−Removed: Risk Factors.
−Removed: An investment in our securities involves a high degree of risk.
−Removed: You should consider carefully all of the risks described below, together with the other information contained in this Annual Report, the prospectus associated with our Initial Public Offering and the registration statement of which such prospectus forms a part before making a decision to invest in our securities.
−Removed: If any of the following events occur, our business, financial condition and operating results may be materially adversely affected.
−Removed: In that event, the trading price of our securities could decline, and you could lose all or part of your investment.
−Removed: Summary of Risk Factors
−Removed: Our business is subject to numerous risks and uncertainties.
−Removed: These risks include, but are not limited to, risks associated with:
−Removed: ● our ability to complete our initial business combination, including risks arising from the uncertainty resulting from concerns about the U.S.
−Removed: budget deficit, the debt ceiling and the credit rating of the United States, the conflict between Russia and Ukraine, the conflict between Israel and Hamas and related volatility in the financial markets;
−Removed: ● our public shareholders’ ability to exercise redemption rights;
−Removed: ● the requirement that we complete our initial business combination within the completion window;
−Removed: ● the possibility that NYSE may delist our securities from trading on its exchange;
−Removed: federal excise tax in connection with redemptions of our Class A common stock;
−Removed: ● being declared an investment company under the Investment Company Act;
−Removed: ● complying with changing laws and regulations;
−Removed: ● the performance of the prospective target business or businesses;
−Removed: ● our ability to select an appropriate target business or businesses;
−Removed: ● the pool of prospective target businesses available to us and the ability of our officers and directors to generate a number of potential business combination opportunities;
−Removed: ● the issuance of additional Class A common stock in connection with a business combination that may dilute the interest of our shareholders;
−Removed: ● the incentives to our Sponsor, officers and directors to complete a business combination to avoid losing their entire investment in us if our initial business combination is not completed;
−Removed: ● our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination;
−Removed: ● our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;
−Removed: ● our ability to obtain additional financing to complete our initial business combination;
−Removed: ● our public securities’ potential liquidity and trading;
−Removed: ● provisions in our amended and restated certificate of incorporation and Delaware law that may have the effect of inhibiting a takeover of us and discouraging lawsuits against our directors and officers, and limiting our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees, agents or stockholders.
−Removed: Risks Relating to Consummation of or Inability to Consummate an Initial Business Combination
−Removed: Holders of our founder shares will participate in the vote for our proposed business combination, which means we may complete our initial business combination even though a majority of our public stockholders do not support such a combination.
−Removed: In connection with our proposed initial business combination, holders of our founder shares will participate in the vote on such approval.
−Removed: Holders of our founder shares and private placement shares hold 32.4% of our common stock.
−Removed: Accordingly, we may consummate our initial business combination even if holders of a majority of our outstanding public shares do not approve of the business combination we consummate.
−Removed: Please see “Item 1.
−Removed: Business— Manner of Conducting Redemptions ” for additional information.
−Removed: Our Sponsor, officers and directors have agreed to vote in favor such initial of the business combination, regardless of how our public stockholders vote.
−Removed: Our initial stockholders, officers and directors have agreed (and their permitted transferees will agree) to vote any founder shares and any public shares held by them in favor of our initial business combination.
−Removed: As a result, in addition to our founder shares and private placement shares, we would need 7,600,261, or 26.1%, of the 29,150,521 public shares that remain outstanding to be voted in favor of a transaction (assuming all issued and outstanding shares are voted) in order to have such initial business combination approved.
−Removed: Holders of our founder shares and private placement shares hold 32.4% of our common stock.
−Removed: Accordingly, it is more likely that the necessary stockholder approval will be received than would be the case if our initial stockholders and their permitted transferees agreed to vote their founder shares and private placement shares in accordance with the majority of the votes cast by our public stockholders.
−Removed: Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash and the stockholder vote regarding the approval of such business combination.
−Removed: Your only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption rights within the period of time set forth in our proxy documents mailed to our public stockholders in which we describe our initial business combination and voting on such business combination.
−Removed: The ability of our public stockholders to redeem their shares for cash may prevent us from completing the initial business combination.
−Removed: The Merger Agreement has a Minimum Cash Condition that requires as a closing condition that we have a certain amount of cash.
−Removed: If too many public stockholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to consummate the business combination.
−Removed: The amount of the deferred underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection with a business combination and such amount of deferred underwriting discount is not available for us to use as consideration in an initial business combination.
−Removed: Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination.
−Removed: Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the related business combination and may instead search for an alternate business combination or liquidate.
−Removed: If we are able to consummate the business combination, the per-share value of shares held by non-redeeming stockholders will reflect our obligation to pay the deferred underwriting commissions.
−Removed: The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure.
−Removed: At the time we entered into the Merger Agreement, we did not know how many stockholders may exercise their redemption rights and, therefore, we had to structure the transaction based on our expectations as to the number of shares that would be submitted for redemption.
−Removed: Since the Merger Agreement contains a Minimum Cash Condition, we needed to reserve a portion of the cash in the trust account to meet such requirements or may need to arrange for third-party financing.
−Removed: In addition, if a larger number of shares is submitted for redemption than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third party financing.
−Removed: Raising additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels.
−Removed: Furthermore, this dilution would increase to the extent that the anti-dilution provision of the Class B common stock results in the issuance of shares of Class A common stock on a greater than one-to-one basis upon conversion of the Class B common stock at the time of our initial business combination.
−Removed: In addition, the amount of deferred underwriting commissions payable to the underwriters is not required to be adjusted for any shares that are redeemed in connection with an initial business combination.
−Removed: The above considerations may limit our ability to complete the business combination or optimize our capital structure.
−Removed: The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your stock.
−Removed: Because the Merger Agreement contains a Minimum Cash Condition, the probability that our initial business combination would be unsuccessful increases.
−Removed: If our initial business combination is unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the trust account.
−Removed: If you are in need of immediate liquidity, you could attempt to sell your stock in the open market;
−Removed: however, at such time our stock may trade at a discount to the pro rata amount per share in the trust account.
−Removed: In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your stock in the open market.
−Removed: We may not be able to complete our initial business combination within the completion window, in which case we will cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public stockholders would only receive approximately $10.41 per share based on amounts in the trust account at December 31, 2023, or less than such amount in certain circumstances.
−Removed: Pursuant to our amended and restated charter, we must consummate our initial business combination within the completion window.
−Removed: There can be no assurances that we will be able to complete the business combination or to find a suitable alternative target business within such time period.
−Removed: Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein.
−Removed: For example, the U.S.
−Removed: debt ceiling and budget deficit concerns have increased the possibility of credit-rating downgrades and economic slowdowns, or a recession in the United States.
−Removed: Financial markets also may be adversely affected by current or anticipated military conflict, including the ongoing war between Russia and Ukraine, the ongoing conflict between Israel and Hamas, terrorism, sanctions or other geopolitical events globally, which could cause or continue to cause, as applicable, market disruptions, including significant volatility in energy and other commodity prices, credit and capital markets, as well as supply chain interruptions, and adversely affect the global economy and financial markets leading to instability and lack of liquidity in capital markets.
−Removed: Any negative impact on the global economy, capital markets or other geopolitical conditions resulting from downgrades to the U.S.
−Removed: government’s sovereign credit rating or its perceived creditworthiness, the war in Ukraine and subsequent actions could adversely affect our search for a business combination and any target business with which we may ultimately consummate a business combination.
−Removed: If we have not completed our initial business combination within the completion window, we will:
−Removed: (1) cease all operations except for the purpose of winding up;
−Removed: (2) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of permitted withdrawals and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law;
−Removed: and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
−Removed: In such case, our public stockholders may receive only $10.41 per share (based on amounts in the trust account at December 31, 2023), or less than $10.41 per share in certain circumstances where a third party brings a claim against us that the Sponsor is unable to indemnify (as described herein), on the redemption of their shares.
−Removed: Please see “ If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per share redemption amount received by stockholders may be less than $10.00 per share ” and other risk factors included herein.
−Removed: If permitted withdrawals and other sources of working capital are insufficient, it could limit the amount available to complete our initial business combination.
−Removed: If we are unable to obtain such loans, we may be unable to complete our initial business combination.
−Removed: If we are required to seek additional capital, we would need to borrow funds from our Sponsor, management team or other third parties to operate or may be forced to liquidate.
−Removed: Neither our Sponsor, members of our management team nor any of their respective affiliates is under any obligation or other duty to loan funds to us in such circumstances.
−Removed: Any such loans would be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business combination.
−Removed: If we are unable to complete our initial business combination because of insufficient funds, we will be forced to cease operations and liquidate the trust account.
−Removed: In such case, our public stockholders may receive only $10.41 per share (based on amounts in the trust account at December 31, 2023), or less in certain circumstances.
−Removed: Please see “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share ” and other risk factors included herein.
−Removed: Our Sponsor, directors, officers, advisors or any of their respective affiliates may elect to purchase shares from the public, which may influence a vote on a proposed business combination and reduce the public “float” of our common stock.
−Removed: At any time prior to the stockholder special meeting in connection with the business combination, during a period when they are not then aware of any material nonpublic information regarding our public shares, our Sponsor, directors, officers, advisors or any of their respective affiliates may (although they are under no obligation to do so) purchase public shares from public stockholders in privately negotiated transactions or in the open market and separate from the redemption process in connection with the stockholder special meeting in connection with the business combination.
−Removed: Our Sponsor, directors, officers, advisors or any of their respective affiliates will only make open market purchases to the extent the price per public share so acquired is no higher than the redemption price that would be available in connection with the redemption procedures described in the proxy statement/prospectus/consent solicitation statement filed in connection with the stockholder special meeting.
−Removed: In addition, our Sponsor, directors, officers, advisors or any of their respective affiliates will waive any redemption rights with respect to any public shares purchased in open market purchases and will not vote any public shares purchased in open market purchases in favor of the business combination proposal.
−Removed: As of the date of this report, no such transactions have occurred nor are they planned to occur.
−Removed: However any such purchase arrangements might include, without limitation, that in the event shares are purchased in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares.
−Removed: Similarly, our Sponsor, and our directors, officers or advisors or any of our respective affiliates may (although they are under no obligation to do so) enter into arrangements or contractual acknowledgements with public stockholders, including to (i) confirm that such stockholder, although still the record holder of public shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights or (ii) protect such stockholders against potential loss in value of their shares, including through the granting of put options and the transfer to such stockholders of shares owned by our Sponsor for nominal value.
−Removed: The purposes of such purchases and arrangements would be to reduce the number of public shares that may be redeemed in connection with the stockholder special meeting, and to increase the likelihood of satisfaction of the requirements to consummate the business combination where it appears that such requirements would otherwise not be met, and may, in the case of purchases, include a business decision to increase such purchaser's ownership of shares at an attractive price.
−Removed: If such purchases are made, the public “float” of our Class A common stock may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of our securities on NYSE or another national securities exchange or reducing the liquidity of the trading market for such securities.
−Removed: If a stockholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for redeeming its shares, such shares may not be redeemed.
−Removed: If a stockholder fails to receive our proxy materials such stockholder may not become aware of the opportunity to redeem its shares.
−Removed: In addition, the proxy materials that we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures that must be complied with in order to validly redeem public shares.
−Removed: For example, we may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent up to two business days prior to the vote on the proposal to approve the initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically.
−Removed: In the event that a stockholder fails to comply with these procedures, its shares may not be redeemed.
−Removed: You will not have any rights or interests in funds from the trust account, except under certain limited circumstances.
−Removed: To liquidate your investment, therefore, you may be forced to sell your public shares, potentially at a loss.
−Removed: Our public stockholders will be entitled to receive funds from the trust account only upon the earlier to occur of:
−Removed: (1) the completion of our initial business combination, and then only in connection with those shares of Class A common stock that such
−Removed: stockholder properly elected to redeem, subject to the limitations described herein;
−Removed: (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the completion window;
−Removed: and (3) the redemption of all of our public shares if we are unable to complete our initial business combination within the completion window, subject to applicable law and as further described herein.
−Removed: In addition, if we are unable to complete an initial business combination within the completion window for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing stockholders for approval prior to the distribution of the proceeds held in our trust account.
−Removed: In that case, public stockholders may be forced to wait beyond the completion window before they receive funds from our trust account.
−Removed: In no other circumstances will a public stockholder have any right or interest of any kind in the trust account.
−Removed: Accordingly, to liquidate your investment, you may be forced to sell your public shares, potentially at a loss.
−Removed: If the funds available to us outside of the trust account are insufficient to allow us to operate for at least the completion window, we may be unable to complete our initial business combination.
−Removed: The funds available to us outside of the trust account may not be sufficient to allow us to operate for at least the completion window, assuming that our initial business combination is not completed during that time.
−Removed: We expect to incur significant costs in pursuit of our acquisition plans.
−Removed: However, our affiliates are not obligated to make loans to us in the future, and we may not be able to raise additional financing from unaffiliated parties necessary to fund our expenses.
−Removed: Any such event in the future may negatively impact the analysis regarding our ability to continue as a going concern at such time.
−Removed: We believe that the funds available to us outside of the trust account, including permitted withdrawals and loans or additional investments from our Sponsor, will be sufficient to allow us to operate for at least the completion window;
−Removed: however, we cannot assure you that our estimate is accurate.
−Removed: Of the funds available to us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business.
−Removed: We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent or merger agreements designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so.
−Removed: If we entered into a letter of intent or merger agreement where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business.
−Removed: If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.41 per share (based on amounts in the trust account at December 31, 2023), or less in certain circumstances, on the liquidation of our trust account.
−Removed: Please see “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share ” and other risk factors included herein.
−Removed: Subsequent to our completion of our initial business combination, we may be required to take write-downs or writeoffs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and the price of our securities, which could cause you to lose some or all of your investment.
−Removed: We cannot assure you that our due diligence will identify all material issues that may be present with a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise.
−Removed: As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses.
−Removed: Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis.
−Removed: Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities.
−Removed: In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing.
−Removed: Accordingly, any stockholders who choose to remain a stockholder following our initial business combination could suffer a reduction in the value of their securities.
−Removed: Such stockholders are unlikely to have a remedy for such reduction in value.
−Removed: If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per share redemption amount received by stockholders may be less than $10.00 per share.
−Removed: Our placing of funds in the trust account may not protect those funds from third-party claims against us.
−Removed: Although we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account.
−Removed: If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative.
−Removed: Making such a request of potential target businesses may make our acquisition proposal less attractive to them and, to the extent prospective target businesses refuse to execute such a waiver, it may limit the field of potential target businesses that we might pursue.
−Removed: Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where we are unable to find a service provider willing to execute a waiver.
−Removed: In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason.
−Removed: Upon redemption of our public shares, if we are unable to complete our initial business combination within the completion window, or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption.
−Removed: Accordingly, the per share redemption amount received by public stockholders could be less than the per share amount initially held in the trust account, due to claims of such creditors.
−Removed: Our Sponsor has agreed that it will indemnify us if and to the extent losses to which it may become subject as a result of any claims by a vendor (other than our independent public accountants) for services rendered or products sold to it, or a prospective target business with which it has entered into a transaction agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per share of our Class A common stock or (ii) the actual amount per share of Class A common stock held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share of Class A common stock is then held in the trust account due to reductions in the value of the trust assets less a price per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of amounts withdrawn to fund our working capital requirements), subject to an annual limit of $1,000,000, and/or to pay our taxes.
−Removed: Such indemnification obligation (x) shall not apply to any claims by a third party that executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) and (x) shall not apply to any claims under our indemnity of Citigroup Global Markets Inc.
−Removed: against certain liabilities, including liabilities under the Securities Act.
−Removed: Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our Sponsor will not be responsible to the extent of any liability for such third-party claims.
−Removed: We have not independently verified whether our Sponsor has sufficient funds to satisfy its indemnity obligations and believe that our Sponsor’s only assets are our securities.
−Removed: We have not asked our Sponsor to reserve for such indemnification obligations.
−Removed: As a result, if any such claims were successfully made against the trust account, the funds available for our initial business combination and redemptions could be reduced to less than $10.00 per share of Class A common stock.
−Removed: In such event, we may not be able to consummate our initial business combination, and our public shareholders would receive such lesser amount per share in connection with any redemption of their shares of Class A common stock.
−Removed: None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
−Removed: Our independent directors may decide not to enforce the indemnification obligations of our Sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public stockholders.
−Removed: In the event that the proceeds in the trust account are reduced below the lesser of:
−Removed: (1) $10.00 per public share or (2) the actual amount per share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per share due to reductions in the value of the trust assets, in each case net of permitted withdrawals, and our Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our Sponsor to enforce its indemnification obligations.
−Removed: While we currently expect that our independent directors would take legal action on our behalf against our Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in certain instances.
−Removed: For example, the cost of such legal action may be deemed by the independent directors to be too high relative to the amount recoverable or the independent directors may determine that a favorable outcome is not likely.
−Removed: If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public stockholders may be reduced below $10.00 per share.
−Removed: If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.
−Removed: If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders.
−Removed: In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith by paying public stockholders from the trust account prior to addressing the claims of creditors, thereby exposing itself and us to claims of punitive damages.
−Removed: If, before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.
−Removed: If, before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders.
−Removed: To the extent any bankruptcy claims deplete the trust account, the per share amount that would otherwise be received by our public stockholders in connection with our liquidation would be reduced.
−Removed: We may be subject to a 1% U.S.
−Removed: federal excise tax in connection with redemptions of our Class A common stock.
−Removed: On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into law.
−Removed: The IR Act provides for, among other things, a 1% U.S.
−Removed: federal excise tax on certain repurchases (including redemptions) of stock by publicly traded U.S.
−Removed: corporations after December 31, 2022.
−Removed: The excise tax is imposed on the repurchasing corporation itself, not its stockholders from whom the shares are repurchased (although it may reduce the amount of cash distributable in a current or subsequent redemption).
−Removed: The amount of the excise tax is 1% of the fair market value of any shares repurchased by the repurchasing corporation during a taxable year, which may be potentially netted by the fair market value of certain new stock issuances by the repurchasing corporation during the same taxable year.
−Removed: In addition, a number of exceptions apply to this excise tax.
−Removed: Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out, and prevent the abuse or avoidance of, this excise tax.
−Removed: On December 27, 2022, the Treasury published Notice 2023-2, which provided clarification on some aspects of the application of the excise tax.
−Removed: The notice generally provides that if a publicly traded U.S.
−Removed: corporation completely liquidates and dissolves, distributions in such complete liquidation and other distributions by such corporation in the same taxable year in which the final distribution in complete liquidation and dissolution is made are not subject to the excise tax.
−Removed: Because any such excise tax would be payable by us and not by the redeeming holder, it could cause a reduction in the value of our Class A common stock, cash available with which to effectuate a business combination or cash available for distribution in a subsequent liquidation.
−Removed: Whether and to what extent we would be subject to the excise tax in connection with an initial business combination will depend on a number of factors, including (i) the structure of the initial business combination, (ii) the fair market value of the redemptions and repurchases in connection with the initial business combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with the initial business combination (or any other equity issuances within the same taxable year of the initial business combination) and (iv) the content of any subsequent regulations, clarifications, and other guidance issued by the Treasury.
−Removed: However, to mitigate this uncertainty, any funds held in the trust account prior to the termination of such account, including any interest thereon, will not be used to pay for any excise tax liabilities with respect to any redemptions of the Class A common stock, prior to or in connection with an extension of the completion window, an initial business combination or our liquidation.
−Removed: Changes in laws, regulations or rules, or a failure to comply with any laws, regulations or rules, may adversely affect our business, including our ability to negotiate and complete our initial business combination, investments and results of operations.
−Removed: We are subject to laws, regulations and rules enacted by national, regional and local governments and the NYSE.
−Removed: In particular, we are required to comply with certain SEC, the NYSE and other legal or regulatory requirements.
−Removed: Compliance with, and monitoring of, applicable laws, regulations and rules may be difficult, time consuming and costly.
−Removed: Those laws, regulations or rules and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations.
−Removed: In addition, a failure to comply with applicable laws, regulations or rules, as interpreted and applied, could have a material adverse effect on our business, including its ability to consummate our initial business combination, investments and results of operations.
−Removed: On January 24, 2024, the SEC adopted final rules (the “2024 SPAC Rules”) relating to, among other items, enhancing disclosures in initial business combination transactions involving SPACs and private operating companies;
−Removed: amending the financial statement requirements applicable to transactions involving shell companies;
−Removed: enhancing disclosure requirements related to projections, including requiring disclosure of all material bases of the projections and all material assumptions underlying the projections;
−Removed: increasing the potential liability of certain participants in proposed initial business combination transactions;
−Removed: and the extent to which SPACs could become subject to regulation under the Investment Company Act.
−Removed: The 2024 SPAC Rules will become effective July 1, 2024.
−Removed: In the event our initial business combination has not been consummated by such date, such rules may materially adversely affect our ability to consummate our initial business combination and may increase the costs and time related thereto.
−Removed: See also “— We may be subject to a 1% U.S.
−Removed: federal excise tax in connection with redemptions of our Class A Common stock ” and “— If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.
−Removed: If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.
−Removed: If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including, without limitation, restrictions on the nature of our investments, restrictions on the issuance of securities, and restrictions on the enforceability of agreements entered into by us, each of which may make it difficult for us to complete a business combination.
−Removed: In addition, we may have imposed upon us burdensome requirements, including, without limitation, registration as an investment company with the SEC (which may be impractical and would require significant changes in, among other things, our capital structure);
−Removed: adoption of a specific form of corporate structure;
−Removed: and reporting, record keeping, voting, proxy and disclosure requirements and compliance with other rules and regulations that we are currently not subject to.
−Removed: In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading in securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our total assets (exclusive of U.S.
−Removed: government securities and cash items) on an unconsolidated basis.
−Removed: Our business is to identify and complete a business combination and thereafter to operate the post-transaction business or assets for the long term.
