What changed in this filing

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Item 1A. Risk Factors

2026-04-07 compared with 2025-03-31 · 807 added, 1116 removed, 949 unchanged (67% of the section changed)

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Additional risks not currently

known to us or that we currently believe are immaterial may also impair our business, financial condition, results of operations and

known to us or that we currently believe are immaterial may also impair our business, financial condition, results of operations and cash

The occurrence of any of the events or developments described below could materially and adversely affect our business, financial

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Risks Related to Thunder Power’s Business and

Our limited operating

history makes evaluating our business and future prospects difficult and may increase the risk of your investment.

Our limited operating history makes evaluating our business and

future prospects difficult and may increase the risk of your investment.

We are an early-stage company

with a limited operating history, operating in a rapidly evolving and highly regulated market.

Furthermore, we have not released any

commercially available product, and we have no experience manufacturing or selling a commercial product at scale.

Because we have not

generated revenue, and as a result of the capital-intensive nature of our business, we expect to continue to incur substantial operating

losses for the foreseeable future.

We have encountered and

expect to continue to encounter risks and uncertainties frequently experienced by early-stage companies in rapidly changing markets,

including risks relating to our ability to, among other things:

hire, integrate and retain

professional and technical talent, including key members of management;

continue to make significant

investments in research, development, manufacturing, marketing and sales;

successfully obtain, maintain,

protect and enforce our intellectual property and defend against claims of intellectual property infringement, misappropriation or

other violation;

build a well-recognized and

respected brand;

establish, refine and scale

our commercial manufacturing capabilities and distribution infrastructure;

establish and maintain

satisfactory arrangements with third-party suppliers;

establish and expand a

customer base;

navigate an evolving and

complex regulatory environment;

anticipate and adapt to

changing market conditions, including consumer demand for certain vehicle types, models or trim levels, technological developments

and changes in competitive landscape;

successfully design, build,

manufacture and market new variants and models of electric vehicles.

Furthermore, we have not released any commercially

available product, and we have no experience manufacturing or selling a commercial product on a scale.

Because we have not generated revenue,

and as a result of the capital-intensive nature of our business, we expect to continue to incur substantial operating losses for

the foreseeable future.

We have encountered and expect

to continue to encounter risks and uncertainties frequently experienced by early-stage companies in rapidly changing markets, including

risks relating to our ability to, among other things:

hire, integrate and retain professional and technical talent, including key members of management;

continue to make significant investments in research, development, manufacturing, marketing and sales;

successfully obtain, maintain, protect and enforce our intellectual property and defend against claims of intellectual property infringement, misappropriation or other violation;

build a well-recognized and respected brand;

establish, refine and scale our commercial manufacturing capabilities and distribution infrastructure;

establish and maintain satisfactory arrangements with third-party suppliers;

establish and expand a customer base;

navigate an evolving and complex regulatory environment;

anticipate and adapt to changing market conditions, including consumer demand for certain vehicle types, models or trim levels, technological developments and changes in competitive landscape;

successfully design, build, manufacture and market new variants and models of electric vehicles.

You must consider the risks

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or materials provided by the customer or a third party, equipment and materials delivery delays, schedule changes, customer scope changes,

delays related to obtaining regulatory permits and rights-of-way, inability to find adequate sources of labor in the locations where

we are building new plants, weather-related delays, delays by customers’ contractors in completing their portion of a project,

delays related to obtaining regulatory permits and rights-of-way, inability to find adequate sources of labor in the locations where we

are building new plants, weather-related delays, delays by customers’ contractors in completing their portion of a project,

technical or transportation difficulties, cost overruns, supply difficulties, geopolitical risks and other factors.

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of economic, business, competitive, regulatory, legislative, and political or other changes.

The success of our business may depend

on attracting prospective customers and retaining sufficient capital to commence mass production.

If we are unable to do so, we may not

be able to achieve profitability.

We currently do not have

any customers that our business depends upon, and our success depends, in large part, on attracting prospective customers and retaining

sufficient capital to commence mass production.

We expect to incur significant and sustained marketing expenses to attract prospective

In addition, if our prospective customers perceive our vehicles and services as lacking in quality, value, cost competitiveness

with vehicles from other manufacturers, performance or aesthetic appeal, we may not be able to attract customers.

If, for any of these

reasons, we are unable to attract, or to build and maintain a strong customer base, our business, prospects, financial condition, results

of operations, and cash flows may be materially harmed.

If we fail to implement

our business strategy, our financial condition and results of operations could be adversely affected.

Our future financial performance

and success depend in large part on our ability to successfully implement our business strategy.

We cannot assure you that we will be

able to successfully implement our business strategy or be able to improve our operating results.

In particular, we cannot assure you

that we will successfully negotiate and sign contracts with customers and suppliers nor can we assure you that we will be able to successfully

execute our contracts if signed.

Implementation of our business strategy may be impacted by factors outside of our control, including

competition, price fluctuations, industry, legal and regulatory changes or developments and general economic and political conditions.

Any failure to successfully implement our business strategy could adversely affect our financial condition and results of operations.

We may, in addition, decide to alter or discontinue certain aspects of our business strategy at any time.

We have incurred net losses each year since

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We anticipate our losses will increase substantially as we:

Continue designing and

developing our vehicles

Establish manufacturing

Build our brand and marketing

Develop our distribution

infrastructure

Invest in research and

Continue designing and developing our vehicles

Establish manufacturing capabilities

Build our brand and marketing operations

Develop our distribution infrastructure

Invest in research and development

Given the significant capital

required to bring our products to market, we expect to continue incurring substantial losses for the foreseeable future.

assurance that we will ever achieve or sustain profitability.

Our lack of operating history in a highly competitive and rapidly evolving

industry makes evaluating our business and future prospects difficult.

We face all the risks and uncertainties of an early-stage company

in a complex, capital-intensive industry.

If we fail to successfully address these risks and uncertainties, our business, financial condition,

and results of operations will be materially harmed.

There is no assurance

that we will ever achieve or sustain profitability.

Our lack of operating history in a highly competitive and rapidly evolving industry

makes evaluating our business and future prospects difficult.

We face all the risks and uncertainties of an early-stage company in a complex,

capital-intensive industry.

If we fail to successfully address these risks and uncertainties, our business, financial condition, and results

of operations will be materially harmed.

If our product development

or commercialization of vehicles is delayed, our costs and expenses may be significantly higher than we currently expect.

will incur the costs and expenses from these efforts before we receive any incremental revenues with respect thereto, we expect our losses

Because we will

incur the costs and expenses from these efforts before we receive any incremental revenues with respect thereto, we expect our losses

in future periods will be significant.

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of our business, we can be expected to continue to sustain substantial operating expenses and may not generate sufficient revenues to

cover expenditures.

Any investment in our company is therefore highly speculative and could result in the loss of your entire investment.

We may have difficulty managing growth

in our business, which could have a material adverse effect on our business, financial condition and results of operations and our ability

cover expenditure.

Any investment in our company is therefore highly speculative and could result in a loss of your entire investment.

We may have difficulty managing growth in

our business, which could have a material adverse effect on our business, financial condition and results of operations and our ability

to execute its business plan in a timely fashion.

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Because our vehicles

are based on a different technology platform than traditional internal combustion engines, individuals with sufficient training in electric

vehicles may not be available to hire, and as a result, we will need to expend significant time and expense training the personnel we

Competition for individuals with experience designing, engineering, manufacturing and servicing electric vehicles is intense,

are based on a different technological platform than traditional internal combustion engines, individuals with sufficient training in

electric vehicles may not be available to hire, and as a result, we will need to spend significant time and expense training the personnel

Competition for individuals with experience in designing, engineering, manufacturing and servicing electric vehicles is intense,

and we may not be able to identify, attract, integrate, train, motivate or retain additional highly qualified personnel in the future.

The failure to identify, attract, integrate, train, motivate and retain these additional personnel could seriously harm our business

and prospects.

The failure to identify, attract, integrate, train, motivate and retain these additional personnel could seriously harm our business and

If we are unable to grant equity awards, or if we are forced to reduce the value of equity awards we grant due to shortage

of shares available for issuance under our 2024 Omnibus Equity Inventive Plan, we may not be able to attract, hire and retain the personnel

necessary for our business, which would have a material adverse effect on our business, prospects financial condition and results of

In addition, we have no

experience in mass manufacturing our vehicles.

necessary for our business, which would have a material adverse effect on our business, prospects financial condition and results of operations.

In addition, we have no experience

in mass manufacturing our vehicles.

We cannot assure our investors that we will be able to develop efficient, automated, low-cost manufacturing

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will only fund operations for a limited time and we will need to obtain additional financing to continue operations and execute our business

If we are unable to obtain such financing, we may be unable to complete the development and commercialization of our products

and services.

If we are unable to obtain such financing, we may be unable to complete the development and commercialization of our products and

Our operations have consumed

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The net losses of Thunder Power Holdings Limited were $2.12 and $2.50 million for the years

ended December 31, 2024 and 2023, respectively.

We anticipate that our future cash requirements will continue to be significant and

we will need to obtain additional financing beyond that being provided by the Business Combination to implement our business plan as described

in this prospectus.

Specifically, we may need to raise additional funds to complete the research and development, testing, manufacturing,

marketing, and shipping of our vehicles, as well as to support the continued research and development of our vehicles and the development

of other models, and to build contingencies for unforeseen events.

Such financings could include equity financing, which may be dilutive

to stockholders, or debt financing, which would likely restrict our ability to borrow from other sources.

In addition, such securities

may contain rights, preferences or privileges senior to those of the rights of the stockholders of the Company upon the closing thereof.

ending December 31, 2025 and 2024, respectively.

We anticipate that our future cash requirements will continue to be significant

and we will need to obtain additional financing beyond that being provided by the Business Combination to implement our business plan

as described in this prospectus.

Specifically, we may need to raise additional funds to complete the research and development, testing,

manufacturing, marketing, and shipping of our vehicles, as well as to support the continued research and development of our vehicles and

the development of other models, and to build contingencies for unforeseen events.

Such financing could include equity financing, which

may be dilutive to stockholders, or debt financing, which would likely restrict our ability to borrow from other sources.

such securities may contain rights, preferences or privileges senior to those of the rights of the stockholders of the Company upon closing

Additional funds may not be available when we need them, on terms attractive to us, or at all.

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curtail, reduce or terminate our research and development and commercialization activities.

We could be forced to sell or dispose of

our rights or assets.

Any inability to raise adequate funds on commercially reasonable terms could have a material adverse effect on

our business, financial condition, results of operation and prospects, including the possibility that a lack of funds could cause our

business to fail and liquidate with little or no return to investors.

We could be forced to sell or dispose of our

rights or assets.

Any inability to raise adequate funds on commercially reasonable terms could have a material adverse effect on our business,

financial condition, results of operation and prospects, including the possibility that a lack of funds could cause our business to fail

and liquidate with little or no return to investors.

Thunder Power’s management has limited experience in operating

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has limited experience in the management of a publicly traded company.

Thunder Power’s management team may not successfully or

effectively manage its transition to a public company that will be subject to significant regulatory oversight and reporting obligations

Thunder Power’s management team may not successfully or effectively

manage its transition to a public company that will be subject to significant regulatory oversight and reporting obligations under U.S.

federal securities laws.

Their limited experience in dealing with the increasingly complex laws pertaining to public companies

could be a significant disadvantage in that it is likely that an increasing amount of their time may be devoted to these activities which

will result in less time being devoted to the management and growth of the post-combination company.

Thunder Power may not have

adequate personnel with the appropriate level of knowledge, experience and training in the accounting policies, practices or internal

control over financial reporting required of public companies in the U.S.

Any fault in Thunder Power’s finance and accounting

systems could impact its ability or prevent it from timely reporting its operating results, timely filing required reports with the SEC

and complying with Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”).

development and implementation of the standards and controls necessary for Thunder Power to achieve the level of accounting standards

required of a public company in the U.S.

Their limited experience in dealing with the increasingly complex laws pertaining to public companies could be

a significant disadvantage in that it is likely that an increasing amount of their time may be devoted to these activities which will

result in less time being devoted to the management and growth of the post-combination company.

Thunder Power may not have adequate

personnel with the appropriate level of knowledge, experience and training in the accounting policies, practices or internal control over

financial reporting required of public companies in the U.S.

Any fault in Thunder Power’s finance and accounting systems could

impact its ability or prevent it from timely reporting its operating results, timely filing required reports with the SEC and complying

with Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”).

The development and

implementation of the standards and controls necessary for Thunder Power to achieve the level of accounting standards required of a public

company in the U.S.

may require costs greater than expected.

It is possible that Thunder Power will be required

to expand its employee base and hire additional employees to support its operations as a public company which will increase its operating

costs in future periods.

It is possible that Thunder Power will be required to expand its employee

base and hire additional employees to support its operations as a public company which will increase its operating costs in future periods.

We are actively negotiating with our affiliates

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severely compromised, potentially rendering our business model unviable.

Even if we secure these licenses, we may face challenges in

maintaining them, or the licenses may be terminated, significantly impacting our operations.

Our lack of direct ownership of key patents

and technologies exposes us to substantial risk and uncertainty regarding our ability to execute our business strategy.

Even if we secure these licenses, we may face challenges in maintaining

them, or the licenses may be terminated, significantly impacting our operations.

Our lack of direct ownership of key patents and technologies

exposes us to substantial risk and uncertainty regarding our ability to execute our business strategy.

If we are unable to maintain

our planned license agreements, our ability to continue developing, designing, manufacturing, distributing, and selling our products

would be limited and may require us to stop operations entirely.

If any such future license agreement is terminated for any reason, we

may be forced to acquire or develop alternative technology, which we may be unable to do in a commercially feasible manner, if at all,

and may require us to use alternative technology of lower quality or performance standards.

This would, in turn, limit, delay or disrupt

our ability to offer new or competitive products and could also increase our costs, which would adversely affect our margins, market

share, business, financial condition, and operating results.

our planned license agreements, our ability to continue developing, designing, manufacturing, distributing, and selling our products would

be limited and may require us to stop operations entirely.

If any such future license agreement is terminated for any reason, we may be

forced to acquire or develop alternative technology, which we may be unable to do in a commercially feasible manner, if at all, and may

require us to use alternative technology of lower quality or performance standards.

This would, in turn, limit, delay or disrupt our ability

to offer new or competitive products and could also increase our costs, which would adversely affect our margins, market share, business,

financial condition, and operating results.

The obligations associated with being a

public company involve significant expenses and require significant resources and management attention, which may divert from our business

As a public company, we

are subject to the ongoing reporting requirements of the Exchange Act and Sarbanes-Oxley Act.

The Exchange Act requires the

filing of annual, quarterly, and current reports with respect to our business and financial condition.

The Sarbanes-Oxley Act requires,

among other things, that we establish and maintain effective internal controls over financial reporting.

As a result, we have and expect

to continue to incur significant legal, accounting, and other expenses that Thunder Power did not incur prior to the Business Combination.

As a public company, we are

subject to the ongoing reporting requirements of the Exchange Act and Sarbanes-Oxley Act.

The Exchange Act requires the filing

of annual, quarterly, and current reports with respect to our business and financial condition.

The Sarbanes-Oxley Act requires, among

other things, that we establish and maintain effective internal controls over financial reporting.

As a result, we have and expect to

continue to incur significant legal, accounting, and other expenses that Thunder Power did not incur prior to the Business Combination.

For example, these rules and regulations may make it more difficult or more expensive for us to obtain director and officer liability

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or similar coverage.

Additionally, our officers and many of our other employees may need to devote substantial time and attention to

regulatory compliance which may divert their time and attention from our business operations.

Additionally, our officers and many of our other employees may need to devote substantial time and attention to regulatory

compliance which may divert their time and attention from our business operations.

The inability to attract and retain qualified

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Current or future economic conditions could also impact the ability of third-party service providers to access

credit and, thus, impair their ability to provide us quality services in a timely manner, or at all.

Our business and prospects will depend

significantly on our brand.

credit and, thus, impair their ability to provide us with quality services in a timely manner, or at all.

