{"url_path":"/sec/nklr/10-k/2026/item-1a","section_key":"item-1a","section_title":"Item 1A RISK FACTORS.**","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-06-16","source_url":"https://www.sec.gov/Archives/edgar/data/2067627/0001213900-26-068933-index.html","accession_number":"0001213900-26-068933","cik":"0002067627","ticker":"NKLR","issuer_name":"Terra Innovatum Global N.V.","edgar_url":"https://www.sec.gov/Archives/edgar/data/2067627/0001213900-26-068933-index.html","primary_entity_key":"0002067627","primary_entity_name":"Terra Innovatum Global N.V."},"word_count":20367,"has_tables":true,"body_markdown":"** **\n\n**ITEM 1A. RISK FACTORS.**\n\n \n\n**RISK FACTORS**\n\n \n\n*These disclosures reflect the Company’s\nbeliefs and opinions as to factors that could materially and adversely affect the Company and its securities in the future. References\nto past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or\nnot such factors have occurred in the past or their likelihood of occurring in the future.*\n\n \n\n**Risks Related to Terra Innovatum’s Business**\n\n* *\n\n*We are a holding company with no direct operations\nthat relies on dividends, distributions, loans and other payments, advances and transfers of funds from our operating Subsidiary, Terra\nInnovatum s.r.l., an Italian limited liability company (Italian Società a responsabilità limitata) (**“Terra OpCo”**),\nto pay dividends, pay expenses and meet our other obligations. Accordingly, our securityholders are subject to all of the risks of Terra\nOpCo’s business.*\n\n* *\n\n*Throughout this section, unless otherwise\nnoted, “Terra Innovatum,” “we,” “us” or “our” refers to Terra Innovatum Global N.V. and\nour consolidated subsidiaries, including Terra OpCo.*\n\n**  **\n\n**We have incurred losses and have not generated any revenue since\nour inception. We anticipate that we will continue to incur losses, and expect that we will not generate revenue, for the foreseeable\nfuture.**\n\n \n\nSince inception, we have incurred significant\noperating losses, and have an accumulated deficit of approximately $607.3 million as of December 31, 2025 and negative operating cash\nflow in 2025 and 2024. We expect that operating losses and negative cash flows will increase in the coming years because of additional\ncosts and expenses related to our research and development (which we refer to herein as **“R&D”**), business development\nactivities and our status as a publicly traded company. To date, we have not generated any revenue. We do not expect to generate any revenue\nunless and until we are able to commercialize our reactors and/or other lines of business. As we have incurred losses and experienced\nnegative operating cash flows since our inception, and accordingly we have undertaken equity financing from investors to satisfy our funding\nneeds; however, we may not raise adequate funding to offset our expenses and losses. Moreover, we may encounter unforeseen expenses, difficulties,\ncomplications, delays, and other unknown factors that may adversely affect our business. The magnitude of our future net losses will depend,\nin part, on the rate of future growth of our expenses and our ability to generate and grow revenue. We cannot predict the outcome of the\nactions to generate liquidity to fund our operations, whether such actions would generate the expected liquidity to fund our operations\nas currently planned or whether the costs of such actions will be available on reasonable terms or at all. Our continued solvency is dependent\nupon our ability to obtain additional working capital to complete our reactor development, to successfully market our reactors and to\nachieve commerciality for our reactors. Our prior losses and expected future losses have had and may continue to have adverse effects\non our shareholders’ equity (deficit) and working capital and may lead to the failure of our business.\n\n** **\n\n**Our limited operating history makes it difficult to evaluate\nour future prospects and the risks and challenges we may encounter.**\n\n \n\nWe have a limited operating history in a rapidly\nevolving industry. The markets for nuclear reactor design, nuclear reactor production, nuclear fuel design, nuclear fuel supply, and\nservices related to any or all of the foregoing business may not continue to develop in a manner that we expect or that otherwise would\nbe favorable to our business. As a result of our limited operating history and ongoing changes in our new and evolving industry, including\nevolving demand for our products and services and the potential development of technologies that may prove more efficient or effective\nfor our intended use cases, our ability to forecast our future results of operations and plan for future growth is limited and subject\nto uncertainties. We have encountered and expect to continue to encounter risks and uncertainties frequently experienced by companies\nin rapidly evolving industries, such as the risks and uncertainties described in this annual report. Accordingly, we may be unable to\nprepare accurate internal financial forecasts or replace anticipated revenue that we do not receive as a result of delays, changed circumstances,\nor changed market conditions arising from these factors, and our results of operations in future reporting periods may be below the expectations\nof investors or analysts. If we do not address these risks successfully, our results of operations could differ materially from our estimates\nor the expectations of investors or analysts, causing our business to suffer and our ordinary share price to decline.\n\n** **\n\n12\n\n** **\n\n**We have not yet commercialized or sold the SOLO or any other\nmicro-modular reactor (“MMR”), and there is no guarantee that we will be able to do so.**\n\n \n\nAfter we develop and obtain regulatory approval,\nthe planned initial deployment of the SOLO is subject to Terra Innovatum reaching binding agreements for its scope of supply with potential\ncustomers. If no customer enters into such binding agreements with us, our initial deployment of the SOLO and ongoing services associated\nwith such deployment could be significantly delayed. This could have a material adverse effect on our business and financial condition.\nTo date, the various memoranda of understanding that we have entered into with potential purchasers are non-binding and largely contingent\nupon successful site characterization studies — including for the First-Of-A-Kind site, governing body approvals and regulatory\napprovals, and may not result in binding agreements for the purchase of our products or services. The potential purchasers may also elect\nto terminate or pursue other alternative transactions.\n\n** **\n\n**If we fail to manage our growth effectively, we may be unable\nto execute our business plan, and our business, results of operations, and financial condition could be harmed.**\n\n \n\nIn order to achieve future revenue growth, we\nmust finalize our reactor design, receive regulatory approvals, and continue to develop and market new products and services to traditional\nand non-traditional end-users. We intend to expand our operations as we develop and deploy our products and services in the future, and\nwill need to hire and retain additional personnel, upgrade our existing operational management and financial and reporting systems, and\nimprove our business processes and controls. Our future expansion will include:\n\n \n\n \n●\nhiring and training new personnel;\n\n \n\n \n●\ncompleting the designs, licensing, construction, and commissioning of SOLO;\n\n \n\n \n●\nfinalizing our reactor design and developing new technologies and services (*e.g.*, training,\nmaintenance, procurement);\n\n \n\n \n●\noptimizing applications of our reactors to serve both traditional utility and electric power customers\nand a broad base of non-traditional industrial customers interested in utilizing the efficient high-temperature heat produced by\nour design;\n\n \n\n \n●\ncontrolling expenses and investments in anticipation of expanded operations and rising costs;\n\n \n\n \n●\nupgrading the existing operational management and financial reporting systems and team to comply\nwith requirements as a public company; and\n\n \n\n \n●\nimplementing and enhancing administrative infrastructure, systems and processes.\n\n \n\nIf our operations continue to grow as planned,\nof which there can be no assurance, we will need to expand our sales and marketing, research and development, customer and commercial\nstrategy, products and services, supply, and manufacturing functions. These efforts will require us to invest significant financial and\nother resources, including in industries and sales channels in which we have limited experience to date. We will also need to develop\nand implement our manufacturing and operational systems and processes, and there is no guarantee that we will be able to scale the business\nas currently planned or within the planned timeframe. The continued expansion of our business will require manufacturing and operational\nfacilities, as well as space for administrative support, and there is no guarantee that we will be able to find suitable locations for\nsuch facilities.\n\n \n\nOur growth will increase the strain on our resources,\nand we could experience operating difficulties, including difficulties in hiring and training employees, finding manufacturing capacity\nto produce our MMRs and related equipment, delays in production, challenges in scaling-up fuel and component fabrication capacity and\ndifficulty sourcing adequate raw material, such as graphite, for our reactors. These difficulties may divert the attention of management\nand key employees and impact financial and operational results. If we are unable to drive commensurate growth, these costs, which include\nheadcount and capital assets, could result in decreased margins, which could have a material adverse effect on our business, financial\ncondition and results of operations.\n\n \n\n13\n\n \n\n**We are dependent upon key officers.**\n\n \n\nOur success depends to a significant extent on\nthe continued service of our key management, technical and other personnel. We are very thinly staffed and, as a result, the loss of\none or more of our executive officers could adversely affect our business, financial condition and prospects. We do not maintain “key\nperson” life insurance on any of our executives. If we are unable to retain our current officers or attract and retain additional\nqualified employees as needed, our ability to execute our business strategy and achieve our objectives could be materially and adversely\naffected.\n\n** **\n\n**There is limited operating experience or regulatory precedent\nfor reactors of this type, configuration and scale, which may result in greater than expected construction and material costs, maintenance\nrequirements, operating expense or delivery timing. **\n\n \n\nOur MMR design will be actively managed through\ndesign reviews, prototyping, involvement of external partners and application of industry lessons. However, we could still fail to identify\nmanufacturing, material and construction issues early enough to avoid negative effects on production, fabrication, construction or ultimate\nperformance of our MMRs and related technologies, or we may encounter unexpected regulatory issues. Where these issues arise at such\nlater stages of deployment, deployment could be subject to greater costs or be significantly delayed, which could materially and adversely\naffect our business.\n\n \n\nWe\nintend to operate deployed SOLO reactors in accordance with all applicable laws and regulations. For certain deployments, we may seek\nto engage one or more qualified operators with recognized experience in civil nuclear generation for the operation and maintenance of\nSOLO reactors. We may not be able to engage such operators on commercially agreeable terms, which could adversely affect our ability\nto deploy and commercialize SOLO reactors.\n\n** **\n\n**The market for MMRs generating electric power and high-temperature\nheat is not yet established and may not achieve the growth potential we expect or may grow more slowly than expected.**\n\n \n\nThe market for MMRs, and particularly for MMRs\nutilizing advanced nuclear technologies such as those employed in the SOLO, has not yet been established. MMRs utilizing advanced nuclear\ntechnologies have limited operational history and have not been proven at scale. Estimates for the total addressable market and our expectations,\ninclusive of recent updates, with regards to certain unit economics are based on a number of internal and third-party estimates, including\nour potential contracted revenue, the number of potential customers who have expressed interest in our MMRs, assumed prices and production\nand regulatory costs for our MMRs, our ability to develop logistical and operational processes, assumptions regarding our technology\nand general market conditions. However, our assumptions and the data underlying our estimates may not be correct and the conditions supporting\nour assumptions or estimates may change at any time, reducing the predictive accuracy of these underlying factors. As a result, our expected\nperformance as indicated by the illustrative unit economics provided in this annual report, our estimates of the annual total addressable\nmarket and serviceable addressable market for our services, as well as the expected growth rate for the total addressable market and\nserviceable addressable market for our services, may prove to be incorrect.\n\n** **\n\n**We may not attract customers to our MMR technology as quickly\nas we expect, or at all, and acquiring customers may be more expensive than we currently anticipate.**\n\n \n\nMMRs and advanced nuclear technologies are relatively\nnew and unproven and may be more costly than alternatives. Accordingly, adoption of our technology, or MMRs and advanced nuclear technologies\ngenerally, among our potential customers may progress more slowly than we anticipate or it may be more expensive to bring potential customers\ninto our pipeline. Any delay or failure to attract potential customers to our reactors or MMR technology may have a material and adverse\nimpact on our business and financial condition.\n\n** **\n\n**Our cost estimates are highly sensitive to broader economic\nfactors, and our ability to control or manage our costs may be limited.**\n\n \n\nCapital and operating costs for the deployment\nof a first-of-a-kind reactor such as the SOLO are difficult to project, inherently variable and are subject to significant change based\non a variety of factors, including site-specific factors, customer off-take requirements, regulatory oversight, operating agreements,\nsupply chain availability, inflation and other factors. Opportunities for cost reductions with subsequent deployments are similarly uncertain.\nTo the extent cost reductions are not achieved within the expected timeframe or magnitude, the SOLO may not be cost competitive with\nalternative technologies, which could materially and adversely affect our expected revenues, gross margins and on the other information\nincluded in the Unit Economics Information.\n\n \n\n14\n\n \n\n**Competition from existing or new companies could cause us to\nexperience downward pressure on prices, fewer customer orders, reduced margins, the inability to take advantage of new business opportunities,\nand the loss of market share.**\n\n \n\nWe operate in highly competitive markets and\nare subject to competition based upon product design, performance, pricing, quality, and services, from competing nuclear suppliers as\nwell as from alternative means of producing electricity and/or heat. There are a number of advanced reactor designs, and some advanced\nreactor projects, under development in the United States. Many of these designs are involved in pre-application review with the\nNRC. Our advanced design, projected product design performance, engineering expertise, and quality control have been important factors\nin our growth; nonetheless other companies providing competing technologies could capture customers or market share from us, which could\nhave a material adverse effect on our business or financial condition.\n\n \n\nFor sales and/or deployments outside of jurisdictions\nwith highly-developed nuclear regulatory frameworks, some of our foreign competitors currently benefit from, and others may benefit in\nthe future from, permissive regulatory and licensing regimes and/or from protective measures by their home countries where governments\nare providing financial support, including significant investments in the development of new technologies.