Lightning eMotors (ZEVY) Financial Report Summaries

Risks

• Risks Related to Our Business and Industry
• Risks Related to Manufacturing and Supply Chain
• Risks Related to Intellectual Property, Cybersecurity and Data Privacy
• Risks Related to Litigation and Regulation
• Risks Related to Ownership of Our Common Stock
• We have a history of losses, and we expect to incur significant expenses and continuing losses for the foreseeable future, and our December 31, 2022 audited financial statements included disclosure that casts substantial doubt regarding our ability to continue as a going concern.
• Our business requires a significant amount of capital. We expect to need to raise additional funds and these funds may not be available to us when we need them. If we cannot raise additional funds as needed, our business could be negatively affected.
• Our debt could adversely affect our financial condition.
• We will need to raise additional cash to service our debt and sustain our operations. Our ability to generate cash and raise funds depends on many factors beyond our control, and we may not be able to generate the cash required to service our debt.
• If we are unable to maintain compliance with the continued listing requirements as set forth in the NYSE listing rules, our common stock could be delisted from the NYSE, and if this were to occur, then the price and liquidity of our common stock, and our ability to raise additional capital, may be adversely affected.
• Our financial results may vary significantly from period to period due to fluctuations in our operating costs and other factors.
• We may fail to meet our publicly announced guidance or other expectations about our business and future operating results, which may cause our stock price to decline.
• The specialty commercial vehicle market is highly competitive, and we may not be successful in competing in this industry.
• We may fail to qualify or continue to qualify to sell our ZEVs in one or more states.
• Our growth and success is dependent upon the willingness of commercial fleet operators to adopt electric vehicles and specifically our ZEVs. We operate in the automotive industry, which is generally susceptible to cyclicality and volatility.
• We may fail to attract new customers or to retain existing customers, and we are subject to substantial customer concentration.
• Cancellations, reductions or delays in customer orders or customer breaches of purchase agreements may adversely affect our results of operations.
• We have been, and may in the future be, adversely affected by the global COVID-19 pandemic, the duration and economic, governmental and social impact of which is difficult to predict, which may significantly harm our business, prospects, financial condition and operating results.
• Our ZEVs make use of lithium-ion battery cells, which, if not appropriately managed and controlled, have occasionally been observed to catch fire or vent smoke and flames. Such instances in our ZEVs could expose us to liability associated with our warranty, for damage or injury, adverse publicity and a potential safety recall, any of which would adversely affect our business, prospects, financial condition and operating results.
• Our Lightning chargers, which, if not appropriately managed and controlled, can cause damage or injury, adverse publicity and a potential safety recall, any of which would adversely affect our business, prospects, financial condition and operating results.
• Any failure to maintain effective internal control over financial reporting could harm us.
• If we are unable to establish and maintain confidence in our long-term business prospects among customers and analysts within our industry, then our financial condition, operating results, business prospects and access to capital may suffer materially.
• Our business and prospects depend significantly on our ability to build our brand. We may not succeed in continuing to establish, maintain and strengthen our brand and reputation could be harmed by negative publicity regarding us or our ZEVs.
• Developments in alternative technology improvements in the internal combustion engine may adversely affect the demand for our ZEVs.
• We may experience challenges in servicing our ZEVs. If we are unable to address the service requirements of our customers, customer satisfaction and our business in general may be materially and adversely affected.
• We may engage in transactions, including acquisitions, that could disrupt our business, cause dilution to our stockholders, reduce our financial resources, or prove not to be successful.
• If we fail to introduce ZEVs that achieve broad market acceptance on a timely basis, or if our ZEVs are not adopted as expected, we will not be able to compete effectively.
• If we are unable to attract and retain key employees and hire qualified management, technical and engineering personnel, our ability to compete could be harmed.
• We have experienced and may in the future experience significant delays in the design, manufacture, launch and financing of our ZEVs and zero-emission powertrains, which could harm our business and prospects.
