Our business is subject to a number of risks and uncertainties, including those highlighted in the section titled “Item 1A. Risk Factors” in this Annual Report on Form 10-K. Some of these principal risks include the following:
Risks Related to Our Business and Industry
| ● | We have incurred significant operating losses since inception and cannot assure you that we will ever achieve or sustain profitability. |
| ● | The Company operates in evolving markets, which makes it difficult to evaluate the Company’s business and future prospects. |
| ● | Failure to manage our planned growth could place a significant strain on our resources. |
| ● | If we fail to retain our existing customers or do not acquire new customers in a cost-effective manner, our revenue may decrease and our business, financial condition or results of operations may be harmed. |
| ● | Material delays or defaults in customer payments could leave us unable to cover expenditures related to such customer’s projects, including the payment of our subcontractors. |
| ● | Our marketing efforts depend significantly on our ability to receive positive references from our existing customers. |
| ● | Our technology, products and services have only been developed in the last several years and we have had only limited opportunities to deploy and assess their performance in the field at full scale. |
| ● | We expect to incur substantial research and development costs and devote significant resources to identifying and commercializing new products and services, which could significantly reduce our profitability and may never result in revenue to us. |
| ● | If our products do not interoperate with our customers’ other systems, the purchase or deployment of our products and services may be delayed or cancelled. |
| ● | Cyberattacks through security vulnerabilities could lead to disruption of business, reduced revenue, increased costs, liability claims, or harm to our reputation or competitive position. |
| ● | If the Company is required to write down goodwill and other intangible assets, the Company’s financial condition and results could be negatively affected. |
| ● | War, terrorism, and other acts of violence may affect the markets in which we operate, our clients and our product and service delivery. |
| ● | We may not be able to secure adequate insurance policies, or secure insurance policies at reasonable prices. |
| ● | Litigation may adversely affect our business, financial condition, and results of operations. |
| ● | Our products have inherent safety risks, as they often operate in hazardous industrial environments and are relied on by our customers to operate in a safe manner. If the reliability of our products fails to meet expected levels during commercial operation, this could result property damage, injury, death, financial harm to the business, and/or brand harm to the business. |
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Risks Related to Regulatory Requirements
| ● | We and our customers operate in a highly regulated business environment and changes in regulation could impose costs on us or make our products less economical. |
| ● | Failure to obtain necessary regulatory approvals from the Federal Aviation Administration (“FAA”) or other governmental agencies, or limitations put on the use of small UAS in response to public privacy and other concerns, may prevent us from expanding the sales of our drone solutions to industrial and government customers in the United States. |
| ● | Substantially all our current products depend on the availability and are subject to the use of licensed radio frequencies regulated by the Federal Communications Commission (“FCC”) in the United States. |
| ● | As a manufacturer of commercial UAS, we are subject to various government regulations, restrictions and requirements, and may be subject to additional regulations in the future, violation of which could subject us to sanctions or otherwise harm, restrict or add costs to our business. |
Risks Related to our Intellectual Property
| ● | Our ability to protect our intellectual property and proprietary technology is uncertain. |
| ● | Our business may suffer if it is alleged or found that our products infringe the intellectual property rights of others. |
Risks Related to our Financial and Tax Results
| ● | We will need to generate significant sales to achieve profitable operations. |
| ● | Our future profitability may be dependent upon achieving cost reductions and projected economies of scale from increasing manufacturing quantities of our products. Failing to achieve such reductions in manufacturing costs and projected economies of scale could materially adversely affect our business. |
| ● | If our internal controls over financial reporting or our disclosure controls and procedures are not effective, we may not be able to accurately report our financial results, prevent fraud or file our periodic reports in a timely manner, which may cause investors to lose confidence in our reported financial information and may lead to a decline in our stock price. |
| ● | Following the completion of the 2025 acquisitions, our exposure to fluctuations in foreign currency exchange rates has increased. |
| ● | We are subject to income taxes in the U.S. and in numerous non-U.S. jurisdictions. Due to the potential for changes to tax laws and regulations or changes to the interpretation thereof (including regulations and interpretations pertaining to the U.S. Tax Cuts and Jobs Act (“TCJA”) or the One Big Beautiful Bill Act (“OBBBA”)), the ambiguity of tax laws and regulations, the subjectivity of factual interpretations, the complexity of our intercompany arrangements, uncertainties regarding the geographic mix of earnings in any particular period, and other factors, our estimates of effective tax rate and income tax assets and liabilities can be incorrect and our financial statements could be adversely affected. |
Risks Related to our Common Stock
| ● | We may issue more shares to raise additional capital, which may result in substantial dilution. |
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