Aebi Schmidt Holding (AEBI) risk factors, FY2025 10-K

Risks Relating to Our Company and Business

1. 01Changes in U.S. trade policy, including the imposition of tariffs and the resulting consequences, may have a material adverse impact on our business and results of operations
2. 02A disruption, termination or alteration of the supply of critical components from third-party suppliers could materially adversely affect the sales of our products
3. 03Increases in the price of commodities would impact the cost or price of our products, which may impact our ability to sustain and grow earnings
4. 04Any negative change in our relationship with major customers could have significant adverse effects on revenues and profits
5. 05The unavailability, reduction, elimination or adverse application of government funding could have an adverse effect on our business, prospects, financial condition and operating results
6. 06We may not be able to remain competitive in the rapidly changing markets in which we compete
7. 07Amounts included in order backlog may not result in actual revenue and are an uncertain indicator of our future revenue
8. 08result, the actual profitability of those sales in the future may differ materially from the initial estimates when we recorded the firm purchase orders in backlog
9. 09The integration of businesses or assets we have acquired or may acquire in the future involves challenges that could disrupt our business and harm our financial condition
10. 10Reconfiguration or relocation of our production operations could negatively impact our earnings
11. 11Unforeseen or recurring operational problems at any of our facilities, or a catastrophic loss of one of our key manufacturing facilities, may cause significant lost production and adversely affect our results of operations
12. 12We rely, for certain of our products, on a network of independent dealers to market, stock, deliver, provide training for, and service our products to and for customers. Our business is influenced by our ability to initiate and manage new and existing relationships with dealers
13. 13We may be unsuccessful in implementing our growth strategy
14. 14The potential inability to successfully implement and manage our growth strategy could adversely affect our business and our results of operations. The successful implementation of our growth strategy will depend, in part, on our ability to integrate operations with acquired companies
15. 15When we introduce new products, we may incur expenses that we did not anticipate, such as recall expenses, resulting in reduced earnings
16. 16We may discover defects in our vehicles, potentially resulting in delaying new model launches, recall campaigns, increased warranty costs, liability or other costs
17. 17Increases in the cost of labor, deterioration in employee relations, union organizing activity and work stoppages at our facilities could have a negative effect on our business
18. 18Our ability to execute our strategy is dependent upon our ability to attract, retain, and develop qualified personnel, including our ability to execute proper succession plans for senior management and key employees
19. 19Risks associated with international sales and contracts could have a negative effect on our business
20. 20Our EVs rely on software and hardware that is highly technical, and if these systems contain errors, bugs, vulnerabilities, or design defects, or if we are unsuccessful in addressing or mitigating technical limitations in our systems, our EV business could be adversely affected
21. 21There are complex software and technology systems that we must develop in coordination with vendors and suppliers to reach mass production for our EVs, and there can be no assurance that we will successfully develop or integrate them
22. 22General economic, market, and/or political conditions, whether on a global, national, or more regional scale, could have a negative effect on our business
23. 23If there is a rise in the frequency and size of product liability, warranty and other claims against us, including wrongful death claims, our business, results of operations and financial condition may be harmed
24. 24Changes to laws and regulations governing our business could have a material impact on our operations
25. 25Failure to comply with, and liabilities arising under, environmental and motor vehicle laws and regulations could have a material impact on our operations
26. 26Our vehicles are subject to motor vehicle safety standards, and the failure to satisfy such mandated safety standards could have a material adverse effect on our business, financial condition, results of operations, and cash flows
27. 27Our operating results may fluctuate significantly on a quarter-to-quarter basis
28. 28Our businesses are cyclical, and this can lead to fluctuations in our operating results
29. 29Economic, legal and other factors could impact our customers’ ability to pay accounts receivable balances due from them
30. 30Our business operations could be disrupted if our information technology systems fail to perform adequately or experience a cybersecurity incident
31. 31Fuel shortages, or higher prices for fuel, could have a negative effect on sales
32. 32We could incur asset impairment charges for goodwill, intangible assets or other long-lived assets
33. 33We may be unable to adequately protect our intellectual property
34. 34The unavailability, reduction, elimination or adverse application of government incentives could have an adverse effect on our business, prospects, financial condition and operating results
35. 35Emerging issues related to the development and use of artificial intelligence (“AI”) could give rise to legal or regulatory action, damage our reputation or otherwise materially harm our business
36. 36We are subject to litigation in the ordinary course of business, and uninsured judgments, settlements or other costs, or a rise in insurance premiums may adversely impact our results of operations
37. 37Fluctuations in foreign currency exchange rates have adversely affected and could continue to adversely affect our operating results
38. 38Weather conditions, including conditions exacerbated by global climate change, present chronic and acute physical risks, have previously impacted, and may continue to impact, demand for some of our products and/or cause disruptions in our operations
39. 39Our business is subject to risks arising from our indebtedness, contingent obligations, liquidity and financial position
40. 40The New Credit Facilities Agreement contains, and agreements governing future indebtedness may contain, restrictive covenants that may impair our ability to access sufficient capital and operate our business
41. 41We have meaningful contingent obligations, which could negatively impact our results of operations
42. 42Expectations relating to environmental, social and governance (“ESG”) considerations expose us to potential liabilities, increased costs, reputational harm and other adverse effects on our business