\n\n \n\nWe believe our ability to compete successfully\nin designing, engineering and manufacturing our products and services at attractive costs to customers does and will depend on a number\nof factors, which may change in the future due to increased competition, our ability to meet our customers’ needs and the frequency\nand availability of our offerings. If we are unable to compete successfully, our business, financial condition and results of operations\nwould be adversely affected.\n\n** **\n\n**Technological changes could render our technology and products\nuncompetitive or obsolete, which could prevent us from achieving market share and sales.**\n\n \n\nOur failure to refine or advance our MMR technologies\ncould cause our reactor technology to become uncompetitive or obsolete, which could prevent us from achieving market share and sales.\nWe may need to invest significant financial resources in research and product development to keep pace with technological advances in\nthe industry and to compete in the future; we may be unable to secure such financing. A variety of competing alternative technologies\nmay be in development by other companies that could result in lower manufacturing or operating costs and/or higher performance than those\nexpected for our technology. Our development efforts may be rendered obsolete by the technological advances of others, and other technologies\nmay prove more advantageous for commercialization.\n\n** **\n\n**Changes in the availability and cost of electricity, natural\ngas and other forms of energy are subject to volatile market conditions that could adversely affect our business.**\n\n \n\nThe prices for and availability of electricity,\noil and other energy resources are subject to volatile market conditions. We do not control these market conditions, which are, moreover,\noften affected by political and economic factors beyond our control. Decreases in energy prices, or changes in nuclear energy costs relative\nto other forms of energy, may adversely affect our business. To the extent that these uncertainties cause suppliers and customers to\nbe more cost sensitive or to adjust their business plans and operations, decreased energy prices may have an adverse effect on our results\nof operations and financial condition.\n\n** **\n\n**The cost of electricity generated from nuclear sources may not\nbe cost competitive with other electricity generation sources in some markets, which could materially and adversely affect our business.**\n\n \n\nMany U.S. electricity markets price electric\nenergy, capacity, and/or ancillary services on a competitive basis, with market prices subject to substantial fluctuations. Other markets\nremain heavily regulated by state or local utility regulatory authorities, with power purchase decisions by electric utilities subject\nto various competitiveness or prudence tests. As a result of competitive pressures, some electricity markets experience low marginal\nenergy prices at certain times due to a combination of subsidized generating resources, competitors with low-cost or no-cost fuel sources,\nor market-design features that create incentives for certain attributes or deliver revenue in unpredictable ways over time, and Terra\nInnovatum may not be able to compete in these markets unless the benefits of the low-carbon, reliable and/or resilient energy generation\nprovided by the SOLO is sufficiently valued. Even in markets that price reliable capacity on a long-term basis, there is no guarantee\nthat our customers’ SOLO units will be sufficiently low-cost so as to clear auction-style capacity markets, and clearing in any\none year is no guarantee of clearing in successive years. Moreover, our SOLO reactor will likely serve a specific market segment\nof smaller distributed generation, remote application or industrial customers, who may have lower-cost power/heat alternatives available\nto them, especially in the near-term.\n\n \n\n15\n\n \n\nGiven the relatively lower electricity prices\nand higher availability of power in the United States when compared to many international markets, the risk may be greater with\nrespect to business in the United States. Regardless of jurisdiction, however, failure of our MMRs to provide competitively priced\nelectricity or heat could materially and adversely affect our business.\n\n** **\n\n**We and our customers operate in a politically sensitive environment,\nand the public perception of nuclear energy can affect our customers and us.**\n\n \n\nSuccessful execution of our business model is\ndependent upon public support for nuclear power in the United States and other countries. The risks associated with uses of radioactive\nmaterials by our customers in future deployments of our MMR designs, and the public perception of those risks, can affect our business.\nOpposition by third parties can delay or prevent the licensing and construction of new nuclear power facilities and in some cases can\nlimit the operation of nuclear reactors. Adverse public reaction to developments in the use of nuclear power could directly affect our\ncustomers and indirectly affect our business. In the past, adverse public reaction, increased regulatory scrutiny and related litigation\nhave contributed to extended licensing and construction periods for new nuclear reactors, sometimes delaying construction schedules by\ndecades or more, or even shutting down operations at already-constructed reactors.\n\n** **\n\n**Accidents involving nuclear power facilities, including but\nnot limited to events similar to any of the Three Mile Island, Chernobyl or Fukushima Daiichi nuclear accidents, or terrorist acts or\nother high profile events involving radioactive materials, could materially and adversely affect the public perception of the safety\nof nuclear energy, our customers and the markets in which we operate and potentially decrease demand for nuclear energy or facilities,\nincrease regulatory requirements and costs or result in liabilities or claims that could materially and adversely affect our business.**\n\n \n\nHistorical nuclear accidents and fears of a new\nnuclear accident can hinder widespread acceptance of nuclear power. Nuclear power faces strong opposition from certain individuals and\norganizations both in the United States and abroad. With respect to public perceptions, the accident that occurred at the Fukushima\nnuclear power plant in Japan in 2011 increased public opposition to nuclear power in some countries, resulting in a slowdown in, or,\nin some cases, a complete halt to new construction of nuclear power plants, an early shut down of existing power plants and a dampening\nof the favorable regulatory climate needed to introduce new nuclear technologies. As a result of the Fukushima accident, some countries\nthat were considering launching new domestic nuclear power programs delayed or cancelled the preparatory activities they were planning\nto undertake as part of such programs. If a high-visibility or high-consequence nuclear accident, including the loss or mishandling of\nnuclear materials, or other event, such as a terrorist attack involving a nuclear facility, occurs, public opposition to nuclear power\nmay increase dramatically, regulatory requirements and costs could become more onerous or prohibitory, and customer demand for the SOLO\ncould suffer, which could materially and adversely affect our business and operations.\n\n** **\n\n**The direct and indirect impact on us and our customers from\nsevere weather and other effects of climate change and the economic impacts of the transition to non-carbon based energy, could adversely\naffect our financial condition, operating results, and cash flows.**\n\n \n\nOur operations and properties, and those of our\ncustomers, may in the future be adversely impacted by flooding, wildfires, high winds, drought and other effects of severe weather conditions\nthat may be caused or exacerbated by climate change. These events can force our customers to suspend operations at impacted properties\nand may result in significant damage to such properties. Even if these events do not directly impact us or our customers they may indirectly\nimpact us and our customers through increased insurance, energy or other costs. In addition, although the ongoing transition to non-carbon\nbased energy is creating significant opportunities for us and our customers, the transition also presents certain risks, including macroeconomic\nrisks related to higher energy costs and energy shortages, among other things. These direct and indirect impacts from climate change\ncould adversely affect our financial condition, operating results, supply chain and cash flows.\n\n \n\n16\n\n \n\n**Our operations involve the use, transportation and disposal\nof toxic, hazardous and/or radioactive materials and could result in liability without regard to fault or negligence.**\n\n \n\nOur operations involve the use, transportation,\nand disposal of toxic, hazardous and radioactive materials. A release of these materials could pose a health risk to humans, plants and\nanimals or the environment. If an accident were to occur, its severity would depend on the volume and location of the release and the\nspeed of corrective action taken by emergency response personnel, as well as other factors beyond our control, such as weather and wind\nconditions.\n\n \n\nWe currently do not own any property, if, in the\nfuture we do, under federal, state and local laws and regulations, a current or former owner or operator of real property may be liable\nfor costs to remediate contamination resulting from the presence or release of hazardous substances, wastes or petroleum products. These\ncosts could be substantial and liability under such laws is strict and may attach whether or not the owner or operator knew of or caused\nsuch contamination. Moreover, the presence of contamination may expose us to third-party claims for property damage or bodily injury,\nsubject our properties to liens in favor of the government for damages and cleanup costs, impose restrictions on the manner in which we\nuse our properties, and materially adversely affect our ability to sell, lease, insure, or develop our properties. We also may be liable\nfor costs of remediating third-party disposal sites to which we arranged for the disposal or treatment of hazardous substances without\nregard to whether such disposal occurred in compliance with environmental laws. These matters could have an adverse effect on our financial\ncondition.\n\n \n\nAdditionally, we may be responsible for decontamination\nor decommissioning of facilities where we conduct, or previously conducted, operations. Activities of our contractors, suppliers or other\ncounterparties similarly may involve toxic, hazardous, and radioactive materials and we may be liable contractually, or under applicable\nlaw, to contribute to remedy damages or other costs arising from such activities, including the decontamination or decommissioning of\nthird-party facilities.\n\n \n\nIn the United States, the nuclear liability\nlaw codified at 42 U.S.C. 2210 (along with subsequent amendments, the **“Price-Anderson Act”**) and applicable NRC regulations\nand corresponding insurance requirements channel liability to the nuclear operator of a nuclear power plant for third-party offsite damages\ncaused by a nuclear incident or a precautionary evacuation due to a possible or actual nuclear incident. U.S. law is substantially\nsimilar in effect to global nuclear liability regimes wherein operators are subject to robust financial protection regimes, such as required\ninsurance policies or government indemnification, to cover the operator’s financial risk in the event of a nuclear incident that\ngives rise to third-party offsite liability. If, however, an incident or precautionary evacuation is not covered under such a nuclear\nliability regime, we could be financially liable for damages arising from such incident or evacuation, which could have an adverse effect\non our results of operations and financial condition.\n\n \n\nThe Price-Anderson Act does not, however, cover\non-site loss or damage to property due to a nuclear incident. Rather, the NRC, like many nuclear regulators around the world, requires\nnuclear operators to maintain on-site property damage insurance. If an incident resulting in onsite property damage is not otherwise\ncovered by the mandatory insurance policy maintained at the facility, then we could be potentially liable for damages arising from such\nincident, which could have an adverse effect on our results of operations and financial condition.\n\n \n\nIn our contracts, we seek to protect ourselves\nfrom liability, but there is no assurance that such contractual limitations on liability will be effective in all cases or in all jurisdictions.\nThe costs of defending against a claim arising out of a nuclear incident or precautionary evacuation not otherwise covered by insurance,\nand any damages awarded as a result of such claim, could adversely affect our results of operations and financial condition.\n\n** **\n\n17\n\n \n\n**Unresolved spent nuclear fuel storage and disposal issues and\nassociated costs could have a significant negative impact on Terra Innovatum’s business operations if potential SOLO customers\nview the risks associated with these issues and costs as unacceptably high.**\n\n \n\nThe Nuclear Waste Policy Act of 1982\nrequires the DOE to provide for the permanent disposal of spent nuclear fuel (**“SNF”**) and associated high-level nuclear\nwaste (**“HLW”**). In 1987, Congress amended the Nuclear Waste Policy Act to identify Yucca Mountain, in Nevada, as the\nonly site that the DOE could consider for a permanent repository. The DOE has since cancelled this project, but under the federal law,\nis required to construct storage facilities for, and to dispose of, all SNF and other HLW generated by domestic nuclear reactors. Interim\nstorage requires the construction and maintenance of NRC licensed SNF/ HLW storage facilities. While the costs of developing and\nmaintaining these interim storage facilities can have a significant effect on the costs associated with waste storage and disposal for\nnuclear reactors, including Terra Innovatum’s reactors, these costs could themselves be impacted by the timing of the opening of\na disposal facility, as well as any possible future changes to the interim storage or transportation requirements for SNF and other forms\nof HLW, and the extent to which operators are able to continue to successfully sue DOE for costs incurred as a result of its continued\nfailure to provide for permanent disposal.\n\n \n\nThere are currently two consolidated interim storage\n(**“CIS”**) facilities under development in the United States for the interim storage of SNF/HLW. One facility\nhas received an NRC license for construction and operation, and the other facility is in the final stages of its NRC licensing review.\nIt is possible that SNF/HLW generated at a Terra Innovatum reactor could be stored at one of these CIS facilities; however, it is also\npossible that these CIS facilities are never built or become operational, or are unable to store such waste from a Terra Innovatum reactor,\nin which case, the waste would need to be stored onsite or at another interim SNF storage facility until another disposal option became\navailable, such as a U.S. government determined permanent national repository or other government storage facility.\n\n \n\nThe establishment of a national repository for\nthe storage and/or permanent disposal of SNF, such as the one previously considered at Yucca Mountain, Nevada, the timing of such a facility’s\nopening and the ability of such a facility to accept waste from a Terra Innovatum reactor, and any related regulatory action, could\nimpact the costs associated with our SOLO customers’ storage and/or disposal of SNF/HLW. Likewise, the establishment of a\nCIS for the storage of SNF/HLW, the timing of such a facility’s opening and being able to accept waste from a Terra Innovatum reactor,\nand any related regulatory action, could impact our customers’ costs associated with storage of SNF/HLW. These waste storage\nissues, and changes to the current waste disposal practices or changes to reactor operators’ ability to recover storage costs from\nDOE through litigation, could be material to Terra Innovatum’s operations if potential customers view waste disposal as problematic,\ndetrimental or a negative factor when considering an investment in a Terra Innovatum reactor.\n\n** **\n\n**Unsatisfactory safety performance or security incidents at our\nfacilities — or any nuclear facility around the world — could have a material adverse effect on our business,\nfinancial condition and results of operations.**\n\n \n\nWe design and will manufacture highly sophisticated\nMMRs that depend on complex technology. We also work cooperatively with our suppliers, subcontractors, venture partners and other parties.