Company: AGCC
Filing Date: 2025-03-31
Form Type: DRS
Source: 0001213900-25-026121
Chunk: 19

Company: Agencia Comercial Spirits Ltd.
Filing Date: 2025-03-31
Form: DRS
Chunk 19
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 our sales and operating results. In addition, our inventory may become obsolete as we introduce new products, cease to produce old products, or modify the design of our products’ packaging, which would increase our operating losses and negatively impact our results of operations. For example, in the whisky industry, the aging process can result in losses known as the “angel’s share,” in which a portion of the liquid evaporates through the porous wood of the barrel. This natural loss, along with potential obsolescence due to changes in consumer preferences or packaging updates, can affect our inventory levels and profitability. Our business is subject to seasonality related to sales of our products. The whisky market experiences considerable seasonal fluctuations. Historically, a significant portion of net sales and earnings in the whisky industry occurs during the holiday season, particularly in November and December. This period is marked by increased social gatherings, family parties, and gift -giving, which drive higher demand for whisky. Additionally, the summer months, particularly June through August, also see a rise in sales due to outdoor activities and social events where whisky is a popular choice. As a result, our operating results may fluctuate significantly from quarter to quarter, and the outcomes for any given quarter are not necessarily indicative of results for other periods. If our sales were to decline substantially below these seasonal norms for any reason, our annual revenues and earnings could be materially and adversely affected. 14 Contamination of our products and / or counterfeit or confusingly similar products could harm the image and integrity of, or decrease customer support for, our brands and decrease our sales. The success of our brands depends on consumers’ positive perceptions of them. Any contamination, whether accidental or due to the intentional actions of third parties, or other incidents that compromise the integrity or consumer support of our brands could impact product demand. Contaminants in third -partyraw materials or defects in the distillation and fermentation processes could result in poor beverage quality, causing illness or injury to consumers and potentially reducing sales of the affected brand or all of our brands. Furthermore, if third parties sell counterfeit versions of our brands or brands that closely resemble ours, consumers may confuse our products with inferior alternatives. Additionally, we have no control over the usage of our whisky products, in particular the raw cask whisky, if third parties utilize our whisky to produce counterfeit whisky products resembling other whisky brands, it could create the perception that we are complicit in these activities. This confusion may result in administrative or criminal investigations, which could further damage our reputation. Consequently, these issues