Operational Risks and Challenges - The company has not yet constructed any powerhouses or entered into binding contracts with customers for electricity or heat delivery, which poses significant operational risks [58]. - The company is an early-stage entity with a history of financial losses and expects to incur significant expenses and continuing losses until its powerhouses become commercially viable [64]. - The company relies on high-assay low-enriched uranium (HALEU) for its powerhouses, which is currently not available at scale, potentially affecting fuel manufacturing and power production [72]. - The company faces challenges in scaling its supply base to meet production levels necessary for sales projections, which could hinder operational capabilities [58]. - The company’s construction and delivery timelines for powerhouses may increase due to factors such as contractor performance and procurement challenges [65]. - The company’s ability to secure HALEU supplies is contingent on regulatory approvals and may require significant government assistance, impacting operational timelines [73]. - The company relies on third-party manufacturers for production, which poses risks related to timeline, cost, and financing, potentially impacting projected sales revenues [76]. - Limited suppliers for specialized materials may hinder the ability to meet manufacturing needs, leading to increased production costs and delays [78]. - The company anticipates challenges in scaling up fuel recycling capacity and sourcing adequate raw materials, which could adversely affect financial and operational results [101]. - The company has not received any approval or licensing for its powerhouses and must navigate complex regulatory processes, which could delay operations and impact financial performance [161]. Financial Projections and Funding - The company anticipates that its operating expenses will increase over the next several years, necessitating additional capital from external sources [64]. - The company expects to require additional funding to support operations and growth plans due to ongoing operating expenditures and recurring losses [206]. - The company does not anticipate generating meaningful revenue until the development and commercialization of the Aurora product line are finalized [207]. - The company may need to delay or discontinue some research and development programs if adequate funding is not available [202]. - The company’s financial results may vary significantly from quarter to quarter due to factors such as customer contract terms and demand variability [212]. - The company’s business plan relies on government policies and incentives, which, if changed or eliminated, could adversely impact financial conditions [204]. - The company’s ability to raise additional capital may be limited, affecting its capacity to invest in growth opportunities [202]. Market and Competitive Landscape - The market for alternative carbon-free energy generation technologies may grow more slowly than expected, impacting the demand for the company's powerhouses and profitability [104]. - The company faces competition from existing and new technologies, which could lead to downward pressure on prices and reduced margins [106]. - The cost of electricity generated from the company's powerhouses may not be competitive with other energy sources, limiting the ability to charge a premium [110]. - Public perception of nuclear energy is critical for the company's business model, and negative incidents could materially damage demand and regulatory conditions [120]. Regulatory and Compliance Issues - The company must navigate complex regulatory environments and public sentiment, which can delay project timelines and increase operational costs [118]. - The company is subject to evolving laws and regulations regarding data privacy and security, which could require significant operational changes and incur costs [141]. - The company is subject to stringent U.S. export control laws, and failure to comply could adversely affect business prospects and financial condition [185]. - The company may face substantial fines and enforcement actions for non-compliance with environmental, health, and safety laws, which could materially affect operations [191]. - The company has been working to address technical and policy matters for its COLA application, but there is no guarantee that it will meet the expected timeline for submission or approval [166]. - The NRC's existing framework has not been applied to license a commercial nuclear fuel recycling facility, creating uncertainty regarding the timeline for development [169]. - Changes in federal, state, and local government policies could significantly impact the company's operations and business plans, including regulatory oversight and financial incentives [173]. Intellectual Property and Cybersecurity - The company relies on a combination of patents, trademarks, copyrights, and trade secret laws to protect its intellectual property, but faces challenges in enforcing these rights [123]. - Patent applications may not result in issued patents due to complexities in patentability, which could adversely affect the company's competitive position [124]. - The company may need to defend against intellectual property infringement claims, which could incur substantial costs and divert management's focus [130]. - Cybersecurity risks pose a significant threat to the company's IT systems, potentially leading to data breaches and reputational damage [136]. Economic and Global Factors - Inflation and rising costs may disproportionately impact the company, affecting its competitiveness and ability to operate fuel fabrication and recycling facilities [142]. - Uncertain global macroeconomic and political conditions could materially adversely affect the company's business prospects, financial condition, results of operations, and cash flows [143]. - The ongoing military conflict in Ukraine has led to sanctions that present potential supply chain risks, particularly affecting the availability and cost of HALEU, which could increase uranium enrichment service costs [145]. - Global supply chain disruptions have increasingly affected the availability and cost of materials, which may result in delays in equipment deliveries and cost escalations [146]. - The company's cost estimates are highly sensitive to broader economic factors, and significant changes in capital and operating costs may occur due to various unpredictable factors [147]. Corporate Governance and Internal Controls - A material weakness in internal control over financial reporting has been identified, specifically related to complex accounting matters associated with the business combination with AltC [229]. - The company plans to improve processes and controls regarding third-party information review and amendments to agreements to remediate the identified material weakness [231]. - Failure to effectively implement controls required by Section 404 of the Sarbanes-Oxley Act could negatively impact the company's business and investor confidence [228]. - The company is subject to increased regulatory compliance and reporting requirements as a public entity, which may strain its management resources [228]. - Provisions in the company's bylaws may discourage or delay transactions involving a change in control, potentially affecting minority stockholders [224]. - The company has limitations on cumulative voting in director elections, which restricts minority stockholders' influence [225]. - The existence of certain provisions may adversely affect the market price of the company's common stock if perceived as discouraging takeover attempts [224].
AltC Acquisition (ALCC) - 2024 Q4 - Annual Report