What the changes say
- Net losses widened significantly to $39.1 million in 2025, triggering going concern doubts with $0.4 million in cash.
What changed since the prior 10-K
New
- NewRisks Related to Our Business
Management has concluded that there is substantial doubt about our ability to continue as a going concern
We reported $0.4 million in cash and negative working capital of $9.8 million, raising substantial doubt about our ability to continue as a going concern.
- NewRisks Related to Our Business
Our future growth is dependent upon demand for our products and services in markets that are rapidly evolving
Our growth depends on emerging markets like zero-emission trucks, heavy lift drones, and AI compute infrastructure that may not develop as expected.
- NewRisks Related to Our Business
The market for commercial zero-emission EVs is rapidly evolving and characterized by rapidly changing technologies, price competition, additional competitors, evolving government regulation and industry standards, frequent new vehicle announcements and changing consumer demands and behaviors
We face intense competition in the heavy-lift drone and UAV markets from larger, better-resourced incumbent and new competitors.
- NewRisks Related to Our Business
Demand in our industries is volatile, which may materially and adversely affect our business, prospects, operating results and financial condition
Demand volatility in our target industries can lead to lower sales, excess inventory, and severe price pressure given our small scale.
- NewRisks Related to Our Business
We may not be able to keep pace with technological advances and we depend on advances in technology by other companies
Alternative fuel technologies, internal combustion engine improvements, and rapid technological shifts in the drone industry could hurt our prospects.
- NewRisks Related to Our Business
The sizes of the markets for our current and future drone products or AI data compute infrastructure may be smaller than we estimate
Our addressable market projections for heavy lift drones and AI infrastructure rely on internal models that may overstate actual customer demand.
- NewRisks Related to Our Business
The market for heavy-lift drones is still emerging and may not scale as expected
The heavy-lift drone sector for agricultural and forestry use is emerging and may stall due to safety, reliability, cost, or regulatory hurdles.
- NewRisks Related to Our Business
Expansion of our business strategy into the AI infrastructure market could increase competitive, operational, legal and regulatory risks to our business in ways we cannot predict
Our 2026 partnership with Azio AI Corporation to pilot immersion-cooled energy infrastructure introduces unproven legal, operational, and competitive AI market risks.
- NewRisks Relating to the Design, Supply and Manufacturing of our Products
We depend on information technology, and any breakdown, interruption or breach of our information technology systems could subject us to liability or interrupt the operation of our business, which could have a material adverse effect on our business, financial condition, cash flows and results of operations
Any breakdown, cyber-attack, or interruption of our increasingly relied-upon information technology systems could disrupt operations and cause liability.
- NewRisks Relating to the Design, Supply and Manufacturing of our Products
We may not be able to identify or secure suitable business relationship opportunities in the future or to ensure that our competitors will not capitalize on such opportunities before we do
Joint ventures or co-investments could expose us to partner bankruptcy, conflicting goals, or lack of sole decision-making authority.
- NewRisks Relating to the Design, Supply and Manufacturing of our Products
Our medical supplies segment is solely dependent on a single customer
Our medical supplies segment relies entirely on a single customer, Maddox Medical, founded by our President and CFO.
- NewRisks Relating to the Legal and Regulatory Matters
Our drones business is highly regulated and our ability to generate revenues and profit may be limited by regulatory restrictions and/or changes and the speed with which such restrictions and/or changes occur
FAA and EASA regulations governing drones impose heavy compliance costs and potential restrictions that could limit our revenues.
- NewRisks Relating to the Legal and Regulatory Matters
We may be involved in leg al and administrative p roceedings that could result in su bstantia l liabilities
- NewRisks Related to our Financial Condition
We are in the process of identifying a new independent director to appoint to the Board to fill the vacancy created by this resignation, and we anticipate appointing such replacement director within the applicable cure period. However, there can be no assurance that we will do so
- NewRisks Related to our Financial Condition
Our reported financial results may be adversely affected by changes in Generally Accepted Accounting Principles ("GAAP")
- NewRisks Related to the Ownership of Our Securities
Future sales of our Common Stock could lower our stock price and dilute existing stockholders
Dropped
- DroppedRisks Related to Our Business
Our future growth is dependent upon demand for new mid-sized zero-emission trucks and cargo vans, and other fleet vehicles
- DroppedRisks Related to Our Business
We may not be able to compete successfully against current and future competitors
- DroppedRisks Related to Our Business
Demand in the zero-emission electric vehicles vehicle industry is volatile, which may materially and adversely affect our business, prospects, operating results and financial condition
- DroppedRisks Related to Our Business
Developments in alternative technologies or improvements in the internal combustion engine may materially adversely affect the demand for electric vehicles and our products
Growth dependent on mid-sized zero-emission trucks and cargo vans.