Risks Relating to Tax Matters

1. 43Future changes to tax laws could adversely affect our effective tax rate, potential tax liability, operations or financial performance
2. 44Any change in tax law, interpretation or practice, or in the terms of tax treaties, in a jurisdiction where we are subject to tax could increase the amount of tax payable by us. These changes could negatively affect our operations or financial performance
3. 45Repurchases of shares of our capital stock could be subject to Swiss tax, and it may not be possible to manage such share repurchases efficiently at a sufficiently large scale
4. 46stock, in case of the repurchase of the shares of our capital stock in excess of certain thresholds or failure to sell or reissue such shares of our capital stock within the applicable time period after the repurchase

Risks Relating to the recent acquisition of Shyft

1. 47Our future results may be adversely impacted if we do not effectively manage our expanded operations
2. 48We incurred substantial expenses related to the completion of the Merger, and we expect to incur substantial expenses related to the integration of the Shyft into our businesses
3. 49We will incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to compliance with our public company responsibilities and corporate governance practices
4. 50We may fail to realize the anticipated benefits and cost savings of the Merger, which could adversely affect the value of our Common Stock

Risks Relating to our Common Stock

1. 51Our limited operating history as a publicly-traded company, and our inexperience could materially and adversely affect us and our stockholders
2. 52We are parties to certain Relationship Agreements, which provide certain Stockholders with certain rights over company matters
3. 53We are a Swiss corporation, and our shareholders may not have the same rights and protections generally afforded to shareholders of U.S. corporations
4. 54The PCS Parties control a significant number of shares of our Common Stock, providing them with substantial influence over our business
5. 55Our shares are not listed in Switzerland, our home jurisdiction. As a result, shareholders may not benefit from certain provisions of Swiss law that are designed to protect shareholders in a public takeover offer or a change-of-control transaction
6. 56The Amended Articles designate the courts at the location of our registered seat as the exclusive forum for certain types of actions and proceedings that may be initiated by the our shareholders
7. 57We cannot guarantee the timing, amount or payment of dividends on shares of our capital stock
8. 58Dividends on shares of our capital stock may subject U.S. shareholders to Swiss withholding tax
9. 59Swiss law imposes certain restrictions on our ability to repurchase our Common Stock
10. 60Certain provisions of the Amended Articles and Swiss law may limit our flexibility to raise capital, issue dividends and otherwise manage ongoing capital needs
11. 61Additionally, Swiss law grants preemptive rights to existing shareholders to subscribe for new issuances of shares and advance subscription rights for convertible bonds or similar instruments with conversion or option rights
12. 62Certain provisions in the Amended Articles may limit or preclude shareholders’ ability to exercise control over us
13. 63Shareholders may not be able to exercise preemptive rights in future issuances of equity or other securities that are convertible into equity
14. 64Holders of shares of our capital stock may not be able to exercise certain shareholder rights if they are not registered as shareholders of record on our Share Register
15. 65U.S. shareholders may not be able to obtain judgments or enforce civil liabilities against us or our executive officers or members of our Board