−Removed: In addition to the other information set forth in this report, you should carefully consider the factors discussed under “Risk Factors” in our annual report on Form 10-K as filed with the Securities and Exchange Commission on March 13, 2020.
−Removed: These factors could materially adversely affect our business, financial condition, liquidity, results of operations and capital position, and could cause our actual results to differ materially from our historical results or the results contemplated by any forward-looking statements contained in this report.
We are subject to many risks that may harm our business, prospects, results of operations and financial condition.
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We have a limited operating history upon which investors may rely in evaluating our business and prospects.
−Removed: We have generated limited revenues to date, and as of September 30, 2020, we had an accumulated deficit of approximately $287 million.
+Added: We have generated limited revenues to date, and as of March 31, 2021, we had an accumulated deficit of approximately $303 million.
Our ability to generate revenues and achieve profitability will depend on our ability to execute our business plan, complete the development and approval of our technology, incorporate the technology into products that customers wish to buy, and if necessary, secure additional financing.
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If we are unable to generate revenues of significant scale to cover our costs of doing business, our losses will continue and we may not achieve profitability, which could negatively impact the value of your investment in our securities.
−Removed: We will need additional financing to achieve our long-term business plans, and there is no guarantee that it will be available on acceptable terms, or at all.
−Removed: We do not have sufficient funds to fully implement our long-term business plans.
+Added: We may need additional financing to achieve our long-term business plans, and there is no guarantee that it will be available on acceptable terms, or at all.
+Added: We may not have sufficient funds to fully implement our long-term business plans.
It is likely that we will need to raise additional capital through new financings, even if we begin to generate meaningful commercial revenue.
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Any inability to raise adequate funds on commercially reasonable terms could have a material adverse effect on our business, results of operations and financial condition, including the possibility that a lack of funds could cause our business to fail and liquidate with little or no return to investors.
−Removed: Risks Related to Our T e chnology and Products
+Added: Risks Related to Our Technology and Products
We may not be able to develop all the features we seek to include in our technology.
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Any outbreaks of contagious diseases and other adverse public health developments in countries where we, our customers and suppliers operate could have a material and adverse effect on our business, results of operations and financial condition.
−Removed: For example, the outbreak of COVID-19, which was declared by the World Health Organization as a pandemic, has resulted in significant governmental measures being implemented to control the spread of the virus, including quarantines, travel restrictions, manufacturing restrictions, declarations of states of emergency, business shutdown and restrictions on the movement of employees in China, the United States and many other countries.
+Added: For example, COVID-19 pandemic has resulted in significant governmental measures being implemented to control the spread of the virus, including quarantines, travel restrictions, manufacturing restrictions, declarations of states of emergency, business shutdown and restrictions on the movement of employees in China, the United States and many other countries.
A majority of our potential customers have a significant dependence on the Chinese manufacturing and supply chain infrastructure.
−Removed: We believe the outbreak of COVID-19 has delayed adoption of our technology by potential customers who temporarily shut down their workforce and supply chain based in China.
+Added: We believe the COVID-19 pandemic has delayed adoption of our technology by potential customers who temporarily shut down their workforce and supply chain based in China.
In the United States, COVID-19 has resulted in travel and other restrictions in order to reduce the spread of the disease, including executive orders in California and several other state and local orders across the country, which, among other things, direct individuals to shelter at their places of residence, direct businesses and governmental agencies to cease non-essential operations at physical locations, prohibit certain non-essential gatherings, and order cessation of non-essential travel.
−Removed: As a result of these developments, we have implemented work-from-home policies for our employees that will likely be in place until the end of the year.
+Added: As a result of these developments, we have implemented work-from-home policies for our employees that will likely be in place until at least the second half of 2021.
The effects of state executive orders, local shelter-in-place orders, government-imposed quarantines and our work-from-home policies could negatively impact productivity, disrupt our research and development or other operations and delay the planned launch of our customers’ new products that incorporate our technology, the magnitude of which will depend, in part, on the length and severity of the continuing restrictions and other limitations on our ability to conduct our business in the ordinary course.
Due to the continuing developments and fluidity of this situation, the magnitude and duration of the pandemic and its impact on our operations and liquidity are still uncertain as of the date of this report.
−Removed: In addition, COVID-19 has resulted and may continue to result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in a global economic downturn that could affect interest in our products or demand by potential customers.
−Removed: Any of these events could materially and
−Removed: adversely affect our business, results of operations and financial condition.
