EDGAR 10-K Filing

Company CIK: 1744494
Filing Year: 2024
Filename: 1744494_10-K_2024_0001829126-24-005453.json

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ITEM 1. BUSINESS
Item 1. Business.
Overview
We are an advanced materials and technology development company operating in the fuel cell and hydrogen technology space. We develop, manufacture, and assemble complete fuel cell systems and the critical components that determine the performance of hydrogen fuel cells and other energy systems.
We develop and manufacture high-temperature proton exchange membranes (“HT-PEM” or “HT-PEMs”) and fuel cell systems. Our systems are aimed to provide stationary power for the off-grid, backup, critical infrastructure, and portable markets that replace diesel generators with quiet, clean fuel cell power. Select applications are telecom towers (5G and older), energy infrastructure (critical infrastructure off-grid or backup power), and portable power for construction, events, and defense. As the systems increase in size and power, we see opportunities in the P2X, data center, buildings, and microgrid markets. Through strategic Joint Development Agreements (JDAs), we are expanding into the heavy-duty mobility market (Marine, Aerospace, and Heavy Duty Automotive).
Our mission is to bring fuel cells that have a lower Total Cost of Ownership (TCO) to market when compared to diesel generators and internal combustion engines. Our goal is to become a leading provider of HT-PEM fuel cell systems and HT-PEM-based membrane electrode assemblies (“MEA” or “MEAs”).
Our current revenue is derived from the sale of fuel cell systems and the sale of MEAs, membranes, and electrodes for specific applications in the fuel cell market. While fuel cell systems sales and associated revenue is expected to provide the majority of our income in the near future, the MEA innovation is expected to facilitate strategic partnerships between Tier 1 suppliers and us and original equipment manufacturers (“OEMs”) as these downstream manufacturers develop their own white-labeled HT-PEM products. We have had early success in forging such strategic partnerships, as with the case of Airbus for the aerospace sector and Siemens Energy for the maritime industry. The US Army development contracts for human portable power fuel cells also fall under this category.
Our headquarters are in Livermore, California, and we have MEA fabrication and system production facilities in Livermore, California and Patras, Greece. Our investment priorities are increasing MEA performance and meeting the milestones of the Joint Development Agreements we have with Airbus, Hyundai Motors and the US Army. Our business priorities are to expand our network of strategic OEM relationships in the Automotive and Large Scale Stationary power markets.
Recent Developments
On April 29, 2024, the Company held a Special Meeting of Stockholders, at which time the Company’s stockholders voted to approve a 1-for-30 reverse stock split of its issued and outstanding Common Stock (the “Reverse Stock Split”). Following stockholder approval, the Company filed a Certificate of Amendment to its Second Amended and Restated Certificate of Incorporation (the “Charter Amendment”) on May 13, 2024 to effectuate the Reverse Stock Split, and our Common Stock began trading on a split-adjusted basis on the Nasdaq Capital Market at the opening of trading on May 14, 2024. Unless noted, all references to shares of common stock and per share amounts contained in this Annual Report on Form 10-K have been retroactively adjusted to reflect a 1-for-30 reverse stock split.
Additionally, on July 25, 2024, Advent Technologies A/S, a Danish subsidiary of the Company (the “Danish Subsidiary”), was declared bankrupt under and pursuant to the Denmark Bankruptcy Act (the “Danish Subsidiary Bankruptcy”), and, as a result, Advent Technologies A/S and its wholly-owned subsidiary Green Energy Philippines Inc., was deconsolidated from the Company. We have provided proforma financial information adjusting the Balance Sheet amounts as of December 31, 2023, for the Danish Subsidiary Bankruptcy.
The Fuel Cell Market
Fuel cell and hydrogen technology are expected to play a critical role in global decarbonization. In order to meet the targets established in the Paris Climate Accords, which seek to mitigate climate change and maintain global temperatures less than 1.5°C-2.0°C above pre-industrial levels, the international community will need to accelerate the adoption of technologies like our fuel cells that reduce or eliminate emissions of carbon dioxide and other greenhouse gases.
In addition, the challenges associated with existing battery technology limit it from mass adoption across industries. Globally, an average of $38 billion per annum is expected to be invested in the hydrogen and fuel cell sector between 2020 and 2040 to increase production capacity while lowering the cost of production significantly. While the availability of hydrogen limited the fuel cell industry in the past, it is now expected to become an opportunity for growth, particularly in sectors such as industrials, power generation, and automotive.
We believe that fuel cells will be a key component of the future energy generation platform given that:
● Fuel cells generate electricity and heat from hydrogen-based fuels, thereby substantially reducing emissions of carbon dioxide and other pollutants generated by the combustion process in internal combustion engines (“ICE” or “ICEs”) and diesel generators. Fuel cells can be powered autonomously for hours or days when the fuel comes from a discrete source or for longer when there is a pipeline or other large available source of fuel, such as a tank.
● Fuel cells utilize fuels with a high energy density relative to lithium-ion batteries and other battery technology (according to ARPA-E power densities, hydrogen contains 40,000 Wh/kg while lithium-ion batteries carry only about 260Wh/kg). This makes fuel cell technology well-suited for use in heavy-duty mobility (marine, aerospace, trucks) and off-grid energy generation applications where battery technology faces limitations such as lifespan, self-discharge, weight (fuel cells are between 3 to 25 times lighter than batteries providing equivalent power), operation under almost any weather conditions, and recharge times.
● Hydrogen is already used to create liquid, synthetic fuels (eFuels like eMethanol, made by combining hydrogen with carbon dioxide for a net-zero liquid fuel) that have the advantage of lower transportation costs and network infrastructure investment relative to hydrogen gas. Interim fuels like methanol produced from natural gas have become subject to increasing interest worldwide because they are currently available, cleaner, and less expensive than diesel. We believe eMethanol has the potential to become a leading zero-emissions liquid fuel that can leverage the current global infrastructure from gas stations to fuel tankers and trucks. Given the urgency to decarbonize power generation and the challenges the investment requirement poses for developing countries, we expect methanol to have an increasingly significant role as a liquid hydrogen carrier and a low/no carbon dioxide emission alternative to oil.
The High-Temperature PEM Fuel Cell Technology
Our fuel cells are developed with the general concept of using “Any Fuel. Anywhere.” because of the HT-PEM technology we have pioneered since 2006. HT-PEM fuel cells have the advantage of operating with multiple low-carbon fuels (in addition to hydrogen), better heat exchange management, and efficiency, and they operate reliably under extreme conditions. Our high-temperature fuel cells operate between 80°C and 240°C, unlike typical LT-PEM fuel cells that are limited to below 100°C. This temperature advantage allows the fuel cell to work with other fuels and to have reliable operation at extreme conditions, which we believe are both significant competitive advantages for the stationary power generation market.
Within the fuel cell market, our products have significant advantages relative to those of our competitors, who are focused on low-temperature proton exchange membrane technology (“LT-PEM” or “LT-PEMs”). We believe these advantages will help us secure commercial opportunities in the fuel cell market and help drive the widespread adoption of fuel cell technology.
A. “Any Fuel”: Advent’s HT-PEM fuel cells are designed to be multifuel
“eFuel-ready”: While LT-PEMs require high-purity hydrogen to operate, our HT-PEMs can utilize low-cost and abundant hydrogen-carrier fuels, including methanol, natural gas, eFuels, hydrogen extracted from liquid organic hydrogen carriers, dimethyl ether, and renewable biofuels. We have focused on optimizing our fuel cells for methanol, a liquid green hydrogen carrier. Methanol comes in three main forms:
● Gray (natural-gas-based) methanol is the most promising interim semi-clean alternative to diesel.
Advantages: 40% lower CO2 emissions, lower price than diesel, no NOx, SOx.
● Biomethanol is currently available.
Advantages: 80% lower CO2 emissions, lower price than diesel, no NOx, SOx.
● eMethanol is already under production, with approximately 78 projects underway globally, aiming to produce 11.7 million tones by 2028. eMethanol is produced from green hydrogen and is, therefore, a green liquid fuel.
Advantages: 80% lower CO2 emissions, lower price than diesel, no NOx, SOx.
To date, Advent has delivered over 1,200 of these systems, totaling 731,274 operational hours and consuming 1.2 million liters of methanol (as of March 2024). These systems serve telecom towers, critical infrastructure, and defense applications, capitalizing on logistical simplicity and the advantages of fuel availability.
“Enhanced Market Opportunity”: The infrastructure required for clean energy powered solely by high-purity hydrogen would cost trillions of dollars. In contrast, many of the hydrogen-carrier fuels, like eMethanol, can use existing or in-development infrastructure and have a much lower transport cost than hydrogen. This key technology differentiator bypasses the need to commit to a specific energy distribution network and leverages existing infrastructure. Most importantly, it provides an immediately serviceable market today, while we believe many LT-PEM competitors may have to wait at least another decade for the availability of green, high-purity, inexpensive hydrogen, and potentially longer for the maturity of hydrogen transportation and storage networks. Given the urgency to decarbonize power generation and the investment challenges developing countries face, we expect eMethanol to have an increasingly significant role as a liquid hydrogen carrier and a low or no carbon dioxide emission alternative to oil.
Production of green hydrogen remains very expensive. In addition, the cost to transport and distribute green hydrogen is exceptionally high in the same range as the cost of production, and with significant losses, whether liquification, compression, or conversion to ammonia, is considered. Compared to the above, eMethanol can be produced by combining green hydrogen with CO2 using well-known synthesis processes and creating a liquid green fuel that can be transported, stored, and distributed through established global logistics networks. For example, a gas station would require minimal modifications to be able to dispense methanol, while by comparison, a hydrogen station would require an investment of millions and a new location.
Therefore, Advent’s fuel cells optimized for eMethanol are highly suitable for applications where liquid fuel is preferable, and the transportation of hydrogen or batteries (requiring frequent recharging) is highly inefficient. Such applications are off-grid power, telecom tower power, shipping, off-grid charging stations, bad-grid infrastructure, defense, security, emergency response missions, and generally, any area where a diesel generator or a heavy portable battery has applications. We believe decreasing fuel cell costs due to technology innovation and manufacturing scale-up can allow us to grow in the power generation market and potentially displace diesel generators in applications with a clear total cost of ownership value proposition, in addition to the environmental mandate.
B. Anywhere: Advent’s HT-PEM fuel cells are designed to work under extreme conditions
Extreme Weather Conditions: Our HT-PEM fuel cells can operate in various practical conditions, including a wide range of geographies, weather, ambient temperatures (as low as -20oC and up to +55oC), and in humid or polluted environments. On the other hand, LT-PEM fuel cells tend to struggle in the heat, can be damaged by dry climates or polluted air, and cannot handle the impurities of the hydrogen supply.
Superior Heat Management: HT-PEM fuel cells operate at high temperatures (between 160°C and 220°C, with next-generation MEA-based fuel cells operating between 80°C and 240°C). Therefore, the temperature differential between an HT-PEM fuel cell and the outside environment is large. As a result, only a small radiator, similar to or smaller than the radiator in an ICE vehicle, is needed to transfer heat away from the fuel cell stack. Conversely, because LT-PEM fuel cells run relatively cooler (usually under 85°C), a significantly larger radiator is required to effectively maintain suitable operating temperatures and conditions for an LT-PEM fuel cell.
The heat management advantage makes HT-PEMs ideal for the aerospace and heavy-duty truck sectors, among others. An aircraft flying in hot weather, over 35°C, a truck in Arizona or India operating in such high outside temperatures, would need a high to prohibitive amount of power to be wasted just for cooling down, rendering competitive technologies inefficient.