\nFailures, disruptions or compromises to our or our third parties’ systems or facilities may be caused by natural disasters, accidents,\npower disruptions, telecommunications failures, acts of terrorism or war, computer viruses, bugs or vulnerabilities, physical or electronic\nbreak-ins, human error, targeted cyberattacks, other intentional conduct, or similar events or incidents. While we have built operational\nprocesses to ensure that the design, manufacture, performance and servicing of our MMRs meet rigorous safety standards and performance\ngoals, there can be no assurance that we will not experience operational or process failures or other problems, including through manufacturing\nor design defects, failure of third-party safeguards, mishandling or process failures, natural disasters, cyber attacks, or other intentional\nacts, that could result in potential safety risks. There can be no assurance that our preparations, or those of third parties, will be\nable to prevent any such incidents.\n\n \n\nAny actual or perceived safety issues may result\nin significant reputational harm to our businesses, in addition to tort liability, maintenance, increased safety infrastructure and other\ncosts that may arise. Such issues with our MMRs, facilities, or customer safety could result in delaying or cancelling delivery of MMRs\nto our customers, increased regulation or other systemic consequences. Our inability to meet our safety standards or address adverse\npublicity affecting our reputation as a result of accidents, mechanical failures, damage to customer property or medical complications\ncould have a material adverse effect on our business, financial condition and results of operations.\n\n \n\n18\n\n \n\nIn the nuclear industry, an accident or incident\ninvolving the mishandling of nuclear materials at any nuclear facility in the world can have an impact on other nuclear facilities around\nthe world in terms of public acceptance, political pressures, and regulatory requirements and scrutiny. For example, the March 2011\naccident at the Fukushima Daiichi plant in Japan resulted in millions of dollars in additional regulatory reviews and requirements for\nU.S. nuclear power plants. If a safety incident occurs at any nuclear facility in the world, it could delay licensing and/or drive\nup costs to license or own our MMRs and negatively impact our business or financial condition.\n\n \n\n**We are subject to cybersecurity threats which could have adverse\neffects, including regulatory effects, on our business and results of operations.**\n\n \n\nWe are increasingly dependent upon information\ntechnology systems, infrastructure and data to operate our business. In the ordinary course of business, we collect, store, process and\ntransmit confidential information (including but not limited to intellectual property, proprietary business information and personal\ndata). It is critical that we do so in a secure manner to maintain the confidentiality and integrity of such confidential information.\nWe also have outsourced elements of our operations to third parties, and as a result we manage a number of third-party contractors who\nhave access to our confidential information.\n\n \n\nDespite the implementation of security measures,\ngiven their size and complexity and the increasing amounts of confidential information that they maintain, our internal information technology\nsystems, operational technology systems, and industrial control systems, and those of our contractors and consultants are potentially\nvulnerable to breakdown or other damage or interruption from service interruptions, system malfunction, natural disasters, terrorism,\nwar and telecommunication and electrical failures, as well as security breaches from inadvertent or intentional actions by our employees,\ncontractors, consultants, business partners, and/or other third parties, or from cyber-attacks by malicious third parties (including the\ndeployment of harmful malware, ransomware, denial-of-service attacks, social engineering and other means to affect service reliability\nand threaten the confidentiality, integrity and availability of information), which may compromise our system infrastructure or lead to\ndata leakage. As part of our regular review of potential risks, we analyze emerging cyber security threats to us and our contractors,\nconsultants, business partners and other third parties as well as our plans and strategies to address them. We are also subject to the\nSEC’s cybersecurity disclosure rules, which require us to describe our cybersecurity risk management, strategy, and governance,\nand to disclose material cybersecurity incidents. These obligations require us to maintain processes to assess the materiality of cybersecurity\nincidents on a timely basis, and any failure to timely or accurately make required disclosures could result in SEC enforcement action,\ninvestor litigation, or reputational harm. Our board of directors (“**Board of Directors**”), which has oversight responsibility\nfor cyber security risks, including through the audit committee, which annually reviews our cybersecurity risk profile. See “Item\n1C. Cybersecurity” for further information regarding our cybersecurity risk management, strategy and governance. Any failure to\nmaintain effective cybersecurity governance processes could increase our vulnerability to cybersecurity threats and adversely affect our\nability to satisfy our regulatory disclosure obligations. To the extent that any disruption or security breach were to result in a loss\nof, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability\nand reputational damage, and the further development and commercialization of our products could be delayed.\n\n \n\nAdditionally, we rely on third-party service\nproviders for certain information technology functions, including cloud computing services. Any cybersecurity incident affecting our\nthird-party service providers could adversely affect our operations or result in unauthorized access to our confidential information,\neven if our own systems are not directly compromised.\n\n \n\nWhile we have not experienced any such system\nfailure, accident or security breach to date, we cannot assure you that our data protection efforts and our investment in information\ntechnology will prevent significant breakdowns, data leakages, breaches in our systems or other cyber incidents that could have a material\nadverse effect upon our reputation, business, operations or financial condition. For example, we maintain databases comprised of our\nSOLO nuclear design technical engineering information and operations information, which have been and will continue to be used to design\nthe SOLO reactors and will be utilized in “digital twin” construction and operations environments to allow for highly efficient\nconstruction and operations of these designs. If this database were to be lost or compromised, our ability to efficiently deploy and\noperate our reactors could be significantly impaired.\n\n \n\n19\n\n \n\nFurthermore, significant disruptions of our internal\ninformation technology systems or security breaches could result in the loss, misappropriation, and/or unauthorized access, use, or disclosure\nof, or the prevention of access to, confidential information (including, but not limited to, intellectual property, proprietary business\ninformation, and personal information), which could result in financial, legal, business, and reputational harm to us. For example, any\nsuch event that leads to unauthorized access, use, or disclosure of personal information, including personal information related to our\nemployees, could harm our reputation directly, compel us to comply with federal and/or state breach notification laws and foreign law\nequivalents, subject us to mandatory corrective action, and otherwise subject us to liability under laws and regulations that protect\nthe privacy and security of personal information, which could result in significant legal and financial exposure and reputational damages\nthat could potentially have an adverse effect on our business.\n\n \n\nIn addition, we and our customers are or will\nbe subject to specific cybersecurity requirements imposed by the NRC, which requires licensees to protect digital computer and communication\nsystems and networks associated with safety, security, and emergency preparedness functions from cyber attacks. Compliance with these\nrequirements may be costly and technically complex, and any failure to comply could result in regulatory enforcement action, delays in\nobtaining or maintaining NRC licenses, or restrictions on our operations.\n\n** **\n\n**Our supply base may not be able to scale to the production levels\nnecessary to meet sales projections.**\n\n \n\nWe do not have manufacturing assets and will\nrely on third-party manufacturers and construction firms to build SOLO, fuel fabrication facilities and associated equipment. While we\nare working to secure and manage sufficient third-party manufacturing capabilities and facilities, these capabilities and the facilities\ninvolve risks including timeline, cost, and financing risk and even if successfully developed, might not be available for our earliest\nSOLO deployments. Moreover, we are dependent on future supplier capability to meet production demands attendant to our forecasts. If\nour supply chain cannot meet the schedule demands of the market, our projected sales revenues could be materially impacted.\n\n \n\n**We rely on a limited number of suppliers for certain materials\nand supplied components, some of which are highly specialized and are being designed for first-of-a-kind or sole use in the SOLO. We\nand our third-party vendors may not be able to obtain sufficient materials or supplied components to meet our manufacturing and operating\nneeds, or obtain such materials on favorable terms or at expected costs.**\n\n \n\nWe do not directly manufacture any components\nof our MMRs. Our ability to manufacture our MMRs depends on the sufficient availability of raw materials and supplied components, including\nmany highly technical components that are still under design, are being developed for first-of-a-kind or sole use in the SOLO and have\nnot yet been qualified for use, or are produced only by a limited number of suppliers and may be particularly susceptible to cost increases,\nsupply chain disruptions, or inflationary pressures.\n\n \n\nCertain materials, such as the graphite used\nfor the moderator, are currently produced in limited quantities and are available predominantly from a small number of vendors inside\nand outside the United States (e.g., Italy, Germany, and Japan).\n\n \n\nWe rely on a limited number of suppliers for\nsuch materials and components, which means we may not be able to obtain sufficient raw materials or supplied components to meet our manufacturing\nand operating needs, or obtain such materials on favorable terms or at expected costs. Our reliance on multi-layered international supply\nchains to secure raw materials and supplied components exposes us to volatility in the prices and availability of these materials and\nmay make us susceptible to changes in geopolitical relationships that could impair our ability to fulfill orders in a timely manner or\nincrease our production costs.\n\n \n\nBeyond tariffs and inflation, our international\nsupply chain is also exposed to the risk that foreign governments may impose trade restrictions—including export bans, import licensing\nrequirements, foreign direct investment screening, or local content mandates—that could affect the availability or cost of critical\ncomponents. The imposition of tariffs and the impacts of inflation on raw materials or supplied components for our reactors could have\na material adverse effect on our operations, and foreign government trade restrictions could further compound these effects.\n\n \n\n20\n\n \n\nProlonged disruptions in the supply of any key\nraw materials or components, difficulties in qualifying new sources of supply or implementing the use of replacement materials, or any\nvolatility in prices could have a material adverse effect on our ability to operate in a cost-efficient and timely manner. Such prolonged\ndisruptions could also result in cancellations or delays of scheduled launches, customer cancellations, or reductions in prices and margins,\nany of which could harm our business, financial condition, and results of operations.\n\n** **\n\n**We depend on key executives and management to execute our business\nplan and conduct our operations. A departure of key personnel could have a material adverse effect on our business.**\n\n \n\nOur success depends, in significant part, on\nthe continued services of our senior management team and on our ability to attract, motivate, develop and retain a sufficient number\nof other highly skilled personnel, including engineers, manufacturing and quality assurance, finance, marketing and sales personnel.\nOur senior management team has extensive experience in the energy and manufacturing industries, and we believe that their depth of experience\nis instrumental to our continued success. The loss of any one or more members of our senior management team, for any reason, including\nresignation or retirement, could impair our ability to execute our business strategy and have a material adverse effect on our business\nand financial condition if we are unable to successfully attract and retain qualified and highly skilled replacement personnel.\n\n** **\n\n**Our business plan requires us to attract and retain qualified\npersonnel including personnel with highly technical expertise. Were we not to be able to successfully recruit and retain experienced\nand qualified personnel, it could have a material adverse effect on our business.**\n\n \n\nOur future success depends in part on our ability to contract with,\nhire, integrate, and retain highly competent nuclear reactor and fuels focused engineers and scientists, and other qualified personnel.\nCompetition for the limited number of these skilled professionals is intense. If we are unable to adequately anticipate our needs for\ncertain key competencies and implement human resource solutions to recruit or improve these competencies, our business, results of operations\nand financial condition would suffer. If we are unable to recruit and retain highly skilled personnel, especially personnel with sufficient\ntechnical expertise to develop our reactors and fuel, we may experience delays, increased costs and reputational harm. As a result, the\nlicensing and approval process and the project development and ongoing nuclear regulatory oversight for our nuclear power plants may be\ndelayed or be more costly.\n\n** **\n\n**We rely heavily on our intellectual property portfolio. Our\nability to protect our patents and other intellectual property rights may be challenged and is not guaranteed. If we are unable to protect\nour intellectual property rights, our business and competitive position may be harmed.**\n\n \n\nWe may not be able to prevent unauthorized use\nof our intellectual property, which could harm our business and competitive position. We rely upon a combination of the intellectual\nproperty protections afforded by patents, trademarks/service marks, copyrights and trade secret laws in the United States and other\njurisdictions, as well as commercial agreements such as confidentiality agreements, and license agreements to establish, maintain and\nenforce rights associated with our MMRs and related proprietary technologies. These measures are aimed at preventing third parties from\nusing, practicing, selling, manufacturing, or otherwise commercially exploiting our MMRs and related technologies, which would erode\nour competitive position in our market. Our success depends in large part on our ability to obtain and enforce patent protection for\nour MMRs, as well as our ability to operate without infringing or violating the proprietary rights of others. We either own or have significant\nlicense rights to certain intellectual property applicable to our MMRs, including patent rights and pending patent applications on the\nsame, and we will continue to file patent applications claiming new technologies directed to our MMRs in the United States and in\nother jurisdictions based on several factors including, but not limited to, commercial viability. Monitoring unauthorized use of our\nintellectual property rights is difficult and costly, and the steps we have taken or will take to prevent misappropriation may not be\nsufficient.