−Removed: We do not plan to buy businesses or assets with a view to resale or profit from their resale.
−Removed: We do not plan to buy unrelated businesses or assets or to be a passive investor.
−Removed: It is possible that a claim could be made that we have been operating as an unregistered investment company.
−Removed: If we were deemed to be an investment company for purposes of the Investment Company Act, we might be forced to abandon our efforts to complete an initial business combination and instead be required to liquidate.
−Removed: If we are required to liquidate, our investors would not be able to realize the benefits of owning stock in a successor operating business, including the potential appreciation in the value of our stock following such a transaction.
−Removed: We do not believe that our principal activities currently subject us to the Investment Company Act.
−Removed: To this end, from the time beginning with the consummation of our Initial Public Offering, the proceeds held in the trust account have been invested only in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S.
−Removed: government treasury obligations or cash.
−Removed: Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets.
−Removed: By restricting the investment of the proceeds to these instruments and by subsequently holding all funds in the trust account in cash, which may include demand deposit accounts (as described in the following paragraph), and by having a business plan targeted at acquiring and growing businesses for the long-term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we do not believe we are an “investment company” within the meaning of the Investment Company Act.
−Removed: The Initial Public Offering was not intended for persons seeking a return on investments in government securities or investment securities.
−Removed: The trust account is intended as a holding place for funds pending the earliest to occur of:
−Removed: (i) the completion of our primary business objective, which is a business combination;
−Removed: (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the completion window;
−Removed: and (iii) absent a business combination, our return of the funds held in the trust account to our public stockholders as part of our redemption of the public shares.
−Removed: Because we have invested only in permitted instruments, we believe we are not an investment company.
−Removed: If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to consummate our initial business combination.
−Removed: If we are unable to complete our initial business combination within the completion window our public stockholders may receive only approximately $10.00 per share on the liquidation of our trust account.
−Removed: In certain circumstances, our public stockholders may receive less than $10.00 per share on the redemption of their shares if we are unable to complete our initial business combination within the completion window.
−Removed: To mitigate the risk of us being deemed to have been operating as an unregistered investment company (including under the subjective test of Section 3(a)(1)(A) of the Investment Company Act of 1940, as amended), all funds in the trust account are held and will be held in cash (which may include demand deposit accounts) until the earlier of consummation of our business combination or liquidation.
−Removed: Furthermore, such cash (which may include demand deposit accounts) is held in bank accounts, which exceed federally insured limits as guaranteed by the Federal Deposit Insurance Corporation (the “FDIC”).
−Removed: While we have only placed our trust account deposits with JPMorgan Chase Bank N.A., only a small portion of the funds in our trust account will be guaranteed by the FDIC.
−Removed: We may issue additional shares of Class A common stock or preferred stock to complete our initial business combination or under an employee incentive plan after completion of our initial business combination.
−Removed: We may also issue shares of Class A common stock upon the conversion of the Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions described herein.
−Removed: Any such issuances would dilute the interest of our stockholders and likely present other risks.
−Removed: Our amended and restated certificate of incorporation authorizes the issuance of up to 500,000,000 shares of Class A common stock, par value $0.0001 per share, and 100,000,000 shares of Class B common stock, par value $0.0001 per share and 1,000,000 shares of undesignated preferred stock, par value $0.0001 per share.
−Removed: There are 469,399,479 and 87,500,000 authorized but unissued shares of Class A and Class B common stock, respectively, available for issuance, which amount takes into account shares reserved for issuance upon the conversion of the Class B common stock.
−Removed: Shares of Class B common stock are automatically convertible into shares of our Class A common stock at the time of our initial business combination, initially at a one-for-one ratio but subject to adjustment as set forth herein.
−Removed: There are no shares of preferred stock issued and outstanding.
−Removed: We may issue a substantial number of additional shares of Class A common stock, and may issue shares of preferred stock, in order to complete our initial business combination or under an employee incentive plan after completion of our initial business combination (although our amended and restated certificate of incorporation provides that we may not issue additional securities that can vote on amendments to our amended and restated certificate of incorporation or on our initial business combination or that would entitle holders thereof to receive funds from the trust account).
−Removed: We may also issue shares upon conversion of the Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions described herein.
−Removed: However, our amended and restated certificate of incorporation provides, among other things, that prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (1) receive funds from the trust account or (2) vote on any initial business combination.
−Removed: The issuance of additional shares of common or preferred stock:
−Removed: ● may significantly dilute the equity interest of investors in the Initial Public Offering;
−Removed: ● may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;
−Removed: ● could cause a change in control if a substantial number of shares of common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
−Removed: ● may adversely affect prevailing market prices for our common stock.
−Removed: Resources could be wasted in researching initial business combinations that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business.
−Removed: If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less than such amount in certain circumstances, on the liquidation of our trust account.
−Removed: We anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others.
−Removed: If we decide not to complete a specific initial business combination, including the proposed business combination with Oklo, the costs incurred up to that point for the proposed transaction likely would not be recoverable.
−Removed: Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business combination for any number of reasons including those beyond our control.
−Removed: Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business.
−Removed: If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account.
−Removed: We may only be able to complete one business combination with the proceeds of the Initial Public Offering and the sale of the private placement shares, which will cause us to be solely dependent on a single business which may have a limited number of products or services.
−Removed: This lack of diversification may materially negatively impact our operations and profitability.
−Removed: As of December 31, 2023, we had access to approximately $303.6 million in the trust account that we may use to complete our initial business combination (which includes $7,000,000 of deferred underwriting commissions being held in the trust account).
−Removed: We may effectuate our initial business combination with a single target business or multiple target businesses simultaneously or within a short period of time.
−Removed: However, we may not be able to effectuate our initial business combination with more than one target business because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the financial condition of several target businesses as if they had been operated on a combined basis.
−Removed: By completing our initial business combination with only a single entity our lack of diversification may subject us to numerous economic, competitive, geographic and regulatory risks.
−Removed: Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry.
−Removed: Accordingly, the prospects for our success may be:
−Removed: ● solely dependent upon the performance of a single business, property or asset;
−Removed: ● dependent upon the development or market acceptance of a single or limited number of products, processes or services.
−Removed: This lack of diversification may subject us to numerous economic, competitive, geographic and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
−Removed: We do not have a specified maximum redemption threshold.
−Removed: The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which a substantial majority of our stockholders do not agree.
−Removed: Our amended and restated certificate of incorporation does not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (such that we do not then become subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination.
−Removed: As a result, we may be able to complete our initial business combination even though a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder approval of our initial business combination and do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our Sponsor, officers, directors, advisors or any of their respective affiliates.
−Removed: In the event the aggregate cash consideration we would be required to pay for all shares of common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all shares of common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
−Removed: Certain provisions of our amended and restated certificate of incorporation that relate to our pre-business combination activity (and corresponding provisions of the agreement governing the release of funds from our trust account) may be amended with the approval of holders of not less than 65% of our common stock, which is a lower amendment threshold than that of some other blank check companies.
−Removed: It may be easier for us, therefore, to amend our amended and restated certificate of incorporation and the trust agreement to facilitate the completion of an initial business combination that some of our stockholders may not support.
−Removed: Our amended and restated certificate of incorporation provides that any of its provisions (other than amendments relating to the appointment of directors, which require the approval by a majority of the Class B common stock then outstanding) related to pre-business combination activity (including the requirement to fund the trust account and not release such amounts except in specified circumstances and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of at least 65% of our common stock, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65% of our common stock.
−Removed: In all other instances, our amended and restated certificate of incorporation provides that it may be amended by holders of a majority of our common stock, subject to applicable provisions of the DGCL, or applicable stock exchange rules.
−Removed: We may not issue additional securities that can vote on amendments to our amended and restated certificate of incorporation or on our initial business combination.
−Removed: Our initial stockholders, who beneficially own 32.4% of our common stock, may participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and have the discretion to vote in any manner they choose.
−Removed: As a result, we may be able to amend the provisions of our amended and restated certificate of incorporation which governs our pre-business combination behavior more easily than some other blank check companies, and this may increase our ability to complete our initial business combination with which you do not agree.
−Removed: Our stockholders may pursue remedies against us for any breach of our amended and restated certificate of incorporation.
−Removed: Our Sponsor, officers and directors have agreed, pursuant to a written agreement, that they will not propose any amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the completion window, unless we provide our public stockholders with the opportunity to redeem their shares of Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, divided by the number of then outstanding public shares.
−Removed: These agreements are contained in letter agreements that we have entered into with each of our Sponsor, officers and directors.
−Removed: Our stockholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our Sponsor, officers or directors for any breach of these agreements.
−Removed: As a result, in the event of a breach, our stockholders would need to pursue a stockholder derivative action, subject to applicable law.
−Removed: We may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular business combination.
−Removed: Although we believe that the funds available in our trust account will be sufficient to allow us to complete our initial business combination, because we have not yet held a stockholder vote on the proposed business combination with Oklo, we cannot say so for certain.
−Removed: If the funds available in our trust account prove to be insufficient, either because of the size of our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation to redeem for cash a significant number of shares from stockholders who elect redemption in connection with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing (including from M.
−Removed: Klein and Company) or to abandon the proposed business combination.
−Removed: We cannot assure you that such financing will be available on acceptable terms, if at all.
−Removed: Klein and Company is not obligated to provide, or seek, any such financing or, except as expressly set forth herein, to provide any other services to us.
−Removed: To the extent that additional financing proves to be unavailable when needed to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target business candidate.
−Removed: In addition, even if we do not need additional financing to complete our initial business combination, we may require such financing to fund the operations or growth of the target business.
−Removed: The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business.
−Removed: None of our officers, directors or stockholders is required to provide any financing to us in connection with or after our initial business combination.
−Removed: If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account.
−Removed: Our initial business combination and our structure thereafter may not be tax-efficient to our stockholders.
−Removed: As a result of our business combination, our tax obligations may be more complex, burdensome and uncertain.
−Removed: Although we will attempt to structure our initial business combination in a tax-efficient manner, tax structuring considerations are complex, the relevant facts and law are uncertain and may change, and we may prioritize commercial and other considerations over tax considerations.
−Removed: For example, in connection with our initial business combination and subject to any requisite stockholder approval, we may structure our business combination in a manner that requires stockholders to recognize gain or income for tax purposes, effect a business combination with a target company in another jurisdiction, or reincorporate in a different jurisdiction (including, but not limited to, the jurisdiction in which the target company or business is located).
−Removed: We do not intend to make any cash distributions to stockholders to pay taxes in connection with our business combination or thereafter.
−Removed: Accordingly, a stockholder may need to satisfy any liability resulting from our initial business combination with cash from its own funds or by selling all or a portion of the shares received.
−Removed: In addition, stockholders may also be subject to additional income, withholding or other taxes with respect to their ownership of us after our initial business combination.
−Removed: In addition, we may effect a business combination with a target company that has business operations outside of the United States, and possibly, business operations in multiple jurisdictions.
−Removed: If we effect such a business combination, we could be subject to significant income, withholding and other tax obligations in a number of jurisdictions with respect to income, operations and subsidiaries related to those jurisdictions.
−Removed: Due to the complexity of tax obligations and filings in other jurisdictions, we may have a heightened risk related to audits or examinations by U.S.
−Removed: federal, state, local and non-U.S.
−Removed: taxing authorities.
−Removed: This additional complexity and risk could have an adverse effect on our after-tax profitability and financial condition.
−Removed: Risks Relating to Our Securities
−Removed: The NYSE may delist our securities from trading on its exchange, which could limit investors’ ability to transact in our securities and subject us to additional trading restrictions.
−Removed: Our Class A common stock is currently listed on the NYSE.
−Removed: We cannot assure you that our securities will be, or will continue to be, listed on the NYSE in the future and prior to our initial business combination.
−Removed: In order to continue listing our securities on the NYSE prior to our initial business combination, we must maintain certain financial, distribution and stock price levels Our continued eligibility for listing may depend on, among other things, the number of public shares that are redeemed in connection with the initial business combination.
−Removed: Additionally, in connection with our initial business combination, we will be required to demonstrate compliance with the NYSE’s initial listing requirements, which are more rigorous than the NYSE’s continued listing requirements, in order to continue to maintain the listing of our securities on the NYSE.
−Removed: For instance, our stock price would generally be required to be at least $4 per share.
−Removed: We cannot assure you that we will be able to meet those initial listing requirements at that time.
−Removed: If the NYSE delists any of our securities from trading on its exchange and we are not able to list such securities on another national securities exchange, we expect such securities could be quoted on an over-the- counter market.
−Removed: If this were to occur, we could face significant material adverse consequences, including:
−Removed: ● a limited availability of market quotations for our securities;
−Removed: ● reduced liquidity for our securities;
−Removed: ● a determination that our Class A common stock is a “penny stock” which will require brokers trading in our Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
−Removed: ● a limited amount of news and analyst coverage;
−Removed: ● a decreased ability to issue additional securities or obtain additional financing in the future.
−Removed: The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because our Class A common stock is listed on the NYSE, our Class A common stock qualify as covered securities under such statute.
−Removed: Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case.
−Removed: While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states.
−Removed: Further, if we were no longer listed on the NYSE, our securities would not qualify as covered securities under such statute and we would be subject to regulation in each state in which we offer our securities.
−Removed: You will not be entitled to protections normally afforded to investors of many other blank check companies.
−Removed: Since the net proceeds of the Initial Public Offering and the sale of the private placement shares are intended to be used to complete an initial business combination with a target business, we may be deemed to be a “blank check” company under the U.S.
−Removed: securities laws.
−Removed: However, because we have net tangible assets in excess of $5,000,000 and filed a Current Report on Form 8-K, including an audited balance sheet of our company demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419.
−Removed: Accordingly, investors will not be afforded the benefits or protections of those rules.
−Removed: Among other things, this means we will have a longer period of time to complete our initial business combination than do companies subject to Rule 419.
−Removed: Moreover, if the Initial Public Offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of our initial business combination.
−Removed: If you or a “group” of stockholders are deemed to hold in excess of 15% of our Class A common stock, you will lose the ability to redeem all such shares in excess of 15% of our Class A common stock.
−Removed: Our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in the Initial Public Offering, without our prior consent, which we refer to as the “Excess Shares.” However, our amended and restated certificate of incorporation does not restrict our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
−Removed: Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions.
−Removed: Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination.
−Removed: And as a result, you will continue to hold the Excess Shares and, in order to dispose of such shares, would be required to sell your Excess Shares in open market transactions, potentially at a loss.
−Removed: Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them.
−Removed: Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution.
−Removed: The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within the completion window may be considered a liquidating distribution under Delaware law.
−Removed: If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.
−Removed: However, it is our intention to redeem our shares of Class A common stock as soon as reasonably possible following the last day of the completion window in the event we do not complete an initial business combination and, therefore, we do not intend to comply with the foregoing procedures.
−Removed: Because we do not intend to comply with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following our dissolution.
−Removed: However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, consultants, etc.) or prospective target businesses.
−Removed: If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution.
−Removed: We cannot assure you that we will properly assess all claims that may be potentially brought against us.
−Removed: As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend beyond the third anniversary of such date.
−Removed: Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within the completion window is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution.
−Removed: We will not hold an annual meeting of stockholders until after we consummate our initial business combination and you will not be entitled to any of the corporate protections provided by such a meeting.
−Removed: We will not hold an annual meeting of stockholders until after we consummate our initial business combination.
−Removed: Our Class B stockholders are entitled to elect all of our directors prior to the completion of our initial business combination and have elected to do so by written consent without a meeting.
−Removed: The grant of registration rights to our initial stockholders and their permitted transferees, and the future exercise of such rights may adversely affect the market price of our Class A common stock.
−Removed: Pursuant to an agreement entered into concurrently with the issuance and sale of the securities in our Initial Public Offering, our initial stockholders and their permitted transferees can demand that we register the resale of their founder shares after those shares convert to shares of our Class A common stock at the time of our initial business combination.
−Removed: In addition, our Sponsor and its permitted transferees can demand that we register the resale of the private placement shares, and holders of shares that may be issued upon conversion of working capital loans may demand that we register the resale of such shares.
−Removed: We will bear the cost of registering these securities.
−Removed: The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our Class A common stock.
−Removed: We may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our stockholders’ investment in us.
−Removed: Although we have no commitments as of the date of this Annual Report to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial debt to complete our initial business combination.
−Removed: We have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the trust account.
−Removed: As such, no issuance of debt will affect the per share amount available for redemption from the trust account.
−Removed: Nevertheless, the incurrence of debt could have a variety of negative effects, including:
−Removed: ● default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
−Removed: ● acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
−Removed: ● our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
−Removed: ● our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt security is outstanding;
−Removed: ● our inability to pay dividends on our common stock;
−Removed: ● using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
−Removed: ● limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
−Removed: ● increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;
−Removed: ● limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
−Removed: Our initial stockholders control the election of our board of directors until consummation of our initial business combination and hold a substantial interest in us.
−Removed: As a result, they will elect all of our directors prior to the consummation of our initial business combination and may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support.
−Removed: Similarly, following the consummation of our initial business combination, one or more shareholders of the target may have a substantial interest in the combined company and may require us to enter into agreements or other arrangements with respect to board composition and for designation rights.
−Removed: Our initial stockholders own 32.4% of our outstanding common stock.
−Removed: In addition, the founder shares, all of which are held by our initial stockholders, entitle the holders to elect all of our directors prior to the consummation of our initial business combination, provided, however, that with respect to the election of directors in connection with a meeting of the stockholders of the company in which a business combination is submitted to the stockholders of the company for approval, holders of the Class A common stock and holders of the Class B common stock, voting together as a single class, shall have the exclusive right to vote for the election of directors.
−Removed: Holders of our public shares will, other than as provided in the preceding sentence, have no right to vote on the election of directors prior to the consummation of our initial business combination.
−Removed: These provisions of our amended and restated certificate of incorporation may only be amended by a majority of the Class B common stock then outstanding.
−Removed: As a result, you will not have any influence over the election of directors prior to our initial business combination, other than at a stockholders’ meeting during which a business combination is submitted to the stockholders for approval, as described above.
−Removed: Neither our initial stockholders nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional securities, other than as disclosed in this Annual Report.
−Removed: Factors that would be considered in making such additional purchases would include consideration of the current trading price of our Class A common stock.
−Removed: In addition, as a result of their substantial ownership in our company, our initial stockholders may exert a substantial influence on other actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate of incorporation and approval of major corporate transactions.
−Removed: If our initial stockholders purchase any additional shares of common stock in the aftermarket or in privately negotiated transactions, this would increase their influence over these actions.
−Removed: Accordingly, our initial stockholders will exert significant influence over actions requiring a stockholder vote.
−Removed: Our Sponsor contributed $25,000, or approximately $0.002 per founder share, and, accordingly, you will experience immediate and substantial dilution from the purchase of our Class A common stock.
−Removed: Our Sponsor acquired the founder shares at a nominal price, significantly contributing to the dilution of our Class A common stock.
−Removed: This dilution would increase to the extent that the anti-dilution provisions of the Class B common stock result in the issuance of Class A shares on a greater than one-to-one basis upon conversion of the Class B common stock at the time of our initial business combination and would become exacerbated to the extent that public stockholders seek redemptions from the trust.
−Removed: In addition, because of the anti-dilution rights of the founder shares, any equity or equity-linked securities issued or deemed issued in connection with our initial business combination would be disproportionately dilutive to our Class A common stock.
−Removed: The purchase price paid by our Sponsor for the founder shares may significantly dilute value of our public shares in the event we consummate an initial business combination, and our sponsor may make a substantial profit on its investment in us in the event we consummate an initial business combination, even if the trading price of our common stock were to materially decline following completion of an initial business combination.
−Removed: Our Sponsor paid an aggregate purchase price of $25,000 for the founder shares, or approximately $0.002 per share.
−Removed: Additionally, our Sponsor purchased an aggregate of 1,450,000 private placement shares at a price of $10.00 per share, for an aggregate purchase price of $14,500,000.
−Removed: Each of our directors has an economic interest in the founder shares and private placement shares purchased by our Sponsor as a result of his or her membership interest or affiliated membership in our Sponsor.
−Removed: Even if the trading price of our common stock significantly declines following a business combination, and not giving effect to any lock-up or vesting terms for its founder shares in connection with our initial business combination, our Sponsor, as well as our directors and officers that have an economic interest in our Sponsor, would be able to make significant profit on its investment in us even if the trading price of our common stock at such time is substantially less than $10.00 per share.
−Removed: Accordingly, our Sponsor, as well as our directors and officers that have an economic interest in our Sponsor may be more willing to pursue an initial business combination with a riskier, weaker-performing or less-established target business than would be the case if our Sponsor had paid the same per share price for the founder shares as our public stockholders paid for their public shares.
−Removed: Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees, agents or stockholders.
−Removed: Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery lacks jurisdiction, a state court located within the State of Delaware or the federal district court for the District of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law:
−Removed: ● any derivative action or proceeding brought on our behalf;
−Removed: ● any action asserting a claim of breach of a fiduciary duty owed by or other wrongdoing by any of our current or former directors, officers, employees, agents or stockholders to us;
−Removed: ● any action asserting a claim arising under any provision of the DGCL, our amended and restated certificate of incorporation or our bylaws (as either may be amended from time to time), or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware;
−Removed: ● any action asserting a claim governed by the internal affairs doctrine.
−Removed: Any person or entity purchasing or otherwise acquiring any interest in our securities will be deemed to have notice of and to have consented to this exclusive forum provision of our amended and restated certificate of incorporation.
−Removed: This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, employees, agents or stockholders, which may discourage lawsuits with respect to such claims.
−Removed: Alternatively, if a court were to find this choice of forum provision in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions.
−Removed: Additional costs associated with resolving an action in other jurisdictions could materially adversely affect our business, financial condition and results of operations.
−Removed: Provisions in our amended and restated certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A common stock and could entrench management.
−Removed: Our amended and restated certificate of incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests.
