7 unchanged sentences
Our business, financial condition and results of operations could also be harmed by risks and uncertainties not currently known to us or that we currently do not believe are material.
−Removed: Risks Related to our Financial Position and Capital Requirements.
+Added: Risks Relating to our Financial Position and Capital Requirements.
If we are not successful in our efforts to increase sales or raise capital, we could experience a shortfall in cash over the next twelve months, and our ability to obtain additional financing on acceptable terms, if at all, may be limited.
24 unchanged sentences
Factors that may be considered a change in circumstances, indicating that the carrying value of our goodwill may not be recoverable, include a decline in stock price and market capitalization, reduced future cash flow estimates and slower growth rates in our industry.
−Removed: Our annual impairment tests resulted in no impairment of goodwill during fiscal 2020.
−Removed: The annual impairment test during fiscal 2019 resulted in $2,938,653 of impairment.
+Added: Our annual impairment tests resulted in no impairment of goodwill during fiscal 2021 and fiscal 2020.
Deterioration in estimated future cash flows in our reporting unit could result in further future goodwill impairment.
Changes to our business strategy, changes in industry or market conditions, changes in operating performance or other indicators of impairment could cause us to record a significant impairment charge during the period in which the impairment is determined, negatively impacting our results of operations and financial position.
−Removed: Risks Relating to the Company
−Removed: Our residential construction business model using our GreenSteel technology depends upon the support of an independent third-party licensee.
−Removed: We entered into an exclusive license agreement with CPF, pursuant to which we granted CPF an exclusive license solely within the United States and its legal territories to commercialize our GreenSteel technology, intellectual property, any improvements thereto, and any related permits, in order to develop and commercialize products within the field of design and project management platforms for residential use, including, without limitation, single-family residences and multi-family residences, but specifically excluding military housing.
−Removed: Under the terms of the License Agreement, CPF is to provide us with royalties based upon its sale of products that utilize the licensed technology.
−Removed: Inasmuch as CPF has an exclusive license in the United States, which is the only territory to date where we have been retained to construct products for use for residences, unless we were to either expand residential construction product sales to territories outside of the United States or enter into licensing arrangements similar to that with CPF for sales of products that utilize our technology outside of the United States for residential use or in the United States for business not cover by the License, such as military residences and commercial and industrial construction, we will be totally dependent upon CPF for our revenue for residential construction.
−Removed: CPF is an independent entity and we cannot control the amount or timing of resources that it devotes to such commercialization efforts.
−Removed: CPF may not assign as great a priority to such commercialization efforts or pursue them as diligently as we would if we were undertaking such commercialization ourselves.
−Removed: If CPF or any other licensee fails to devote sufficient time and resources to such commercialization efforts, or if its performance is substandard our ability to generate revenue may be adversely affected.
−Removed: CPF may also have relationships with other commercial entities, some of whom may compete with us.
−Removed: If CPF assists our competitors at our expense, our competitive position would be harmed.
−Removed: In addition, upon certain extraordinary events, CPF is entitled to terminate the license agreement in which case we would be forced to incur the costs to commercialize products for residential construction unless another licensee were found.
+Added: Risks Relating to our Company
Our residential construction business is difficult to evaluate because we are currently focused on a new business model and have very limited operating history and limited information.
−Removed: We recently engaged in a new licensing business model for our residential construction business in the United States.
−Removed: We have entered into one license agreement for use of our technology for construction of residences in the United States and if successful, we intend to expand our model and enter into additional similar agreements.
−Removed: There is a risk that we will be unable to successfully generate revenue from this new business model and that we will be unable to enter into additional licensing agreements or that any additional agreements that we enter into will be on favorable terms.
−Removed: Although we believe that we will experience cost savings from this new business model resulting in greater net income since we will no longer require the same level of capital, personnel and equipment as was required from our prior residential construction business model, there can be no assurance that we will experience the level of cost savings that we anticipate or generate the income that we anticipate.
−Removed: We are subject to many risks associated with this new business model such as our dependence upon licensees to commercialize products that utilize our technology.
−Removed: There is no assurance that the licensees activities will be successful or will result in any revenues or profit.
