preferences and voting rights, without stockholder approval, which could adversely affect the rights

of our common stockholders or be used to deter a possible acquisition of our company;

or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of

ability of our board of directors to authorize the issuance of additional shares of preferred stock and to determine the terms of

those shares, including preferences and voting rights, without stockholder approval, which could adversely affect the rights of our

common stockholders or be used to deter a possible acquisition of our company;

ability of our board of directors to alter our bylaws without obtaining stockholder approval;

required approval of the holders of at least two-thirds of the shares entitled to vote at an election of directors to adopt,

amend or repeal our bylaws or repeal the provisions of our articles of incorporation and bylaws regarding the election and

removal of directors;

prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special

meeting of our stockholders;

requirement that a special meeting of stockholders may be called only by the chairman of the board of directors, the chief

executive officer, the president (in the absence of a chief executive officer) or the board of directors, which may

delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;

notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose

matters to be acted upon at a stockholders’

meeting, which may discourage or deter a potential acquirer from conducting

a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of

ability of our directors to issue one or more series of preferred stock with dividend, liquidation, conversion, voting or

other rights which would dilute the interest of or impair the voting power of our common stockholders.

required approval of the holders of at least two-thirds of the shares entitled to vote at an election of directors to adopt, amend

or repeal our bylaws or repeal the provisions of our articles of incorporation and bylaws regarding the election and removal of directors;

prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting

of our stockholders;

requirement that a special meeting of stockholders may be called only by the chairman of the board of directors, the chief executive

officer, the president (in the absence of a chief executive officer) or the board of directors, which may delay the ability of our

stockholders to force consideration of a proposal or to take action, including the removal of directors;

notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters

to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation

of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.

ability of our directors to issue one or more series of preferred stock with dividend, liquidation, conversion, voting or other rights

which would dilute the interest of or impair the voting power of our common stockholders.

provisions could inhibit or prevent possible transactions that some stockholders may consider attractive.

3 unchanged sentences

stock offerings without further action by our stockholders.

If we issue preferred stock, it could affect your rights or reduce

the value of our outstanding common stock.

In particular, specific rights granted to future holders of preferred stock may include

voting rights, preferences as to dividends and liquidation, conversion, and redemption rights, sinking fund provisions, and restrictions

on our ability to merge with or sell our assets to a third party.

As of December 31, 2020, 715 shares of our preferred stock are

outstanding, consisting of 382 shares of Series D Preferred Stock and 333 shares of Series E Preferred Stock.

addition to the possible negative effect on the market price of our common shares resulting from the public sale or perceived

sale of common shares issuable upon conversion or exercise of these securities, the Certificate of Designations for the Series

D Preferred Stock provides that upon occurrence of certain triggering events described in the Certificate, including but not limited

to, payment defaults, breaches of the transaction documents pertaining to the Series D Preferred Stock and failure to maintain

listing on the NASDAQ Capital Market, the Series D Preferred Shares would become subject to redemption, at the option of the holder,

at a 125% premium to the underlying value of the Series D Shares being redeemed.

If we issue preferred stock, it could affect your rights or reduce the value

of our outstanding common stock.

In particular, specific rights granted to future holders of preferred stock may include voting rights,

preferences as to dividends and liquidation, conversion, and redemption rights, sinking fund provisions, and restrictions on our ability

to merge with or sell our assets to a third party.

As of December 31, 2021, 465 shares of our preferred stock are outstanding, consisting

of 132 shares of Series D Preferred Stock and 333 shares of Series E Preferred Stock.

In addition to the possible negative effect on

the market price of our common shares resulting from the public sale or perceived sale of common shares issuable upon conversion or exercise

of these securities, the Certificate of Designations for the Series D Preferred Stock provides that upon occurrence of certain triggering

events described in the Certificate, including but not limited to, payment defaults, breaches of the transaction documents pertaining

to the Series D Preferred Stock and failure to maintain listing on the NASDAQ Capital Market, the Series D Preferred Shares would become

subject to redemption, at the option of the holder, at a 125% premium to the underlying value of the Series D Shares being redeemed.

UNRESOLVED STAFF COMMENTS.

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