−Removed: These provisions include three-year director terms and the ability of the board of directors to designate the terms of and issue new series of preferred shares, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
−Removed: Section 203 of the DGCL affects the ability of an “interested stockholder” to engage in certain business combinations, for a period of three years following the time that the stockholder becomes an “interested stockholder.” We elected in our certificate of incorporation not to be subject to Section 203 of the DGCL.
−Removed: Nevertheless, our certificate of incorporation contains provisions that have the same effect as Section 203 of the DGCL, except that it provides that affiliates of our Sponsor and their transferees are not deemed to be “interested stockholders,” regardless of the percentage of our voting stock owned by them, and are therefore not subject to such restrictions.
−Removed: These charter provisions may limit the ability of third parties to acquire control of our company.
−Removed: If we are unable to maintain an effective system of disclosure controls and procedures and internal controls over financial reporting, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence in us and materially and adversely affect our business and financial results.
−Removed: A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected and corrected on a timely basis.
−Removed: Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud.
−Removed: In connection with the restatement of our previously issued audited balance sheet as of July 12, 2021 we previously identified a material weakness in our internal control over financial reporting, solely related to our accounting for complex financial instruments.
−Removed: While our previous material weakness has been remediated, if we identify any new material weaknesses in the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements.
−Removed: In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and our stock price may decline as a result.
−Removed: We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses.
−Removed: Risks Relating to Our Management Team
−Removed: Our officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs.
−Removed: This conflict of interest could have a negative impact on our ability to complete our initial business combination.
−Removed: Our officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other responsibilities.
−Removed: We do not intend to have any full-time employees prior to the completion of our business combination.
−Removed: Each of our officers and directors is engaged in several other business endeavors for which he or she may be entitled to substantial compensation and our officers and directors are not obligated to contribute any specific number of hours per week to our affairs.
−Removed: For example, Michael Klein, the Chairman of our board of directors, is the founder and managing partner of M.
−Removed: Klein and Company and acts as a strategic advisor to its clients.
−Removed: Klein has fiduciary duties to the other entities in which he serves as a director or officer, and will have no duty to offer acquisition opportunities to the company unless presented to him solely in his capacity as an officer or director of the company.
−Removed: If our officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination.
−Removed: Please see “Item 10.
−Removed: Directors, Executive Officers and Corporate Governance” and “—Conflicts of Interest” in Part III of this Annual Report for a discussion of our officers’ and directors’ other business affairs and potential conflicts of interest.
−Removed: We are dependent upon our officers and directors and their departure could adversely affect our ability to operate.
−Removed: Our operations are dependent upon a relatively small group of individuals.
−Removed: We believe that our success depends on the continued service of our officers and directors, at least until we have completed our initial business combination.
−Removed: We do not have an employment agreement with, or key-man insurance on the life of any of our other directors or officers.
−Removed: The unexpected loss of the services of one or more of our directors or officers could have a detrimental effect on us.
−Removed: Our ability to successfully effect our initial business combination and to be successful thereafter will be dependent upon the efforts of our key personnel, some of whom may join us following our initial business combination.
−Removed: The loss of key personnel could negatively impact the operations and profitability of our post- combination business.
−Removed: Our ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel.
−Removed: The role of our key personnel in the target business, however, cannot presently be ascertained.
−Removed: Although some of our key personnel may remain with the target business in senior management or advisory positions following our initial business combination, we do not currently expect that any of them will do so.
−Removed: While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure you that our assessment of these individuals will prove to be correct.
−Removed: These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
−Removed: In addition, the officers and directors of an acquisition candidate may resign upon completion of our initial business combination.
−Removed: The departure of a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business.
−Removed: The role of an acquisition candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time.
−Removed: Although we contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our initial business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.
−Removed: The loss of key personnel could negatively impact the operations and profitability of our post-combination business.
−Removed: Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination, and a particular business combination may be conditioned on the retention or resignation of such key personnel.
−Removed: These agreements may cause our key personnel to have conflicts of interest in determining whether to proceed with a particular business combination.
−Removed: However, we do not expect that any of our key personnel will remain with us after the completion of our initial business combination.
−Removed: Our key personnel may be able to remain with our company after the completion of our initial business combination only if they are able to negotiate employment or consulting agreements in connection with the business combination.
−Removed: Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us after the completion of the business combination.
−Removed: Such negotiations also could make such key personnel’s retention or resignation a condition to any such agreement.
−Removed: The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business.
−Removed: However, we believe the ability of such individuals to remain with us after the completion of our initial business combination will not be the determining factor in our decision as to whether or not we will proceed with any potential business combination, as we do not expect that any of our key personnel will remain with us after the completion of our initial business combination.
−Removed: The determination as to whether any of our key personnel will remain with us will be made at the time of our initial business combination.
−Removed: We may have a limited ability to assess the management of a prospective target business and, as a result, may affect our initial business combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.
−Removed: When evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess the target business’s management may be limited due to a lack of time, resources or information.
−Removed: Our assessment of the capabilities of the target business’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected.
−Removed: Should the target business’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination business may be negatively impacted.
−Removed: Accordingly, any stockholders who choose to remain a stockholder holder following our initial business combination could suffer a reduction in the value of their securities.
−Removed: Such stockholders are unlikely to have a remedy for such reduction in value.
−Removed: The officers and directors of an initial business combination candidate may resign upon completion of our initial business combination.
−Removed: The departure of a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business.
−Removed: The role of an initial business combination candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time.
−Removed: Although we contemplate that certain members of an acquisition candidate’s management team will remain associated with the initial business combination candidate following our initial business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.
−Removed: As a result, we may need to reconstitute the management team of the post-transaction company in connection with our initial business combination, which may adversely impact our ability to complete an initial business combination in a timely manner or at all.
−Removed: Certain of our officers and directors are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity or other transaction should be presented.
−Removed: Until we consummate our initial business combination, we intend to engage in the business of identifying and combining with one or more businesses.
−Removed: Our Sponsor and officers and directors are, or may in the future become, affiliated with entities (such as operating companies or investment vehicles) that are engaged in a similar business.
−Removed: We do not have employment contracts with our officers and directors that will limit their ability to work at other businesses.
−Removed: In addition, our Sponsor, officers and directors may participate in the formation of, or become an officer or director of, any other blank check company prior to completion of our initial business combination.
−Removed: As a result, our Sponsor, officers or directors could have conflicts of interest in determining whether to present business combination opportunities to us or to any other blank check company with which they may become involved.
−Removed: In addition, Mr.
−Removed: Klein and Company may have sponsored or form other blank check companies similar to ours during the period in which we were seeking an initial business combination.
−Removed: Any such companies may have presented additional conflicts of interest in pursuing an acquisition target.
−Removed: In particular, M.
−Removed: Klein and Company, Mr.
−Removed: Klein and the Strategic and Operating Partners have formed and are actively engaged in Churchill Capital Corp VII, a special purpose acquisition corporation that completed its initial public offering in February 2021, and Churchill Capital Corp IX, a blank check company incorporated as a Cayman Islands exempted company that is in the process of completing its initial public offering as of the date of this report.
−Removed: Churchill Capital Corp VII, like us, may pursue initial business combination targets in any businesses or industries and has until August 17, 2024 to do so (absent an extension in accordance with its charter).
−Removed: Any such companies, including Churchill Capital Corp VII and Churchill Capital Corp.
−Removed: IX, may have presented or may present, as applicable, additional conflicts of interest in pursuing an acquisition target and may present additional conflicts of interest in completing our initial business combination.
−Removed: As described in “Item 10.
−Removed: Directors, Executive Officers and Corporate Governance —Conflicts of Interest ” in Part III of this Annual Report, each of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations or duties to one or more other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entities.
−Removed: Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for one or more entities to which he or she has fiduciary, contractual or other obligations or duties, he or she will honor these obligations and duties to present such business combination opportunity to such entities first, and only
−Removed: present it to us if such entities reject the opportunity and he or she determines to present the opportunity to us.
−Removed: These conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us.
−Removed: Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless (i) such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company, (ii) such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue and (iii) the director or officer is permitted to refer the opportunity to us without violating another legal obligation.
−Removed: Please see “Item 10 .
−Removed: Directors, Executive Officers and Corporate Governance —Conflicts of Interest ” and “Item 13.
−Removed: Certain Relationships and Related Transactions, and Director Independence” in Part III of this Annual Report for a discussion of our officers’ and directors’ business affiliations and potential conflicts of interest.
−Removed: Our officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
−Removed: We have not adopted a policy that expressly prohibits our directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest.
−Removed: In fact, we may enter into a business combination with a target business that is affiliated with M.
−Removed: Klein and Company, our Sponsor or our directors or officers.
−Removed: We do not have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us.
−Removed: Accordingly, such persons or entities may have a conflict between their interests and ours.
−Removed: In particular, affiliates of our Sponsor, our directors and our officers have invested, and may in the future invest, in a broad array of sectors, including those in which our company may invest.
−Removed: As a result, there may be substantial overlap between companies that would be a suitable business combination for us and companies that would make an attractive target for such other affiliates.
−Removed: Please see “Item 1 .
−Removed: Business —Certain Potential Conflicts of Interest Relating to M.
−Removed: Klein and Company and Our Officers and Directors ” in Part I of this Annual Report for additional information.
−Removed: We may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with M.
−Removed: Klein and Company, our Sponsor, officers or directors which may raise potential conflicts of interest.
−Removed: In light of the involvement of our Sponsor, officers and directors with other businesses, we may decide to acquire one or more businesses affiliated with or competitive with M.
−Removed: Klein and Company, our Sponsor, officers and directors, and their respective affiliates.
−Removed: Our directors also serve as officers and board members for other entities, including, without limitation, those described under “Item 10.
−Removed: Directors, Executive Officers and Corporate Governance —Conflicts of Interest ” in Part III of this Annual Report.
−Removed: Such entities may compete with us for business combination opportunities.
−Removed: Our Sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our initial business combination with any entities with which they are affiliated, and there have been no substantive discussions concerning a business combination with any such entity or entities.
−Removed: Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for a business combination as set forth in “Item 1.
−Removed: Business —Initial Business Combination ” in Part I of this Annual Report and such transaction was approved by a majority of our independent and disinterested directors.
−Removed: Despite our agreement to obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm, regarding the fairness to our stockholders from a financial point of view of a business combination with one or more domestic or international businesses affiliated with M.
−Removed: Klein and Company, our Sponsor, officers or directors, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public stockholders as they would be absent any conflicts of interest.
−Removed: We may engage M.
−Removed: Klein and Company, or another affiliate of our Sponsor, as our lead financial advisor on our business combinations and other transactions.
−Removed: Any fee in connection with such engagement may be conditioned upon the completion of such transactions.
−Removed: This financial interest in the completion of such transactions may influence the advice such affiliate provides.
−Removed: We may engage M.
−Removed: Klein and Company, or another affiliate of our Sponsor, as a financial advisor in connection with our initial business combination and pay such affiliate a customary financial advisory fee in an amount that constitutes a market standard financial advisory fee for comparable transactions.
−Removed: Pursuant to any such engagement, the affiliate may earn its fee upon closing of the initial business combination.
−Removed: The payment of such fee would likely be conditioned upon the completion of the initial business combination.
−Removed: Therefore, our Sponsor may have additional financial interests in the completion of the initial business combination.
−Removed: These financial
−Removed: interests may influence the advice any such affiliate provides us as our financial advisor, which advice would contribute to our decision on whether to pursue a business combination with any particular target.
−Removed: Since our initial stockholders will lose their entire investment in us if our initial business combination is not completed (other than with respect to any public shares they may hold), a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.
−Removed: In March 2021, the Sponsor purchased 43,125,000 shares of the company’s Class B common stock for an aggregate price of $25,000 (the “Founder Shares”).
−Removed: On March 9, 2021, the Sponsor forfeited 14,375,000 Founder Shares for no consideration, resulting in an aggregate of 28,750,000 Founder Shares outstanding.
−Removed: On July 7, 2021, the Sponsor surrendered 16,250,000 Founder Shares for no consideration, resulting in an aggregate of 12,500,000 Founder Shares outstanding.
−Removed: All shares and associated amounts have been retroactively restated to reflect the share forfeiture.
−Removed: The number of founder shares issued was determined based on the expectation that the founder shares would represent 20% of the outstanding shares of common stock upon the completion of the Initial Public Offering (excluding the private placement shares).
−Removed: The founder shares will be worthless if we do not complete an initial business combination.
−Removed: The Founder Shares are identical to the shares of Class A common stock sold in the Initial Public Offering, except that:
−Removed: (1) only holders of the founder shares have the right to vote on the election of directors prior to our initial business combination provided, however, that with respect to the election of directors in connection with a meeting of the stockholders of the company in which a business combination is submitted to the stockholders of the company for approval, holders of the Class A common stock and holders of the Class B common stock, voting together as a single class, shall have the exclusive right to vote for the election of directors;
−Removed: (2) the founder shares are subject to certain transfer restrictions, as described in more detail below;
−Removed: (3) our Sponsor, officers and directors have each entered into a letter agreement with us, pursuant to which they have agreed to:
−Removed: (a) waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion of our initial business combination, (b) waive their redemption rights with respect to any founder shares and public shares held by them in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we have not consummated our initial business combination within the completion window;
−Removed: and (c) waive their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination within the completion window (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the completion window);
−Removed: (4) the founder shares are automatically convertible into shares of our Class A common stock at the time of our initial business combination on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described herein;
−Removed: and (5) the holders of founder shares are entitled to registration rights.
−Removed: The personal and financial interests of our Sponsor, officers and directors may influence their motivation in identifying and selecting a target business combination, completing an initial business combination and influencing the operation of the business following the initial business combination.
−Removed: This risk may become more acute as the deadline for completing our initial business combination nears.
−Removed: Changes in the market for directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination.
−Removed: In recent months, the market for directors and officers liability insurance for special purpose acquisition companies has changed in ways adverse to us and our management team.
−Removed: Fewer insurance companies are offering quotes for directors and officers liability coverage, the premiums charged for such policies have generally increased and the terms of such policies have generally become less favorable.
−Removed: These trends may continue into the future.
−Removed: The increased cost and decreased availability of directors and officers liability insurance could make it more difficult and more expensive for us to negotiate an initial business combination.
−Removed: In order to obtain directors and officers liability insurance or modify its coverage as a result of becoming a public company, the post-business combination entity might need to incur greater expense, accept less favorable terms or both.
−Removed: However, any failure to obtain adequate directors and officers liability insurance could have an adverse impact on the post-business combination’s ability to attract and retain qualified officers and directors.
−Removed: In addition, even after we were to complete an initial business combination, our directors and officers could still be subject to potential liability from claims arising from conduct alleged to have occurred prior to the initial business combination.
−Removed: As a result, in order to protect our directors and officers, the post-business combination entity may need to purchase additional insurance with respect
−Removed: to any such claims (“run-off insurance”).
−Removed: The need for run-off insurance would be an added expense for the post-business combination entity, and could interfere with or frustrate our ability to consummate an initial business combination on terms favorable to our investors.
−Removed: Risks Associated with Acquiring and Operating a Business in Foreign Countries
−Removed: If our management team pursues a company with operations or opportunities outside of the United States for our initial business combination, we may face additional burdens in connection with investigating, agreeing to and completing such combination, and if we effect such initial business combination, we would be subject to a variety of additional risks that may negatively impact our operations.
−Removed: If our management team pursues a company with operations or opportunities outside of the United States for our initial business combination, we would be subject to risks associated with cross-border business combinations, including in connection with investigating, agreeing to and completing our initial business combination, conducting due diligence in a foreign jurisdiction, having such transaction approved by any local governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.
−Removed: If we effect our initial business combination with such a company, we would be subject to any special considerations or risks associated with companies operating in an international setting, including any of the following:
−Removed: ● costs and difficulties inherent in managing cross-border business operations and complying with commercial and legal requirements of overseas markets;
−Removed: ● rules and regulations regarding currency redemption;
−Removed: ● complex corporate withholding taxes on individuals;
−Removed: ● laws governing the manner in which future business combinations may be effected;
−Removed: ● tariffs and trade barriers;
−Removed: ● regulations related to customs and import/export matters;
−Removed: ● longer payment cycles;
−Removed: ● tax consequences;
−Removed: ● currency fluctuations and exchange controls;
−Removed: ● rates of inflation;
−Removed: ● challenges in collecting accounts receivable;
−Removed: ● cultural and language differences;
−Removed: ● employment regulations;
−Removed: ● crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars, including the conflict in Ukraine and the surrounding region and between Israel and Hamas;
−Removed: ● deterioration of political relations with the United States;
−Removed: ● obligatory military service by personnel;
−Removed: ● government appropriation of assets.
−Removed: We may not be able to adequately address these additional risks.
−Removed: If we were unable to do so, we may be unable to complete such initial business combination or, if we complete such initial business combination, our operations might suffer, either of which may adversely impact our business, results of operations and financial condition.
−Removed: If our management following our initial business combination is unfamiliar with U.S.
−Removed: securities laws, they may have to expend time and resources becoming familiar with such laws, which could lead to various regulatory issues.
−Removed: Following our initial business combination, any or all of our management could resign from their positions as officers of the company, and the management of the target business at the time of the business combination could remain in place.
−Removed: Management of the target business may not be familiar with U.S.
−Removed: securities laws.
−Removed: If new management is unfamiliar with U.S.
−Removed: securities laws, they may have to expend time and resources becoming familiar with such laws.
−Removed: This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.
−Removed: General Risk Factors
−Removed: We have no operating history and no revenues, and investors have no basis on which to evaluate our ability to achieve our business objective.
−Removed: We have no operating results, and we will not commence operations until after we have completed our initial business combination.
−Removed: Because we lack an operating history and our sole purpose is to complete a business combination with one or more operating companies, investors have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination with one or more target businesses.
−Removed: If we fail to complete our business combination, we will never generate any operating revenues.
−Removed: Past performance by M.
−Removed: Klein and Company and members of our management team or our Strategic and Operating Partners may not be indicative of future performance of an investment in us.
−Removed: Information regarding performance by, or businesses associated with, M.
−Removed: Klein and Company and other members of our management team or our Strategic and Operating Partners is presented for informational purposes only.
−Removed: Any past experience and performance, including related to acquisitions, of M.
−Removed: Klein and Company and members of our management team or our Strategic and Operating Partners is not a guarantee either:
−Removed: (1) that we have successfully identified a suitable candidate for our initial business combination;
−Removed: or (2) of any results with respect to any initial business combination we may consummate.
−Removed: You should not rely on the historical record and performance of M.
−Removed: Klein and Company and members of our management team or our Strategic and Operating Partners as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward.
−Removed: An investment in us is not an investment in M.
−Removed: Klein and Company or our Strategic and Operating Partners.
−Removed: Certain agreements related to the Initial Public Offering may be amended without stockholder approval.
−Removed: Certain agreements, including the underwriting agreement relating to the Initial Public Offering, the letter agreements between us and each of our Sponsor, officers and directors, and the registration rights agreement among us and our initial stockholders, may be amended without stockholder approval.
−Removed: These agreements contain various provisions that our public stockholders might deem to be material.
−Removed: While we do not expect our board to approve any amendment to any of these agreements prior to our initial business combination, it may be possible that our board, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more amendments to any such agreement in connection with the consummation of our initial business combination.
−Removed: Any such amendments would not require approval from our stockholders, may result in the completion of our initial business combination that may not otherwise have been possible, and may have an adverse effect on the value of an investment in our securities.
−Removed: We are an emerging growth company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
−Removed: We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of
−Removed: Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
+Added: The below is a summary of principal risks to our business and risks associated with ownership of our Common Stock.
+Added: The risks and uncertainties described below should be carefully considered, together will all other information in this Annual Report on Form 10-K, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, before making a decision to invest in our common stock.
+Added: Our business, financial condition, results of operations, or prospects could also be harmed by risks and uncertainties not currently known to us or what we currently do not believe are material.
+Added: In the event that any of the risks actually occur, our business, financial condition, results of operations, and prospects could be adversely affected and could lead to a decline in the market price of our common stock.
+Added: Risk Factors Summary
+Added: • We have not yet constructed any powerhouses or entered into any binding contract with any customer to operate a plant or deliver electricity or heat, and there is no guarantee that we will be able to do so in the future.
+Added: Our limited commercial operating history and limited experience in operating a company presents risks and challenges.
+Added: • We are an early‑stage company with a history of financial losses, and we expect to incur significant expenses and continuing financial losses.
+Added: • Acquisitions, divestitures, or joint ventures can involve unknown risks.
+Added: • Our powerhouses are expected to rely on high-assay low-enriched uranium (“HALEU”).
+Added: Our inability to access HALEU or recycled waste fuel will adversely affect our ability to manufacture fuel and to produce power.
+Added: • Building a new fuel fabrication and/or fuel recycling facility is challenging.
+Added: • Our supply base may not be able to scale to the production levels necessary to meet sales projections.
+Added: • We and our third‑party vendors may not be able to obtain sufficient materials or supplied components or scale productions levels necessary to meet our manufacturing and operating needs or obtain such materials on favorable terms including price.
+Added: Additionally, certain components may only be available from international suppliers.
+Added: • Our business operations rely heavily on securing agreements with suppliers for essential materials and components.
+Added: Our ability to enter into agreements with potential new customers to provide power may be limited by certain terms of the February 2024 LOI, as described below.
+Added: • Customers may rescind or back out of non-binding agreements.
+Added: • A departure of key personnel or our failure to successfully recruit and retain skilled personnel could have a material adverse effect on our business.
+Added: • Risks related to our power purchase agreements.
+Added: • There is limited precedent for independent developer construction and operation, use of power purchase agreements, and other behind the meter or off grid business models relating to deployment of fission power plants.
+Added: • Some of our management team have limited experience in operating a public company.
+Added: • If we fail to manage our growth effectively, we may be unable to execute our business plan.
