Financial Performance - The company reported a negative operating cash flow of $2,455,612 for the year ended December 31, 2023, compared to a negative cash flow of $2,265,770 for the year ended December 31, 2022[48]. - The company may need to raise substantial additional funds in the future, which may not be available on acceptable terms[45]. - The company’s future earnings and cash flows may be volatile, resulting in uncertainty about its prospects[46]. - There is uncertainty regarding the availability of substantial additional funds needed for future operations[109]. - The company does not intend to pay any dividends in the foreseeable future, focusing instead on retaining earnings to fund business growth[161]. - The company does not anticipate paying any cash dividends on its common stock in the foreseeable future[181]. Stock and Financing - The company has sold 44,010 shares of common stock at $39.99 per share, generating proceeds of $1.76 million as of May 25, 2023[69]. - The company issued 1,000,000 shares of common stock in connection with the merger with Grants Greenhouse Growers, Inc., and received an option to purchase approximately 505 acres of land at $5,000 per acre[70]. - The company modified its private placement offering to authorize the sale of 20,000,000 shares at $2.00 per share under the EB-5 immigrant investor program[143]. - The company initiated its EB-5 Program on February 1, 2023, allowing the issuance of up to 12,609,152 shares of common stock at a price of $39.99 per share, with 44,010 shares issued to date[165]. - The company may need to seek additional financing for future acquisitions or strategic transactions, which could lead to dilution for current stockholders[147]. - The company may issue additional shares of common stock in the future, which could significantly dilute existing stockholders[158]. - The company expects to issue additional shares of common stock or securities convertible into common stock in connection with possible financings or acquisitions, which could result in substantial dilution[203]. - The company has issued warrants and may continue to issue additional securities, which could dilute ownership interest and exert downward pressure on the stock price[204]. Regulatory and Compliance Risks - The company faces risks related to obtaining insurance at economically viable rates due to its involvement in the cannabis industry[78]. - The company is subject to significant regulatory risks, including FDA regulations that could negatively impact its financial condition[45]. - Future FDA regulations could significantly affect the cannabis industry, impacting operational costs and business prospects[94]. - The company is subject to various laws and regulations in different jurisdictions, which may impede expansion and increase operational costs[129]. - The company may face increased legal and financial compliance costs due to changing laws and regulations, potentially diverting management's attention from revenue-generating activities[192]. - The company has identified a material weakness in its internal control over financial reporting as of June 30, 2022, but concluded that its disclosure controls were effective as of December 31, 2023[58]. Market and Industry Conditions - The cannabis markets are heavily reliant on discretionary consumer spending, which may be adversely affected by the current economic environment due to COVID-19 and high volatility[80]. - The U.S. wholesale market for cannabis and other controlled substances for research is of unknown size and difficult to forecast[121]. - Recent enforcement actions by U.S. Customs and Border Protection against state-legal cannabis could disrupt product transport and reduce profitability[141]. - The company faces competition in attracting and retaining research and pharmaceutical customers, which could impact profitability[122]. Operational Challenges - The company is subject to various risks related to construction projects, including delays in obtaining necessary governmental approvals and permits[104]. - Logistical problems and unexpected costs in facility construction could disrupt production schedules and negatively affect financial conditions[105]. - Quality control systems are critical to the success of the business, and any significant failure could adversely affect operations[138]. - The company may face product liability claims that could adversely affect its reputation and financial condition[106]. - The company may experience significant integration challenges and increased costs associated with future acquisitions[170]. Management and Personnel - The company is highly dependent on its management team, and the loss of key personnel could adversely affect its business and growth prospects[50]. - The company is dependent on stable banking relations, which may be affected by banks' risk aversion towards the cannabis industry[144]. - The company is dependent on traditional banking services for its operations, and any loss of banking relationships could adversely affect its business[167]. Cybersecurity and Intellectual Property - The company is susceptible to cyber-security risks, with successful attacks potentially leading to financial losses and reputational damage[150]. - The company faces risks related to intellectual property, including potential litigation to defend its rights, which could be costly and distract management[171]. Stock Market Compliance - The company received notice from Nasdaq granting an additional 180-day grace period until August 12, 2024, to regain compliance with the Bid Price Rule, requiring a minimum bid price of $1.00 for at least 10 consecutive business days[195]. - If the company fails to regain compliance, it may face delisting from Nasdaq, which could negatively affect the market price of its common stock[196]. - The company is classified as an "emerging growth company," allowing it to take advantage of reduced disclosure requirements[183]. - The company may rely on exemptions from certain disclosure requirements as a smaller reporting company, which could affect the attractiveness of its common stock to investors[186].
Bright Green (BGXX) - 2023 Q4 - Annual Report