Fabric.AI, Inc.
For the period ended Dec 31, 2024. Filed Mar 31, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 31, 2025
Extracted filing text, with the paragraph anchors used by the comparison.
See the whole filing, with its images and exhibitsContents
Forward-Looking Statements; Risk Factor Summary
FORWARD-LOOKING STATEMENTS;
This Annual Report on Form 10-K contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of forward-looking terms such as “anticipates,” “assumes,” “believes,” “can,” “could,” “estimates,” “expects,” “forecasts,” “guides,” “intends,” “is confident that,” “may,” “plans,” “seeks,” “projects,” “targets,” “would,” and “will” or the negative of such terms or other variations on such terms or comparable terminology. Such forward-looking statements include, but are not limited to, future financial and operating results, the company’s plans, objectives, expectations and intentions, statements concerning the strategic review of our product development strategy, the development and launch of the AYRO Vanish (the “Vanish”) and other statements that are not historical facts. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. These forward-looking statements speak only as of the date of this Annual Report on Form 10-K and are subject to a number of risks, uncertainties, and assumptions that could cause actual results to differ materially from our historical experience and our present expectations, or projections described under the sections in this Annual Report on Form 10-K and our other reports filed with the SEC titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
A summary of the principal risk factors that make investing in our securities risky and might cause our actual results to differ materially from those projected in these forward-looking statements is set forth below. If any of the following risks occur, our business, financial condition, results of operations, cash flows, cash available for distribution, and ability to service our debt obligations and prospects could be materially and adversely affected:
| ● | our consolidated financial statements have been prepared on a going concern basis; we must raise additional capital to fund our operations in order to continue as a going concern; |
|---|---|
| ● | we may be acquired by a third party; |
| ● | we have a history of losses and have never been profitable, and we expect to incur additional losses in the future and may never be profitable; |
| ● | our failure to meet the continued listing requirements of the Nasdaq Capital Market (“Nasdaq”) could result in a delisting of our common stock, par value $0.0001 per share (“common stock”); |
| ● | holders of our Series H-7 Convertible Preferred Stock, with a stated value of $1,000 per share (“Series H-7 Preferred Stock”), are entitled to certain payments that may be paid in cash or in shares of common stock depending on the circumstances, if we make these payments in cash, we may be required to expend a substantial portion of our cash resources, and if we make these payments in common stock, it may result in substantial dilution to the holders of our common stock; |
| ● | the certificate of designations for the Series H-7 Preferred Stock (the “Certificate of Designations”) and the warrants issued concurrently therewith (“Series H-7 Warrants”) contain anti-dilution provisions and other adjustment provisions that have resulted in the reduction of the conversion price of the Series H-7 Preferred Stock and the exercise price of such Series H-7 Warrants and may do so again in the future. These features may increase the number of shares of common stock issuable upon conversion of the Series H-7 Preferred Stock or upon the exercise of the Series H-7 Warrants; |
| ● | under the Purchase Agreement (as defined herein) we are subject to certain restrictive covenants that may make it difficult to procure additional financing; |
| ● | a significant portion of our revenues has historically been derived from Club Car LLC (“Club Car”) pursuant to the MPA (as defined herein). Following our termination of the MPA, our sales could decrease significantly, and we will need to identify new strategic channel partners to support the sales of our vehicles; |
| ● | we may experience delays in the development and introduction of new products; |
| ● | we are currently evaluating our product development strategy, which may result in significant changes and have a material impact on our business, results of operations and financial condition; |
| ● | our business is subject to general economic and market conditions, including trade wars and tariffs; |
| ● | if disruptions in our transportation network continue to occur or our shipping costs continue to increase, we may be unable to sell or timely deliver our products, and our gross margin could decrease; |
| ● | our limited operating history makes evaluating our business and future prospects difficult and may increase the risk of any investment in our securities; |
|---|---|
| ● | if we are unable to effectively implement or manage our growth strategy, our operating results and financial condition could be materially and adversely affected; |
| ● | developments in alternative technologies or improvements in the internal combustion engine may have a materially adverse effect on the demand for our electric vehicles; |
| ● | the markets in which we operate are highly competitive, and we may not be successful in competing in these industries; |
| ● | our future growth depends on customers’ willingness to adopt electric vehicles; |
| ● | we may experience lower-than-anticipated market acceptance of our current models and the vehicles in development; |
| ● | if we are unable to manage our growth and expand our operations successfully, our business and operating results will be harmed, and our reputation may be damaged; |
| ● | if we fail to include key feature sets relative to the target markets for our electric vehicles, our business will be harmed; |
| ● | unanticipated changes in industry standards could render our vehicles incompatible with such standards and adversely affect our business; |
| ● | our future success depends on our ability to identify additional market opportunities and develop and successfully introduce new and enhanced products that address such markets and meet the needs of customers in such markets; |
