Financial Performance - The company incurred a net loss of approximately $134.1 million for the year ended December 31, 2023, compared to a loss of $76.4 million for the year ended December 31, 2022, with an accumulated deficit of $831.9 million as of December 31, 2023[205]. - The company has not achieved operating profitability in any quarter since its formation and anticipates continuing to incur losses until it can sufficiently scale operations[205]. - Financial results may vary significantly from quarter to quarter due to various unpredictable factors, making period-to-period comparisons challenging[235][236]. - The company may require additional financing to fund operations and development, which could lead to dilution of shares or increased debt obligations[238][242]. - The company has recorded a valuation allowance related to its net operating loss (NOL) carryforwards and other deferred tax assets due to uncertainty in realizing future benefits[312]. - As of December 31, 2023, the company had approximately $321 million in U.S. federal net operating loss carryovers to offset future taxable income[310]. Operational Risks - The company faces significant risks associated with the maintenance, expansion, and refurbishment of facilities, which could reduce production capacity and ultimately revenues[220]. - The construction of plants by the company and its partners may not be completed on time or within budget, which could severely impact business prospects[215]. - The company anticipates that fluctuations in the prices of waste-based feedstocks may affect its cost structure and ability to compete[204]. - The availability of waste-based feedstocks is uncertain and could lead to production delays or increased prices, reducing demand and revenue[229]. - The company faces significant risks related to the enforcement and validity of its patents, which may be challenged by third parties[336]. - The company may face difficulties in managing acquisitions and integrating new technologies, which could adversely affect its financial condition[301]. Market and Competitive Landscape - The company competes in a rapidly advancing industry with indirect competition from companies with greater resources, which could adversely affect market share[230][232]. - The company's commercial success is influenced by the price of fossil feedstocks relative to waste-based feedstocks, impacting competitiveness and revenues[224]. - The company does not believe it has direct competitors producing similar sustainable, waste-based products, leading to a limited referenceable market[330]. - The largest contracting entity accounted for 38% of the company's revenue for the fiscal year ended December 31, 2023, up from 22% in 2022[272]. - The company expects to generate most of its revenues through a limited number of industry partners until the end of 2024[271]. Regulatory and Compliance Issues - The company is subject to extensive international laws and regulations, and any changes could adversely affect its business[206]. - The company faces risks related to international expansion, including compliance with diverse legal environments and potential instability in foreign countries[213]. - Regulatory scrutiny of genetically engineered microbes may impose additional costs and challenges for the company[290]. - The company is subject to extensive environmental laws and regulations, and any changes could materially affect its ability to manufacture and commercialize its products[281]. - Governmental programs incentivizing low-carbon fuels may not include products from the company’s technology platform, impacting its business[264]. Intellectual Property and Technology - The company relies on trade secrets and confidentiality agreements to protect proprietary technology, but these measures may not be fully effective[342]. - The company depends on licensed technologies, and any loss of these rights could hinder its ability to develop or sell its process technologies[349]. - The company’s ability to commercialize products is contingent upon not infringing on third-party intellectual property rights, which could lead to costly legal proceedings[340]. - The company may face expensive and time-consuming lawsuits to protect its patents, which could result in adverse outcomes affecting patent validity[354]. - The company’s strategic partnerships may lead to disputes over intellectual property ownership, which could negatively affect commercialization plans[346]. Financial and Operational Controls - The company identified material weaknesses in internal control over financial reporting, which could adversely affect the accuracy and timeliness of financial reporting[375]. - As of December 31, 2023, the company's internal control over financial reporting was deemed ineffective due to weaknesses in accounting for complex transactions and revenue recognition[376]. - The company may face litigation risks due to identified material weaknesses in internal control over financial reporting, which could adversely affect business and financial condition[382]. External Factors and Economic Conditions - Supply chain challenges, including disruptions and increased costs, could materially impact the company's operations and financial results[305]. - Inflation has materially affected the company's business, particularly increasing costs of labor, laboratory supplies, consumables, and equipment[512]. - Changes in interest rates and capital availability may affect investment decisions by industry partners, potentially impacting the company's results[300]. - The company operates in China and is subject to significant political and economic uncertainty, which may adversely impact its revenue and operations[317]. - The Chinese government exercises substantial control over the economy, and any new regulations could require additional compliance efforts and expenditures[320].
AMCI ACQUISITION(AMCI) - 2023 Q4 - Annual Report