This advantage has been the key reason that Advent has had success in establishing strategic relationships with companies in the Aerospace and Automotive sector, such as the Joint Development Agreements with Airbus and Hyundai, as well as multiple Technology Assessments (which we aim to convert to Joint Development Agreements or Technology License Agreements) with other world-leading companies in these two fields.
○ Fuel and Air Quality Tolerance: Fuel cell systems take hydrogen and air as inputs. Any low-quality intake, even in one instance, may destroy an LT-PEM fuel cell. LT-PEM technology is intolerant to CO damage (with performance degradation at levels as low as 10 ppm), while HT-PEM can withstand 1-4% CO concentrations, depending on temperature and operation. For example, readily available low-cost hydrogen can be made with 1-2% carbon monoxide (20,000ppm), which works well with HT-PEMs. LT-PEM loses performance with only 10 ppm of carbon monoxide. The relative durability of our products in a range of environments also provides a longer life of operation relative to LT-PEM fuel cells.
○ Water Management Issues: HT-PEM fuel cells use phosphoric acid as an electrolyte rather than water-assisted membranes. Therefore, they reduce the need for water balance and other compensating engineering systems.
○ Simplified Design for Manufacturing: Our HT-PEM technology significantly reduces the balance of plant requirements of a fuel cell system relative to LT-PEM fuel cells due to the water, heat management, and air/fuel advantages described above. This means that HT-PEMs have simplified requirements for supporting components and auxiliary systems, which enables reduced cost and increases application range for the end-user.
The Ion Pair MEA
In order to achieve high-temperature operation, we develop highly differentiated chemistry components, the MEAs. In particular, we are developing a new Advanced MEA (“Ion Pair MEA”). The Ion Pair MEA has been developed in collaboration with the U.S. DoE after we were awarded the L’Innovator commercialization program. Under this program, we are working closely with the Los Alamos National Laboratory (LANL), Brookhaven National Laboratory (BNL), and National Renewable Energy Laboratory (NREL), to commercialize the decade-long materials advancements in the field of MEA development. We expect that these next-generation MEAs will bring the HT-PEM technology into the mobility area by enabling fuel cells to be lightweight with high-power density. The Ion Pair MEA is also anticipated to eventually deliver as much as three times the power output and lifetime versus the current MEA product. While we are already projecting being able to pass through substantial cost benefits to its customers through economies of scale as it increases MEA production, the successful development of the Ion Pair MEA will be an important factor in delivering the required improvement in cost-effective performance to our customers.
Advent stands at the forefront of revolutionizing the global fuel cell market with its groundbreaking Ion Pair™ MEA technology, which has been developed through strategic collaborations with esteemed institutions such as Los Alamos, Brookhaven, and the National Renewable Energy Laboratories. In August 2023, Advent was honored to receive the prestigious Richard P. Feynman Innovation Prize for Technology Transfer Excellence from the U.S. Department of Energy’s Los Alamos National Laboratory, recognizing the groundbreaking potential of Ion Pair MEAs. These MEAs have demonstrated exceptional performance in challenging applications, particularly in heavy-duty mobility. They are promising to match LT-PEM in power density and lifetime and offer unparalleled versatility for a wide range of applications due to their ability to operate from 80°C to 200°C. The technology’s heat rejection capabilities render it ideal for aerospace and truck markets. Through ongoing Joint Development Agreements with renowned global enterprises such as Airbus and Hyundai Motor Company, Advent focuses on integrating its Ion Pair MEA technology into their fuel cell projects. Simultaneously, Advent has engaged in technology assessments with five additional global leaders to expedite HT-PEM MEA development for mobility markets. By combining LT-PEM’s power density potential with HT-PEM’s resilience and multifuel capability, Ion Pair MEAs offer increased operational lifetimes and the ability to operate at far higher current densities compared to existing high-temperature MEAs. Advent holds unique intellectual property rights over the core technology and the manufacturing scale-up of the MEA. HT-PEM fuel cells featuring Advent’s Ion Pair MEA aim to offer tripled lifespan and power density compared to previous products. Advent aims to introduce the Ion Pair MEA in its 4th generation of marine and stationary power products in 2025 for mass production. The anticipated result of significant improvements in lifetime and power density is expected to dramatically reduce the total cost of ownership of Advent’s fuel cell solutions. Advent has established resources in the USA and Europe to mass-produce the Ion Pair MEA and is expanding its partner network to license out hardware technology. By 2026, fuel cell systems running on the Ion Pair MEA technology are projected to be more cost-effective on a total cost of ownership basis than diesel generators in most global use cases, in addition to providing green power, thus marking an inflection point. Framework agreements are under negotiation with end-users, as well as licensing agreements with Tier 1 manufacturers and global leaders in stationary and off-grid power equipment. Joint Development Agreements with the aerospace, marine, and automotive sectors are expected to accelerate the Ion Pair MEA technology in 2024 and 2025, with commercial scale-up planned for 2026. Additionally, the Defense solution under development (Honey Badger 50) is also expected to transition to mass production by 2026.
Acquisitions and Other Significant Milestones
Advent Technologies LLC: Advent and US DoD are in constant discussions during the progress of both ongoing programs with GTS and ENVISION, and we have received green light by DoD to make additional proposals for new programs focusing on further improvement of Honey Badger product on one hand and also leveraging its manufacturability towards mass production. One of these new proposals is currently drafted and the target is to be submitted for approval within Q3 2024 with a kick-off date in Q1 2025.
IPCEI Hy2Tech: On June 16, 2022, we announced the receipt of a notification from the Greek State informing the Company that one of the Important Projects of Common European Interests (“IPCEIs”), Green HiPo, was submitted for ratification by the European Union (“EU”). On July 15, 2022, we received official ratification from the European Commission of the EU. The Green HiPo project is designed to bring the development, design, and manufacture of HT-PEM fuel cells and electrolyzers for the production of power and green hydrogen to the Western Macedonia region of Greece. In February 2024, the Company received a formal invitation from the Greek State for €24 million grant for the Green HiPo IPCEI project, however, due to the two-year delay in receiving a signed agreement from the Greek Ministry of Economy and Finance and the uncertainty in the Company’s ability to secure the additional €36 million in funding, the Company does not expect any disbursement of the state aid package in the near future.
Following the acquisitions of UltraCell, SerEnergy, and FES and our recruiting and development in the U.S., we have significantly streamlined our product, system integration, manufacturing, and testing capabilities, avoiding duplication and abandoning less promising product development efforts to manage costs better. During this process, we have significantly reduced personnel and support activities in certain locations where overlap existed after the acquisitions.
Advent’s Livermore subsidiary brings Silicon Valley-type innovation. Ion Pair MEA technology brings a significant advantage toward reducing cost and increasing the performance of our systems. Our investment plan reflects its strategic goal to assemble significant global know-how of the HT-PEM industry.
Following the expected availability of IPCEI funds, we will expand R&D and manufacturing operations in the selected region of Western Macedonia, Greece. We expect to focus future manufacturing activity plans in Greece and the USA (for MEA and defense-market-related reasons) while product development efforts will be across the USA and Greece.
Business Strengths
Highly Differentiated Technology: We believe that for the reasons explained above, HT-PEM is a highly differentiated technology that provides significant competitive advantages to Advent and our partners. HT-PEM technology is a new and promising technology when compared to LT-PEM. It was developed for the last 50 years and may have plateaued in terms of expected technology breakthroughs.
Experienced management team with a proven track record: We were founded and managed by world-class electrochemists, material scientists, and fuel cell specialists with significant industry and manufacturing expertise. We have received numerous R&D funds from the US DoE and the European Union and are considered a pioneer with years of experience in clean energy technology innovation. The team that we have recruited to bring innovation to the fuel cell industry is highly experienced and has a long pedigree in R&D and world-class manufacturing. Our team has been developing MEA components since 2006 and is led by Dr. Emory De Castro (CTO), who has significant industrial experience.
Strategic Partnership with US DoE and Los Alamos National Laboratories: In addition, we initiated in 2021 a joint development effort under the U.S. Department of Energy (“DoE”) umbrella to commercialize next-generation MEAs and ultra-low platinum catalyst solutions developed by Los Alamos, NREL Laboratories, and Brookhaven Laboratories in the U.S. We were selected as the scale-up and commercialization partner of the DoE and are working closely with the highly-skilled R&D teams of top U.S. labs.
MEA IP and Technology: We firmly believe in the transformative potential of the Ion Pair MEA to redefine the global fuel cell market, enabling applications that were previously unattainable with conventional fuel cell materials. Our objective is to enhance the MEA’s capabilities to operate above 100°C for more than 20,000 hours, delivering a higher power density that will result in a simpler, more cost-effective system with superior performance in terms of weight, power, lifetime, total cost of ownership, and infrastructure investment. As we continue to strengthen our collaborations with some of the world’s largest OEMs and Tier 1 Manufacturers, our aim is to capitalize on the growing momentum and demand for our HT-PEM technology.
Products and Services
We derive revenue from the following sources:
1. Fuel Cell Systems: Fuel cells for portable and stationary power generation applications range from 20W to MWs. These fuel cells have applications in the telecom tower (e.g., 5G, 4G) power, defense (and other portable power applications), energy (and other critical) infrastructure, data center, and marine power markets. Our fuel cells are manufactured in the U.S. .
2. Engineering and License Fees: In the mobility sector (e.g., heavy-duty automotive, mining equipment, marine, aerospace), we are entering into Joint Development Agreements (JDAs) (as in the case of Siemens Energy, Hyundai, and Airbus) to develop joint solutions for specific sectors. We plan to enter into Technology License Agreements (TLAs) to allow 3rd party Tier 1 manufacturers or world-leading companies to market the licensed Advent technology in exchange for a license fee. We intend to be a provider of MEAs and core technology via licensing rather than producing complete fuel cells for the mobility industry. Revenue from joint development agreements may include engineering fees during the 1-3 year initial development cycle (JDA fees), MEA sales, and ongoing licensing fees.
3. MEA Sales: We develop the critical component of the fuel cell, the MEA. The operation of the MEA is key to the functionality and characteristics of a fuel cell system. In addition to our fuel cell system offerings, our MEA is a discrete product offering to third-party manufacturers. MEA sales are expected to be a rapidly growing market as more fuel cells are deployed globally by third parties, especially in the mobility space.
Addressable Markets
Based on the several critical advantages offered by our HT-PEM technology over batteries and LT-PEM technology, we expect to be highly competitive in numerous applications. In particular, our HT-PEM fuel cells and MEAs are well-suited to off-grid power, portable power applications, combined heat and power, and mobility (e.g., heavy-duty automotive, aviation, mining equipment, marine, and UAV). Our goal is to partner with Tier 1 suppliers and OEMs in these new markets, focusing on fuel cell technology development, licensing, and the mass production of the next-generation MEAs.
Off-Grid & Backup Power: We have a growing presence in the off-grid power market, with our SereneU product offering having shipped about 1,200 systems worldwide to telecommunications providers for backup power systems and stationary power sectors. Methanol is easier and cheaper to deliver to remote locations compared to pure hydrogen, providing our HT-PEM technology with an advantage in the off-grid market. Off-grid fuel cell solutions can use methanol, which is already available at some remote industrial sites, like wellheads. Fuel cells in these applications produce significantly fewer greenhouse gases than ICE generators and produce power without ICEs’ attendant high levels of nitrogen oxides, sulfur oxides, or particulate emissions. Off-grid power solutions have the potential to run full-time, 365 days a year, 24 hours per day.
