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• Our research and development efforts may not yield the expected results, or results on expected timelines or at expected costs.
−Removed: • Increases in costs, disruption of supply or shortage of materials, including but not limited to, lithium-ion battery cells and key semiconductor chip components necessary for our electric vehicles, could materially and negatively affect our business.
+Added: • Increases in costs, disruption of supply, or shortage of materials and components necessary for our electric vehicles, could materially and negatively affect our business.
• Our limited operating history makes evaluating our business and future prospects difficult.
• We may be unable to develop and produce electric vehicles of sufficient quality, on a schedule and at scale, that would appeal to a large customer base.
−Removed: • We are a pioneer in a new space.
−Removed: As we scale and expand our business, we may not be able to adequately control the costs of our operations.
−Removed: • The electric vehicle sector is rapidly growing and our products and services are and will be subject to strong competition from a growing list of competitors.
+Added: • The electric vehicle sector is growing and our products and services are and will be subject to competition from competitors.
• Our business and prospects depend significantly on our ability to build the LiveWire brand and consumers’ recognition, acceptance and adoption of the LiveWire brand.
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• If we are unable to establish and maintain confidence in our long-term business prospects among customers and analysts and within our industry, or are subject to negative publicity, then our business, prospects, financial condition and operating results may suffer materially.
−Removed: • We, our outsourcing partners, and our suppliers are subject to numerous regulations.
−Removed: Unfavorable changes to, or failure by us, our outsourcing partners or our suppliers to comply with these regulations could materially and negatively affect our business, prospects, financial condition and operating results.
+Added: • We, our service providers, and our suppliers are subject to numerous regulations.
+Added: Unfavorable changes to, or failure by us, our service providers or our suppliers to comply with these regulations could materially and negatively affect our business, prospects, financial condition and operating results.
• Electric vehicles are inherently new products.
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Failure to become profitable could materially and adversely affect the value of our Common Stock.
−Removed: If we are ever to achieve profitability, it will be dependent upon the successful development and commercial introduction and acceptance of our electric vehicles, such as the LiveWire One and the S2 Del Mar, and our services, which may not occur.
+Added: If we are ever to achieve profitability, it will be dependent upon the successful development and commercial introduction and acceptance of our electric vehicles, and our services, which may not occur.
Our business also will at times require significant amounts of working capital to support the growth of additional electric vehicle platforms and electric vehicle models.
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Our research and development expenses accounted for 156.73%, 142.20%, and 76.04% of our total revenues for the years ended December 31, 2024, 2023, and 2022, respectively.
−Removed: The electric vehicle industry is experiencing rapid technological changes, and we need to invest significant resources in research and development to lead technological advances and remain competitive in the market.
+Added: The electric vehicle industry can experience rapid technological changes, and we often need to invest significant resources in research and development to lead or maintain technological advances and remain competitive in the market.
Therefore, we expect that our research and development expenses will continue to be significant.
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Even if we are able to keep pace with changes in technologies and develop new models, our prior models could become obsolete more quickly than expected, potentially reducing our return on investment.
−Removed: Increases in costs, disruption of supply or shortage of materials, in particular for lithium-ion battery cells and key semiconductor chip components necessary for our electric vehicles, could materially and negatively affect our business.
+Added: Increases in costs, disruption of supply, or shortage of materials and components necessary for our electric vehicles, could materially and negatively affect our business.
We and our suppliers may experience increases in the cost of or a sustained interruption in the supply or shortage of materials.
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The available supply of these materials may be unstable, depending on market conditions and global demand.
−Removed: For example, COVID-19, the conflict in Ukraine, the Israeli-Palestinian military conflict, and inflationary pressure, may cause disruptions to and delays in our operations, including shortages and delays in the supply of certain parts, including semiconductors, materials and equipment necessary for the production of our vehicles, and the various internal designs and processes we may adopt in an effort to remedy or mitigate impacts of such disruptions and delays may result in higher costs.
+Added: For example, global trade issues and changes in and uncertainties with respect to trade and export regulations, trade policies and sanctions, tariffs, international trade disputes, particularly those relating to exports of certain technologies to China, geopolitical events and related actions that may occur between mainland China and Taiwan, the conflict in Ukraine, the Israeli-Palestinian military conflict, and inflationary pressure, may cause disruptions to and delays in our operations, including shortages and delays in the supply of certain parts, including semiconductors, materials and equipment necessary for the production of our vehicles, and the various internal designs and processes we may adopt in an effort to remedy or mitigate impacts of such disruptions and delays may result in higher costs.
In addition, our business also depends on the continued supply of battery cells for our electric vehicles.
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LiveWire has in the past experienced, and we may in the future experience, semiconductor chip and electronics subcomponents shortages, and the availability and cost of these components would be difficult to predict.
−Removed: In particular, increased demand for semiconductor chips in 2020, due in part to the COVID-19 pandemic and increased demand for consumer electronics that use these chips, has resulted in a severe global shortage of chips in 2021, 2022 and 2023, which we expect to continue in 2024 as a consequence of the COVID-19 pandemic, inflation of raw material costs, the conflict in Ukraine and the Israeli-Palestinian military conflict.
−Removed: As a result, our ability to source semiconductor chips used in our electric vehicles could continue to be adversely affected.
−Removed: This shortage may result in increased chip delivery lead times, delays in the production of our electric vehicles, and increased costs to source available semiconductor chips.
−Removed: For example, we faced supply constraints related to certain components including those impacted by the global semiconductor chip shortages.
−Removed: To the extent this semiconductor chip shortage continues, and we are unable to mitigate the effects of this shortage, our ability to deliver sufficient quantities of our electric vehicles could be adversely affected.
−Removed: In addition, we may be required to incur additional costs and expenses in managing ongoing semiconductor chip shortages, including additional research and development expenses and engineering design and development costs in the event that new suppliers must be onboarded on an expedited basis.
Furthermore, fluctuations or shortages in petroleum and changes in economic conditions may cause us to experience significant increases in freight charges and material costs.
Substantial increases in the prices for our materials or prices charged to us, such as those charged by battery cell or semiconductor chip suppliers, would increase our operating costs and could reduce our margins.
−Removed: For example, due to the global semiconductor supply shortage, other supply chain issues including the COVID-19 pandemic, the conflict in Ukraine, the Israeli-Palestinian military conflict, and the current inflationary environment in the United States, the cost of input materials, components and processes required to produce our electric vehicles is expected to
−Removed: increase, and we may need to increase the prices of our electric vehicles in response to these cost pressures.
+Added: For example, supply chain issues, resulting from global trade issues and changes in and uncertainties with respect to trade and export regulations, trade policies and sanctions, tariffs, international trade disputes, particularly those relating to exports of certain technologies to China, geopolitical events and related actions that may occur between mainland China and Taiwan, the conflict in Ukraine, the Israeli-Palestinian military conflict, and inflationary pressure, may result in increases in the cost of input materials, components and processes required to produce our electric vehicles, and we may need to increase the prices of our electric vehicles in response to these cost pressures.
Price increases and other measures taken by us to offset higher costs could materially and adversely affect our reputation and brand, result in negative publicity and loss of customers and sales, and adversely affect our business, prospects, financial condition and operating results.
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We then launched the LiveWire One model in July 2021 followed by a special launch edition of the S2 Del Mar® in May 2022 with full production and sales beginning in the third quarter of 2023.
+Added: In 2024, additional models on the S2 platform were sold.
In 2019, H-D acquired STACYC Inc.
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and manage our growth effectively.
−Removed: While our Electric Motorcycles segment currently focuses on the LiveWire One and the S2 Del Mar, we expect our product roadmap to expand beyond the LiveWire One and the S2 Del Mar and introduce new models in other categories or using other technologies that we have less experience in as we may adjust our strategies and plans from time to time to remain competitive as a pioneer in a new industry.
+Added: While our Electric Motorcycles segment currently focuses on the LiveWire One and the S2 platform, we expect our product roadmap to expand beyond the LiveWire One and the S2 platform and introduce new models in other categories or using other technologies that we have less experience in as we may adjust our strategies and plans from time to time to remain competitive as a pioneer in a new industry.
If we fail to address any or all of these risks and challenges, our business may be materially and adversely affected.
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Our business depends in large part on our ability to develop, market, produce and sell our electric vehicles.
−Removed: The continued development of and the ability to sell our electric vehicles at scale, including the LiveWire One, the S2 Del Mar, and future electric vehicles, are and will be subject to risks, including with respect to:
+Added: The continued development of and the ability to sell our electric vehicles at scale, including the LiveWire One, the S2 platform, and future electric vehicles, are and will be subject to risks, including with respect to:
• our ability to secure necessary funding;
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• defects in design and/or manufacture that cause our electric vehicles not to perform as expected or that require repair, field actions, product recalls or design changes;
−Removed: • delays, disruptions or increased costs in our third-party outsourcing partners’ and our third-party suppliers’ supply chain, including raw material supplies;
+Added: • delays, disruptions or increased costs in our third-party service providers’ and our third-party suppliers’ supply chain, including raw material supplies;
• other delays, cost overruns and backlog in manufacturing and research and development of new models;
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Historically, motorcycle customers have expected motorcycle manufacturers to periodically introduce new and improved vehicle models.
−Removed: To meet these expectations, we intend to introduce new electric motorcycle models and enhanced versions of
−Removed: existing models.
+Added: To meet these expectations, we intend to introduce new electric motorcycle models and enhanced versions of existing models.
The electric vehicle market is new and quickly evolving.
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Any of the foregoing could have a material adverse effect on our business, prospects, financial condition and operating results.