Our business and prospects will depend significantly

on our brand.

Our business and prospects

will heavily depend on our ability to develop, maintain and strengthen the “Thunder Power” brand association with luxury

and technological excellence.

Promoting and positioning our brand will likely depend significantly on our ability to provide a consistently

will heavily depend on our ability to develop, maintain and strengthen the “Thunder Power” brand association with luxury and

technological excellence.

Promoting and positioning our brand will likely depend significantly on our ability to provide consistently

high-quality customer experience, an area in which we have limited experience.

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be evaluated and reviewed by third parties.

Perceptions of our offerings in the marketplace may be significantly influenced by these

reviews, which are disseminated via various media, including the internet.

Any negative reviews or reviews which compare us unfavorably

to competitors could adversely affect consumer perception about our vehicles and reduce demand for our vehicles, which could have a material

adverse effect on our business, results of operations, prospects and financial condition.

Perceptions of our offerings in the marketplace may be significantly influenced by these reviews,

which are disseminated via various media, including the internet.

Any negative reviews or reviews which compare us unfavorably to competitors

could adversely affect consumer perception about our vehicles and reduce demand for our vehicles, which could have a material adverse

effect on our business, results of operations, prospects and financial condition.

Risks Related to Regulation and Litigation

The SEC and other parties may find that

Thunder Power’s public-relations information before the production on any of our EVs may have misled investors or conditioned

the market for investors or that we may have omitted to provide information that investors may reasonably find important to their investment

There is always a risk against

The SEC and other parties may find that Thunder Power’s public-relations information

before the production on any of our EVs may have misled investors or conditioned the market for investors or that we may have omitted

to provide information that investors may reasonably find important to their investment decision.

There is always a risk of

making false claims about the prospects of an EV technology company.

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In a cease-and-desist order against Nikola and the subsequent case S.E.C.

(AKH), the SEC said that Trevor Milton (“Milton”), the founder and one-time chairperson of Nikola, lied to inflate stock

prices during the company’s public-relations campaign to investors by making forward-looking statements since the company

had not yet produced a single vehicle.

the SEC said that Trevor Milton (“Milton”), the founder and one-time chairperson of Nikola, lied to inflate stock prices

during the company’s public-relations campaign to investors by making forward-looking statements since the company had

not yet produced a single vehicle.

Other misleading and forward-looking statements included claims about Nikola’s technological

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Ltd, an affiliate of Thunder Power.

There prototypes were built for

the purpose of showcasing Thunder Power’s technology and for early fundraising purpose.

Thunder Power has not produced a single

electric vehicle and all our statements in this prospectus regarding our production capabilities, technologies, weight, charging time,

driving range and potential partnerships are forecasts or forward-looking statements based on our own beliefs, opinions, and internal

research, development and testing.

These prototypes were built for the

purpose of showcasing Thunder Power’s technology and for early fundraising purposes.

Thunder Power has not produced a single electric

vehicle and all our statements in this prospectus regarding our production capabilities, technologies, weight, charging time, driving

range and potential partnerships are forecasts or forward-looking statements based on our own beliefs, opinions, and internal research,

development and testing.

Some of our directors, officers and assets

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officers reside outside the United States and a majority of our assets are located outside the United States.

it may be difficult or impossible to effect service of process within the United States upon these directors and officers, or to

recover against those persons on judgments of United States courts, including judgments predicated upon the civil liability provisions

of the United States federal securities laws.

As a result, it

may be difficult or impossible to effect service of process within the United States upon these directors and officers, or to recover

against those persons on judgments of United States courts, including judgments predicated upon the civil liability provisions of

the United States federal securities laws.

Moreover, it is not certain that a court in the British Virgin Islands, Hong Kong,

or Taiwan would award damages on the same basis as a United States court, or that a British Virgin Islands, Hong Kong, or Taiwanese

court would enforce foreign judgments if it viewed the amount of damages as excessive or inconsistent with local practice or public policy.

court would enforce foreign judgments if it viewed the number of damages as excessive or inconsistent with local practice or public policy.

Further, the United States

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While these proceedings do not directly involve our company, they create substantial risks, including:

reputational damage affecting our ability to secure partnerships, investments, and customer

Potential reputational damage affecting our ability to secure partnerships, investments, and customer trust;

Diversion of Mr.

Sham’s attention from our business operations;

Possible loss of Mr.

Sham’s leadership or voting control if legal actions are successful;

in accessing capital markets or obtaining favorable terms from suppliers and partners.

Challenges in accessing capital markets or obtaining favorable terms from suppliers and partners.

Wellen Sham, Thunder

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for an investigation of favorable evidence, and actively exercising his right to defend himself.

The outcome of these legal

matters is uncertain and could have far-reaching consequences for our business strategy, operations, and future prospects.

We are subject to substantial laws and

regulations that could impose substantial costs, legal prohibitions or unfavorable changes upon our operations or products, and any failure

to comply with these laws and regulations, including as they evolve, could substantially harm our business and results of operations.

The outcome of these legal matters is uncertain

and could have far-reaching consequences for our business strategy, operations, and future prospects.

We are subject to substantial laws and regulations

that could impose substantial costs, legal prohibitions or unfavorable changes upon our operations or products, and any failure to comply

with these laws and regulations, including as they evolve, could substantially harm our business and results of operations.

We are or will be subject

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and maintaining our facilities.

The costs of compliance, including remediating contamination if any is found on our properties and any

changes to our operations mandated by new or amended laws, may be significant.

The costs of compliance, including remediating contamination, if any, are found on our properties and

any changes to our operations mandated by new or amended laws, may be significant.

We may also face unexpected delays in obtaining permits

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In addition, models will

be to substantial regulation under international, federal, state and local laws.

We have incurred, and expect to continue to incur, significant

costs in complying with these regulations.

be subject to substantial regulations under international, federal, state and local laws.

We have incurred and expect to continue to incur

significant costs in complying with these regulations.

Any failures to comply could result in significant expenses, delays or fines.

In the United States,

vehicles must meet or exceed all federally mandated motor vehicle safety standards to be certified under the federal regulations.

testing and the use of approved materials and equipment are among the requirements for achieving federal certification.

Any future vehicles

will be subject to substantial regulation under federal, state and local laws and standards.

These regulations include those promulgated

Environmental Protection Agency, NHTSA, other federal agencies, various state agencies and various state boards, and

compliance certification is required for each individual vehicle we manufacture for sale.

These laws and standards are subject to change

from time to time, and we could become subject to additional regulations in the future, which would increase the effort and expense of

In addition, federal, state and local laws and industrial standards for electric vehicles are still developing, and we face

risks associated with changes to these regulations, which could have an impact on the acceptance of our electric vehicles, and increased

sensitivity by regulators to the needs of established automobile manufacturers with large employment bases, high fixed costs and business

models based on the internal combustion engine, which could lead them to pass regulations that could reduce the compliance costs of such

established manufacturers or mitigate the effects of government efforts to promote electric vehicles.

Compliance with these regulations

is challenging, burdensome, time consuming and expensive.

If compliance results in delays or substantial expenses, our business could

be adversely affected.

the United States, vehicles must meet or exceed all federally mandated motor vehicle safety standards to be certified under the federal

Rigorous testing and the use of approved materials and equipment are among the requirements for achieving federal certification.

Any future vehicles will be subject to substantial regulation under federal, state and local laws and standards.

These regulations include

those promulgated by the U.S.

Environmental Protection Agency, NHTSA, other federal agencies, various state agencies and various

state boards, and compliance certification is required for each individual vehicle we manufacture for sale.

These laws and standards are

subject to change from time to time, and we could become subject to additional regulations in the future, which would increase the effort

and expense of compliance.

In addition, federal, state and local laws and industrial standards for electric vehicles are still developing,

and we face risks associated with changes to these regulations, which could have an impact on the acceptance of our electric vehicles,

and increased sensitivity by regulators to the needs of established automobile manufacturers with large employment bases, high fixed costs

and business models based on the internal combustion engine, which could lead them to pass regulations that could reduce the compliance

costs of such established manufacturers or mitigate the effects of government efforts to promote electric vehicles.

Compliance with these

regulations is challenging, burdensome, time consuming and expensive.

If compliance results in delays or substantial expenses, our business

could be adversely affected.

We also expect to become

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in Europe, the Middle East and China.

Applicable regulations in countries outside of the U.S., such as standards relating to vehicle

safety, fuel economy and emissions, among other things, are often materially different from requirements in the United States.

Applicable regulations in countries outside of the U.S., such as standards relating to vehicle safety,

fuel economy and emissions, among other things, are often materially different from requirements in the United States.

with such regulations will therefore require additional time, effort and expense to ensure regulatory compliance in those countries.

This process may include official review and certification of our vehicles by foreign regulatory agencies prior to market entry, as well

as compliance with foreign reporting and recall management systems requirements.

process may include official review and certification of our vehicles by foreign regulatory agencies prior to market entry, as well as

compliance with foreign reporting and recall management systems requirements.

There can be no assurance that we will be able to achieve

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financial condition.

We may have to choose in the future, or

we may be compelled, to undertake product recalls or take other actions, which could adversely affect our business, prospects, results

of operations, reputation and financial condition.

Product recalls may result

in adverse publicity, damage our reputation and adversely affect our business, prospects, results of operations and financial condition.

If a large number of vehicles are the subject of a recall or if needed replacement parts are not in adequate supply, we may be unable

to service and repair recalled vehicles for a significant period of time.

These types of disruptions could jeopardize our ability to

fulfill existing contractual commitments or satisfy demand for our electric vehicles and could also result in the loss of business to

our competitors.

Such recalls, whether caused by systems or components engineered or manufactured by us or our suppliers, would involve

significant expense and diversion of management’s attention and other resources, which could adversely affect our brand image in

our target market and our business, prospects, results of operations and financial condition.

In the future, if we develop or acquire

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If we develop or acquire

new technologies, it will be critical that we protect our intellectual property assets against third-party infringement.

If we develop

or acquire intellectual property, there is a risk that our patent applications may not be granted, or we may not receive sufficient protection

of our proprietary interests.

We may also expend considerable resources in defending any future patents against third-party infringement.

It may become critical that we protect our proprietary intellectual property interests to prevent competitive harm.

proprietary intellectual property in the future, protecting such intellectual property will be critical to our operations.

assurance that our patent applications will be granted or that issued patents will provide adequate protection.

We may also need to expend

significant resources to defend our intellectual property against third-party infringement, and failure to protect these rights could

result in competitive harm.

We are subject to legal proceedings, regulatory

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investigations, claims and regulatory proceedings cannot be predicted with certainty, and determining reserves for pending litigation

and other legal and regulatory matters requires significant judgment.

and other legal and regulatory matters require significant judgment.

There can be no assurance that our expectations will prove correct,

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claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims.

We may become subject to

product liability claims, which could harm our business, prospects, results of operations and financial condition.

The automotive industry

experiences significant product liability claims, and we face inherent risks of exposure to claims in the event our production vehicles

do not perform or are claimed not to perform as expected or malfunction, resulting in property damage, personal injury or death.

expect that, as is true for other automakers, our vehicles will be involved in crashes resulting in death or personal injury, and even

if not caused by the failure of our vehicles, we may face product liability claims and adverse publicity in connection with such incidents.

In addition, we may face claims arising from or related to failures, claimed failures or misuse of new technologies that we expect to

may become subject to product liability claims, which could harm our business, prospects, results of operations and financial condition.

The automotive industry experiences significant product liability claims, and we face inherent risks of exposure to claims in the event

our production vehicles do not perform or are claimed not to perform as expected or malfunction, resulting in property damage, personal

injury or death.

We also expect that, as is true for other automakers, our vehicles will be involved in crashes resulting in death or

personal injury, and even if not caused by the failure of our vehicles, we may face product liability claims and adverse publicity in

connection with such incidents.

In addition, we may face claims arising from or related to failures, claimed failures or misuse of new

technologies that we expect to offer.

In addition, the battery packs that we produce make use of lithium-ion cells.

On rare occasions, lithium-ion cells

can rapidly release the energy they contain by venting smoke and flames in a manner that can ignite nearby materials as well as other

lithium-ion cells.

While we have designed our battery packs to passively contain a single cell’s release of energy without

spreading to neighboring modules, there can be no assurance that a field or testing failure of our vehicles or other battery packs that

we produce will not occur, in particular due to a high-speed crash.

In addition, although we equip our vehicles with systems designed

to detect and warn vehicle occupants of such thermal events, there can be no assurance that such systems will function as designed or

will provide vehicle occupants with sufficient, or any, warning in all circumstances.

Any such events or failures of our vehicles, battery

packs or warning systems could subject us to lawsuits, product recalls or redesign efforts, all of which would be time consuming and

rare occasions, lithium-ion cells can rapidly release the energy they contain by venting smoke and flames in a manner that can ignite

nearby materials as well as other lithium-ion cells.

While we have designed our battery packs to passively contain a single cell’s

release of energy without spreading to neighboring modules, there can be no assurance that a field or testing failure of our vehicles

or other battery packs that we produce will not occur, in particular due to a high-speed crash.

In addition, although we equip our

vehicles with systems designed to detect and warn vehicle occupants of such thermal events, there can be no assurance that such systems

will function as designed or will provide vehicle occupants with sufficient, or any, warning in all circumstances.

Any such events or

failures of our vehicles, battery packs or warning systems could subject us to lawsuits, product recalls or redesign efforts, all of

which would be time-consuming and expensive.

A successful product liability

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Moreover, a product liability claim against us or our competitors could generate substantial

negative publicity about our vehicles and business and inhibit or prevent commercialization of our future vehicles, which would have

material adverse effect on our brand, business, prospects and results of operations.

Our insurance coverage might not be sufficient to

cover all potential product liability claims, and insurance coverage may not continue to be available to us or, if available, may be

at a significantly higher cost.

Any lawsuit seeking significant monetary damages or other product liability claims may have a material

adverse effect on our reputation, business and financial condition.

We may be exposed to delays, limitations

and risks related to the environmental permits and other operating permits required to establish or operate our manufacturing facilities.

Operation of an automobile

manufacturing facility requires land use and environmental permits and other operating permits from federal, state and local government

We believe that we will have the permits necessary to carry out and perform our current plans and operations at our future

US manufacturing facilities based on our current targeted production capacity.

We plan to build our manufacturing facilities and construct

additional manufacturing facilities over time to achieve a future target production capacity and will be required to apply for and secure

various environmental, wastewater, and land use permits and certificates of occupancy necessary for the commercial operation of such

expanded and additional facilities.

Delays, denials or restrictions on any of the applications for or assignment of the permits to operate

our manufacturing facilities could adversely affect our ability to execute on our business plans and objectives based on our current

target production capacity or our future target production capacity.

negative publicity about our vehicles and business and inhibit or prevent commercialization of our future vehicles, which would have material

adverse effect on our brand, business, prospects and results of operations.

Our insurance coverage might not be sufficient to cover all

potential product liability claims, and insurance coverage may not continue to be available to us or, if available, may be at a significantly

Any lawsuit seeking significant monetary damages or other product liability claims may have a material adverse effect on

our reputation, business and financial condition.

We are subject to various environmental,

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to federal, state and local environmental laws and regulations and will be subject to international environmental laws, including laws

relating to the use, handling, storage, disposal of and human exposure to hazardous materials.

relating to the use, handling, storage, and disposal of and human exposure to hazardous materials.

Environmental, health and safety laws

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for us under environmental laws and regulations, including, but not limited to, the Comprehensive Environmental Response, Compensation

and Liability Act, which can impose liability for the full amount of remediation-related costs without regard to fault, for the

investigation and cleanup of contaminated soil and ground water, for building contamination and impacts to human health and for damages

to natural resources.

The costs of complying with environmental laws and regulations and any claims concerning noncompliance, or liability

with respect to contamination in the future, could have a material adverse effect on our financial condition or results of operations.

Our operations are also

subject to federal, state, and local workplace safety laws and regulations, including, but not limited to, the Occupational Health and

Safety Act, which require compliance with various workplace safety requirements, including requirements related to environmental safety.

