Company Classification and Financial Reporting - The company is classified as an "emerging growth company" under the JOBS Act, allowing it to provide only two years of audited financial statements and selected financial data [92]. - The company will maintain its status as an emerging growth company until it reaches total annual gross revenue of 1.235billionorotherspecifiedconditions[93].MarketandEconomicRisks−TheongoingmilitaryconflictinUkrainemayadverselyaffectthecompany′soperationsandexpansionplansintheEuropeanUnionduetosanctionsandmarketdisruptions[95].−TheconflictbetweenIsraelandHamashasnegativelyimpactedtheglobaleconomy,whichcouldaffectthecompany′sbusinessandfinancialcondition[96][98].−Thecompanyfacesrisksfrominflationarypressuresandmarketfluctuations,includingtariffsthatcouldincreasethecostofproductsandlabor[99][100][101].DemandandCompetition−Thedemandforelectricvehicles(EVs)iscrucialforthecompany′sgrowth,withpotentialimpactsfromregulatorychangesandcompetitionfromalternativefuelvehicles[105][107].−Thecompanyreliesonlithium−ionbatteries,whichhavefacedsafetyconcerns,potentiallyaffectingmarketconditionsandcustomerperceptions[111][112].−Changesinenergystoragestandardsorthesuccessofalternativetechnologiescouldnegativelyimpactthedemandforthecompany′sbatteryenergystorageproducts[113][114].−Thecompanymayincursignificantcostsrelatedtoenvironmentalregulationsforthestorageandshipmentoflithium−ionbatterypacks[115].−Thecompany′sfuturegrowthispartlydependentontherapidadoptionofdecentralizedrenewableenergy[117].−Themarketforindividualinstalledrenewableenergyisrapidlyevolving,influencedbychangingtechnologies,competitivepricing,andgovernmentregulations[118].−Demandforbattery−energystoragesystemshasgrown,butfuturedemandisuncertainandcouldbeaffectedbyvariousfactorsincludingcompetitionandcostvolatility[120].−TheEVandbatteryenergystoragemarketreliesongovernmentincentives,whichifreducedoreliminated,couldadverselyaffectdemandforproducts[121].InnovationandProductDevelopment−ThecompanymustcontinuetoinnovateanddevelopnewproductstokeeppacewithrapidtechnologicalchangesintheEVandbatteryenergystoragemarkets[123].−Delaysinproductdevelopmentorfailuretomeetcustomerrequirementscoulddamagecustomerrelationshipsandmarketshare[126].−ResearchanddevelopmentexpensesforADSEwerekEUR2,012,kEUR1,701,andkEUR2,832forthefiscalyearsendedDecember31,2021,2022,and2023respectively,indicatingatrendofincreasinginvestmentinproductdevelopment[145].CustomerConcentrationandRevenue−In2023,onemajorcustomeraccountedforapproximately90.01 per warrant if the Ordinary Shares have been trading at or above 18.00for20outof30tradingdays[212].−RecenttradingpricesfortheOrdinaryShareshavenotmetthe18.00 threshold for Public Warrants to become redeemable [213]. - The Company may lose its foreign private issuer status, resulting in higher regulatory and compliance costs under U.S. securities laws [206]. - Investors may face difficulties in protecting their interests due to the Company's formation under Irish law and the location of its assets outside the U.S. [215]. - The rights of shareholders and fiduciary responsibilities of directors are governed by Irish law, which may not be as clearly established as in the U.S. [216]. - The Amended and Restated Warrant Agreement provides that disputes are governed by New York law, which may limit the ability of warrant holders to pursue claims in other jurisdictions [218]. Currency and Market Risks - As of December 31, 2023, the company has a currency exposure of kEUR 9,806 in USD bank balances, down from kEUR 10,087 in 2022, with 95% of revenues generated in EUR [599]. - The company has no significant exposure to interest rate risk as shareholder loans have a remaining term of less than six months and interest rates are fixed [598]. - Equity risks related to warrant liabilities amount to EUR 21.6 million as of December 31, 2023, which could impact future share-based payments [600]. - The company does not intend to pay dividends on Ordinary Shares in the foreseeable future, and if dividends were declared, a withholding tax of 25% may apply [223]. - The company's M&A includes provisions that may delay or prevent a change of control, including a classified board of directors and restrictions on shareholder actions [228]. - The company is subject to the Irish Takeover Rules, which ensure fair treatment in takeover situations and require offers for shares if an acquirer reaches 30% voting rights [237][238]. - The company has entered into arrangements with DTC to indemnify against any Irish stamp duty assessed, allowing for efficient trading of Ordinary Shares and Warrants [221]. - The company’s M&A excludes pre-emptive rights until December 22, 2026, which may limit shareholder flexibility regarding new share issuances [236]. - The company has no significant exposure to other market risks beyond currency and equity risks [601]. - The company’s financial instruments are primarily affected by market risks related to foreign exchange rates, interest rates, and equity prices [597].
Ads-Tec Energy(ADSE)2024-04-30 20:50