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Risk Factors” in this Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statement.
−Removed: We are seeking to reshape the world of electronics with our disruptive organic thin-film transistors (“OTFTs”) that we believe have the potential to drive the next generation of displays.
−Removed: Our patented TRUFLEX® semiconductor and dielectric inks, or electronic polymers, are used to make a new type of transistor that we believe have the capability to potentially revolutionize the display industry.
−Removed: Our inks enable low temperature printing processes that are compatible with existing manufacturing infrastructure to deliver low-cost displays that outperform existing technologies.
−Removed: Our electronic polymer platform can be used in a range of display technologies including microLED, miniLED and AMOLED displays for next generation televisions, laptops, augmented reality (“AR”) and virtual reality (“VR”) headsets, smartwatches and smartphones.
−Removed: Our loss before income taxes was $8.5 million and $11.5 million for the year ended December 31, 2023, and 2022, respectively.
−Removed: As of December 31, 2023, our accumulated deficit was $95.1 million.
−Removed: Substantially all our operating losses have resulted from expenses incurred in connection with research and development activities and from general and administrative costs associated with our operations.
+Added: We are seeking to change the world of electronics with a new class of transistor developed using our proprietary advanced semiconductor materials that we believe has the potential to revolutionize the display industry.
+Added: Our TRUFLEX® semiconductor polymers enable low temperature printing processes that are compatible with existing manufacturing infrastructure to deliver low-cost, high-performance displays.
+Added: Our semiconductor platform can be used in a range of display technologies including MicroLED, miniLED and AMOLED, as well as in applications in advanced chip packaging, sensors, and logic.
+Added: We design and develop our materials at our research and development facility in Manchester, UK and provide prototyping services at the Centre for Process Innovation (“CPI”) in Sedgefield, UK.
+Added: We also operate a field application office in Hsinchu, Taiwan, close to our collaboration partner, The Industrial Technology Research Institute of Taiwan (“ITRI”), where we demonstrate the scalability of our technology using ITRI’s equipment.
+Added: With our collaboration partners, we are developing a commercial-scale production process and EDA tools for our materials to demonstrate the commercial viability of manufacturing a new generation of displays using our materials.
+Added: We have an extensive IP portfolio including 138 granted patents across 17 patent families, 17 pending patents and 40 codified trade secrets.
Key Factors Affecting Our Performance
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Therefore, steps such as additional patent applications, confidentiality, and non-disclosure agreements, as well as other security measures are important.
−Removed: While we believe we have a strong patent portfolio and there is no actual or, to our knowledge,
−Removed: threatened litigation against us for patent-related matters, litigation or threatened litigation is a common method to effectively enforce or protect intellectual property rights.
+Added: While we believe we have a strong patent portfolio and there is no actual or, to our knowledge, threatened litigation against us for patent-related matters, litigation or threatened litigation is a common method to effectively enforce or protect intellectual property rights.
Such action may be initiated by or against us and would require significant management time and expenses.
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Additionally, future commercial and other factors beyond our control will impact our development programs and plans.
−Removed: Selling, General and Administrative.
−Removed: Selling, general and administrative expenses consist primarily of allocated compensation and related costs for personnel, including share-based compensation, employee benefits and travel.
+Added: General and Administrative.
+Added: General and administrative expenses consist primarily of allocated compensation and related costs for personnel, including share-based compensation, employee benefits and travel.
In addition, general and administrative expenses include third-party consulting, legal, audit, accounting services, allocations of overhead costs, such as rent, facilities and information technology.
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Revenues were $82.0 thousand for the year ended December 31, 2024, compared to $27.0 thousand for the same period of 2023.
−Removed: Cost of revenue was $23.0 thousand for the twelve months ended December 31, 2023, compared to $33.0 thousand for the same period of 2022.
−Removed: The decrease is mainly the results of less unit sales in 2023 compared to 2022, reflecting the largely one-off nature of these sales, consistent with our current stage of commercialization.
+Added: The increase in revenues resulted primarily from an increase in the sale of demonstrator products to potential partners, as we sought to expand our marketing efforts.
+Added: Cost of revenue was $32.0 thousand for the twelve months ended December 31, 2024, compared to $23.0 thousand for the same period of 2023, primarily as a result of a unit increase in the number of products sold during 2024.
Other Operating Income
−Removed: Other operating income was $0.8 million and $1.2 million for the years ended December 31, 2023 and 2022, respectively.
−Removed: The primary sources of the other operating income in these periods were a research grant and research and development tax credits.
−Removed: The decrease is mostly attributable to a reduction in the allowable research and development expenses and a lowering of the tax credit rate to be applied to the allowable expenses of which both went into effect in 2023.
+Added: Other operating income was $1.0 million and $0.8 million for the years ended December 31, 2024 and 2023, respectively, and is comprised primarily of research grants and research and development tax credits.
