What changed in this filing

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Item 1A. Risk Factors

2023-03-30 compared with 2022-03-24 · 200 added, 143 removed, 241 unchanged (59% of the section changed)

RISK FACTORS.

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.

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 Report and in any other public statements we make may turn out

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 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 securities

could decline.

Additional 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.

We will require additional financing to continue

our operations, and there is substantial doubt regarding our ability to continue as a going concern.

As of December 31, 2022, we had

cash of $2,845,931.

Our existing cash on hand and anticipated revenues are sufficient to fund our remaining anticipated operating costs and capital expenditure

requirements only through May 2023.

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.

We have no current understanding or arrangement to obtain any additional

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.

In light of the foregoing,

there is substantial doubt our ability to continue as a going concern, and the report of our registered independent public accounting firm on our financial statements as of and for the year ended December 31, 2022 contains a going concern

qualification.

are not 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, 2021 and 2020 were

Our net loss applicable to common stockholders for the years ended December 31, 2022 and 2021 was

$8,749,304 and $7,488,172, respectively.

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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.

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.

We 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 prospective investors and others to evaluate our business.

face the risks normally associated with a new business.

face all of the risks inherent in a new business, including the expenses, difficulties, complications and delays frequently encountered

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.

face all of the risks inherent in a business based upon emerging technologies, including the expenses, difficulties, complications and delays frequently

encountered 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 expanding our

customer base, among others.

If we are not effective in addressing these risks, we will not be able to achieve profitability 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.

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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.

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.

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

Although we do have liability insurance,

Although we maintain liability insurance,

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

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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.

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.

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.

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

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 eleven years, and we expect to grow in the near future as our business develops

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

and becomes further established.

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

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.

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 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:

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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may choose to grow our business by acquiring other entities.

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

We may be unable to manage businesses that we acquire or to integrate

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

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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.

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 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 results.

Proprietary trade secrets and unpatented know-how

are also very important to our business;

however, trade secrets are difficult to protect.

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

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

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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 for indemnifying our officers and directors.

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

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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.

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.

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

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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.

The consequences of such loss, possible misuse of our proprietary and confidential information, or operational disruptions

could include, among other things, unfavorable publicity, damage to our reputation, difficulty marketing our products, customer allegations

of breach-of-contract, claims and litigation by affected parties, investigations by and other proceedings involving governmental authorities

and possible financial liabilities for damages, any of which could materially adversely affect our business, financial condition, reputation

and relationships with customers and partners.

We also rely on a number of third-party service providers to host, store or otherwise

process information for us, or to provide other facilities or infrastructure that we make use of, including “cloud-based”

providers of corporate infrastructure services relating to, among other things, human resources, electronic communication services and

some financial functions, and we are therefore dependent on the security systems of these providers.

Any security breaches or incidents

or other unauthorized access to, or disruptions of, our service-providers’ systems or viruses, loggers, ransomware or other malfeasant

code in their data or software, or unauthorized access to or acquisition of any data they process or otherwise maintain for us could

expose us to information loss, corruption and unavailability, operational disruptions, and misappropriation of confidential information,

and could have similar consequences to us as any incidents affecting our own systems or the data we process or maintain.

We and our third

parties face these threats from a variety of sources, including attacks from hackers, phishing and other forms of social engineering,

and human error or employee or contractor malfeasance.

Because the techniques used to obtain unauthorized access to or sabotage security

systems change frequently and are often not recognized until after an attack, we and our third-party service providers may be unable

to anticipate the techniques or implement adequate preventative measures, thereby exposing us to material adverse effects on our business,

financial condition, results of operations and growth prospects.

A security breach or other security incident impacting us or our third-party

service providers could require a substantial level of financial resources to rectify and otherwise respond to, may be difficult to identify

or address in a timely manner, and could result in claims, investigations, and inquires by private parties or governmental entities that

may divert management’s attention and require the expenditure of significant time and resources, and which may cause us to incur

substantial fines, penalties, or other liability and related legal and other costs.

Any actual or perceived security breach or other

security incident may also harm our reputation and market position.

Any of the foregoing matters could harm our operating results and

financial condition.

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 epidemic.

potential reemergence 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 on favorable terms or at all.

Related to Our Securities

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

for our stockholders.

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, 2022 and December 31, 2022, the trading price of our common stock has ranged from a low of $0.40 to a high of $2.42 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:

These 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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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.

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.

October 14, 2022, Nasdaq notified us that the closing bid price for our common stock had been below $1.00 per share for 30 consecutive

business days, and that the Company therefore is not in compliance with the minimum bid price requirement for continued inclusion on

The Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2).

The notice indicates that the Company has 180 calendar days, or until

April 12, 2023, to regain compliance with this requirement.

The Company can regain compliance with the $1.00 minimum bid price requirement

if the closing bid price of the Company’s common stock is at least $1.00 for a minimum of ten consecutive business days during

the 180-day compliance period.

If the Company does not regain compliance during the initial compliance period, the Company may be eligible

for additional time to regain compliance.

To qualify, the Company will be required to meet the continued listing requirement for market

value of its publicly held shares and all other Nasdaq initial listing standards, except the bid price requirement, and will need to

provide written notice to Nasdaq of the Company’s intention to cure the deficiency during the second compliance period by effecting

a reverse stock split, if necessary.

If the Company meets these requirements, we expect that Nasdaq will grant the Company the additional

180 calendar days to regain compliance with the minimum bid price requirement.

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.

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

order to raise additional capital, we may sell additional shares of our common stock or other securities convertible into

or exchangeable for our common stock.

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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.

intend to use our cash for the development of our products and services, and to pursue a possible strategic investment or other transaction.

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

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

outstanding warrants may result in further dilution to our stockholders.

of our outstanding warrants to purchase a total of up to approximately 898,806 shares of our common stock contain so-called

full-ratchet anti-dilution adjustments in the event we sell or issue shares of common stock or common stock equivalents at an

effective price less than the exercise price of such warrants, subject to certain exceptions.

Of these warrants, warrants with an

aggregate exercise price of $956,015 also provide for a ratable increase in the number of shares purchasable upon exercise of the

warrants in the event the exercise price per share of the warrants is reduced.

These anti-dilution adjustments resulted in a reduction in the exercise price of such warrants to $0.58 per share and an increase of 1,265,896 shares in the number of underlying warrant

shares due to the grant of stock options to our directors and officers in January 2023.

The anti-dilution adjustments of our outstanding

warrants would be triggered by future issuances of shares of our common stock at a price per share below the then-exercise price of

such warrants, which adjustments would have a further dilutive effect on our stockholders.

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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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 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.

As of December 31, 2022, we had

10,498,802 outstanding shares of common stock.

Future sales of a large number of our shares or shares issuable 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.

and Nasdaq reporting and corporate governance requirements.

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 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

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

Nasdaq corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002.

These rules and regulations

may 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.

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.

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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

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 Directors;

ability of our Board of Directors to alter our bylaws without obtaining stockholder approval;

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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.

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

What changed 10-K

Item 1A. Risk Factors