Portable Power for Construction, EV Charging Applications, and Events): In December 2023, Advent introduced SereneP, a portable clean power solution designed for various applications, including construction sites, remote EV charging stations, events, and concerts. This innovative solution integrates both a battery and a fuel cell, operating seamlessly on liquid green fuels such as methanol, biomethanol, or eMethanol. Battery-only systems face challenges in off-grid applications as they require continuous relocation to the grid or alternative power sources for recharging. Diesel generators emit harmful emissions, noise, and pose risks of fuel theft. Pure hydrogen systems entail significant fuel sourcing, storage, and transportation costs in off-grid locations. Recognizing a specific market demand within the construction rental sector, particularly in anticipation of forthcoming regulations prohibiting diesel gensets, SereneP emerges as an ideal solution ready for immediate deployment.
Human-Portable Power: Our acquisition of Silicon Valley-based UltraCell provided us with complete system technology for the portable power and defense markets. Electrification is one of the key initiatives in the defense industry as the needs for mobility and power on demand are increasing dramatically. Our fuel cells have already been deployed by the US Department of Defense (“DoD”), in the XX-55 portable power system, while the next-generation “Honey Badger” product, a wearable fuel cell designed to provide soldiers with on-the-go power, is currently in the DoD’s demonstration/validation program.
Marine: In the marine industry, neither compressed hydrogen nor batteries are a viable option for commercial shipping. The industry is evaluating alternative fuels to replace bunker fuel, and methanol appears to be among the most likely hydrogen carriers positioned to meet the European Union’s 2050 decarbonization objectives. Our fuel cells are well-suited for methanol use, as the high-temperature operation can use low-grade hydrogen (converted from methanol via reformation) that does not work with current LT-PEM fuel cells. Applications in the marine industry are likely to develop initially in auxiliary power and smaller ships and eventually scale to the multi-MW range main propulsion market. Our fuel cells promise fuel flexibility with hydrogen gas, liquid organic hydrogen carriers, methanol, and natural gas and operate at high temperatures through proprietary chemistry. Marine applications could be scalable for divergent load requirements and applications such as powering the entire propulsion system or, alternatively, providing auxiliary power to a differently powered primary propulsion system. Marine fuel cell usage could offer long range and fast refill; unlike battery power, longer routes and larger vessels can be powered by fuel cells as compared to batteries. In addition, fuel cells can be used in a hybrid structure in conjunction with battery power. We are planning our initial focus on applications for auxiliary marine power, and then we plan to focus on the main power of vessels.
Progress in the Marine sector is proven by the JDA signed with Siemens Energy, the award of the Rivercell EU multimillion-euro grant, and the installation of the first Advent fuel cell system in a Sanlorenzo yacht. We expect to actively cooperate with Siemens Energy and bid for RFPs to win more projects in the Marine sector.
The above markets define our current products, while the markets below constitute its largest opportunities for growth in the future:
Combined Heat and Power (“CHP”): By virtue of their high-temperature operation, HT-PEM fuel cells are well suited for delivering heat in addition to power to large commercial buildings and single or multi-family homes. The CHP efficiency is in the 85%-90% range, making HT-PEM fuel cells highly efficient for such uses. HT-PEM fuel cells can be supplied by existing natural gas infrastructure and eventually by a future hydrogen-blend or pure-hydrogen pipeline network.
Automotive: Our fuel cells can work together with EV batteries, charging batteries on-board by converting high-purity hydrogen or hydrogen-carrier fuels into electricity, and thus solve the range and recharging issues that battery-only electric vehicles currently face. This issue is a particular challenge in heavy-duty and commercial vehicles. Since our fuel cells can use hydrogen-carrier fuels such as eFuels and biofuels, we believe that our technology can be critical in accelerating the mass adoption of electric vehicles and the shift away from ICEs. Existing battery and LT-PEM technology have challenges in meeting heavy-duty transportation needs, which require long-range, heavy payloads, fast refill times, and the ability to operate in diverse environments. For example, LT-PEM fuel cells cannot operate efficiently in hot environments because the radiator required to cool the MEA to the appropriate temperature range would be too large and impractical. The use of battery-only technology has the added disadvantage of insufficient power capacity without a substantial volume and weight of batteries, which significantly reduces cargo capacity.
Aerospace: The recent JDA with Airbus showcases the potential of HT-PEM technology for the Aerospace sector. The primary aim of our collaborative project is to expedite the advancement of Advent’s Ion Pair MEA technology, aligning it with aviation standards and anticipated technological thresholds. Our overarching objective is to assist Airbus in realizing its vision of propelling aircraft solely through fuel cells. Central to the project’s mission is addressing the requirements for future hydrogen-powered aircraft, emphasizing the potential for substantial weight and volume reduction in the powertrain system. This will be achieved through streamlining the balance of plant and cooling subsystems. We anticipate that our technology will play a pivotal role in realizing this milestone, potentially leading to widespread adoption across numerous aircraft in the near future. Given LT-PEM systems’ heat exchange issues, high-temperature operation in aviation is essential. In addition, our fuel cells can deliver a much longer range (autonomy) and better utilization (through faster time to refill and greater payload) for aircraft, commercial drones, eVTOLs, and auxiliary power for traditional aircraft than battery power alone can deliver. Compared to battery-powered flights, aircraft powered by fuel cells using next-generation HT-PEMs and ultra-lightweight non-metal plates could increase range, payload/passenger capacity, and the number of trips made on one charge or fill-up. HT-PEM aircraft have the potential to refuel significantly faster than an equivalent battery could recharge. The high-purity hydrogen currently required by LT-PEM is considered unsafe for widespread commercial use. At the same time, our HT-PEM provides sufficient range using safer liquid fuels, and the Company believes it is critical to efficient real-world flight usage. Hydrogen gas and dimethyl ether are suitable for fuel for aviation fuel cells, and both work well with HT-PEM technology. Fuel cells have shown that drones can stay airborne for longer, enhancing their value proposition and business applications.
Stationary Power for Data Centers, Microgrids, and Buildings: With a run-time of 200 hours per year (serving as backup) and typical power generator sizes ranging from 1 to 20MW, the total deployed capacity of power generators in data centers globally stands at 5.6GW. This highlights a substantial market for green power generation solutions, presenting a unique opportunity for Advent’s fuel cells and clean power solutions, such as SereneP, to be widely deployed in the data center industry. There is significant potential for mass adoption in data center, off-grid and microgrid hybrid systems, as a source of power with global average run-hours ranging from 2,920 to 8,760 annually. Advent fuel cells also fit well in industrial facilities, hospitals, and hotels, with backup systems averaging 200 to 800 run hours annually.
Business Strategy
Our growth strategy is focused on targeting the following four sectors:
● The stationary off-grid market is expected to be a growing market.
● The large-scale fuel cell systems market (power generation, data centers and power to gas).
● The human-portable defense, surveillance, energy infrastructure, and leisure market based on our innovative Honey Badger products.
● The development of next-generation MEA and fuel cell solutions for the mobility market.
In fuel cell systems, our distribution strategy involves leveraging a network of local partners and resellers to cater to TowerCos and Critical Infrastructure Networks. Concurrently, we have embarked on a strategic venture to penetrate select segments of the marine market, commencing with yachts and tugboats while also providing cold ironing power solutions to vessels during port stays. Our approach extends beyond direct sales; we actively supply our Membrane Electrode Assemblies (MEAs) to other fuel cell manufacturers. This serves as a cornerstone for our expansion plans, focusing on scaling up through the licensing of our technology. Central to our strategy for future growth is the emphasis on licensing agreements with large-scale manufacturers possessing market access and robust service, support, and capital expenditure capabilities. Through partnerships with Tier1s and OEMs, we empower our collaborators to innovate and commercialize fuel cell systems powered by Advent’s proprietary technology on a significant scale. Our collaborators actively manage the entire value chain, including sales, marketing, and after-sales service. Additionally, we derive revenues from major partners through Joint Development Agreements, which are pivotal in financing the early stages of market-specific product development.
As our business ramps up to mass production, we plan to pursue a revenue model that includes fuel cell system sales, MEA sales, and hardware-technology licensing fees. Our customer relationship is split into two phases: 1) partner with OEMs to co-develop customized fuel cell systems based on our expertise in MEAs and HT-PEM fuel cell systems. During the product development phase, we earn engineering fees, and 2) once the industry and application-specific fuel cell system are qualified, we intend to license the hardware design to OEMs or Tier1s for large-scale manufacturing in exchange for license fees. In addition, we intend to manufacture and sell proprietary MEAs directly to OEMs and Tier1s. We expect high-margin licensing fees and MEA sales to become a larger component of our revenue mix over time (vs. direct fuel cell system sales) as our customers scale to mass manufacturing of fuel cells and other products.
We intend to focus future production activities in the USA and potentially in Western Macedonia, Greece, upon IPCEI funding approval. We have significant capacity in place when it comes to MEA manufacturing. Regarding fuel cell manufacturing, we expect to license the technology to large-scale manufacturers and selectively manufacture it (for defense and other promising markets directly).
Specific Product Offerings
SereneU: Our line of Serene solutions includes the core SereneU unit, which is a 5kW fourth-generation methanol-powered hydrogen fuel cell. Due to technology advancements, we expect the SereneU to reach 7.5kW in 2025 and 10kW in 2026-2027. This base unit can be configured and/or stacked to meet the energy needs of multiple MWs. Additionally, a 50kW system to be used as building block for multi-MW and marine applications is under development. The SereneU is based on our proprietary MEA and HT-PEM technologies, which enable higher efficiency and performance in extreme temperatures and result in lower total cost of ownership and start-up time while offering true fuel flexibility. There are over 1,000 SereneU-based installations worldwide serving various purposes, including providing reliable green power to telecom towers, emergency networks, industrial facilities, and marine applications.
SereneM: Launched in September 2023, this family of products results from the synergy of the Company’s Serene fuel cells with a compact battery unit and is designed to fulfill both primary and auxiliary power requirements for vessels. SereneM integrates a compact battery, significantly smaller than traditional battery-only solutions, with a small fuel cell configuration operating on methanol or eMethanol. This combination serves as the primary power source for smaller vessels, including leisure boats, sailboats, ferries, and inland river vessels. It replaces conventional diesel generators, providing a clean and efficient power alternative for a wide range of marine applications. Furthermore, Serene Power Systems offers robust power capacity for supporting auxiliary loads on larger vessels and supplies convenient shore power solutions for vessels at ports. Operating at high temperatures, they efficiently generate electricity while producing heat, significantly boosting overall efficiency, reaching up to 85%. Advent is currently engaging with world-leading customers in the marine industry and anticipates signing commercial term sheets in the near term to pursue upcoming Requests for Proposals (RFPs).
SereneP: Launched in December 2023, this family of products is set to redefine portable power solutions with a particular focus on construction and EV charging applications. Advent’s SereneP offers unparalleled flexibility, configurable to exact power needs ranging from 10kVA to 300kVA. It combines a battery and a fuel cell, and operates on liquid green fuels like methanol, biomethanol, or eMethanol. SereneP is the epitome of eco-friendly power generation, offering 80% CO2 emissions reduction with biomethanol and up to 100% reduction in CO2 emissions with eFuels use when compared to traditional fossil fuel power sources. Advent has established a global network of fuel suppliers, guaranteeing its clients a steady methanol supply for SereneP. We have already implemented successful SereneP installations in construction projects and events across Denmark, where 14 of the largest public sector builders have signaled that they will require contractors to use emission-free work machines at building and construction project sites.