+Added: We recently terminated our licensing business model for our residential construction business in the United States and are currently developing and constructing our own residential developments.
+Added: In 2019 we entered into one license agreement for use of our technology for construction of residences in the United States which we terminated in June 2021.
+Added: There is a risk that we will be unable to successfully generate revenue from this new business model.
+Added: Although we believe that we will experience increased revenue from this new business model, there can be no assurance that we will experience increased costs and generate less income that we anticipate.
+Added: We are subject to many risks associated with this new business model such as our dependence upon third parties to provide services and supply required materials.
Even if we generate revenue, there can be no assurance that we will be profitable.
2 unchanged sentences
Although we expect to control have better control of cost of goods and efficiency from this acquisition, it is too early to determine the full benefits, if any to be experienced as a result of the acquisition.
−Removed: In December 2019, a novel strain of coronavirus, COVID-19, was reported to have surfaced in Wuhan, China.
−Removed: Since then, the COVID-19 coronavirus has spread to multiple countries, including the United States.
The impact of the COVID-19 coronavirus outbreak, or similar global health concerns, could negatively impact our ability to source certain products, impact product pricing, impact our customers’ ability or that of our licensee to obtain financing or have a negative impact on our business.
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To date, we have experienced some delays in projects due to COVID-19 .
−Removed: Any quarantines, the timing and length of containment and eradication solutions, travel restrictions, absenteeism by infected workers, labor shortages or other disruptions to our suppliers and their contract manufacturers or our customers or our licensee, CPF, would likely adversely impact our sales and operating results and result in further project delays.
+Added: Any quarantines, the timing and length of containment and eradication solutions, travel restrictions, absenteeism by infected workers, labor shortages or other disruptions to our suppliers and their contract manufacturers or our customers would likely adversely impact our sales and operating results and result in further project delays.
In addition, the pandemic could result in an economic downturn that could affect the ability of our customers and licensees to obtain financing and therefore impact demand for our products.
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Our success depends highly upon the personal efforts and abilities of our senior management team, specifically the efforts of Paul M.
−Removed: Galvin, our Chief Executive Officer, Gerald Sheeran , our Acting Chief Financial Officer, Stevan Armstrong, our Chief Technology Officer, William Rogers, our Chief of Operations and Rockey Butler, our Vice President of Operations.
+Added: Galvin, our Chief Executive Officer, Gerald Sheeran , our Acting Chief Financial Officer and William Rogers, our Chief Operations Officer.
The Company has entered into employment agreements with Messrs.
−Removed: Galvin and Armstrong.
+Added: Galvin, Sheeran and Rogers.
The employment agreements with Messrs.
−Removed: Galvin and Armstrong each provide for two-year terms, with automatic renewal after the end of such term.
+Added: Galvin, Sheeran and Rogers each provide for two-year terms, with automatic renewal after the end of such term.
The loss of the services of one or more of these individuals could have a material adverse effect on our business.
2 unchanged sentences
A few customers have in the past, and may in the future, account for a significant portion of our revenues in any one year or over a period of several consecutive years.
−Removed: For example, for the year ended December 31, 2020 , approximately 61% of our revenue was generated from three customers.
+Added: At December 31, 2021 and 2020, 78% and 79%, respectively, of the our gross accounts receivable were due from four and three customers.
+Added: Revenue relating to one and three customers represented approximately 80% and 61% of our total revenue for the years ended December 31, 2021 and 2020, respectively.
Although we have contractual relationships with many of our significant customers, our customers may unilaterally reduce or discontinue their contracts with us at any time.
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Any negative impacts to our business or liquidity could adversely impact our ability to establish or maintain these relationships.
−Removed: For the year ended December 31, 2020, there were no vendors which represented 10% or more of our cost of revenue.
−Removed: For the year ended December 31, 2019, 74% of our cost of revenue related to three vendors.
We currently are, and may in the future be, subject to legal proceedings or investigations, the resolution of which could negatively affect our profitability and cash flows in a particular period.
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Legal Proceedings .”