\n\n \n\n21\n\n \n\nAs noted above, we also rely upon unpatented\ntrade secret protection, unpatented know-how and continuing technological innovation to develop and help maintain our business and competitive\nposition. We seek to protect our proprietary technology, in part, by entering into confidentiality agreements with our suppliers, subcontractors,\nventure partners, employees and consultants, and other third parties. However, we may not be able to prevent the unauthorized disclosure\nor use of information which we consider to be confidential, our technical know-how or other trade secrets by the parties to these agreements,\ndespite the existence generally of confidentiality provisions and other contractual restrictions. If any of the suppliers, subcontractors,\nventure partners, employees and consultants, and other third parties who are parties to these agreements breaches or violates the terms\nof any of these agreements, we may not have adequate remedies for any such breach or violation, and we could lose our trade secrets as\na result. It is also possible that our trade secrets, know-how or other proprietary information could be obtained by third parties as\na result of breaches of our physical or electronic security systems. Even where remedies are available, enforcing a claim that a party\nillegally disclosed or misappropriated our trade secrets is expensive and time consuming, and the outcome is unpredictable. Courts outside\nthe United States are sometimes less willing to protect trade secrets. Additionally, despite our efforts to protect our proprietary\ntechnology, our trade secrets could otherwise become known or be independently discovered by our competitors. If any of our trade secrets\nwere to be lawfully obtained or independently developed by a competitor or other third party, we would have no right to prevent them,\nor those to whom they communicate, from using that technology or information to compete with us.\n\n \n\nThe patent position of our nuclear power reactors\nis not a guarantee of protection or rights. During the patent prosecution process, a patent office may require us or our licensors to\nnarrow the scope of the claims of our or our licensors’ pending and future patent applications. This may limit the scope of patent\nprotection and our or our licensors’ ability to assert patent infringement if the patent is subsequently issued. In some cases,\na patent may not be issued if we or our licensors are unable to overcome rejections from a patent office. By pursuing patent rights by\nfiling a patent, we or our licensors may lose trade secrets that would have otherwise been protected had a patent not been sought and\nthird parties may be able to exploit such published information in our patent application. Additionally, even if we obtain a patent in\none jurisdiction (*e.g.*, the United States), we cannot guarantee that we will obtain a corresponding patent in another jurisdiction\n(*e.g.*, Italy) as patent laws differ from jurisdiction to jurisdiction. Additionally, maintaining and enforcing patent rights can\ninvolve complex legal and factual questions and may be subject to litigation in some cases. For example, third parties may challenge\nthe validity of our or our licensors’ patents based on prior art at a tribunal such as the Patent Trial and Appeal Board at the\nU.S. Patent and Trademark Office and in a federal court. Because we cannot assure that all of the potentially relevant prior art\nrelating to our patents and patent applications has been found, third parties may prevail in invalidating a patent or preventing a patent\napplication from being issued as a patent. If we or our licensors are able to maintain valid patents or prevail in patent challenges\ninstituted by third parties, we or our licensors may still bear the risk of third parties “designing around” our technologies\nto avoid an intellectual property infringement claim.\n\n \n\nOur patent applications may not result in issued\npatents, which may have a material adverse effect on our ability to prevent others from commercially exploiting products similar to ours.\nThe status of patents involves complex legal and factual questions and the breadth of claims allowed is uncertain. As a result, we cannot\nbe certain that the patent applications that we file will result in patents being issued, or that our patents and any patents that may\nbe issued to us will afford protection against competitors with similar technology. Numerous patents, published pending patent applications\nand unpublished pending patent applications owned by others exist in the fields in which we have developed and are developing our technology.\nIn addition to the risk of infringing those patents, those patents may also be used as a basis to invalidate our patents or prevent our\npatent applications from issuing as patents. Our patents may also be challenged as invalid under other prior art and/or be challenged\nas unenforceable. Furthermore, patent applications filed in foreign countries are subject to laws, rules and procedures that differ from\nthose of the United States, and thus we cannot be certain that foreign patent applications related to issued U.S. patents will\nbe issued.\n\n \n\nEven if our patent applications succeed and we\nare issued patents in accordance with those applications, it is still uncertain whether these patents will be contested, circumvented,\ninvalidated or limited in scope in the future. The rights granted under any issued patents may not provide us with meaningful protection\nor competitive advantages, and some foreign countries provide significantly less effective patent enforcement than in the United States.\nIn addition, the claims of any patents that issue from our patent applications may not be broad enough to prevent others from developing\ntechnologies that are similar or that achieve results similar to ours. The intellectual property rights of others could also bar us from\nlicensing and exploiting any patents that are issued from our pending patent applications. In addition, patents issued to us may be infringed\nor designed around by others and others may obtain patents that we need to license or design around, either of which would increase costs\nand may adversely affect our business, prospects, financial condition and operating results.\n\n \n\n22\n\n \n\n**We currently enjoy only limited geographical protection with\nrespect to certain issued patents and may not be able to protect our intellectual property rights throughout the world.**\n\n \n\nWe do not have worldwide patent rights for our\nMMRs and related proprietary technologies because there is no such thing as worldwide or “international patent rights.” Accordingly,\nwe may not be able to protect our intellectual property rights in certain jurisdictions and their legal systems. Filing, prosecuting\nand defending patents on our MMRs worldwide can pose several challenges. First, procuring patent rights in multiple jurisdictions would\nbe cost prohibitive because individual patent offices in different jurisdictions will have to examine each patent application separately.\nTherefore, costs such as examination fees, translation fees and attorneys’ fees are considered. Once a patent is registered, we\nor our licensors will also have the continued obligation of paying maintenance fees periodically to avoid patents from becoming abandoned\nor lapsed. Second, the breadth of claims in patents may vary from jurisdiction to jurisdiction. For instance, certain patent offices\nmay require narrower claims, resulting in patent rights that are less extensive. Further, as noted above, we may not be able to obtain\npatents in some jurisdictions even if we obtain patents in other jurisdictions. Accordingly, our competitors may operate in countries\nwhere we do not have patent protection and can freely use our technologies and discoveries in such countries to the extent such technologies\nand discoveries are publicly known or disclosed in countries where we do have patent protection or pending patent applications.\n\n \n\nMany countries have compulsory licensing laws\nunder which a patent owner may be compelled to grant licenses to third parties. Many countries also limit the enforceability of patents\nagainst government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially\ndiminish the value of such patent. If we or any of our licensors are forced to grant a license to third parties with respect to any patents\nrelevant to our business, our competitive position may be impaired, and our business and financial condition may be adversely affected.\n\n** **\n\n**We may need to defend ourselves against intellectual property\ninfringement claims, which may be time-consuming and could cause us to incur substantial fees and costs.**\n\n \n\nCompanies, organizations or individuals, including\nour existing and future competitors, may hold or obtain patents, trademarks/service marks or other intellectual property rights that\nwould prevent, limit or interfere with our ability to develop our intellectual property and make, use, develop, import, offer to sell\nor sell our MMRs and related technology, which could make it more difficult for us to operate our company. From time to time, we may\nreceive inquiries from holders of patents or trademarks/service marks inquiring whether we are infringing their proprietary rights and/or\nseeking court declarations that they do not infringe our intellectual property rights. Companies holding patents or other intellectual\nproperty rights similar to our technology may bring proceedings alleging infringement of such rights or otherwise asserting their rights\nand seeking licenses. In addition, if we are determined to have infringed a third party’s intellectual property rights, we may\nbe required to do among other things, one or more of the following: (i) cease selling, incorporating or using MMRs that incorporate\nthe challenged intellectual property; (ii) pay substantial damages; (iii) pay for and obtain a license from the holder of the\ninfringed intellectual property right, which may not be available on reasonable terms or at all; or (iv) redesign part or all of\nour technology. In the event of a successful claim of infringement against us and our failure or inability to obtain a license to the\ninfringed technology, our business, prospects, operating results and financial condition could be materially adversely affected. In addition,\nany litigation or claims, whether or not valid, could result in substantial costs and diversion of resources and management’s focus\nand attention.\n\n \n\nWe also license patents and other intellectual\nproperty from third parties, and we may face claims that the use of this intellectual property infringes the rights of other third parties.\nIn such cases, we may seek indemnification from the licensors under our license contracts with those licensors or other damages. However,\nour rights to indemnification or damages may be unavailable or insufficient to cover our costs and losses, depending on our use of the\ntechnology, whether we choose to retain control over conduct of the litigation, and other factors.\n\n \n\n23\n\n \n\n**We may not identify relevant third-party patents or may incorrectly\ninterpret the relevance, scope or expiration of a third-party patent, which might adversely affect our ability to develop and market\nour MMRs.**\n\n \n\nWe cannot guarantee that any of our patent searches\nor analyses, including the identification of relevant patents, the scope of patent claims or the expiration of relevant patents, are\ncomplete or thorough because there may be hundreds of thousands of relevant patents worldwide. We also cannot be certain that we have\nidentified each and every third-party patent and pending application in the United States and abroad that is relevant to or necessary\nfor the commercialization of our MMRs in any jurisdiction. The scope of a patent claim is generally determined by an interpretation of\nthe law, the written disclosure in a patent, and the patent’s prosecution history. Our interpretation of the relevance or the scope\nof a patent or a pending application may be incorrect or not accepted by a court of competent jurisdiction. Our determination of the\nexpiration date of any patent in the United States or abroad that we consider relevant may be incorrect or inaccurate. Our failure\nto identify and correctly interpret relevant patents may negatively impact our ability to develop and market our MMRs.\n\n \n\nThere are several circumstances under which a\npatent application may not be published and accessible to us or our licensors. For example, patent applications in the United States\nand many foreign jurisdictions are typically not published until 18 months after filing, but some patent applications in the United States\nmay be maintained in secrecy until the patents are issued. Publications in scientific literature also often lag behind actual discoveries.\nTherefore, we cannot be certain that others have not filed patent applications for technology covered by our issued patents or our pending\napplications, or that we were the first to invent the technology or to file a patent application covering the technology. Our competitors\nmay have filed, and may in the future file, patent applications covering our MMRs or technology similar to ours without us knowing. Any\nsuch patent application may have priority over our patent applications or patents, which could require us to procure rights to issued\npatents covering such technologies in order to avoid infringement claims.\n\n** **\n\n**We may be subject to claims of ownership and other rights to\nour patents and other intellectual property by third parties.**\n\n \n\nWe may be subject to claims that former employees,\ncollaborators, or other third parties have an interest in our patents or other intellectual property as an owner, a joint owner, a licensee,\nan inventor, or a co-inventor. In the latter two cases, the failure to name the proper inventors on a patent application can result in\nthe patents issuing thereon being unenforceable. Inventorship disputes may arise from conflicting views regarding the contributions of\ndifferent individuals named as inventors, the effects of foreign laws where foreign nationals are involved in the development of the\nsubject matter of the patent, conflicting obligations of third parties involved in developing our patented technology or as a result\nof questions regarding co-ownership of potential joint inventions. Litigation may be necessary to resolve these and other claims challenging\ninventorship and ownership. Alternatively, or additionally, we may enter into agreements to clarify the scope of our rights in such intellectual\nproperty. If we fail in defending any such claims, in addition to paying monetary damages, we may lose exclusive ownership of, or right\nto use or license valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are\nsuccessful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other\nemployees.\n\n** **\n\n**Our management has limited experience in operating a public\ncompany.**\n\n \n\nOur executive officers have limited experience\nin the management of a publicly traded company and our management team may not successfully or effectively manage our transition to a\npublic company that will be subject to significant regulatory oversight and reporting obligations under federal securities laws. Their\nlimited experience in dealing with the increasingly complex laws pertaining to public companies could be a disadvantage and could result\nin an increasing amount of their time being devoted to compliance activities which would result in less time being devoted to the management\nand growth of the Company. We may not have adequate personnel with the appropriate level of knowledge, experience, and training in the\naccounting policies, practices or internal controls over financial reporting required of public companies in the United States.\nThe development and implementation of the standards and controls necessary for the Company to achieve the level of accounting standards\nrequired of a public company in the United States may require costs greater than expected. It is possible that we will be required\nto expand our employee base and hire additional employees to continue to support our operations as a public company which will increase\nour operating costs in future periods.\n\n \n\n24\n\n \n\n**We are subject to data privacy and protection laws in multiple\njurisdictions, including the GDPR, and any failure to comply with these laws could result in significant penalties and harm to our business**.