SereneCHP: In February 2023, Advent launched Serene CHP, a methanol-powered fuel cell system aiming to solve stationary electric and thermal power generation demands in remote areas. The mobile SereneCHP (combined heat and power) 5kW system allows users to mix and match heat and power output by powering a heat pump, significantly increasing efficiency. The SereneCHP system can supply up to 13 thermal kW of heat or 10.5kW of cooling. The unit meets the immediate needs of logistics centers, mission-critical and defense operations, housing, and critical infrastructure in remote grid areas. The SereneCHP can be quickly deployed with readily available and easily portable liquid fuels and biofuels such as methanol and biomethanol.
Honey Badger: The Reformed Methanol Wearable Fuel Cell Power System, or “Honey Badger” is an offering marketed by our subsidiary UltraCell. On June 7, 2021, the U.S. DoD, through the U.S. Army DEVCOM Command, Control, Communications, Computers, Cyber, Intelligence, Surveillance, and Reconnaissance (C5ISR) Center, with funding through the Project Manager Integrated Visual Augmentation System (PM IVAS), has entered into a contract with us to complete the MIL-STD certification of the cutting edge “Honey Badger”. “Honey Badger” is placed on a soldier-worn plate carrier and provides on-the-move battery charging in the field. It has been selected by the DoD’s National Defense Center for Energy and Environment (NDCEE) to take part in its 2021 demonstration/validation program and is the only fuel cell to take part in this program. The NDCEE is a DoD program that addresses high-priority environmental, safety, occupational health, and energy technological challenges that are demonstrated and validated at active installations for military application. The product is offered at 50W and 100W power versions, and both are in the testing and certification stages. Its core technology has completed successful field trials in Army Expeditionary Warrior Experiments and high-altitude tests in California’s Sierra Nevada. UltraCell’s “Honey Badger 50” (the 50W power version) fuel cell is the only fuel cell that is part of this program that supports the U.S. Army’s goal of having a technology-enabled force by 2028.
On August 4, 2022, we announced the launch of our HB50 power system, a compact portable fuel cell system and quiet power supply for use in off-grid field applications such as military and rescue operations. The launch of Advent’s portable power system coincided with the Company’s fulfillment of its first shipment order from the U.S. Department of Defense. The HB50 power system can be fueled by biodegradable methanol, allowing near-silent generation of up to 50W of continuous power with clean emissions. Designed for covert operations, HB50 can easily power radio and satellite communications gear, remote fixed and mobile surveillance systems, laptop computers, and more general battery charging needs. HB50 is a unique technology that can save 65% of weight versus batteries over a typical 72-hour mission. The weight savings benefit increases further for longer missions.
In September and December 2023, contracts totaling $2.2 million and $2.8 million, respectively, were signed with the U.S. Department of Defense. These contracts focus on integrating the Ion Pair MEA technology into HB50 and enhancing specific components/manufacturing processes. The objective is to facilitate the shift from low-prototype volume to small manufacturing volume. Advent and the U.S. DoD plan to strengthen their collaboration by concentrating on the improved HB50 fuel cell system’s manufacturing process, aiming to achieve high-volume production capacity. Multiple applications of the HB50 are expected in the future in sectors such as robotics, agriculture, drones, emergency operations, and consumer uses.
HB50’s unique design allows it to be used in soldier-worn configurations or operated inside a portable backpack or vehicle while charging batteries and powering soldier systems, while its thermal features allow it to operate within an ambient temperature range of -20°C to +55°C. Aside from its optimized compatibility with the Integrated Visual Augmentation System (“IVAS”), HB50 can also power devices such as high-frequency radios, such as the model 117G and B-GAN and StarLink terminals. HB50’s durability allows it to be easily deployed in challenging conditions and climates while supporting mission mobility for three to seven days without the need to re-supply.
Since Honey Badger’s fuel cell technology can run on hydrogen or liquid fuels, the system can operate at a fraction of the weight of traditional military-grade batteries to meet the U.S. Department of Defense’s continuously evolving needs for ‘on-the-go’ electronics needs. As military adoption and use of IVAS equipment continue to evolve, highly portable lightweight power solutions like Honey Badger and HB50 will become a mission-critical necessity.
Important Projects of Common European Interest (“IPCEI”)
Green HiPo: On June 16, 2022, we announced the receipt of a notification from the Greek State informing the Company that the IPCEI Green HiPo was submitted for ratification by the EU for funding. On July 15, 2022, we received official ratification from the European Commission of the EU. Green HiPo is an IPCEI that will allow us to develop, design, and manufacture fully scalable HT-PEM fuel cells and electrolyzers for power and green hydrogen production, respectively. In February 2024, the Company received a formal invitation from the Greek State for €24 million grant for the Green HiPo IPCEI project, however, due to the two-year delay in receiving a signed agreement from the Greek Ministry of Economy and Finance and the uncertainty in the Company’s ability to secure the additional €36 million in funding, the Company does not expect any disbursement of the state aid package in the near future.
Intellectual Property
Our intellectual property portfolio covers, among other things: membranes, electrodes, MEAs, and systems exploiting the unique operating characteristics of its materials. In general, our employees are party to agreements providing that all inventions, whether patented or not, made or conceived while being an Advent employee, which are related to or result from work or research that the Company performs, will remain our sole and exclusive property.
We have been issued, acquired, licensed, or applied for approximately 200 international and United States patents, with a concentration in membranes, electrodes, and MEAs, which support its product offerings. Leveraging our membrane and electrode technologies, we also have the intellectual property for lightweight stacks made through advances in bipolar plate materials, which support water-cooled systems. This results in a simpler and more compact balance-of-plant design. Our own investments in developing leading next-generation fuel cell technology are supported by being able to leverage the research and development efforts of its strategic partners.
Our rights to commercialize the next-generation HT-PEM materials technology from the DoE L’Innovator Program also includes rights to a portfolio of patents supporting this advanced technology. We were selected through a highly competitive bidding process by virtue of our management team’s track record in taking laboratory inventions and processes through to a fully scaled and manufactured product. We expect that this technology will reduce production costs of its MEAs significantly through a 3-fold increase in power output per unit area of the membrane and will provide a longer operating lifetime and a wider temperature operating range as well as substantially lower platinum content. We expect these advantages will enable us to reduce the cost to end-users of fuel cells and encourage wider market adoption.
Competition
The market for alternative fuel and energy storage systems is still in the early stages of growth and is characterized by well-established battery and LT-PEM products. We believe the principal competitive factors in the markets in which it operates include, but are not limited to, the size, weight, lifetime, durability, and total cost of ownership of these systems to the end-user. We believe that our HT-PEM technology competes with these other technologies across a number of new and existing applications in the alternative energy fuel market, especially in the realm of fuel flexibility and heat management. We believe the total addressable market opportunity could be over $72 billion by the year 2030.
HT-PEM vs Diesel Gensets: In contrast to polluting diesel gensets, HT-PEM fuel cell technology offers a clean and sustainable alternative ready for immediate deployment. Its adaptability extends to operating with various hydrogen-carrying fuels available in today’s market. Diesel generators not only emit harmful pollutants but also pose a significant risk of fuel theft and contribute to noise pollution. With growing global concern over environmental issues, diesel gensets face escalating scrutiny and potential bans due to their emissions of pollutants such as NOx, SOx, and Particulate Matter (PM). Conversely, HT-PEM fuel cells operate without emitting harmful pollutants, while also generating minimal noise. This aligns seamlessly with evolving regulations aimed at reducing carbon footprints and underscores the viability of HT-PEM fuel cells as a sustainable energy solution.
HT-PEM vs LT-PEM: HT-PEM technology operates at optimal temperatures for efficient heat rejection, maximizing overall efficiency and enabling operation in hot climate regions. In contrast, Low-Temperature Proton Exchange Membrane (LT-PEM) technology lacks rapid cooling capabilities, rendering it unsuitable for aerospace and heavy-duty truck applications. One of the key advantages of HT-PEM technology lies in its versatility in utilizing various hydrogen-carrying fuels, such as methanol and its derivatives. Methanol, being a liquid and easily transportable hydrogen carrier, is witnessing a steady increase in availability. Projections indicate the potential for significant growth, with 130 projects planning to produce 16 million metric tonnes (t) of methanol capacity by 2027 and 19.5 million t by 2028. Moreover, transporting compressed hydrogen off-grid presents economic challenges and safety risks. HT-PEM technology demonstrates resilience in extreme environments, offering a key differentiating factor. The absence of water in the fuel cell membrane simplifies the system and facilitates efficient operation in both hot and cold climates. Furthermore, HT-PEM fuel cells exhibit remarkable performance in extreme ambient temperatures and can function effectively even in highly polluted urban areas or harsh environmental conditions.
HT-PEM vs SOFC: HT-PEM systems typically boast shorter start-up times compared to SOFCs, allowing for quicker deployment and response to power demands. SOFC systems are not suitable for backup or mobility applications as they are optimized to work continuously 24x7. Additionally, HT-PEM fuel cells tend to be more compact in size, offering greater flexibility in installation and integration into various applications. Cost-wise, HT-PEM systems often exhibit lower initial investment requirements compared to SOFCs, making them more accessible for a range of applications and markets. These distinctions underscore the unique advantages of HT-PEM technology in terms of efficiency, versatility, and affordability.
HT-PEM vs Batteries: When operating as standalone power sources, batteries are often impractical and cumbersome, particularly in off-grid scenarios where they require daily transportation back to the grid for recharging. Additionally, they incur high costs and offer limited runtime, while recharging from the grid often results in higher net emissions in most countries. At Advent, we firmly believe in the transformative potential of hybrid power solutions that merge our HT-PEM fuel cell technology with batteries. Unlike traditional methods, where batteries draw power from the grid, our approach for certain applications favors charging batteries using our fuel cells to ensure unlimited green power generation and provide a consistent power supply constrained only by the availability of fuel. Furthermore, our hybrid solution offers significant cost savings and extended runtime compared to battery-only alternatives. Moreover, it achieves remarkable emission reductions, up to 80% when utilizing biomethanol fuel and 100% with eMethanol.
Research and Development
Our R&D projects cover the full lifecycle of fuel cells, from their actual development and optimization for use in hard-to-abate industries such as heavy-duty mobility to the effective recycling of end-of-life systems, emphasizing our commitment to sustainability. We are actively engaged in over 20 research and development initiatives across the EU and the US, which serve as pivotal pillars for our strategic advancement. These programs afford us the opportunity to collaborate closely with some of the world’s most esteemed research institutions, universities, and leading companies committed to decarbonized solutions. Through these partnerships, we continuously broaden our scope and expertise. A prime illustration is Advent’s latest marine R&D endeavor, Rivercell 3. This initiative aims to pioneer a maritime fuel cell system, culminating in an auxiliary power unit exceeding 500kW in capacity. RiverCell 3 will leverage Advent’s modular 50kW eMethanol-powered fuel cell systems, which are based on our proprietary Ion-Pair™ MEA technology, and collaborative partners include MEYER NEPTUN Engineering GmbH, Siemens Energy Global GmbH & Co. KG, Lloyd’s Register EMEA Niederlassung Deutschland, and Hochschule Wismar Bereich Seefahrt, Anlagentechnik und Logistik.
Employees and Human Capital Resources
Our employees are critical to our success. As of December 31, 2023, we had approximately 100 employees, including part-time and contractors. We occasionally rely on additional independent contractors to support our operations. None of our employees are represented by a labor organization or are a party to any collective bargaining arrangement.
We believe that developing a diverse, equitable, and inclusive culture is critical to continuing to attract and retain the top talent necessary for our long-term success and strategy. We value diversity at all levels.