−Removed: We have identified weaknesses in our internal controls, and we cannot provide assurances that these weaknesses will be effectively remediated or that additional material weaknesses will not occur in the future.
−Removed: We do not yet have effective disclosure controls and procedures, or internal controls over all aspects of our financial reporting.
−Removed: We are continuing to develop and refine our internal controls over financial reporting .
−Removed: Our management is responsible for establishing and maintaining adequate internal control over our financial reporting, as defined in Rule 13a-15(f) under the Exchange Act.
−Removed: We will be required to expend time and resources to further improve our internal controls over financial reporting, including by expanding our staff.
−Removed: However, we cannot assure you that our internal control over financial reporting, as modified, will enable us to identify or avoid material weaknesses in the future.
−Removed: We have identified material weaknesses in our internal control over financial reporting.
−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 financial statements will not be prevented or detected on a timely basis.
−Removed: The material weaknesses identified to date include (i)insufficient internal controls related to the timely closing of our accounting records, caused by insufficient accounting resources and a lack of formal review procedures and (ii) insufficient internal controls related to the application of technical accounting guidance to complex and/or new transactions.
−Removed: As such, our internal controls over financial reporting were not designed or operating effectively.
−Removed: We will be required to expend time and resources to further improve our internal controls over financial reporting, including by expanding our staff .
−Removed: However, we cannot assure you that our internal control over financial reporting, as modified, will enable us to identify or avoid material weaknesses in the future.
−Removed: Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business, including increased complexity resulting from our international expansion.
−Removed: Further, weaknesses in our disclosure controls or our internal control over financial reporting may be discovered in the future.
−Removed: Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm our operating results or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods.
−Removed: Any failure to implement and maintain effective internal control over financial reporting could also adversely affect the results of management reports and independent registered public accounting firm audits of our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed with the SEC.
−Removed: Ineffective disclosure controls and procedures, and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the market price of our common stock.
+Added: We may have difficulty protecting our proprietary manufacturing processes, which could adversely affect our ability to compete.
+Added: We use a proprietary manufacturing process that allows us to be code-compliant in our SGBlocks™ product .
+Added: Such manufacturing process is unique to the construction industry and is important to ensure our continued success, and we cannot assure you that our efforts to protect our proprietary rights will be sufficient or effective.
+Added: If other companies replicate our methodology, we could lose our competitive advantage.
+Added: Any future patent or trademark applications may not lead to issued patents and registered trademarks in all instances.
+Added: We also cannot be assured that the scope of any patents issued in the future will be sufficiently broad to offer meaningful protection.
+Added: Others may develop or patent similar or superior technologies, products or services, and our intellectual property rights may be challenged, invalidated, misappropriated or infringed by others.
+Added: If we are unable to protect and maintain our intellectual property rights, or if there are any successful intellectual property challenges or infringement proceedings against us, our business and revenue could be materially and adversely affected.
Risks Relating to our Business and Industry
−Removed: We, in particular Echo, and CPF are dependent on the availability and skill of subcontractors, their willingness to work with us, and their selection of, and ability to obtain, suitable and quality building materials.
−Removed: We and CPF will rely on subcontractors to perform the actual construction of our building projects and, in many cases, to select and obtain raw materials.
−Removed: Despite detailed specifications and quality control procedures, in some cases, improper construction processes or defective materials may be used to finish construction of our building projects.
−Removed: We and CPF may need to spend money to remediate such problems when they are discovered.
−Removed: Defective products can result in the need to perform extensive repairs to large numbers of buildings.
−Removed: Though subcontracts are written to protect from substandard performance or materials, pervasive problems could adversely affect CPF’s business and therefore our ability to generate royalty income.
−Removed: Our revenue from our CPF is based upon the gross revenue it receives from product sales which is exclusive of amounts repaid or credited by reason of rejection or returns.
−Removed: The inability to contract with skilled subcontractors or general contractors at reasonable costs and on a timely basis could limit our or CPF’s ability to construct and deliver buildings and could erode our profit margins and adversely affect our results of operations and cash flows.
+Added: We, in particular Clarity Mobile Venture, are dependent on the availability and skill of subcontractors, their willingness to work with us, and their expertise in the medical industry.
+Added: We rely and expect to continue to rely on subcontractors to perform the collection of COVID-19 tests and run testing procedures within our LAX laboratory.
+Added: Despite detailed specifications and quality control procedures, in some cases, improper processes or defective materials may cause issues in producing a timely test result.
+Added: We may need to spend money to remediate such problems when they are discovered.
+Added: Defective materials and or improper testing procedures can result in refunds owed back to our COVID-19 customers.
+Added: Pervasive problems could adversely affect our business and therefore our ability to generate income at LAX.
+Added: The inability to contract with skilled subcontractors at reasonable costs and on a timely basis could erode our profit margins and adversely affect our results of operations and cash flows.
We depend on third parties for transportation services, and limited availability or increases in costs of transportation could adversely affect our business and operations.
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Additionally, an increase in transportation rates or fuel surcharges could adversely affect our sales, profitability, and cash flows.
−Removed: We may have difficulty protecting our proprietary manufacturing processes, which could adversely affect our ability to compete.
−Removed: We use a proprietary manufacturing process that allows us to be code-compliant in our SGBlocks™ product .
−Removed: Such manufacturing process is unique to the construction industry and is important to ensure our continued success, and we cannot assure you that our efforts to protect our proprietary rights will be sufficient or effective.
−Removed: If other companies replicate our methodology, we could lose our competitive advantage.
−Removed: Any future patent or trademark applications may not lead to issued patents and registered trademarks in all instances.
−Removed: We also cannot be assured that the scope of any patents issued in the future will be sufficiently broad to offer meaningful protection.
−Removed: Others may develop or patent similar or superior technologies, products or services, and our intellectual property rights may be challenged, invalidated, misappropriated or infringed by others.
−Removed: If we are unable to protect and maintain our intellectual property rights, or if there are any successful intellectual property challenges or infringement proceedings against us, our business and revenue could be materially and adversely affected.
Expansion of our operations may strain resources, and our failure to manage growth effectively could adversely impact our operating results and harm our ability to attract and retain key personnel.
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As of December 31, 2020, our backlog totaled approximately $ 25.1 million and as of December 31, 2021 , our backlog totaled approximately $3.2 million.
−Removed: The increase in backlog at December 31, 2020 from December 31, 2019 is primarily attributable to executing two contracts during the third quarter of 2020 in the amount of approximately $4 million and approximately $2.95 million and three contracts during the fourth quarter of 2020 in the amount of approximately $2.7 million, $0.80 million and $0.70 million.
+Added: The decrease in backlog at December 31, 2021 from December 31, 2020 is primarily attributable to two contract cancellation, one which occurred during the third quarter of 2021 in the amount of approximately $1.3 million and one cancellation during the fourth quarter of 2021 in the amount of approximately $16.9 million.
Our backlog is described more in detail in “Note 13 —Construction Backlog” of the notes to our consolidated financial statements included elsewhere in this Annual Report.
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The construction industry is highly cyclical and seasonal and is influenced by many international, national and regional economic factors, including the availability of consumer and wholesale financing, which may be severely reduced due to COVID-19 coronavirus, seasonality of demand, consumer confidence, interest rates, income levels and general economic conditions, including inflation and recessions.
−Removed: As a result of the foregoing factors, the revenues and operating results we derive from customers and CPF will fluctuate and we currently expect them to continue to fluctuate in the future.
+Added: As a result of the foregoing factors, the revenues and operating results we derive from customers will fluctuate and we currently expect them to continue to fluctuate in the future.
Moreover, we have experienced, and may continue to experience, operating losses during cyclical downturns in the construction market.
2 unchanged sentences
The construction industry is cyclical and significantly affected by changes in general and local economic and real estate conditions, such as employment levels, consumer confidence, demographic trends, housing demand, inflation, deflation, interest rates and credit availability.
−Removed: Changes in these general and local economic conditions or deterioration in the broader economy could negatively impact the level of purchases, capital expenditures and creditworthiness of our indirect customers and suppliers to CPF s, and, therefore, our royalty income and financial condition, results of operations and cash flows.
+Added: Changes in these general and local economic conditions or deterioration in the broader economy could negatively impact the level of purchases, capital expenditures and creditworthiness of our indirect customers and suppliers, and, therefore, our royalty income and financial condition, results of operations and cash flows.
Changes in these economic conditions may affect some of our regions or markets more than others.
If adverse conditions affect our larger markets, they could have a proportionately greater impact on us than on some other companies.
−Removed: In addition, any uncertainty regarding global economic conditions may have an adverse effect on the results of operations and financial condition of us or our customers, distributors and suppliers, such as negative effects of currency exchange fluctuations.
+Added: In addition, any uncertainty regarding global economic conditions such as raising gas prices may have an adverse effect on the results of operations and financial condition of us or our customers, distributors and suppliers, such as negative effects of currency exchange fluctuations.
A shortage of labor in the construction industry could also have an impact on our financial results.
Our business relies on private investment and a slower than expected economy may adversely affect our results.
−Removed: A significant portion of our sales and those of CPF are for projects with non-public owners, such as non-residential builders and home builders who make investments with private funds into their projects.
+Added: A significant portion of our sales are for projects with non-public owners, such as non-residential builders and home builders who make investments with private funds into their projects.
Construction spending is affected by their customers’ ability to finance projects, which may be severely reduced due to the COVID-19 coronavirus .
Residential and nonresidential construction could decline if companies and consumers are unable to finance construction projects or if the economy slows or is stalled, which could result in delays or cancellations of capital projects.
−Removed: If the economy slows, or if housing starts and nonresidential projects do not increase, sales of our products directly by us to consumers or by CPF and related services may decline, and our financial position, results of operations and liquidity could be materially adversely affected.
+Added: If the economy slows, or if housing starts and nonresidential projects do not increase, sales of our products directly by us to consumers and related services may decline, and our financial position, results of operations and liquidity could be materially adversely affected.
A material disruption at one of our suppliers’ facilities or Echo's facilities could prevent us from meeting customer demand, reduce our sales and negatively affect our overall financial results.
63 unchanged sentences
During 2020 , the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was passed, which temporarily removes such 80% limitation for years 2020 and 2019 .
−Removed: At December 31, 2020 , we had a valuation allowance of $4.6 million, primarily related to net operating loss carry forwards that are not more likely than not to be utilized due to an inability to carry back these losses in most states and short carry forward periods that exist in certain states.
+Added: At December 31, 2021 , we had a valuation allowance of approximately $7.4 million, primarily related to net operating loss carry forwards that are not more likely than not to be utilized due to an inability to carry back these losses in most states and short carry forward periods that exist in certain states.
If we are unable to use our net operating losses, we may be required to record charges or reduce our deferred tax assets, which could have an adverse effect on our results of operations.
Risks Relating to the Construction Sector
−Removed: We and CPF are dependent upon third-party financing, and our financial condition and results of operations could be negatively affected if additional third-party financing for our customers does not become available
−Removed: Our business and earnings depend substantially on our ability and the ability of CPF to obtain financing for the development of their construction projects , which may be adversely impacted by the recent COVID-19 coronavirus outbreak.
+Added: We are dependent upon third-party financing, and our financial condition and results of operations could be negatively affected if additional third-party financing for our customers does not become available
+Added: Our business and earnings depend substantially on our ability to obtain financing for the development of their construction projects , which may be adversely impacted by the recent COVID-19 coronavirus outbreak.
The availability and cost of such financing is further dependent on the number of financial institutions participating in the industry, the departure of financial institutions from the industry, the financial institutions’ lending practices, the strength of the domestic and international credit markets generally, governmental policies and other conditions, all of which are beyond our control.
−Removed: In light of the current economic climate, some of our projects and those of CPF may not be successful in obtaining additional funds in a timely manner, on favorable terms or at all.
+Added: In light of the current economic climate, some of our projects may not be successful in obtaining additional funds in a timely manner, on favorable terms or at all.
The availability of borrowed funds, especially for construction financing, has been greatly reduced, and lenders may require project developers to invest increased amounts of equity in a project in connection with both new loans and the extension of existing loans.