+Added: The increase in other operating income during 2024 was largely attributable to additional grant revenue recognized in 2024.
Operating Expenses
−Removed: Operating expenses decreased by $0.1 million to $10.8 million for the year ended December 31, 2023, compared to $10.9 million for the comparable period of 2022.
−Removed: Research and development expense, which represents 51.3% and 53.4% of our total operating expenses for the twelve months ended December 31, 2023 and 2022, respectively, decreased by $0.2 million to $5.6 million for the year ended December 31, 2023, compared to $5.8 million for the same period of 2022.
−Removed: The decrease is mainly due to lower personnel costs related to reductions in force effected in December 2022 and September 2023 and lower technical research and development costs, including consulting, testing and lab supplies.
−Removed: Selling, general and administrative expense, which represents 47.9% and 46.6% of our total operating expenses for the twelve months ended December 31, 2023 and 2022, respectively, increased by $0.1 million to $5.2 million for year ended December 31, 2023 as compared to $5.1 million for the same period in 2022.
−Removed: There was an increase in personnel costs due to severance costs and the accrual of bonus payments in 2023.
−Removed: This was offset by a reduction in investor relations cost and other professional service fees.
−Removed: Non-Operating Income/(Expenses) and Net Loss
−Removed: The increase of $3.0 million in gain on foreign currency transactions was due to fluctuations in U.S.
−Removed: pound value arising from transactions denominated in foreign currencies and the translation of foreign currency denominated balances on intra-group loans.
−Removed: Issuance costs of $0.2 million allocated to the warrant liability were expensed in full during the year ended December 31, 2023.
−Removed: The majority of costs were legal, placement and consulting fees specifically related to the private placement transaction.
−Removed: There were no similar gains or losses recorded during the prior year.
−Removed: A gain of $0.5 million related to the valuation of the warrant liability was recorded during the year ended December 31, 2023.
−Removed: There were no similar gains or losses recorded during the prior year.
−Removed: The loss before income taxes was $8.5 million for the year ended December 31, 2023, a decrease of $3.0 million, compared to a loss before income taxes of $11.5 million for the year ended December 31, 2022.
−Removed: The decrease in the 2023 period was attributable increases in gains on foreign currency transactions and lower operating expenses as described in the preceding paragraphs.
+Added: Operating expenses increased by $0.7 million to $11.5 million for the year ended December 31, 2024, compared to $10.8 million for the comparable period of 2023.
+Added: Research and development expenses, which represented 44.3% and 51.3% of our total operating expenses for the twelve months ended December 31, 2024 and 2023, respectively, decreased by $0.5 million to $5.1 million for the year ended December 31, 2024, compared to $5.6 million for the same period of 2023.
+Added: The decrease in research and development expenses was mainly due to lower personnel costs resulting from a reduction in force effected in September 2023, as well as lower technical research and development costs, including consulting, testing and lab supplies.
+Added: We expect that our research and development expense will increase in 2025 as a result of an expected increase in the cost of our prototyping activities.
+Added: Business – CPI Agreement” for additional information.
+Added: General and administrative expense, which represented 55.0% and 47.9% of our total operating expenses for the twelve months ended December 31, 2024 and 2023, respectively, increased by $1.1 million to $6.3 million for year ended December 31, 2024 as compared to $5.2 million for the same period in 2023.
+Added: This increase was mainly due to increased professional service fees.
+Added: Non-Operating Income/(Expenses)
+Added: Total non-operating income/(expense) was $0.1 million for the year ended December 31, 2024, compared to $1.5 million for the year ended December 31, 2023.
+Added: The decrease in non-operating income resulted primarily from a loss on foreign currency transactions of $0.5 million in 2024, compared to a gain of $1.2 million for the comparable period of 2023.
+Added: The increase in loss on foreign currency transactions resulted from fluctuations in U.S.
+Added: dollar/British pound value affecting transactions denominated in foreign currencies and the translation of foreign currency denominated balances on intra-group loans.
+Added: There was an increase of $0.2 million in non-operating income resulting from the change in the valuation of the warrant liability.
+Added: Net loss was $10.3 million for the year ended December 31, 2024, an increase of $1.8 million, compared to a net loss of $8.5 million for the year ended December 31, 2023.
+Added: The increase in net loss in the 2024 period was attributable to the factors described in the preceding paragraphs.
Liquidity and Capital Resources
As of December 31, 2024, our cash and cash equivalents were $7.1 million compared with $8.8 million as of December 31, 2023.
−Removed: We believe this will be sufficient to fund our operating expenses and capital expenditure requirements through the end of April 2025.
−Removed: It is possible this period could be shortened if there are any significant increases in planned spending or development programs or more rapid progress of development programs than anticipated.
+Added: We anticipate operating losses to continue for the foreseeable future due to, among other things, costs related to research and development of our technology and products and expenses related to the marketing and commercialization of our products.