+Added: • Risks related to limited commercial operating experience for metal-fueled fast reactors of this type, configuration, and scale.
+Added: • The distributed generation industry is an emerging market, and distributed generation may not receive widespread market acceptance or demand may be lower than we expect.
+Added: • Successful commercialization of new, or further enhancements to existing, alternative carbon free energy generation technologies may adversely affect the market demand for our powerhouses.
+Added: • If demand for our powerhouses fails to develop sufficiently, our business and operations could suffer, and we would be unable to achieve or maintain profitability.
+Added: • Competition could cause us to experience downward pressure.
+Added: The cost of electricity and heat generated from our powerhouses may not be cost competitive with electricity and/or heat generated from other sources.
+Added: • Changes in the availability and cost of oil, natural gas and other forms of energy are subject to volatile market conditions.
+Added: Our investment in recycling may not provide the return we expect.
+Added: • Our business plan involves the concurrent development of two configurations of our powerhouses (15 MWe and 75 MWe) and may also include the development of other configurations (100 MWe and higher), and makes certain assumptions that may not be accurate or correct.
+Added: Any adverse change to these assumptions may have a material adverse effect on our business.
+Added: • Negative public and political perceptions of nuclear energy and radioactive materials could materially and adversely affect us.
+Added: • Our use of technologies and systems that use artificial intelligence or large language models may cause inadvertent or unexpected impacts that may harm our business.
+Added: • Our ability to protect our patents and other intellectual property rights may be challenged.
+Added: • Risks related to cybersecurity and data privacy.
+Added: • Macroeconomic risks related to our business, including inflation, rising costs, uncertain global macroeconomic and political conditions, and climate change impacts.
+Added: Furthermore, if the market for artificial intelligence ("AI") technologies contracts or grows slower than expected, it may reduce demand for our offerings.
+Added: • Risks related to compliance with law, government regulation and litigation.
+Added: • Risks related to our capital resources and our ability to continue as a going concern, and risks related to tax laws and regulations.
+Added: • Risks related to the volatility of our common stock, and provisions in our certificate of incorporation and bylaws.
+Added: • Risks as an emerging growth company.
+Added: • Our failure to timely and effectively implement controls and procedures required by Section 404(a) of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") could negatively impact our business.
+Added: Risks Related to Our Business and Operations
+Added: We have not yet constructed any powerhouses or entered into any binding contract with any customer to operate a plant or deliver electricity or heat, and there is no guarantee that we will be able to do so in the future.
+Added: This limited commercial operating history makes it difficult to evaluate our prospects, the risks and challenges we may encounter and our total potential addressable market.
+Added: Our business plan to construct and operate our powerhouses is subject to reaching binding agreements with potential customers for electricity or heat delivered by our powerhouses.
+Added: If no potential near‑term customer enters into such binding agreements with us, our planned construction and operation of our powerhouses could be significantly delayed.
+Added: Such delays would result in delays in revenue and could hinder our ability to gain market traction with other potential customers.
+Added: This could have a material adverse effect on our business and financial condition.
+Added: To date, we have entered into contingent non‑binding letters of intent to purchase power with potential customers, which may not result in binding agreements for the purchase of electricity or heat from our powerhouses.
+Added: In addition, we have been tentatively selected to provide electricity and steam to Eielson AFB, and such award has not been finalized and is subject to our completion of various requirements set forth by the U.S.
+Added: As a result of our limited commercial operating history and ongoing changes in our new and evolving industry, including evolving demand for our products and services and the potential development of technologies that may prove more efficient or effective for our intended use cases, our ability to forecast our future results of operations and plan for and model future growth is limited and subject to a number of uncertainties.
+Added: Therefore, there can be no assurance that our internal estimates relating to the size of our total addressable market will be correct.
+Added: In addition, our expectations with respect to our total potential addressable market may differ from those of third parties, including investors or securities analysts.
+Added: We have a limited commercial operating history in a rapidly evolving industry.
+Added: The markets for electricity and heat generated by nuclear power plants, nuclear reactor design, nuclear reactor production, nuclear fuel design, nuclear fuel supply, nuclear waste recycling, nuclear fuel fabrication, nuclear waste management and services related to any or all of the foregoing may not continue to develop in a manner that we expect or that otherwise would be favorable to our business.
+Added: We have encountered and expect to continue to encounter risks and uncertainties frequently experienced by growing companies in rapidly evolving industries, such as the risks and uncertainties described in this Annual Report on Form 10-K.
+Added: Accordingly, we may be unable to prepare accurate internal financial forecasts or replace anticipated revenue that we do not receive as a result of delays, changed circumstances, or changed market conditions arising from these factors, and our results of operations in future reporting periods may be below the expectations of investors or analysts.
+Added: If we do not address these risks successfully, our results of operations could differ materially from our estimates and forecasts or the expectations of investors or analysts, causing our business to suffer and our common stock price to decline.
+Added: We have limited experience in operating a company that builds and operates commercial nuclear power plants or that directly provides customers heat or power.
+Added: We have limited experience operating a company that builds, operates, or maintains commercial nuclear power plants or that directly provides customers energy as electricity or heat.
+Added: Our management may not be fully aware of many of the specific requirements of operating such a company.
+Added: We believe our primary business approach of providing power directly to customers as opposed to licensing designs or selling powerhouses is unique in the nuclear power industry.
+Added: As a result of our business model and lack of experience of our management, our management’s decisions and choices may not take into account standard managerial approaches that commercial nuclear power companies commonly use, some of which may not be directly relevant to our business.
+Added: Our operations, earnings and ultimate financial success could suffer due to our management’s lack of experience.
+Added: We are an early‑stage company with a history of financial losses (i.e., negative cash flows), and we expect to incur significant expenses and continuing financial losses at least until our powerhouses become commercially viable, which may never occur.
+Added: We expect our operating expenses to increase over the next several years and to continue to incur operating losses for the foreseeable future as we continue to expand and develop, and we may need additional capital from external sources.
+Added: Our construction and delivery timeline estimates for our powerhouses, facilities, and other equipment may increase due to a number of factors, including the degree of pre‑fabrication, standardization, on‑site construction, long‑lead procurement, contractor performance, plant pre‑operational and startup testing and other site‑specific considerations.
+Added: The success of our business will depend in large part on our ability to successfully construct our powerhouses and deliver heat and electricity to potential customers on‑time and on‑budget at guaranteed performance levels, which would tend to establish greater confidence in our subsequent customers.
+Added: The success of our business will also depend in part on our ability to construct fuel fabrication and recycling facilities.
+Added: There is no guarantee that all necessary components will be commercially available and substantial development of new supply chains might be necessary.
+Added: Additionally, we cannot guarantee the level of quality of these third‑party supplies or import and export requirements or limitations that might be
+Added: stipulated by the NRC or U.S.
+Added: Department of Energy (“DOE”) for the procurement of these components.
+Added: There is no guarantee that the planned construction, delivery, and performance of our powerhouses or the equipment we need to fabricate and recycle fuel will be successful, timely, or on budget or that our third‑party suppliers and contractors will deliver timely or on budget;
+Added: plant pre‑operational and startup testing, including tests mandated as license conditions by the NRC, will be successfully completed on‑time;
+Added: we will not experience delays, operational or process failures, and other problems during our first commercial deployment or any planned deployment thereafter;
+Added: or the construction of our fuel fabrication and recycling facilities will be completed at the cost and on the timeline we expect.
+Added: We will depend on third‑party contractors to perform many of the essential activities needed to deploy our powerhouses.
+Added: We do not control the performance of these contractors and our contracts with them may not provide adequate remedies if they fail to perform.
+Added: We do not currently employ any risk-sharing structures to mitigate the risks associated with the construction, delivery and performance of our powerhouses or our fuel fabrication and recycling facilities.
+Added: Any delays or setbacks we may experience for our first commercial delivery or in establishing our fuel fabrication or recycling facilities as well as any failure to obtain final investment decisions for future orders could have a material adverse effect on our business prospects, financial condition, results of operations and cash flows and could harm our reputation.
+Added: Acquisitions, divestitures or joint ventures involve unknown risks and could result in operating difficulties or other consequences that may have adverse effects on our business and operating results.
+Added: Acquisitions, divestitures, or joint ventures, including the acquisition of Atomic Alchemy, may fail to achieve their intended results, and their activities may disrupt or have a negative impact on the Company’s business or to our financial condition and operating results.
+Added: The pursuit of acquisitions, divestitures, or joint ventures could create unforeseen operating difficulties and expenditures.
+Added: Some of the areas where we face risks include:
+Added: • diversion of management time and focus from operating our business to challenges related to acquisitions, divestitures, and other strategic arrangements;
+Added: • failure to complete acquisitions, divestitures, or joint ventures in a timely basis, if at all, could restrict our ability to realize the expected financial or strategic goals of a transaction;
+Added: • failure to successfully integrate the acquired operations, technologies, services, and personnel (including cultural integration and retention of employees) and further develop the acquired business or technology;
+Added: • implementation of controls (or remediation of control deficiencies), procedures, and policies at the acquired company;
+Added: • integration of the acquired company’s accounting and other administrative systems, and the coordination of product, engineering, and sales and marketing functions;
+Added: • transition of the acquired company’s operations, users, and customers onto our existing platforms;
+Added: • failure to accomplish commercial, strategic or financial objectives with respect to investments, joint ventures, and other strategic arrangements;
+Added: • liability for activities of the acquired company before the acquisition, including patent and trademark infringement claims, data privacy and security issues, violations of laws, commercial disputes, tax liabilities, warranty claims, product liabilities, and other known and unknown liabilities;
+Added: • litigation or other claims in connection with the acquired company, including claims from former employees, customers, former stockholders, or other third parties.
+Added: Our failure to address these risks or other problems encountered in connection with our past or future acquisitions, divestitures, and other strategic arrangements could cause us to fail to realize their anticipated benefits, incur unanticipated liabilities, and harm our business generally.
+Added: Our acquisitions and other strategic arrangements could also result in dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities, or amortization expenses, or impairment of goodwill and/or purchased long-lived assets, and restructuring charges, any of which could harm our financial condition and operating results.
+Added: In connection with our divestitures, we have agreed, and may in the future agree, to provide indemnification for certain potential liabilities, which could harm our financial condition and operating results.
+Added: Our powerhouses, like many advanced fission reactors, are expected to rely on HALEU, in part or for a period of time until recycled waste fuel is available.
+Added: HALEU is not currently available at scale.
+Added: Access to a domestic supply of HALEU
+Added: requires regulatory approval, and may require additional third‑party development and investment and/or significant government assistance.
+Added: If we are unable to access HALEU or recycled waste fuel, our ability to manufacture fuel and to produce power will be adversely affected, which could have a material adverse effect on our business prospects, financial condition, results of operations and cash flows .
+Added: Existing commercial nuclear infrastructure, including enrichment facilities and fuel fabrication facilities, were in most cases designed and are currently licensed to produce uranium in pellet and rod form, with enrichment of the isotope Uranium 235 up to 5%, according to the World Nuclear Association and NRC.
+Added: Our powerhouses are expected to rely, in part, on HALEU that is not currently available at scale domestically.
+Added: Supplying fresh HALEU to our powerhouses could require continued modifications to, and NRC licensing of, existing commercial uranium enrichment and fuel fabrication facilities, none of which are currently owned or operated by us.
+Added: Currently, HALEU for our commercial powerhouses is available only in limited quantities globally.
+Added: In the United States, HALEU can be sourced in small amounts from the DOE, and a small but growing supply is being produced domestically by Centrus Energy Corp.
+Added: ("Centrus") and by others.
+Added: government initiatives, including the $700 million in funding for HALEU development (supported by the Energy Act of 2020 and the Inflation Reduction Act of 2022) and the DOE’s request for proposals to purchase low-enriched uranium (LEU) from domestic sources on June 27, 2024 (supported by $2.7 billion from President Biden’s Investing in America agenda), the HALEU program is still in its early stages, and significant progress is required to achieve reliable and scalable production.
+Added: It is possible that the U.S.
+Added: government may release feedstock, initially in the form of highly enriched uranium (HEU), that could be down-blended to HALEU for commercial use.
+Added: However, the ability to process HEU into HALEU is currently limited to a few licensed third parties in the United States, and these entities do not yet produce commercial-scale HALEU.
+Added: Additionally, these third parties may require regulatory approvals, infrastructure modifications, and process changes to scale up their operations.
+Added: With the change in administration, it is possible recent federal funding initiatives will be delayed or discontinued.
+Added: Additionally, some industry participants may be slow to implement required infrastructure upgrades or to obtain Nuclear Regulatory Commission licenses or other regulatory approvals needed to enable the enrichment and fabrication of HALEU fuel.
+Added: These challenges could impair our ability to secure adequate HALEU supplies on a predictable schedule and at a manageable cost.
+Added: Delays in obtaining HALEU could impact key activities such as fuel loading, testing, and operation of our powerhouses, potentially exposing us to cost and schedule uncertainties.
+Added: Any such delays may negatively affect the competitiveness of our powerhouses and the power and heat they produce.
+Added: Building a new fuel fabrication facility is challenging as a result of many factors, including regulatory and construction complexity, and may take longer or cost more than we expect.
+Added: We have received initial third‑party cost estimates related to building our first‑of‑a‑kind new commercial fuel fabrication facility.
+Added: Costs may ultimately be significantly higher than our current estimates, which may affect the marketability, capital and operational costs of our powerhouses and our expectations with respect to our business plan and future profitability.
+Added: Where these issues arise at such later stages of deployment, deployment could be subject to greater costs or be significantly delayed, which could materially and adversely affect our business prospects, financial condition, results of operations and cash flows.
+Added: Building a new fuel recycling facility is challenging as a result of many factors, including regulatory and construction complexity, and may take longer or cost more than we expect.
+Added: Our estimates for a fuel recycling facility are based upon studies performed at the U.S.
+Added: national labs and work that is underway through a series of joint Oklo-DOE projects.
+Added: However, costs may be significantly higher than our current estimates, both in terms of the capital and operational costs of our recycling facilities and our expectations with respect to our business plan and future profitability.
+Added: There is limited experience with licensing and constructing fuel recycling facilities at commercial scale in the United States.
+Added: As a result, the deployment of this facility could be subject to higher costs than expected or be significantly delayed, which could materially and adversely affect our business prospects, financial condition, results of operations and cash flows.
+Added: Our supply base may not be able to scale to the production levels necessary to meet sales projections .
+Added: We do not have manufacturing assets and will rely on third-party manufacturers and construction firms to build powerhouses, fuel fabrication facilities, recycling facilities, and associated equipment.
+Added: These capabilities and the facilities involve risks including timeline, cost, and financing risk and even if successfully developed, such capabilities will not be available for our earliest powerhouse deployments.
+Added: Moreover, we are dependent on future supplier capability to meet production demands attendant to our forecasts.
+Added: If our supply chain cannot meet the schedule demands of the market, our projected sales revenues could be materially impacted.
+Added: We rely on a limited number of suppliers for certain materials and supplied components, some of which are highly specialized and are being designed for first‑of‑a‑kind or sole use in our powerhouses, fuel fabrication facilities, and fuel recycling facilities.
+Added: We and our third‑party vendors may not be able to obtain sufficient materials or supplied components to meet our manufacturing and operating needs or obtain such materials on favorable terms including price.
+Added: Additionally, certain components may only be available from international suppliers.
+Added: We rely on a limited number of suppliers for certain materials and supplied components.
+Added: We may not be able to obtain sufficient materials or supplied components to meet our manufacturing and operating needs, or obtain such materials on favorable terms, which could impair our ability to fulfill our orders in a timely manner or increase our costs of production.
+Added: We do not have significant prior experience in the manufacture of any of the components of fuel fabrication facilities, fuel recycling facilities, or power plants.
+Added: We have done prototypic fabrication work and are working to establish manufacturing capabilities for components as well as the deployment of a manufacturing facility.
+Added: Our suppliers’ ability to manufacture components for our fuel fabrication facilities, fuel recycling facilities, and powerhouses is dependent upon sufficient availability of materials and possibly other supplied components, some of which are highly specialized and are being designed for first‑of‑a‑kind or sole use in our fuel fabrication facilities, fuel recycling facilities, and powerhouses.
+Added: Any supply chain disruption incurred by our third‑party suppliers or degradation in the quality and processes of our manufacturer partners, may result in delays, cost overruns or impairments to the development of our fuel fabrication facilities, fuel recycling facilities, and powerhouses.
+Added: Additionally, certain components may only be available from international suppliers, and the imposition of sanctions, tariffs, or material changes in import and export requirements on a nation‑by‑nation basis, on materials or supplied components for our power plants could have a material adverse effect on our operations.
+Added: Prolonged disruptions in the supply of any of our key materials or components, difficulty qualifying new sources of supply, implementing the use of replacement materials or new sources of supply or any volatility in prices could have a material adverse effect on our ability to operate in a cost‑efficient, timely manner.
+Added: Such prolonged disruptions could also cause us to experience cancellations or delays of scheduled launches, customer cancellations or reductions in our prices and margins, any of which could harm our business, financial condition, results of operations and cash flows.
+Added: Our business operations rely heavily on securing agreements with suppliers for essential materials and components that will be used to construct our powerhouses, fuel fabrication facilities, and recycling facilities.
+Added: The execution, termination, expiration, or failure to renew agreements with our suppliers, including, but not limited to, Siemens Energy and Centrus, whether due to unforeseen circumstances such as supplier insolvency and regulatory changes, pose significant risks to our supply chain.
+Added: In the event that such agreements are not successfully maintained or replaced, we may encounter difficulties sourcing required materials and components, leading to deployment delays, increased costs, or an inability to meet customer demand.
+Added: Any interruption or inability to maintain relationships with current and future suppliers, or failure to secure materials from alternative suppliers could adversely impact our business operations, financial performance, and reputation.
+Added: Our ability to enter into agreements with potential new customers to provide power may be limited by certain terms of the February 2024 LOI, including right of first refusal and most favored nations provisions.
+Added: On February 16, 2024 (the “LOI Execution Date”), Legacy Oklo entered into that certain Confidential Letter of Intent to Purchase Power, dated as of February 16, 2024, by and between Legacy Oklo and Equinix (the "February 2024 LOI"), which confirms Equinix’s interest in purchasing power from our powerhouses to serve its data centers in the United States.
+Added: The terms and conditions contained in the February 2024 LOI are expected to be further expanded specific to future deployments within a Power Purchase Agreement (each a “PPA”).
+Added: The terms of a PPA are expected to include, but not be limited to, the following:
+Added: (i) defining deployment locations; (ii) cost; (iii) jurisdictional and regulatory requirements; (iv) schedule; (v) engineering; (vi) manufacturing; (vii) operational performance; and (viii) detailed terms required to complete each location specific PPA.
+Added: Subject to the terms of the February 2024 LOI, for a period of 36 months following the LOI Execution Date, Equinix will have a continuing right of first refusal to purchase energy output produced by powerhouses developed by us in the United States, excluding any powerhouses supplying output to any governmental entity and powerhouses sited in Idaho, Arizona and Ohio (any non‑excluded powerhouse being referred to herein as a “Covered Facility”) for power capacity of no less than 100 MW of energy output from any Covered Facility and up to 500 MW of energy output from any Covered Facility (the “ROFR”).
+Added: It was further agreed, subject to the terms of the February 2024 LOI, that we will not enter into, effective on or after the date of the February 2024 LOI, any letter of intent, PPA or similar agreements or understanding with any current or prospective third‑party customer that would grant to such third‑party customer any more favorable agreement terms, material terms or most favored nation pricing than those set in the February 2024 LOI (the “MFN”).
+Added: The application of the ROFR and MFN provisions may negatively impact our ability to achieve results consistent with our illustrative unit economics and may impair our ability to enter into power purchase agreements with additional customers, including by dampening potential interest from any such potential customers.
+Added: Customers may rescind or back out of non‑binding agreements due to various reasons, which could adversely affect our revenue streams, project timelines, and overall financial performance.
+Added: We have entered into and may enter into additional non‑binding agreements, such as a master power agreement, memorandum of understanding or letter of interest with customers for the purchase of power or to collaborate on projects.
+Added: These agreements are non‑binding and the underlying contracts may not come to fruition as a result of among other things, changes in business priorities, financial constraints, regulatory changes, force majeure events, failure to obtain necessary approvals, or failure to meet contractual obligations by either party.
+Added: The termination of these agreements could adversely affect our business.
+Added: Additionally, loss of planned customers or projects may negatively impact our reputation and future business prospects.
+Added: We depend on key executives, management, directors, and other highly skilled personnel to execute our business plan and conduct and oversee our operations, as applicable.
+Added: A departure of key personnel or our failure to successfully recruit and retain skilled personnel could have a material adverse effect on our business.
+Added: Our success depends, in significant part, on the continued services of our senior management team and directors and on our ability to attract, motivate, develop, and retain a sufficient number of other highly skilled personnel, including engineering, science, technology, manufacturing and quality assurance, regulatory affairs, finance, marketing and sales personnel.
+Added: Our senior management team and directors have extensive experience in the energy and manufacturing industries, and we believe that their depth of experience is instrumental to our continued success.
+Added: The loss of any one or more members of our senior management team or directors, for any reason, including resignation or retirement, could impair our ability to execute our business strategy and have a material adverse effect on our business and financial condition if we are unable to successfully attract and retain qualified and highly skilled replacement personnel.
+Added: Competition for the limited number of these skilled personnel is intense.
+Added: If we are unable to adequately anticipate our needs for certain key competencies and implement human resource solutions to recruit or improve these competencies, our business, results of operations and financial condition would suffer.
+Added: If we are unable to recruit and retain highly skilled personnel, especially personnel with sufficient technical expertise to develop our powerhouses, fuel fabrication facilities, recycling facilities, and fuel, we may experience delays, increased costs, and reputational harm.
+Added: Power purchase agreements are a key component to our anticipated business model for sales of power, and customers may be able to void all or part of these contracts under certain circumstances, which could significantly impact our financial performance and operational stability.