\n\n \n\nIn the ordinary course of business, we collect,\nstore, transmit and otherwise process confidential information (including personal data) of our employees, contractors and business contacts\nand we are subject to data privacy and protection laws and regulations with respect to same. These laws include the European Union’s\nGeneral Data Protection Regulation (**“GDPR”**) (and the applicable national GDPR implementation acts), which applies to\nour operations in Italy and the broader European Economic Area, as well as an evolving patchwork of U.S. federal and state privacy laws\nand other global privacy laws in the jurisdictions where we operate. The GDPR imposes stringent requirements on data controllers and processors,\nincluding requirements for lawful processing, restrictions on cross-border data transfers, requirements for data processing agreements,\ndata subject rights, requirements for appropriate technical and organizational security measures, and mandatory data breach notification\nobligations. Penalties for non-compliance with the GDPR can be significant, including fines of up to 4% of global annual turnover or €20\nmillion, whichever is greater. We process personal data relating to our employees, contractors, and business contacts, and as our operations\nexpand, the volume and sensitivity of personal data we process is likely to increase. The regulatory landscape for privacy and data protection\nis rapidly evolving, with new laws and amendments being enacted in jurisdictions where we operate or intend to operate. Compliance with\nthese diverse and sometimes conflicting requirements is complex and costly, and our failure to comply could result in regulatory enforcement\nactions (including fines), (civil) litigation (including class actions), reputational harm, and restrictions on our ability to process\npersonal data, any of which could have a material adverse effect on our business, financial condition, and results of operations.\n\n \n\nIn addition, our international operations may\nimplicate data localization requirements, restrictions on cross-border data transfers (such as requirements for the EU standard contractual\nclauses or other approved transfer mechanisms), and other compliance obligations that could increase our operational complexity and costs.\n\n \n\n**The use of artificial intelligence technologies may present\nbusiness, legal, and regulatory risks.**\n\n** **\n\nWe may utilize artificial intelligence and machine\nlearning technologies in our operations, including design optimization, predictive maintenance, and operational analytics. The regulatory\nlandscape for AI is rapidly evolving, with the European Union’s AI Act and various U.S. federal and state initiatives introducing\nnew compliance obligations for AI systems. Our use of AI in connection with nuclear operations may be subject to additional regulatory\nscrutiny by the NRC and other authorities. AI technologies may produce inaccurate, biased, or otherwise flawed outputs, which could result\nin operational inefficiencies, reputational harm, or liability. Our data center customers, who represent a significant portion of our\ntarget market, may be subject to AI-related regulations that could affect their operations and, indirectly, demand for our products.\nAs AI regulation continues to evolve, compliance costs may increase, and we may be required to modify our use of AI technologies, which\ncould have a material adverse effect on our business, financial condition, and results of operations.\n\n \n\n**Risks Relating to Terra Innovatum’s Capital Resources**\n\n \n\n**In order to fulfill our business plan, we will require substantial\nadditional funding. To the extent we require such additional investor funding in the future, such funding may be dilutive to our investors\nand no assurances can be provided as to terms of any such funding. Any such funding and the associated terms will be highly dependent\nupon market conditions and the progress of our business at the time we seek such funding. The terms of any financing that we pursue may\nbe less favorable than previously anticipated and could become even less favorable depending on the amount of funds we may require.**\n\n \n\nOur business is capital intensive. We expect\nthat significant additional capital will be needed in the future to continue our planned operations, including commercialization efforts,\nexpanded research and development activities and costs associated with operating a public company. To raise capital, we may enter into\nfinancing arrangements that may be costly or impose certain restrictive covenants or otherwise restrict our ability to seek additional\nleverage or financing. We may also seek to sell ordinary shares, convertible securities or other equity securities in one or more transactions\nat prices and in a manner we determine from time to time. If we sell ordinary shares, convertible securities or other equity securities,\ninvestors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing shareholders,\nand new investors could gain rights, preferences and privileges senior to the holders of our ordinary shares. Pursuant to our Equity\nIncentive Plan, which became effective upon the Closing, our board is authorized to grant compensatory equity awards to our employees,\ndirectors and consultants. If the number of shares reserved under our Equity Incentive Plan is increased pursuant to the terms of our\nEquity Incentive Plan, our shareholders may experience additional dilution, which could cause our share price to fall. Any of the above\nevents could significantly harm our business, prospects, financial condition and results of operations and cause the price of our ordinary\nshares to decline.\n\n \n\n25\n\n \n\n**Our corporate expenditures, including our corporate level expenses,\nare subject to numerous risks and uncertainties.**\n\n \n\nOur current and future operating expenses are\nuncertain and impacted by various factors outside of our control, including rising costs and other impacts of inflation, evolving regulatory\nrequirements, raw material availability, global conflicts, global supply chain challenges and component manufacturing and testing uncertainties,\namong other factors. Accordingly, it is possible that our overall expenses and related outspend could be higher than the levels\nwe currently estimate, and any increases could have a material adverse effect on our business, financial condition and results of operations.\n\n** **\n\n**We may experience a disproportionately higher impact from inflation\nand rising costs.**\n\n \n\nInflation has resulted in, and may continue to\nresult in, higher interest rates and capital costs, higher shipping costs, higher material costs, supply shortages, increased costs of\nlabor and other similar effects. Although the impact of material cost, labor, or other inflationary or economically driven factors will\nimpact the entire nuclear and energy transition industry (including renewable sources of electricity, like solar and wind), the relative\nimpact may not be the same across the industry, and the particular effects within the industry will depend on a number of factors, including\nmaterial use, design, structure of supply agreements, project management and others, which could result in significant changes to the\ncompetitiveness of our technology and our ability to sell SOLO reactors, which could have a material adverse effect on our business,\nfinancial condition and results of operations.\n\n** **\n\n**If we incur indebtedness in the future, we could be exposed\nto risks that could adversely affect our business, financial condition and results of operations.**\n\n \n\nIn the future, we may incur indebtedness which\ncould have significant negative consequences for our security holders, business, results of operations and financial condition by, among\nother things:\n\n \n\n \n●\nincreasing our vulnerability to adverse economic and industry conditions;\n\n \n\n \n●\nlimiting our ability to obtain additional financing;\n\n \n\n \n●\nrequiring the dedication of a substantial portion of our cash flow from operations to service our\nindebtedness, which will reduce the amount of cash available for other purposes;\n\n \n\n \n●\nlimiting our flexibility to plan for, or react to, changes in our business; and\n\n \n\n \n●\nplacing us at a possible competitive disadvantage with competitors that are less leveraged than\nus or have better access to capital.\n\n \n\nOur business may not generate sufficient funds,\nand we may otherwise be unable to maintain sufficient cash reserves, to pay any additional indebtedness that we may incur. Any future\nindebtedness that we may incur may contain financial and other restrictive covenants that will limit our ability to operate our business,\nraise capital or make payments under our indebtedness. If we fail to comply with such covenants or to make payments under any of our\nindebtedness when due, then we would be in default under that indebtedness, which could, in turn, result in that indebtedness becoming\nimmediately payable in full and cross-default or cross-acceleration under our other indebtedness and other liabilities.\n\n** **\n\n**Our actual operating results may differ significantly from our\nguidance.**\n\n \n\nFrom time to time, we may release guidance in\nour quarterly earnings releases, quarterly earnings conference calls, or expectations regarding our future performance that represent\nour management’s estimates as of the date of release. This guidance, which includes forward-looking statements, will be based on\nprojections prepared by our management. These projections are not expected to be prepared with a view toward compliance with published\nguidelines of the American Institute of Certified Public Accountants, and neither our registered public accountants nor any other independent\nexpert or outside party is expected to comply or examine the projections. Accordingly, no such person is expected to express any opinion\nor any other form of assurance with respect to the projections.\n\n \n\n26\n\n \n\nProjections are based upon a number of assumptions\nand estimates that, while presented with numerical specificity, are inherently subject to significant business, economic, and competitive\nuncertainties and contingencies, many of which are beyond our control, and are based upon specific assumptions with respect to future\nbusiness decisions, some of which will change. Any material change to the assumptions or estimates underlying the projections management\nprepares, or any material overruns or other unexpected increase in costs, could have a material adverse effect on the projections and\nthe guidance on which it is based. The rapidly evolving market in which we operate may make it difficult to evaluate our current business\nand our future prospects, including our ability to plan for and model future growth. We intend to state possible outcomes as high and\nlow ranges which are intended to provide a sensitivity analysis as variables are changed. However, actual results will vary from our\nguidance and the variations may be material. The principal reason that we release guidance is to provide a basis for our management to\ndiscuss our business outlook as of the date of release with analysts and investors. We do not accept any responsibility for any projections\nor reports published by any such persons. Investors are urged not to rely upon our guidance in making an investment decision regarding\nour ordinary shares.\n\n \n\nAny failure to successfully implement our operating\nstrategy or the occurrence of any of the events or circumstances set forth in this “*Risk Factors*” section could result\nin our actual operating results being different from our guidance, and the differences may be adverse and material.\n\n \n\n**Our financial results may vary significantly from quarter to\nquarter.**\n\n \n\nWe expect our revenue and operating results to\nvary from quarter to quarter. We may incur significant operating expenses during the start-up and early stages of contracts and may not\nbe able to recognize corresponding revenue in that same quarter. We may also incur additional expenses when contracts are terminated\nor expire and are not renewed. We may also incur additional expenses when companies are newly acquired.\n\n \n\nAdditional factors that may cause our financial\nresults to fluctuate from quarter to quarter include those addressed elsewhere in this “*Risk Factors*” section and\nthe following factors, among others:\n\n \n\n \n●\nthe terms of customer contracts that affect the timing of revenue recognition;\n\n \n\n \n●\nvariability in demand for our services and solutions;\n\n \n\n \n●\ncommencement, completion or termination of contracts during any particular quarter;\n\n \n\n \n●\ntiming of award or performance incentive fee notices;\n\n \n\n \n●\ntiming of significant bid and proposal costs;\n\n \n\n \n●\nthe costs of remediating unknown defects, errors or performance problems of our product offerings;\n\n \n\n \n●\nrestrictions on and delays related to the export of nuclear articles and services;\n\n \n\n \n●\ncosts related to government inquiries;\n\n \n\n \n●\nstrategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs and\njoint ventures;\n\n \n\n \n●\nstrategic investments or changes in business strategy;\n\n \n\n \n●\nchanges in the extent to which we use subcontractors;\n\n \n\n27\n\n \n\n \n●\nfluctuations in our staff utilization rates;\n\n \n\n \n●\nchanges in our effective tax rate, including changes in our judgment as to the necessity of the\nvaluation allowance recorded against our deferred tax assets; and\n\n \n\n \n●\nthe length of sales cycles.\n\n \n\nSignificant fluctuations in our operating results\nfor a particular quarter could cause us to fall out of compliance with the financial covenants related to any potential future indebtedness,\nwhich if not waived, could restrict our access to capital and cause us to take extreme measures to pay down the debt, if any.\n\n \n\n**If we experience significant fluctuations in our operating results\nand rate of growth and fail to meet revenue and earnings expectations, our share price may fall rapidly and without advance notice.**\n\n \n\nDue to our limited operating history, our unproven\nand evolving business model and the unpredictability of our emerging industry, we may not be able to accurately forecast our rate of\ngrowth. We base our current and future expense levels and our investment plans on estimates of future revenue and future rate of growth.\nOur expenses and investments are, to a large extent, not fixed and we expect that these expenses will increase in the future. We may\nnot be able to adjust our spending quickly enough if our revenue falls short of our expectations.\n\n \n\nOur results of operations depend on both the\ngrowth of demand for the products and services we are going to offer in future and the general economic and business conditions throughout\nthe world. A softening of demand for our products and services for any reason will harm our operating results. Terrorist attacks, armed\nhostilities and wars in the past created, and may in the future create economic and business uncertainty that may also adversely affect\nour results of operations.\n\n \n\nOur revenue and operating results may also fluctuate\ndue to other factors, including:\n\n \n\n \n●\nour ability to design, develop, manufacture and sale smaller, cheaper, and safer advanced clean\nenergy solutions, including nuclear reactors.\n\n \n\n \n●\nassumptions relating to the size of the market for our nuclear reactors.\n\n \n\n \n●\nunanticipated regulations of nuclear energy that add barriers to our business and have a negative\neffect on our operations.\n\n \n\n \n●\nour estimates of expenses, future revenue, capital requirements and our needs for, or ability to\nobtain, additional financing.\n\n \n\n \n●\nnew product and service introductions by our competitors.\n\n \n\n \n●\ntechnical difficulties or interruptions in our service.\n\n \n\n \n●\ngeneral economic conditions in our geographic markets.\n\n \n\n \n●\nadditional investment in our service or operations.\n\n \n\n \n●\nregulatory compliance costs.\n\n \n\nAs a result of these and other factors, we expect\nthat our operating results may fluctuate significantly on a quarterly basis. We believe that period-to period comparisons of our operating\nresults may not be meaningful, and you should not rely upon them as an indication of future performance.\n\n \n\n28\n\n \n\n**Changes in our accounting estimates and assumptions could negatively\naffect our financial position and results of operations.**\n\n \n\nWe prepare our financial statements in accordance\nwith U.S. GAAP. These accounting principles require us to make estimates and assumptions that affect the reported amounts of\nassets and liabilities and the disclosure of contingent assets and liabilities at the date of our financial statements. We are also required\nto make certain judgments that affect the reported amounts of revenues and expenses during each reporting period. We periodically evaluate\nour estimates and assumptions including, but not limited to, those relating to business acquisitions, revenue recognition, recoverability\nof assets including customer receivables, contingencies, valuation of financial instruments, stock-based compensation and income taxes.\nWe base our estimates on historical experience and various assumptions that we believe to be reasonable based on specific circumstances.\nThese assumptions and estimates involve the exercise of judgment and discretion, which may evolve over time in light of operational experience,\nregulatory direction, developments in accounting principles and other factors. Actual results could differ from these estimates as a\nresult of changes in circumstances, assumptions, policies or developments in the business, which could materially affect our financial\nstatements.