+Added: In addition, COVID-19 has resulted and may continue to result in a widespread health crisis that could contribute to increased market volatility and adversely affect the economies and financial markets of many countries, resulting in a global economic downturn that could affect interest in our products or demand by potential customers.
+Added: Any of these events could materially and adversely affect our business, results of operations and financial condition.
The extent of the impact will depend on future developments, which are highly uncertain and cannot be predicted.
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Dialog may have other priorities or may encounter difficulties in its own business that interfere with the success of our relationship.
−Removed: If this strategic relationship does not work as we intend, then we may be required to seek an arrangement with another strategic partner, or to develop internal capabilities, which will require a commitment of management time and our
−Removed: financial resources to identify a replacement strategic partner, or to develop our own production and distribution capabilities.
+Added: If this strategic relationship does not work as we intend, then we may be required to seek an arrangement with another strategic partner, or to develop internal capabilities, which will require a commitment of management time and our financial resources to identify a replacement strategic partner, or to develop our own production and distribution capabilities.
As a result, we may be unable without undue expense to replace this agreement with one or more new strategic relationships to promote and provide our technology which could increase our costs and delay revenues.
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If we are unable to protect our intellectual property rights, we may be unable to prevent competitors from using our own inventions and intellectual property to compete against us, and our business may be harmed.
−Removed: Terms of our existing or new development and license agreements could limit our ability to license our technology in specific markets.
−Removed: The terms of our current development and license agreement with a tier-one consumer electronics company could limit our ability to do business in some industry verticals through December 2020, which could cause some potential customers not to choose, or delay using, our technology in their products, which could have a negative impact on our revenue opportunities and financial results.
We may be subject to patent infringement or other intellectual property lawsuits that could be costly to defend.
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A required notification to a regulatory authority or recall could result in an investigation by regulatory authorities of products incorporating our technology, which could in turn result in required recalls, restrictions on the sale of such products or other penalties.
−Removed: The adverse publicity
−Removed: resulting from any of these actions could adversely affect the perception of our customers and potential customers.
+Added: The adverse publicity resulting from any of these actions could adversely affect the perception of our customers and potential customers.
These investigations or recalls, especially if accompanied by unfavorable publicity, could result in our incurring substantial costs, losing revenues and damaging our reputation, each of which would harm our business.
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Our ability to implement our business plan depends, to a critical extent, on the continued efforts and services of a very small number of key executives.
−Removed: If we lose the services of any of these persons, we could be required to expend significant time and money in the pursuit of replacements, which may result in a delay in the implementation of our business plan and plan of operations.
+Added: If we lose the services of any of these persons, we could be required to expend significant time and money in the pursuit of replacements, which may result in a delay in the implementation of our business plan and plan of operations, including in particular the result of the establishment of the Office of the CEO by our Board in April 2021, following our chief executive officer’s announcement in connection with a temporary step down due to health reasons.
If necessary, we can give no assurance that we could find satisfactory replacements for these individuals on terms that would not be unduly expensive or burdensome to us.
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We are a “smaller reporting company,” meaning that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a “smaller reporting company,” and have either:
−Removed: (i) a public float of less than $250 million or (ii) annual revenues of less than $100 million during the most recently completed fiscal year anda public float of less than $700 million.
+Added: (i) a public float of less than $250 million or (ii) annual revenues of less than $100 million during the most recently completed fiscal year and a public float of less than $700 million.
As a “smaller reporting company,” we are subject to reduced disclosure obligations in our SEC filings compared to other issuers, including with respect to disclosure obligations regarding executive compensation in our periodic reports and proxy statements.
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As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such internal controls.
−Removed: Although our management has determined that our internal control over financial reporting was effective as of September 30, 2020, we cannot assure you that we will not identify any material weakness in our internal control in the future.
−Removed: While we are no longer an emerging growth company and we included an attestation report on the effectiveness of our internal control over financial reporting of our independent registered public accounting firm in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, it is possible that we will qualify as a “smaller reporting company” under new SEC rules such that an auditor attestation report will no longer be required.
+Added: Although our management has determined that our internal control over financial reporting was effective as of March 31, 2021, we cannot assure you that we will not identify any material weakness in our internal control in the future.
+Added: We qualify as a “smaller reporting company” under new SEC rules such that we are not required to file an auditor attestation report.
If we experience a material weakness in our internal controls, we may fail to detect errors in our financial accounting, which may require a financial statement restatement or otherwise harm our operating results, cause us to fail to meet our SEC reporting obligations or Nasdaq listing requirements, adversely affect our reputation, cause our stock price to decline or result in inaccurate financial reporting or material misstatements in our annual or interim financial statements.