+Added: We may need to find substitute customer power and/or heat offtake or may need to cancel licensing work related to particular customers and sites as a result of changes in customer demand or contracts with customers.
+Added: In our power purchase agreements with customers, we will seek to protect ourselves from risks, but there is no guarantee that we can prevent all customers from voiding our contracts in full or in part.
+Added: Customers might have the right to terminate or renegotiate these contracts based on a number of factors that will be specified on an agreement‑by‑agreement basis.
+Added: Given the risk that a customer might void, or attempt to re‑negotiate, a power purchase agreement, we might ultimately expend resources on a deployment that does not realize the expected revenue.
+Added: Depending on the stage of development of the deployment we may cancel licensing and procurement efforts, losing our investment to that point, or we may be forced to find substitute customers, which may not ultimately purchase energy on as favorable of terms, reducing the expected revenue of the deployment.
+Added: Attracting new customers could be time‑consuming, and there is no guarantee that we will be able to secure new power purchase agreements on terms that are as favorable as the original agreements.
+Added: Fluctuations in energy prices could impact the viability of our power purchase agreements, especially if the contract prices are fixed or based on long term projections.
+Added: Rapid changes in the energy markets might render our pricing less competitive or less profitable.
+Added: Power purchase agreements may include penalties for not delivering sufficient electric and/or heat energy on schedule, which may result in liabilities and reductions in cash flow.
+Added: A term occasionally used in power purchase agreements involves penalties that may accrue if either party fails to meet the stipulations of the relevant agreement, including penalties for the power producer, in this case the Company, if adequate power is not provided on time.
+Added: Such penalties may adversely impact our profitability and financial stability.
+Added: Additionally, such penalties might lead to cash flow reductions as our financial resources are diverted to remediate.
+Added: Reduced cash flow may inhibit our ability to invest in growth opportunities, fund operational expenses, and service debt, among other financial
+Added: Incurring penalties might also harm our reputation in the market, and may put us at a competitive disadvantage to our competitors.
+Added: There is limited precedent for independent developer construction and operation, use of power purchase agreements, and other behind‑the‑meter or off‑grid business models relating to deployment of fission power plants.
+Added: The deployment of fission power plants by independent developers, as well as the utilization of power purchase agreements and other behind‑the‑meter or off‑grid business models, is relatively novel in the energy industry.
+Added: As a result, our business faces certain risks and challenges due to the novelty of the business model.
+Added: The absence of prior experiences may introduce uncertainties that could impact our business projections and subsequent performance.
+Added: Additionally, the novelty of this business approach, or the perception thereof, might lead to higher perceived risks and, consequently, less favorable financing terms, or higher uncertainty risk assessments that might increase the potential for cost overruns and delays of deployment.
+Added: The unfamiliarity of independent developer fission power plants and alternative business models might affect market acceptance.
+Added: Potential customers and stakeholders might hesitate to adopt our approach, which could slow down market penetration and revenue growth.
+Added: This approach is novel to the nuclear industry and if proven successful, may be adopted by competitors.
+Added: Increased competition could erode profit margins and hinder our market expansion.
+Added: Some of our powerhouses may rely on interconnections to distribution and transmission facilities owned and operated by third parties, meaning that those specific deployments are exposed to interconnection and transmission facility development and curtailment risks.
+Added: These curtailment risks could impede delivery of our electricity, have a material adverse effect on our revenue and operational performance, occur without compensation and reduce our ability to fully capitalize on the potential of those specific deployments.
+Added: Insurers may perceive higher risks associated with limited precedent projects, potentially leading to increased insurance premiums or difficulties in obtaining adequate coverage.
+Added: Some of our management team have limited experience in operating a public company.
+Added: Some of our executive officers have limited experience in the management of a publicly traded company.
+Added: Their limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage in that it is likely that an increasing amount of their time may be devoted to these activities, which will result in less time being devoted to our management and growth.
+Added: We may need to add additional personnel with the appropriate level of knowledge, experience, and training in the accounting policies, practices or internal controls over financial reporting to maintain what is required of public companies in the United States.
+Added: The development and implementation of the standards and controls necessary for us to maintain the level of accounting standards required of a public company in the United States may require costs greater than expected.
+Added: We could be required to expand our employee base and hire additional employees to support our operations as a public company, which will increase our operating costs in future periods.
+Added: If we fail to manage our growth effectively, we may be unable to execute our business plan, which could have a material adverse effect on our business prospects, financial condition, results of operations and cash flows.
+Added: We intend to expand our operations significantly to address our target market.
+Added: To properly manage our growth, we will need to hire and retain additional personnel, upgrade our existing operational management and financial and reporting systems, and improve our business processes and controls.
+Added: Our future expansion will include:
+Added: • hiring and training new personnel;
+Added: • completing the designs, licensing, construction, and commissioning of our powerhouses;
+Added: • optimizing applications of our reactors to serve both electric power customers and a broad base of non‑traditional industrial customers interested in utilizing the heat produced by our powerhouses;
+Added: • developing the supply chain necessary to supply components for our powerhouses;
+Added: • developing the processes and technologies to transport radiological materials;
+Added: • developing fuel fabrication capabilities and capacity;
+Added: • developing the operational capabilities and functions necessary to operate our powerhouses;
+Added: • establishing the supply chain required to source and obtain fuel;
+Added: • controlling expenses and investments in anticipation of expanded operations;
+Added: • completing the design, licensing, construction, and commissioning of our fuel recycling facilities;
+Added: • upgrading the existing operational management and financial reporting systems and team to comply with requirements as a public company; and
+Added: • implementing and enhancing administrative infrastructure, systems, and processes.
+Added: If our operations continue to grow, of which there can be no assurance, we will need to continue to expand our sales and marketing, research and development, customer, and commercial strategy, permitting and licensing, products and services, manufacturing, supply, and operations functions.
+Added: These efforts will require us to invest significant financial and other resources, including in industries and sales channels in which we have limited experience to date.
+Added: We will also need to continue to develop our manufacturing and operational systems and processes, and there is no guarantee that we will be able to scale the business as currently planned or within the planned timeframe.
+Added: The continued expansion of our business may also require additional manufacturing and operational facilities, as well as space for administrative support, and there is no guarantee that we will be able to find suitable locations for such facilities.
+Added: Our continued growth could increase the strain on our resources, and we could experience operating difficulties, including difficulties in hiring and training employees, finding capacity internally and with third parties to construct our powerhouses and related equipment, delays in production, challenges in scaling‑up fuel recycling capacity, and difficulty sourcing adequate raw materials, such as HALEU.
+Added: These difficulties may divert the attention of management and key employees and impact financial and operational results.
+Added: If we are unable to drive commensurate growth, these costs, which include lease commitments, headcount, and capital assets, could result in decreased margins, which could have a material adverse effect on our business, financial condition, and results of operations.
+Added: There is limited commercial operating experience for metal‑fueled fast reactors of this type, configuration, and scale, particularly compared to that of the existing fleet of large light water reactors.
+Added: This creates risks in cost and timeline estimates, and lack of recent domestic commercial experience in terms of labor and supply chain and other factors may result in greater than expected construction costs, deployment timelines, maintenance requirements, differing power output and greater operating expenses.
+Added: The lack of commercial experience building and operating metal-fueled fast reactors like ours could lead to us failing to identify latent design, manufacturing, construction, and operations issues of our powerhouses early enough to avoid negative effects on production, fabrication, construction or ultimate performance of powerhouse and related technologies.
+Added: Moreover, the cost and time associated with the construction and maintenance of our metal‑fueled fast reactors may be greater than we expect because of a lack of a domestic labor force with relevant commercial experience and an inexperienced supply chain for this type of reactor.
+Added: Where these issues arise at later stages of deployment, deployment could be subject to greater costs or be significantly delayed, which could materially and adversely affect our business.
+Added: Successful commercialization of new, or further enhancements to existing, alternative carbon‑free energy generation technologies, such as adding carbon capture and sequestration/storage mechanisms to fossil fuel power plants, wind, solar, geothermal or fusion, may prove to be more cost effective or appealing to the global energy markets and therefore may adversely affect the market demand for our powerhouses, potentially adversely affecting our ability to successfully commercialize our powerhouses.
+Added: The expected market for our powerhouses may be superseded or rendered obsolete by new technology or the novel application of existing technology.
+Added: Our estimates for the total addressable market and expectations with regards to certain unit economics are based on a number of internal and third‑party estimates, including our potential contracted revenue, the number of potential customers who have expressed interest in heat and electricity from our powerhouses, the conversion rate of those potential customers into paying customers, assumed prices and production costs for our powerhouses and resulting power, our ability to leverage our current logistical and operational processes, and assumptions regarding our technology and general market conditions.
+Added: However, our assumptions and the data underlying our estimates may not be correct and the conditions supporting our assumptions or estimates may change at any time, reducing the predictive accuracy of these underlying factors.
+Added: Any material change to our assumptions or expectations may have a material adverse effect on our business prospects, financial condition, results of operations and cash flows and could harm our reputation.
+Added: The market for alternative carbon‑free energy generation technologies has not yet been established and may not achieve the potential we expect or may grow more slowly than expected.
+Added: If demand for our powerhouses fails to develop sufficiently, our business and operations could suffer, and we would be unable to achieve or maintain profitability.
+Added: The viability and continued growth in demand for alternative carbon‑free energy generation technologies, and in turn, our powerhouses, may be impacted by many factors outside of our control, including:
+Added: • market acceptance of nuclear power;
+Added: • cost competitiveness, reliability and performance of our powerhouses compared to conventional and renewable energy sources and products;
+Added: • availability and amount of financing to support the development and deployment of our powerhouses;
+Added: • the extent to which the nuclear power industry and broader energy industries are deregulated to permit broader adoption of nuclear electricity generation;
+Added: • the cost and availability of key materials and components used in the production of our powerhouses;
+Added: • prices of traditional utility‑provided energy sources; and
+Added: • the emergence, continuance, or success of, or increased government support for, other alternative energy generation technologies and products.
+Added: Reduction in energy demand or changes in climate‑related policies may change market conditions, reducing our product’s competitiveness and affecting our performance.
+Added: If demand does not grow, our business and operations could suffer, which would have an adverse impact on our ability to grow our business and we could be unable to achieve or maintain profitability.
+Added: Competition from existing or new competitors or technologies domestically and internationally could cause us to experience downward pressure on prices, fewer customer orders, reduced margins, the inability to take advantage of new business opportunities, and the loss of market share.
+Added: We operate in a highly competitive energy market and are subject to competition based upon product design, performance, technology, pricing, quality, and services, from competing nuclear suppliers, as well as from alternative means of producing electricity and/or heat.
+Added: There are a number of advanced reactor designs and advanced reactor projects under development in the United States.
+Added: Many of these designs are involved in application and pre-application reviews with the NRC.
+Added: Our products and services will conform to more exacting specifications and may carry a higher price than competing non‑nuclear products due to the highly regulated nature of the U.S.
+Added: nuclear industry.
+Added: Other companies providing competing technologies could capture customers or market share from us, which could have a material adverse effect on our business or financial condition.
+Added: Moreover, our competitors may develop or adopt technologies that are superior, more efficient, more effective, and/or more attractive to prospective customers compared to our technologies (on a price-to-value basis, operational impact, or otherwise), or may adapt more quickly to leverage new or emerging technologies or meet new or evolving regulatory requirements in our target markets.
+Added: We will need to anticipate and respond to these changes by enhancing our offerings and/or internal processes in order to maintain our competitive position, but we may not be successful in doing so.
+Added: For sales and/or deployments outside of jurisdictions with highly developed nuclear regulatory frameworks, some of our foreign competitors currently benefit from, and others may benefit in the future from, permissive regulatory and licensing regimes and/or from protective measures by their home countries where governments are providing financial support, including significant investments in the development of new technologies.
+Added: Those competitors may have a competitive advantage if they are able to obtain approvals, or if they can demonstrate to potential customers the value and benefits of their products and services, particularly in jurisdictions that have less stringent nuclear regulatory requirements.
+Added: These competitors may have access to greater sources of funding to develop and commercialize their power than we do, whether as a result of potential competitive advantages or from supportive national governments.
+Added: This market environment may result in increased pressures on our pricing and other competitive factors.
+Added: We believe our ability to compete successfully in designing, engineering, manufacturing, and operating our products and services at significantly reduced costs to customers does and will depend on a number of factors, which may change in the future due to increased competition.
+Added: If we are unable to compete successfully, our business, financial condition, results of operations and cash flows would be adversely affected.
+Added: The cost of electricity and heat generated from our powerhouses may not be cost competitive with electricity and/or heat generated from other sources, which could materially and adversely affect our business prospects, financial condition, results of operations and cash flows.
+Added: electricity markets price electric energy, capacity, and/or ancillary services on a competitive basis, with market prices subject to substantial fluctuations.
+Added: Other markets remain heavily regulated by state or local utility regulatory authorities, with power purchase decisions by electric utilities subject to various competitiveness or prudence tests.
+Added: As a result of competitive pressures, some electricity markets experience low marginal energy prices at certain times due to a combination of subsidized generating resources, competitors with low‑cost or no‑cost fuel sources, or market‑design features that create incentives for certain attributes or deliver revenue in unpredictable ways over time, and we may not be able to compete in these markets unless the benefits of our advanced fission power technology and business model are sufficiently valued.
+Added: Even in markets that price reliable capacity on a long‑term basis, there is no guarantee that advanced fission power will be sufficiently low‑cost so as to clear auction‑style capacity markets or to attract customers to sign power purchase agreements with us on commercially acceptable terms, and signing a power purchase agreement or clearing a capacity auction in any one year is no guarantee of similar outcomes in successive years.
+Added: Moreover, powerhouses will likely serve a specific number of market segments targeting smaller distributed generation, remote application, or industrial customers, who may have lower cost power/heat alternatives available to them, especially in the near‑term.
+Added: Failure of the cost of electricity and heat generated from our powerhouses to be cost competitive with electricity and/or heat generated from other sources, will limit our ability to charge a premium relative to other energy sources, which could materially and adversely affect our business prospects, financial condition, results of operations and cash flows.
+Added: Changes in the availability and cost of oil, natural gas and other forms of energy are subject to volatile market conditions that could adversely affect our business prospects, financial condition, results of operations and cash flows.
+Added: The availability and prices of oil, natural gas, and other forms of energy are subject to volatile market conditions.
+Added: These market conditions are affected by political, economic, and other factors beyond our control.
+Added: Decreases in energy prices or increases in nuclear energy costs relative to other forms of energy may adversely affect our business prospects, financial condition, results of operations and cash flows.
+Added: To the extent that these uncertainties cause suppliers and customers to be more cost sensitive or to adjust their business plans and operations, decreased energy prices may have an adverse effect on our business prospects, financial condition, results of operations, and cash flows.
+Added: Our investment in recycling may not provide the return we expect.
+Added: The market for recycled nuclear fuel in the United States may never be established or may be smaller or grow more slowly than expected.
+Added: We are actively developing fuel recycling capabilities with the goal of deploying a commercial‑scale fuel recycling facility in the United States by the 2030s.
+Added: We currently expect to be the primary, but not the sole, users of the recycled fuel we plan to generate.
+Added: Challenges that could impact timeline and cost might arise from necessary activities such as siting, obtaining of federal, state, and local permits and approvals, transportation, threatened litigation, access to used fuel for the purposes of recycling, and securing disposal solutions for waste.
+Added: Our estimates for the total addressable market and expectations with regards to this potential line of business are based on several internal and third‑party estimates, including those for facility deployment, licensing, capital and operational costs, and sales prices for the resulting recycled fuel.
+Added: The timeline to scale‑up and deploy the necessary technological processes is based upon assumptions regarding our technology and general market conditions.
+Added: However, our assumptions and the data underlying these estimates may not be correct, and the conditions supporting our assumptions or estimates might change at any time, reducing the accuracy of these underlying assumptions.
+Added: As a result, our investment in fuel recycling technology and this potential line of business may not provide any return, or the return we have projected.
+Added: In addition, the market for recycling nuclear fuel in the United States has not yet been established and nuclear fuel recycling technologies such as ours have limited operational history and have not been proven at scale.
+Added: Any material change to our assumptions or expectations with respect to the market for recycled nuclear fuel and the technology we plan to utilize may have a material adverse effect on our business prospects, financial condition, results of operations, and cash flows, and could harm our reputation.
+Added: Our business plan involves the concurrent development of two configurations of our powerhouses (15 MWe and 75 MWe), and makes certain assumptions with respect to learnings, efficiencies and regulatory approvals as a result of this concurrent development approach, which may not be accurate or correct.
+Added: Any adverse change to these assumptions may have a material adverse effect on our business prospects, financial condition, results of operations and cash flows.
+Added: Our business plan to construct and operate our powerhouses is subject to the continued development activities and makes assumptions with respect to learnings, efficiencies and regulatory approvals as a result of this concurrent development approach.
+Added: If such assumptions regarding the concurrent development of our powerhouses are not accurate, we may be
+Added: unable to successfully introduce, market, and sell these configurations of our powerhouses in a timely and cost‑effective manner, and properly position and/or price our products, and our business, results of operations, or financial position could be materially impacted.
+Added: Our business plan may also include the development of other configurations of our powerhouses (100 MWe and higher), and makes certain assumptions with respect to learnings, efficiencies, and regulatory approvals as a result of this new development approach which may not be accurate or correct.
+Added: Any adverse change to these assumptions may have a material adverse effect on our business prospects, financial condition and results of operations and cash flows.
+Added: We compete in a market characterized by rapid technological advances, evolving regulatory standards in software technology and frequent new product introductions and enhancements.
+Added: To succeed, we may also rely on the development of other configurations of our powerhouses (100 MWe and higher).
+Added: The development of other configurations of our powerhouses has inherent risks, including, but not limited to:
+Added: • higher than expected research and development costs;
+Added: • delays or unexpected costs in developing new configurations;
+Added: • ability or delays in obtaining regulatory approval;
+Added: • customers delaying purchase decisions in anticipation of new configurations;
+Added: • customer confusion and extended evaluation and negotiation time;
+Added: • educating our sales, marketing, and consulting personnel to work with new configurations;
+Added: • competition from earlier and more established entrants;
+Added: • market acceptance of earlier configurations; and
+Added: • the accuracy of assumptions about the nature of customer demand.
+Added: If we are unable to successfully introduce, market, and sell other configurations of our powerhouses in a timely and cost‑effective manner, and properly position and/or price our products, our business, results of operations, or financial position could be materially impacted.
+Added: We and our customers operate in a politically sensitive environment, and negative public and political perceptions of nuclear energy and radioactive materials could materially and adversely affect us, our customers, and the markets in which we operate.
+Added: Successful execution of our business model is dependent upon public support for nuclear power, in general, in the United States and other countries.
+Added: The risks associated with uses of radioactive materials in our nuclear facilities and the public perception of those risks can affect our business.
+Added: Opposition by third parties can delay or prevent the licensing and construction of new nuclear facilities and in some cases can limit the operation of nuclear facilities.
+Added: Adverse public reaction to developments in the use of nuclear power could directly affect our business and indirectly affect our customers’ businesses.
+Added: In addition, journalists, trade press, and other third parties, potentially including one or more of the agencies with regulatory jurisdiction over us, may publish statements that negatively affect the public or political perception of us.
+Added: We may also face adverse public or political perception due to a variety of environmental and social factors, including as relevant standards continue to evolve.
+Added: Stakeholder and policymaker expectations on such matters are not uniform, and any failure to successfully navigate such expectations may result in various adverse impacts.
+Added: Adverse public opinion or political perceptions could result in increased regulatory requirements and costs or increase the likelihood that our operations are subject to liabilities or adverse claims.
+Added: In the past, adverse public reaction, increased regulatory scrutiny and related litigation contributed to extended licensing and construction periods for new nuclear power plants, sometimes delaying construction schedules by decades or more, or even shutting down operations at already‑constructed nuclear power facilities.
+Added: Incidents involving nuclear energy facilities, including accidents, terrorist acts or other high profile events involving radioactive materials, could materially and adversely affect the public perception of the safety of nuclear energy, and such adverse effects could potentially decrease demand for nuclear energy, increase regulatory requirements and costs, or result in liability or claims that could materially and adversely affect our business.
+Added: Successful execution of our business model is dependent upon public support for nuclear power, in general, in the United States and other countries.
+Added: Any significant incident affecting a nuclear energy facility could materially damage public perception of nuclear power.
+Added: In the past, adverse public reaction to such incidents (for example, incidents involving the Fukushima nuclear power plant in Japan, and incidents at Three Mile Island and Chernobyl) led to increased public and regulatory scrutiny, which contributed to extended licensing and construction periods for new nuclear power plants, sometimes delaying construction schedules by decades or more or even shutting down operations at already‑constructed nuclear power facilities.
+Added: Such an incident could also impact customer demand for heat, electricity, or fuel derived from nuclear energy.
+Added: Any of these effects could materially and adversely affect our business prospects, financial condition, results of operations and cash flows.
+Added: Our use of technologies and systems that use artificial intelligence or large language models, given the dynamic state of such technologies, may cause inadvertent or unexpected impacts that may harm our business.
+Added: Like many companies, we are using and looking for more opportunities to use artificial intelligence technologies, including those that leverage large language models, in an effort to reduce costs and run our business efficiently.
+Added: In particular, we are evaluating opportunities to leverage artificial intelligence operations in our research & development efforts, as well as in operational areas like procurement and contract management.
+Added: Some of these technologies are nascent, and their reliability and effectiveness is unproven.
+Added: As a result, the resources and time we expend to use such systems may ultimately fail to create efficiencies and may even make us less efficient.
+Added: Additionally, these systems may hallucinate or generate incorrect outputs that may negatively impact our business or operations in unexpected ways if we fail to identify and screen out such errors, particularly if we are using such technologies in our research and development efforts (for example, if we use such technologies to help us evaluate design parameters).
