micromobility.com (GR90) Risk Analysis

We operate at a loss and have needed to raise capital to continue to fund operations. Many of these capital raises have been in the form of equity offerings, including hybrid offerings such as debt that is convertible into shares of our common stock. Each such equity raise diluted the economic ownership and voting power of our shareholders of Common Stock prior to such raise. In the aggregate these equity raises were the primary reason that the total outstanding shares of our common stock increased from approximately 4,069 at December 31, 2021 to 92,214,637 at June 30, 2024. We will need to obtain additional equity financing to fund our operations. These financings may take the form of capital raises or the retirement of outstanding debt, including to related parties, for equity issuances. Such financings, if any, may be on terms that continue to result in significant dilution to shareholders, in per share value and/or voting power, or that result in shareholders losing all of their investment in the Company. Such financings may be at prices substantially below our per share price or our per share net tangible book value.

As of the date of this quarterly report on Form 10-Q, Palella Holdings LLC maintains a controlling amount of our common stock. Mr. Salvatore Palella maintains sole voting and dispositive power over the shares held by Palella Holdings LLC. As a result, Mr. Palella will have the ability to elect all of the members of our board of Directors and thereby may be able to indirectly control our policies and operations, including the appointment of management, future issuances of our common stock or other securities, the payment of dividends, if any, on our common stock, the incurrence or modification of debt by us, amendments to our amended and restated articles of incorporation and amended and restated bylaws and the entering into of extraordinary transactions, and their interests may not in all cases be aligned with your interests. In addition, may be able to control or influence the outcome of matters submitted to the stockholders for vote in a manner that may conflict with other of our stockholders. Accordingly, other stockholders may be unable to influence management and exercise control over our business. In addition to Mr. Palella's stock ownership through Palella Holdings LLC, he is our executive director and Chief Executive Officer. Thus, in addition to Mr. Palella's shareholding of the Company, he is key to our operations and will have significant influence regarding our key decisions. This concentration of ownership and influence over our decision-making may also discourage, delay or prevent a change in control of the Company, which could deprive our other stockholders of an opportunity to receive a premium for their shares as part of a sale of the Company and might reduce the price of our common stock. These actions may be taken even if they are opposed by our other stockholders.

We are authorized to issue shares of preferred stock, the terms of which may be set by our Board of Directors without any additional input from our shareholders. If we were to issue shares of preferred stock with preferred or super voting power, something that we believe could occur in connection with the retirement of significant debt or a larger capital raise, the holders of our common stock could lose a significant portion of their voting power and the ability to control the direction of our company. The holders of any such preferred stock with preferred or super voting power may have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests. This concentrated control may have the effect of delaying, preventing or deterring a change in control of the Company, could deprive our stockholders of an opportunity to receive a premium for their capital stock as part of a sale of the securities, and might ultimately affect the market price of shares of common stock.

Sales of a substantial number of shares of our common stock in the public market or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. For example, capital raises were the primary reason that the total outstanding shares at our common stock increased from 2,172 at December 31, 2021, to 37,129 at March 24, 2023 and to 45,185,172 as of April 9, 2024. In tandem with the hyper dilution caused by our equity issuances, the market price of our common stock markedly decreased from a per share price of $41,175 as at December 31, 2021, to $982.50 at December 30, 2022, to $0.073 at December 31, 2023 to $0.0080 at April 9, 2024. The per share price of our class A common stock may be adversely affected by any such future dilutive stock issuances.

On December 20, 2023, our common stock was delisted from the Nasdaq Capital Market for failure to meet continued listing requirements. As a result, our common stock trades upon the OTC Pink Sheets. Historically, stock that trades on the OTC Pink Sheets has had a lower volume than a stock that trades on a national securities exchange. We believe that the resulting material adverse consequences include: - a limited availability of market quotations for our securities; - reduced liquidity for our securities; - a determination that our common stock is a "penny stock" which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; - a limited amount of news and analyst coverage; and - a decreased ability to issue additional securities or obtain additional financing in the future.

The stock markets in general and the markets for early-stage stocks have experienced extreme volatility. The market for the common stock of smaller companies such as ours is characterized by significant price volatility when compared to the shares of larger, more established companies that trade on a national securities exchange and have large public floats, and we expect that our share price will be more volatile than the shares of such larger, more established companies for the indefinite future. In 2023, the closing price of our common stock on the Nasdaq Capital Market fluctuated between a high of $3,195 to a low of $0.073. In addition to the factors discussed in this "Risk Factors" section, price declines in our common stock could also result from general market and economic conditions and a variety of other factors, including: -   continued hyper dilution of our common stock; -   adverse actions taken by regulatory agencies with respect to our products; -   announcements of technological innovations, patents or new products by our competitors; -   regulatory developments in the United States and foreign countries; -   any lawsuit involving us or our product candidates; -   announcements concerning our competitors, or the industry in which we compete in general; -   developments concerning any strategic alliances or acquisitions we may enter into; -   actual or anticipated variations in our operating results; -   changes in recommendations by securities analysts or lack of analyst coverage; -   deviations in our operating results from the estimates of analysts; -   our inability, or the perception by investors that we will be unable, to continue to meet all applicable requirements for continued listing of our common stock on the Nasdaq Capital Market, and the possible delisting of our common stock; -   sales of our common stock by our executive officers, directors and principal stockholders or sales of substantial amounts of common stock; and -   loss of any of our key management personnel. In the past, following periods of volatility in the market price of a particular company's securities, litigation has often been brought against that company. Any such lawsuit could consume resources and management time and attention, which could adversely affect our business.