CitroTech (CITR) risk factors, FY2025 10-K

Risks Relating to Our Business

1. 01We have incurred losses since inception and cannot assure that we will ever achieve or sustain profitability
2. 02We are controlled by one principal stockholder who serves as our Chairman of the Board
3. 03If we are unable to expand our base of customers, our future growth and operating results could be adversely affected
4. 04If we are unable to expand our base of materials suppliers, our future growth and operating results could be adversely affected
5. 05Various factors outside our direct control may adversely affect suppliers and distribution of our product
6. 06We are subject to the seasonality of wildfires that may occur and acts of God that are inconsistent and unpredictable
7. 07Since we have a limited operating history, it is difficult for potential investors to evaluate our business
8. 08Increased operating costs and obstacles to cost recovery due to the pricing and cancellation terms of our raw materials and support services contracts may constrain our ability to make a profit
9. 09If we do not have sufficient product liability insurance, we may be subject to claims that are in excess of our net worth
10. 10Our failure to maintain effective internal controls over financial reporting could have an adverse impact on us
11. 11The success of our business depends, in part, upon the continued popularity of our product, and shifts in these consumer preferences could negatively affect our future profitability
12. 12We may become subject to potential claims for product liability
13. 13Increases in prices of commodities needed to manufacture our product could adversely affect profitability

Risks Related to Regulatory and Legal Matters

1. 14Our product is provided to emergency services personnel and is intended to protect lives and property, so we are subject to heightened liability and reputational risks if our product fails to provide such protection as intended
2. 15Our product is subject to extensive government scrutiny and regulations, including the EPA and USDA Forest Service. There can be no assurance that such regulations will not change and that our product will continue to be approved for usage
3. 16Our product or facility could have environmental impacts and side effects

Risks Relating to Our Indebtedness

1. 17The material terms of the convertible notes issued during July 2024 to February 2025
2. 18We could incur additional indebtedness in the future. If new indebtedness is added to our current debt levels, the related risks we now face could increase

Risks Relating to our Common Stock and Securities

1. 19Our stock price has fluctuated in the past, has recently been volatile and may be volatile in the future, and as a result, investors in our Common Stock could incur substantial losses

General Business Risks

1. 20We will be increasingly dependent on information technology, and our systems and infrastructure face certain risks, including cybersecurity and data leakage risks
2. 21We could become subject to litigation that could be costly, result in the diversion of management’s time and efforts, require us to pay damages, and/or prevent us from developing or marketing our existing product or future products
3. 22We could become subject to patent litigation that could be costly, result in the diversion of management’s time and efforts, require us to pay damages, and/or prevent us from developing or marketing our existing product or future products
4. 23Our operating results and stock price may be volatile, and the market price of our Common Stock may decline
5. 24The availability of shares for sale in the future could reduce the market price of our Common Stock
6. 25The indemnification provisions in our Articles of Incorporation and bylaws under Wyoming law may result in substantial expenditures by our Company and may discourage lawsuits against our directors, officers, and employees
7. 26This exclusion of liability does not limit any right, which a director may have to be indemnified, and does not affect any director’s liability under federal or applicable state securities laws
8. 27We are classified as a “smaller reporting company,” and we cannot be sure if the reduced disclosure requirements applicable to smaller reporting companies will make our Common Stock less attractive to investors
9. 28Because directors and officers currently and for the foreseeable future will continue to control the Company, you will not likely be able to elect directors or have any say in the Company’s policies
10. 29We do not expect to pay dividends in the future; any return on investment may be limited to our Common Stock’s value
11. 30Because our Company has anti-takeover mechanisms through the issuance of our Series A Preferred Stock, which votes with the Common Stock together as a single class, this preference could have a negative impact on other stockholders in voting on matters of the Company
12. 31Our Series A Preferred Stock may lead to conflicts of interest and could negatively impact the price of our securities