+Added: Additionally, the legal and regulatory framework that applies to the use of artificial intelligence technologies is rapidly evolving.
+Added: Such evolving laws and regulations may prevent us from being able to effectively use such technologies, may impact the costs of using such technologies, may cause operational costs if we need to change processes that we implement to use such technologies, or may subject us to legal or regulatory liabilities.
+Added: Our ability to protect our patents and other intellectual property rights may be challenged and is not guaranteed.
+Added: If we are unable to protect our intellectual property rights, our business and competitive position may be harmed.
+Added: We may not be able to prevent unauthorized use of our intellectual property, which could harm our business and competitive position.
+Added: We rely upon a combination of the intellectual property protections afforded by patents, trademarks/service marks, copyrights and trade secret laws in the United States and other jurisdictions, as well as commercial agreements, such as confidentiality agreements, assignment agreements, and license agreements to establish, maintain and enforce rights associated with our powerhouses and related proprietary technologies.
+Added: Given that the underlying technology is many decades old, we primarily use patents to help ensure that others cannot preclude us from using certain technologies or key design aspects.
+Added: Our success depends in part on our ability to obtain and enforce patent protection for our powerhouses and related technologies, but our patent applications may not result in issued patents, given the complexity of questions around patentability and the large number of patents and patent applications in related fields.
+Added: Failing to obtain patent protection may have a material adverse effect on our ability to prevent others from commercially exploiting products similar to ours.
+Added: Even if issued, our patents may be contested, challenged, circumvented, invalidated, or limited in scope in the future.
+Added: The rights granted under any issued patents may not provide us with meaningful protection or competitive advantages, and some foreign countries provide significantly less effective patent enforcement as compared to the United States.
+Added: In addition, the claims of any patents that issue from our patent applications may be narrowed in scope during prosecution, challenged as invalid, or may simply not be broad enough to prevent others from developing technologies that are similar or that achieve results similar to ours (for example if competitors can “design around” our patents).
+Added: Additionally, some of our technology has been developed with funding from the United States Department of Energy.
+Added: Inventions conceived or first actually reduced to practice under agreements with the Department of Energy (“subject inventions”) grant the United States Government (“USG”) certain rights and impose specific obligations on our ability to practice and license these inventions.
+Added: Specifically, the USG obtains a worldwide, nonexclusive, nontransferable, irrevocable, paid‑up license to practice or have the subject invention practiced for or on behalf of the USG and we are generally obligated to ensure that any products embodying or produced through the use of any subject invention will be manufactured substantially in the United States unless the USG determines that it is not commercially feasible to do so.
+Added: Failure to abide by the United States competitiveness requirements for domestic manufacture of certain subject inventions may also cause us to forfeit and assign all rights to certain inventions to the United States Department of Energy.
+Added: Another right the USG has in subject inventions ‑ although it has never exercised such a right ‑ is march‑in rights whereby the USG
+Added: may require us to license a patent on reasonable terms under very limited circumstances, such as if we or a licensee are not commercializing the invention or if there is a violation of the domestic manufacturing requirement in 35 U.S.C.
+Added: We also rely upon unpatented trade secret protection, unpatented know‑how and continuing technological innovation to develop and help maintain our business and competitive position.
+Added: We may not be able to prevent the unauthorized disclosure or use of our trade secrets, know‑how, or information that we consider to be confidential, by the parties to these agreements, despite the existence generally of confidentiality provisions and other contractual restrictions.
+Added: If any of the suppliers, subcontractors, venture partners, employees, and consultants, and other third parties who are parties to these agreements breach or violate the terms of any of these agreements, we may not have adequate remedies for any such breach or violation, and we could lose our trade secrets as a result.
+Added: It is also possible that our trade secrets, know‑how or other proprietary information could be obtained by third parties as a result of breaches of our physical or electronic security systems.
+Added: Even where remedies are available, enforcing a claim that a party illegally disclosed or misappropriated our trade secrets is expensive and time consuming, and the outcome is unpredictable.
+Added: Courts outside the United States are sometimes less willing to protect trade secrets.
+Added: Additionally, our trade secrets could become known or be independently discovered by our competitors.
+Added: If any of our trade secrets were to be lawfully obtained or independently developed by a competitor or other third party, we would have no right to prevent them, or those to whom they communicate, from using that technology or information to compete with us.
+Added: We do not have worldwide patent rights for our powerhouses and related proprietary technologies because there is no such thing as a worldwide patent or “international patent rights.” We also do not have worldwide trademark protection for our brand for similar reasons.
+Added: Accordingly, we may not be able to protect our intellectual property rights in certain jurisdictions and their legal systems.
+Added: Our competitors may operate in countries where we do not have patent protection and can freely use our technologies and discoveries in such countries to the extent such technologies and discoveries are publicly known or disclosed in countries where we do have patent protection.
+Added: We may need to defend ourselves against intellectual property infringement claims, which may be time‑consuming and could cause us to incur substantial fees and costs.
+Added: Companies, organizations or individuals, including our existing and future competitors, may hold or obtain patents, trademarks/service marks or other intellectual property rights that would prevent, limit or interfere with our ability to develop our intellectual property and make, use, develop, import, offer to sell or sell the power and heat generated by our powerhouses and related technology, which could make it more difficult for us to operate our company.
+Added: From time to time, we may receive inquiries from holders of patents or trademarks/service marks inquiring whether we are infringing their proprietary rights.
+Added: Companies, organizations or individuals, including our existing and future competitors, may also seek court declarations that they do not infringe our intellectual property rights.
+Added: Companies holding patents or other intellectual property rights similar to our technology may bring proceedings alleging infringement of such rights or otherwise asserting their rights and seeking licenses.
+Added: In addition, if we are determined to have infringed a third party’s intellectual property rights, we may be required to do among other things, one or more of the following:
+Added: (i) cease making, using, offering to sell, selling or importing our powerhouses or the power and heat generated by our powerhouses that incorporate the challenged intellectual property; (ii) pay substantial damages; (iii) pay for and obtain a license from the holder of the infringed intellectual property right, which may not be available on reasonable terms or at all; or (iv) redesign part or all of our technology.
+Added: In the event of a successful claim of infringement against us and our failure or inability to obtain a license to the infringed technology, our business, prospects, operating results, and financial condition could be materially adversely affected.
+Added: In addition, any litigation, or claims, whether or not valid, could result in substantial costs and diversion of resources and management’s focus and attention.
+Added: We also anticipate licensing patents and other intellectual property from third parties, and we may face claims that the use of this intellectual property infringes the rights of other third parties.
+Added: Our rights to indemnification or damages under our license contracts may be unavailable or insufficient to cover our costs and losses, depending on our use of the technology, whether we choose to retain control over conduct of the litigation, and other factors.
+Added: Additionally, our confidentiality and intellectual property assignment agreements with our employees, consultants, and contractors generally provide that inventions conceived by the party in the course of rendering services to us will be our exclusive intellectual property.
+Added: Those agreements may not be honored and obligations to assign intellectual property may be challenged or breached.
+Added: Moreover, there may be some circumstances where we are unable to negotiate for such ownership rights or where others misappropriate those rights.
+Added: We may be subject to claims that former employees, collaborators, or other third parties have an interest in our patents or other intellectual property as an owner, a joint owner, a licensee, an inventor, or a co‑inventor.
+Added: In the latter two cases, the failure to name the proper inventors on a patent application can result in the patents issuing thereon being unenforceable.
+Added: Inventorship disputes may arise from conflicting views regarding the contributions of different individuals named as inventors, the effects of foreign laws where foreign nationals are involved in the development of the subject matter of the
+Added: patent, conflicting obligations of third parties involved in developing our patented technology or as a result of questions regarding co‑ownership of potential joint inventions.
+Added: Litigation may be necessary to resolve these and other claims challenging inventorship and ownership.
+Added: Alternatively, or additionally, we may enter into agreements to clarify the scope of our rights in such intellectual property.
+Added: If we fail in defending any such claims, in addition to paying monetary damages, we may lose exclusive ownership of, or right to use or license valuable intellectual property.
+Added: Such an outcome could have a material adverse effect on our business.
+Added: Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.
+Added: If we or our third-party providers fail to protect confidential information and experience data security incidents, we may experience adverse effects, including regulatory enforcement consequences, on our business and results of operations.
+Added: In the ordinary course of business, we collect, store, and transmit confidential information (including but not limited to intellectual property, proprietary business information and personal information).
+Added: We process this information on our own and third-party computer systems, hardware, software, technology, infrastructure and online sited and networks (collectively, “IT Systems”).
+Added: It is critical that we do so in a secure manner to maintain the confidentiality, availability and integrity of such confidential information.
+Added: While we own some of these IT Systems, we also have outsourced elements of our operations to third parties, and as a result we manage a number of third‑party contractors who may provide IT Systems or otherwise have access to our confidential information.
+Added: Regarding actual powerhouse deployments, we are subject to the NRC’s regulations in this area, the violation of which could carry regulatory enforcement action.
+Added: Despite the implementation of security measures, our IT Systems and those of our contractors and consultants are potentially vulnerable to breakdown or other damage or interruption from service interruptions, system malfunctions, natural disasters, terrorism, war and telecommunication and electrical failures.
+Added: Our IT Systems and those of our contractors and consultants also face numerous and evolving cybersecurity risks from diverse threats, such as security breaches from inadvertent or intentional actions by our employees, contractors, consultants, business partners, and/or other third parties, or from cyber‑attacks by malicious third parties, state-sponsored organizations, opportunistic hackers and hacktivists, as well as through diverse attack vectors, including the deployment of harmful malware, ransomware, denial‑of‑service attacks, social engineering, natural disasters, terrorism, war and telecommunication and electrical failures, as well as security breaches from inadvertent or intentional actions by our employees, contractors, consultants, business partners and other means to affect service reliability and threaten the confidentiality, integrity and availability of information.
+Added: Cyberattacks are expected to accelerate on a global basis in frequency and magnitude as threat actors are becoming increasingly sophisticated in using techniques and tools – including artificial intelligence – that circumvent security controls, evade detection and remove forensic evidence.
+Added: As a result, we may be unable to detect, investigate, remediate or recover from future attacks or incidents, or to avoid a material adverse impact to our IT Systems, confidential information or business.
+Added: There can also be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our IT Systems and confidential information.
+Added: Furthermore, given the nature of complex systems, software and services like ours, and the scanning tools that we deploy across our networks and products, we regularly identify and track security vulnerabilities.
+Added: We are unable to comprehensively apply patches or confirm that measures are in place to mitigate all such vulnerabilities, or that patches will be applied before vulnerabilities are exploited by a threat actor.
+Added: To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or IT Systems, or inappropriate disclosure of confidential or proprietary information, we could incur liability and reputational damage and the further development and commercialization of our products could be delayed.
+Added: Furthermore, significant disruptions of our internal IT Systems or security breaches could result in the loss, misappropriation, and/or unauthorized access, use, or disclosure of, or the prevention of access to, confidential information (including, but not limited to, intellectual property, proprietary business information, export‑controlled information, and personal information), which could result in financial, legal, business, and reputational harm to us.
+Added: Any such event that leads to unauthorized access, use, or disclosure of personal information, including personal information related to our employees, could harm our reputation directly, compel us to comply with federal and/or state breach notification laws and foreign law equivalents, result in legal claims or proceedings (including class actions), subject us to mandatory corrective action, and otherwise subject us to liability under laws and regulations that protect the privacy and security of personal information, which could result in significant legal and financial exposure and reputational damage that could potentially have an adverse effect on our business.
+Added: Additionally, some of our systems may be considered to be critical infrastructure systems and so we may have additional obligations in response to a cybersecurity attack.
+Added: We cannot guarantee that any costs and liabilities incurred in relation to an attack or incident will be covered by our existing insurance policies or that applicable insurance will be available to us in the future on economically reasonable terms or at all.
+Added: Any actual or perceived failure to comply with new or existing laws, regulations and other requirements relating to the privacy, security and processing of personal information could adversely affect our business, results of operations or financial condition.
+Added: In connection with running our business, we process information that relates to individuals, including from our employees and business contacts.
+Added: We are therefore subject to certain laws and regulations relating to the privacy, security and handling of personal information.
+Added: The application and interpretation of such requirements are constantly evolving and are subject to change, creating a complex compliance environment.
+Added: In some cases, these requirements may be either unclear in their interpretation and application or they may have inconsistent or conflicting requirements with each other.
+Added: Further, there has been a substantial increase in legislative activity and regulatory focus on data privacy and security in the United States, including in relation to cybersecurity incidents.
+Added: It is possible that new laws and regulations, or amendments to or changes in interpretations of existing laws and regulations, may require us to incur significant costs, implement new processes, or change our handling of information and business operations, which could ultimately hinder our ability to grow our business.
+Added: In addition, any failure or perceived failure by us to comply with laws, regulations and other requirements relating to the privacy, security and handling of information could result in legal claims or proceedings (including class actions), regulatory investigations or enforcement actions.
+Added: We could incur significant costs in investigating and defending such claims and, if found liable, pay significant damages or fines or be required to make changes to our business.
+Added: These proceedings and any subsequent adverse outcomes may subject us to significant negative publicity and an erosion of trust.
+Added: If any of these events were to occur, our business, results of operations and financial condition could be materially adversely affected.
+Added: Macroeconomic Risks Relating to Our Business
+Added: We may experience a disproportionately larger impact from inflation and rising costs.
+Added: Inflation has resulted in, and may continue to result in, higher interest rates and capital costs, higher shipping costs, higher material costs, supply shortages, increased costs of labor and other similar effects.
+Added: Although the impact of material cost, labor, or other inflationary or economically driven factors will impact the entire nuclear and energy transition industry (including renewable sources of electricity, like solar and wind), the relative impact will not be the same across the industry, and the particular effects within the industry will depend on a number of factors, including material use, technology, design, structure of supply agreements, project management and others.
+Added: Such inflation could significantly affect the competitiveness of our technology and our ability to construct and operate our fuel fabrication facilities, fuel recycling facilities, and powerhouses, which could have a material adverse effect on our business, financial condition, and results of operations.
+Added: Uncertain global macroeconomic and political conditions could materially adversely affect our business prospects, financial condition, results of operations, and cash flows.
+Added: Our results of operations could be materially affected by economic and political conditions in the United States and internationally, including inflation, deflation, fluctuations in interest rates, fluctuations in exchange rates, availability of capital, energy and commodity prices, trade laws and the effects of governmental initiatives to manage economic conditions.
+Added: Potential customers may delay or decrease spending on our powerhouses and related services as their business and budgets are impacted by economic conditions.
+Added: The inability of potential customers to pay us for our powerhouses and related services may adversely affect our earnings and cash flows.
+Added: The ongoing military conflict in Ukraine has escalated tensions between the United States, and its North Atlantic Treaty Organization (“NATO”) allies on one hand, and Russia on the other.
+Added: The United States and other NATO member states, as well as some non‑member states, have imposed sanctions against Russia and certain Russian banks, enterprises, and individuals.
+Added: Now that there are sanctions on Russian companies supplying HALEU, sourcing HALEU presents a potential supply chain risk.
+Added: These circumstances have impacted the commercial availability of HALEU and increasing the cost of uranium enrichment services to produce HALEU and could potentially increase the adverse impact on the price of enrichment services and on our future operations.
+Added: Further, the ongoing military conflict resulting sanctions and related countermeasures by NATO states, the United States, and other countries have led to, and are likely to lead to additional market disruptions, including significant volatility in commodity prices, credit, and capital markets, as well as supply chain interruptions for equipment.
+Added: These disruptions could have an adverse impact on our operations and financial performance.
+Added: Global supply chain disruptions have increasingly affected both the availability and cost of materials, component manufacturing and deliveries.
+Added: Disruptions such as military conflicts, sanctions, and other countermeasures between nations, as well as any escalation in tension between nations, may result in delays in equipment deliveries and cost escalations that could adversely affect our business prospects, financial condition, results of operations and cash flows.
+Added: Our cost estimates are highly sensitive to broader economic factors, and our ability to control or manage our costs may be limited.
+Added: Capital and operating costs for the deployment of any energy infrastructure, and especially for Oklo’s first‑of‑a‑kind powerhouses, are difficult to project, inherently variable and are subject to significant change based on a variety of factors including site specific factors, customer off‑take requirements, regulatory oversight, operating agreements, supply chain availability, supply chain availability effects on reactor and power plant performance, inflation and other factors.
+Added: Opportunities for cost reductions with subsequent deployments are similarly uncertain.
+Added: The cost estimates may increase significantly through design maturity, when accounting for supply chain availability, fabrication costs, as we progress through the regulatory process, or as a result of other factors, including unexpected cost increases that particularly affect our powerhouses.
+Added: To the extent cost reductions are not achieved within the expected timeframe or magnitude, powerhouses, like the Aurora, may not be cost competitive with alternative technologies, which may have a material adverse effect on our business prospects, financial condition, results of operations and cash flows, and could harm our reputation.
+Added: The direct and indirect impact on us and our value chain from severe weather and other effects of climate change could adversely affect our financial condition, operating results, and cash flows.
+Added: Our operations and properties, and those of our value chain, may in the future be adversely impacted by flooding, wildfires, high winds, drought, and other natural disasters and catastrophic events.
+Added: Climate change is expected to increase the frequency and intensity of certain such events, as well as contribute to chronic changes (such as in weather patterns or water levels) that may result in various adverse impacts.
+Added: These events can force us or our value chain to suspend operations at impacted properties and may result in significant damage to such properties.
+Added: Even if these events do not directly impact us or our value chain, they may indirectly impact us and our value chain through increased insurance, energy, or other costs.
+Added: In addition, although the ongoing transition to non‑carbon‑based energy is creating significant opportunities for us and parts of our value chain, the transition also presents certain risks, including macroeconomic risks related to higher energy costs and energy shortages, among other things.
+Added: These direct and indirect impacts from climate change could adversely affect our financial condition, operating results, supply chain and cash flows.
+Added: The occurrence of adverse events, cancellations of significant projects, delays in project timelines, adjustments in cost structures, and other negative developments announced by competitors could have an impact on our operations, financial performance, and future prospects.
+Added: The occurrence of newsworthy events in the nuclear industry as a whole, including, but not limited to the delay of major projects, inflated cost adjustments, fluctuations in product pricing strategies, cancellations of public offerings, customer withdrawals, or disruptions in supply chain may adversely affect our business in several ways, including:
+Added: • Negative news or events associated with industry peers may lead to decreased investor confidence in the sector, which could impact the broader stock market performance of companies operating within the industry, including us.
+Added: This could result in fluctuations or declines in our stock price irrespective of our internal performance.
+Added: • Adverse events in competitor firms may alter the competitive landscape, affecting market share dynamics, pricing strategies, and overall positioning within the industry.
+Added: This could impact our ability to retain or expand our market presence.
+Added: • Changes in market dynamics influenced by competitors’ actions, such as inflated cost adjustments or potential cancellations, could have ripple effects on our financial stability and profitability, influencing our financial metrics and potentially impacting investor perceptions.
+Added: There is no guarantee that we will be insulated from the adverse effects of the foregoing events and the occurrence of any of these events could negatively impact our business operations and financial condition.
+Added: If the market for technologies using artificial intelligence contracts or does not grow at the rate some parties expect, our customers or prospective customers may reduce their projected needs for power and/or heat, which may impact the market for our offerings.
+Added: Some of our customers and prospective customers operate or otherwise rely on data centers and other similar infrastructure that can support, among other things, the growing demand for technologies that use artificial intelligence.
+Added: Their business plans, including their construction of or expansion of infrastructure facilities that they intend to power or heat using our offerings, may rely in part on assumptions around the growth of artificial intelligence technologies, which may prove to be unwarranted.
+Added: If these assumptions prove incorrect, it may impact the business plans of these customers or prospective customers, which may reduce their need for our products or services, and may even lead to them canceling or renegotiating
+Added: contracts with us.
+Added: Such market disruptions could adversely affect our business plans, operating results, supply chain and cash flows.
+Added: Risks Relating to Compliance with Law, Government Regulation and Litigation
+Added: The nature of our business requires us to interact with various governmental entities, making us subject to the policies, priorities, regulations, mandates, and funding levels of such governmental entities and we may be negatively or positively impacted by any change thereto.
+Added: We are subject to a wide variety of laws and regulations relating to various aspects of our business, including with respect to use and possession of radioactive materials; design, manufacture, operations, marketing, and export of nuclear technologies; employment and labor; tax; data security of the operational and information technology we use; health and safety; zoning and environmental issues.
+Added: Laws and regulations at the foreign, federal, state, and local levels may change and may be interpreted in different ways, especially in relation to new and emerging industries, and we cannot always reasonably predict the impact from, or the ultimate cost of compliance with, current or future regulatory or administrative changes.
+Added: We cannot guarantee that our measures to monitor these developments and the time and resources we spent to comply with these laws, regulations, and guidelines will be satisfactory to regulators or other third parties, such as our customers, who may also be subject to extensive governmental regulation.
+Added: We may need to expend substantial efforts to comply with any new and changing relevant and applicable laws and regulations, which may result in increased general and administrative expenses and a diversion of management time and attention.
+Added: Moreover, changes in law, the imposition of new or additional regulations or the enactment of any new or more stringent legislation that impacts our business could require us to change the way we operate and could have a material adverse effect on our sales, profitability, cash flows, and financial condition, and lead to regulatory delays that could impact our ability to obtain licenses, certificates, authorizations, permits, certifications from regulatory agencies, and/or any other type of regulatory approval.
+Added: Failure to comply with these laws may result in civil and criminal penalties or private lawsuits, or the suspension or revocation of those regulatory approvals, which would prevent us from operating our business.
+Added: With respect to our powerhouses, fuel fabrication and fuel recycling, we require regulatory approval from the NRC to construct and operate the facilities, and any additional local and state permitting requirements, as needed.
+Added: Failure to comply with these laws, obtain the required regulatory approvals, or receive exemptions from such regulations, as needed, could result in regulatory enforcement, violations, fines, penalties, or the inability to operate our commercial deployments.