These laws and regulations can give rise to liability for oversight costs, compliance costs, bodily injury (including workers’

compensation), fines, and penalties.

and Liability Act, which can impose liability for the full amount of remediation-related costs without regard to fault, for the investigation

and cleanup of contaminated soil and ground water, for building contamination and impacts to human health and for damages to natural resources.

The costs of complying with environmental laws and regulations and any claims concerning noncompliance, or liability with respect to contamination

in the future, could have a material adverse effect on our financial condition or results of operations.

Our operations are also subject

to federal, state, and local workplace safety laws and regulations, including, but not limited to, the Occupational Health and Safety

Act, which require compliance with various workplace safety requirements, including requirements related to environmental safety.

laws and regulations can give rise to liability for oversight costs, compliance costs, bodily injury (including workers’ compensation),

fines, and penalties.

Additionally, non-compliance could

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of our first models, the Coupe and the City Car, which could have a material adverse effect on our business, prospects and results of

We are subject to risks associated with autonomous driving and

advanced driver assistance system technology, and we cannot guarantee that our vehicles will achieve our targeted assisted or autonomous

driving functionality within our projected timeframe, if ever.

Our vehicles are designed

with a modularized chassis system.

This approach contrasts with the normal industry practice for internal combustion engine manufacturers

(“ICE”), where other components, such as the engine, gearbox, and fuel tank, need to be taken into consideration before styling

can be completed.

The modular chassis allows a much simpler solution for the chassis design, thereby reducing development time and cost

with new vehicle development.

Additionally, vehicle stiffness/rigidity is enhanced, and weight is reduced in comparison to the weight

of other electric vehicles.

Advanced Driver Assistance

Systems (“ADAS”) technologies are emerging and becoming increasingly common in electric vehicles.

ADAS is subject to known

and unknown risks, and there have been accidents and fatalities associated with such technologies.

The safety of such technologies depends

in part on user interaction, and users, as well as other drivers on the roadways, may not be accustomed to using or adapting to such

technologies.

In addition, self-driving technologies are the subject of intense public scrutiny and interest, and previous accidents

involving autonomous driving features in other vehicles, including alleged failures or misuse of such features, have generated significant

negative media attention and government investigations.

We and others in our industry are subject to a Standing General Order issued

by NHTSA that requires us to report any crashes in which certain ADAS features were active, and these crash reports will become publicly

To the extent accidents associated with our ADAS technologies occur, we could be subject to significant liability, negative

publicity, government scrutiny and further regulation.

Any of the foregoing could materially and adversely affect our results of operations,

financial condition and growth prospects.

In addition, we face substantial

competition in the development and deployment of ADAS technologies.

Many of our competitors, including established automakers and technology

companies, have devoted significant time and resources to developing self-driving technologies.

If we are unable to develop competitive

Level 2 or more advanced ADAS technologies in-house or acquire access to such technologies via partnerships or investments in other

companies or assets, we may be unable to equip our vehicles with competitive ADAS features, which could damage our brand, reduce consumer

demand for our vehicles or trigger cancellations of reservations and could have a material adverse effect on our business, results of

operations, prospects and financial condition.

ADAS technology is also

subject to considerable regulatory uncertainty, which exposes us to additional risks.

We face risks associated with international

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These risks include:

our vehicles to various international regulatory requirements where our vehicles are sold, or homologation;

● establishing

localized supply chains and managing international supply chain and logistics costs;

● establishing

sufficient charging points for our customers in those jurisdictions, via partnerships or,

if necessary, via development of our own charging networks;

in staffing and managing foreign operations;

● difficulties

attracting customers in new jurisdictions;

● difficulties

establishing international manufacturing operations, including difficulties establishing

relationships with or establishing localized supplier bases and developing cost-effective and

reliable supply chains for such manufacturing operations and financing such manufacturing

government taxes, regulations and permit requirements;

as well as fluctuations in foreign currency exchange rates and interest rates, including

risks related to any forward currency contracts, interest rate swaps or other hedging activities

we undertake;

● United States

and foreign government trade restrictions, tariffs and price or exchange controls;

labor laws, regulations and restrictions;

data privacy and security laws, regulations and obligations;

in diplomatic and trade relationships, including political risk and customer perceptions

based on such changes and risks;

instability, natural disasters, pandemics, war or events of terrorism;

strength of international economies.

conforming our vehicles to various international regulatory requirements where our vehicles are sold, or homologation;

establishing localized supply chains and managing international supply chain and logistics costs;

establishing sufficient charging points for our customers in those jurisdictions, via partnerships or, if necessary, via development of our own charging networks;

difficulty in staffing and managing foreign operations;

difficulties attracting customers in new jurisdictions;

difficulties establishing international manufacturing operations, including difficulties establishing relationships with or establishing localized supplier bases and developing cost-effective and reliable supply chains for such manufacturing operations and financing such manufacturing operations;

foreign government taxes, regulations and permit requirements;

inflation as well as fluctuations in foreign currency exchange rates and interest rates, including risks related to any forward currency contracts, interest rate swaps or other hedging activities we undertake;

United States and foreign government trade restrictions, tariffs and price or exchange controls;

foreign labor laws, regulations and restrictions;

foreign data privacy and security laws, regulations and obligations;

changes in diplomatic and trade relationships, including political risk and customer perceptions based on such changes and risks;

political instability, natural disasters, pandemics, war or events of terrorism;

the strength of international economies.

If we fail to successfully

address these risks, our business, prospects, results of operations and financial condition could be materially harmed.

Increasing scrutiny and changing expectations

from global regulations, our investors, customers and personnel with respect to our ESG practices may impose additional costs on us or

expose us to new or additional risks.

There is increased focus,

including from governmental organizations and investors, customers and personnel, on ESG issues such as environmental stewardship, climate

change, diversity and inclusion, racial justice and workplace conduct.

There can be no certainty that we will manage such issues successfully,

or that we will successfully meet society’s expectations as to our proper role.

Negative public perception, adverse publicity or

negative comments in social media could damage our reputation if we do not, or are not perceived to, adequately address these issues.

Any harm to our reputation could impact our personnel’s engagement and retention and the willingness of our customers and partners

to do business with us.

It is possible that our

stakeholders may not be satisfied with our ESG practices, or the speed of their adoption and our systems may not be adequate to meet

increasing global regulations on ESG topics.

Actual or perceived shortcomings with respect to our ESG initiatives and reporting could

negatively impact our business.

We could also incur additional costs and require additional resources to monitor, report, and comply

with various ESG practices.

In addition, a variety of organizations have developed ratings to measure the performance of companies on

ESG topics, and the results of these assessments are widely publicized.

Investment in funds that specialize in companies that perform

well in such assessments are increasingly popular, and major institutional investors have publicly emphasized the importance of such

ESG measures to their investment decisions.

Unfavorable ratings of our company or our industries, as well as non-inclusion of our

stock on ESG-oriented investment funds, may lead to negative investor sentiment and the diversion of investment to other companies

or industries, which could have a negative impact on our stock price.

In addition, due to the

impacts of climate change, there are increasing risks to our business, including physical risks such as wildfires, floods, tornadoes

or other events, that could cause disruptions to our supply chain, manufacturing, and corporate functions.

We may incur additional costs

and resources preparing for and addressing such risks.

Various states’ automobile manufacturer

and dealer regulations may limit Thunder Power’s ability to implement its business model for the sale of the Coupe and for the

servicing of its entire family of EVs in the U.S.

and dealer regulations may limit Thunder Power’s ability to implement its business model for the sale of the Coupe and for the servicing

of its entire family of EVs in the U.S.

In the United States,

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and dealers to be licensed in order to sell vehicles directly to residents.

Certain states do not permit automobile manufacturers to

be licensed as dealers or to act in the capacity of a dealer, or otherwise restrict a manufacturer’s ability to deliver or service

Certain states do not permit automobile manufacturers to be

licensed as dealers or to act in the capacity of a dealer, or otherwise restrict a manufacturer’s ability to deliver or service

To sell vehicles to residents of states where Thunder Power is not licensed as a dealer, Thunder Power expects to conduct the

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ability to operate existing stores or expand to new locations.

Certain dealer associations may also actively lobbied state licensing

agencies and legislators to interpret existing laws or enact new laws in ways not favorable to Thunder Power’s planned direct sales

and service model.

Thunder Power expects dealer trade associations to continue to lobby state licensing agencies and legislators to interpret

existing laws or enact new laws in ways not favorable to its business model;

however, Thunder Power intends to oppose such efforts to

limit its ability to operate and intends to proactively support legislation that enables its business model.

Certain dealer associations may also actively lobbied state licensing agencies

and legislators to interpret existing laws or enact new laws in ways not favorable to Thunder Power’s planned direct sales and service

Thunder Power expects dealer trade associations to continue to lobby state licensing agencies and legislators to interpret existing

laws or enact new laws in ways not favorable to its business model;

however, Thunder Power intends to oppose such efforts to limit its

ability to operate and intends to proactively support legislation that enables its business model.

Should Thunder Power not

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of its family of EVs.

If Thunder Power is successful

in building out its business model without limitations from legislations, trade associations or lobbyist, it may be able to explore having

a relationship with one of the large service providers for EVs in the U.S.

This potential partner currently maintains 1,000 technicians,

750 mobile service trucks and 24/7 call centers for warranty and service processing.

This potential partner is currently servicing reputable

BYD commercial vehicles.

In addition, a sister company of this potential partner specializes in and is the leading full-service provider

of repair/remanufacture, storage, distribution and logistics, first life extension and recycling services on the entire battery life

Together these two companies are subsidiaries of a large $21 billion revenue privately held company in the U.S.

would offer great potential to Thunder Power should the service segment of Thunder Power’s business model materializes.

Power has not entered into any formal discussions or negotiations with this potential partner and there is no guarantee that Thunder

Power will ever do so.

ADAS technology is subject to uncertain

and evolving regulations.

We expect to introduce certain

ADAS technologies into our vehicles over time.

ADAS technology is subject to considerable regulatory uncertainty as the law evolves to

catch up with the rapidly evolving nature of the technology itself, all of which is beyond our control.

There is a variety of international,

federal and state regulations that may apply to self-driving and driver-assisted vehicles, which include many existing vehicle

standards that assume a human driver will be controlling the vehicle at all times.

There are currently no federal U.S.

pertaining to the safety of self-driving vehicles;

however, NHTSA has established recommended guidelines.

Certain states have legal

restrictions on self-driving vehicles, and many other states are considering them.

In Europe, certain vehicle safety regulations

apply to self-driving braking and steering systems, and certain treaties also restrict the legality of certain higher levels of

self-driving vehicles.

Self-driving laws and regulations are expected to continue to evolve in numerous jurisdictions in the

United States and foreign countries, which increases the likelihood of a patchwork of complex or conflicting regulations or may

delay products or restrict self-driving features and availability, which could adversely affect our business.

Our vehicles may not

achieve compliance with the regulatory requirements in some countries or jurisdictions for certification and rollout to consumers or

satisfy changing regulatory requirements which could require us to redesign, modify or update our ADAS hardware and related software

Any such requirements or limitations could impose significant expense or delays and could harm our competitive position, which

could adversely affect our business, prospects, results of operations and financial condition.

Our auditor, Assentsure PAC, is headquartered

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determined by the PCAOB.

Our auditor is not headquartered in the PRC and was not identified in this report as a firm subject to

the PCAOB’s determination.

Our auditor is not headquartered in the PRC and was not identified in this report as a firm subject to the

PCAOB’s determination.

Our independent registered

public accounting firm issued an audit opinion on the financial statements included in this report filed with the SEC and will issue

audit reports related to us in the future.

public accounting firm issued an audit opinion on the financial statements included in this report filed with the SEC and will issue audit

reports related to us in the future.

As auditors of companies that are traded publicly in the United States and a firm registered

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Inspections of certain other accounting firms that the PCAOB has conducted have

identified deficiencies in those firms’ audit procedures and quality control procedures, which may be addressed as part of the

inspection process to improve future audit quality.

We are required by the HFCAA to have an auditor that is subject to the inspection

by the PCAOB.

While our present auditor is located in the United States and the PCAOB is able to conduct inspections on such

auditor, to the extent this status changes in the future and our auditor’s audit documentation related to their audit reports for

our company becomes outside of the inspection by the PCAOB or if the PCAOB is unable to inspect or investigate completely our auditor

because of a position taken by an authority in a foreign jurisdiction, trading in our Ordinary shares could be prohibited under the HFCAA,

and as a result our ordinary shares could be delisted from NASDAQ.

On March 24, 2021,

the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCAA,

which became effective on May 5, 2021.

We will be required to comply with these rules if the SEC identifies our auditors as having

a “non-inspection” year under a process to be subsequently established by the SEC.

identified deficiencies in those firms’ audit procedures and quality control procedures, which may be addressed as part of the inspection

process to improve future audit quality.

We are required by the HFCAA to have an auditor that is subject to the inspection by the PCAOB.

our present auditor is located in the United States and the PCAOB is able to conduct inspections on such auditor, to the extent this

status changes in the future and our auditor’s audit documentation related to their audit reports for our company becomes outside

of the inspection by the PCAOB or if the PCAOB is unable to inspect or investigate completely our auditor because of a position taken

by an authority in a foreign jurisdiction, trading in our Common Stock on the over-the-counter market could be restricted, and our securities

could be subject to regulatory actions under the HFCAA.

On March 24, 2021, the

SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCAA, which

became effective on May 5, 2021.

We will be required to comply with these rules if the SEC identifies our auditors as having a “non-inspection” year

under a process to be subsequently established by the SEC.

On May 13, 2021, the

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House of Representatives and signed into law, would reduce the number

of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two,

under this proposal, if the auditor is not subject to PCAOB inspections for two consecutive years, it will trigger the prohibition

on trading, thus posing more risks on potential delisting as well as the price of Company’s Ordinary shares especially on foreign

of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two, under

this proposal, if the auditor is not subject to PCAOB inspections for two consecutive years, it will trigger the prohibition on trading,

thus posing more risks on potential delisting as well as the price of Company’s Ordinary shares especially on foreign companies.

The SEC is assessing how

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While the HFCAA is not currently

applicable to us because our current auditors are subject to PCAOB review, if this changes in the future for any reason, we may

be subject to the HFCAA.

The implications of this regulation as applied to us is uncertain.

applicable to us because our current auditors are subject to PCAOB review, if this changes in the future for any reason, we may be

subject to the HFCAA.

The implications of this regulation as applied to us are uncertain.

Such uncertainty could cause the market

price of our ordinary shares to be materially and adversely affected, and our securities could be delisted or prohibited from being traded on

Nasdaq earlier than would be required by the HFCAA.

If our Common Stock are unable to be listed on another securities exchange,

such a delisting may substantially impair your ability to sell or purchase our Common Stock, and the risk and uncertainty associated

with a potential delisting would have a negative impact on the price of the Common Stock.

price of our ordinary shares to be materially and adversely affected.

While our securities are no longer listed on Nasdaq, failure to

comply with the HFCAA could result in restrictions on trading our securities on the over-the-counter market, impairing your ability to

sell or purchase our Common Stock.

The risks and uncertainties associated with a potential delisting would have a negative impact on the

price of the Common Stock.

Risks Related to Thunder Power’s Products and Services

We have not yet commenced mass production,

and any significant delay in the design, manufacture, launch and financing could make it difficult for us to commence production and

harm our business and prospects.

and any significant delay in the design, manufacture, launch and financing could make it difficult for us to commence production and harm

our business and prospects.

Our plan to commercially

manufacture and sell our vehicles is dependent upon the timely availability of funds, upon our finalizing of the related design, engineering,

component procurement, testing, build-out and manufacturing plans in a timely manner and also upon our ability to execute these

plans within the planned timeline.

Automobile manufacturers often experience delays in the design, manufacture and commercial release

of new vehicle models, and if we experience significant delays in any of the foregoing processes, it would be difficult for us to commence

production, which could harm our business and prospects.

component procurement, testing, build-out and manufacturing plans in a timely manner and also upon our ability to execute these plans

within the planned timeline.