We strive to create a collaborative environment where our colleagues feel respected and valued. We provide our employees with competitive compensation, opportunities for equity ownership, and a robust employment package, including health care, retirement benefits, and paid time off. In addition, we regularly interact with our employees to gauge employee satisfaction and identify focus areas.
At Advent, we champion the belief that individual uniqueness enhances greatness. Our commitment is to cultivate a diverse and inclusive environment. We uphold equal opportunities, human rights, and the principles of diversity and inclusion. Through rigorous protocols, we continuously work to identify and eradicate any form of harassment within our organization, fostering a fair and respectful workplace. Recognizing that a diverse, equitable, and inclusive culture is fundamental to our long-term success and strategy, we prioritize the value and respect of our employees, unequivocally condemning violence, discrimination, or harassment. Employees are encouraged to address any questions or concerns regarding equity, diversity, and inclusion with our Human Resources department. We honor and accommodate the physical or mental limitations of qualified employees with disabilities, enabling them to fulfill their job responsibilities. Furthermore, our compensation structure is determined by factors such as position, education, and experience, ensuring gender pay parity across all roles.
Performance Management: We are committed to optimizing performance management within our organization. Our focus lies in nurturing strong relationships between our management team and employees, fostering a culture of mutual respect across all operational sites and facilities. We conduct formal performance evaluations annually to track progress and provide feedback. Furthermore, we actively encourage ongoing dialogue between employees and supervisors to discuss development goals and performance metrics regularly.
Talent and Training: Our employees engage in a range of inclusive training and development programs covering diverse subjects to enhance their skills and competencies. These include professional skills enhancement, human rights, ethics, health and safety in laboratory processes, and technological expertise. We also mandate standard business ethics training for all employees.
Health Safety Wellness: To safeguard the well-being of our employees across all operational sites, we rigorously uphold and surpass relevant safety and health regulations. At every location, Advent maintains strict adherence to local health and safety standards. Our commitment to employee welfare is articulated in our comprehensive Group Health and Safety Policy. Within Advent’s Employee Handbook, we delineate our existing protocols concerning health and safety matters and the oversight responsibilities of our management team.
Available Information
Our Internet address is https://www.advent.energy. Our website and the information contained on, or that can be accessed through, the website will not be deemed to be incorporated by reference in, and are not considered part of, this Annual Report on Form 10-K. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, including exhibits, proxy and information statements and amendments to those reports filed or furnished pursuant to Sections 13(a), 14, and 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, are available through the “Investors” portion of our website free of charge as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. In addition, our filings with the SEC may be accessed through the SEC’s Interactive Data Electronic Applications system at http://www.sec.gov. All statements made in any of our securities filings, including all forward-looking statements or information, are made as of the date of the document in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law.

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ITEM 1A. RISK FACTORS
Item 1A. Risk Factors.
An investment in our common stock involves a high degree of risks. You should consider carefully the risks described below as well as the other information contained in this Annual Report on Form 10-K before investing in our common stock. The risks described below are those that we believe are the material risks that we face. If any of the following risks actually occurs, our business, prospects, operating results and financial condition could suffer materially, the trading price of our common stock could decline and you could lose all or part of your investment. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business. See “Forward-Looking Statements” in this Annual Report on Form 10-K.
Risk Factors Relating to Our Operations and Business
We have identified material weaknesses in our system of internal controls pursuant to Section 404 of the Sarbanes-Oxley Act of 2002. If not remediated, these material weaknesses could result in material misstatements in our consolidated financial statements. We may be unable to develop, implement and maintain appropriate controls in future periods.
Our management identified material weaknesses in our internal control processes. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected and corrected on a timely basis. Management has concluded that, because of these material weaknesses, we were unable to timely file our annual report on Form 10-K for the fiscal year ended December 31, 2023 and our quarterly report on Form 10-Q for the quarter ended March, 31, 2024. These deficiencies primarily relate to our lack of an effective internal control structure and sufficient financial reporting and accounting personnel due to the resignation of key control operators in early 2024 including the Company’s Chief Financial Officer and then the subsequent resignation of his successor soon thereafter. As a result of the material weaknesses, the Company’s management, under the supervision of the Audit Committee of the Board of Directors and with participation of the Company’s Chief Executive Officer and Acting Chief Financial Officer, concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2023.
Although we are working to remedy the ineffectiveness of the Company’s internal control over financial reporting, there can be no assurance as to when the remediation plan will be fully developed and implemented. Until our remediation plan is fully implemented, our management will continue to devote significant time, attention and financial resources to these efforts. If we do not complete our remediation in a timely fashion, or at all, or if our remediation plan is inadequate, there will continue to be an increased risk that we will be unable to timely file quarterly reports on Form 10-Q and Annual Reports on Form 10-K. As of the filing of this report, we have not yet filed our 10-Q for the quarter ended March, 31, 2024. Further and continued determinations that there are one or more material weaknesses in the effectiveness of the Company’s internal control over financial reporting could also reduce our ability to obtain financing or could increase the cost of any financing we obtain and require additional expenditures of both money and our management’s time to comply with applicable requirements. For more information relating to the Company’s internal control over financial reporting, the material weaknesses that existed as of December 31, 2023 and the remediation activities undertaken by us, see Part IJ, Item 9A, “Controls and Procedures” of this Annual Report on Form 10-K.
If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or detect fraud. Consequently, shareholders could lose confidence in our financial reporting and this may decrease the trading price of our common stock.
We are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002, or SOX, and Nasdaq rules and regulations. SOX requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. We perform system and process evaluation and testing of our internal controls over financial reporting to allow management to report on the effectiveness of our internal controls over financial reporting in our Annual Report on Form 10-K filing for that year, as required by Section 404 of SOX. As mentioned herein, we have identified material weaknesses in our internal control processes related to the separation of several members of our finance team. While we are currently working to remediate these material weaknesses, we cannot assure that, in the future, a material weakness or significant deficiency will not exist or otherwise be discovered. If that were to happen, it could harm our operating results and cause shareholders to lose confidence in our reported financial information. Any such loss of confidence would have a negative effect on the trading price of our securities.
A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be satisfied. Internal control over financial reporting and disclosure controls and procedures are designed to give a reasonable assurance that they are effective to achieve their objectives. We cannot provide absolute assurance that all of our possible future control issues will be detected. These inherent limitations include the possibility that judgments in our decision making can be faulty, and that isolated breakdowns can occur because of simple human error or mistake. The design of our system of controls is based in part upon assumptions about the likelihood of future events, and there can be no assurance that any design will succeed absolutely in achieving our stated goals under all potential future or unforeseeable conditions. Because of the inherent limitations in a cost-effective control system, misstatements due to error could occur and not be detected. This and any future failures could cause investors to lose confidence in our reported financial information, which could have a negative impact on our financial condition and stock price.
Our audited financial statements included a statement that there is a substantial doubt about our ability to continue as a going concern and a continuation of negative financial trends could result in our inability to continue as a going concern.
Our audited financial statements as of and for the year ended December 31, 2023 were prepared on the assumption that we would continue as a going concern. Our audited financial statements as of and for the year ended December 31, 2023 did not include any adjustments that might result from the outcome of this uncertainty. Our management has determined that there is a substantial doubt about our ability to continue as a going concern over the next twelve months based on the insufficient amount of cash and cash equivalents and net revenue from operations, as of the financial statement filing date and our independent registered public accounting firm has included an explanatory paragraph in their report on our financial statements as of and for the year ended December 31, 2023, stating that we have concluded that a substantial doubt exists about our ability to continue as a going concern. In addition to cash inflows from operations, the Company pursues additional debt and/or equity funding.
On July 30, 2024, the Company entered into a securities purchase agreement, dated July 30, 2024 (the “Purchase Agreement”), with an institutional investor (the “Investor”) pursuant to which, at the closing, the Company will issue to the Investor a senior promissory note in the principal amount of $1 million (the “Senior Note”). The Investor has also committed to provide the Company with a one-year revolving line of credit to the Company for an aggregate maximum principal amount of $2 million (the two debt transactions are referred to as the “Financing”), contingent upon the Company’s filing of a Registration Statement on Form S-1 with the Securities and Exchange Commission with respect to an underwritten or “best efforts” public offering by the Company of its common stock, and/or common stock equivalents registered under the Securities Act of 1933, as amended for proceeds to the Company of not less than $5 million (a “Qualified Public Equity Offering”). The Company will use the proceeds from the Financing for general corporate purposes, including expenses related to the preparation of its Annual Report on Form 10-K for the year ended December 31, 2023, and expenses to facilitate a Qualified Public Equity Offering and the proceeds of the Qualified Public Equity Offering for general corporate purposes. We cannot provide assurance that we will be able to obtain additional funding on acceptable terms, if at all. If we are unable to obtain sufficient funding, we could be required to delay our development efforts, limit activities and reduce research and development costs, which could adversely affect its business prospects. The reaction of investors to the inclusion of a going concern statement by our independent auditors, and our potential inability to continue as a going concern, could materially adversely affect the price of our common stock.
We have incurred losses since inception and we expect that we will continue to incur losses for the foreseeable future.
We have not been profitable since operations commenced, and we may never achieve or sustain profitability. We expect to continue to incur net losses and generate negative cash flows until we can produce sufficient revenues and gross profit to cover our costs. We may never become profitable. Even if we do achieve profitability, we may be unable to sustain or increase our profitability in the future. We will require significant additional capital to continue operations and to implement our business strategy. We cannot estimate with reasonable certainty the actual amounts necessary to successfully complete the development, manufacture and commercialization of our products and there is no certainty that we will be able to raise the necessary capital on reasonable terms or at all.
We may be unable to adequately control the costs associated with our operations.
We will require significant capital to develop and grow our business, including developing and manufacturing our fuel cells and building Advent’s brand. We expect to incur significant expenses which will impact our profitability, including research and development expenses, raw material procurement costs, sales and distribution expenses as we build Advent’s brand and market our fuel cells, and general and administrative expenses as we scale our operations. Our ability to become profitable in the future will not only depend on our ability to successfully market our fuel cells and other products and services, but also to control our costs. If we are unable to cost efficiently design, manufacture, market, sell, distribute and service our fuel cells, our margins, profitability and prospects would be materially and adversely affected.
We may need to raise additional funds and these funds may not be available to us when we need them. If we cannot raise additional funds when we need them, our operations and prospects could be negatively affected.
The scale-up of production of our fuel cells, membranes and electrodes, together with the associated investment in our assembly line and product development activities, will consume capital. To ensure that we will have sufficient capital to fund our planned operations, we intend to raise additional funds through the issuance of equity, equity related or debt securities, or through obtaining credit from government or financial institutions. This capital will be necessary to fund our ongoing operations, continue research, development and design efforts, improve infrastructure, and introduce new technologies. We cannot be certain that additional funds will be available to us on favorable terms when required, or at all. If we cannot raise additional funds when we need them, our financial condition, results of operations, business and prospects could be materially adversely affected.
We continue to generate a low level of revenue from our core products.
Based on conversations with existing customers and incoming inquiries from new customers, we anticipate substantial increased demand for our MEAs and fuel cell systems from a wide range of customers as we scale up our production facilities and testing capabilities, and as the awareness our MEA capabilities become widely known in the industry. We expect both existing customers to increase order volume, and to generate substantial new orders from major organizations, with some of whom we are already in discussions regarding prospective commercial partnerships and joint development agreements. As of December 31, 2023, we were still generating a low level of revenues compared to our future projections and have not made any commercial sales to major organizations.
If we fail to manage our future growth effectively, we may not be able to market and sell our fuel cells successfully.