\n\n** **\n\n**Our ability to pay dividends may be limited and the level of\nfuture dividends is subject to change.**\n\n \n\nWe do not expect to pay dividends for the foreseeable\nfuture. Payment of dividends on our shares in the future will be subject to business conditions, financial conditions, earnings, cash\nbalances, commitments, strategic plans and other factors that the Board of Directors may deem relevant at the time it recommends approval\nof the dividend. Any dividend policy, once adopted, will be subject to change based on changes in statutory requirements, market trends,\nstrategic developments, capital requirements and a number of other factors. In addition, under the Articles of Association and Dutch\nlaw, dividends may be declared on the Ordinary Shares only if the amount of equity exceeds the paid up and called up capital plus the\nreserves that have to be maintained pursuant to Dutch law or the Articles of Association. Further, even if we are permitted under the\nArticles of Association and Dutch law to pay cash dividends on our shares, we may not have sufficient cash to pay dividends in cash on\nour shares. We will be a holding company and our operations will be carried out through our subsidiaries. As a result, our ability to\npay dividends will primarily depend on the ability of our subsidiaries to generate earnings and to provide us with the necessary financial\nresources.\n\n** **\n\n**It may be difficult to enforce U.S. judgments against us.**\n\n \n\nWe are a public limited liability company under\nthe laws of the Netherlands, and a substantial portion of our assets are outside of the United States. Many of our directors and\nsenior management are resident outside the United States, and all or a substantial portion of our respective assets may be located\noutside the United States. As a result, it may be difficult for U.S. investors to effect service of process within the United States\nupon these persons. It may also be difficult for U.S. investors to enforce within the United States judgments predicated upon\nthe civil liability provisions of the securities laws of the United States or any state thereof. In addition, there is uncertainty\nas to whether the courts outside the United States would recognize or enforce judgments of U.S. courts obtained against us\nor our directors and officers predicated upon the civil liability provisions of the securities laws of the United States or any\nstate thereof. Therefore, it may be difficult to enforce U.S. judgments against us, our directors and officers and independent auditors.\n\n** **\n\n**Fluctuations in Foreign Currency Exchange Rates and Withholding\nTaxes May Adversely Affect Our Results of Operations and Cash Flows**\n\n \n\nThe financial statements included in this annual\nreport are presented in U.S. dollars, while a substantial portion of Terra Innovatum Global S.r.l.’s revenues, expenses and capital\nexpenditures are denominated in euros. Accordingly, we are exposed to fluctuations in the euro/U.S. dollar exchange rate, which may have\na material adverse effect on our results of operations and cash flows. For example, a strengthening of the U.S. dollar against the euro\nwould reduce the reported U.S. dollar value of our euro-denominated revenues and assets, while a weakening of the U.S. dollar would increase\nthe U.S. dollar value of our euro-denominated expenses and liabilities. Although we may enter into hedging arrangements to partially\nmitigate foreign currency risk, such transactions may not fully offset adverse movements, may entail significant costs and may expose\nus to additional risks, including counterparty credit risk and accounting volatility.\n\n \n\n29\n\n \n\nIn addition, under Italian law, payments of dividends\nand interest by our Italian subsidiaries to U.S. or other non-Italian shareholders may be subject to withholding taxes at rates up to\n26% unless reduced by an applicable tax treaty. Such withholding could reduce the net amount of cash available for distribution to our\nshareholders, adversely impact the attractiveness of our ordinary shares to certain investors and, in certain circumstances, require\nus to incur additional costs to secure treaty relief or obtain tax indemnities. Any changes in Italian or U.S. withholding tax rates,\namendments to existing treaties or interpretations by tax authorities could further increase our tax burden and reduce the value of your\ninvestment.\n\n \n\n**Risks Relating to Compliance with Law, Government Regulation and\nLitigation**\n\n** **\n\n**Our business is subject to the policies, priorities, regulations,\nmandates of multiple governmental entities and may be negatively or positively impacted by any change thereto.**\n\n \n\nWe are subject to a wide variety of laws and regulations\nrelating to various aspects of our business, including with respect to use and possession of radioactive materials; design, manufacture,\noperations, marketing and export of nuclear technologies; employment and labor; tax; data security of the operational and information\ntechnology we use; health and safety; zoning and environmental issues. Laws and regulations at the foreign, federal, state and local levels\nfrequently change and are often interpreted in different ways, especially in relation to new and emerging industries, and we cannot always\nreasonably predict the impact from, or the ultimate cost of compliance with, current or future regulatory or administrative changes. While\nwe monitor these developments and devote a significant amount of management’s time and external resources towards compliance with\nthese laws, regulations and guidelines, we cannot guarantee that these measures will be satisfactory to regulators or other third parties,\nsuch as our customers, who are also subject to extensive governmental regulation. Our efforts to comply with new and changing laws and\nregulations may result in increased general and administrative expenses and a diversion of management time and attention. Moreover, changes\nin law, the imposition of new or additional regulations or the enactment of any new or more stringent legislation that impacts our business\ncould require us to change the way we operate and could have a material adverse effect on our sales, profitability, cash flows, financial\ncondition, and lead to regulatory delays that could impact our ability to obtain licenses, certificates, authorizations, permits, approvals,\nand/or certifications from regulatory agencies (collectively referred to herein as **“regulatory approvals”**).\n\n \n\nOur MMRs are subject to regulations in all jurisdictions\nrelated to nuclear safety, environmental, and financial qualification. Regulatory approvals, such as construction permits and operating\nlicenses issued by the NRC, are necessary for our customers to construct and operate our MMRs. Our plans to deploy MMRs rely on timely\nreceipt of such regulatory approvals in the jurisdictions in which we seek to do business. Such regulatory approval processes may be\nsubject to change, can be technically challenging to address, may result in the imposition of conditions that impact the financial viability\nof our MMR products, and may also provide opportunities for third parties to lodge objections or seek more stringent requirements for\nour products.\n\n \n\nLastly, all of our facilities are subject to\nregulations regarding human health and safety, wastewater, stormwater, air emissions and storage of materials like petroleum. If we fail\nto comply with these laws and regulations, we could be subject to fines or penalties from local, state, and federal regulators.\n\n** **\n\n**Uncertain global macro-economic and political conditions could\nmaterially adversely affect our results of operations and financial condition.**\n\n \n\nOur results of operations are materially affected\nby economic and political conditions in the United States and internationally, including inflation, deflation, interest rates, availability\nof capital, energy and commodity prices, trade laws and the effects of governmental initiatives to manage economic conditions. Current\nor potential customers may delay or decrease spending on our products and services as their business and budgets are impacted by economic\nconditions. The inability of current and potential customers to pay us for our products and services may adversely affect our earnings\nand cash flows.\n\n \n\nOngoing global supply chain disruptions have\nincreasingly affected both the availability and cost of raw materials, component manufacturing and deliveries. These disruptions may\nresult in delays in equipment deliveries and cost escalations that could adversely affect our business.\n\n** **\n\n30\n\n** **\n\n**We are subject to stringent export and import control laws and\nregulations, and our failure to comply with these laws and regulations or to obtain necessary authorizations, could have a material adverse\neffect on our business, financial condition and results of operations.**\n\n \n\nIf and when required, the inability to secure\nand maintain necessary export licenses or authorizations could negatively affect our ability to compete successfully or market our MMR\ntechnology for commercial applications. U.S. government agencies responsible for administering nuclear export control regulations have\nconsiderable discretion in interpreting and enforcing these regulations, as well as in approving, denying, or imposing specific conditions\non authorizations to engage in controlled activities.\n\n \n\nIf we were unable to obtain authorization to\nexport our technology, hardware, code, or technical assistance, our market opportunities would be limited, providing a competitive advantage\nto international suppliers of MMRs. Similarly, if export authorization could not be secured, we might need to implement design changes\nto our MMRs to address domestic supply chain issues, which could increase costs or lead to delays in the delivery of new plants and subsequent\nMMRs.\n\n \n\nFailure to comply with export control laws and\nregulations could expose us to civil or criminal penalties, fines, investigations, more stringent compliance requirements, and loss of\nexport privileges. In addition, changes to export control regulations or multilateral non-proliferation frameworks could further restrict\nour ability to export reactor components, technology, or technical data, materially and adversely affecting our international business\nprospects.\n\n** **\n\n**Changes in international trade policies, tariffs and treaties\naffecting imports and exports may have a material adverse effect on our performance or business prospects.**\n\n \n\nThere have recently been significant changes\nto international trade policies and tariffs affecting imports and exports in tariffs on raw materials or could negatively affect our\nperformance, and the current trade policy environment is characterized by considerable uncertainty. The United States has implemented\na range of new tariffs and increases to existing tariffs, affecting steel, aluminum, and other raw materials and manufactured goods that\nmay be relevant to our supply chain and operations. In response to these actions, other countries have imposed, are considering imposing,\nand may in the future impose new or increased tariffs on certain exports from the United States, including retaliatory tariffs that could\nincrease the cost of our reactor systems for international customers and thereby reduce demand for our products in foreign markets.\n\n \n\nThere is currently significant uncertainty about\nthe future relationship between the United States and other countries with respect to trade policies, taxes, government regulations,\nand tariffs, and we cannot predict whether, or to what extent, current tariffs will continue or trade policies will change in the future.\nFurthermore, the renegotiation, suspension, or termination of existing free trade agreements or bilateral investment treaties by the\nUnited States or by countries in which we plan to deploy our technology could adversely affect our international business strategy. Any\nsignificant increase in tariffs on raw materials or components supplied for our reactors, or the imposition of retaliatory tariffs by\nforeign countries on U.S.-origin nuclear technology or equipment, could negatively affect our performance and business prospects.\n\n \n\n**Terrorist attacks, acts of war or natural disasters may adversely\naffect our operations.**\n\n \n\nTerrorist acts, acts of war or natural disasters\nmay disrupt our operations, as well as the operations of the businesses in which we invest. Such acts, including the ongoing conflicts\nin the Middle East and Ukraine, have created, and continue to create, economic and political uncertainties and have contributed to global\neconomic instability. Future terrorist activities, military or security operations, or natural disasters could further weaken the domestic/global\neconomies and create additional uncertainties, which may negatively impact our performance or business prospects. Losses from terrorist\nattacks and natural disasters are generally uninsurable.\n\n \n\nIn addition, the current U.S. political environment\nand the resulting uncertainties regarding actual and potential shifts in U.S. foreign investment, trade, taxation, economic, environmental\nand other policies, as well as the impact of geopolitical tension, such as a deterioration in the bilateral relationship between the\nU.S. and China or the ongoing conflicts in the Middle East and Ukraine, could lead to disruption, instability and volatility in the global\nmarkets. Unfavorable economic conditions also would be expected to increase our funding costs, limit our access to the capital markets\nor result in a decision by lenders not to extend credit to us. These events may limit our ability to grow and could have a material negative\nimpact on our operating results, financial condition, results of operations and cash flows.\n\n** **\n\n31\n\n** **\n\n**We are part of the nuclear power industry, which is highly regulated.\nOur MMR designs similarly differ from reactors currently in operation, including with respect to potential industrial uses. As a result,\nthe regulatory licensing and approval process for our nuclear power plants may be delayed and made more costly.**\n\n \n\nThe nuclear power industry is highly regulated.\nAll entities that operate nuclear power facilities, fabricate nuclear fuel, or transport special nuclear materials in the United States\nare subject to the jurisdiction of the NRC (except for those facilities and applications separately regulated by the DOE). Entities performing\nsimilar activities in other countries are subject to regulation by the NRC’s counterparts around the world.\n\n \n\nOur MMR designs differ in certain respects from\nthe reactors currently used at commercial nuclear power facilities. Because of these design differences, our reactor designs could result\nin more prolonged and extensive review by the NRC and its counterparts around the world. Our reactor development timeline depends on\nthe relevant nuclear regulator’s acceptance and approval of technical information and documentation related to our reactor designs\nin the course of any design-specific licensing, certification, approval, or similar process, or in facility-specific licensing.\n\n \n\nU.S. government agencies responsible for administering\nnuclear export control regulations have considerable discretion in interpreting and enforcing these regulations, as well as in approving,\ndenying, or imposing specific conditions on authorizations to engage in controlled activities. This regulatory discretion, combined with\nour unique MMR design, could result in more prolonged and extensive reviews by the NRC and its counterparts around the world, potentially\ncausing delays in our reactor development program and commercialization efforts. Regulators may also require additional information regarding\nreactor behavior or performance, necessitating unplanned analytical or experimental work that could cause further schedule delays and\nrequire additional research and development funding.\n\n** **\n\n**These key materials and components may also be particularly\nvulnerable to inflationary pressures and cost increases.