+Added: Any delays in regulatory approvals could also adversely affect our ability to meet construction and operation timelines and thereby affect our financial performance.
+Added: Our powerhouses, fuel fabrication, and fuel recycling activities are subject to regulations in all jurisdictions related to nuclear safety, environmental, and financial qualification, among other requirements.
+Added: Regulatory approvals, such as construction permits and operating licenses issued by the NRC and DOE, are necessary for us to construct and operate our powerhouses, fuel fabrication and fuel recycling facilities.
+Added: Our plans to construct and operate these facilities relies on timely receipt of such regulatory approvals.
+Added: Such regulatory approval processes may be subject to change, can be technically challenging to address, may result in the imposition of conditions that impact the financial viability of our facilities, and may also provide opportunities for third parties to lodge objections or file petitions against the licensing of our facilities.
+Added: government’s budget deficit and the national debt, as well as any inability of the U.S.
+Added: government to complete its budget or appropriations process for any government fiscal year could have an adverse impact on our business, prospects, financial condition, results of operations and cash flows.
+Added: government’s budget deficit and the national debt, as well as any inability of the U.S.
+Added: government to complete its budget process for any government fiscal year and consequently having to shut down or operate on funding levels equivalent to its prior fiscal year pursuant to a “continuing resolution,” could have an adverse direct or indirect impact on our business, financial condition, results of operations, and cash flows.
+Added: Considerable uncertainty exists regarding how future budget and program decisions will unfold, including the energy spending priorities of the U.S.
+Added: government, what challenges budget reductions will present for the energy industry and whether annual appropriations bills for all agencies will be enacted by the U.S.
+Added: government in a given fiscal year and thereafter due to many factors, including but not limited to, changes in the political environment, including before or after a change to the leadership within the government administration, and any resulting uncertainty or changes in policy or priorities and resultant funding.
+Added: government’s budget deficit and the national debt could have an adverse impact on our business, prospects, financial condition, results of operations and cash flows in a number of ways, including the following:
+Added: government could reduce or delay its spending on, reprioritize its spending away from, or decline to provide funding for the government programs in which we participate;
+Added: government spending could be impacted by alternate arrangements to sequestration, which increases the uncertainty as to U.S.
+Added: government spending priorities and levels; and
+Added: • We may experience declines in revenue, profitability, and cash flows as a result of reduced or delayed orders or payments or other factors caused by economic difficulties of our customers and prospective customers, including U.S.
+Added: federal, state, and local governments.
+Added: These factors may become exacerbated by elevated interest rates and overall interest rate volatility as more U.S.
+Added: government spending must be appropriated to servicing the national debt.
+Added: Furthermore, we believe continued budget pressures could have serious negative consequences for the nuclear energy industry and the customers, employees, suppliers, investors, and communities that rely on companies in the nuclear energy industry.
+Added: Budget and program decisions made in this environment would have long‑term implications for us and the entire nuclear energy industry.
+Added: Our powerhouses, recycling facilities and fuel fabrication facilities will be highly regulated by the U.S.
+Added: government, including the NRC and potentially the DOE, as well as foreign, state, and local governments.
+Added: We have not received any approval or licensing to date or submitted our updated custom combined license application (“COLA”) to the NRC, and approval or licensing of these designs or facilities, and the timing of such approval or licensing, if any, is not guaranteed.
+Added: Our planned international expansion will subject us to additional U.S.
+Added: and foreign regulations.
+Added: Our commercial powerhouses, including our planned plants in Idaho and Ohio, commercial recycling facilities, and commercial fuel fabrication facilities will be subject to NRC licensing and approvals, from initial approval or licensing through construction and operations and into decommissioning.
+Added: They may also be highly regulated by other U.S.
+Added: federal and state level governmental authorities and regulatory bodies in other jurisdictions in which we may establish operations.
+Added: Under the Atomic Energy Act of 1954, as amended (the “Atomic Energy Act”) and the implementing NRC regulations, members of the public, state, or tribal governments may request a public hearing opposing the issuance of any NRC permit or license, or challenging portions of the license or permit application or of the NRC’s review.
+Added: Certain NRC actions also include provision for a mandatory administrative hearing regardless of whether any contentions are submitted in conjunction with the action.
+Added: These hearing processes may delay or prevent the issuance of required regulatory approvals (i.e., permits or licenses) for our powerhouses, recycling facilities, and fuel fabrication facilities.
+Added: Additionally, any facilities, commercial or otherwise, that may be located on DOE land may be subject to additional oversight from the DOE.
+Added: Our planned fuel facility in Idaho will require oversight from the DOE and will require approvals prior to construction and operation.
+Added: Any deployments that require both NRC and DOE oversight might introduce additional uncertainties and complexities.
+Added: Additionally, state, or other local jurisdictions may have or could elect to develop regulations specific to the siting, construction, operation, and decommissioning of commercial nuclear facilities or the transportation of radiological materials that could impact our deployment timelines and business model.
+Added: Our planned international expansion will increase our exposure to U.S.
+Added: export control laws as well as laws and regulations of foreign jurisdictions the impact of which cannot be predicted at this time.
+Added: Exports to other countries may require cooperation from the United States or other governments and may result in shortages and delays if not accomplished within assumed timelines or costs.
+Added: Additionally, we may require U.S.
+Added: approvals in order to import certain materials and components that may be predominantly produced outside of the United States.
+Added: We must obtain governmental licenses to transport, possess, and use radioactive materials, including isotopes of uranium, in our powerhouses, fuel facility, and recycling facility operations.
+Added: These are generally granted as part of operations licensing, but failure to obtain or maintain, or delays in obtaining, such licenses could impact our ability to generate electricity and/or heat for our customers and have a material adverse effect on our business prospects, financial condition, results of operations, and cash flows.
+Added: Notwithstanding our custom COLA to the NRC or other actions to date, no powerhouse in the Aurora product family has been licensed or approved by the NRC or any other regulatory body.
+Added: Additionally, no commercial nuclear reactor that is not water cooled is currently operating in the U.S.
+Added: under an NRC‑issued license, and no advanced fission technology has been approved for commercial operation by the NRC.
+Added: The NRC has also not yet established an oversight program for advanced reactors and therefore it is unclear what level and scope oversight the NRC may choose to implement during power operations.
+Added: The implementation of an NRC oversight program could substantially affect our operation of our commercial facilities.
+Added: Related to operations, the NRC has the authority to issue notices of violation for violations of Title 10 of the Code of Federal Regulations, executing the Atomic Energy Act, NRC’s regulations and conditions of licenses, certificates of compliance, and orders.
+Added: The NRC has authority to impose civil penalties (the maximum amount of which is adjusted
+Added: annually to account for inflation) or additional requirements and to order cessation of operations for violations of these requirements.
+Added: Penalties under the NRC regulations and applicable agency guidelines could include substantial fines, imposition of additional requirements, or withdrawal or suspension of licenses or certificates and criminal penalties.
+Added: Any penalties imposed on us could adversely affect our results of operations and liquidity.
+Added: Legacy Oklo started working with the NRC to pilot a COLA application with a new structure in 2018 and formally submitted a COLA in 2020.
+Added: The COLA was partially reviewed by the NRC and denied without prejudice in 2022, with the NRC identifying additional information it required.
+Added: While we have been actively working to address technical, policy, and programmatic matters ahead of the submission of our updated COLA, we cannot guarantee that we will be able to meet our expected timeline or any timeline for which the NRC will accept our COLA for review or subsequently approve our COLA.
+Added: Our planned rapid deployment includes the planned use of a reference and subsequent COLA approach, or R‑COLA and S‑COLA, where NRC safety decisions from the R‑COLA are incorporated by reference or copied into the staff evaluation for the S‑COLA.
+Added: This is designed to enable review efficiencies for subsequent COLAs.
+Added: However, this approach has not yet been used to review COLAs for nuclear reactors that are not water‑cooled or for custom COLAs; accordingly, whether this approach will result in the anticipated review efficiencies is still unclear.
+Added: If the NRC disagrees with our licensing approach, the technical bases supporting the nuclear safety and environmental impact evaluations, or finds policy issues associated with the COLA, the initial and subsequent COLA processes could take longer than currently expected, or a license may not be granted at all, which could materially and adversely affect our business.
+Added: Further, the NRC could impose conditions in a license that are not acceptable to us or our customers, which could materially and adversely affect our business.
+Added: Any delays, conditions or unexpected requirements may increase costs for us or our customers and may result in uncertainty regarding the ability to deploy our technology in a predictable way, which may adversely impact our competitiveness.
+Added: The existing NRC framework has not been applied to license a nuclear fuel recycling facility for commercial use, and there is no guarantee that the NRC will support the development of our proposed nuclear fuel recycling facility on the timeline we anticipate or at all.
+Added: To our knowledge, the NRC has never licensed a commercial nuclear fuel recycling facility.
+Added: As such, the existing NRC regulatory framework has not been applied to license a nuclear fuel recycling facility for commercial use.
+Added: There is no guarantee that the NRC will support the development of our proposed nuclear fuel recycling facility on the timeline we anticipate or at all.
+Added: Unresolved spent nuclear fuel storage and disposal policy issues and associated costs could have a significant negative impact on our plans to recycle spent fuel as a potential fuel source for our powerhouses.
+Added: Additionally, U.S.
+Added: policy related to storage and disposal of used fuel from our power plant and/or negative customer perception of risks relating to these policies could have a significant negative impact on our business prospects, financial condition, results of operations and cash flows.
+Added: During the licensing process, a nuclear power plant operator must indicate how it will decommission its power plant and must have a “standard agreement” with the DOE related to the storage of the fuel waste created during its operating life.
+Added: Therefore, although we expect to use existing used nuclear fuel waste as well as recycling our own used fuel for decades into the future, the requirement for the first-of-a-kind facility to establish the disposal of fuel may create challenges related to timeline and optimal use of the fuel asset.
+Added: Specifically, the Nuclear Waste Policy Act of 1982 requires the DOE to provide for the permanent disposal of spent nuclear fuel (“SNF”) and associated high‑level nuclear waste (“HLW”).
+Added: In 1987, Congress amended the Nuclear Waste Policy Act to identify Yucca Mountain, in Nevada, as the only site that the DOE could consider for a permanent repository.
+Added: The DOE has since failed to pursue the licensing of Yucca Mountain.
+Added: There is a potential in the future that operators will have to bear the costs of developing and maintaining these spent fuel storage facilities.
+Added: As such, the establishment of a national repository for the storage and/or permanent disposal of SNF, such as the one previously considered at Yucca Mountain, Nevada, the timing of such a facility’s opening and the ability of such a facility to accept waste from our powerhouses, and any related regulatory action, could impact the costs associated with our powerhouses’ storage and/or disposal of SNF/HLW.
+Added: Moreover, an inability to utilize SNF for the purpose of developing fuel for the powerhouse, either due to policy issues or technical limitations, could also impact the costs associated with the powerhouse.
+Added: These issues could be material to our operations if potential customers view waste disposal as problematic, detrimental or a negative factor when considering purchasing power produced by our reactors.
+Added: Our operations and business plans could be significantly impacted by changes in federal, state, and local government policies and priorities.
+Added: The current environment of bipartisan political support of advanced nuclear power technologies at the U.S.
+Added: federal level could change.
+Added: Changes in support, in policies, or in priorities by the legislative or executive branch could have impacts on the leadership at the NRC, the DOE, the U.S.
+Added: Department of Homeland Security, the U.S.
+Added: Environmental Protection Agency, or any other federal agency that affects policy related to nuclear power.
+Added: Each of these agencies themselves may experience changes in policies and priorities that impact our operations and business plans.
+Added: Federal, state, and local policies and priorities could affect regulatory oversight, supply chain availability, tax and other financial incentives or costs, availability of financing, labor force initiatives or restrictions, and many other possible areas.
+Added: The NRC also has the authority to issue new regulatory requirements or to change existing requirements.
+Added: Changes to the regulatory requirements could require us to incur additional expenses to retrofit any of our nuclear facilities under the NRC’s jurisdiction to bring them into compliance or otherwise adversely affect our results of operations and financial condition.
+Added: DOE regulations and additional applicable Idaho state laws and regulations might also apply to the Aurora powerhouse we plan to site at INL.
+Added: This could introduce substantial complications and time delays for deployment.
+Added: Currently, the Company has been granted a site use permit and provisional acceptance for a specific location to site the Aurora powerhouse at INL; the provisional acceptance clearly states that there is still significant uncertainty for the final site location for the Aurora at INL, which could impact our deployment timelines.
+Added: Changes in leadership and vision for INL could result in the DOE deprioritizing siting the Aurora powerhouse, resulting in significant time delays for deployment.
+Added: Our first‑of‑a‑kind Aurora powerhouse at INL is subject to certain regulations, contracts, permits, and approvals by the DOE and the state of Idaho.
+Added: Site characterization and non‑safety related site preparation and construction requires National Environmental Policy Act (“NEPA”) review by the DOE for the Aurora powerhouse at INL.
+Added: The Bureau of Land Management, U.S.
+Added: Fish and Wildlife Service, and the Environmental Protection Agency have existing regulations, relationships, and agreements with the DOE – Idaho with which we must comply, thus these or other Federal agencies may be consulted during the NEPA review process.
+Added: Additionally, local and tribal authorities could elect to interfere with the Aurora powerhouse deployment in Idaho.
+Added: The Aurora powerhouse may be the first commercially owned and operated nuclear power plant in the state of Idaho.
+Added: The state of Idaho or other local jurisdictions could elect to develop regulations specific to the siting, construction, operation, and decommissioning of commercial nuclear power plants or the transportation of radiological materials that could impact the deployment timeline of our first‑of‑a‑kind Aurora powerhouse.
+Added: The DOE in Idaho has standing agreements and relationships with the Idaho Department of Environmental Quality and the Idaho Department of Emergency Management.
+Added: Changes in these agreements could also impact the deployment timeline.
+Added: Portions of the Ohio sites that Oklo is investigating for deployment are currently owned by the DOE and are under decommissioning and decontamination for transfer to the Southern Ohio Diversification Initiative.
+Added: Similar to the INL site, the deployment timeline is impacted by the DOE regulations, processes, approvals, and requirements.
+Added: The state of Ohio or local authorities could elect to change their processes for regulations of nuclear materials or commercial nuclear power.
+Added: Additionally, certain aspects of our current fuels research and development activity take place within INL.
+Added: These activities are subject to DOE regulation, i.e., authorization, and contractual requirements.
+Added: DOE may place additional requirements or restrictions on us which could adversely affect our business.
+Added: Additionally, changes in federal, state, or local government policies and priorities can impact our nuclear fuel operations.
+Added: These could include changes in interpretations of regulatory requirements, increased inspection or enforcement activities, changes in budgetary priorities, changes in tax laws and regulations and other government actions or inaction.
+Added: Any of these local, state, and federal agencies may have the authority to impose civil penalties and additional requirements, which could adversely affect our results of operations.
+Added: Changes in governmental agency budgets as well as staffing shortages at national laboratories and other governmental agencies may lengthen our estimated timelines for regulatory approval and construction.
+Added: Certain of our powerhouses, fuel fabrication, and recycling facilities are dependent upon collaborations with national laboratories and/or various regulatory approvals.
+Added: Government agency budgets and staffing are driven by the priorities of leadership at federal agencies as well as policy makers.
+Added: Changes in governmental agency budgets, personnel, and any resulting staffing shortages may delay our powerhouses, fuel fabrication, and recycling facilities and delay or prevent the issuance of required regulatory approvals (e.g., permits or licenses) for our nuclear facilities.
+Added: Operating a nuclear power plant in an unusual environment whether due to unusual siting or in an industrial application has additional risks and costs compared to conventional electric power and heat applications.
+Added: We focused on a technology with inherent safety characteristics and have designed powerhouses such that we anticipate being able to serve customers in unusual environments, which we believe is a key gap in current United States energy infrastructure.
+Added: These unusual environments may include areas that are far away from typical urban infrastructure or resources, permafrost, with higher seismic activity, in closer proximity to population centers, etc.
+Added: Additionally, remote environments are often in harsh climates and can be difficult to transport to and travel to, when required during operations.
+Added: As such, deployments in unusual environments could bear additional risks and costs that may exceed our business projections or have surprising or unpredicted impacts on costs and schedules for deployment and/or operation and/or maintenance of our powerhouses, including costs associated with the licensing process, configuration control of the plant, minimum operating staff, training, security infrastructure, radiation protection, government reporting, and nuclear insurance, all of which may be cost prohibitive or reduce the competitiveness of technology.
+Added: We also currently have several government awards involving cost‑share related to recycling R&D work, which could be affected by our failure to comply with certain laws and regulations.
+Added: As a recipient of federal funds under grants and cooperative agreements, in addition to our ordinary contractual obligations, we must comply with various statutes and regulations applicable to entities that perform awards in support of government entities.
+Added: Many of these additional obligations are contained in the regulations in 2 CFR Part 200 as amended by 2 CFR Part 910, which regulate the formation, administration, and performance of non‑procurement federal financial assistance awards (e.g., grants and cooperative agreements).
+Added: We must also comply with various national policy requirements that are prescribed by statute, Executive Order, policy guidance issued by the Executive Office of the President, or other regulations.
+Added: Our performance under our U.S.
+Added: government awards and our compliance with the terms of those awards and applicable laws and regulations are subject to periodic audit, review, and investigation by various agencies of the U.S.
+Added: government, and the current environment has led to increased regulatory scrutiny and sanctions for non‑compliance by such agencies generally.
+Added: Compliance with these laws and regulations affects how we do business and may impose added costs on our business.
+Added: Failure to comply, however, may lead to civil or criminal penalties, including whole or partial suspension or termination of our U.S.
+Added: government awards, and/or suspension or debarment from contracting with federal agencies.
+Added: Our business is subject to stringent U.S.
+Added: export control laws and regulations.
+Added: Unfavorable changes in these laws and regulations or U.S.
+Added: government licensing policies, our failure to secure timely U.S.
+Added: government authorizations under these laws and regulations, or our failure to comply with these laws and regulations could have a material adverse effect on us and our ability to expand and thereby affect our business prospects, financial condition, results of operations and cash flows.
+Added: The inability to secure and maintain required export licenses or authorizations could negatively impact our ability to compete successfully or market our powerhouses outside the United States.
+Added: For example, if we were unable to obtain or maintain licenses to export nuclear technology or certain hardware to a particular country, we would be effectively prohibited from exporting our powerhouses to or operating our powerhouses in that country, which would limit the number of customers to those in the United States and in countries where we are able to secure licenses (or where licenses are not required).
+Added: Similarly, if export control laws and regulations prevent us from sharing certain export controlled information with suppliers we intend to use to operate our business or build or develop our powerhouses or other facilities, we may not be able to work with certain suppliers, which may impact our finances, business plans, and the competitiveness of our offerings.
+Added: Failure to comply with export control laws and regulations could expose us to civil or criminal penalties, fines, investigations, more onerous compliance requirements, loss of export privileges, debarment from government contracts or limitations on our ability to enter into contracts with the U.S.
+Added: Any changes in export control regulations or U.S.
+Added: government licensing policy, such as that necessary to implement U.S.
+Added: government commitments to multilateral control regimes, may restrict our market size.
+Added: Our ability to rely on global supply chains for source components and/or raw materials may be impacted by tariffs, trade disputes, or other changes in trade policy or trade regulation.
+Added: We plan to rely on global supply chains to source components and materials essential for our business, including for our powerhouses and other facilities.
+Added: The imposition of new or increased tariffs, trade restrictions, or other changes in trade policy by the United States or other countries could increase our costs of materials and components, require us to find alternative suppliers, or force adjustments to our pricing structure.
+Added: These changes could reduce our profit margins, may impact our licenses or may require additional regulatory approval, or could otherwise disrupt our business operations.
+Added: In particular, recent global trade tensions and policy shifts have created an unpredictable environment for businesses operating across international borders.
+Added: Changes in trade agreements, sanctions, export controls, and customs regulations may limit our ability to source materials from certain countries or entities, potentially forcing rapid and costly adjustments to our supply chain.
+Added: Trade policies can change with limited notice, making long-term planning difficult and increasing operational costs.
+Added: While we attempt to mitigate these risks through diversification of our supplier base, inventory management strategies, and contractual protections, there can be no assurance that these measures will be effective.
+Added: Any significant disruption to our supply chain resulting from tariffs or trade policy changes could have a material adverse effect on our business, financial condition, and ability to meet projected deadlines and milestones.
+Added: We may become involved in litigation that may materially adversely affect us.
+Added: From time to time, we may become involved in various legal proceedings relating to matters incidental to the ordinary course of our business, including intellectual property, commercial, product liability, employment, class action, whistleblower and other litigation and claims, and governmental and other regulatory investigations and proceedings.
+Added: Such matters can be time‑consuming, divert management’s attention and resources from the operation of our business and cause us to incur significant expenses or liability or require us to change our business practices.
+Added: Because of the potential risks, expenses, and uncertainties of litigation, from time to time, we may settle disputes, even where we believe that we have meritorious claims or defenses.
+Added: Because litigation is inherently unpredictable, we cannot assure you that the results of any of these actions will not have a material adverse effect on our business.
+Added: We are subject to laws and regulations governing the use, transportation, and disposal of toxic, hazardous and/or radioactive materials.
+Added: Failure to comply with these laws and regulations could result in substantial fines and/or enforcement actions.
+Added: Both in the United States and abroad, our operations will be subject to a variety of federal, state, and local environmental, health and safety laws and regulations governing, among other things, air emissions, wastewater discharges, management and disposal of hazardous, non‑hazardous, and radioactive materials and waste, and remediation of releases of hazardous materials.
+Added: Additionally, we are responsible for decommissioning of facilities where we conduct, or previously conducted, commercial, NRC‑licensed, operations.
+Added: We may be liable if we fail to comply with federal, state, and local environmental, health and safety laws and regulations.