- DroppedRisks Related to Our Business
If we are unable to keep up with advances in zero-emission electric vehicles technology, we may suffer an inability to obtain a competitive position in the market or suffer a decline in our competitive position
- DroppedRisks Relating to the Design, Supply and Manufacturing of our Products
If our zero-emission electric vehicles fail to perform as expected, our ability to develop, market and sell our vehicles could be harmed
Competition in the commercial zero-emission electric vehicle market.
- DroppedRisks Relating to the Design, Supply and Manufacturing of our Products
Our business success will depend in part on the success of our strategic relationships with third parties. We may not be able to identify adequate strategic relationship opportunities, or form strategic relationships, in the future
Demand volatility as a low volume electric vehicle producer.
- DroppedRisks Relating to the Design, Supply and Manufacturing of our Products
Our service model may be costly for us to operate and may not address the service requirements of our prospective customers
- DroppedRisks Relating to the Design, Supply and Manufacturing of our Products
Our decentralized assembly, sales and service model presents numerous challenges and we may not be able to execute on our plan to establish sales, service and assembly facilities in the urban areas we have targeted and our facilities in any of those markets may underperform relative to our expectations
Alternative technologies and internal combustion engine improvements affecting EV demand.
- DroppedRisks Relating to the Legal and Regulatory Matters
dissolution of incentive structures for electric vehicle adoption resulting from the changes in federal policy with the introduction of a new presidential administration
Inability to keep up with advances in zero-emission electric vehicle technology.
- DroppedRisks Relating to the Legal and Regulatory Matters
We may be involved in legal and administrative proceedings that could result in substantial liabilities
- DroppedRisks Related to our Financial Condition
Our reported financial results may be adversely affected by changes in GAAP
Reworded
- 93% rewrittenRisks Related to our Financial Condition
We are currently out of compliance with Nasdaq ’ s corporate governance requirements and if we fail to satisfy all such requirements, our common stock may be delisted from Nasdaq, which could have an adverse impact on the liquidity and market price of our common stock
Updated from a minimum bid price Nasdaq deficiency to non-compliance with board independence and Audit Committee rules following a director resignation.
Was: We are currently out of compliance with the Nasdaq’s continuing listing requirements and if we fail to satisfy all such requirements, our common stock may be delisted from Nasdaq, which could have an adverse impact on the liquidity and market price of our common stock
- 80% rewrittenRisks Relating to the Design, Supply and Manufacturing of our Products
If our suppliers fail to use ethical business practices and comply with applicable laws and regulations, our brand image could be harmed due to negative publicity
Retained supplier ethical compliance risk while formatting references.
- 78% rewrittenRisks Relating to the Design, Supply and Manufacturing of our Products
Our growth depends in part on the availability and amounts of government subsidies and incentives and the application of regulations that encourage conversion to EVs. These subsidies and incentives are limited and unpredictable and could expire or change to benefit competing technologies
Retained government subsidy dependence risk for zero-emission systems.
Was: Our growth depends in part on the availability and amounts of government subsidies and incentives and the application of regulations that encourage conversion to electric vehicles. These subsidies and incentives are limited and unpredictable and could expire or change to benefit competing technologies
- 71% rewrittenRisks Relating to the Design, Supply and Manufacturing of our Products
The facilities or operations of our third-party providers could be damaged or adversely affected as a result of disasters or unpredictable events
Retained third-party provider disaster disruption risk.
- 70% rewrittenRisks Related to Our Business
We have a history of losses and we may not achieve and/or sustain profitability in the future
Updated 2025 net loss to $39.1 million, impairment charges to $13.4 million, negative working capital to $9.8 million, and accumulated deficit to $112.6 million.
- 59% rewrittenRisks Relating to the Legal and Regulatory Matters
We are subject to substantial regulations, which are evolving, and unfavorable changes or any failure by us to comply with these regulations could substantially harm our business and operating results
Expanded regulatory scope from electric vehicles to include heavy lift drones and lithium-ion battery disposal rules.
Was: We are subject to substantial regulation, which is evolving, and unfavorable changes or any failure by us to comply with these regulations could substantially harm our business and operating results
- 56% rewrittenRisks Related to Our Business
increase our general and administrative functions to support our growing operations
Retained operating expense growth and profitability risk.
- 51% rewrittenRisks Related to Our Business
We may also become subject to regulations that require us to alter the design of our products, which could negatively impact consumer interest in our products
Expanded product scope from electric vehicles to also cover heavy lift drones.