| ● | unforeseen or recurring operational problems at our facilities, or a catastrophic loss of our manufacturing facilities, may cause significant lost or delayed production and adversely affect our results of operations; |
| ● | 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; |
| ● | if our vehicles fail to perform as expected due to defects, our ability to develop, market and sell our electric vehicles could be seriously harmed; |
| ● | we depend on key personnel to operate our business, and the loss of one or more members of our management team, or our failure to attract, integrate and retain other highly qualified personnel in the future, could harm our business; |
| ● | transitioning from an offshoring to an onshoring business model carries risks; |
| ● | we currently have limited electric vehicles marketing and sales experience, and if we are unable to establish sales and marketing capabilities or enter into dealer agreements to market and sell our vehicles, we may be unable to generate any revenue; |
| ● | failure to maintain the strength and value of our brand could have a material adverse effect on our business, financial condition and results of operations; |
| ● | the range of our electric vehicles on a single charge declines over time, which may negatively influence potential customers’ decisions whether to purchase our vehicles; |
| ● | an unexpected change in failure rates of our products could have a material adverse impact on our business, financial condition and operating results; |
| ● | increases in costs, disruption of supply or shortage of raw materials, in particular lithium-ion battery cells, chipsets and displays, could harm our business; |
| ● | customer financing and insuring our vehicles may prove difficult because retail lenders are unfamiliar with our vehicles and our vehicles have a limited loss history determining residual values within the insurance industry; |
| ● | our electric vehicles 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; |
| ● | our business may be adversely affected by labor and union activities; |
|---|---|
| ● | we rely on our dealers for the service of our vehicles and have limited experience servicing our vehicles, and if we are unable to address the service requirements of our future customers, our business will be materially and adversely affected; |
| ● | if we fail to deliver vehicles and accessories to market as scheduled, our business will be harmed; |
| ● | failure in our information technology and storage systems could significantly disrupt the operation of our business; |
| ● | we may be required to raise additional capital to fund our operations, and such capital raising may be costly or difficult to obtain, and could dilute our stockholders’ ownership interests; |
| ● | our long-term capital requirements are subject to numerous risks; |
| ● | we may invest in or acquire other businesses, and our business may suffer if we are unable to successfully integrate acquired businesses into our company or otherwise manage the growth associated with multiple acquisitions; |
| ● | increased safety, emissions, fuel economy or other regulations may result in higher costs, cash expenditures, and/or sales restrictions; |
| ● | our vehicles are subject to multi-jurisdictional motor vehicle standards; |
| ● | we may fail to comply with evolving environmental and safety laws and regulations; |
| ● | changes in regulations could render our vehicles incompatible with federal, state or local regulations, or use cases; |
| ● | unusual or significant litigation, governmental investigations or adverse publicity arising out of alleged defects in our vehicles, or otherwise, may derail our business; |
| ● | we are required to comply with state-specific regulations regarding the sale of vehicles by a manufacturer; |
| ● | we have identified a material weakness in our internal control over financial reporting, and if we are unable to remediate the material weakness, or if we experience additional material weaknesses in the future, our business may be harmed; |
| ● | if we are unable to adequately protect our proprietary designs and intellectual property rights, our competitive position could be harmed; |
| ● | we may need to obtain rights to intellectual property from third parties in the future, and if we fail to obtain licenses or fail to comply with our obligations in existing agreements under which we have licensed intellectual property and other rights from third parties, we could lose our ability to manufacture our vehicles; |
| ● | many of our proprietary designs are in digital form, and a breach of our computer systems could result in these designs being stolen; |
| ● | our proprietary designs are susceptible to reverse engineering by our competitors; |
| ● | if we are unable to protect the confidentiality of our trade secrets or know-how, such proprietary information may be used by others to compete against us; |
| ● | legal proceedings or third-party claims of intellectual property infringement and other challenges may require us to spend substantial time and money and could harm our business; |
| ● | we are generally obligated to indemnify our sales channel partners, customers, suppliers and contractors for certain expenses and liabilities resulting from intellectual property infringement claims regarding our products, which could force us to incur substantial costs; |
| ● | we are subject to exposure from changes in the exchange rates of local currencies; and |
| ● | we are subject to governmental export and import controls that could impair our ability to compete in international markets due to licensing requirements and subject us to liability if we are not in compliance with applicable laws. |
For a more detailed discussion of these and other factors that may affect our business and that could cause our actual results to differ materially from those projected in these forward-looking statements, see the risk factors and uncertainties set forth in Part I, Item 1A of this Annual Report on Form 10-K. Any one or more of these uncertainties, risks and other influences could materially affect our results of operations and whether forward-looking statements made by us ultimately prove to be accurate. We undertake no obligation to publicly update or revise any forward-looking statements, whether from new information, future events or otherwise, except as required by law.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.