+Added: We expect that our cash and cash equivalents of $7.1 million as of December 31, 2024 will not be sufficient to fund our operating expenses and capital expenditure requirements for the next 12 months and that we will require additional capital funding to continue our operations and research development activity thereafter.
+Added: Our expected cash payments over the next twelve months include (a) $1.8 million to satisfy accounts payable and accrued expenses and (b) $47 thousand to satisfy the lease liabilities.
+Added: Additional expected cash payments beyond the next twelve months include $25 thousand of lease liabilities.
Our future viability is dependent on our ability to raise additional capital to fund our operations.
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If we raise additional funds by issuing equity securities, our existing security holders will likely experience dilution.
−Removed: If we borrow money, the incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that could restrict our operations.
−Removed: If we enter into a collaboration, strategic alliance or other similar arrangement, we may be forced to give up valuable rights.
+Added: If we borrow money, the incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that could restrict its operations.
+Added: If we enter into a collaboration, strategic alliance or other similar arrangement, it may be forced to give up valuable rights.
There can be no assurance however that such financing will be available in sufficient amounts, when and if needed, on acceptable terms or at all.
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If the Company is unable to substantially increase revenues, reduce expenditures, or otherwise generate cash flows for operations, then the Company will need to raise additional funding.
+Added: There is substantial doubt that we will be able to pay our obligations as they fall due, and this substantial doubt is not alleviated by management plans.
Cash Flow from Operating Activities
−Removed: Net cash used in operating activities was $8.0 million for the year ended December 31, 2023, compared to $9.0 million for the year ended December 31, 2022, a decrease of $1.0 million.
−Removed: The decrease resulted primarily from a decrease in our net loss of $3.0 million, partially offset by an increase of non-cash activities of $3.3 million and a net increase in operating assets and liabilities of $1.3 million.
+Added: Net cash used in operating activities was $8.1 million for the year ended December 31, 2024 and $8.0 million for the year ended December 31, 2023.
+Added: While our net loss increased by $1.8 million for the year ended December 31, 2024, the non-cash expenses decreased by $1.8 million.
Cash Flow from Investing Activities
−Removed: Net cash used in investing activities was $18.0 thousand for the year ended December 31, 2023, compared to $79.0 thousand for the year ended December 31, 2022, a decrease of $61.0 thousand.
−Removed: The decrease resulted from a reduced level of investment in laboratory and capital equipment purchases in 2023.
+Added: Net cash used in investing activities was $75.4 thousand for the year ended December 31, 2024, compared to $18.0 thousand for the year ended December 31, 2023, an increase of $57.4 thousand.
+Added: The increase resulted from additional purchases of laboratory and capital equipment in 2024.
Cash Flow from Financing Activities
−Removed: Net cash flows provided by financing activities was $12.7 million for the year ended December 31, 2023, compared to $1.8 million for the year ended December 31, 2022, an increase of $10.9 million.
−Removed: In June 2023, we completed a private placement of our preferred stock and warrants resulting in net proceeds of $12.4 million with an additional $1.8 million related to the issuance of warrants.
−Removed: We incurred $1.5 million in issuance costs in connection with this private placement.
+Added: Net cash flows provided by financing activities was $6.5 million for the year ended December 31, 2024, compared to $12.7 million for the year ended December 31, 2023, a decrease of $6.2 million.
+Added: The decrease in net cash provided by financing activities resulted primarily from lower proceeds from offering activities in 2024 compared to 2023.
Contractual Payment Obligations
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(i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations.
−Removed: Management has discussed the development and selection of these critical accounting estimates with the Audit Committee of our Board of Directors.
−Removed: In addition, there are other items within our financial statements that require estimation but are not deemed critical as defined above.
−Removed: Changes in estimates used in these and other items could have a material impact on our financial statements.
−Removed: Share-Based Compensation
−Removed: The Company determines the fair value of certain share-based awards using the Black-Scholes option-pricing model which uses both historical and current market data to estimate the fair value.
−Removed: This method incorporates various assumptions such as the risk-free interest rate, expected volatility, expected dividend yield, and expected life of the options.
−Removed: Prior to February 2022, the Company’s common stock was not traded on an over the counter or national securities exchange and consequently the Company developed estimates for the inputs to the option-pricing model.
−Removed: Warrant Liability
−Removed: The valuation of the warrant liability was determined using an option pricing model.
−Removed: This model uses inputs such as the underlying price of the shares issued at the measurement date, expected volatility, risk free interest rate and expected life of the instrument.
−Removed: Since our common stock was not publicly traded until February 2022 there has been insufficient volatility data available.
−Removed: Accordingly, we have used an expected volatility based on historical common stock volatility of our peers.
−Removed: In addition, we used the probability of uplisting as an input in the model to determine the fair value of the warrant liability.
+Added: Although there are items within our financial statements that require management to make accounting estimates, we do not believe them to be critical, as defined above.
JOBS Act Accounting Election
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.