Was: We may also become subject to regulations that require us to alter the design of our vehicles, which could negatively impact consumer interest in our products
- 46% rewrittenRisks Related to our Financial Condition
W e may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all. If we cannot raise additional capital when needed, our operations and prospects will be negatively affected
Was: We will require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all. If we cannot raise additional capital when needed, our operations and prospects will be negatively affected
- 37% rewrittenRisks Related to Our Business
If we fail to manage our anticipated growth effectively, we may be unable to execute our business plan, maintain high levels of service or address competitive challenges adequately
- 35% rewrittenRisks Relating to the Design, Supply and Manufacturing of our Products
We may become subject to product liability claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims
- 31% rewrittenRisks Related to Our Business
We may experience quarterly fluctuations in our operating results due to a number of factors, many of which are outside our control, which make our future results difficult to predict and could cause our operating results to fall below expectations
- 26% rewrittenRisks Related to Our Business
We may not be able to reduce and adequately control the costs and expenses associated with operating our business, including our material and production costs
- 25% rewrittenRisks Related to Our Business
Public health crises and other global health pandemics, epidemics or disease outbreaks could adversely impact our business, results of operation and financial condition
- 25% rewrittenRisks Relating to the Design, Supply and Manufacturing of our Products
If we are unable to design, develop, market and sell other product offerings that address additional market opportunities, our business, prospects and operating results will suffer
Was: If we are unable to design, develop, market and sell zero-emission electric vehicles and other product offerings that address additional market opportunities, our business, prospects and operating results will suffer
- 22% rewrittenRisks Related to Our Business
Unfavorable conditions in the global economy, rising interest rates and capital market liquidity issues could limit our ability to grow our business and negatively affect our operating results
All 57 risk factors
Headings as the filing states them, in filing order.
Risks Related to Our Business
- 01We have a history of losses and we may not achieve and/or sustain profitability in the future70% rewritten
- 02increase our general and administrative functions to support our growing operations56% rewritten
- 03Management has concluded that there is substantial doubt about our ability to continue as a going concernNew
- 04We may experience quarterly fluctuations in our operating results due to a number of factors, many of which are outside our control, which make our future results difficult to predict and could cause our operating results to fall below expectations31% rewritten
- 05Our future growth is dependent upon demand for our products and services in markets that are rapidly evolvingNew
- 06We may also become subject to regulations that require us to alter the design of our products, which could negatively impact consumer interest in our products51% rewritten
- 07The market for commercial zero-emission EVs is rapidly evolving and characterized by rapidly changing technologies, price competition, additional competitors, evolving government regulation and industry standards, frequent new vehicle announcements and changing consumer demands and behaviorsNew
- 08Demand in our industries is volatile, which may materially and adversely affect our business, prospects, operating results and financial conditionNew
- 09Our sales cycle can be long and unpredictable and require considerable time and expense before executing a customer agreement, which may make it difficult to project when, if at all, we will obtain new customers and generate revenue from those customers
- 10We may not be able to keep pace with technological advances and we depend on advances in technology by other companiesNew
- 11The sizes of the markets for our current and future drone products or AI data compute infrastructure may be smaller than we estimate New
- 12The market for heavy-lift drones is still emerging and may not scale as expected New
- 13We may not be able to reduce and adequately control the costs and expenses associated with operating our business, including our material and production costs26% rewritten
- 14If we fail to manage our anticipated growth effectively, we may be unable to execute our business plan, maintain high levels of service or address competitive challenges adequately37% rewritten
- 15Public health crises and other global health pandemics, epidemics or disease outbreaks could adversely impact our business, results of operation and financial condition25% rewritten
- 16Unfavorable conditions in the global economy, rising interest rates and capital market liquidity issues could limit our ability to grow our business and negatively affect our operating results22% rewritten
- 17Our business depends on our Chief Executive Officer and management team, retaining and attracting qualified management, key employees and technical personnel and expanding our sales and marketing capabilities
- 18Our management has limited experience with operating a public company. If we fail to manage our growth effectively, we may not be able to develop, produce, make or sell our products or services successfully
- 19The forecasts of market growth may prove to be inaccurate, and even if the markets in which we compete achieve the forecasted growth, our business may not grow at similar rates, if at all
- 20We may selectively pursue acquisitions of complementary businesses and technologies, which could divert capital and our management ’ s attention, result in additional dilution to our stockholders and otherwise disrupt our operations and adversely affect our operating results
- 21use of substantial portions of our available cash to consummate the acquisition
- 22Expansion of our business strategy into the AI infrastructure market could increase competitive, operational, legal and regulatory risks to our business in ways we cannot predictNew