Any failure to manage our growth effectively could materially and adversely affect our business, prospects, operating results and financial condition. We intend to expand our operations significantly. Our future expansion will include:
● training new personnel;
● forecasting production and revenue;
● geographic expansion;
● controlling expenses and investments in anticipation of expanded operations;
● entry into new material contracts;
● establishing or expanding design, production, licensing and sales; and
● implementing and enhancing administrative infrastructure, systems and processes.
We intend to hire additional personnel, including design and production personnel. Because our technologies are different from traditional electric vehicle battery technology, individuals with sufficient training in alternative fuel and electric vehicles may not be available to hire, and as a result, we will need to expend significant time and expense training the employees we do hire. Competition for individuals with experience designing and manufacturing hydrogen fuel cells is high, and we may not be able to attract, integrate, train, motivate or retain additional highly qualified personnel in the future. The failure to attract, integrate, train, motivate and retain these additional employees could seriously harm our business and prospects.
We will rely on complex machinery for our operations and production involves a significant degree of risk and uncertainty in terms of operational performance and costs.
We will rely heavily on complex machinery for our operations and our production will involve a significant degree of uncertainty and risk in terms of operational performance and costs. Our membrane and fuel cell production plant will consist of large-scale machinery combining many components. The production plant components are likely to suffer unexpected malfunctions from time to time and will depend on repairs and spare parts to resume operations, which may not be available when needed. Unexpected malfunctions of the production plant components may significantly affect the intended operational efficiency. Operational performance and costs can be difficult to predict and are often influenced by factors outside of our control, such as, but not limited to, scarcity of natural resources, environmental hazards and remediation, costs associated with decommissioning of machines, labor disputes and strikes, difficulty or delays in obtaining governmental permits, damages or defects in electronic systems, industrial accidents, fire, and seismic activity and natural disasters. Should operational risks materialize, it may result in the personal injury to or death of workers, the loss of production equipment, damage to manufacturing facilities, monetary losses, delays and unanticipated fluctuations in production, environmental damage, administrative fines, increased insurance costs and potential legal liabilities, all which could have a material adverse effect on our business, results of operations, cash flows, financial condition or prospects.
Our future growth is dependent upon the market’s willingness to adopt our hydrogen-powered fuel cell and membrane technology.
Our growth is highly dependent upon the adoption by the automotive, aerospace, power and energy industries. If the market for our fuel cells and membranes does not develop at the rate or to the extent that we expect, our business, prospects, financial condition and operating results will be harmed. The market for alternative fuel and energy storage systems is still new and is characterized by rapidly changing technologies, price competition, numerous competitors, evolving government regulation and industry standards and uncertain customer demands and behaviors.
Factors that may influence the adoption of our fuel cell and membrane technology include:
● perceptions about safety, design, performance and cost, especially if adverse events or accidents occur that are linked to the quality or safety of alternative fuel or electric vehicles;
● improvements in the fuel economy of internal combustion engines and battery powered vehicles;
● the availability of service for alternative fuel vehicles;
● volatility in the cost of energy, oil, gasoline and hydrogen;
● government regulations and economic incentives promoting fuel efficiency, alternate forms of energy, and regulations banning internal combustion engines;
● the availability of tax and other governmental incentives to sell hydrogen;
● volatility in the cost of energy, oil, gasoline and hydrogen;
● government regulations and economic incentives promoting fuel efficiency, alternate forms of energy, and regulations banning internal combustion engines;
● the availability of tax and other governmental incentives to sell hydrogen;
● perceptions about and the actual cost of alternative fuel; and
● macroeconomic factors.
Future product recalls could materially adversely affect our business, prospects, operating results and financial condition.
Any product recall in the future may result in adverse publicity, damage our brand and materially adversely affect our business, prospects, operating results and financial condition. In the future, we may voluntarily or involuntarily, initiate a recall if any of our fuel cells or membranes prove to be defective. Such recalls involve significant expense and diversion of management attention and other resources, which could adversely affect our brand image in our target markets, as well as our business, prospects, financial condition and results of operations.
If we are unable to attract and retain key employees and hire qualified management, technical and fuel cell and system engineering personnel, our ability to compete could be harmed.
Our success depends, in part, on our ability to retain our key personnel. The unexpected loss of or failure to retain one or more of our key employees could adversely affect our business, including our recent turnover in the finance function. Our success also depends, in part, on our continuing ability to identify, hire, attract, train and develop other highly qualified personnel.
Competition for these employees can be intense, and our ability to hire, attract and retain them depends on our ability to provide competitive compensation. We may not be able to attract, assimilate, develop or retain qualified personnel in the future, and our failure to do so could adversely affect our business, including the execution of our global business strategy. Any failure by our management team to perform as expected may have a material adverse effect on our business, prospects, financial condition and results of operations.
Increases in costs, disruption of supply or shortage of raw materials could harm our business.
Once we increase production, we may experience increases in the cost or a sustained interruption in the supply or shortage of raw materials. Any such increase or supply interruption could materially negatively impact our business, prospects, financial condition and operating results. We use various raw materials including precious group metals such as platinum; carbon black; polymer precursors, reactants, and solvents; as well as carbon cloth and carbon fiber paper. The prices for these raw materials fluctuate depending on market conditions and global demand and could adversely affect our business and operating results.
We are or may be subject to risks associated with strategic alliances or acquisitions.
We have entered into, and may in the future enter into additional, strategic alliances, including joint ventures or minority equity investments with various third parties to further our business purpose. These alliances could subject us to a number of risks, including risks associated with sharing proprietary information, non-performance by the third party and increased expenses in establishing new strategic alliances, any of which may materially and adversely affect our business. We may have limited ability to monitor or control the actions of these third parties and, to the extent any of these strategic third parties suffers negative publicity or harm to their reputation from events relating to their business, we may also suffer negative publicity or harm to our reputation by virtue of our association with any such third party.
When appropriate opportunities arise, we may acquire additional assets, products, technologies or businesses that are complementary to our existing business. In addition to possible stockholder approval, we may need approvals and licenses from relevant government authorities for the acquisitions and to comply with any applicable laws and regulations, which could result in increased delay and costs, and may disrupt our business strategy if we fail to do so. Furthermore, acquisitions and the subsequent integration of new assets and businesses into our own require significant attention from our management and could result in a diversion of resources from our existing business, which in turn could have an adverse effect on our operations. Acquired assets or businesses may not generate the financial results we expect. Acquisitions could result in the use of substantial amounts of cash, potentially dilutive issuances of equity securities and exposure to potential unknown liabilities of the acquired business. Moreover, the costs of identifying and consummating acquisitions may be significant.
We may experience difficulties integrating the operations of acquired companies into our business and in realizing the expected benefits of these acquisitions.
Acquisitions involve numerous risks, any of which could harm our business and negatively affect our financial condition and results of operations. The success of various strategic acquisitions that the Company may make in the future will depend in part on our ability to realize the anticipated business opportunities from combining their and our operations in an efficient and effective manner. These integration processes could take longer than anticipated and could result in the loss of key employees, the disruption of each company’s ongoing businesses, tax costs or inefficiencies, or inconsistencies in standards, controls, information technology systems, procedures and policies, any of which could adversely affect our ability to maintain relationships with customers, employees or other third parties, or our ability to achieve the anticipated benefits of the acquisitions, and could harm our financial performance. If we are unable to successfully or timely integrate the operations of such acquired businesses with our business, we may incur unanticipated liabilities and be unable to realize the revenue growth, synergies and other anticipated benefits resulting from the acquisitions, or fully offset the costs of the acquisition, and our business, results of operations and financial condition could be materially and adversely affected.
We are subject to substantial regulation and unfavorable changes to, or failure by us to comply with, these regulations could substantially harm our business and operating results.
Our fuel cells and membranes are subject to substantial regulation under international, federal, state, and local laws. We expect to incur significant costs in complying with these regulations. Regulations related to alternative energy are currently evolving and we face risks associated with changes to these regulations, including but not limited to:
● increased subsidies for corn and ethanol production, which could reduce the operating cost of vehicles that use ethanol or a combination of ethanol and gasoline; and
● increased sensitivity by regulators to the needs of established automobile manufacturers with large employment bases, high fixed costs and business models based on the internal combustion engine, which could lead them to pass regulations that could reduce the compliance costs of such established manufacturers or mitigate the effects of government efforts to promote alternative fuel vehicles. Compliance with changing regulations could be burdensome, time consuming, and expensive. To the extent compliance with new regulations is cost prohibitive, our business, prospects, financial condition and operating results would be adversely affected.
We face risks associated with our international operations, including unfavorable regulatory, political, tax and labor conditions, which could harm our business.
We face risks associated with our international operations, including possible unfavorable regulatory, political, tax and labor conditions, which could harm our business. We have international operations in Europe and Asia that are subject to the legal, political, regulatory and social requirements and economic conditions in these jurisdictions. We are subject to a number of risks associated with international business activities that may increase our costs, impact our ability to sell our fuel cells and membranes and require significant management attention. These risks include:
● difficulty in staffing and managing foreign operations;
● 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 U.S., and foreign tax and other laws limiting our ability to repatriate funds to the U.S.;
● fluctuations in foreign currency exchange rates and interest rates;
● increased inflation rates and cost of goods;
● U.S. and foreign government trade restrictions, tariffs and price or exchange controls;
● foreign labor laws, regulations and restrictions;
● changes in diplomatic and trade relationships;
● political instability, natural disasters, war, or events of terrorism;
● the escalation or continuation of armed conflict, hostilities or economic sanctions between countries or regions, including the current conflict between Russia and Ukraine;
● the strength of international economies and economic relations between countries or regions; and
● economic uncertainties and potential disruptions include a slow-down in the general economy.
If we fail to successfully address these risks, our business, prospects, operating results and financial condition could be materially harmed.
The unavailability, reduction or elimination of government and economic incentives could have a material adverse effect on our business, prospects, financial condition and operating results.
Any reduction, elimination or discriminatory application of government subsidies and economic incentives because of policy changes, the reduced need for such subsidies and incentives due to the perceived success of alternative energies or other reasons may result in the diminished competitiveness of the alternative fuel industry generally. This could materially and adversely affect the growth of the alternative fuel automotive markets and our business, prospects, financial condition and operating results.
While certain tax credits and other incentives for alternative energy production and alternative fuel vehicles have been available in the past, there is no guarantee these programs will be available in the future. If current tax incentives are not available in the future, our financial position could be harmed.
We may not be able to obtain or agree on acceptable terms and conditions for all or a significant portion of the government grants, loans and other incentives for which we may apply in the future. As a result, our business and prospects may be adversely affected.
We anticipate continuing to apply for federal and state grants, loans and tax incentives under government programs designed to stimulate the economy and support the production of alternative fuel vehicles and related technologies. We anticipate that in the future there will be new opportunities for us to apply for grants, loans and other incentives from the U.S., state and foreign governments. Our ability to obtain funds or incentives from government sources is subject to the availability of funds under applicable government programs and approval of our applications to participate in such programs. The application process for these funds and other incentives will likely be highly competitive. We cannot assure you that we will be successful in obtaining any of these additional grants, loans and other incentives. If we are not successful in obtaining any of these additional incentives and we are unable to find alternative sources of funding to meet our planned capital needs, our business and prospects could be materially adversely affected.
We may need to defend ourselves against patent or trademark infringement claims, which may be time-consuming and cause us to incur substantial costs.