Automobile manufacturers often experience delays in the design, manufacture and commercial release of new

vehicle models, and if we experience significant delays in any of the foregoing processes, it would be difficult for us to commence production,

which could harm our business and prospects.

Many of our vehicles are

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We expect to face these and similar challenges which

may affect our ability, and the ability of our suppliers, to obtain parts, components and manufacturing equipment on a timely basis,

and in some instances have resulted in increased costs.

We expect that these industry-wide trends will continue for the foreseeable

To the extent our suppliers experience any delays in providing us with or developing necessary components, we could experience

delays in delivering on our timelines.

may affect our ability, and the ability of our suppliers, to obtain parts, components and manufacturing equipment on a timely basis, and

in some instances have resulted in increased costs.

We expect that these industry-wide trends will continue for the foreseeable future.

To the extent our suppliers experience any delays in providing us with or developing necessary components, we could experience delays

in delivering on our timelines.

Any significant delay or

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financial condition and results of operations.

The continued development

of and the ability to manufacture our vehicles, are and will be subject to risks, including with respect to:

ability to ensure readiness of firmware features and functions to be integrated into the

unified hardware network and cloud as planned and on the desired timeline;

delays by us in delivering final component designs to our suppliers;

or our suppliers’ ability to successfully tool their manufacturing facilities as planned

and on the desired timeline;

ability to ensure a working supply chain and desired supplier part quality and quantity as

planned and on the desired timeline;

ability to accurately manufacture vehicles within specified design tolerances;

ability to establish, refine and scale, as well as make significant investments in manufacturing,

supply chain management and logistics functions, including the related information technology

systems and software applications;

ability to adequately reduce and control the costs of key parts and materials;

ability to manage any transitions or changes in our production process, planned or unplanned;

occurrence of product defects that cannot be remedied without adversely affecting the production;

ability to secure necessary funding;

ability to negotiate and execute definitive agreements with various suppliers for hardware,

software, or services necessary to engineer or manufacture our vehicles;

ability to obtain required regulatory approvals and certifications;

ability to comply with environmental, safety, and similar regulations and in a timely manner;

ability to secure necessary components, services, or licenses on acceptable terms and in

a timely manner;

ability to attract, recruit, hire, retain and train skilled personnel including supply chain

management, supplier quality, manufacturing and logistics personnel;

ability to implement effective and efficient quality controls;

or disruptions in our supply chain including raw material supplies;

ability to maintain arrangements on commercially reasonable terms with our suppliers, delivery

and other partners, after sales service providers, and other operationally significant third

delays, backlog in manufacturing and research and development of new models, and cost overruns;

other risks identified herein.

We expect that we will require

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and results of operations.

Our prospect for future growth depends

upon our ability to establish and maintain relationships with our potential suppliers and source suppliers for our critical components,

and to completely build out our supply chain, while effectively managing the risks due to such relationships.

Our success will depend

on our ability to enter into supplier agreements and establish and maintain our relationships with hundreds of suppliers that are critical

Our prospect for future growth depends upon

our ability to establish and maintain relationships with our potential suppliers and source suppliers for our critical components, and

to completely build out our supply chain, while effectively managing the risks due to such relationships.

Our success will depend on

our ability to enter into supplier agreements and establish and maintain our relationships with hundreds of suppliers that are critical

to the output and production of our vehicles.

We currently have no supply or supplier agreements and the supplier agreements we have

been in discussions regarding, or may enter into with potential key suppliers in the future may have provisions where such agreements

can be terminated in various circumstances, including potentially without cause.

To the extent that we do not have long-term supply

agreements with guaranteed pricing for our parts or components, we will be exposed to fluctuations in prices of components, materials

and equipment.

In addition, our agreements for the purchase of other components may contain pricing provisions that are subject to adjustment

based on changes in market prices of key commodities.

Substantial increases in the prices for such components, materials and equipment,

whether due to supply chain or logistics issues or due to inflation, would increase our operating costs and could reduce our margins

if we cannot recoup the increased costs.

Any attempts to increase the announced or expected prices of our vehicles in response to increased

costs could be viewed negatively by our potential customers and could adversely affect our business, prospects, financial condition or

results of operations.

We currently have no supply or supplier agreements and the supplier agreements we have been

in discussions regarding or may enter into with potential key suppliers in the future may have provisions where such agreements can be

terminated in various circumstances, including potentially without cause.

To the extent that we do not have long-term supply agreements

with guaranteed pricing for our parts or components, we will be exposed to fluctuations in prices of components, materials and equipment.

In addition, our agreements for the purchase of other components may contain pricing provisions that are subject to adjustment based on

changes in market prices of key commodities.

Substantial increases in the prices for such components, materials and equipment, whether

due to supply chain or logistics issues or due to inflation, would increase our operating costs and could reduce our margins if we cannot

recoup the increased costs.

Any attempts to increase the announced or expected prices of our vehicles in response to increased costs could

be viewed negatively by our potential customers and could adversely affect our business, prospects, financial condition or results of

We currently have no supply

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and we may not be successful in competing in this industry.

The global automotive market,

particularly for electric and alternative fuel vehicles, is highly competitive, and we expect it will become even more so in the future.

In recent years, the electric vehicle industry has grown, with several companies that focus completely or partially on the electric

vehicle market.

global automotive market, particularly for electric and alternative fuel vehicles, is highly competitive, and we expect it will become

even more so in the future.

In recent years, the electric vehicle industry has grown, with several companies that focus completely

or partially on the electric vehicle market.

We expect additional companies to enter this market within the next several years.

Electric vehicle manufacturers

with which we compete include Tesla, BYD, NIO as well as an increasing number of U.S.-based and international entrants,

many of which have announced plans to begin selling their own electric vehicles in the near-term.

We also compete with established automobile

manufacturers in the luxury vehicle segment, many of which have entered or have announced plans to enter the alternative fuel and electric

vehicle market with either fully electric or plug-in hybrid versions of their vehicles.

We compete for sales with luxury vehicles

with internal combustion engines from established manufacturers.

Many of our current and potential competitors have significantly greater

financial, technical, manufacturing, marketing and other resources than we do and may be able to devote greater resources to the design,

development, manufacturing, distribution, promotion, sale, servicing, and support of their products.

In addition, many of these companies

have longer operating histories, greater name recognition, larger and more established sales forces, broader customer and industry relationships

and other resources than we do.

Our competitors may be in a stronger position to respond quickly to new technologies and may be able

to design, develop, market and sell their products more effectively than we do.

We expect competition in our industry to significantly

intensify in the future in light of increased demand for alternative fuel vehicles, continuing globalization, favorable governmental

policies, and consolidation in the worldwide automotive industry.

Our ability to successfully compete in our industry will be fundamental

to our future success in existing and new markets.

There can be no assurance that we will be able to compete successfully in our markets.

Electric vehicle manufacturers with which we compete include Tesla, BYD, NIO as well as an increasing number of U.S.-based and

international entrants, many of which have announced plans to begin selling their own electric vehicles in the near-term.

We also compete

with established automobile manufacturers in the luxury vehicle segment, many of which have entered or have announced plans to enter

the alternative fuel and electric vehicle market with either fully electric or plug-in hybrid versions of their vehicles.

for sales with luxury vehicles with internal combustion engines from established manufacturers.

Many of our current and potential competitors

have significantly greater financial, technical, manufacturing, marketing and other resources than we do and may be able to devote greater

resources to the design, development, manufacturing, distribution, promotion, sale, servicing, and support of their products.

many of these companies have longer operating histories, greater name recognition, larger and more established sales forces, broader

customer and industry relationships and other resources than we do.

Our competitors may be in a stronger position to respond quickly

to new technologies and may be able to design, develop, market and sell their products more effectively than we do.

We expect competition

in our industry to significantly intensify in the future in light of increased demand for alternative fuel vehicles, continuing globalization,

favorable governmental policies, and consolidation in the worldwide automotive industry.

Our ability to successfully compete in our industry

will be fundamental to our future success in existing and new markets.

There can be no assurance that we will be able to compete successfully

in our markets.

Our ability to generate meaningful product

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We are developing and producing

only electric vehicles and, accordingly, our ability to generate meaningful product revenue will highly depend on sustained consumer

demand for alternative fuel vehicles in general and electric vehicles in particular.

If the market for electric vehicles does not develop

as we expect or develops more slowly than we expect, or if there is a decrease in consumer demand for electric vehicles, our business,

prospects, financial condition and results of operations will be harmed.

The market for electric and other alternative fuel vehicles

is relatively new, rapidly evolving, characterized by rapidly changing technologies, price competition, additional competitors, evolving

government regulation (including government incentives and subsidies) and industry standards, frequent new vehicle announcements and

changing consumer demands and behaviors.

Any number of changes in the industry could negatively affect consumer demand for electric vehicles

in general and our electric vehicles in particular.

In addition, demand for electric vehicles may

be affected by factors directly impacting automobile prices or the cost of purchasing and operating automobiles such as sales and financing

incentives such as tax credits, prices of raw materials and parts and components, cost of fuel, availability of consumer credit, and

governmental regulations, including tariffs, import regulation and other taxes.

Volatility in demand may lead to lower vehicle unit sales,

which may result in downward price pressure and adversely affect our business, prospects, financial condition and results of operations.

Further, sales of vehicles in the automotive industry tend to be cyclical in many markets, which may expose us to increased volatility,

especially as we expand and adjust our operations and retail strategies.

Specifically, it is uncertain how such macroeconomic factors

will impact us as a new entrant in an industry that has globally been experiencing a recent decline in sales.

Other factors that may influence the adoption

of electric vehicles include:

● perceptions

about electric vehicle quality, safety, design, performance and cost;

● perceptions

about the limited range over which electric vehicles may be driven on a single battery charge;

● perceptions

about the total cost of ownership of electric vehicles, including the initial purchase price

and operating and maintenance costs, both including and excluding the effect of government

and other subsidies and incentives designed to promote the purchase of electric vehicles;

about electric grid capacity and reliability;

● perceptions

about the sustainability and environmental impact of electric vehicles, including with respect

to both the sourcing and disposal of materials for electric vehicle batteries and the generation

of electricity provided in the electric grid;

availability of other alternative fuel vehicles, including plug-in hybrid electric vehicles;

● improvements

in the fuel economy of the internal combustion engine;

quality and availability of service for electric vehicles, especially in international markets;

in the cost of oil and gasoline;

regulations and economic incentives promoting fuel efficiency and alternate forms of energy;

to charging stations and cost to charge an electric vehicle, especially in international

markets, and related infrastructure costs and standardization;

availability of tax and other governmental incentives to purchase and operate electric vehicles

or future regulation requiring increased use of nonpolluting vehicles;

● macroeconomic

The influence of any of

the factors described above or any other factors may cause a general reduction in consumer demand for electric vehicles or our electric

vehicles in particular, either of which would materially and adversely affect our business, results of operations, financial condition

and prospects.

only electric vehicles and, accordingly, our ability to generate meaningful product revenue will highly depend on sustained consumer demand

for alternative fuel vehicles in general and electric vehicles in particular.

If the market for electric vehicles does not develop as

we expect or develops more slowly than we expect, or if there is a decrease in consumer demand for electric vehicles, our business, prospects,

financial condition and results of operations will be harmed.

The market for electric and other alternative fuel vehicles is relatively

new, rapidly evolving, characterized by rapidly changing technologies, price competition, additional competitors, evolving government

regulation (including government incentives and subsidies) and industry standards, frequent new vehicle announcements and changing consumer

demands and behaviors.

Any number of changes in industry could negatively affect consumer demand for electric vehicles in general and

our electric vehicles in particular.

In addition, demand for electric

vehicles may be affected by factors directly impacting automobile prices or the cost of purchasing and operating automobiles such as sales

and financing incentives such as tax credits, prices of raw materials and parts and components, cost of fuel, availability of consumer

credit, and governmental regulations, including tariffs, import regulation and other taxes.

Volatility in demand may lead to lower vehicle

unit sales, which may result in downward price pressure and adversely affect our business, prospects, financial condition and results

of operations.

Further, sales of vehicles in the automotive industry tend to be cyclical in many markets, which may expose us to increased

volatility, especially as we expand and adjust our operations and retail strategies.

Specifically, it is uncertain how such macroeconomic

factors will impact us as a new entrant in an industry that has globally been experiencing a recent decline in sales.

Until the foreseeable future our revenue

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dependent on a limited number of models.

Although we have other vehicle models on our product roadmap, we currently do not expect to

introduce another vehicle model for sale to these four models until at least 2030.

We expect to rely on sales from the Limited Edition

Coupe (the “Coupe” or “488”), Long-range Sedan (the “Sedan”), Compact City Car (the “City

Car” or “Chloe”) and the Long-range SUV (the “SUV”, the Coupe, Sedan, City Car and SUV collectively

referred to as the “Models”), among other sources of financing, for the capital that will be required to develop and commercialize

those subsequent models.

To the extent that production of the models is delayed, reduced, or is not well-received by the market

for any reason, our revenue and cash flow would be adversely affected, we may need to seek additional financing earlier than we expect,

and such financing may not be available to us on commercially reasonable terms, or at all.

Although we have other vehicle models on our product roadmap, we currently do not expect to introduce

another vehicle model for sale to these four models until at least 2030.

We expect to rely on sales from the Limited Edition Coupe (the

“Coupe” or “488”), Long-range Sedan (the “Sedan”), Compact City Car (the “City Car”

or “Chloe”) and the Long-range SUV (the “SUV”, the Coupe, Sedan, City Car and SUV collectively referred to

as the “Models”), among other sources of financing, for the capital that will be required to develop and commercialize those

subsequent models.

To the extent that production of the models is delayed, reduced, or is not well-received by the market for any

reason, our revenue and cash flow would be adversely affected, we may need to seek additional financing earlier than we expect, and such

financing may not be available to us on commercially reasonable terms, or at all.

Developments in electric vehicle or alternative

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We may be unable to keep

up with changes in electric vehicle technology or alternatives to electricity as a fuel source and, as a result, our competitiveness

up with changes in electric vehicle technology or alternatives to electricity as a fuel source and, as a result, our competitiveness may

Significant developments in alternative technologies, such as alternative battery cell technologies, hydrogen fuel cell technology,

advanced gasoline, ethanol or natural gas, or improvements in the fuel economy of the internal combustion engine, may materially and

adversely affect our business and prospects in ways we do not currently anticipate.

Existing and other battery cell technologies, fuels

or sources of energy may emerge as customers’ preferred alternative to the technologies in our electric vehicles.

Any failure by

us to develop new or enhanced technologies or processes, or to react to changes in existing technologies, could materially delay our

development and introduction of new and enhanced electric vehicles, which could result in the loss of competitiveness of our vehicles,

decreased revenue and a loss of market share to competitors.

In addition, we expect to compete in part on the basis of our vehicles’

range, efficiency, charging speeds and performance, and improvements in the technology offered by competitors could reduce demand for

our models or other future vehicles.

As technologies change, we plan to upgrade or adapt our vehicles and introduce new models that reflect

such technological developments, but our vehicles may become obsolete, and our research and development efforts may not be sufficient

to adapt to changes in alternative fuel and electric vehicle technology.

Additionally, as new companies and larger, existing vehicle

manufacturers continue to enter the electric vehicle space, we may lose any technological advantage we may have and suffer a decline

in our competitive position.

Any failure by us to successfully react to changes in existing technologies or the development of new technologies

could materially harm our competitive position and growth prospects.

advanced gasoline, ethanol or natural gas, or improvements in the fuel economy of the internal combustion engine, may materially and adversely

affect our business and prospects in ways we do not currently anticipate.

Existing and other battery cell technologies, fuels or sources

of energy may emerge as customers’ preferred alternative to the technologies in our electric vehicles.

Any failure by us to develop

new or enhanced technologies or processes, or to react to changes in existing technologies, could materially delay our development and

introduction of new and enhanced electric vehicles, which could result in the loss of competitiveness of our vehicles, decreased revenue

and a loss of market share to competitors.

