VenHub Global (VHUB) risk factors, FY2025 10-K

RISKS RELATED TO VENHUB’S BUSINESS AND INDUSTRY

1. 01Because we are an early-stage company with minimal revenue and a history of losses and we expect to continue to incur substantial losses for the foreseeable future, we cannot assure you that we can or will be able to operate profitably
2. 02We have a limited operating history, which may make it difficult to evaluate our business and prospects
3. 03If we fail to effectively manage our growth, we may not be able to design, develop, manufacture, market and launch new generations of our robotic systems, firmware, and software products successfully
4. 04Our revenues and profits are subject to fluctuations
5. 05We are dependent on general economic conditions
6. 06Many of our planned features are still in development or conceptual and may not be commercialized on our anticipated timeline, if at all
7. 07We rely on the availability of certain raw materials and a limited number of suppliers for key components, and any disruption in our supply chain could adversely affect our operations
8. 08The inability of our supply chain to deliver certain key electrical components, such as computer components and accessories, could materially adversely affect our business, financial condition and results of operations
9. 09Our failure to attract and retain highly qualified personnel in the future could harm our business
10. 10The benefits to customers of our products could be supplanted by other technologies or solutions or competitors’ products that utilize similar technology to ours in a more effective way
11. 11Our VenHub Smart Stores rely heavily on artificial intelligence for operations of the units. Interruptions, hallucinations, errors, and malfunctions created from our artificial intelligence could limit the functionality of our VenHub Smart stores and cause damage to our reputation in the market
12. 12The deployment of artificial intelligence and robotics as a replacement to conventional brick and mortar stores may create social and ethical concerns that could indirectly affect use of our VenHub Smart Stores
13. 13Failure to ultimately engage end users could affect our potential to continue to grow the business
14. 14Even if our products perform properly and are used as intended, if operators sustain any injuries while using our products, we could be exposed to liability and our results of operations, financial condition and our reputation may be adversely affected
15. 15If we cannot protect, maintain and, if necessary, enforce our intellectual property rights, our ability to develop and commercialize products may be adversely impacted
16. 16We may be subject to claims of infringement of third-party intellectual property rights
17. 17Security breaches and other disruptions could compromise our proprietary information and expose us to liability, which would cause our business and reputation to suffer
18. 18We may be subject to theft, loss, or misuse of personal data by or about our employees, customers or other third parties, which could increase our expenses, damage our reputation or result in legal or regulatory proceedings
19. 19Our business plans require a significant amount of capital. Our future capital needs may require us to sell additional equity or debt securities that may dilute our stockholders or contain terms unfavorable to us or our investors
20. 20We will need additional capital to develop our next generation of autonomous smart stores and scale our operations. We will not be able to continue product development and our autonomous smart store operations if we cannot raise additional debt and/or equity financing
21. 21Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance by domestic and international financial institutions or transactional counterparties, could adversely affect our business, financial condition and results of operations
22. 22Variations in local permitting and zoning rules may delay or even prevent roll out of VenHub Smart Stores in certain locales that could affect our overall footprint
23. 23Our systems, products, technologies and services and related equipment may have shorter useful lives than we anticipate
24. 24Any acquisitions, partnerships or joint ventures that we enter into could disrupt our operations and have a material adverse effect on our business, financial condition and results of operations
25. 25Changes to the Company’s business segments and operations could create additional costs and complications that could burden the growth of the Company
26. 26Failure to successfully identify, complete, manage and integrate acquisitions could materially and adversely affect our business, financial condition and results of operations and could cause our stock price to decline
27. 27Our management team will have broad discretion in making strategic decisions to execute their growth plans, and there can be no assurance that our management’s decisions will result in successful achievement of our business objectives or will not have unintended consequences that negatively impact our growth prospects
28. 28Our controlling stockholders have significant influence over the Company
29. 29Our executive employment agreements include significant cash bonus and equity award provisions, which could increase our expenses or result in substantial dilution to our stockholders
30. 30Our incorporation in Nevada may have adverse effects on stockholder rights
31. 31We and any manufacturing partners and suppliers may rely on complex machinery for production, which involves a significant degree of risk and uncertainty in terms of operational performance and costs
32. 32We may be unable to adequately control the costs associated with our operations
33. 33Our ability to manufacture products of sufficient quality on schedule in the future is uncertain, and delays in the design, production and launch of our products could harm our business, prospects, financial condition and operating results
34. 34Laws, regulations and other legislative efforts related to climate change, environmental concerns and health and safety could result in increased operating costs, reduced demand for our products and services or the loss of future business
35. 35Climate change laws and environmental regulations could result in increased operating costs and reduced demand for our services
36. 36We are subject to cybersecurity risks to our operational systems, security systems, infrastructure, integrated software in our products and data processed by us or third-party vendors
37. 37Being a public company can be administratively burdensome and will significantly increase our legal and financial compliance costs
38. 38Material weaknesses in our internal control over financial reporting could result in material misstatements of our financial statements and impair our ability to produce timely and accurate financial information
39. 39Our management as a group has limited experience in operating a publicly traded company
40. 40Our Significant Executive Cash Compensation Obligations May Adversely Affect Our Liquidity and Operational Flexibility
41. 41We may face risks related to securities litigation that could result in significant legal expenses and settlement or damage awards
42. 42We may be significantly impacted by pandemics, outbreaks of other contagious diseases and other catastrophic events
43. 43Our status as an “emerging growth company” under the JOBS Act Of 2012 may make it more difficult to raise capital when we need to do it
44. 44We will not be required to comply with certain provisions of the Sarbanes-Oxley Act for as long as we remain an “emerging growth company.”
45. 45Reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors
46. 46We will incur ongoing costs and expenses for SEC reporting and compliance, with minimal revenues and operations at a net loss we may not be able to remain in compliance, making it difficult for investors to sell their shares, if at all
47. 47Our Chief Executive Officer will control and make corporate decisions that may differ from those that might be made by the other shareholders
48. 48Our future results may vary significantly in the future which may adversely affect the price of our common stock
49. 49We Are Unlikely To Pay Dividends

RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK

1. 50Any future market price for the shares may be volatile
2. 519. Sales or perceived potential sales of the shares
3. 52If securities or industry analysts do not publish research or publish unfavorable or inaccurate research about our business, our stock price and trading volume could decline
4. 53FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our common stock
5. 54Issuances of Equity-Based Compensation to Executives Will Result in Substantial Dilution to Existing Stockholders