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The market price of our common stock has fluctuated significantly since our initial public offering in 2014.
−Removed: Our common stock has experienced an intra-day trading high of $4.58 per share and a low of $0.61 per share on The Nasdaq Stock Market over the last 52 weeks, as of November 2, 2020.
+Added: Our common stock has experienced an intra-day trading high of $7.69 per share and a low of $1.69 per share on The Nasdaq Stock Market over the last 52 weeks, as of May 1, 2021.
The price of our common stock is likely to continue to fluctuate significantly in response to many factors that are beyond our control, including:
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As a public reporting company, we incur significant legal, accounting and other expenses.
−Removed: We are subject to reporting requirements of the Securities Exchange Act of 1934 and rules subsequently implemented by the Securities and Exchange Commission that require us to establish and maintain effective disclosure controls and internal controls over financial reporting, as well as some specific corporate governance practices.
+Added: We are subject to reporting requirements of the Securities Exchange Act of 1934, as amended, and rules subsequently implemented by the Securities and Exchange Commission that require us to establish and maintain effective disclosure controls and internal controls over financial reporting, as well as some specific corporate governance practices.
Our management and other personnel are expected to devote a substantial amount of time to compliance initiatives associated with our public reporting company status.
Those costs can be expected to increase as we emerged from emerging growth company status and will increase significantly if we no longer qualify as a smaller reporting company.
−Removed: Concentration of ownership among our existing executive officers, directors and significant stockholders may prevent new investors from influencing significant corporate decisions.
−Removed: All decisions with respect to the management of our company are made by our board of directors and our officers, who beneficially own approximately 5.4% of our common stock collectively as of October 30, 2020.
−Removed: As a result, these stockholders will be able to exercise a significant level of control over all matters requiring stockholder approval, including the election of directors, amendment of our certificate of incorporation and approval of significant corporate transactions.
−Removed: This control could have the effect of delaying or preventing a change of control of our company or changes in management and will make the approval of certain transactions difficult or impossible without the support of these stockholders.
We may be subject to securities litigation, which is expensive and could divert management attention.
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Securities litigation is costly and can divert management attention from other business concerns, which could seriously harm our business and the value of your investment in our company.
−Removed: An active trading market for our common stock may not be maintained.
−Removed: Our stock is currently traded on The Nasdaq Stock Market, but we can provide no assurance that we will be able to maintain an active trading market on The Nasdaq Stock Market or any other exchange in the future, including if we no longer meet the applicable listing standards of Nasdaq.
−Removed: If an active market for our common stock is not maintained, or if we no longer qualify to be listed on Nasdaq, it may be difficult for our stockholders to sell or purchase shares on such a national securities exchange, or otherwise.
−Removed: An inactive market may also impair our ability to raise capital to continue to fund operations by selling shares and impair our ability to acquire other companies or technologies by using our shares as consideration.
−Removed: If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our stock price and trading volume could decline.
−Removed: The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business.
−Removed: We do not have any control over these analysts.
−Removed: There can be no assurance that analysts will continue to cover us or provide favorable coverage.
−Removed: If one or more of the analysts who cover us downgrade our stock or change their opinion of our stock, our stock price would likely decline.
−Removed: If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.
Our ability to use Federal net operating loss carry forwards to reduce future tax payments may be limited if our taxable income does not reach sufficient levels.
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This potential inability to obtain a control premium could reduce the price of our common stock.
+Added: General Risk Factors
+Added: An active trading market for our common stock may not be maintained.
+Added: Our stock is currently traded on The Nasdaq Stock Market, but we can provide no assurance that we will be able to maintain an active trading market on The Nasdaq Stock Market or any other exchange in the future, including if we no longer meet the applicable listing standards of Nasdaq.
+Added: If an active market for our common stock is not maintained, or if we no longer qualify to be listed on Nasdaq, it may be difficult for our stockholders to sell or purchase shares on such a national securities exchange, or otherwise.
+Added: An inactive market may also impair our ability to raise capital to continue to fund operations by selling shares and impair our ability to acquire other companies or technologies by using our shares as consideration.
+Added: If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our stock price and trading volume could decline.
+Added: The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business.
+Added: We do not have any control over these analysts.
+Added: There can be no assurance that analysts will continue to cover us or provide favorable coverage.
+Added: If one or more of the analysts who cover us downgrade our stock or change their opinion of our stock, our stock price would likely decline.
+Added: If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.
Sales of Unregistered Securities;
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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.