**\n\n \n\nThe equipment, components, and materials used\nin a nuclear power plant are subject to a heightened level of manufacturing and quality assurance scrutiny, in compliance with NRC regulations,\napplicable codes and nuclear industry standards. Moreover, it is critical to demonstrate in facility design and development that the\nmaterials used in the facility that will be exposed to radiation will perform in accordance with necessary design parameters. The heightened\nmanufacturing and quality assurance requirements and regulatory oversight limit the number of potential suppliers from whom we can procure\nmany types of equipment, components, and materials used in our reactors, as well as the types of facilities where we can test certain\nmaterials. These suppliers and the key materials and essential components may be particularly vulnerable to price increases, as a result\nof supply and demand dynamics, inflation and other price pressures. As a result, supplier delays, unexpected performance testing results,\nissues in the manufacturing process or procuring necessary materials, international procurement needs, regulatory compliance issues,\ncomponent qualification issues or delays, increases in costs as a result of inflation or otherwise, and geopolitical considerations can\nall impact our ability to perform necessary R&D, assist a customer in licensing a reactor, construct and assist customers in operating\na Terra Innovatum reactor design. This could impact our project timelines and costs, as well as affect potential customer interest in\nour reactors.\n\n** **\n\n**The public has the ability to intervene in licensing proceedings\nbefore the NRC for a reactor.**\n\n \n\nUnder the Atomic Energy Act and the implementing\nNRC regulations, members of the public, state, or tribal governments may request a public hearing opposing the issuance of any NRC permit\nor license, or challenging portions of the license or permit application or of the NRC’s review. Certain NRC actions also include\nprovision for a mandatory administrative hearing regardless of whether any contentions are submitted in conjunction with the action.\nThese hearing processes may delay or prevent the issuance of required regulatory approvals (*e.g.*, permits or licenses) for a customer’s\nMMR.\n\n** **\n\n32\n\n** **\n\n**The SOLO designs have not yet been approved or licensed for\nuse at any site by the NRC, and approval or licensing of these designs is not guaranteed.**\n\n \n\nTerra Innovatum submitted its regulatory engagement\nplan to the NRC in January 2025. Notwithstanding these actions, the SOLO designs have not yet been licensed or approved by the NRC,\nand no currently operating NRC-regulated reactor uses technology we use in SOLO.\n\n \n\nIf the NRC disagrees with our, or our customers’,\nlicensing approach or the technical bases supporting the nuclear safety and environmental impact evaluations, the construction and operating\nlicense application processes could take longer than currently expected, or a license may not be granted at all, which could materially\nand adversely affect our business. Further, the NRC could impose conditions in a license that are not acceptable to us or our customers,\nwhich could materially and adversely affect our business. Any delays, conditions or unexpected requirements may increase costs for us\nor our customers and may result in uncertainty regarding the ability to deploy our technology in a predictable way, which may adversely\nimpact our competitiveness.\n\n \n\n **Even if the SOLO is licensed in the United States,\nwe must still obtain approvals on a country-by-country basis to deploy these reactor technologies, which approvals may be delayed or\ndenied or which may require modification to our design.**\n\n \n\nEven if the SOLO is licensed or approved in the\nUnited States, deploying our technology in other countries would require obtaining regulatory approvals in those jurisdictions.\nThe regulatory framework for securing such approvals is complex, varies from country to country, and may involve authorities at national,\nsub-national, or local levels. Timelines are likely to be longer for initial deployments of our technology in any jurisdiction, as regulatory\nagencies may not be familiar with our technology or its differences from the legacy reactor designs used in existing nuclear power facilities.\nMoreover, other countries’ approval processes may differ significantly from the NRC’s process, or they may require modifications\nto certain aspects of our design as a condition of approval.\n\n \n\nSome countries impose local content requirements\nor preferential procurement mandates on large infrastructure projects, including nuclear facilities. These requirements could increase\nour costs, necessitate the qualification of local suppliers who may not meet our quality standards, or limit our ability to use our preferred\ninternational supply chain. As a result, local content obligations could materially and adversely affect our financial performance in\nthose markets.\n\n \n\nDenial or delay in obtaining approvals abroad,\nwhether due to regulatory, trade-related, or local content considerations, could materially and adversely affect our business outside\nthe United States.\n\n** **\n\n**Our customers could incur substantial costs as a result of violations\nof, or liabilities under, environmental laws.**\n\n \n\nThe operations and properties of our customers\nare subject to a variety of federal, state, local and foreign environmental, health and safety laws and regulations governing, among\nother things, air emissions, wastewater discharges, management and disposal of hazardous, non-hazardous and radioactive materials and\nwaste and remediation of releases of hazardous materials. Although Terra Innovatum’s business is to design and sell technology\nrather than to construct and own or operate power plants, we must design our technology so it complies with such laws and regulations.\nCompliance with environmental requirements could require our customers to incur significant expenditures or result in significant restrictions\non their operations, and the failure to comply with such laws and regulations, including failing to obtain any necessary permits, could\nresult in substantial fines or enforcement actions, including regulatory or judicial orders enjoining or curtailing operations or requiring\nour customers to conduct or fund remedial or corrective measures, install pollution control equipment or perform other actions. More\nvigorous enforcement by regulatory agencies, the future enactment of more stringent laws, regulations or permit requirements, including\nrelating to climate change, or other unanticipated events may arise in the future and adversely impact the market for our products or\ndemand for our products from our customers, which could materially and adversely affect our business, financial condition and results\nof operations.\n\n** **\n\n33\n\n** **\n\n**Our MMRs may not qualify as low-emissions or emissions-free\npursuant to regulatory or incentive frameworks that consider emissions on a lifecycle basis or that otherwise account for fuel-cycle\nemissions or energy consumption.**\n\n \n\nWhile our MMRs generate no air emissions during\noperations, including no so-called greenhouse gases, our MMRs may nonetheless not qualify as providers of emissions-free, carbon-free,\nlow-carbon or similar generating resources under emissions-limitation schemes that assess emissions on a lifecycle basis or that otherwise\nconsider emissions from energy consumed in our fuel cycle. The failure of our MMRs to qualify for inclusion in emissions reduction or\nclimate change related emissions control schemes, or emissions-based incentive programs may result in higher costs or lower revenues\nfor us or our customers, and may adversely impact the demand for our products from our customers, which could materially and adversely\naffect our business, financial condition and results of operations.\n\n** **\n\n**We may become involved in litigation that may materially adversely\naffect us.**\n\n \n\nFrom time to time, we may become involved in\nvarious legal proceedings relating to matters incidental to the ordinary course of our business, including intellectual property, commercial,\nproduct liability, employment, class action, whistleblower and other litigation and claims, and governmental and other regulatory investigations\nand proceedings. Such matters can be time-consuming, divert management’s attention and resources from the operation of our business\nand cause us to incur significant expenses or liability or require us to change our business practices. Because of the potential risks,\nexpenses and uncertainties of litigation, from time to time, we may settle disputes, even where we believe that we have meritorious claims\nor defenses. Because litigation is inherently unpredictable, we cannot assure you that the results of any of these actions will not have\na material adverse effect on our business.\n\n \n\n**We have identified material weaknesses in our internal controls\nover financial reporting and if our remediation of such material weaknesses is not effective, or if we fail to develop and maintain an\neffective system of disclosure controls and internal controls over financial reporting, our ability to produce timely and accurate financial\nstatements or comply with applicable laws and regulations could be impaired.**\n\n** **\n\nAs a public company, we are subject to the reporting\nrequirements of Dutch Law and the Exchange Act, the Sarbanes-Oxley Act, and the rules and regulations of the applicable listing standards\nof the Nasdaq Global Market. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting,\nand financial compliance costs, make some activities more difficult, time-consuming, and costly, and place significant strain on our personnel,\nsystems, and resources.\n\n \n\nThe Sarbanes-Oxley Act requires, among other things,\nthat we maintain effective disclosure controls and procedures and internal control over financial reporting. We are continuing to develop\nand refine our disclosure controls, internal control over financial reporting and other procedures that are designed to ensure information\nrequired to be disclosed by us in our financial statements and in the reports that we will file with the SEC is recorded, processed, summarized\nand reported within the time periods specified in SEC rules and forms, and information required to be disclosed in reports under the Exchange\nAct is accumulated and communicated to our principal executive and financial officers. In order to maintain and improve the effectiveness\nof our internal controls and procedures, we have expended, and anticipate that we will continue to expend, significant resources, including\naccounting related costs and significant management oversight.\n\n \n\nAs further described in Section 9A, below,\nwe identified material weaknesses in our internal controls over financial reporting. A material weakness is a deficiency, or\ncombination of deficiencies, in internal controls over financial reporting, such that there is a reasonable possibility that a\nmaterial misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. Our\nmaterial weaknesses are related to (1) the lack of resources with adequate experience to execute internal controls over financial\nreporting at a level commensurate with public company requirements; (2) failure to complete a formal assessment of the impact of our\nde-SPAC transaction on our internal control environment; (3) failure to uplift our internal controls from a private-company operating environment to public company requirements; and (4) failure to\nimplement a monitoring program to assess effectiveness of our internal controls.\n\n \n\nWe cannot assure you that the measures we have\ntaken to date, and actions we may take in the future, will be sufficient to remediate the control deficiencies that led to a material\nweakness in our internal controls over financial reporting or that they will prevent or avoid potential future material weaknesses. Our\ncurrent controls and any new controls we develop may become inadequate because of changes in conditions in our business. Further, additional\nweaknesses in our internal controls may be discovered in the future. Any failure to develop or maintain effective controls, or any difficulties\nencountered in their implementation or improvement, could harm our operating results, may result in a restatement of our financial statements\nfor prior periods, cause us to fail to meet our reporting obligations, and could adversely affect the results of periodic management evaluations\nand annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over\nfinancial reporting that we are required to include in the periodic reports we will file with the SEC. However, while we remain an “emerging\ngrowth company,” we will not be required to include an attestation report on internal control over financial reporting issued by\nour independent registered public accounting firm. Ineffective disclosure controls and procedures and internal control over financial\nreporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative\neffect on the market price of our ordinary shares.\n\n \n\nOur independent registered public accounting firm\nis not required to formally attest to the effectiveness of our internal control over financial reporting until after we are no longer\nan “emerging growth company” as defined in the JOBS Act. At such time, our independent registered public accounting firm may\nissue a report that is adverse in the event it is not satisfied with the level at which our internal control over financial reporting\nis documented, designed or operating. Any failure to maintain effective disclosure controls and internal control over financial reporting\ncould have an adverse effect on our business and results of operations and could cause a decline in the price of our ordinary shares.\n\n \n\nAs a public company, and particularly after we\nare no longer an “emerging growth company,” significant resources and management oversight will be required. As a result,\nmanagement’s attention may be diverted from other business concerns, which could harm our business, financial condition and operating\nresults.\n\n \n\n34\n\n \n\n**Risk Relating to Tax Matters Applicable to Terra Innovatum**\n\n \n\n**Changes in tax, tariff or fiscal policies could adversely affect\ndemand for our products.**\n\n \n\nImposition of any additional taxes and levies\non our products could adversely affect the demand for our products and our results of operations. Changes in corporate and other taxation\npolicies as well as changes in export and other incentives given by various governments, or import or tariff policies, could also adversely\naffect our results of operations. Considerable uncertainty surrounds the introduction and scope of tariffs by countries around the world,\nas well as the potential for trade actions, and the imposition of tariffs and trade restrictions as a result of international trade disputes\nor changes in trade policies may adversely affect our sales and profitability. The occurrence of any the above may have a material adverse\neffect on our business, results of operations and financial condition.\n\n \n\nAs discussed above under the risk factor relating\nto international trade policies and tariffs, the tariff and trade policy environment is rapidly evolving and may have direct and indirect\neffects on our cost structure and the demand for our MMRs. To the extent that tariff-related cost increases or trade policy uncertainty\ncauses our potential customers to delay purchasing decisions, this could materially and adversely affect our revenues and business prospects.\n\n** **\n\n**Changes to taxation or the interpretation or application of\ntax laws could have an adverse impact on our results of operations and financial condition.**\n\n \n\nOur business is expected to be subject to various\ntaxes in different jurisdictions (currently, mainly Italy), which include, among others, the Italian corporate income tax (**“IRES”**),\nregional trade tax (**“IRAP”**), value added tax (**“VAT”**), excise duty, registration tax and other indirect\ntaxes.\n\n \n\nWe are exposed to the risk that our overall tax\nburden may increase in the future.\n\n \n\nChanges in tax laws or regulations, or in the\nposition of the relevant Italian and non-Italian authorities regarding the application, administration or interpretation of these laws\nor regulations, particularly if applied retrospectively, could have a material adverse effect on our business, results of operations\nand financial condition.\n\n \n\nIn addition, tax laws are complex and subject\nto subjective valuations and interpretive decisions. The tax authorities may not agree with our interpretations of, or the positions\nwe have taken or intend to take on, tax laws applicable to our ordinary activities and extraordinary transactions. In case of challenges\nby the tax authorities to our interpretations, we could face long tax proceedings that could result in the payment of additional tax\nand penalties, with potential material adverse effects on our business, results of operations and financial condition.\n\n** **\n\n**We intend to be treated exclusively as a resident of the Republic\nof Italy for tax purposes, but Dutch or other tax authorities may seek to treat us as a tax resident of another jurisdiction as a result\nof which we could be subject to increased and/or different taxes.