Company: AGCC
Filing Date: 2025-03-31
Form Type: DRS
Source: 0001213900-25-026121
Chunk: 34

Company: Agencia Comercial Spirits Ltd.
Filing Date: 2025-03-31
Form: DRS
Chunk 34
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 we may decide to enter into more hedging transactions in the future, the availability and effectiveness of these hedges may be limited and we may not be able to adequately hedge our exposure or at all. In addition, our currency exchange losses may be magnified by local exchange control regulations that restrict our ability to convert NTD into foreign currencies. See “— Our Taiwan Operating Subsidiary is subject to restrictions on paying dividend or making other payments to us, which may restrict our ability to satisfy its liquidity requirements.” As a result, fluctuations in exchange rates may have a material adverse effect on your investment. 22 RISKS RELATED TO OUR DEPENDENCE ON THIRD PARTIES Our business is highly dependent on third-party distributors for selling our products to various accounts such as retailers, restaurants, bars, hotels, casinos, and entertainment venues. As we expand our wholesale distribution network, we expect that sales to distributors will represent an increasing portion of our future net sales. However, industry consolidation or the loss of a major distributor could have a material adverse effect on our business, financial condition and results of operations. Our distributors also carry competing brands, including larger national and international brands. Their relationships with these competitors could influence their commitment to our products. If our independent distributors rely on a major competitor for a significant portion of their sales, they may be inclined to favor that relationship. There can be no assurance that our distributors will continue to effectively market and distribute our products in the future. The loss of a distributor or the failure to promptly replace an underperforming distributor could impede our growth and have a material adverse effect on our business. Expanding our distribution network into new states where we do not currently have a presence may also present challenges. In addition, as we seek to increase our market share in existing markets or enter new markets, there can be no assurance that we will be successful in attracting new distributors. The purchasing decisions of wholesalers, retailers and consumers are influenced by the perceived overall value of our products compared to competitive products, taking into account both quality and price. Unit and dollar sales may also be affected by pricing, purchasing, financing, operating, advertising or promotional decisions made by wholesalers, state and provincial government agencies and retailers. These decisions may affect the supply of, or consumer demand for, our products. In addition, we may experience higher than expected selling, general and administrative expenses if we need to increase personnel or advertising and marketing expenditures to maintain our competitive position. Substantial disruption to operations at our warehouses or distribution facilities, or at facilities with which we