• We are dependent on our suppliers, including battery manufacturers, some of which are single or limited source suppliers, and the inability of these suppliers to deliver the necessary components of our vehicles at prices, quality, volumes, and specifications acceptable to us, could have a material adverse effect on our business, prospects, financial condition and operating results.
• We face risks associated with a high concentration of suppliers.
• Increases in costs, global and regional economic conditions, disruption of supply or shortage of raw materials could harm our business.
• If our ZEVs fail to perform as expected or contain defects, we could incur significant expenses to remediate such defects, our reputation could be damaged, and we could lose market share.
• Insufficient warranty reserves to cover warranty claims could materially adversely affect our business, prospects, financial condition and operating results.
• Our ZEVs are subject to motor vehicle standards and the failure to satisfy such mandated safety standards would have a material adverse effect on our business and operating results.
• We and our suppliers rely on production facilities with complex machinery for our production, which involves a significant degree of risk and uncertainty in terms of operational performance and costs.
• We may need to defend ourselves against patent or trademark infringement claims, which may be time-consuming and cause us to incur substantial costs.
• Our business may be adversely affected if we are unable to protect our intellectual property rights from unauthorized use by third parties.
• Our patent applications may not issue as patents, which may have a material adverse effect on our ability to prevent others from commercially exploiting products similar to ours.
• Breaches in data security, failure of information security systems and privacy concerns could adversely impact our financial condition, subject us to penalties, damage our reputation and brand, and harm our business, prospects, financial condition, results of operations, and cash flows.
• Any unauthorized control or manipulation of our zero-emission powertrains’ systems could result in loss of confidence in us, ZEVs and our powertrains and harm our business.
• We retain certain personal information about our customers, employees or others and may be subject to various privacy laws.
• We operate in a highly regulated industry, and if we fail to comply with applicable regulations we could face fines and penalties that could negatively impact our reputation and our financial results; in addition, future regulations applicable to us or our suppliers could increase costs and could substantially harm our business and operating results.
• We may not have adequate insurance coverage for possible claims, lawsuits, product recalls or other damages claims made against us.
• The unavailability, reduction or elimination of government and economic incentives could have a material adverse effect on our business, prospects, financial condition and operating results.
• We have been, and may in the future be, subject to lawsuits or indemnity claims in the ordinary course of business, including product liability claims and securities litigation resulting in possible class action and derivative lawsuits,
• which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims.
• Product recalls could materially adversely affect our business, prospects, operating results and financial condition.
• We are subject to various environmental laws and regulations that could impose substantial costs upon us and give rise to liabilities.
• Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could expose us to greater than anticipated tax liabilities.
• The market price of our securities may fluctuate and may decline.
• Sales of substantial amounts of our common stock in the public markets by our existing stockholders, or the perception that such sales might occur, could cause the market price of our common stock to decline significantly, even if our business is doing well.
• The issuance of additional shares of our common stock in connection with financings, acquisitions, investments, our share incentive plans or otherwise will dilute all other stockholders.
• We do not expect to declare any dividends in the foreseeable future.
• There is no guarantee that the warrants will ever be in the money, and they may expire worthless and the terms of warrants may be amended.
• Certain of our warrants are accounted for as a warrant liability and are recorded at fair value upon issuance with changes in fair value each period reported in earnings, which may have an adverse effect on the market price of our common stock.
• If securities or industry analysts cease publishing research or reports about us, our business, or our market, or if they change their recommendations regarding our securities adversely, the price and trading volume of our securities could decline.
• Anti-takeover provisions contained in our Second Amended and Restated Certificate of Incorporation as well as provisions of Delaware law, could impair a takeover attempt.
• Our Second Amended and Restated Certificate of Incorporation provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware and the federal district courts of the United States of America is the sole and exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with Lightning eMotors or our directors, officers, or employees.
• We have incurred and will continue to incur significant additional costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives and corporate governance practices.
• The JOBS Act permits “emerging growth companies” like us to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies.
• We are subject to U.S. and foreign anti-corruption and anti-money laundering laws and regulations. We can face criminal liability and other serious consequences for violations, which can harm our business.
• Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations.