Avax One Technology (AVX) risk factors, FY2024 10-K

Risks Relating to the Company’s Business

1. 01The Company is an early stage company with little operating history, a history of losses and the Company cannot assure profitability
2. 02There is no assurance that the Company’s FORCEGH+™ facilities will operate as intended
3. 03There is no assurance that UN(THINK)™ will operate as intended
4. 04There is no assurance that Hydroxyl Generating Systems will operate as intended
5. 05Bitcoin prices are highly volatile, which may affect our ability to effectively manage growth plans and our profitability
6. 06The price of bitcoin may be influenced by regulatory, commercial, and technical factors that are highly uncertain
7. 07Fluctuations in the price of bitcoin may significantly influence the market price of our bitcoin holdings and therefore, the price of our common stock
8. 08If we fail to grow our hash rate, we may be unable to compete, and our results of operations could suffer
9. 09Geopolitical or economic crises may create increased uncertainty and price changes, or motivate large-scale sales of digital assets, which could result in a reduction in some or all digital assets’ values and adversely affect an investment in our securities
10. 10We may sell our digital assets to pay expenses on an as-needed basis, irrespective of then-current prices. Consequently, our digital assets may be sold at a time when the prices on the respective digital asset exchange market are low, which could adversely affect an investment in our securities
11. 11If a malicious actor or botnet obtains control in excess of 50% of the processing power active on any digital asset network, including the Bitcoin network, it is possible that such actor or botnet could manipulate the blockchain in a manner that adversely affects an investment in our securities
12. 12The loss or destruction of a private key required to access a digital asset may be irreversible. Our loss of access to our private keys or a data loss relating to our digital assets could adversely affect an investment in our securities
13. 13Security threats to our business could result in, a loss of our digital assets, or damage to our reputation and our brand, each of which could adversely affect an investment in our securities
14. 14Our ability to adopt technology in response to changing security needs or trends and our reliance on, third-party custody providers, poses a challenge to the safekeeping of our digital assets
15. 15Digital asset transactions are irrevocable and stolen or incorrectly transferred digital assets may be irretrievable. As a result, any incorrectly executed digital asset transactions could adversely affect an investment in our securities
16. 16The limited rights of legal recourse against us, and our lack of insurance protection expose us and our stockholders to the risk of loss of our digital assets for which no person is liable
17. 17If we or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our bitcoin, we may lose some or all of our bitcoin and our financial condition and results of operations could be materially adversely affected
18. 18We have engaged in, and in the future may engage in, strategic acquisitions and other arrangements that could disrupt our business, cause dilution to our stockholders, reduce our financial resources and harm our operating results
19. 19We may not realize the anticipated benefits of, and synergies from, acquisitions and may become responsible for certain liabilities and integration costs as a result
20. 20Fluctuations in the exchange rate of foreign currencies could result in losses
21. 21The Company will require additional financing and there is no assurance that additional financing will be available when required
22. 22The Company had negative cash flow for the year ended December 31, 2024
23. 23The Company’s actual financial position and results of operations may differ materially from the expectations of the Company’s management
24. 24The Company expects to incur significant ongoing costs and obligations related to its investment in infrastructure, growth, regulatory compliance and operations
25. 25There is no assurance the Company will be able to repatriate or distribute funds for investment from the United States to Canada or elsewhere
26. 26The Company may not be able to effectively manage its growth and operations, which could materially and adversely affect its business
27. 27The Company may face significant competition from other facilities
28. 28The Company may face significant competition from other nutritious food companies
29. 29If we are unable to protect our intellectual property, our business may be adversely affected
30. 30Impairments of the carrying amounts of intangible asset could negatively affect our financial condition and results of operations
31. 31We operate in an industry with the risk of intellectual property litigation. Claims of infringement against us may hurt our business
32. 32We have limited foreign intellectual property rights and may not be able to protect our intellectual property rights throughout the world
33. 33If we are unable to obtain or defend our patents, our business could be materially adversely affected
34. 34As a result, our owned and licensed patents may not be valid and we may not be able to obtain and enforce patents and to maintain trade secret protection for the full commercial extent of our technology. The extent to which we are unable to do so could materially harm our business
35. 35International intellectual property protection is particularly uncertain, and if we are involved in opposition proceedings in foreign countries, we may have to expend substantial sums and management resources
36. 36If we are found to be infringing on patents or trade secrets owned by others, we may be forced to cease or alter our product development efforts, obtain a license to continue the development or sale of our products, and/or pay damages
37. 37We rely on confidentiality agreements to protect our trade secrets. If these agreements are breached by our employees or other parties, our trade secrets may become known to our competitors
38. 38We have a limited operating history on which to judge our business prospects and management
39. 39We may not be able to continue as a going concern
40. 40Our management team will be required to devote substantial time to regulatory compliance which may divert our attention from the day-to-day management of our business
41. 41The Company may become subject to litigation, which may have a material adverse effect on the Company’s reputation, business, results from operations, and financial condition
42. 42If the Company is unable to attract and retain key personnel, it may not be able to compete effectively
43. 43The size of the Company’s initial target market is difficult to quantify and investors will be reliant on their own estimates on the accuracy of market data
44. 44The Company’s industry is experiencing rapid growth and consolidation that may cause the Company to lose key relationships and intensify competition
45. 45The Company will be reliant on information technology systems and may be subject to damaging cyberattacks
46. 46The Company’s officers and directors may be engaged in a range of business activities resulting in conflicts of interest
47. 47There is no guarantee that how the Company uses its available funds will yield the expected results or returns which could impact the business and financial condition of the Company
48. 48Our Articles of incorporation, by-laws and certain Canadian legislation, contain provisions that may have the effect of delaying or preventing a change in control
49. 49We are governed by the corporate laws of British Columbia, Canada which in some cases have a different effect on shareholders than the corporate laws of the United States

Risks Related to the Ownership of Our Common Shares

1. 50New laws, regulations, and standards relating to corporate governance and public disclosure may create uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming
2. 51The market price of our common shares and Series A Warrants may be volatile, and you may not be able to resell your common shares and Series A Warrants at or above the acquisition price
3. 52As an “emerging growth company” under applicable law, we will be subject to lessened disclosure requirements, which could leave our shareholders without information or rights available to shareholders of more mature companies
4. 53Because we have elected to use the extended transition period for complying with new or revised accounting standards for an “emerging growth company” our financial statements may not be comparable to companies that comply with public company effective dates
5. 54FINRA sales practice requirements may also limit your ability to buy and sell our common shares, which could depress the price of our shares
6. 55If research analysts do not publish research about our business or if they issue unfavorable commentary or downgrade our common shares or Series A Warrants, our securities’ price and trading volume could decline
7. 56We may issue additional equity securities, or engage in other transactions that could dilute our book value or relative rights of our common shares, which may adversely affect the market price of our common shares and Series A Warrants
8. 57An investment in our Series A Warrants is speculative in nature and could result in a loss of your investment therein
9. 58Our Series A Warrants and contain a provision which only permits securities claims to be brought in federal court
10. 59We do not currently intend to pay dividends on our common shares in the foreseeable future, and consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common shares