In addition, we expect to compete in part on the basis of our vehicles’ range, efficiency,

charging speeds and performance, and improvements in the technology offered by competitors could reduce demand for our models or other

future vehicles.

As technologies change, we plan to upgrade or adapt our vehicles and introduce new models that reflect such technological

developments, but our vehicles may become obsolete, and our research and development efforts may not be sufficient to adapt to changes

in alternative fuel and electric vehicle technology.

Additionally, as new companies and larger, existing vehicle manufacturers continue

to enter the electric vehicle space, we may lose any technological advantage we may have and suffer a decline in our competitive position.

Any failure by us to successfully react to changes in existing technologies or the development of new technologies could materially harm

our competitive position and growth prospects.

We will be dependent on our suppliers and

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and performance characteristics, which would impact our ability to achieve our product specifications and performance characteristics

Additionally, our potential third-party suppliers may be unable to obtain required certifications or provide necessary

warranties for their products that are necessary for use in our vehicles.

Additionally, our potential third-party suppliers may be unable to obtain required certifications or provide necessary warranties

for their products that are necessary for use in our vehicles.

We may be affected by ongoing,

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in increased costs.

We may also be impacted by changes in our future supply chain or production needs, including cost increases from

our suppliers, in order to meet our quality targets and development timelines as well as due to design changes.

We may also be impacted by changes in our future supply chain or production needs, including cost increases from our

suppliers, in order to meet our quality targets and development timelines as well as due to design changes.

Likewise, any significant

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Our suppliers may

not ultimately be able to sustainably and timely meet our cost, quality and volume needs, requiring us to replace them with other sources.

In many cases, our suppliers will be providing us with custom-designed parts that would require significant lead time to obtain

from alternative suppliers, or may not be available from alternative suppliers at all.

If we are unable to obtain suitable components

and materials used in our vehicles from our suppliers or if our suppliers decide to create or supply a competing product, our business

could be adversely affected.

Further, if we are unsuccessful in our efforts to control and reduce supplier costs, our results of operations

not ultimately be able to sustainably and in a timely manner to meet our cost, quality and volume needs, requiring us to replace them

with other sources.

In many cases, our suppliers will be providing us with custom-designed parts that would require significant lead

time to obtain from alternative suppliers or may not be available from alternative suppliers at all.

If we are unable to obtain suitable

components and materials used in our vehicles from our suppliers or if our suppliers decide to create or supply a competing product, our

business could be adversely affected.

Further, if we are unsuccessful in our efforts to control and reduce supplier costs, our results

of operations will suffer.

We have not experienced,

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could temporarily disrupt production of our vehicles until an alternative supplier is able to supply the required material.

delay, even if caused by a delay or shortage in only one part, could significantly affect our ability to meet our planned vehicle production

Any such delay,

even if caused by a delay or shortage in only one part, could significantly affect our ability to meet our planned vehicle production

Even in cases where we may be able to establish alternate supply relationships and obtain or engineer replacement components

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This risk is heightened by the fact that we have less negotiating leverage with suppliers than larger and more established automobile

manufacturers, which could adversely affect our ability to obtain necessary components and materials on a timely basis, on favorable

pricing and other terms, or at all.

The industry in which we operate has recently experienced severe supply chain disruptions, and we

expect these conditions to continue for the foreseeable future.

Any such supply disruption could materially and adversely affect our

results of operations, financial condition and prospects.

manufacturers, which could adversely affect our ability to obtain necessary components and materials on a timely basis, on favorable pricing

and other terms, or at all.

The industry in which we operate has recently experienced severe supply chain disruptions, and we expect these

conditions to continue for the foreseeable future.

Any such supply disruption could materially and adversely affect our results of operations,

financial condition and prospects.

Furthermore, as the scale

of our vehicle production increases in the future, we will need to accurately forecast, purchase, warehouse and transport components

to our manufacturing facilities and servicing locations internationally and at much higher volumes.

We have not yet scaled production

in our manufacturing facilities to significant volumes or begun servicing vehicles at significant volumes.

Accordingly, our ability to

scale production and vehicle servicing and mitigate risks associated with these activities has not been thoroughly tested.

unable to accurately match the timing and quantities of component purchases to our actual needs, successfully recruit and retain personnel

with relevant experience, or successfully implement automation, inventory management and other systems or processes to accommodate the

increased complexity in our supply chain and manufacturing operations, we may incur unexpected production disruption, storage, transportation

and write-off costs, which could have a material adverse effect on our results of operations and financial condition.

Furthermore, unexpected

changes in business conditions, materials pricing, labor issues, wars, governmental changes, tariffs, natural disasters, health epidemics,

and other factors beyond our and our suppliers’ control could also affect these suppliers’ ability to deliver components

to us on a timely basis.

We have also identified certain of our suppliers, including certain suppliers we deem critical, as having poor

financial health or being at risk of bankruptcy.

Although we routinely review our suppliers’ financial health and attempt to identify

alternate suppliers where possible, the loss of any supplier, particularly a single- or limited-source supplier, or the disruption

in the supply of components from our suppliers, could lead to vehicle design changes, production delays, idle manufacturing facilities

and potential loss of access to important technology and parts for producing, servicing and supporting our vehicles, any of which could

result in negative publicity, damage to our brand and a material and adverse effect on our business, prospects, results of operations

and financial condition.

In addition, if our suppliers experience substantial financial difficulties, cease operations or otherwise face

business disruptions, we may be required to provide substantial financial support to ensure supply continuity, which could have an additional

adverse effect on our liquidity and financial condition.

of our vehicle production increases in the future, we will need to accurately forecast, purchase, warehouse and transport components to

our manufacturing facilities and servicing locations internationally and at much higher volumes.

We have not yet scaled production in

our manufacturing facilities to significant volumes or begun servicing vehicles at significant volumes.

Accordingly, our ability to scale

production and vehicle servicing and mitigate risks associated with these activities has not been thoroughly tested.

If we are unable

to accurately match the timing and quantities of component purchases to our actual needs, successfully recruit and retain personnel with

relevant experience, or successfully implement automation, inventory management and other systems or processes to accommodate the increased

complexity in our supply chain and manufacturing operations, we may incur unexpected production disruption, storage, transportation and

write-off costs, which could have a material adverse effect on our results of operations and financial condition.

Furthermore, unexpected changes

in business conditions, materials pricing, labor issues, wars, governmental changes, tariffs, natural disasters, health epidemics, and

other factors beyond our and our suppliers’ control could also affect these suppliers’ ability to deliver components to us

on a timely basis.

We have also identified certain of our suppliers, including certain suppliers we deem critical, as having poor financial

health or being at risk of bankruptcy.

Although we routinely review our suppliers’ financial health and attempt to identify alternate

suppliers where possible, the loss of any supplier, particularly a single- or limited-source supplier, or the disruption in the supply

of components from our suppliers, could lead to vehicle design changes, production delays, idle manufacturing facilities and potential

loss of access to important technology and parts for producing, servicing and supporting our vehicles, any of which could result in negative

publicity, damage to our brand and a material and adverse effect on our business, prospects, results of operations and financial condition.

In addition, if our suppliers experience substantial financial difficulties, cease operations or otherwise face business disruptions,

we may be required to provide substantial financial support to ensure supply continuity, which could have an additional adverse effect

on our liquidity and financial condition.

Increases in costs, disruption of supply

or shortage of materials, in particular for lithium-ion cells or semiconductors, could harm our business.

As we scale commercial production

of our vehicles or any future energy storage systems, we have experienced and may continue to experience increases in the cost of or

a sustained interruption in the supply or shortage of materials.

Any such increase, supply interruption or shortage could materially

and adversely impact our business, results of operations, prospects and financial condition.

In addition, we use various materials in

our business, including aluminum, steel, lithium, nickel, copper, cobalt, neodymium, terbium, praseodymium and manganese, as well as

lithium-ion cells and semiconductors from suppliers.

The prices for these materials fluctuate, and their available

supply may be unstable, depending on market conditions, inflationary pressure and global demand for these materials, including as a result

of increased production of electric vehicles, energy storage products by our competitors and the global supply chain crisis, and could

adversely affect our business and results of operations.

For instance, we are exposed to multiple risks relating to lithium-ion cells.

we scale commercial production of our vehicles or any future energy storage systems, we have experienced and may continue to experience

increases in the cost of or a sustained interruption in the supply or shortage of materials.

Any such increase, supply interruption or

shortage could materially and adversely impact our business, results of operations, prospects and financial condition.

In addition, we

use various materials in our business, including aluminum, steel, lithium, nickel, copper, cobalt, neodymium, terbium, praseodymium and

manganese, as well as lithium-ion cells and semiconductors from suppliers.

The prices for these materials fluctuate,

and their available supply may be unstable, depending on market conditions, inflationary pressure and global demand for these materials,

including as a result of increased production of electric vehicles, energy storage products by our competitors and the global supply

chain crisis, and could adversely affect our business and results of operations.

For instance, we are exposed to multiple risks relating

to lithium-ion cells.

These risks include:

inability or unwillingness of current battery manufacturers to build or operate battery cell

manufacturing plants to supply the numbers of lithium-ion cells required to support

the growth of the electric vehicle industry as demand for such cells increases;

increase in the cost, or decrease in the available supply, of materials, such as cobalt,

used in lithium-ion cells;

in the supply of cells due to quality issues or recalls by battery cell manufacturers;

● fluctuations

in the value of any foreign currencies, in which battery cell and related raw material purchases

are or may be denominated against the U.S.

the inability or unwillingness of current battery manufacturers to build or operate battery cell manufacturing plants to supply the numbers of lithium-ion cells required to support the growth of the electric vehicle industry as demand for such cells increases;

an increase in the cost, or decrease in the available supply, of materials, such as cobalt, used in lithium-ion cells;

disruption in the supply of cells due to quality issues or recalls by battery cell manufacturers;

fluctuations in the value of any foreign currencies, in which battery cell and related raw material purchases are or may be denominated against the U.S.

Our ability to manufacture

our vehicles or any future energy storage systems will depend on the continued supply of battery cells for the battery packs used in

our products.

We have limited flexibility in changing battery cell suppliers, and any disruption in the supply of battery cells from

such suppliers could disrupt production of our vehicles until a different supplier is fully qualified.

our vehicles or any future energy storage systems will depend on the continued supply of battery cells for the battery packs used in our

We have limited flexibility in changing battery cell suppliers, and any disruption in the supply of battery cells from such

suppliers could disrupt production of our vehicles until a different supplier is fully qualified.

Furthermore, our ability to manufacture

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many automotive suppliers and manufacturers, including us, that incorporate semiconductors into the parts they supply or manufacture.

We have experienced and may continue to experience an impact on our operations as a result of the semiconductor supply shortage, and

such shortage could in the future have a material impact on us or our suppliers, which could delay or reduce planned production levels

of the Models or planned future vehicles, impair our ability to continue production once started or force us or our suppliers to pay

exorbitant rates for continued access to semiconductors, and of which could have a material adverse effect on our business, prospects

and results of operations.

In addition, prices and transportation expenses for these materials fluctuate depending on many factors beyond

our control, including fluctuations in supply and demand, currency fluctuations, tariffs and taxes, fluctuations and shortages in petroleum

supply, freight charges and other economic and political factors.

These risks could be further magnified by geographical developments

such as the conflict between Ukraine and Russia.

Substantial increases in the prices for our materials or prices charged to us, such

as those charged by battery cell or semiconductor suppliers, would increase our operating costs, and could reduce our margins if we cannot

recoup the increased costs through increased prices.

Any attempts to increase product prices in response to increased material costs

could result in cancellations of orders and reservations and materially and adversely affect our brand, image, business, results of operations,

prospects and financial condition.

We have experienced and may continue to experience an impact on our operations as a result of the semiconductor supply shortage, and such

shortage could in the future have a material impact on us or our suppliers, which could delay or reduce planned production levels of the

Models or planned future vehicles, impair our ability to continue production once started or force us or our suppliers to pay exorbitant

rates for continued access to semiconductors, and of which could have a material adverse effect on our business, prospects and results

of operations.

In addition, prices and transportation expenses for these materials fluctuate depending on many factors beyond our control,

including fluctuations in supply and demand, currency fluctuations, tariffs and taxes, fluctuations and shortages in petroleum supply,

freight charges and other economic and political factors.

These risks could be further magnified by geographical developments such as

the conflict between Ukraine and Russia.

Substantial increases in the prices for our materials or prices charged to us, such as those

charged by battery cell or semiconductor suppliers, would increase our operating costs, and could reduce our margins if we cannot recoup

the increased costs through increased prices.

Any attempts to increase product prices in response to increased material costs could result

in cancellations of orders and reservations and materially and adversely affect our brand, image, business, results of operations, prospects

and financial condition.

Furthermore, currency fluctuations,

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Our vehicles use a substantial

amount of third-party and proprietary software and complex technological hardware to operate, some of which is still subject to

amount of third-party and proprietary software and complex technological hardware to operate, some of which are still subject to

further development and testing.

The development and implementation of such advanced technologies is inherently complex, and requires

coordination with our vendors and suppliers in order to integrate such technology into our electric vehicles and ensure it interoperates

with other complex technology as designed and as expected.

The development and implementation of such advanced technologies is inherently complex and requires coordination

with our vendors and suppliers in order to integrate such technology into our electric vehicles and ensure it interoperates with other

complex technology as designed and as expected.

We may fail to detect defects

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Any defects or errors in, or which are attributed to, our technology could result in, among other things:

production and delivery of our vehicles;

market acceptance of our vehicles;

of customers or inability to attract new customers;

of engineering or other resources for remedying the defect or error;

to our brand or reputation;

service and warranty costs;

action by customers or third parties, including product liability claims;

imposed by regulatory authorities.

In addition, if we are unable

to develop the software and technology systems necessary to operate our vehicles, our competitive position will be harmed.

third-party suppliers to develop a number of technologies for use in our products.

There can be no assurances that

our suppliers will be able to meet the technological requirements, production timing and volume requirements to support our business

In addition, such technology may not satisfy the cost, performance useful life and warranty characteristics we anticipate in our

business plan, which could materially adversely affect our business, prospects and results of operations.

If our manufacturing facilities become

inoperable, we will be unable to produce our vehicles and our business will be harmed.

Any failure to continue

commercial production on schedule, such as a breakdown or interruption of our supply chain, would lead to additional costs and would

delay our ability to generate meaningful revenues.

In addition, it could prevent us from gaining the confidence of potential customers,

spur cancellations of reservations for the Models and open the door to increased competition.

All of the foregoing could hinder our ability

to successfully launch and grow our business and achieve a competitive position in the market.

delayed production and delivery of our vehicles;

delayed market acceptance of our vehicles;

loss of customers or inability to attract new customers;

diversion of engineering or other resources for remedying the defect or error;

damage to our brand or reputation;

increased service and warranty costs;

legal action by customers or third parties, including product liability claims;

penalties imposed by regulatory authorities.

addition, if we are unable to develop the software and technology systems necessary to operate our vehicles, our competitive

position will be harmed.

We rely on third-party suppliers to develop a number of technologies for use in our

There can be no assurances that our suppliers will be able to meet the technological requirements,

production timing and volume requirements to support our business plan.

In addition, such technology may not satisfy the cost,

performance useful life and warranty characteristics we anticipate in our business plan, which could materially adversely affect our

business, prospects and results of operations.

We rely on complex machinery for our operations,

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introduce and scale any such new processes or features.

We also rely heavily on

complex machinery for our operations, and our production involves a significant degree of uncertainty and risk in terms of operational

performance and costs.

Our manufacturing plant employs large-scale, complex machinery combining many components, which may suffer unexpected

malfunctions from time to time and will depend on repairs and spare parts that may not be available when needed.

Unexpected malfunctions

of the manufacturing plant components may significantly decrease our operational efficiency, including by forcing manufacturing shutdowns

We also rely heavily on complex

machinery for our operations, and our production involves a significant degree of uncertainty and risk in terms of operational performance

Our manufacturing plant employs large-scale, complex machinery combining many components, which may suffer unexpected malfunctions

from time to time and will depend on repairs and spare parts that may not be available when needed.