**\n\n \n\nWe intend to continue being resident for fiscal\npurposes exclusively in the Republic of Italy. Indeed, we intend to maintain management and organizational structure in such a manner\nthat (i) our place of effective management would be in Italy and we should be regarded as a tax resident of Italy for Italian domestic\nlaw purposes; (ii) we should be considered to be exclusively tax resident in Italy for purposes of the applicable tax treaties, including\nthe Convention between the Kingdom of the Netherlands and the Republic of Italy for the avoidance of double taxation and the prevention\nof fiscal evasion with respect to taxes on income and on capital (the **“Italy-Netherlands Tax Treaty”**); and (iii) we\nshould not be regarded as a tax resident of any jurisdiction other than Italy, either for purposes of the domestic tax laws of such jurisdiction\nor for the purposes of any applicable tax treaty.\n\n \n\nHowever, the determination of our tax residency\ndepends primarily upon our place of effective management, which is largely a question of fact, based on all relevant circumstances.\n\n \n\nTherefore, no assurance can be given regarding\nthe final determination of our tax residency by tax authorities. In addition, changes to applicable laws and income tax treaties or interpretations\nthereof and changes to applicable facts and circumstances (e.g., a change of board members or the place where board meetings take place),\nmay have a bearing on the determination of our tax residency and the consequent tax treatment.\n\n \n\nIf the competent tax authorities of a jurisdiction\nother than Italy, including the Netherlands, take the position that we should be treated as (exclusively) tax resident of that jurisdiction\nfor purposes of an applicable tax treaty, we would be subject to corporation tax and all distributions made by us to our shareholders\nwould be subject to any applicable dividend withholding tax in such other jurisdiction(s) as well as in Italy.\n\n \n\nTo resolve any dual tax residency issue, we may\nhave access to a mutual agreement procedure and/or dispute resolution mechanisms under an applicable tax treaty and the dispute resolution\nmechanism under the EU Arbitration Directive (if it is an EU jurisdiction), or we could submit our case for judicial review by the relevant\ncourts.\n\n \n\nThese procedures would require substantial time,\ncosts and efforts, and it is not certain that double taxation issues can be resolved in all circumstances.\n\n** **\n\n35\n\n** **\n\n**Risks Related to Ownership of Terra Shares and Terra Operating\nas a Public Company**\n\n** **\n\n**Our only significant asset is our ownership interest in Terra OpCo,\nand such ownership may not be sufficient to satisfy our financial obligations. **\n\n \n\nWe have no direct operations and no significant assets other than our\nownership of Terra OpCo. We depend on Terra OpCo for distributions, loans and other payments to generate the funds necessary to meet our\nfinancial obligations, including our expenses as a publicly traded company and to pay any dividends with respect to Terra Shares. The\nfinancial condition and operating requirements of Terra OpCo may limit our ability to obtain cash from Terra OpCo. The earnings from,\nor other available assets of, Terra OpCo may not be sufficient to pay dividends or make distributions or loans to enable us to pay any\ndividends on Terra Ordinary Shares or satisfy our other financial obligations.\n\n \n\nThis lack of diversification may subject us to\nnumerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry\nin which we may operate.\n\n** **\n\n**If a U.S. person is treated as owning at least 10% of the\nshares of Terra, such person may be subject to adverse U.S. federal income tax consequences.**\n\n \n\nIf a U.S. holder is treated as owning (directly,\nindirectly or constructively) at least 10% of the value or voting power of the stock of Terra, such holder may be treated as a “United States\nshareholder” with respect to each of Terra and its direct and indirect subsidiaries (the **“Terra Group”**) that\nis a “controlled foreign corporation,” (a **“CFC”**), for U.S. federal income tax purposes. A non-U.S. corporation\nis considered a CFC if more than 50% of (1) the total combined voting power of all classes of stock of such corporation entitled\nto vote, or (2) the total value of the stock of such corporation is owned, or is considered as owned by applying certain constructive\nownership rules, by United States shareholders on any day during the taxable year of such non-U.S. corporation. For our\ntaxable years ending on or before December 31, 2025, and any taxable years of U.S. shareholders including that year, if the Terra Group\nincludes one or more U.S. subsidiaries, certain of Terra’s non-U.S. subsidiaries could be treated as CFCs regardless of\nwhether Terra otherwise is treated as a CFC. Immediately following the consummation of the Business Combination, the Terra Group\nincluded a U.S. subsidiary, so that Terra’s non-U.S. subsidiaries likely were considered CFCs for their taxable years ending\non or before December 31, 2025.\n\n \n\nIf Terra or any of its non-U.S. subsidiaries\nis a CFC, 10% “United States shareholders” will be subject to adverse income inclusion and reporting requirements with\nrespect to such CFC. No assurance can be provided that Terra will assist holders in determining whether it or any of its non-U.S. subsidiaries\nis treated as a CFC or whether any holder is treated as a United States shareholder with respect to any of such CFCs or furnish\nto any holder information that may be necessary to comply with reporting and tax payment obligations with respect to such CFCs.\n\n** **\n\n**The PFIC status of Terra could result in adverse U.S. federal\nincome tax consequences to U.S. holders.**\n\n** **\n\nIn general, a non-U.S. corporation is a PFIC\nfor U.S. federal income tax purposes for any taxable year in which (i) 50% or more of the average value of its assets (generally determined\non the basis of a weighted quarterly average) consists of assets that produce, or are held for the production of, passive income, or\n(ii) 75% or more of its gross income consists of passive income. Passive income generally includes dividends, interest, rents and royalties\n(other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of passive assets.\nCash and cash equivalents generally are passive assets. For purposes of the PFIC rules, a non-U.S. corporation that owns, directly or\nindirectly, at least 25% by value of the stock of another corporation is treated as if it held its proportionate share of the assets\nof the other corporation and received directly its proportionate share of the income of the other corporation.\n\n \n\nPrior to the Business Combination, GSR III believed that it was likely\na PFIC due to GSR III being a blank check company with no active business (as determined for purposes of the PFIC rules). Following the\nBusiness Combination our annual PFIC income and asset tests applied based on the assets and activities of the combined business. Based\non the composition of our gross income for the year ending December 31, 2025, we believe that we were a PFIC for the year ending December\n31, 2025 and it is likely that we will be a PFIC for our 2026 taxable year. The determination of whether we are a PFIC is a fact-intensive\ndetermination made on an annual basis and the applicable law is subject to varying interpretation. In particular, the characterization\nof our assets as active or passive may depend in part on our current and intended future business plans, which are subject to change.\n\n \n\nIf we are characterized as a PFIC, our U.S. holders\nmay suffer adverse tax consequences, including having gains realized on the sale of our shares treated as ordinary income, rather than\nas capital gain and the loss of the preferential rate applicable to dividends received on our shares by individuals who are U.S. holders,\nand having interest charges apply to distributions by us and the proceeds of sales of the shares. A U.S. shareholder of a PFIC generally\nmay mitigate these adverse U.S. federal income tax consequences by making a “qualified electing fund,” or QEF, election,\nor, to a lesser extent, a “mark to market” election.\n\n \n\nIf we determine that we are a PFIC for any taxable\nyear, we will use commercially reasonable efforts to, and currently expect to, provide the necessary information for U.S. holders to make\na QEF election.** **\n\n \n\n36\n\n** **\n\n**If analysts do not publish research about Terra’s business\nor if they publish inaccurate or unfavorable research, our share price and trading volume could decline.**\n\n \n\nThe trading market for our ordinary shares depends\nin part on the research and reports that analysts publish about its business. We do not have any control over these analysts. If one\nor more of the analysts who cover Terra downgrade our ordinary shares or publish inaccurate or unfavorable research about our business,\nthe price of our ordinary shares would likely decline. If few analysts cover Terra, demand for our ordinary shares could decrease and\nits ordinary share price and trading volume may decline. Similar results may occur if one or more of these analysts stop covering Terra\nin the future or fail to publish reports on it regularly.\n\n** **\n\n**We may be subject to securities litigation, which is expensive\nand could divert management attention.**\n\n \n\nThe market price of our ordinary shares may be\nvolatile and, in the past, companies that have experienced volatility in the market price of their share have been subject to securities\nclass action litigation.\n\n \n\nWe may be the target of this type of litigation\nin the future. Securities litigation against us could result in substantial costs and divert management’s attention from other\nbusiness concerns, which could seriously harm its business.\n\n** **\n\n**Future resales of our Ordinary Shares may cause the market price\nof our securities to drop significantly, even if our business is doing well.**\n\n \n\nPursuant to the Registration Rights Agreement,\nsubject to certain exceptions, the Sponsor and the Management Holders are contractually restricted from selling or transferring any of\nour ordinary shares. Such restrictions began at Closing and end on the following terms: (i) for the Lock-Up Shares held by the Management\nHolders (the **“Terra Lock-Up Shares”**) and (ii) for the Sponsor Lock-Up Shares, (a) 25% of the Terra Lock-Up\nShares and Sponsor Lock-Up Shares shall be released upon the earlier of the Terra Trading Price being greater than $12.00 or Terra issuing\nits first quarterly earnings release that occurs at least 120 days after the Closing, (b) an additional 25% of the Terra Lock-Up\nShares and Sponsor Lock-Up Shares shall be released upon the earlier of the Terra Trading Price being greater than $14.00 or Terra issuing\nits second quarterly earnings release that occurs at least 120 days after the Closing, (c) a further 25% of the Terra Lock-Up\nShares and Sponsor Lock-Up Shares shall be released upon the earlier of the Terra Trading Price being greater than $16.00 or Terra issuing\nits third quarterly earnings release that occurs at least 120 days after the Closing and (d) all the remaining Terra Lock-Up\nShares and Sponsor Lock-Up Shares shall be released upon the earlier of the Terra Trading Price being greater than $18.00 or Terra issuing\nits fourth quarterly earnings release that occurs at least 120 days after the Closing. As of the date of this annual report, 50%\nof the Terra Lock-Up Shares and Sponsor Lock-Up Shares have been released from these restrictions.\n\n \n\nThe shares held by Sponsor and the Management\nHolders may be sold after the expiration of the applicable lock-up period under the Registration Rights Agreement and the Bylaws. As\nrestrictions on resale end and the registration statement becomes available for use, the sale or possibility of sale of these shares\ncould have the effect of increasing the volatility in our share price or the market price of our Ordinary Shares could decline if the\nholders of currently restricted shares sell them or are perceived by the market as intending to sell them.\n\n** **\n\n37\n\n** **\n\n**The obligations associated with being a public company involve\nsignificant expenses and require significant resources and management attention, which may divert from Terra’s business operations.**\n\n \n\nAs a public company, we are subject to the reporting\nrequirements of the Exchange Act and the Sarbanes-Oxley Act. The Exchange Act requires the filing of annual, quarterly and\ncurrent reports with respect to a public company’s business and financial condition. The Sarbanes-Oxley Act requires, among other\nthings, that a public company establish and maintain effective internal control over financial reporting. As a result, we incur significant\nlegal, accounting and other expenses that we as a private company, did not previously incur. Our entire management team and many of its\nother employees devotes substantial time to compliance and managing our transition into a public company.\n\n \n\nThese rules and regulations have resulted in us\nincurring substantial legal and financial compliance costs and make some activities more time-consuming and costly. For example, these\nrules and regulations have made it more difficult and more expensive for us to obtain director and officer liability insurance, and in\nthe future it may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar\ncoverage. As a result, it may be difficult for us to continue to attract and retain qualified people to serve on our Board of Directors,\nthe committees of our Board of Directors or as executive officers.\n\n** **\n\n**We are currently an emerging growth company and a smaller reporting\ncompany within the meaning of the Securities Act, and to the extent we have taken advantage of certain exemptions from disclosure requirements\navailable to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors and\nmay make it more difficult to compare our performance with other public companies.**\n\n \n\nWe are currently an “emerging growth company”\nwithin the meaning of the Securities Act, as modified by the JOBS Act, and we are taking advantage of certain exemptions from various\nreporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited\nto, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure\nobligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding\na non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.\nAs a result, our shareholders may not have access to certain information they may deem important. We cannot predict whether investors\nwill find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive\nas a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there\nmay be a less active trading market for our securities and the trading prices of our securities may be more volatile.\n\n \n\nFurther, Section 102(b)(1) of the JOBS\nAct exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies\n(that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered\nunder the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that\na company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies\nbut any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when\na standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company,\ncan adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our\nfinancial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has\nopted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards\nused.\n\n \n\nOnce we lose our “emerging growth company”\nstatus, we will no longer be able to take advantage of certain exemptions from reporting, and we will also be required to comply with\nthe auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. We will incur additional expenses in connection with\nsuch compliance and our management will need to devote additional time and effort to implement and comply with such requirements.\n\n** **\n\nWe are also a “smaller reporting company,”\nmeaning that the market value of our stock held by non-affiliates is less than $700.0 million and our annual revenue is less than $100.0\nmillion during the most recently completed fiscal year. We will continue to be a smaller reporting company if either (i) the market value\nof our stock held by non-affiliates is less than $250.0 million or (ii) our annual revenue is less than $100.0 million during the most\nrecently completed fiscal year and the market value of our stock held by non-affiliates is less than $700.0 million. If we are a smaller\nreporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure\nrequirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present\nonly the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth\ncompanies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.\n\n** **\n\n38"}