−Removed: We are a pioneer in a new space.
−Removed: As we scale and expand our business, we may not be able to adequately control the costs of our operations.
−Removed: We have a short operating history in the electric vehicle industry, which is continuously evolving.
−Removed: Through our partnership with H-D and retail partners, comprised largely of existing H-D dealers, we have partners with extensive experience selling internal combustion engine motorcycles at scale.
−Removed: Despite this experience, the electric motorcycle industry is new, and there are no guarantees that this experience will result in sales of electric motorcycles at a comparable scale.
−Removed: We will require significant capital to develop and grow our business, including developing and producing our electric vehicles, establishing or expanding design, research and development, production and building our brand.
−Removed: We have incurred and expect to continue incurring significant expenses, including research and development expenses, raw material procurement costs, sales and distribution expenses, as we build our brand and market our electric vehicles, and general and administrative expenses as we scale our operations, identify and commit resources to investigate new areas of demand and incur costs as a public company, which will impact our profitability.
−Removed: Our ability to become profitable in the future is dependent on the design, development and marketability of our product portfolio while also controlling costs to achieve expected margins.
−Removed: If we are unable to efficiently design, develop, market, deploy, distribute and service our electric vehicles, our margins, profitability and prospects could be materially and adversely affected.
−Removed: The electric vehicle sector is rapidly growing and our products and services are and will be subject to strong competition from a growing list of competitors.
+Added: The electric vehicle sector is growing and our products and services are and will be subject to competition from competitors.
Both the vehicle industry generally, and the electric motorcycle sector in particular, are highly competitive, and our Electric Motorcycle segment will be competing for sales with both leading internal combustion engine-focused companies and smaller electric motorcycle-focused companies.
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Increased competition may lead to lower vehicle unit sales and increased inventory, which may result in downward price pressure and adversely affect our business, prospects, financial condition and operating results.
−Removed: We also expect competition for electric vehicles to intensify due to increased demand and a regulatory push for alternative fuel vehicles, continuing globalization and consolidation in the worldwide automotive industry.
+Added: We also expect competition for electric vehicle customers to intensify due to current and potential future demand constraints.
Further, as a result of new entrants in the electric vehicle market, we may experience increased competition for components and other parts of our electric vehicles, including internal competition between our Electric Motorcycle and STACYC segments, which may have limited or single-source supply.
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In addition, if negative incidents occur or are perceived to have occurred, whether or not such incidents are our fault, we could be subject to adverse publicity.
−Removed: In particular, given the popularity of social media, any negative publicity, whether true or not,
−Removed: could quickly proliferate and materially and negatively affect consumer perceptions and confidence in the LiveWire brand.
+Added: In particular, given the popularity of social media, any negative publicity, whether true or not, could quickly proliferate and materially and negatively affect consumer perceptions and confidence in the LiveWire brand.
Furthermore, there is the risk of potential adverse publicity related to our manufacturing partners or other partners whether or not such publicity is related to their collaboration with us.
−Removed: Our ability to successfully position our brand could also be adversely affected by perceptions about the quality of our competitors’ vehicles.
+Added: Our ability to successfully position our brand could also be adversely affected by perceptions about the quality of ours or our competitors’ vehicles.
In addition, from time to time, our electric vehicles may be evaluated and reviewed by third parties.
−Removed: Any negative reviews or reviews that compare us unfavorably to competitors could adversely affect consumer perception about our electric vehicles.
+Added: Any negative reviews or reviews that compare us unfavorably to competitors or unfavorably to ICE motorcycle products could adversely affect consumer perception about our electric vehicles or electric vehicles in general.
We have an established standard of quality and associated consumer expectations through our H-D motorcycle lineage.
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A key financial benefit to our business is our asset-light operating model in which we rely on contract manufacturers to produce our electric vehicles.
−Removed: We have secured the experience and expertise of H-D and KYMCO to serve as our long-term contract manufacturing partners to provide manufacturing, procurement, logistics and distribution services for our platforms and certain other products.
−Removed: If these contract manufacturing agreements terminate or expire, or if H-D or KYMCO fail to perform or meet our expected quality standards, timelines, capacity requirements, costs, manufacturing capabilities or manufacturing footprint, we may need to engage another third‑party contract manufacturer or build our own in-house manufacturing capabilities, which could cause us to incur significant cost and expense.
−Removed: Additionally, our recourse against H-D for their failure to perform or meet our expected quality standards is limited.
+Added: We have secured the experience and expertise of H-D and KYMCO, as well as other vendors for STACYC products, to serve as our long-term contract manufacturing partners to provide manufacturing, procurement, logistics and distribution services for our platforms and certain other products.
+Added: If these contract manufacturing agreements terminate or expire, or if H-D or KYMCO, or other vendors for STACYC products, fail to perform or meet our expected quality standards, timelines, capacity requirements, costs, manufacturing capabilities or manufacturing footprint, we may need to engage another
+Added: third‑party contract manufacturer or build our own in-house manufacturing capabilities, which could cause us to incur significant cost and expense.
+Added: Additionally, our contractual exclusivity requirements and potential recourse against H-D for their failure to perform or meet our expected quality standards is limited.
We do not currently have alternate manufacturing arrangements in place so it may take time to transition to another contract manufacturer, and there is no guarantee that they would be able to meet our capacity, capability or quality requirements, or otherwise be an effective and acceptable manufacturing solution.
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If retail partners are unwilling to participate in our go-to-market business model or are unable or ineffective in establishing or maintaining relationships with customers for electric vehicles, it may adversely impact our business.
−Removed: We employ a go-to-market business model whereby our revenue is generated primarily by sales through retail partners, which are largely drawn from H-D’s traditional motorcycle dealer network while we also seek to develop new retail partners.
+Added: We employ a go-to-market business model whereby our revenue is generated primarily by selling at wholesale to a network of independent dealers, which currently are largely drawn from H-D’s traditional motorcycle dealer network, while we also seek to develop new retail partners.
We depend on the capability of these retail partners to develop and implement effective retail sales plans to create demand among retail purchasers for our electric vehicles and related products and services that the retail partners may purchase from us.
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Our ability to achieve revenue growth in the future will depend, in part, on our success in maintaining successful relationships with our retail partners, identifying additional retail partners, including in new markets, and training our retail partners to independently sell our electric vehicles.
−Removed: If our retail partners are unsuccessful in selling electric vehicles, or if we are unable to enter into arrangements with or retain a sufficient number of high-quality retail partners in each of the regions in which we sell our electric vehicles and keep them motivated to sell our electric vehicles, our business, prospects, financial condition and operating results could be adversely affected.
+Added: For example, we recently changed our go-to-market strategy in Europe from selling direct to customers through international partners to selling at wholesale to independent dealers.
+Added: If our current retail partners in Europe do not commit to our new go-to-market strategy by continuing to be a part of our network going forward, or if we are unable to enter into arrangements with or retain a sufficient number of high-quality retail partners in each of the regions in which we sell our electric vehicles and keep them motivated to sell our electric vehicles, our business, prospects, financial condition and operating results could be adversely affected.
If we are unable to establish and maintain confidence in our long-term business prospects among customers and analysts and within our industry, or are subject to negative publicity, then our business, prospects, financial condition and operating results may suffer materially.
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and our production and sales performance compared with market expectations.
−Removed: We, our outsourcing partners, and our suppliers are subject to numerous regulations.
−Removed: Unfavorable changes to, or failure by us, our outsourcing partners or our suppliers to comply with, these regulations could materially and negatively affect our business, prospects, financial condition and operating results.
−Removed: We and our electric vehicles, and vehicles in general, as well as our third-party outsourcing partners and our suppliers, are or will be subject to substantial regulation under foreign, federal, state and local laws.
+Added: We, our service providers, and our suppliers are subject to numerous regulations.
+Added: Unfavorable changes to, or failure by us, our service providers or our suppliers to comply with these regulations could materially and negatively affect our business, prospects, financial condition and operating results.
+Added: We and our electric vehicles, and vehicles in general, as well as our third-party service providers partners and our suppliers, are or will be subject to substantial regulation under foreign, federal, state and local laws.
We continue to evaluate requirements for licenses, approvals, certificates and governmental authorizations necessary to manufacture, sell, deploy or service our electric vehicles in the jurisdictions in which we plan to operate and, to the extent we have not already, intend to take such actions necessary to comply.
We may experience difficulties in obtaining or complying with various licenses, approvals, certifications and other governmental authorizations necessary to manufacture, sell, deploy or service our electric vehicles in any of these jurisdictions.
−Removed: If we, our third‑party outsourcing partners or our suppliers are unable to obtain or comply with any of the licenses, approvals, certifications or other governmental authorizations necessary to carry out our operations in the jurisdictions in which we or they currently operate, or those jurisdictions in which we or they plan to operate in the future, our business, prospects, financial condition and operating results could be materially adversely affected.
+Added: If we, our third‑party service providers or our suppliers are unable to obtain or comply with any of the licenses, approvals, certifications or other governmental authorizations necessary to carry out our operations in the jurisdictions in which we or they currently operate, or those jurisdictions in which we or they plan to operate in the future, our business, prospects, financial condition and operating results could be materially adversely affected.
We expect to incur significant costs in complying with these regulations.
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To the extent our suppliers experience any delays in providing our outsourced manufacturing partners with or developing necessary components, we could experience delays in delivering on our timelines.
−Removed: See “-Increases in costs, disruption of supply or shortage of materials, in particular for lithium-ion battery cells, could materially and negatively affect our business.”