Companies, organizations or individuals, including our competitors, may own or obtain patents, trademarks or other proprietary rights that would prevent or limit our ability to make, use, develop, license or sell our fuel cell and membrane technologies, which could make it more difficult for us to operate our business. We may receive inquiries from patent or trademark owners inquiring whether we infringe their proprietary rights. Companies owning patents or other intellectual property rights relating to fuel cells may allege infringement of such rights. In response to a determination that we have infringed upon a third party’s intellectual property rights, we may be required to do one or more of the following:
● cease development, sales, license or use of fuel cells or membranes that incorporate the asserted intellectual property;
● pay substantial damages;
● obtain a license from the owner of the asserted intellectual property right, which license may not be available on reasonable terms or at all; or
● redesign one or more aspects or systems of our fuel cells or membranes.
A successful claim of infringement against us could materially adversely affect our business, prospects, operating results and financial condition. Any litigation or claims, whether valid or invalid, could result in substantial costs and diversion of resources.
We also plan to license patents and other intellectual property from third parties and we may face claims that our use of this in-licensed technology infringes the intellectual property rights of others. In such cases, we will seek indemnification from our licensors. However, our rights to indemnification may be unavailable or insufficient to cover our costs and losses.
Our business may be adversely affected if we are unable to protect our intellectual property rights from unauthorized use by third parties.
Failure to adequately protect our intellectual property rights could result in our competitors offering similar products, potentially resulting in the loss of some of our competitive advantage and a decrease in our revenue, which would adversely affect our business, prospects, financial condition and operating results. Our success depends, at least in part, on our ability to protect our core technology and intellectual property. To accomplish this, we will rely on a combination of patents, trade secrets (including know-how), employee and third-party nondisclosure agreements, copyright, trademarks, intellectual property licenses and other contractual rights to establish and protect our rights in our technology.
The protection of our intellectual property rights will be important to our future business opportunities. However, the measures we take to protect our intellectual property from unauthorized use by others may not be effective for various reasons, including the following:
● any patent applications we submit may not result in the issuance of patents;
● the scope of our issued patents may not be broad enough to protect our proprietary rights;
● our issued patents may be challenged and/or invalidated by our competitors;
● the costs associated with enforcing patents, confidentiality and invention agreements or other intellectual property rights may make aggressive enforcement impracticable;
● current and future competitors may circumvent our patents; and
● our in-licensed patents may be invalidated, or the owners of these patents may breach our license arrangements.
Patent, trademark, and trade secret laws vary significantly throughout the world. Some foreign countries do not protect intellectual property rights to the same extent as do the laws of the U.S. Further, policing the unauthorized use of our intellectual property in foreign jurisdictions may be difficult. Therefore, our intellectual property rights may not be as strong or as easily enforced outside of the U.S.
Our patent applications may not issue as patents, which may have a material adverse effect on our ability to prevent others from commercially exploiting products similar to ours.
We cannot be certain that we are the first inventor of the subject matter to which we have filed a particular patent application, or if we are the first party to file such a patent application. If another party has filed a patent application to the same subject matter as we have, we may not be entitled to the protection sought by the patent application. Further, the scope of protection of issued patent claims is often difficult to determine. As a result, we cannot be certain that the patent applications that we file will issue, or that our issued patents will afford protection against competitors with similar technology. In addition, our competitors may design around our issued patents, which may adversely affect our business, prospects, financial condition or operating results.
Our management team has limited experience managing a public company.
Most members of our management team have limited experience managing a publicly-traded company, interacting with public company investors and complying with the increasingly complex laws pertaining to public companies. Our management team may not successfully or efficiently manage the requirements of being a public company subject to significant regulatory oversight and reporting obligations under the federal securities laws and the scrutiny of securities analysts and investors. These new obligations and constituents will require significant attention from our management team and could divert their attention away from the day-to-day management of our business, which could materially and adversely affect our business, financial condition, operating results, cash flows and prospects.
Obtaining the MIL-STD certification for the Honey Badger and advancing it for U.S. army integration is subject to risks and uncertainty.
Obtaining the MIL-STD certification for the Honey Badger and advancing it for U.S. army integration is subject to risks and uncertainty, and may not be completed on the timeline we expect, or at all.
Cybersecurity risks and attacks, security incidents, and data breaches could compromise our intellectual property or other proprietary information, could disrupt our electronic infrastructure, operations and manufacturing, and could impact our competitive position, reputation, results of operations, financial condition, and cash flows.
We rely upon our information technology and electronic infrastructure and its capacity, reliability, and security in connection with various and critical aspects of our business activities. We also rely on our ability to expand and continually update these technologies and related infrastructure in response to the changing needs of our business and the risks presented. We face challenges related to supporting our older technologies and implementing necessary upgrades and the hardening of current technologies. In addition, some of these technologies are managed by third-party service providers and are not under our direct control. If we experience a problem with a critical technology, including during upgrades or new technology implementations, any resulting disruptions could have an adverse effect on our business operations and our performance.
Our business operations rely upon our electronic infrastructure and that of our third-party vendors, including to handle information and data such as intellectual property, personal information, protected information, financial information and other confidential and proprietary information related to our business and our employees, prospects, customers, suppliers and other business partners. While we maintain certain administrative, technical, and physical safeguards and take preventive and proactive measures to combat known and unknown cybersecurity risks, our work and processes to build out and mature our electronic infrastructure, controls, policies and safeguards is ongoing. There is no assurance that our current controls and our ongoing efforts will be sufficient to eliminate security risks.
Cyberattacks are increasing in frequency and evolving in nature. We and our third-party providers are at risk of attack through use of increasingly sophisticated methods, including malware, phishing, ransomware, and the deployment of technologies to find and exploit vulnerabilities. Like many organizations, we have been targeted by phishing attacks, for example. Our electronic infrastructure, and information technology systems maintained by our third-party providers, have been in the past, and may be in the future, subjected to attempts to gain unauthorized access, disable, destroy, maliciously control or cause other business disruptions. In some cases, it is difficult to anticipate or to detect immediately such incidents and any damage caused. While these types of incidents have not had a material impact on our business to-date, future incidents involving access to or improper use of our systems, or those of our third-parties, could compromise confidential, proprietary or otherwise sensitive information.
In addition, cyberattacks could negatively impact our reputation and our competitive position and could result in litigation with third parties, regulatory action, significant remediation costs, and loss of business and customers relationships, any of which could adversely impact our business, our financial condition, and our operating results. Although we maintain some insurance coverage, we cannot be certain that coverage would apply to cyber risks, that it may be adequate for liabilities incurred, or that any insurer will not accept or deny coverage of future claims.
We may experience problems with the operation of our electronic infrastructure or the technology systems of third parties on which we rely, as well as the development and deployment of new electronic infrastructure, that could adversely affect, or even disrupt, all or a portion of our operations until resolved. In addition, as a result of the COVID-19 pandemic a large percentage of our salaried employees continue to work remotely full or part-time. This remote working environment may pose a heightened risk for security breaches or other disruptions of our information technology environment.
Our global operations are subject to data privacy laws and regulations that impose significant compliance costs and create reputational and legal risk.
Due to the international scope of our operations, we may be subject to a complex system of regulatory requirements regarding data privacy, such as the European Union General Data Protection Regulation and California’s Consumer Privacy Act and its amendments.
Our numerous foreign operations are governed by laws, rules and business practices that differ from those of the U.S. We cannot predict now our future data privacy risks or the nature, scope or effect of future regulatory requirements to which our operations might be subject or the manner in which existing laws might be administered or interpreted.
Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions or transactional counterparties, could adversely affect the Company’s current and projected business operations and its financial condition and results of operations.
Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. For example, on March 10, 2023, Silicon Valley Bank (SVB) was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp. were each swept into receivership. Although a statement by the Department of the Treasury, the Federal Reserve and the FDIC indicated that all depositors of SVB would have access to all of their money after only one business day of closure, including funds held in uninsured deposit accounts, borrowers under credit agreements, letters of credit and certain other financial instruments with SVB, Signature Bank or any other financial institution that is placed into receivership by the FDIC may be unable to access undrawn amounts thereunder. Although we are not a borrower or party to any such instruments with SVB, Signature or any other financial institution currently in receivership, if any of our lenders or counterparties to any such instruments were to be placed into receivership, we may be unable to access such funds. In addition, if any of our customers, suppliers or other parties with whom we conduct business are unable to access funds pursuant to such instruments or lending arrangements with such a financial institution, such parties’ ability to pay their obligations to us or to enter into new commercial arrangements requiring additional payments to us could be adversely affected. In this regard, counterparties to SVB credit agreements and arrangements, and third parties such as beneficiaries of letters of credit (among others), may experience direct impacts from the closure of SVB and uncertainty remains over liquidity concerns in the broader financial services industry. Similar impacts have occurred in the past, such as during the 2008-2010 financial crisis. We hold no deposits or securities with SVB, Signature Bank or Silvergate Capital.
Failure of our information technology systems could significantly disrupt the operation of our business.
Our business increasingly depends on the use of information technologies, which means that certain key areas such as research and development, production and sales are to a large extent dependent on our information systems or those of third-party providers. Our ability to execute our business plan and to comply with regulatory requirements with respect to data control and data integrity, depends, in part, on the continued and uninterrupted performance of our information technology systems, or IT systems and the IT systems supplied by third-party service providers. These systems are vulnerable to damage from a variety of sources, including telecommunications or network failures, malicious human acts and natural disasters. Moreover, despite network security and backup measures, some of our servers are potentially vulnerable to physical or electronic break-ins, computer viruses and similar disruptive problems. Despite the precautionary measures we and our third-party service providers have taken to prevent unanticipated problems that could affect our IT systems, sustained or repeated system failures or problems arising during the upgrade of any of our IT systems that interrupt our ability to generate and maintain data, and in particular to operate our proprietary technology platform, could adversely affect our ability to operate our business.
Risks Related to Ownership of Our Common Stock and Warrants
Delaware law and our second amended and restated certificate of incorporation and second amended and restated bylaws contain certain provisions, including anti-takeover provisions, that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.
Our second amended and restated certificate of incorporation and our amended and restated bylaws, and the Delaware General Corporation Law (“DGCL”), contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by our board of directors and therefore depress the trading price of our common stock. These provisions could also make it difficult for stockholders to take certain actions, including electing directors or taking other corporate actions, including effecting changes in our management. Among other things, our second amended and restated certificate of incorporation and amended and restated bylaws include provisions regarding:
● a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors;
● the ability of our board of directors to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;
● the limitation of the liability of, and the indemnification of, our directors and officers;
● the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;
● the requirement that directors may only be removed from our board of directors for cause;
● a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of stockholders and could delay the ability of stockholders to force consideration of a stockholder proposal or to take action, including the removal of directors;
● the requirement that a special meeting of stockholders may be called only by our board of directors, the chairperson of our board of directors, our chief executive officer or our president (in the absence of a chief executive officer), which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors;
● controlling the procedures for the conduct and scheduling of board of directors and stockholder meetings;
● the requirement for the affirmative vote of holders of at least 65% of the voting power of all of the then outstanding shares of the voting stock, voting together as a single class, to amend, alter, change or repeal any provision of the second amended and restated certificate of incorporation or amended and restated bylaws, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our board of directors and also may inhibit the ability of an acquirer to effect such amendments to facilitate an unsolicited takeover attempt;
● the ability of our board of directors to amend the amended and restated bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the amended and restated bylaws to facilitate an unsolicited takeover attempt; and
● advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our board of directors and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of surviving entity.
These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our board of directors or management.
In addition, as a Delaware corporation, we will be subject to provisions of Delaware law, including Section 203 of the DGCL, which may generally prohibit certain stockholders holding 15% or more of our outstanding capital stock from engaging in certain business combinations with us for a specified period of time unless certain conditions are met.