Unexpected malfunctions of

the manufacturing plant components may significantly decrease our operational efficiency, including by forcing manufacturing shutdowns

in order to conduct repairs or troubleshoot manufacturing problems.

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which may render it difficult or impossible for us to manufacture our vehicles for some period of time.

The inability to produce our

vehicles or the backlog that could develop if our manufacturing plant is inoperable for even a short period of time may result in the

loss of customers or harm our reputation.

Although we maintain insurance for damage to our property and the disruption of our business,

this insurance may not be sufficient to cover all of our potential losses and may not continue to be available to us on acceptable terms,

Should operational risks materialize, they may result in the personal injury to or death of our workers, the loss of production

equipment, damage to manufacturing facilities, monetary losses, delays and unanticipated fluctuations in production, environmental damage,

administrative fines, increased insurance costs and potential legal liabilities, all which could have a material adverse effect on our

business, results of operations, cash flows, financial condition or prospects.

If we update or discontinue the use of

our manufacturing equipment more quickly than expected, we may have to shorten the useful lives of any equipment to be retired as a result

of any such update, and the resulting acceleration in our depreciation could negatively affect our financial results.

We have invested and expect

to continue to invest significantly in what we believe is state of the art tooling, machinery and other manufacturing equipment, and

we depreciate the cost of such equipment over their expected useful lives.

However, manufacturing technology may evolve rapidly, and

we may decide to update our manufacturing processes more quickly than expected.

Moreover, as we ramp the commercial production of our

vehicles, our experience may cause us to discontinue the use of already installed equipment in favor of different or additional equipment.

The useful life of any equipment that would be retired early as a result would be shortened, causing the depreciation on such equipment

to be accelerated, and our results of operations could be negatively impacted.

The inability to produce our vehicles

or the backlog that could develop if our manufacturing plant is inoperable for even a short period of time may result in the loss of customers

or harm our reputation.

Although we maintain insurance for damage to our property and the disruption of our business, this insurance may

not be sufficient to cover all of our potential losses and may not continue to be available to us on acceptable terms, if at all.

operational risks materialize, they may result in the personal injury to or death of our workers, the loss of production equipment, damage

to manufacturing facilities, monetary losses, delays and unanticipated fluctuations in production, environmental damage, administrative

fines, increased insurance costs and potential legal liabilities, all which could have a material adverse effect on our business, results

of operations, cash flows, financial condition or prospects.

We have no experience to date in mass manufacturing

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We cannot provide any assurance

as to whether we will be able to develop efficient, automated, low-cost logistics and production capabilities and processes and

reliable sources of component supply that will enable us to meet the quality, price, engineering, design and production standards, as

well as the production volumes, required to successfully mass market our vehicles.

Even if we are successful in developing our high volume

production capability and processes and reliably source our component supply, no assurance can be given as to whether we will be able

to do so in a manner that avoids significant delays and cost overruns, including as a result of factors beyond our control such as problems

with suppliers and vendors, or force majeure events, or in time to meet our commercialization schedules, or to store and deliver parts

in sufficient quantities to the manufacturing lines in a manner that enables us to maintain our production ramp curve and rates, or to

satisfy the requirements of customers and potential customers.

Any failure to develop such logistics and production processes and capabilities

within our projected costs and timelines could have a material adverse effect on our business, results of operations, prospects and financial

Bottlenecks and other unexpected challenges have and may continue to arise as we ramp production of the models, and it will

be important that we address them promptly while continuing to control our logistics and manufacturing costs.

If we are not successful

in doing so, or if we experience issues with our logistics and manufacturing process improvements, we could face further delays in establishing

and/or sustaining our production ramps or be unable to meet our related cost and profitability targets.

as to whether we will be able to develop efficient, automated, low-cost logistics and production capabilities and processes and reliable

sources of component supply that will enable us to meet the quality, price, engineering, design and production standards, as well as the

production volumes required to successfully mass market our vehicles.

Even if we are successful in developing our high volume production

capability and processes and reliably source our component supply, no assurance can be given as to whether we will be able to do so in

a manner that avoids significant delays and cost overruns, including as a result of factors beyond our control such as problems with suppliers

and vendors, or force majeure events, or in time to meet our commercialization schedules, or to store and deliver parts in sufficient

quantities to the manufacturing lines in a manner that enables us to maintain our production ramp curve and rates, or to satisfy the requirements

of customers and potential customers.

Any failure to develop such logistics and production processes and capabilities within our projected

costs and timelines could have a material adverse effect on our business, results of operations, prospects and financial condition.

and other unexpected challenges have and may continue to arise as we ramp production of the models, and it will be important that we address

them promptly while continuing to control our logistics and manufacturing costs.

If we are not successful in doing so, or if we experience

issues with our logistics and manufacturing process improvements, we could face further delays in establishing and/or sustaining our production

ramps or be unable to meet our related cost and profitability targets.

If our vehicles fail to perform as expected,

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impact the battery’s ability to hold a charge, or could require us to limit vehicles’ battery charging capacity, including

via over-the-air or other software updates, for safety reasons or to protect battery capacity, which could further decrease our

vehicles’ range between charges.

Such decreases in or limitations of battery capacity and therefore range, whether imposed by deterioration,

software limitations or otherwise, could also lead to consumer complaints or warranty claims, including claims that prior knowledge of

such decreases or limitations would have affected consumers’ purchasing decisions.

Further, there can be no assurance that we will

be able to improve the performance of our battery packs, or increase our vehicles’ range, in the future.

Any such battery deterioration

or capacity limitations and related decreases in range may negatively influence potential customers’ willingness to purchase our

vehicles and negatively impact our brand and reputation, which could adversely affect our business, prospects, results of operations

and financial condition.

via over-the-air or other software updates, for safety reasons or to protect battery capacity, which could further decrease our vehicles’

range between charges.

Such decreases in or limitations of battery capacity and therefore range, whether imposed by deterioration, software

limitations or otherwise, could also lead to consumer complaints or warranty claims, including claims that prior knowledge of such decreases

or limitations would have affected consumers’ purchasing decisions.

Further, there can be no assurance that we will be able to improve

the performance of our battery packs, or increase our vehicles’ range, in the future.

Any such battery deterioration or capacity

limitations and related decreases in range may negatively influence potential customers’ willingness to purchase our vehicles and

negatively impact our brand and reputation, which could adversely affect our business, prospects, results of operations and financial

We face challenges providing charging solutions for our vehicles.

Demand for our vehicles

will depend in part on the availability of charging infrastructure both domestically and internationally.

Demand for our vehicles will

depend in part on the availability of charging infrastructure both domestically and internationally.

While the prevalence of charging

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adaptor whereby customers of different brands of electric vehicles may use any charging station.

However, there is no assurance that

more changing stations will be built and implemented in the future, or that a uniform charging adaptor will be available in the future.

However, there is no assurance that more

changing stations will be built and implemented in the future, or that a uniform charging adaptor will be available in the future.

Insufficient reserves to cover future warranty

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results of operations.

Our vehicles will make use of lithium-ion battery

cells, which have been observed to catch fire or vent smoke and flame.

The battery packs within

our vehicles make use of, and any future energy storage systems will make use of lithium-ion cells.

On rare occasions, lithium-ion cells

can rapidly release the energy they contain by venting smoke and flames in a manner that can ignite nearby materials as well as other

lithium-ion cells.

While we have designed our battery packs to passively contain a single cell’s release of energy without

spreading to neighboring cells, a field or testing failure of our vehicles or other battery packs that we produce could occur.

although we equip our vehicles with systems designed to detect and warn vehicle occupants of such thermal events, there can be no assurance

that such systems will function as designed or will provide vehicle occupants with sufficient, or any, warning in all crashes.

events or failures of our vehicles, battery packs or warning systems could subject us to lawsuits, product recalls, or redesign efforts,

all of which would be time consuming and expensive.

Also, negative public perceptions regarding the suitability of lithium-ion cells

for automotive applications or any future incident involving lithium-ion cells, such as a vehicle or other fire, even if such incident

does not involve our vehicles, could seriously harm our business and reputation.

Risks Related to Cybersecurity and Data Privacy

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We and our third-party service providers’ may in the future be affected by security incidents.

Our systems are also vulnerable to damage or interruption from, among other things, computer viruses, malware, ransomware, killware,

wiperware, computer denial or degradation of service attacks, telecommunications failures, social engineering schemes (such as vishing,

phishing or smishing), domain name spoofing, insider theft, physical theft, fire, terrorist attacks, natural disasters, power loss, war,

or misuse, mistake or other attempts to harm our products and systems.

Our data center and our third-party service providers’

or vendors’ data centers could be subject to break-ins, sabotage and intentional acts of vandalism causing potential disruptions.

Some of our systems will not be fully redundant, and our disaster recovery planning cannot account for all eventualities.

at our or our third-party service providers’ or vendors’ data centers and/or cloud infrastructure could result in lengthy

interruptions in our service and our business operations.

There can be no assurance that any security or other operational measures that

we or our third-party service providers or vendors have implemented will be effective against any of the foregoing threats or issues.

Our systems are also vulnerable to damage or interruption from, among other things, computer viruses, malware, ransomware, killware, wiper

ware, computer denial or degradation of service attacks, telecommunications failures, social engineering schemes (such as vishing, phishing

or smishing), domain name spoofing, insider theft, physical theft, fire, terrorist attacks, natural disasters, power loss, war, or misuse,

mistake or other attempts to harm our products and systems.

Our data center and our third-party service providers’ or vendors’

data centers could be subject to break-ins, sabotage and intentional acts of vandalism causing potential disruptions.

Some of our systems

will not be fully redundant, and our disaster recovery planning cannot account for all eventualities.

Any problems at our or our third-party service

providers’ or vendors’ data centers and/or cloud infrastructure could result in lengthy interruptions in our service and our

business operations.

There can be no assurance that any security or other operational measures that we or our third-party service

providers or vendors have implemented will be effective against any of the foregoing threats or issues.

These risks have been heightened

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assurance that our business will not become a potential target as adversaries may attack networks and systems indiscriminately.

cyberattacks may potentially cause unauthorized access to our sensitive data (including our proprietary software codes), products, and

systems, causing data breach, or disruption, modification, destruction to our systems and applications.

As a result, we may suffer monetary

losses, business interruption, and long-lasting operational issues, damage to our reputation and brand, loss of our intellectual

property or trade secrets.

Such cyberattacks

may potentially cause unauthorized access to our sensitive data (including our proprietary software codes), products, and systems, causing

data breach, or disruption, modification, destruction to our systems and applications.

As a result, we may suffer monetary losses, business

interruption, and long-lasting operational issues, damage to our reputation and brand, loss of our intellectual property or trade

If we are unable to protect

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or to the owners of the applicable information, subjecting us to substantial fines, penalties, damages and other liabilities under applicable

laws and regulations, incurring substantial costs to respond to, investigate and remedy such incidents, reducing customer demand for

our products, harming our reputation and brand and compromising or leading to a loss of protection of our intellectual property or trade

In addition, regardless of their veracity, reports of unauthorized access to our vehicles, systems or data, as well as other

factors that may result in the perception that our vehicles, systems or data are vulnerable to being “hacked,” could negatively

affect our brand.

laws and regulations, incurring substantial costs to respond to, investigate and remedy such incidents, reducing customer demand for our

products, harming our reputation and brand and compromising or leading to a loss of protection of our intellectual property or trade secrets.

In addition, regardless of their veracity, reports of unauthorized access to our vehicles, systems or data, as well as other factors that

may result in the perception that our vehicles, systems or data are vulnerable to being “hacked,” could negatively affect

In addition, some members of the U.S.

federal government, including certain members of Congress and the National

Highway Traffic Safety Administration (“ NHTSA ”) , have recently focused attention on automotive cybersecurity

issues and may in the future propose or implement regulations specific to automotive cybersecurity.

federal government, including certain members of Congress and the National Highway

Traffic Safety Administration (“ NHTSA ”) , have recently focused attention on automotive cybersecurity issues

and may in the future propose or implement regulations specific to automotive cybersecurity.

In addition, the United Nations Economic

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The successful assertion of one or more large claims

against us that exceeds our available insurance coverage, or results in changes to our insurance policies (including premium increases

against us that exceed our available insurance coverage, or results in changes to our insurance policies (including premium increases

or the imposition of large deductible or co-insurance requirements), could have an adverse effect on our business.

we cannot be sure that our existing insurance coverage will continue to be available on acceptable terms or that our insurers will not

deny coverage as to any future claim.

In addition, we

cannot be sure that our existing insurance coverage will continue to be available on acceptable terms or that our insurers will not deny

coverage as to any future claim.

Furthermore, we are continuously

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for product data management, vehicle management tools, vehicle security systems, vehicle security management processes, procurement of

bill of material items, supply chain management, inventory management, production planning and execution, lean manufacturing, sales,

service and logistics, dealer management, financial, tax and regulatory compliance systems.

Our ability to operate our business will

depend on the availability and effectiveness of these systems.

The implementation, maintenance, segregation and improvement of these

systems require significant management time, support and cost.

Moreover, there are inherent risks associated with developing, improving

and expanding our core systems as well as implementing new systems, including the disruption of our data management, procurement, manufacturing

execution, finance, supply chain, inventory management, and sales and service processes.

We cannot be certain that these systems or their

required functionality will be effectively and timely developed, implemented, maintained or expanded as planned.

If we are unsuccessful

in any of the foregoing, our operations may be disrupted, our ability to accurately or timely report our financial results could be impaired,

bill of material items, supply chain management, inventory management, production planning and execution, lean manufacturing, sales, service

and logistics, dealer management, financial, tax and regulatory compliance systems.

Our ability to operate our business will depend on

the availability and effectiveness of these systems.

The implementation, maintenance, segregation and improvement of these systems require

significant management time, support and cost.

Moreover, there are inherent risks associated with developing, improving and expanding

our core systems as well as implementing new systems, including the disruption of our data management, procurement, manufacturing execution,

finance, supply chain, inventory management, and sales and service processes.

We cannot be certain that these systems or their required

functionality will be effectively and timely developed, implemented, maintained or expanded as planned.

If we are unsuccessful in any

of the foregoing, our operations may be disrupted, our ability to accurately or timely report our financial results could be impaired,

and deficiencies may arise in our internal control over financial reporting, which may impact our ability to certify our financial results.

If these systems or their functionality do not operate as we expect them to, we may be required to expend significant resources to make

If these systems or their functionality does not operate as we expect them to, we may be required to expend significant resources to make

corrections or find alternative sources for performing these functions.

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software and hardware may cause us to suffer lengthy interruptions to our ability to operate our business and our customers’ ability

to operate their vehicles, compromise of vehicle integrity and physical safety, damage to our reputation, loss of customers, loss of

revenue, governmental fines, investigations or litigation or liability for damages, any of which could materially adversely affect our

business, results of operations, prospects and financial condition.

to operate their vehicles, compromise of vehicle integrity and physical safety, damage to our reputation, loss of customers, loss of revenue,

governmental fines, investigations or litigation or liability for damages, any of which could materially adversely affect our business,

results of operations, prospects and financial condition.

We are subject to evolving laws, regulations,

standards, policies, and contractual obligations related to data privacy and security, and any actual or perceived failure to comply

with such obligations could harm our reputation and brand, subject us to significant fines and liability, or otherwise adversely affect

our business.

standards, policies, and contractual obligations related to data privacy and security, and any actual or perceived failure to comply with

such obligations could harm our reputation and brand, subject us to significant fines and liability, or otherwise adversely affect our

In the course of our operations,

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Additionally, we will use our vehicles’ electronic systems to log information about each vehicle’s use,

such as charge time, battery usage, geolocation, mileage and driving behavior, in order to aid it in vehicle diagnostics, repair and

maintenance, as well as to help us customize and improve the driving and riding experience.

such as charge time, battery usage, geolocation, mileage and driving behavior, in order to aid it in vehicle diagnostics, repair and maintenance,

as well as to help us customize and improve the driving and riding experience.