−Removed: The battery’s range and life will deteriorate with usage and time, which, if material, could negatively influence potential customers’ decisions to purchase our electric vehicles.
−Removed: All lithium-ion batteries are consumable components that become less effective as they chemically age.
−Removed: As lithium-ion batteries chemically age, the amount of charge they can hold diminishes, which may result in a perceptible decrease in range for an
−Removed: electric vehicle.
−Removed: This can be referred to as the battery’s maximum capacity, i.e., the measure of battery capacity relative to when it was new.
−Removed: In addition, a battery’s ability to deliver maximum instantaneous performance, or “peak power,” may decrease and impact acceleration performance in an electric vehicle.
−Removed: A normal battery is designed to retain up to 80% of its original capacity after 30,000 miles when operating under normal conditions.
−Removed: Although common to all electric vehicles, lithium-ion battery aging may negatively influence potential customers’ electric vehicle purchase decisions.
+Added: See “-Increases in costs, disruption of supply, or shortage of materials and components could materially and negatively affect our business.”
Our business may suffer if our products or features contain defects or fail to perform as expected.
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In addition, as we evaluate opportunities and take steps to insource certain components and parts, supply arrangements with current or future suppliers (with respect to other components and parts offered by such suppliers) may be available on less favorable terms or not at all, especially in light of the increases in materials pricing.
−Removed: Unexpected changes in business conditions, materials pricing, including inflation of raw material costs, labor issues, wars, trade policies, natural disasters, health epidemics, trade and shipping disruptions, port congestions and other factors beyond our or our suppliers’ control could also affect these suppliers’ ability to deliver components to us or to remain solvent and operational.
−Removed: For example, a global shortage of semiconductor chips has been reported since early 2021 and has caused challenges in the manufacturing industry and impacted our supply chain and production as well.
+Added: Unexpected changes in business conditions, materials pricing, including inflation of raw material costs, labor issues, wars, trade policies, tariffs, natural disasters, health epidemics, trade and shipping disruptions, port congestions and other factors beyond our or our suppliers’ control could also affect these suppliers’ ability to deliver components to us or to remain solvent and operational.
+Added: For example, a global shortage of semiconductor chips was reported beginning in early 2021 and caused challenges in the manufacturing industry and impacted our supply chain and production as well.
Additionally, if our suppliers do not accurately forecast and effectively allocate production or if they are not willing to allocate sufficient production to us, it may reduce our access to components and require us to search for new suppliers.
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Any attempts to increase the announced or expected prices of our electric vehicles in response to increased costs could be viewed negatively by our potential customers and could adversely affect our business, prospects, financial condition and operating results.
−Removed: As we continue to grow, we may not be able to effectively manage our growth, which could negatively impact our brand and financial performance.
−Removed: We intend to expand our operations significantly, which will require hiring, retaining and training new personnel, controlling expenses, establishing facilities, and implementing administrative infrastructure, systems, and processes.
−Removed: Our future operating results depend to a large extent on our ability to manage this expansion and growth successfully.
−Removed: Risks that we face in undertaking this expansion include, among others:
−Removed: • attracting and retaining skilled and qualified personnel to support our expanded operations at existing facilities or operations at any facilities we may construct or acquire in the future;
−Removed: • managing a larger organization with a great number of employees in different divisions and geographies;
−Removed: • training and integrating new employees into our operations to meet the growing demands of our business;
−Removed: • controlling expenses and investments in anticipation of expanded operations;
−Removed: • establishing or expanding design, manufacturing and sales;
−Removed: • managing regulatory requirements, permits and labor issues and controlling costs in connection with the construction of additional facilities or the expansion of existing facilities;
−Removed: • implementing and enhancing administrative infrastructure, systems and processes.
−Removed: Furthermore, we have limited experience to date in high volume production of our electric vehicles, and we cannot ensure that we will be able to continue to partner with reliable contract manufacturers 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 market our electric vehicles as our operations expand.
−Removed: Any failure to effectively manage our growth could negatively impact our brand and financial performance.
−Removed: Unexpected termination of leases or failure to renew the lease of our existing premises or to renew such leases at acceptable terms could materially and adversely affect our business.
−Removed: We currently lease the premises for our research and development facility, retails stores and offices.
−Removed: We cannot assure you that we would be able to renew the relevant lease agreements without substantial additional cost or increase in the rental cost payable by us.
−Removed: If a lease agreement is renewed at a rent substantially higher than the current rate, or currently existing favorable terms granted by the lessor are not extended, our business and results of operations may be adversely affected.
−Removed: Additionally, if our sublease at our Company-owned dealership location is either terminated or not renewed by our landlord and we do not have an existing alternate dealership location, that could jeopardize our dealer license, which would impact our ability to make direct sales to consumers and could materially and adversely affect our business.
−Removed: We may be unable to complete environmental, social and governance (“ESG”) initiatives, in whole or in part, which could lead to less opportunity for us to have ESG investors and partners and could negatively impact ESG‑focused investors when evaluating us.
−Removed: There has been increased focus, including by consumers, investors, employees and other stockholders, as well as by governmental and non-governmental organizations, on ESG matters generally and with regard to our industry specifically.
−Removed: We have undertaken, and plan to continue undertaking, ESG initiatives.
−Removed: Any failure by us to meet our commitments or loss of confidence on the part of customers, investors, employees, brand partners and other stockholders as it relates to our ESG initiatives could negatively impact our brand, our business, prospects, financial condition and operating results.
−Removed: These impacts could be difficult and costly to overcome, even if such concerns were based on inaccurate or misleading information.
−Removed: In addition, achieving our ESG initiatives may result in increased costs in our supply chain, fulfillment, and/or corporate business operations, and could deviate from our initial estimates and have a material adverse effect on our business and financial condition.
−Removed: In addition, regulation, standards and research regarding ESG initiatives could change and become more onerous for both us and our third-party suppliers and vendors to meet successfully.
−Removed: Evolving data and research could undermine or refute our current claims and beliefs that we have made in reliance on current research, which could also result in costs, a decrease in revenue, and negative market perception that could have a material adverse effect on our business and financial condition.
−Removed: A variety of organizations measure the performance of companies on such ESG topics, and the results of these assessments are widely publicized.
−Removed: In addition, 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.
−Removed: Topics taken into account in such assessments include, among others, the company’s efforts and impacts on climate change and human rights, ethics and compliance with law and the role of the company’s board of directors in supervising various sustainability issues.
−Removed: In light of investors’ increased focus on ESG matters, there can be no certainty that we will manage such issues successfully or that we will successfully meet society’s ESG expectations or achieve our financial goals.
−Removed: Simultaneously, there are efforts by some stakeholders to reduce companies’ efforts on certain ESG-related matters.
−Removed: Both advocates and opponents to certain ESG matters are increasingly resorting to a range of activism forms, including media campaigns and litigation, to advance their perspectives.
−Removed: To the extent we are subject to such activism, it may require us to incur costs or otherwise adversely impact our business.
−Removed: While we may create and publish voluntary disclosures regarding ESG matters from time to time, many of the statements in those voluntary disclosures are based on hypothetical expectations and assumptions that may or may not be representative of current or actual risks or events or forecasts of expected risks or events, including the associated costs.
−Removed: Such expectations and assumptions are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved in measuring and reporting on many ESG matters.
−Removed: In addition, emerging regulation requiring additional ESG public disclosure by certain companies in a number of jurisdictions and/or additional ESG obligations (for example, in relation to supply chains) may lead to heightened scrutiny of our ESG performance, to the extent we are required to publish additional information in relation to our ESG performance or to meet such additional ESG obligations.
−Removed: For example, the SEC has published proposed rules that require companies to provide significantly expanded climate‐related disclosures in their periodic reporting, which may require us to incur significant additional costs to comply, including the implementation of significant additional internal controls processes and procedures regarding matters that have not been subject to such controls in the past, and impose increased oversight obligations on our management and board of directors.
−Removed: The SEC’s Fall 2023 regulatory agenda indicates that the SEC intends to take final action on its ESG reporting rules in April 2024.
−Removed: In addition, California has recently enacted climate disclosure laws that may require us to report on our greenhouse gas emissions, climate‐related financial risks and other climate‐related matters.
−Removed: Furthermore, industry and market practices may further develop to become even more robust than what is required under any new laws and regulations, and we may have to expend significant efforts and resources to keep up with market trends and stay competitive among our peers, which could result in higher associated compliance costs and penalties for failure to comply with such laws and regulations.
−Removed: Additionally, many of our customers and suppliers may be subject to similar expectations, which may augment or create additional risks.
−Removed: To the extent that our ESG initiatives are deemed to be insufficient by stakeholders, this may lead to a negative impact on our business.
The success of our business depends on the availability of power and charging infrastructure for electric vehicles.
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To the extent we are unable to meet user expectations or experience difficulties in facilitating access to charging solutions, our reputation and business, prospects, financial condition and operating results may be materially and adversely affected.
+Added: We may face challenges in expanding our business and operations internationally, and our ability to conduct business in international markets may be adversely affected by legal, regulatory, political and economic risks.
+Added: Our business plan includes operations in international markets, including, but not limited to, Germany, France, Netherlands, Switzerland, Spain, Italy, United Kingdom, and Canada, and eventual expansion into other international markets.
+Added: We will face risks associated with any potential international operations, including possible unfavorable legal, regulatory, political and economic risks, which could materially and negatively affect our business.
+Added: We anticipate having international operations and subsidiaries that are subject to the legal, political, regulatory and social requirements and economic conditions in these jurisdictions.
+Added: Furthermore, conducting and launching operations on an international scale requires close coordination of activities across multiple jurisdictions and time zones and consumes significant management resources.
+Added: We will be subject to a number of risks associated with international business activities that may increase our costs, impact our ability to sell our electric vehicles and require significant management attention.
+Added: These risks include:
+Added: • conforming our electric vehicles to various international regulatory requirements where our electric vehicles are sold and serviced, which requirements may change over time;
+Added: • expenditures related to foreign lawsuits and liability;
+Added: • difficulties in staffing and managing foreign operations;
+Added: • difficulties establishing relationships with, or disruption in the supply chain from, international suppliers;
+Added: • difficulties attracting customers in new jurisdictions;
+Added: • difficulties in attracting effective distributors, dealers or sales agents, as the case may be;
+Added: • foreign government taxes, regulations and permit requirements, including foreign taxes that we may not be able to offset against taxes imposed upon us in the United States, and foreign tax and other laws limiting our ability to repatriate funds to the United States;
+Added: • fluctuations in foreign currency exchange rates and interest rates, including risks related to any foreign currency swap or other hedging activities we undertake;
+Added: • United States and foreign government trade restrictions, tariffs and price or exchange controls;
+Added: • foreign labor laws, regulations and restrictions;
+Added: • changes in diplomatic and trade relationships;
+Added: • laws and business practices favoring local companies;
+Added: • difficulties protecting or procuring intellectual property;
+Added: • the adoption of the LiveWire brand versus competitive foreign brands;
+Added: • political instability, natural disasters, war or events of terrorism and health epidemics, such as the conflict in Ukraine or the Israeli-Palestinian conflict;
+Added: • the strength of international economies.
+Added: If we fail to successfully address these risks, our business, prospects, financial condition and operating results could be materially and adversely affected.
+Added: The battery’s range and life will deteriorate with usage and time, which, if material, could negatively influence potential customers’ decisions to purchase our electric vehicles.
+Added: All lithium-ion batteries are consumable components that become less effective as they chemically age.
+Added: As lithium-ion batteries chemically age, the amount of charge they can hold diminishes, which may result in a perceptible decrease in range for an electric vehicle.
+Added: This can be referred to as the battery’s maximum capacity, i.e., the measure of battery capacity relative to when it was new.
+Added: In addition, a battery’s ability to deliver maximum instantaneous performance, or “peak power,” may decrease and impact acceleration performance in an electric vehicle.
+Added: A normal battery is designed to retain up to 80% of its original capacity after 30,000 miles when operating under normal conditions.
+Added: Although common to all electric vehicles, lithium-ion battery aging may negatively influence potential customers’ electric vehicle purchase decisions.
+Added: Unexpected termination of leases or failure to renew the lease of our existing premises or to renew such leases at acceptable terms could materially and adversely affect our business.
+Added: We lease the premises for our research and development facility, retails stores and offices.
+Added: We cannot assure you that we would be able to renew the relevant lease agreements without substantial additional cost or increase in the rental cost payable by us.
+Added: If a lease agreement is renewed at a rent substantially higher than the current rate, or currently existing favorable terms granted by the lessor are not extended, our business and results of operations may be adversely affected.
+Added: Additionally, if our sublease at our Company-owned dealership location is either terminated or not renewed by our landlord, or otherwise prohibited for legal or regulatory reasons, and we do not have an existing alternate dealership location, that could jeopardize our dealer license, which would impact our ability to make direct sales to consumers and could materially and adversely affect our business.
+Added: We may be unable to complete environmental, social and governance (“ESG”) initiatives, in whole or in part, which could lead to less opportunity for us to have ESG investors and partners and could negatively impact ESG‑focused investors when evaluating us.
+Added: There remains significant attention, including by consumers, investors, employees and other stockholders, as well as by governmental and non-governmental organizations, on ESG matters generally and with regard to our industry specifically.
+Added: We have undertaken, ESG initiatives, which may be costly and not have the desired effect.
+Added: Any failure (or perceived failure) to meet commitments that we have set in relation to ESG matters, or loss of confidence on the part of customers, investors, employees, brand partners and other stockholders as it relates to our ESG initiatives could negatively impact our brand, our business, prospects, financial condition and operating results.
+Added: These impacts could be difficult and costly to overcome, even if such concerns were based on inaccurate or misleading information, and our reputation and brand image could be damaged, and our business, financial condition and results of operations could be adversely impacted.
+Added: In addition, achieving our ESG initiatives may result in increased costs in our supply chain, fulfillment, and/or corporate business operations, and could deviate from our initial estimates and have a material adverse effect on our business and financial condition.
+Added: As with other companies, our approach to such matters has evolved over time, and we expect it will
+Added: continue to evolve, but we cannot guarantee that our approach will ultimately align with any particular stakeholder’s preferences or expectations.
+Added: In addition, regulation, standards and research regarding ESG initiatives and disclosure requirements could change and become more onerous for both us and our third-party suppliers and vendors to meet successfully.
+Added: Evolving data and research could undermine or refute our current claims and beliefs that we have made in reliance on current research, which could also result in costs, a decrease in revenue, and negative market perception that could have a material adverse effect on our business and financial condition.
+Added: A variety of organizations measure the performance of companies on such ESG topics, and the results of these assessments are widely publicized, and are used in investment decision making processes.
+Added: In addition, there is investment in funds that specialize in companies that perform well in such assessments, and certain investors have publicly emphasized the importance of such ESG measures to their investment decisions.
+Added: Topics taken into account in such assessments include, among others, the company’s efforts and impacts on climate change and human rights, ethics and compliance with law and the role of the company’s board of directors in supervising various sustainability issues.
+Added: In light of investors’ increased focus on ESG matters, there can be no certainty that we will manage such issues successfully or that we will successfully meet society’s ESG expectations or achieve our financial goals.
+Added: Simultaneously, there are efforts by some stakeholders to reduce companies’ efforts on certain ESG-related matters.
+Added: Both advocates and opponents to certain ESG matters are increasingly resorting to a range of activism forms, including media campaigns and litigation, to advance their perspectives.
+Added: To the extent we are subject to such activism, it may require us to incur costs or otherwise adversely impact our business.
+Added: While we may create and publish voluntary disclosures regarding ESG matters from time to time, many of the statements in those voluntary disclosures are based on methodologies and data that continue to evolve and that are subject to varying stakeholder interpretations and preferences.
+Added: In addition, emerging regulation requiring additional ESG public disclosure by certain companies in a number of jurisdictions and/or additional ESG obligations may lead to heightened scrutiny of our ESG performance, to the extent we are required to publish additional information in relation to our ESG performance or to meet such additional ESG obligations.
+Added: For example, various policymakers—including the SEC, European Union, and the State of California—have adopted or are considering adopting requirements for certain companies to undertake certain climate- or other-ESG related disclosures or actions.
+Added: Policymakers’ approaches are not uniform, which may increase the cost or complexity of compliance, as well as increase the general risk of litigation or enforcement on such matters.
+Added: Additionally, there are increasing expectations in various jurisdictions that companies monitor the environmental and social performance of their suppliers and otherwise consider a wide range of potential environmental and social matters for their products and value chain (such as in relation to forced labor considerations).
+Added: Certain of our suppliers operate and source materials in China and Taiwan, and their presence in our supply chain could present unique risks for us due to risks associated with the U.S.
+Added: Uyghur Forced Labor Prevention Act (UFLPA), as well as the strain in U.S.-China relations, and China’s unique regulatory landscape.
+Added: Prohibitions on forced labor or related human rights or environmental diligence requirements have also been adopted or proposed in other jurisdictions, such as the European Union, and represents a topic that will likely be subject to further regulation in the markets we operate within.
+Added: Compliance with such requirements can be costly and complex and may impact how we are able or willing to engage with suppliers.
+Added: Regulation in this area has also evolved considerably over recent years and is likely to continue to do so, which may lead to additional costs and challenges associated with ensuring compliance with changing standards.
+Added: Furthermore, industry and market practices may further develop to become even more robust than what is required under any new laws and regulations, and we may have to expend significant efforts and resources to keep up with market trends and stay competitive among our peers, which could result in higher associated compliance costs and penalties for failure to comply with such laws and regulations.
+Added: At the same time, there are efforts by some stakeholders and policymakers to reduce companies’ attention to certain ESG-related matters.
+Added: Advocates and opponents of ESG matters are increasingly resulting to a range of activism to promote their viewpoints, which may require us to incur additional costs or otherwise adversely impact our business.
+Added: This and other stakeholder expectations will likely lead to increased compliance costs as well as scrutiny that could heighten all of the risks identified in this risk factor.
+Added: Additionally, many of our customers, retailers, suppliers, or other stakeholders are subject to similar expectations, which may augment or create additional risks.
Our electric vehicles use lithium-ion battery cells.
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If not properly managed or subject to environmental stresses, 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.
−Removed: While the battery pack is designed to contain any single cell’s release of energy without spreading to neighboring cells, a field or testing failure of battery packs in our electric vehicles could occur, which could result in bodily injury or death and could subject us to lawsuits, product recalls or redesign efforts, all of which would be time consuming and expensive and could materially and negatively affect our brand image and results of operation.
+Added: While the battery pack is designed to contain any single cell’s release of energy without spreading to neighboring cells, a field or testing failure of battery packs in our electric vehicles could occur, which could result in bodily injury or death and could subject us to lawsuits, product recalls or redesign efforts, all of which would be time consuming and expensive and could materially and negatively affect our brand image and results of
Also, negative public perceptions regarding the suitability of lithium-ion cells for automotive applications, the social and environmental impacts of mineral mining or procurement associated with the constituents of lithium-ion cells, or any future incident involving lithium-ion cells, such as a vehicle or other fire, could materially and adversely affect our reputation and business.
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Demand for electric vehicles may be affected by factors directly impacting electric vehicle prices or the cost of purchasing and operating electric vehicles such as sales and financing incentives, prices of raw materials and parts and components, cost of fuel and governmental regulations, including tariffs, import regulation and other taxes.
−Removed: Volatility in
−Removed: demand may lead to lower vehicle unit sales, which may result in downward price pressure and adversely affect our business, prospects, financial condition and operating results.
+Added: 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 operating results.
In addition, the demand for our electric vehicles and services will highly depend upon the adoption by consumers of new energy vehicles in general and electric motorcycles and electric balance bikes in particular.
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• belief that electric vehicles may subject riders and passengers to greater risks because electric vehicles are quieter compared to internal combustion engine vehicles;
−Removed: • regulatory, legislative and political changes;
+Added: • regulatory, legislative and political changes, trade disputes and tariffs;
• macroeconomic factors.
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Any of these conditions could materially and adversely affect the growth of the alternative fuel automobile markets and our business, prospects, financial condition and operating results.
−Removed: While the Inflation Reduction Act included certain federal tax credits and other incentives for alternative energy production and alternative fuel, there is no guarantee these programs will be renewed or extended in the future.
−Removed: Moreover, the Inflation Reduction Act did not include federal tax credits for electric vehicles with two wheels, such as our electric motorcycles.
−Removed: If current state tax incentives for two wheeled vehicles expire and if new federal and state tax incentives for two wheeled vehicles are not enacted in the future, our business, prospects, financial condition and operating results could be materially and negatively affected.
+Added: Certain current state tax incentives for two wheeled vehicles and federal tax credits and other incentives for alternative energy production and alternative fuel will expire in the future if not renewed or extended and there is no guarantee these programs will be renewed or extended.
+Added: If these incentives are not extended or if new federal and state tax incentives for two wheeled vehicles are not enacted in the future, our business, prospects, financial condition and operating results could be materially and negatively affected.
Our electric motorcycles’ quiet performance compared to internal combustion engine motorcycles may subject riders to greater risks.
Our electric motorcycles are quieter compared to internal combustion engine motorcycles, which may subject riders to greater risks.
−Removed: To the extent accidents associated with our quieter electric motors occur, we could be subject to liability, negative
−Removed: publicity, government scrutiny and further regulation.
+Added: To the extent accidents associated with our quieter electric motors occur, we could be subject to liability, negative publicity, government scrutiny and further regulation.
Any of these results could materially and adversely affect our business, prospects, financial condition and operating results.
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As interest rates have risen, market rates for new vehicle financing have also risen, which may make our electric vehicles less affordable to customers or steer customers to less expensive vehicles that would be less profitable for us, adversely affecting our financial condition and operating results.
−Removed: Additionally, all sales of electric motorcycles and related products to independent dealers in the US and Canada are financed through Harley-Davidson Financial Services, Inc.
+Added: Additionally, all sales of electric motorcycles and related products to H-D independent dealers in the US and Canada are financed through Harley-Davidson Financial Services, Inc.
(“HDFS”), therefore we face the risk that HDFS could change its lending policies in the future, which could have a material adverse effect on our business, prospects, financial condition and operating results.
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As a result, a substantial increase in customer interest rates or tightening of lending standards could have a material adverse effect on our business, prospects, financial condition and operating results.
+Added: Our inability to effectively grow or manage our financing and credit risk could materially and adversely affect our business, prospects, financial condition and operating results
+Added: We provide financing for sales of electric motorcycles and related products to non-H-D independent dealers in the US and Canada and independent dealers in Europe.
+Added: As such, we are subject to credit risk of our customers, and our operating results depend on receipt of timely payments from our customers under these arrangements.
+Added: In addition, STACYC is subject to credit risk of its customers, and its operating results depend on receipt of timely payments from its customers.
+Added: Any delay in payment by our customers may have an adverse effect on revenue and operating results.
+Added: There is no assurance that we will be able to
+Added: collect all or any of the amounts owed in a timely matter.
+Added: If any of our customers face unexpected situations such as financial difficulties, we may not be able to receive full or any payment of the uncollected sums or enforce any judgment debts against such clients, and our business, prospects, financial condition and operating results could be materially and adversely affected.
Our warranty reserves may be insufficient to cover future warranty claims which could adversely affect our business, prospects, financial condition and operating results.
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We then launched the LiveWire One model in July 2021 followed by a special launch edition of the S2 Del Mar® in May 2022 with full production and sales beginning in the third quarter of 2023.
+Added: During 2024, we introduced additional models off the S2 platform, including Mulholland™ and Alpinista™.
For the foreseeable future, the Electric Motorcycles segment will depend on revenue generated from a limited number of models.
Historically, motorcycle customers have come to expect a variety of vehicle models offered in a company’s fleet and new and improved vehicle models to be introduced frequently.
−Removed: STACYC’s current product portfolio starts with 12- and 16-inch electric balance bikes built for 3 to 8 year-old riders.
−Removed: STACYC has recently developed an 18- and 20-inch electric balance bike that expanded the range of STACYC riders from 3 to 12 years old.
+Added: STACYC’s current product portfolio ranges from 12- to 20-inch electric balance bikes built for 3 to 12 year-old riders.
For the foreseeable future, STACYC will depend on revenue generated from these limited number of models, until STACYC can expand the range of STACYC riders.
Given that for the foreseeable future our business will depend on a limited number of models, to the extent a particular model is not well received by the market, our sales volume, business, prospects, financial condition and operating results could be materially and adversely affected.
−Removed: STACYC depends on significant customers for a substantial portion of its revenue.
−Removed: If STACYC fails to retain or expand its customer relationships or significant customers reduce their purchases, its revenue could decline significantly.
−Removed: STACYC depends on a small number of significant customers for its sales, and a small number of customers have historically accounted for a material portion of its revenue.
−Removed: The loss of any one of its significant customers, a significant customers inability to perform under their contracts, significant customers termination or failure to renew their contracts with STACYC, or a significant customers default in payment could cause STACYC’s revenue to decline materially.
−Removed: For the near future, STACYC may continue to derive a significant portion of its revenue from a small number of customers.
−Removed: For the twelve months ended December 31, 2023, one customer accounted for approximately 44% of STACYC’s revenue, respectively.
−Removed: Loss of a significant customer or a significant reduction in pricing or order volume from a significant customer could materially reduce STACYC’s revenue and operating results in any reporting period.
−Removed: In addition, STACYC is subject to credit risk of its customers, and its operating results depend on receipt of timely payments from its customers.
−Removed: Any delay in payment by its customers may have an adverse effect on revenue and operating results.
−Removed: There is no assurance that STACYC will be able to collect all or any of the amounts owed to it in a timely matter.
−Removed: If any of its customers face unexpected situations such as financial difficulties, it may not be able to receive full or any payment of the uncollected sums or enforce any judgment debts against such clients, and its business, prospects, financial condition and operating results could be materially and adversely affected.
−Removed: We may face challenges in expanding our business and operations internationally, and our ability to conduct business in international markets may be adversely affected by legal, regulatory, political and economic risks.
−Removed: Our business plan includes operations in international markets, including, but not limited to, Germany, France, Netherlands, Switzerland, United Kingdom, and Canada, as well as prioritizing the Asia Pacific markets of Japan, South Korea, China, Australia, and Taiwan, and eventual expansion into other international markets.
−Removed: We will face risks associated with any potential international operations, including possible unfavorable legal, regulatory, political and economic risks, which could materially and negatively affect our business.
−Removed: We anticipate having international operations and subsidiaries that are subject to the legal, political, regulatory and social requirements and economic conditions in these jurisdictions.
−Removed: Furthermore, conducting and launching operations on an international scale requires close coordination of activities across multiple jurisdictions and time zones and consumes significant management resources.
−Removed: We will be subject to a number of risks associated with international business activities that may increase our costs, impact our ability to sell our electric vehicles and require significant management attention.
−Removed: These risks include:
−Removed: • conforming our electric vehicles to various international regulatory requirements where our electric vehicles are sold and serviced, which requirements may change over time;
−Removed: • expenditures related to foreign lawsuits and liability;
−Removed: • difficulties in staffing and managing foreign operations;
−Removed: • difficulties establishing relationships with, or disruption in the supply chain from, international suppliers;
−Removed: • difficulties attracting customers in new jurisdictions;
−Removed: • difficulties in attracting effective distributors, dealers or sales agents, as the case may be;
−Removed: • foreign government taxes, regulations and permit requirements, including foreign taxes that we may not be able to offset against taxes imposed upon us in the United States, and foreign tax and other laws limiting our ability to repatriate funds to the United States;
−Removed: • fluctuations in foreign currency exchange rates and interest rates, including risks related to any foreign currency swap or other hedging activities we undertake;
−Removed: • United States and foreign government trade restrictions, tariffs and price or exchange controls;
−Removed: • foreign labor laws, regulations and restrictions;
−Removed: • changes in diplomatic and trade relationships;
−Removed: • laws and business practices favoring local companies;
−Removed: • difficulties protecting or procuring intellectual property;
−Removed: • the adoption of the LiveWire brand versus competitive foreign brands;
−Removed: • political instability, natural disasters, war or events of terrorism and health epidemics, such as the COVID-19 pandemic, the conflict in Ukraine or the Israeli-Palestinian conflict;
−Removed: • the strength of international economies.
−Removed: If we fail to successfully address these risks, our business, prospects, financial condition and operating results could be materially and adversely affected.
We are subject to risks associated with exchange rate fluctuations, interest rate changes, commodity and credit risk.
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Furthermore, many competitors headquartered outside the U.S.
−Removed: experience a financial benefit from a strengthening in the U.S.
+Added: experience a financial benefit from a
+Added: strengthening in the U.S.
dollar relative to their home currency that can enable them to reduce prices to U.S.
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We are highly dependent on our senior management and other key personnel.
−Removed: Our success will depend on our ability to retain senior management and to attract, recruit, retain, manage and motivate qualified personnel in the future, particularly with respect to an expected increase in hiring in connection with becoming a public company, including sales and marketing professionals, engineers and other highly skilled personnel, and to integrate current and additional personnel in all departments.
+Added: Our success will depend on our ability to retain senior management and to attract, recruit, retain, manage and motivate qualified personnel in the future.
The loss of members of our senior management, sales and marketing professionals and engineers could result in delays in product development and materially and negatively affect our business.
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Such public health issues or natural disasters could disrupt our business operations, reduce or restrict our supply of materials and services, result in us incurring significant costs to protect our employees and facilities or result in regional or global economic distress, which may materially and adversely affect our business, financial condition and operating results.
−Removed: Actual or threatened war, including the conflict in Ukraine, the Israeli-Palestinian conflict, terrorist activities, political unrest, civil strife and other geopolitical uncertainty could have a similar adverse effect on our business, prospects, financial condition and operating results.
+Added: Actual or threatened war, including the conflict in Ukraine, the Israeli-Palestinian conflict, terrorist activities, political unrest, geopolitical events and related actions that may occur between mainland China and Taiwan, civil strife and other geopolitical uncertainty could have a similar adverse effect on our business, prospects, financial condition and operating results.
Any one or more of these events may impede our production and delivery efforts and adversely affect our sales results, which could materially and adversely affect our business, financial condition and operating results.
−Removed: The impact of COVID-19 and associated variants, including changes in consumer and business behavior, pandemic fears, market downturns and restrictions on business and individual activities, created significant volatility in the global economy and led to reduced economic activity.
−Removed: The spread of COVID-19 and associated variants also created a disruption in the manufacturing, delivery and overall supply chain of vehicle manufacturers and suppliers and led to a global decrease in vehicle sales in markets around the world.
Epidemics, pandemics, and other outbreaks could result in government authorities implementing numerous measures to try to contain the such outbreaks, such as travel bans and restrictions, quarantines, stay-at-home or shelter-in-place orders and business shutdowns.
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If government authorities reinstitute such measures or if existing measures remain in place for a significant period of time, they are likely to adversely affect our sales and marketing activities, and our business, prospects, financial condition and operating results.
−Removed: Specifically, difficult macroeconomic conditions, such as decreases in per capita income and level of disposable income, increased and prolonged unemployment, or a decline in consumer confidence as a result of future epidemics, pandemics and other outbreaks, the conflict in Ukraine, the Israeli-Palestinian conflict and inflationary pressure could have a material adverse effect on the demand for our vehicles.
+Added: Specifically, difficult macroeconomic conditions, such as decreases in per capita income and level of disposable income, increased and prolonged unemployment, or a decline in consumer confidence as a result of future epidemics, pandemics and other outbreaks, the conflict in Ukraine, the Israeli-Palestinian conflict, geopolitical events and related actions that may occur between mainland China and Taiwan and inflationary pressure could have a material adverse effect on the demand for our vehicles or sourcing of components.
Under difficult economic conditions, potential customers may seek to reduce spending by forgoing our electric vehicles for other traditional options, increase use of public and mass transportation options or choose to keep their existing vehicles.
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Weather may impact retail sales by our independent dealers.
−Removed: We have observed that abnormally cold and/or wet conditions in a region, including impacts from hurricanes or unusual storms, could have the effect of reducing demand or changing the timing for purchases of our electric motorcycles at independent dealerships.
+Added: We have observed that abnormally cold and/or wet conditions in a region, including impacts from hurricanes or unusual storms, which may be exacerbated by the effects of climate change, could have the effect of reducing demand or changing the timing for purchases of our electric motorcycles at independent dealerships.
Reduced demand for new electric motorcycles ultimately leads to reduced shipments by us.
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There is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies adopted by the central banks and financial authorities of some of the world’s leading economies, including the United States.
−Removed: There have been concerns over the downturn in economic output caused by the COVID-19 pandemic, the conflict in Ukraine, the Israeli-Palestinian conflict and inflationary pressure.
+Added: There have been concerns over the downturn in economic output caused by global trade issues and changes in and uncertainties with respect to trade and export regulations, trade policies and sanctions, tariffs, international trade disputes, particularly those relating to exports of certain technologies to China, geopolitical events and related actions that may occur between mainland China and Taiwan, the conflict in Ukraine, the Israeli-Palestinian military conflict, and inflationary pressure.
It is unclear whether these challenges will be contained and what effects they each may have.
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If we are unable to obtain an exclusive license to any such third-party joint owners’ interests in such patents or patent applications, such joint owners may be able to license their rights to other third parties, including our competitors, who could market competing products and technology.
−Removed: In addition, we may need the cooperation of any such joint owners to enforce such patents against
−Removed: third parties, and such cooperation may not be provided to us.
+Added: In addition, we may need the cooperation of any such joint owners to enforce such patents against third parties, and such cooperation may not be provided to us.
Any of these factors could materially and negatively affect our business, financial condition and results of operations.
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While we intend to operate in a different business segment than H-D, neither we nor H-D is prohibited from competing against each other.
−Removed: Additionally, under the Intellectual Property License Agreement, H-D has the right to use all of our existing our intellectual property and incremental improvements to our existing intellectual property, which could facilitate H-D’s development of products that compete with ours;
+Added: Additionally, under the Intellectual Property License Agreement, H-D has the right to use all of our existing intellectual property and incremental improvements to our existing intellectual property, which could facilitate H-D’s development of products that compete with ours;
however, H-D may be required in some cases to pay us royalties for the use of our existing intellectual property and their rights to our newly-developed intellectual property would be limited as defined under the Joint Development Agreement.
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H-D may fail to perform under various transaction agreements that were executed as part of the Separation or we may fail to have necessary systems and services in place when certain of the transaction agreements expire.
−Removed: We entered into a number of agreements with H-D as a result of the Separation, including the Trademark License Agreement, Contract Manufacturing Agreement, Tax Matters Agreement, Master Services Agreement, Transition Services Agreement, Joint Development Agreement and Intellectual Property License Agreement, pursuant to which we and/or H-D have continuing obligations to each other.
+Added: We entered into a number of agreements with H-D as a result of the Separation, including the Trademark License Agreement, Contract Manufacturing Agreement, Tax Matters Agreement, Master Services Agreement, Joint Development Agreement and Intellectual Property License Agreement, pursuant to which we and/or H-D have continuing obligations to each other.
If we or H-D fail to perform obligations under such agreements, our business may be negatively impacted.
Furthermore, upon the expiration or termination of such agreements, we may not have necessary or comparable systems and services in place to replace the services provided under such agreements, which may negatively impact our business.
−Removed: We will be required to make payments to H-D under the Contract Manufacturing Agreement, Tax Matters Agreement, Master Services Agreement, Transition Services Agreement and certain other agreements, and the amounts of such payments could be significant.
+Added: We will be required to make payments to H-D under the Contract Manufacturing Agreement, Tax Matters Agreement, Master Services Agreement, and certain other agreements, and the amounts of such payments could be significant.
We have entered into certain agreements pursuant to which we will be obligated to make payments to H-D.
−Removed: Such agreements include the Contract Manufacturing Agreement, Tax Matters Agreement, Master Services Agreement, Transition Services
−Removed: Agreement and certain others.
+Added: Such agreements include the Contract Manufacturing Agreement, Tax Matters Agreement, Master Services Agreement, and certain others.
The amounts payable under these agreements could be significant and could prohibit or restrict us from using these funds in other aspects of our business.
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We have not made pro forma adjustments to reflect many significant changes that have occurred in our cost structure, funding and operations as a result of our transition to becoming a public company, including changes in our employee base, potential increased costs associated with reduced economies of scale and increased costs associated with being a publicly traded, standalone company.
−Removed: For additional information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our historical combined financial statements and notes thereto.
As a result of the Separation, H-D indemnifies us for certain liabilities and we indemnify H-D for certain liabilities.
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In addition, H-D’s insurers may deny coverage to us for liabilities associated with certain occurrences of indemnified liabilities prior to the Separation.
−Removed: Moreover, even if we ultimately succeed in
−Removed: recovering from H-D or such insurance providers any amounts for which we are held liable, we may be temporarily required to bear these losses.
+Added: Moreover, even if we ultimately succeed in recovering from H-D or such insurance providers any amounts for which we are held liable, we may be temporarily required to bear these losses.
Each of these risks could negatively affect our businesses, financial position and operating results.
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Some of our directors and executive officers own H-D restricted stock units and/or stock options that fluctuate in value in accordance with the value of H-D’s share price.
−Removed: In addition, some of our executive officers and directors are executive officers and/or directors of H-D.
+Added: In addition, some of our executive officers and directors are executive officers
+Added: and/or directors of H-D.
Ownership of restricted stock units and options that fluctuate in value in accordance with the value of H-D’s share price by our directors and officers after the Separation and the presence of executive officers or directors of H-D on our Board could create, or appear to create, conflicts of interest with respect to matters involving both us and H-D that could have different implications for H-D than they do for us.
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Risks Related to Information Technology, Intellectual Property, Data Security and Privacy
−Removed: We collect and process significant information about our customers and their vehicles and are subject to various privacy and consumer protection laws.
+Added: We collect and process significant information about our customers and their vehicles and are subject to various privacy, marketing and consumer protection laws.
We collect, receive, store, transmit and otherwise process different types of information about or related to a range of individuals, including our customers, riders of our electric vehicles, website visitors, users of our mobile application, our employees, job applicants and employees of other companies that we do business with (such as our vendors and suppliers).
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The Federal Trade Commission and many state attorneys general are also interpreting federal and state consumer protection laws (including the Federal Trade Commission Act) as imposing standards for the online collection, use, dissemination, and security of data.
−Removed: In addition, by providing financing to and collecting related information from customers, we are subject to financial privacy laws such as the Gramm-Leach-Bliley Act of 1999 and its implementing regulations (“GLBA”), which restricts certain collection, use, disclosure and other processing of certain information and contains compliance requirements such as providing notice to individuals of privacy practices and implementing data security standards.
−Removed: The Federal Trade Commission recently updated its Safeguards Rule, which requires certain companies to implement specific safeguards to protect personal information processed in relation to providing a financial product or service, including to require certain financial institutions to report certain data security breaches to the FTC.
+Added: In addition, by providing financing to and collecting related information from customers, we are subject to financial privacy laws such as the Gramm-Leach-Bliley Act of 1999 and its implementing regulations (the “GLBA”), which restricts certain collection, use, disclosure and other processing of certain information and contains compliance requirements such as providing notice to individuals of privacy practices and implementing data security standards.
+Added: The Federal Trade Commission updated its Safeguards Rule, which requires certain companies to implement specific safeguards to protect personal information processed in relation to providing a financial product or service, including to require certain financial institutions to report certain data security breaches to the FTC.
+Added: The FTC and state attorneys general have also focused particular attention on the processing of vehicle-related and location data in recent years, which elevates the risk of our processing of such data.
We are also subject to certain laws and regulations that have been enacted or proposed, such as “Right to Repair” laws, that could require us to provide third-party access to our network and/or vehicle systems.
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These laws (and other laws that have since been enacted) impose additional regulatory obligations regarding the handling of personal data and further provide certain individual privacy rights to persons whose data is processed by covered organizations.
−Removed: In the United States, the CCPA became operative on January 1, 2020 and became enforceable by the California Attorney General on July 1, 2020, along with related regulations which originally came into force on August 14, 2020 and were amended effective March 29, 2023.
+Added: In the United States, the CCPA became operative on January 1, 2020 and became enforceable by the California Attorney General on July 1, 2020, along with related regulations.
Additionally, the California Privacy Rights Act (the “CPRA”), which amended and expanded upon the CCPA, was passed on November 3, 2020, and became effective on January 1, 2023.
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The CPRA’s amendments to the CCPA have imposed additional data protection obligations on covered companies, including certain consumer rights processes, the right to correct personal information, and opt-outs for certain uses of sensitive personal information and the sharing of personal information for targeted advertising purposes.
−Removed: such requirements look back to January 2022.
The CPRA’s amendments also created a new enforcement bureau, the California Privacy Protection Agency.
−Removed: The California Privacy Protection Agency released amendments to the CCPA Regulations, which became effective on March 29, 2023;
−Removed: and subsequently in December 2023, the Agency published proposed revisions to the CCPA Regulations, which may undergo further changes in the near future.
−Removed: The CCPA has encouraged “copycat” laws in other states across the country.
−Removed: For example, Virginia enacted the Virginia Consumer Data Protection Act (the “VCDPA”), another comprehensive state privacy law, which also became effective January 1, 2023.
−Removed: Also in 2021, Colorado enacted the Colorado Privacy Act (the “CPA”), which is accompanied by CPA Rules and became effective July 1, 2023, Connecticut enacted the Connecticut Data Privacy Rights Act (the “CTDPA”), which also went into effect July 1, 2023, and Utah enacted the Utah Consumer Privacy Act (the “UCPA”), which went into effect December 31, 2023.
−Removed: Additionally, Oregon enacted the Oregon Consumer Privacy Act (the "OCPA"), which goes into effect on July 1, 2024, Texas enacted the Texas Data Privacy and Security Act (the “TDPSA”), which goes into effect on July 1, 2024, and Montana enacted the Montana Consumer Data Privacy Act (the “MCDPA”), which goes into effect on October 1, 2024.
−Removed: Further, similar laws have been passed in Tennessee, Iowa, Delaware and Indiana, going into effect in 2025 or 2026;
−Removed: other state legislatures including Massachusetts, New York and New Jersey are also considering similar legislation.
−Removed: We cannot fully predict the impact of such comprehensive state privacy laws, or subsequent guidance, regulations or rules on our business or operations, including those that are still in draft form, but it may increase our compliance costs and potential liability, particularly in the event of a data breach, and could have a material adverse effect on our business, including how we use personal information, our financial condition, and the results of our operations or prospects.
+Added: The CCPA has encouraged similar laws in other states across the country, which creates a patchwork of overlapping but different state laws.
+Added: We cannot fully predict the impact of such laws, or subsequent guidance, regulations or rules on our business or operations, including those that are still in draft form, but it may increase our compliance costs and potential liability, particularly in the event of a data breach, and could have a material adverse effect on our business, including how we use personal information, our financial condition, and the results of our operations or prospects.
A number of other proposals exist for new federal and state privacy legislation that, if passed, could increase our potential liability, increase our compliance costs, modify our data processing practices and materially and adversely affect our business, prospects, financial condition and operating results.
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The GDPR generally prohibits the transfer of personal data subject to those regimes outside of the EU/UK (including to the United States) unless a lawful data transfer solution has been implemented or a data transfer derogation applies.
−Removed: Recent legal developments in Europe have created complexity and uncertainty regarding transfers of personal information from the EU and the UK to the United States.
−Removed: In July 2020, the Court of Justice of the EU (the “CJEU”) invalidated the EU-U.S.
−Removed: Privacy Shield Framework (the “Privacy Shield”), which provided a mechanism for the transfer of personal data from the European Economic Area (“EEA”)/UK to the United States.
−Removed: Subsequently, the United States Department of Commerce negotiated the EU-U.S.
−Removed: Data Privacy Framework (the “Data Privacy Framework”) with the European Commission, to replace Privacy Shield.
−Removed: On July 10, 2023, the European Commission adopted an adequacy decision for the Data Privacy Framework, which concludes that the United States ensures an adequate level of protection for personal data transferred from the EU to U.S.
−Removed: companies under the framework.
−Removed: Separately, while the CJEU has previously upheld the adequacy of the Standard Contractual Clauses (a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism), it made it clear that reliance alone on the Standard Contractual Clauses may not necessarily be sufficient to protect data transferred in all circumstances.
−Removed: Use of the Standard Contractual Clauses must now be assessed on a case-by-case basis taking into account the legal regime applicable in the destination country, in particular applicable surveillance laws and rights of individuals and additional measures and/or contractual provisions may need to be put in place;
−Removed: however, the nature of these additional measures is currently uncertain.
−Removed: We currently rely on the Standard Contractual Clauses to transfer personal data outside the EEA and the UK, including the United States, with respect to both intragroup and third party transfers.
+Added: Recent legal developments in Europe have created complexity and uncertainty regarding transfers of personal information from the EU and the UK to third countries, including the United States.
As the enforcement landscape further develops, and supervisory authorities issue further guidance on international data transfers, we could suffer additional costs, complaints and/or regulatory investigations or fines;
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In the EU and the UK, informed consent is required for the placement of most cookies or similar technologies that store information, or access information stored, on a user’s device and for direct electronic marketing.
+Added: Consent is tightly defined and includes a prohibition on pre-checked consents and a requirement to obtain separate consents for each type of cookie or similar technology.
If the trend of increasing enforcement by regulators of the strict approach to opt-in consent for all but essential use cases, as seen in recent guidance and decisions, continues, this could lead to substantial costs, require significant systems changes, limit the effectiveness of our marketing activities, divert the attention of our technology personnel, adversely affect our margins, and subject us to additional liabilities.
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violations of such laws could result in regulatory investigations, fines, orders to cease/change our use of such technologies, as well as civil claims including class actions, and reputational damage.
+Added: In addition, in the EU, the Data Act came into force on January 11, 2024, laying down rules to foster a competitive data market by making data more accessible and usable.
+Added: The Data Act may apply to certain data arising from the use of our connected products in the EU, and may require us to make such data available to consumers and other businesses.
+Added: This may require additional compliance measures and changes to our operations and processes, and/or result in increased compliance costs and potential increases in civil claims against us, and could adversely affect our business, operations and financial condition.
Additionally, other countries outside of Europe and the United States, including countries we either operate or may in the future operate within, are considering enacting legislation implementing data protection requirements or imposing cross-border data transfer restrictions or laws requiring local data residency.
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Failure to comply with applicable laws and regulations could result in lawsuits, orders to cease or change our data processing activities, regulatory enforcement notices or actions against us or other liability.
−Removed: For example, our misuse of or failure to secure
−Removed: personal information could result in violation of data privacy laws and regulations, proceedings against us by governmental entities or others, and/or result in significant liability and damage to our reputation and credibility.