2 unchanged sentences
Over the past few years, lenders have tightened the credit underwriting standards, which have reduced lending volumes.
−Removed: If this trend continues, it would negatively impact CPF’s sales and our royalty income, which depend in large part on the availability and cost of financing.
+Added: If this trend continues, it would negatively impact our sales, which depend in large part on the availability and cost of financing.
In addition, where our potential customers must sell their existing buildings or real estate in order to develop new buildings, increases in mortgage costs and/or lack of availability of mortgages could prevent buyers of potential customers’ existing buildings from obtaining the mortgages they need to complete their purchases, which would result in our potential customers’ inability to make purchases from us.
34 unchanged sentences
Our business may be disrupted by the emergence and spread of new variants of the COVID-19 virus that may require different types of tests that may or may not be readily available to us at the time.
−Removed: Currently, we are deploying several COVID-19 tests including the GeneFinder™ test for COVID-19 produced by Osang Healthcare Co., Ltd.
−Removed: and which is effective for the B.1.1.7 (UK) variant, B.1.351 (South Africa) variant and P.1 (Brazil) variant.
−Removed: No assurance can be given that the COVID-19 tests currently deployed by us it will be effective for any future variants.
+Added: Currently, we are deploying several COVID-19 tests including PCR and Rapid-Antigen tests.
+Added: No assurance can be given that the COVID-19 tests currently deployed by us will be effective for any future variants.
We may be adversely affected by actions of our competitors.
9 unchanged sentences
Our common stock is listed on the Nasdaq Capital Market (“Nasdaq” or the “Nasdaq Capital Market”) , which imposes, among other requirements, a minimum bid requirement.
−Removed: On July 1, 2019, we received a letter from Nasdaq that, because the closing bid price for our common stock was below $1.00 for 30 consecutive business days, we no longer met the minimum bid price requirement for continued listing on Nasdaq.
−Removed: On February 21, 2020, we received written notice from the Listing Qualifications department of the Nasdaq notifying us that we had regained compliance with the minimum bid price and stockholder’s equity rules.
−Removed: Although we have been able to regain compliance with the continued listing requirements of the Nasdaq Capital Market and are currently in compliance, there can be no assurance that we will be able to maintain compliance in the future.
+Added: Although we are currently in compliance with the continued listing requirements of the Nasdaq Capital Market in the past we have experiences periods of time when we were not compliant with the minimum bid price requirements and, there can be no assurance that we will be able to maintain compliance in the future.
The delisting of our common stock from Nasdaq may make it more difficult for us to raise capital on favorable terms in the future, or at all.
12 unchanged sentences
The trading price of our common stock has been and is expected to continue to be volatile and has been and may continue to be subject to wide fluctuations in response to various factors, some of which are beyond our control, including limited trading volume.
−Removed: On March 24, 2021, the reported low sale price of our common stock was $4.38, the reported high sale price was $5.19 and closing price of our common stock was $4.48 while on January 19, 2021, the closing price of our common stock was $8.42.
+Added: On March 15, 2022, the reported low sale price of our common stock was $1.60, the reported high sale price was $1.71 and closing price of our common stock was $1.64 while on June 30, 2021, the closing price of our common stock was $5.50.
We may incur rapid and substantial decreases in our stock price in the foreseeable future that are unrelated to our operating performance for prospects.
54 unchanged sentences
Investors seeking cash dividends in the foreseeable future should not purchase our common stock.
−Removed: If securities or industry analysts do not publish research or reports about our business or our industry, or publish negative reports about our business or our industry, our stock price and trading volume could decline.
+Added: If securities or industry analysts do not publi sh research or reports about our business or our industry, or publish negative reports about our business or our industry, our stock price and trading volume could decline .
The trading market for our common stock will be influenced by the research and reports that securities or industry analysts publish about us, our business, our industry or our competitors.
27 unchanged sentences
UNRESOLVED STAFF COMMENTS.
−Removed: We lease office space in Brooklyn, New York for our headquarters.
−Removed: Echo also operates a manufacturing facility located in Durant, Oklahoma.
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.