Accordingly, we may be subject

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While we have taken steps to mitigate the impact on us, the efficacy and longevity of these mechanisms

remains uncertain.

remain uncertain.

At the state level, we may

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The CPRA also creates a new state agency that will be vested with the authority to implement and enforce the CCPA and the CPRA.

Other states, including

Virginia and Colorado, have enacted or are in the process of enacting, or considering similar laws.

Compliance with these state statutes,

other similar state or federal laws that may be enacted in the future, and other applicable privacy and data security laws and regulations

is a rigorous and time-intensive process, and we may be required to put in place additional mechanisms to comply with such laws

and regulations, which could cause us to incur substantial costs or require us to change our business practices, including our data practices,

Other states, including Virginia

and Colorado, have enacted or are in the process of enacting, or considering similar laws.

Compliance with these state statutes, other

similar state or federal laws that may be enacted in the future, and other applicable privacy and data security laws and regulations is

a rigorous and time-intensive process, and we may be required to put in place additional mechanisms to comply with such laws and

regulations, which could cause us to incur substantial costs or require us to change our business practices, including our data practices,

in a manner adverse to our business.

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Failure to comply with applicable laws or regulations or to secure personal information could

result in investigations, enforcement actions and other proceedings against us, which could result in substantial fines, damages and

other liability as well as damage to our reputation and credibility, which could have a negative impact on revenues and profits.

result in investigations, enforcement actions and other proceedings against us, which could result in substantial fines, damages and other

liability as well as damage to our reputation and credibility, which could have a negative impact on revenues and profits.

We will be required to post

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in adverse publicity that could harm our business.

Most jurisdictions have

enacted laws requiring companies to notify individuals, regulatory authorities and other third parties of security breaches involving

certain types of data.

Most jurisdictions have enacted

laws requiring companies to notify individuals, regulatory authorities and other third parties of security breaches involving certain

types of data.

For example, laws in all 50 U.S.

states generally require business to provide notice under certain circumstances

to consumers whose personal information has been disclosed as a result of a breach.

states generally require business to provide notice under certain circumstances to

consumers whose personal information has been disclosed as a result of a breach.

Such laws may be inconsistent or may change, or additional

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prospects, results of operations and financial condition.

Risks Related to Ownership of Thunder Power’s Securities

Risks Related to Ownership of Thunder Power’s

The price of our Common Stock may be volatile.

The stock price of our Common Stock may be volatile.

The market price for our Common Stock may be influenced by many factors, including the other risks described in this section and the

or anticipated variations in our financial results or those of companies that are perceived

to be similar to us;

conditions in the EV sectors;

conditions and sentiment involving companies that have recently completed a business combination

with a special purpose acquisition company (“SPAC”);

● announcements

by us or our competitors of significant acquisitions, strategic alliances, joint ventures

or capital commitments;

● developments

or disputes concerning patents or other proprietary rights, including patents, litigation

matters and our ability to obtain patent protection for its products;

ability or inability to raise additional capital and the terms on which it is raised;

recruitment or departure of key personnel;

or anticipated changes in earnings estimates or changes in stock market analyst recommendations

regarding our Common Stock, other comparable companies or the industry generally;

failure or the failure of our competitors to meet analysts’ projections or guidance;

● fluctuations

in the valuation of companies perceived by investors to be comparable to us;

● announcement

and expectation of additional financing efforts;

● speculation

in the press or investment community;

volume of our Common Stock;

of our Common Stock by us or Selling Stockholders;

concentrated ownership of our Common Stock;

in accounting principles;

acts, acts of war or periods of widespread civil unrest;

disasters, public health crises and other calamities;

economic, industry and market conditions.

The stock price of our Common

Stock may be volatile.

The market price for our Common Stock may be influenced by many factors, including the other risks described in

this section and the following:

actual or anticipated variations in our financial results or those of companies that are perceived to be similar to us;

market conditions in the EV sectors;

market conditions and sentiment involving companies that have recently completed a business combination with a special purpose acquisition company (“SPAC”);

announcements by us or our competitors of significant acquisitions, strategic alliances, joint ventures or capital commitments;

developments or disputes concerning patents or other proprietary rights, including patents, litigation matters and our ability to obtain patent protection for its products;

our ability or inability to raise additional capital and the terms on which it is raised;

the recruitment or departure of key personnel;

actual or anticipated changes in earnings estimates or changes in stock market analyst recommendations regarding our Common Stock, other comparable companies or the industry generally;

our failure or the failure of our competitors to meet analysts’ projections or guidance;

fluctuations in the valuation of companies perceived by investors to be comparable to us;

announcement and expectation of additional financing efforts;

speculation in the press or investment community;

trading volume of our Common Stock;

sales of our Common Stock by us or Selling Stockholders;

the concentrated ownership of our Common Stock;

changes in accounting principles;

terrorist acts, acts of war or periods of widespread civil unrest;

natural disasters, public health crises and other calamities;

general economic, industry and market conditions.

In addition, the stock markets

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This volatility can often be unrelated to the operating performance of the underlying business.

These broad market and industry

factors may seriously harm the market price of our Common Stock, regardless of our operating performance.

We may incur significant costs from class action litigation

due to stock volatility.

Since our delisting from

The These broad market and industry factors may seriously harm the market price of our Common Stock, regardless of our operating performance.

We may incur significant costs from class action litigation due

to stock volatility.

Our stock price may fluctuate

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Additionally, there has recently

been a general increase in litigation against companies that have recently completed business combinations with SPACs alleging fraud

and other claims based on inaccurate or misleading disclosures.

If any of our stockholders were to bring a lawsuit of this type against

us, even if the lawsuit is without merit, we could incur substantial costs defending the lawsuit.

been a general increase in litigation against companies that have recently completed business combinations with SPACs alleging fraud and

other claims based on inaccurate or misleading disclosures.

If any of our stockholders were to bring a lawsuit of this type against us,

even if the lawsuit is without merit, we could incur substantial costs by defending the lawsuit.

The lawsuit could also divert the time

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company, as defined in the JOBS Act, and we intend to take advantage of certain exemptions from various reporting requirements that are

applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor

attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation

in periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation

and stockholder approval of any golden parachute payments not previously approved.

An emerging growth company may elect to delay the

adoption of new or revised accounting standards.

As a result, our financial statements may not be comparable to companies that comply

with the effective dates of revised accounting standards.

Investors may find our Common Stock less attractive because of our reliance

on these exemptions.

If some investors find our Common Stock less attractive as a result, there may be a less active trading market for

their common stock, and the stock price may be more volatile.

applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation

requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in periodic

reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and

stockholder approval of any golden parachute payments not previously approved.

An emerging growth company may elect to delay the adoption

of new or revised accounting standards.

As a result, our financial statements may not be comparable to companies that comply with the

effective dates of revised accounting standards.

Investors may find our Common Stock less attractive because of our reliance on these

If some investors find our Common Stock less attractive as a result, there may be a less active trading market for their common

stock, and the stock price may be more volatile.

Future sales and issuances of Common Stock

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of Common Stock.

Annually, on the first trading day of the calendar year, beginning with calendar year 2025, such share reserve

will automatically increase by 5% of the total number of shares of Common Stock outstanding as of the last day of the immediately

preceding calendar year, unless the Administrator acts prior to January 1 of such year to provide that there will be no increase

or a lesser increase in the share reserve for that year.

The issuance of additional

shares of Common Stock or other equity securities of equal or senior rank may have some or all of the following effects:

amount of cash available per share, including for payment of dividends in the future, may

relative voting strength of each previously outstanding share of common stock may be diminished;

market price of our Common Stock may decline.

Annually, on the first trading day of the calendar year, beginning with calendar year 2025, such share reserve will

automatically increase by 5% of the total number of shares of Common Stock outstanding as of the last day of the immediately preceding

calendar year, unless the Administrator acts prior to January 1 of such year to provide that there will be no increase or a lesser

increase in the share reserve for that year.

The issuance of additional shares of Common Stock

or other equity securities of equal or senior rank may have some or all of the following effects:

the amount of cash available per share, including for payment of dividends in the future, may decrease;

the relative voting strength of each previously outstanding share of Common Stock may be diminished;

the market price of our Common Stock may decline.

Reports published by analysts, including

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research analysts.

Similarly, if one or more of the analysts who write reports on us downgrades our stock or publishes inaccurate or

unfavorable research about our business, our stock price could decline.

If one or more of these analysts ceases coverage or fails to

publish reports on us regularly, our stock price or trading volume could decline.

If no analysts cover us, the trading price and volume

for our Common Stock could be adversely affected.

Similarly, if one or more of the analysts who write reports on us downgrades our stock or publishes inaccurate or unfavorable

research about our business, our stock price could decline.

If one or more of these analysts ceases coverage or fails to publish reports

on us regularly, our stock price or trading volume could decline.

If no analysts cover us, the trading price and volume for our Common

Stock could be adversely affected.

Anti-takeover provisions in our governing

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Among other things, the Charter and/or the Company’s Bylaws include the following provisions:

the Board to issue up to 100,000,000 shares of preferred stock, with any rights, preferences,

and privileges as they may designate, including the right to approve an acquisition or other

change of control;

that the number of directors may be changed only by resolution of the Board;

that, subject to the rights of any series of preferred stock to elect directors, directors

may be removed only for cause by the holders of two-thirds (66 and 2/3%) of the voting

power of all of the then outstanding shares of voting stock of Combined Company entitled

to vote generally at an election of directors;

that all vacancies, subject to the rights of any series of preferred stock, including newly

created directorships, may, except as otherwise required by law, be filled exclusively by

the affirmative vote of a majority of the directors then in office, even though less than

a quorum, or by a sole remaining director;

that stockholders seeking to present proposals before a meeting of stockholders or seeking

to nominate candidates for election as directors at a meeting of stockholders must provide

advance notice in writing, and specify requirements as to the form and content of such notice;

that special meetings of the our stockholders may be called the Board;

that the Board will be divided into three classes of directors, with only one class of directors

being elected each year and each individual director serving a three-year term, thereby

making it more difficult for stockholders to change the composition of the Board.

These provisions, alone

or together, could delay or prevent hostile takeovers and changes in control or changes in our management.

As a Delaware corporation,

we are also subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation Law, as may be amended from

time to time (the “DGCL”), which prevents interested stockholders, such as certain stockholders holding more than 15% of

our outstanding common stock, from engaging in certain business combinations unless (i) prior to the time such stockholder became an

interested stockholder, the board of directors approved the transaction that resulted in such stockholder becoming an interested stockholder,

(ii) upon consummation of the transaction that resulted in such stockholder becoming an interested stockholder, the interested stockholder

permit the Board to issue up to 100,000,000 shares of preferred stock, with any rights, preferences, and privileges as they may designate, including the right to approve an acquisition or other change of control;

provide that the number of directors may be changed only by resolution of the Board;

provide that, subject to the rights of any series of preferred stock to elect directors, directors may be removed only for cause by the holders of two-thirds (66 and 2/3%) of the voting power of all of the then outstanding shares of voting stock of Combined Company entitled to vote generally at an election of directors;

provide that all vacancies, subject to the rights of any series of preferred stock, including newly created directorships, may, except as otherwise required by law, be filled exclusively by the affirmative vote of a majority of the directors then in office, even though less than a quorum, or by a sole remaining director;

provide that stockholders seeking to present proposals before a meeting of stockholders or seeking to nominate candidates for election as directors at a meeting of stockholders must provide advance notice in writing, and specify requirements as to the form and content of such notice;

provide that special meetings of the our stockholders may be called the Board;

provide that the Board will be divided into three classes of directors, with only one class of directors being elected each year and each individual director serving a three-year term, thereby making it more difficult for stockholders to change the composition of the Board.

These provisions, alone or

together, could delay or prevent hostile takeovers and changes in control or changes in our management.

As a Delaware corporation, we

are also subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation Law, as may be amended from

time to time (the “DGCL”), which prevents interested stockholders, such as certain stockholders holding more than 15% of our

outstanding common stock, from engaging in certain business combinations unless (i) prior to the time such stockholder became an interested

stockholder, the board of directors approved the transaction that resulted in such stockholder becoming an interested stockholder, (ii)

upon consummation of the transaction that resulted in such stockholder becoming an interested stockholder, the interested stockholder

owned at least 85% of the common stock, or (iii) following board approval, such business combination receives the approval of the holders

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the Company’s Bylaws or Delaware law that has the effect of delaying, preventing or deterring a change in control could limit the

opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some

investors are willing to pay for our common stock.

opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors

are willing to pay for our common stock.

If the Business Combination’s benefits

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below the price you paid for it.

Factors affecting the trading price of our Common

Stock following the Business Combination may include:

or anticipated fluctuations in our quarterly financial results or the quarterly financial

results of companies perceived to be similar to us;

in the market’s expectations about our operating results;

operating results failing to meet the expectation of securities analysts or investors in

a particular period;

and stock price performance of other companies that investors deem comparable to us;

in laws and regulations affecting our business;

● commencement

of, or involvement in, litigation involving us;

in our capital structure, such as future issuances of securities or the incurrence of additional

volume of shares available for public sale;

major change in our Board or senior management;

of substantial amounts of securities by our directors, executive officers, or significant

stockholders or the perception that such sales could occur;

material developments affecting the EV industry.

Factors affecting the trading

price of our Common Stock following the Business Combination may include:

actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;

changes in the market’s expectations about our operating results;

our operating results failing to meet the expectation of securities analysts or investors in a particular period;

operating and stock price performance of other companies that investors deem comparable to us;

changes in laws and regulations affecting our business;

commencement of, or involvement in, litigation involving us;

changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;

the volume of shares available for public sale;

any major change in our Board or senior management;

sales of substantial amounts of securities by our directors, executive officers, or significant stockholders or the perception that such sales could occur;

other material developments affecting the EV industry.

Broad market and industry

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The stock market in general

and Nasdaq have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance

of the particular companies affected.

has experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular

companies affected.

The trading prices and valuations of these stocks, and of our securities, may not be predictable.

A loss of investor confidence in the market for retail stocks or the stocks of other companies, notably in the EV industry, which investors

perceive to be similar to us could depress our stock price regardless of its business, prospects, financial conditions or results of

A decline in the market price for our Common Stock also could adversely affect our ability to issue additional securities

and our ability to obtain additional financing in the future.

A loss of investor

confidence in the market for retail stocks or the stocks of other companies, notably in the EV industry, which investors perceive to be

similar to us could depress our stock price regardless of its business, prospects, financial conditions or results of operations.

in the market price for our Common Stock also could adversely affect our ability to issue additional securities and our ability to obtain

additional financing in the future.

Risks Related to Ownership of Thunder Power’s Warrants

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future issuance and resale in the public market.

Outstanding warrants to

purchase an aggregate of 10,537,475 shares of our Common Stock became exercisable in accordance with the terms of the Warrant Agreement

governing those securities.

Outstanding warrants to purchase

an aggregate of 10,537,475 shares of our Common Stock became exercisable in accordance with the terms of the Warrant Agreement governing

those securities.

The public warrants became exercisable 30 days after the completion of the Business Combination.

likelihood that those warrants will be exercised increases if the trading price of our Common Stock exceeds the exercise price of the

The exercise price of these warrants is $11.50 per share.

There is no guarantee that the warrants will ever be in the money

after they become exercisable prior to their expiration, and as such, the warrants may expire worthless.

To the extent warrants are exercised,

additional shares of our Common Stock will be issued, which may result in dilution to the holders of our Common Stock and increase the

number of shares eligible for resale in the public market.

Sales of substantial numbers of shares issued upon the exercise of warrants

in the public market could adversely affect the market price of our Common Stock.

The likelihood

that those warrants will be exercised increases if the trading price of our Common Stock exceeds the exercise price of the warrants.

exercise price of these warrants is $11.50 per share.

There is no guarantee that the warrants will ever be in the money after they become

exercisable prior to their expiration, and as such, the warrants may expire worthless.

To the extent warrants are exercised, additional

shares of our Common Stock will be issued, which may result in dilution to the holders of our Common Stock and increase the number of

shares eligible for resale in the public market.