+Added: For example, our misuse of or failure to secure personal information could result in violation of data privacy laws and regulations, proceedings against us by governmental entities or others, and/or result in significant liability and damage to our reputation and credibility.
In addition, we may also face civil claims including representative actions and other class action type litigation (where individuals have alleged to suffered harm) potentially amounting to significant compensation or damages liabilities, as well as associated costs, diversion of internal resources, and reputational harm.
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The techniques used by threat actors change frequently, are becoming increasingly diverse and sophisticated, and may be difficult to detect for long periods of time.
−Removed: We receive information technology services, including cybersecurity support, from H-D through the Transition Services Agreement.
+Added: We receive information technology services, including cybersecurity support, from H-D through the Master Services Agreement.
Although we maintain information technology measures designed to protect the confidentiality, integrity and availability of our information systems, and protect us against intellectual property theft, data breaches and other cybersecurity incidents, such measures will require updates and improvements, and we cannot guarantee that such measures will be adequate to detect, prevent or mitigate cybersecurity threats or incidents.
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• the increase of subsidies for alternative fuels such as corn and ethanol could reduce the operating cost of vehicles that use such alternative fuels and gasoline, and thereby reduce the appeal of electric vehicles;
−Removed: • changes to the regulations governing the sourcing, assembly, transportation and labeling of battery cells could increase the cost of battery cells or make such commodities more difficult to obtain;
+Added: • changes to the regulations governing the sourcing, assembly, transportation and labeling of battery cells (such as the Batteries Regulation in the EU and related secondary legislation) could increase the cost of battery cells or make such commodities more difficult to obtain;
• changes in regulation, for example relating to the noise required to be emitted by electric vehicles, may impact the design or function of electric vehicles, and thereby lead to decreased consumer appeal;
• changes in regulations governing the range and miles per gallon of gasoline-equivalent calculations could lower our electric vehicles’ ratings, making electric vehicles less appealing to consumers;
−Removed: • the amendment or rescission of the Corporate Average Fuel Economy (“CAFE”) standards could reduce new business opportunities for our business.
+Added: • changes in the U.S.
+Added: NHTSA Corporate Average Fuel Economy (“CAFE”) standards could reduce new business opportunities for our business.
In particular, jurisdictions, including the EU, continue to progress initiatives that may have a significant impact on the sourcing of batteries.
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(i) the revised Batteries Regulation, which entered into force in August 2023 and which will introduce, in a phased in manner, considerable new requirements in relation to batteries placed on the EU market;
−Removed: (ii) the Critical Raw Materials Act, which was proposed in March 2023 and politically agreed in November 2023 and will, among other areas, set targets in relation to the EU’s domestic extraction, processing and recycling of certain raw materials;
−Removed: and (iii) the Corporate Sustainability Due Diligence Directive, which was politically agreed by the European Parliament and European Council in December 2023 and will impose additional obligations on certain entities in relation to their supply chains.
−Removed: To the extent that our current practices do not align with these and other proposed regulatory developments, this may lead to additional costs to the sourcing, assembly, transportation, and labeling of batteries.
+Added: (ii) the Critical Raw Materials Act, which enacted in April 2024and will, among other areas, set targets in relation to the EU’s domestic extraction, processing and recycling of certain raw materials;
+Added: and (iii) the Corporate Sustainability Due Diligence Directive, which was enacted in July 2024 and will impose additional obligations on certain entities in relation to their supply chains.
+Added: To the extent that our current practices do not align with these and other updated and/or proposed regulatory developments, this may lead to additional costs to the sourcing, assembly, transportation, and labeling of batteries.
In addition, to the extent the laws change, our electric vehicles may not comply with applicable international, federal, state or local laws, which could have an adverse effect on our business.
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Our operations currently use hazardous materials and generate limited quantities of hazardous wastes from time to time.
−Removed: We could become subject to claims for toxic torts, natural resource damages and other damages as well as for the investigation and cleanup of contamination in the soil, surface water, groundwater, and other media.
+Added: We could become subject to claims for toxic torts, natural resource damages and other damages as well as for the investigation and cleanup of contamination in the soil, surface water, groundwater, air, and other media.
Such claims may arise, for example, out of conditions at sites that we currently lease, own or operate, as well as at sites that we previously leased, owned or operated, at sites that we may acquire, or at third-party disposal sites.
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We are also subject to permitting, registration, and other government approval requirements under environmental, health and safety laws and regulations applicable in the jurisdictions in which we operate.
−Removed: Those requirements obligate us to obtain permits, registrations, and other government approvals from one or more governmental agencies to conduct our operations and sell our products.
+Added: Those requirements obligate us to obtain permits, registrations, certifications, and other government approvals from one or more governmental agencies to conduct our operations and sell our products.
The requirements vary depending on the location where our regulated activities are conducted.
−Removed: Any failure to obtain or delay in obtaining required permits, registrations, and other government approvals could result in production delays and materially and adversely impact our operations and business.
+Added: Any failure to obtain or delay in obtaining required permits, registrations, and other government approvals could result in production delays or the ability to sell direct to customers and materially and adversely impact our operations and business.
Changes in US or international trade policy, including the continuation or imposition of tariffs and the resulting consequences, could adversely affect our business, prospects, financial condition, and operating results.
−Removed: The US government has adopted a new approach to trade policy and in some cases has renegotiated or terminated certain existing bilateral or multilateral trade agreements.
−Removed: It has also imposed tariffs on certain foreign goods, including steel and certain vehicle parts, which have begun to result in increased costs for goods imported into the United States.
−Removed: Many of these restrictions remain in place despite a change in Administration.
−Removed: In response to these tariffs, a number of US trading partners have imposed retaliatory tariffs on a wide range of US products, which makes it more costly for us to export our electric vehicles to those countries.
+Added: The US government has in the past and could in the future adopt a new approach to trade policy, renegotiate or terminate certain existing bilateral or multilateral trade agreements or impose tariffs on certain foreign goods, including steel and certain vehicle parts.
+Added: For example, these changes in the past have resulted in increased costs for goods imported into the United States.
+Added: Many of these restrictions could remain in place or could escalate under the new Administration.
+Added: In response to these tariffs, a number of US trading partners have in the past imposed retaliatory tariffs on a wide range of US products and may do so in the future, which makes it more costly for us to export our electric vehicles to those countries.
China and the United States have each imposed tariffs, indicating the potential for further trade barriers which may escalate a nascent trade war between China and the United States.
−Removed: In addition, additional trade restrictions or barriers could be implemented on a broader range of products or raw materials.
+Added: In addition, additional trade restrictions or barriers could be implemented on a broader range of products or raw materials with additional countries or regions such as China, Canada, Mexico, the European Union or other countries and / or regions.
If we are unable to pass price increases on to our customer base or otherwise mitigate the costs, or if demand for our exported electric vehicles decreases due to the higher cost, our business, prospects, financial condition and operating results could be materially adversely affected.
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In particular, presidential, congressional, state and local elections in the United States could result in significant changes in, and uncertainty with respect to, tax legislation, regulation and government policy directly affecting our business or indirectly affecting us because of impacts on our customers, suppliers and manufacturers.
−Removed: For example, the United States government has recently imposed a corporate alternative minimum tax and has, from time to time, proposed and may enact significant changes to the taxation of business entities including, among others, an increase in the corporate income tax rate and surtaxes on certain types of income.
+Added: For example, the United States government has, from time to time, proposed and may enact significant changes to the taxation of business entities including, among others, an increase in the corporate income tax rate and surtaxes on certain types of income.
The likelihood of these changes being enacted or implemented is unclear.
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In the past, our operations have been a part of H-D and H-D provided us with certain financial, operational and managerial resources for conducting our business.
−Removed: Following the Separation, while a number of these resources will continue to be at H-D and used to provide services to us under the Transition Services Agreement, we now perform certain of our own financial, operational and managerial functions.
+Added: Following the Separation, while a number of these resources will continue to be at H-D and used to provide services to us under the Master Services Agreement, we now perform certain of our own financial, operational and managerial functions.
There are no assurances that we will be able to successfully put in place the financial, operational and managerial resources necessary to perform these functions.
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It is possible that we will be required to expand our employee base and hire additional employees to support our operations as a public company which will increase our operating costs in future periods.
−Removed: Our facilities, and our suppliers’ facilities, are vulnerable to disruption due to natural disasters, which could become more frequent and severe due to climate change.
−Removed: There is growing concern that a gradual increase in global average temperatures as a result of climate change may cause an adverse change in weather patterns around the globe, resulting in an increase in the frequency and severity of such natural disasters.
−Removed: Increased frequency or duration of extreme weather conditions may disrupt the productivity of our facilities, the operation of our supply chain or impact demand for our products.
−Removed: In addition, the increasing concern over climate change may result in more regional, federal and global legal and regulatory requirements and could increase the costs we incur in our operations.
+Added: Our facilities, and our suppliers’ facilities, are vulnerable to disruption due to natural or man-made disasters, which could become more frequent and severe due to phenomena such as climate change.
+Added: There is growing concern that a gradual increase in global average temperatures as a result of climate change may result in an increase in the frequency and severity of extreme weather events or other natural disasters.
+Added: Natural or man-made disasters, as well as chronic changes (such as changes to temperature and hydrological patterns), may disrupt the productivity of our facilities, the operation of our supply chain or impact demand for our products.
+Added: In addition, the increasing concern over climate change may result in more local, regional, federal and global legal and regulatory requirements and could increase the costs to comply with such requirements that we incur in our operations.
Our insurance coverage strategy may not be adequate to protect us from all business risks.
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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.