Risk Factors
Investment risks and considerations
Introduction
INVESTING IN THE SHARES INVOLVES A HIGH DEGREE OF RISK. PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS, AS WELL AS ALL OTHER INFORMATION CONTAINED IN THIS MEMORANDUM, BEFORE MAKING AN INVESTMENT DECISION.
YOU SHOULD ONLY SUBSCRIBE FOR THESE SHARES IF YOU CAN AFFORD A COMPLETE LOSS OF YOUR INVESTMENT.
The following is a summary of certain risks that may materially affect the Company's business, financial condition, results of operations, and prospects. This list is not exhaustive, and additional risks not presently known or currently deemed immaterial may also impair the Company's business operations.
Technology Risks
Regulatory Risks
Market Risks
- Nuclear battery technology is new, and market acceptance is uncertain
- Customers may be slow to adopt nuclear-powered alternatives
- Negative public perception of nuclear technology could affect demand
- End-users may prefer established technologies despite inferior performance
- Market education and awareness building requires significant investment
Operational Risks
Financial Risks
Capital Requirements
- The Company may require additional capital beyond this Offering
- Future financing may not be available on acceptable terms
- Additional equity financing would dilute existing shareholders
- Debt financing could impose restrictive covenants
- Lack of funding could delay or prevent growth plans
Revenue Timing
- Revenue projections in this Memorandum are forward-looking estimates
- Actual revenues may differ materially from projections
- Defence contracts have long sales cycles with uncertain timing
- Customer contract negotiations may take longer than expected
- Revenue recognition may be subject to milestones
Profitability
- The Company may not achieve profitability
- Operating losses are expected in early years
- Margin assumptions may prove incorrect
- Fixed costs may be higher than projected
- The path to profitability may take longer than anticipated
Royalty Obligation
- The Company owes a 2% royalty on after-tax profits to NDB Inc. for licensed technology
- This royalty reduces net profit from products using licensed patents
- The royalty is perpetual and applies for the life of the licensed patents
- Royalty calculations may be subject to audit or dispute
Intellectual Property Risks
Geopolitical Risks
- The Company operates in an international business environment
- Political instability in key markets could affect operations
- Trade sanctions or restrictions could limit market access
- Regulatory changes in foreign jurisdictions could affect operations
- Currency controls could affect repatriation of funds
Environmental and Safety Risks
Working with radioactive materials involves inherent risks that require careful management.
Securities-Related Risks
Lack of Public Market
- There is no public market for the Company's securities
- Investors may not be able to sell their shares
- Transfer restrictions limit liquidity
- Investors should be prepared to hold their investment indefinitely
- There is no guarantee a public market will ever develop
Valuation Uncertainty
- The valuation of the Company is based on assumptions and projections
- Actual performance may not support the current valuation
- Future financing rounds may be at lower valuations
- The Company may never achieve projected valuations
- Exit opportunities may not materialise as expected
Dilution
- Future equity financings will dilute existing shareholders
- Employee option plans will dilute existing shareholders
- Conversion of any debt instruments would dilute shareholders
- The Company may issue shares for acquisitions
Minority Position
- Investors in this Offering will hold a minority position
- Management and existing shareholders will retain control
- Investors will have limited influence on Company decisions
- Investor protections are limited to those in transaction documents
General Business Risks
- The Company has limited operating history
- The business model is unproven at scale
- Execution risk is substantial
- The Company may fail despite good technology
Specific Company Risks
Summary
The risks described above are not exhaustive. Other risks not currently known or deemed immaterial could also materially adversely affect the Company's business, financial condition, and results of operations.
Prospective investors should carefully consider all the information in this Memorandum and consult their own legal, tax, and financial advisors before making an investment decision.
AN INVESTMENT IN THE COMPANY IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF RISK, INCLUDING THE RISK OF LOSS OF THE ENTIRE INVESTMENT.
[End of Risk Factors]