Sales of substantial numbers of shares issued upon the exercise of warrants in the public

market could adversely affect the market price of our Common Stock.

Once our warrants become exercisable, we may redeem the unexpired

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by first class mail.

We will not redeem the warrants unless a registration statement under the Securities Act covering the shares of

Common Stock issuable upon exercise of the warrants is effective and a current prospectus relating to those shares of Common Stock is

available throughout the redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise is

exempt from registration under the Securities Act.

If we elect to redeem the warrants on a cashless basis, we will not receive any cash

proceeds from the exercise of such warrants.

We will not redeem the warrants unless a registration statement under the Securities Act covering the shares of Common

Stock issuable upon exercise of the warrants is effective and a current prospectus relating to those shares of Common Stock is available

throughout the redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt from

registration under the Securities Act.

If we elect to redeem the warrants on a cashless basis, we will not receive any cash proceeds from

the exercise of such warrants.

Redemption of the outstanding

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less than the market value of the warrants.

The Warrant Agreement designates the courts of the State of

New York or the United States District Court for the Southern District of New York as the exclusive forum for certain types of actions

and proceedings that may be initiated by holders of the warrants.

Pursuant to the Warrant

Agreement, any action, proceeding or claim against us arising out of or relating in any way to the Warrant Agreement shall be brought

and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York.

The provision

will apply to suit, action, proceeding or claim brought to enforce any liability or duty arising under the Securities Act.

Notwithstanding

the foregoing, the provision will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other

claim for which the federal district courts of the United States of America are the sole and exclusive forum.

The Warrant Agreement designates the courts of the State of New

York or the United States District Court for the Southern District of New York as the exclusive forum for certain types of actions and

proceedings that may be initiated by holders of the warrants.

Pursuant to the Warrant Agreement,

any action, proceeding or claim against us arising out of or relating in any way to the Warrant Agreement shall be brought and enforced

in the courts of the State of New York or the United States District Court for the Southern District of New York.

The provision will apply

to suits, actions, proceedings or claims brought to enforce any liability or duty arising under the Securities Act.

Notwithstanding the

foregoing, the provision will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim

for which the federal district courts of the United States of America are the sole and exclusive forum.

Any person or entity purchasing

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a current and effective prospectus relating to the shares of Common Stock issuable upon exercise of our warrants at the time that holders

wish to exercise such warrants, they will only be able to exercise them on a “cashless basis” provided that an exemption

from registration is available.

As a result, the number of shares of our Common Stock that holders will receive upon exercise of our

warrants will be fewer than it would have been had such holder exercised such warrant for cash.

wish to exercise such warrants, they will only be able to exercise them on a “cashless basis” provided that an exemption from

registration is available.

As a result, the number of shares of our Common Stock that holders will receive upon exercise of our warrants

will be fewer than it would have been had had such holder exercised such warrant for cash.

Further, if an exemption from registration

is not available, holders will not be able to exercise on a cashless basis and will only be able to exercise their warrants for cash

if a prospectus relating to the shares of Common Stock issuable upon exercise of our warrants is filed and effective.

Under the terms

of the Warrant Agreement, ewe have agreed to use our best efforts to meet these conditions and to file and maintain a current and effective

prospectus relating to the shares of Common Stock issuable upon exercise of our warrants, until the expiration of our warrants.

is not available, holders will not be able to exercise on a cashless basis and will only be able to exercise their warrants for cash if

a prospectus relating to the shares of Common Stock issuable upon exercise of our warrants is filed and effective.

Under the terms of

the Warrant Agreement, we have agreed to use our best efforts to meet these conditions and to file and maintain a current and effective

prospectus relating to the shares of Common Stock are issuable upon exercise of our warrants, until the expiration of our warrants.

we cannot assure you that it will be able to do so.

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Risks Related to Finance, Accounting and Tax Matters

Our actual results could differ from the estimates and assumptions

used to prepare our consolidated financial statements.

Our actual results could differ from the

estimates and assumptions used to prepare our consolidated financial statements.

The preparation of our consolidated

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our business, prospects, financial condition and operating results could be materially adversely affected.

Our financial results may vary significantly from quarter to

Our financial results may vary significantly

from quarter to quarter.

We expect our revenue and

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budgets to gain congressional and administration approval in a timely manner.

Additional factors that

may cause our financial results to fluctuate from quarter to quarter include those addressed elsewhere in this “ Risk Factors ”

Additional factors that may

cause our financial results to fluctuate from quarter to quarter include those addressed elsewhere in this “ Risk Factors ”

section, including the immediately preceding risk factor, and the following factors, among others:

● variability

in demand for our services and solutions;

of award or performance incentive fee notices;

of shipments and deliveries to potential future customers;

purchasing patterns under blanket purchase agreements and other indefinite delivery/indefinite

quantity contracts;

of potential future contracts which may affect the timing of revenue recognition;

related to government inquiries;

decisions by us or our competitors, such as acquisitions, divestitures, spin-offs and

joint ventures;

investments or changes in business strategy;

in the extent to which we use subcontractors;

performance errors in our systems;

fluctuations in our staff utilization rates;

in our effective tax rate, including changes in our judgment as to the necessity of the valuation

allowance recorded against our deferred tax assets;

length of sales cycles.

variability in demand for our services and solutions;

timing of award or performance incentive fee notices;

timing of shipments and deliveries to potential future customers;

variable purchasing patterns under blanket purchase agreements and other indefinite delivery/indefinite quantity contracts;

terms of potential future contracts which may affect the timing of revenue recognition;

costs related to government inquiries;

strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs and joint ventures;

strategic investments or changes in business strategy;

changes in the extent to which we use subcontractors;

potential performance errors in our systems;

seasonal fluctuations in our staff utilization rates;

changes in our effective tax rate, including changes in our judgment as to the necessity of the valuation allowance recorded against our deferred tax assets;

the length of sales cycles.

We could be subject to additional tax liabilities.

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affected by many factors, including, among other things, changes to our operating or holding structure, changes in the amounts of earnings

in jurisdictions with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, and changes in

Tax authorities may disagree with our calculation of research and development tax credits, cross-jurisdictional transfer

pricing, or other matters and assess additional taxes, interest, or penalties.

While we regularly assess the likely outcomes of these

examinations to determine the adequacy of our provision for income taxes and we believe that our financial statements reflect adequate

reserves to cover any such contingencies, there can be no assurance that the outcomes of such examinations will not have a material impact

on our results of operations and cash flows.

If tax authorities change applicable tax laws, our overall taxes could increase, and our

financial condition or results of operations may be adversely impacted.

Unanticipated changes in effective tax

rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our financial condition

and results of operations.

in jurisdictions with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, and changes in U.S.

Tax authorities may disagree with our calculation of research and development tax credits, cross-jurisdictional transfer pricing,

or other matters and assess additional taxes, interest, or penalties.

While we regularly assess the likely outcomes of these examinations

to determine the adequacy of our provision for income taxes and we believe that our financial statements reflect adequate reserves to

cover any such contingencies, there can be no assurance that the outcomes of such examinations will not have a material impact on our

results of operations and cash flows.

If tax authorities change applicable tax laws, our overall taxes could increase, and our financial

condition or results of operations may be adversely impacted.

Unanticipated changes in effective tax rates or adverse outcomes

resulting from examination of our income or other tax returns could adversely affect our financial condition and results of operations.

We are subject to income

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Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including:

in the valuation of our deferred tax assets and liabilities;

timing and amount of the release of any tax valuation allowances;

effects of stock-based compensation;

related to intercompany restructurings;

in tax laws, regulations or interpretations thereof;

than anticipated future earnings in jurisdictions where we have lower statutory tax rates

and higher than anticipated future earnings in jurisdictions where we have higher statutory

In addition, we may be subject to audits of our

income, sales and other transaction taxes by taxing authorities.

Outcomes from these audits could have an adverse effect on our financial

condition and results of operations.

changes in the valuation of our deferred tax assets and liabilities;

expected timing and amount of the release of any tax valuation allowances;

tax effects of stock-based compensation;

costs related to intercompany restructurings;

changes in tax laws, regulations or interpretations thereof;

lower than anticipated future earnings in jurisdictions where we have lower statutory tax rates and higher than anticipated future earnings in jurisdictions where we have higher statutory tax rates.

In addition, we may be subject

to audits of our income, sales and other transaction taxes by taxing authorities.

Outcomes from these audits could have an adverse effect

on our financial condition and results of operations.

The issuance and sale of additional shares

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the effectiveness of this registration statement, we may direct Westwood to purchase shares of our Common Stock under the Purchase Agreement.

The purchase price for shares will be based on the lowest daily volume weighted average price of our Common Stock during a three consecutive

trading day period following delivery of a purchase notice, less a 5% discount.

Because this price is based on prevailing market prices

at the time of each sale, if our stock price declines, we might need to issue more shares to raise the same amount of funding.

While we have the right

to control the timing and amount of sales under the Purchase Agreement, subject to certain conditions, any such issuances would result

in dilution to our existing stockholders.

The purchase price for shares will be based on the lowest daily volume weighed average price of our Common Stock during a three consecutive

trading day following delivery of a purchase notice, less a 5% discount.

Because this price is based on prevailing market prices at the

time of each sale, if our stock price declines, we might need to issue more shares to raise the same amount of funding.

While we have the right to

control the timing and number of sales under the Purchase Agreement, subject to certain conditions, any such issuances would result in

dilution to our existing stockholders.

The extent of dilution will depend on numerous factors, including:

market price of our Common Stock at the time of each sale

number of shares we ultimately sell to Westwood

sales of our Common Stock that we may make from time to time

The market price of our Common Stock at the time of each sale

The number of shares we ultimately sell to Westwood

Other sales of our Common Stock that we may make from time to time

Moreover, additional issuances

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This in turn could:

the dilution to existing stockholders from future issuances

our ability to raise additional capital through other equity offerings

it more difficult to meet the Nasdaq continued listing requirements

We are not in compliance with the Nasdaq

continued listing requirements.

If we are unable to comply with the continued listing requirements of The Nasdaq Capital Market, our

common stock could be delisted, which could affect our common stock’s market price and liquidity and reduce our ability to raise

March 7, 2025, Thunder Power Holdings, Inc., a Delaware corporation (the “Company”) received a notification letter from the

Nasdaq Listing Qualifications department of The Nasdaq Stock Market LLC (“Nasdaq”) stating that the Company has not regained

compliance with Nasdaq Listing Rules 5450(a)(1), which requires the Company’s listed securities to maintain a minimum bid price

of $1.00 per share (the “Bid Price Rule”) and 5450(b)(2)(A), which requires the Company to maintain a minimum Market Value

of Listed Securities (“MVLS”) of $50,000,000 (the “MVLS Rule”).

Accordingly, the Nasdaq Staff has determined

that the Company’s securities will be delisted from the Nasdaq Global Market.

Unless the Company requests an appeal of Nasdaq’s

determination, trading of the Company’s common stock will be suspended at the opening of business on March 18, 2025, and a Form

25-NSE will be filed with the Securities and Exchange Commission, which will remove the Company’s securities from listing and registration

on The Nasdaq Stock Market.

Increase the dilution to existing stockholders from future issuances

Impair our ability to raise additional capital through other equity offerings

Adversely affect the liquidity and trading price of our Common Stock on the OTCQB Venture Market

Our Common Stock has been delisted from

The Nasdaq Capital Market and is now traded on the OTCQB Venture Market, which could adversely affect its market price, liquidity, and

our ability to raise capital.

March 7, 2025, the Company received a notification letter from the Nasdaq Listing Qualifications department of The Nasdaq Stock Market

LLC (“Nasdaq”) stating that the Company has not regained compliance with Nasdaq Listing Rules 5450(a)(1), which requires the

Company’s listed securities to maintain a minimum bid price of $1.00 per share (the “Bid Price Rule”) and 5450(b)(2)(A),

which requires the Company to maintain a minimum Market Value of Listed Securities (“MVLS”) of $50,000,000 (the “MVLS

Accordingly, the Nasdaq Staff has determined that the Company’s securities will be delisted from The Nasdaq Global

Unless the Company requests an appeal of Nasdaq’s determination, trading of the Company’s Common Stock will be suspended

at the opening of business on March 18, 2025, and a Form 25-NSE will be filed with the Securities and Exchange Commission, which will

remove the Company’s securities from listing and registration on The Nasdaq Stock Market.

previously disclosed in the Company’s Current Report on Form 8-K filed on September 6, 2024, Nasdaq notified the Company on September

4, 2024 that, based upon the closing bid price for the Company’s Common Stock for the 30 prior consecutive business days, the Company

no longer satisfied the Bid Price Rule, and that it had been provided a 180-calendar day grace period to regain compliance with that

requirement, through March 3, 2025.

As disclosed in the same Form 8-K, Nasdaq also notified the Company that it was not in compliance

with the MVLS Rule based upon the Company’s MVLS for the previous 30 consecutive business days, and that it had been provided a

180-calendar day grace period to regain compliance with that requirement, through March 3, 2025.

can be no assurances that the Panel will grant our request for a hearing or a stay on its suspension of our securities.

Additionally,

there can be no assurances that the Panel will provide a decision in our favor after the hearing, or that we will be able to remain in

compliance with the applicable Nasdaq listing requirements on an ongoing basis.

If our common stock is delisted,

it could be more difficult to buy or sell our common stock and to obtain accurate quotations, and the price of our common stock could

suffer a material decline.

Delisting could also impair the liquidity of our common stock and could harm our ability to raise capital

through alternative financing sources on terms acceptable to us, or at all, and may result in potential loss of confidence by investors,

employees, and fewer business development opportunities.

no longer satisfied the Bid Price Rule, and that it had been provided a 180-calendar day grace period to regain compliance with that requirement,

through March 3, 2025.

As disclosed in the same Form 8-K, Nasdaq also notified the Company that it was not in compliance with the MVLS

Rule based upon the Company’s MVLS for the previous 30 consecutive business days, and that it had been provided a 180-calendar day

grace period to regain compliance with that requirement, through March 3, 2025.

March 26, 2025, the Company received approval from the Listing Qualifications Department of Nasdaq to transfer the listing of the Company’s

Common Stock from The Nasdaq Global Market to The Nasdaq Capital Market.

On April 1, 2025, the Company received a partial moot letter

from Nasdaq, stating that the noncompliance concern of MVLS Rule is moot, and that the Company is only noncompliant with the Bid Price

On April 2, 2025, the Company submitted its written pre-hearing materials, detailing its plan to regain the Bid Price Rule.

of the foregoing, on April 8, 2025, the Company received an additional Staff delist determination letter, outlining a new concern that

the Staff believed the Company is a “public shell,” as that term is defined by Nasdaq under Nasdaq Listing Rule 5101 and will

consider this matter in rendering a determination regarding the Company’s continued listing.

The Company disagrees with the Staff’s

As previously disclosed, the Company has requested a hearing before the Nasdaq Hearings Panel (the “Panel”), and

plans to address the issue at the hearing.

On April 17, 2025, Nasdaq

notified the Company that the Panel has determined to affirm the denial of the Company’s request to continue its listing of the

Company’s Common Stock, and that trading of the Company’s Common Stock was suspended at the open of trading on April 21, 2025.

On July 21, 2025, Nasdaq filed Form 25 with the Securities and Exchange Commission to delist the Company’s securities from Nasdaq.

The delisting became effective on July 31, 2025.

As of the date of this report, the Company’s Common Stock is traded on the over-the-counter

market under the symbol “AIEV”.

As our securities were delisted

from the The Nasdaq Capital Market on July 31, 2025, there can be no assurance that an active or liquid trading market for our Common

Stock will be sustained on the over-the-counter market.

It could be more difficult to buy or sell our Common Stock and to obtain accurate

quotations, and the price of our Common stock could suffer a material decline.

Delisting could also impair the liquidity of our common

stock and could harm our ability to raise capital through alternative financing sources on terms acceptable to us, or at all, and may

result in potential loss of confidence by investors, employees, and fewer business development opportunities.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors