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INVESTMENT RISKS DISCLOSURES

 

Investors should carefully consider the following risk factors before making an investment decision. The risks outlined below could materially affect the company's business, financial condition, and operating results. These are not exhaustive, and additional risks, unknown or unforeseen at present, may also affect the company.

 

• Manufacturing and Supply Chain Risks: Vertikka’s business model heavily relies on acquiring and setting up a new manufacturing facility. Delays or complications in this process, such as zoning issues, regulatory approvals, or construction delays, could significantly impact our production timeline and cost structure. Additionally, our reliance on specific suppliers for sustainable materials presents risks. Disruptions in the supply chain, whether due to material shortages, transportation delays, or supplier insolvency, could hinder our ability to meet production targets and deliver homes on time.

• Market Adoption and Demand Uncertainty: While the market for affordable and sustainable housing is growing, there is a risk that our innovative prefabricated and modular homes may not achieve the anticipated level of market adoption. This could be due to various factors, including consumer reluctance to adopt new construction technologies, competition from traditional construction methods, or economic downturns affecting overall housing demand. If the market does not embrace our products as expected, it could result in lower sales and profitability, challenging our growth projections.

• Regulatory and Compliance Challenges: Vertikka operates in a highly regulated industry, and compliance with various local, state, and federal regulations is critical. Changes in building codes, environmental regulations, or housing policies could impose additional costs or limit our ability to operate as planned. As we expand into new markets, particularly with the establishment of a manufacturing site in New York, we may encounter unfamiliar regulatory landscapes that could delay expansion efforts or increase operational complexity. Non-compliance or delays in meeting regulatory requirements could result in fines, legal challenges, or project delays, impacting our overall business performance.

• Capital Intensity and Financing Risks: The expansion and scaling of Vertikka’s operations, including the acquisition of a manufacturing facility, are capital-intensive endeavors. Securing the necessary funding through our current and future investment rounds is critical to our growth strategy. There is a risk that we may not raise sufficient capital, or that the terms of financing could be unfavorable, leading to dilution of existing equity or an inability to fully execute our business plan. Additionally, economic downturns or changes in investor sentiment could reduce access to capital markets, further complicating our funding efforts.

• Customer and Partnership Reliance: Vertikka’s business model depends on establishing strong relationships with key customers and partners, including government entities, financial institutions, and home builders. If these partnerships do not materialize, or if existing relationships deteriorate, it could negatively impact our sales channels, financing options, and overall business growth. Additionally, our reliance on a limited number of large customers or partners creates revenue concentration risks, where the loss of a single key partner or customer could significantly affect our financial stability.

• Technology Integration and Innovation Risks: Vertikka’s success is heavily dependent on the effective integration and continuous innovation of prefabrication and modular construction technologies. There is a risk that the technology may not perform as expected, or that unforeseen technical challenges could arise during implementation. Staying ahead of competitors in terms of technological innovation requires ongoing investment in R&D, which could strain resources. Failure to successfully integrate new technologies or maintain our innovative edge could diminish our competitive advantage and market position.

• Management Team Risk: Vertikka’s future success depends on the efforts of a small management team. The loss of services from key members of the management team may have an adverse effect on the company. There can be no assurance that we will be successful in attracting and retaining other personnel required to grow the business.