+Added: Failing to comply with such laws and regulations, including failing to obtain any necessary permits, could result in substantial fines or enforcement actions.
+Added: This might require us to stop or curtail operations or conduct or fund remedial or corrective measures, make additional investments into safety‑related improvements or perform other actions.
+Added: The enactment of more stringent laws, regulations or permit requirements or other unanticipated events may arise in the future and adversely impact the market for our products, which could materially and adversely affect our business, financial condition, and results of operations.
+Added: We could incur substantial costs as a result of a violation of, or liabilities under, environmental laws.
+Added: We will seek to cover gaps in nuclear liability coverage in our contracts, but such coverage may not always be possible as an operator of nuclear reactors, and such liability could materially and adversely affect our business, results of operations and financial condition.
+Added: We will seek to cover gaps in nuclear liability coverage in our contracts, but such coverage may not always be possible as an operator of nuclear reactors.
+Added: The costs of defending a claim arising out of a nuclear incident or precautionary evacuation not otherwise covered by insurance or an indemnity, and any damages awarded as a result of such claim, could adversely affect our business prospects, financial conditions, results of operations and cash‑flows.
+Added: Prospective future customers may also require that we comply with their own unique requirements relating to their compliance with policies, priorities, regulations, controls, and mandates, including provision of data and related assurance for environmental, social, and governance related standards or goals, and such compliance may add cost and timeline uncertainty or risk.
+Added: In the United States, nuclear liability law is codified at 42 U.S.C.
+Added: 2210 (along with subsequent amendments, the “Price‑Anderson Act”).
+Added: The Price‑Anderson Act and its implementing NRC regulations channel legal liability to certain licensees (such as operators of nuclear reactors) for third‑party offsite damages caused by a nuclear incident or a precautionary evacuation due to a possible or actual nuclear incident, and requires these licensees to maintain robust coverage that would protect against any such liability.
+Added: Outside of the United States, international nuclear liability conventions and national nuclear liability laws legally channel liability for offsite nuclear damage to the nuclear reactor operator and require operators to maintain insurance up to the established liability limits.
+Added: In all jurisdictions that subscribe to international nuclear liability principles (essentially, all countries with operating nuclear reactors and many with research
+Added: reactors), operator liability for offsite nuclear damage is covered by mandatory insurance.
+Added: However, if we were to operate in a country that does not have a nuclear liability regime or one where the regime does not meet international nuclear liability standards, we could be financially liable for damages arising from nuclear incidents or evacuation, which could have an adverse effect on our business prospects, financial conditions, results of operations and cash‑flows.
+Added: Further, there is no international nuclear liability regime that covers every jurisdiction and thus gaps exist where we could be liable for transboundary nuclear damage in countries that are not party to a nuclear liability treaty.
+Added: Neither the Price‑Anderson Act nor international nuclear liability conventions and national domestic nuclear liability laws cover on‑site loss or damage to property due to a nuclear incident.
+Added: Rather, most nuclear regulators (including the NRC) require nuclear operators to maintain on‑site property damage insurance.
+Added: If an incident resulting in onsite property damage is not otherwise covered by the mandatory insurance policy maintained at the facility, then we could be potentially liable for damages arising from such incident, which could have an adverse effect on our results of operations and financial condition.
+Added: Risks Relating to Our Capital Resources
+Added: The amount of time and funding needed to bring our powerhouses to market and to develop our recycling and fuel fabrication facilities may exceed our expectations, and we may need to make significant adjustments to our business plan or significantly delay, scale back or discontinue the deployments of our facilities and/or some or all of our research and development programs and will need to seek additional capital.
+Added: Bringing our powerhouses to market as well as developing our recycling and fuel fabrication facilities will take a significant amount of time and funding.
+Added: Any shortfall in research, development and other funding, any delay in achieving fuel development milestones, uncertainty in regulatory licensing timelines or adverse public reaction to developments in the use of nuclear power by special interest groups, community groups, and state and local government agencies leading to environmental litigation or other legal proceedings could result in significant delays and cost overruns and could adversely affect our ability to construct and operate our powerhouses, recycling facilities, or fuel fabrication facilities.
+Added: At this stage, we cannot accurately predict the complete amount of funding or the time required to successfully construct and operate our powerhouses, recycling facilities, or fuel fabrication facilities.
+Added: The actual cost and time required to construct and operate our powerhouses, recycling facilities, or fuel fabrication facilities or to bring our nuclear fuel to market at scale may vary significantly from our current forecasts depending on, among other things:
+Added: • the results of our research and product development efforts;
+Added: • changes in the focus and direction of our research and product development programs;
+Added: • competitive and technological advances;
+Added: • the cost of filing, prosecuting, defending, and enforcing claims with respect to patents;
+Added: • the regulatory approval process;
+Added: • the fuel recycling process;
+Added: • the fuel fabrication process;
+Added: • limitations and impediments to supply chains;
+Added: • adverse public reaction to the developments in the use of nuclear power;
+Added: • availability and cost of HALEU; and
+Added: • other costs associated with commercialization of these technologies.
+Added: Any material change to our assumptions or expectations with respect to our timeline and funding needs, or any material overruns or other unexpected increase in costs or delays, may have a material adverse effect on our business prospects, financial condition, results of operations and cash flows and could harm our reputation.
+Added: In addition, we may need to make significant adjustments to our business plan or significantly delay, scale back or discontinue the deployments of our facilities, including our fuel fabrication facilities and fuel recycling facilities, and/or some or all of our research and development programs and will need to seek additional capital.
+Added: Depending on our available capital resources, we may need to delay or discontinue expected near‑term expenditures, which could materially impact our
+Added: business prospects, financial condition, results of operations and cash flows by limiting our ability to pursue some of our other strategic objectives and/or reducing the resources available to further develop our design, sales, and manufacturing efforts.
+Added: In order to fulfill our business plan, we may require additional funding.
+Added: Such funding may be dilutive to our investors, may result in a decline in the market price of your shares, and no assurances can be provided as to the availability or terms of any such funding.
+Added: Any such funding and the associated terms will be highly dependent upon market conditions and the progress of our business at the time we seek such funding.
+Added: Additional financing may not be available on terms favorable to us, if at all.
+Added: If adequate funds are not available on acceptable terms, we may be unable to invest in future growth opportunities or business strategies and we may be required to delay, scale back, or terminate some or all of our research and development programs, each of which could harm our business, operating results, and financial condition.
+Added: If we incur additional debt, the debt holders would have rights senior to holders of our Class A common stock, par value $0.0001 per share ("Common Stock") to make claims on our assets, and the terms of any debt could restrict our operations, including our ability to pay dividends on our Common Stock, limitations on our ability to incur liens or additional debt, repurchase our securities, make certain investments, and engage in certain merger, consolidation, or asset sale transactions.
+Added: Furthermore, to the extent we raise additional capital by issuing additional equity securities, including under employee benefit plans, stockholders will experience dilution, the relative voting strength of each previously outstanding share of common stock may be diminished, the market price of the shares of our Common Stock may decline, and the new equity securities could have rights senior to those of our Common Stock.
+Added: Because our decision to issue securities in the future will depend on numerous considerations, including factors beyond our control, we cannot predict or estimate the amount, timing, or nature of any future issuances of debt or equity securities.
+Added: As a result, our stockholders bear the risk of future issuances of debt or equity securities reducing the value of our Common Stock and diluting their interests.
+Added: Our business plan includes the use of investment tax credits, production tax credits or other forms of government funding to finance the commercial development of our powerhouses, and there is no guarantee that our projects will qualify for these credits or that government funding will be available in the future.
+Added: Our business plan depends in part on federal, state, and local government policies and incentives that support the development, financing, ownership, and operation of renewable energy generation projects.
+Added: These policies and incentives include investment tax credits, production tax credits, accelerated depreciation, renewable portfolio standards, feed‑in‑tariffs and similar programs, renewable energy credit mechanisms, and tax exemptions.
+Added: If these policies and incentives are changed or eliminated, or we are unable to use them, it could result in a material adverse impact on our business prospects, financial condition, results of operations, and cash flows.
+Added: Changes in tax laws could adversely affect our business prospects and financial results.
+Added: We will be subject to taxes in the United States and certain foreign jurisdictions.
+Added: Due to economic and political conditions, tax rates in various jurisdictions, including the United States, may be subject to change.
+Added: Our future effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities and changes in tax laws or their interpretation.
+Added: We may be subject to income tax audits by various tax authorities.
+Added: An adverse resolution by one or more taxing authorities could have a material impact on our finances.
+Added: Further, we may be unable to utilize any net operating losses in the event a change in control is determined to have occurred.
+Added: We expect to require additional future funding to support our operations and implementation of our growth plans.
+Added: Based on our recurring losses and management’s expectations that significant on-going operating expenditures will be necessary to successfully implement our business plan and develop our powerhouses, we expect to require additional funding to continue our operations through commercialization.
+Added: If we are unable to raise additional funding, we may be forced to liquidate our assets and the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our financial statements.
+Added: We do not expect to generate meaningful revenue unless and until we are able to finalize development of and commercialize the Aurora product line, and we may not be able to do so on our anticipated timetable, if at all.
+Added: We expect our expenses and capital expenditures to increase in connection with our ongoing activities, including developing and advancing the Aurora product line, obtaining a COLA and completing our manufacturing preparation and trials.
+Added: In addition, we expect to incur additional costs associated with operating as a public company.
+Added: Certain costs are not reasonably estimable at this time, and we may require additional funding and our forecasts anticipate certain customer‑sourced income that is not guaranteed.
+Added: Our primary source of funding to support our operations has been from capital raises.
+Added: We have concluded that no substantial doubt exists about our ability to continue as a going concern for the one-year period following the issuance date of the accompanying consolidated financial statements in Part II, Item 8.
+Added: Our actual operating results may differ significantly from our guidance.
+Added: Any failure to successfully implement our operating strategy or the occurrence of any of the events or circumstances set forth in this “Risk Factors” section could result in our actual operating results being different from our guidance, and the differences may be adverse and material.
+Added: From time to time, we may release guidance in our shareholder letters, quarterly investor company update conference calls, quarterly company update presentations, or otherwise, regarding our future performance that represents our management’s estimates as of the date of release.
+Added: This guidance, which includes forward‑looking statements, will be based on projections prepared by management.
+Added: These projections are not prepared with a view toward compliance with published guidelines of the American Institute of Certified Public Accountants, and neither our registered public accountants nor any other independent expert or outside party compiles or examines the projections.
+Added: Accordingly, no such person expresses any opinion or any other form of assurance with respect to the projections.
+Added: Projections are based upon a number of assumptions and estimates that, while presented with numerical specificity, are inherently subject to significant business, political, economic, and competitive uncertainties and contingencies, many of which are beyond our control, such as public health emergencies and the Russia‑Ukraine conflict, and are based upon specific assumptions with respect to future business decisions, some of which will change.
+Added: The rapidly evolving market in which we operate may make it difficult to evaluate our current business and our future prospects, including our ability to plan for and model future growth.
+Added: We intend to state possible outcomes as high and low ranges, which are intended to provide a sensitivity analysis as variables are changed.
+Added: However, actual results will vary from our guidance, and the variations may be material.
+Added: The principal reason that we release guidance is to provide a basis for our management to discuss our business outlook as of the date of release with analysts and investors.
+Added: We do not accept any responsibility for any projections or reports published by any such persons.
+Added: Investors are urged not to rely upon our guidance in making an investment decision regarding our Common Stock.
+Added: Any failure to successfully implement our operating strategy or the occurrence of any of the events or circumstances set forth in this “ Risk Factors ” section could result in our actual operating results being different from our guidance, and the differences may be adverse and material.
+Added: Our financial results may vary significantly from quarter to quarter.
+Added: We expect our revenue and operating results to vary from quarter to quarter.
+Added: We may incur significant operating expenses during the start‑up and early stages of large contracts and may not be able to recognize corresponding revenue in that same quarter.
+Added: We may also incur additional expenses when contracts are terminated or expire and are not renewed.
+Added: Additional factors that may cause our financial results to fluctuate from quarter to quarter include those addressed elsewhere in this “Risk Factors” section and the following factors, among others:
+Added: • the terms of customer contracts that affect the timing of revenue recognition;
+Added: • variability in demand for our services and solutions;
+Added: • commencement, completion, or termination of contracts during any particular quarter;
+Added: • timing of shipments and product deliveries;
+Added: • timing of award or performance incentive fee notices;
+Added: • timing of significant bid and proposal costs;
+Added: • the costs of remediating unknown defects, errors, or performance problems of our product offerings;
+Added: • variable purchasing patterns under blanket purchase agreements and other indefinite delivery/indefinite quantity contracts;
+Added: • restrictions on and delays related to the export of nuclear articles and services;
+Added: • costs related to government inquiries, regulatory investigations or interactions, or litigation;
+Added: • strategic decisions by us or our competitors, such as acquisitions, divestitures, spin‑offs and joint ventures;
+Added: • strategic investments or changes in business strategy;
+Added: • changes in the extent to which we use subcontractors;
+Added: • seasonal fluctuations in our staff utilization rates;
+Added: • changes in our effective tax rate, including changes in our judgment as to the necessity of the valuation allowance recorded against our deferred tax assets; and
+Added: • the length of sales cycles.
+Added: Reports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of our Common Stock.
+Added: Securities research analysts may establish and publish their own periodic projections for us.
+Added: These projections may vary widely and may not accurately predict the results we actually achieve.
+Added: Our share price may decline if our actual results do not match the projections of these securities research analysts.
+Added: Similarly, if one or more of the analysts who write reports on us downgrades our stock or publishes inaccurate or unfavorable research about our business, our share price could decline.
+Added: If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, our share price or trading volume could decline.
+Added: Moreover, if certain analysts fail to commence coverage of us, the market price and volume for our Common Stock could be adversely affected.
+Added: Risks Related to Being a Public Company
+Added: The market price of our Common Stock is and could remain highly volatile.
+Added: You may lose some or all of your investment.
+Added: The trading price of our Common Stock is and could remain volatile and subject to significant fluctuations.
+Added: The trading price of our Common Stock depends on many factors, including those described in this “ Risk Factors ” section, many of which are beyond our control and may not be related to our operating performance.
+Added: We do not intend to pay cash dividends on our Common Stock for the foreseeable future.
+Added: Furthermore, the stock markets in general have experienced extreme volatility, which has sometimes been unrelated to the operating performance of the issuer.
+Added: The trading price of our Common Stock may be adversely affected by third parties trying to drive down or drive up the market price.
+Added: Short sellers and others, some of whom post anonymously on social media, may be positioned to profit if our stock declines or otherwise exhibits volatility, and their activities can negatively affect our stock price and increase the volatility of our stock price.
+Added: These broad market and industry factors may seriously harm the market price of our Common Stock, regardless of our operating performance.
+Added: In addition, in the past, following periods of volatility in the overall market and the market prices of particular companies’ securities, securities class action litigations have often been instituted against these companies.
+Added: Litigation of this type, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.
+Added: Any adverse determination in any such litigation or any amounts paid to settle any such actual or threatened litigation could require that we make significant payments.
+Added: Some provisions of Delaware law and our certificate of incorporation and bylaws may deter third parties from acquiring us and diminish the value of our Common Stock.
+Added: Our certificate of incorporation and bylaws provide for, among other things:
+Added: • the ability of our board of directors (the "Board") to issue one or more series of preferred stock with voting or other rights or preferences that could have the effect of impeding the success of an attempt to acquire us or otherwise effect a change in control;
+Added: • provide for a classified board of directors with staggered, three‑year terms, which could delay the ability of stockholders to change the membership of a majority of our Board;
+Added: • prohibit cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
+Added: • advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at stockholder meetings; and
+Added: • certain limitations on convening special stockholder meetings.
+Added: In addition, in our certificate of incorporation, we have not opted out of Section 203 of the DGCL, which prohibits a Delaware corporation from engaging in certain “business combinations” with any “interested stockholder” for a three‑year period following the time that the stockholder became an interested stockholder, unless:
+Added: • prior to such time, the board of directors approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;
+Added: • upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of voting stock outstanding at the time the transaction commenced, excluding certain shares; or
+Added: • at or subsequent to that time, the business combination is approved by our Board and by the affirmative vote of holders of at least two‑thirds of the votes of our outstanding voting stock that is not owned by the interested stockholder.
+Added: Generally, a “business combination” includes a merger, asset or stock sale or other transaction resulting in a financial benefit to the interested stockholder.
+Added: Subject to certain exceptions, an “interested stockholder” is a person who, together with that person’s affiliates and associates, owns, or within the previous three years owned, 15% or more of the votes of our outstanding voting stock.
+Added: For purposes of this provision, “voting stock” means any class or series of stock entitled to vote generally in the election of directors.
+Added: Under certain circumstances, this provision will make it more difficult for a person who would be an “interested stockholder” to effect various business combinations with us for a three‑year period.
+Added: This provision may encourage companies interested in acquiring us to negotiate in advance with our board of directors because the stockholder approval requirement would be avoided if our Board approves either the business combination or the transaction that results in the stockholder becoming an interested stockholder.
+Added: These provisions also may have the effect of preventing changes in our Board and may make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests.
+Added: These provisions in our certificate of incorporation and our bylaws, as well as Delaware law, may discourage, delay or prevent a transaction involving a change in control of us that is in the best interest of its minority stockholders.
+Added: Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our Common Stock if they are viewed as discouraging future takeover attempts.
+Added: These provisions could also make it more difficult for stockholders to nominate directors for election to our board of directors and take other corporate actions.
+Added: We are an emerging growth company within the meaning of the Securities Act and a smaller reporting company within the meaning of the Exchange Act, and if we take advantage of certain exemptions from disclosure requirements available to “emerging growth companies” or “smaller reporting companies,” this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
+Added: We are an emerging growth company within the meaning of the Securities Act, as modified by the JOBS Act, and we take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but are not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes‑Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from say‑on‑pay, say‑on‑frequency and say‑on‑golden parachute voting requirements.
As a result, our stockholders may not have access to certain information they may deem important.
−Removed: We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our common stock held by non-affiliates exceeds $700 million as of the end of any second quarter of a fiscal year, in which case we would no longer be an emerging growth company as of the end of such fiscal year.
−Removed: We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions.
−Removed: If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
+Added: We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year:
+Added: (a) following July 7, 2026, the fifth anniversary of the date AltC consummated its initial public offering; (b) in which we have total annual gross revenue of at least $1,235,000,000; or (c) in which we are deemed to be a large accelerated filer, which means the market value of the shares of our Common Stock that are held by non‑affiliates exceeds $700,000,000 as of the last business day of our prior second fiscal quarter, and (ii) the date on which we have issued more than $1,000,000,000 in non‑convertible debt securities during the prior three‑year period.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.
The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non‑emerging growth companies but any such election to opt out is irrevocable.
−Removed: We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
−Removed: This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
−Removed: Provisions in our amended and restated certificate of incorporation and Delaware law may have the effect of discouraging lawsuits against our directors and officers.
−Removed: Our amended and restated certificate of incorporation requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against directors, officers and employees for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel.
−Removed: This provision may have the effect of discouraging lawsuits against our directors and officers.
+Added: We intend to take advantage of the benefits of this extended transition period.
+Added: We cannot predict whether investors will find our securities less attractive because we rely on these exemptions.
+Added: If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
+Added: Our failure to timely and effectively implement controls and procedures required by Section 404(a) of the Sarbanes‑Oxley Act could negatively impact our business.
+Added: As a public company, we are subject to Section 404 of the Sarbanes‑Oxley Act and are required to provide management’s attestation on internal controls.
+Added: The standards required for a public company under Section 404(a) of the Sarbanes‑Oxley Act are significantly more stringent than those required of us as a privately held company.
+Added: Management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements.
+Added: If our management is unable to conclude that we have effective internal control over financial reporting, or to certify the effectiveness of such controls, and our independent registered public accounting firm cannot render an unqualified opinion on management’s assessment and the effectiveness of our internal control over financial reporting at such time as it is required to do so, and material weaknesses in our internal control over financial reporting are identified, we could be subject to regulatory scrutiny, a loss of public and investor confidence, prevent us from obtaining capital on favorable terms or at all, and to litigation from investors and stockholders, which could have a material adverse effect on our business and our stock price.
+Added: In addition, if we do not maintain adequate financial and management personnel, processes, and controls, we may not be able to manage our business effectively or accurately report our financial performance on a timely basis, which could cause a decline in our stock price and adversely affect our business, financial condition, and results of operations.
+Added: Failure to comply with the Sarbanes‑Oxley Act could potentially subject us to sanctions or investigations by the SEC, the NYSE or other regulatory authorities, which would require additional financial and management resources.
+Added: We have identified a material weakness in our internal control over infrequent and complex accounting.
+Added: If our remediation of such material weakness is not effective it could impact our ability to timely and accurately report our financial condition and results of operations or comply with applicable laws and regulations could be impaired, which may adversely affect investor confidence.
+Added: We are in the process of developing our internal processes and procedures to accommodate our rapid growth.
+Added: In connection with the preparation of our consolidated financial statements for the year ended December 31, 2024 we identified a material weakness in our internal control over financial reporting in the area of complex and infrequent accounting, relating specifically to complex accounting matters relating to closing entries associated with our Business Combination with AltC.
+Added: A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis.
+Added: The material weakness described above, if not remediated, could result in a misstatement of account balances or disclosures that, if not detected, would result in a material misstatement to the annual or interim consolidated financial statements.
+Added: Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition or results of operations, cause us to lose investor confidence, prevent us from obtaining capital on favorable terms or at all, subject us to sanctions or investigations by the SEC, the NYSE or other regulatory authorities, or subject us to civil litigation, which would be costly and time-consuming to defend.
+Added: In order to remediate this material weakness, we plan to improve our processes and controls relating to how we review information provided by third parties, and relating to how we review amendments to third party agreements, as supported through hiring or use of third-party consultants and specialists, to ensure appropriate accounting treatment.
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.