Risks Relating to the Design, Supply and Manufacturing of our Products
- 23If we encounter unexpected difficulties with our current suppliers, and if we are unable to fill these needs from other suppliers, we could experience production delays, which could have a material adverse effect on our financial condition and operating results
- 24The facilities or operations of our third-party providers could be damaged or adversely affected as a result of disasters or unpredictable events71% rewritten
- 25We depend on information technology, and any breakdown, interruption or breach of our information technology systems could subject us to liability or interrupt the operation of our business, which could have a material adverse effect on our business, financial condition, cash flows and results of operationsNew
- 26If our suppliers fail to use ethical business practices and comply with applicable laws and regulations, our brand image could be harmed due to negative publicity80% rewritten
- 27We may not be able to identify or secure suitable business relationship opportunities in the future or to ensure that our competitors will not capitalize on such opportunities before we doNew
- 28Our suppliers must scale their zero-emission vehicle manufacturing and assembling processes effectively and quickly from low volume production to high volume production
- 29We may become subject to product liability claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims35% rewritten
- 30We may be compelled to undertake product recalls
- 31Our warranty reserves may be insufficient to cover future warranty claims, which could adversely affect our financial performance
- 32Our insurance strategy may not be adequate to protect us from all business risks
- 33If we are unable to design, develop, market and sell other product offerings that address additional market opportunities, our business, prospects and operating results will suffer25% rewritten
- 34Our growth depends in part on the availability and amounts of government subsidies and incentives and the application of regulations that encourage conversion to EVs. These subsidies and incentives are limited and unpredictable and could expire or change to benefit competing technologies78% rewritten
- 35Our medical supplies segment is solely dependent on a single customer New
Risks Relating to the Legal and Regulatory Matters
- 36We are subject to substantial regulations, which are evolving, and unfavorable changes or any failure by us to comply with these regulations could substantially harm our business and operating results59% rewritten
- 37Our drones business is highly regulated and our ability to generate revenues and profit may be limited by regulatory restrictions and/or changes and the speed with which such restrictions and/or changes occurNew
- 38Vehicle dealer and distribution laws could adversely affect our ability to sell our commercial zero-emission EVs
- 39We are subject to various environmental laws and regulations that could impose substantial costs upon us and cause delays in opening our sales, service and assembly facilities
- 40We may be involved in leg al and administrative p roceedings that could result in su bstantia l liabilitiesNew
Risks Related to Intellectual Property
- 41Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology
- 42We could incur substantial costs as a result of any claim of infringement of another party ’ s intellectual property rights
- 43redesign technology or vehicles that utilize our technology to avoid infringement
Risks Related to our Financial Condition
- 44W e may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all. If we cannot raise additional capital when needed, our operations and prospects will be negatively affected46% rewritten
- 45We are currently out of compliance with Nasdaq ’ s corporate governance requirements and if we fail to satisfy all such requirements, our common stock may be delisted from Nasdaq, which could have an adverse impact on the liquidity and market price of our common stock93% rewritten
- 46We are in the process of identifying a new independent director to appoint to the Board to fill the vacancy created by this resignation, and we anticipate appointing such replacement director within the applicable cure period. However, there can be no assurance that we will do soNew
- 47We may not be able to utilize a significant portion of o ur net o perating loss or research and development tax credit carryforwards, which could adversely affect our profitability
- 48Federal NOLs generated for tax years beginning with 2018 will carryforward indefinitely due to changes in the Coronavirus Aid, Relief and Economic Security ("CARES") Act of 2020. California tax law has not changed to conform to the new federal law on carryforward of NOLs generated in tax years beginning with 2018
- 49Our reported financial results may be adversely affected by changes in Generally Accepted Accounting Principles ("GAAP")New
Risks Related to the Ownership of Our Securities
- 50The price of our common stock is and is likely to continue to be volatile and fluctuate substantially, which could result in substantial losses for our stockholders and may prevent you from reselling your shares at or above the price you paid for your shares
- 51any other factors discussed in this report
- 52Future sales of our Common Stock could lower our stock price and dilute existing stockholdersNew
- 53If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline
- 54We may fail to meet our publicly announced guidance or other expectations about our business, which would cause our stock price to decline
- 55We do not intend to pay dividends for the foreseeable future
- 56Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable
- 57prohibit stockholder action by written consent, requiring all actions to be taken at a meeting of the stockholders
Other AZIO AI Holdings 10-Ks
- FY2024 10-K risk factors53 risks
Azio AI Holdings faces heavy net losses and high capital requirements as a low-volume commercial EV producer. The company depends heavily on market demand for mid-sized zero-emission trucks, government subsidies, and third-party suppliers. Growth strategy relies on a decentralized assembly and service network alongside potential acquisitions like Maddox.
Filed Apr 15, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.