Any provision of the second amended and restated certificate of incorporation, amended and restated bylaws or Delaware law that has the effect of delaying or preventing a change in control could limit the opportunity for stockholders to receive a premium for their shares of our capital stock and could also affect the price that some investors are willing to pay for our common stock.
Our second amended and restated certificate of incorporation designate a state or federal court located within the State of Delaware as the exclusive forum for substantially all disputes between us and our stockholders, and also provide that the federal district courts will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, each of which could limit the ability of our stockholders to choose the judicial forum for disputes with us or our directors, officers, or employees.
The second amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (1) any derivative action or proceeding brought on its behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of its directors, officers, or other employees to us or our stockholders, (3) any action arising pursuant to any provision of the Delaware General Corporation Law, or the second amended and restated certificate of incorporation or the amended and restated bylaws or (4) any other action asserting a claim that is governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware), in all cases subject to the court having jurisdiction over indispensable parties named as defendants. The second amended and restated certificate of incorporation also provides that the federal district courts of the U.S. will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. The exclusive forum provision is applicable to the fullest extent permitted by applicable law, subject to certain exceptions. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. We note, however, that there is uncertainty as to whether a court would enforce this provision and that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Section 22 of the Securities Act creates concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
Any person or entity purchasing or otherwise acquiring any interest in any of our securities shall be deemed to have notice of and consented to this provision. This exclusive-forum provision may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers, and other employees. If a court were to find the exclusive-forum provision be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could harm its results of operations.
An active market for our securities may not develop, which would adversely affect the liquidity and price of our securities.
The price of our securities may vary significantly due to factors specific to our business as well as to general market or economic conditions. Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market can be established and sustained.
NASDAQ may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
Our securities, including common stocks and warrants, are currently listed on the Nasdaq Capital Market. However, we cannot assure you that our securities will continue to be listed on the Nasdaq Capital Market in the future. In order to continue listing our securities on the Nasdaq Capital Market, we must maintain certain financial, distribution and stock price levels. Generally, we must maintain a minimum amount in stockholders’ equity (generally $2,500,000) and a minimum number of holders of our securities (generally 300 public holders). Additionally, we are required to demonstrate compliance with other Nasdaq’s continued listing requirements in order to continue to maintain the listing of our securities on the Nasdaq Capital Market.
In the past, we have received deficiency letters from Nasdaq regarding our failure to satisfy continued listing requirements and are currently not in compliance with all such requirements. On May 24, 2023, the Company received a letter from the Listing Qualifications Staff (the “Staff”) of Nasdaq Stock Market LLC (“Nasdaq”) indicating that the bid price of the Common Stock had closed below $1.00 per share for 30 consecutive business days and, as a result, the Company was not in compliance with Nasdaq Listing Rule 5550(a)(2), which sets forth the minimum bid price requirement for continued listing on the Nasdaq Capital Market (the “Minimum Bid Requirement”).
On May 13, 2024, the Company effectuated the Reverse Stock Split, and our Common Stock began trading on a split-adjusted basis on the Nasdaq Capital Market at the opening of trading on May 14, 2024, in an effort to comply with the Minimum Bid Requirement. The Company has since received confirmation from Nasdaq that it has met the Minimum Bid Requirement.
On April 17, 2024, we received a letter from Nasdaq notifying the Company that it is not in compliance with the periodic reporting requirements for continued listing set forth Nasdaq Listing Rule 5250(c)(1) (the “Timely Report Requirement”) due to the fact that this Annual Report on Form 10-K was not filed by the required due date of March 31, 2024 (the “10-K Delinquency Letter”). Additionally, on May 24, 2024, we received a letter from Nasdaq notifying the Company that it is not in compliance with the periodic requirements for continued listing set forth Nasdaq Listing Rule 5250(c)(1) due to the fact that the Company did not file its Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 (the “First Quarter 10-Q”) by the required due date of May 14, 2024 (the “10-Q Delinquency Letter”). The Company submitted compliance plans to Nasdaq setting forth its plan to file both this Annual Report on Form 10-K and the First Quarter 10-Q. Pursuant to each compliance plan, the Company has until October 14, 2024 to file this Annual Report on Form 10-K and its First Quarter 10-Q to regain compliance with the Timely Report Requirement. As of the date of this Annual Report on Form 10-K, the Company anticipates that its Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 will not be filed by the required due date of August 14, 2024.
We cannot assure you that we will be able to meet Nasdaq’s continued listing requirements at all times. If Nasdaq delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
● a limited availability of market quotations for its securities;
● reduced liquidity for its securities;
● a determination that our common stock is a “penny stock” which will require brokers trading in the 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.
If our common stock were delisted and determined to be a “penny stock,” a broker-dealer may find it more difficult to trade our common stock and an investor may find it more difficult to acquire or dispose of our common stock in the secondary market.
If our common stock were removed from listing with The Nasdaq Capital Market, it may be subject to the so-called “penny stock” rules. The SEC has adopted regulations that define a “penny stock” to be any equity security that has a market price per share of less than $5.00, subject to certain exceptions, such as any securities listed on a national securities exchange, which is the exception on which we currently rely. For any transaction involving a “penny stock,” unless exempt, the rules impose additional sales practice requirements on broker-dealers, subject to certain exceptions. If our common stock were delisted and determined to be a “penny stock,” a broker-dealer may find it more difficult to trade our common stock and an investor may find it more difficult to acquire or dispose of our common stock on the secondary market.
Our common stock price may change significantly and you could lose all or part of your investment as a result.
The trading price of our common stock is likely to be volatile. The stock market recently has experienced extreme volatility. This volatility often has been unrelated or disproportionate to the operating performance of particular companies. You may not be able to resell your shares of our common stock at an attractive price due to a number of factors such as those listed in “Risk Factors Relating to Our Operations and Business” and the following:
● results of operations that vary from the expectations of securities analysts and investors;
● results of operations that vary from our competitors;
● changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors;
● declines in the market prices of stocks generally;
● strategic actions by us or our competitors;
● announcements by us or our competitors of significant contracts, acquisitions, joint ventures, other strategic relationships or capital commitments;
● any significant change in our management;
● changes in general economic or market conditions or trends in our industry or markets;
● changes in business or regulatory conditions, including new laws or regulations or new interpretations of existing laws or regulations applicable to our business;
● future sales of our common stock or other securities;
● investor perceptions of the investment opportunity associated with our common stock relative to other investment alternatives;
● the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC;
● litigation involving us, our industry, or both, or investigations by regulators into our operations or those of our competitors;
● guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance;
● the development and sustainability of an active trading market for our common stock;
● actions by institutional or activist stockholders;
● changes in accounting standards, policies, guidelines, interpretations or principles; and
● other events or factors, including those resulting from pandemics, natural disasters, war, acts of terrorism or responses to these events.
These broad market and industry fluctuations may adversely affect the market price of our common stock, regardless of our actual operating performance. In addition, price volatility may be greater if the public float and trading volume of our common stock is low.
In the past, following periods of market volatility, stockholders have instituted securities class action litigation. If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation.
Because there are no current plans to pay cash dividends on our common stock for the foreseeable future, you may not receive any return on investment unless you sell your common stock at a price greater than what you paid for it.
We intend to retain future earnings, if any, for future operations, expansion and debt repayment and there are no current plans to pay any cash dividends for the foreseeable future. The declaration, amount and payment of any future dividends on shares of common stock will be at the sole discretion of the board of directors. The board of directors may take into account general and economic conditions, our financial condition and results of operations, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions, implications of the payment of dividends by us to our stockholders or by its subsidiaries to it and such other factors as the board of directors may deem relevant. As a result, you may not receive any return on an investment in our common stock unless you sell your common stock for a price greater than that which you paid for it.
Our stockholders may experience dilution in the future.
The percentage of shares of our common stock owned by current stockholders may be diluted in the future because of equity issuances for acquisitions, capital market transactions or otherwise, including, without limitation, equity awards that we may grant to its directors, officers and employees, or exercise of warrants. Such issuances may have a dilutive effect on our earnings per share, which could adversely affect the market price of our common stock.
If securities or industry analysts do not publish research or reports about our business, if they change their recommendations regarding our common stock or if our operating results do not meet their expectations, our common stock price and trading volume could decline.
The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our businesses. If no securities or industry analysts commence coverage of us or our business, the trading price for our common stock could be negatively impacted. In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover us downgrade our securities or publish unfavorable research about our businesses, or if our operating results do not meet analyst expectations, the trading price of our common stock would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease, which might cause our common stock price and trading volume to decline.
Future sales, or the perception of future sales, by us or our stockholders in the public market could cause the market price for our common stock to decline.
The sale of shares of our common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of our common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that it deems appropriate.
The shares of Advent’s common stock reserved for future issuance under the 2021 Equity Incentive Plan will become eligible for sale in the public market once those shares are issued, subject to any applicable vesting requirements, lockup agreements and other restrictions imposed by law. A total of 18,977 shares of common stock have been reserved for future issuance under the 2021 Equity Incentive Plan. We filed a Registration Statement on Form S-8 on June 10, 2021 (the “Form S-8”) to register the shares of our common stock reserved for issuance pursuant to the 2021 Equity Incentive Plan. Until such time as we have filed all Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K that are due with the Securities and Exchange Commission, including this Annual Report on Form 10-K and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, we are prohibited from issuing equity awards pursuant to the 2021 Equity Incentive Plan under the Form S-8 or from filing a registration statement on Form S-1 with the Securities and Exchange Commission.
In the future, we may also issue our securities in connection with investments or acquisitions. The amount of shares of our common stock issued in connection with an investment or acquisition could constitute a material portion of the then-outstanding shares of our common stock. Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to our stockholders.
As a public company, we are subject to additional laws, regulations and stock exchange listing standards, which impose additional costs on us and may strain our resources and divert our management’s attention.
Advent previously operated on a private basis and following the Business Combination it became a wholly-owned subsidiary of a public company that is subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the listing requirements of Nasdaq and other applicable securities laws and regulations. Compliance with these laws and regulations will increase our legal and financial compliance costs and make some activities more difficult, time-consuming or costly, which may strain our resources or divert management’s attention.
We may redeem unexpired public warrants prior to their exercise at a time that is disadvantageous for warrant holders.
We will have the ability to redeem outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of our common stock equals or exceeds $540.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date we send the notice of redemption to the warrant holders. If and when the public warrants become redeemable by us, we may exercise our redemption right when the registration statement to which this Annual Report forms a part comes into effect with respect to the shares of common stock underlying such warrants. Redemption of the outstanding public warrants could force you to: (1) exercise your warrants and pay the related exercise price at a time when it may be disadvantageous for you to do so; (2) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants; or (3) accept the nominal redemption price which, at the time the outstanding public warrants are called for redemption, is likely to be substantially less than the market value of your warrants. None of the placement warrants or working capital warrants will be redeemable by us for cash so long as they are held by our sponsor or its permitted transferees.
Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial condition and results of operations.
Accounting principles and related pronouncements, implementation guidelines and interpretations we apply to a wide range of matters that are relevant to our business, including, but not limited to, revenue recognition, leases and stock-based compensation, are complex and involve subjective assumptions, estimates and judgments by our management. Changes in accounting pronouncements or their interpretation or changes in underlying assumptions, estimates or judgments by our management could significantly change our reported or expected financial performance.
The exercise of Warrants for our common stock would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.
As of December 31, 2023, we had Warrants to purchase an aggregate of 878,985 shares of our common stock outstanding. To the extent remaining Warrants are exercised, additional shares of common stock will be issued, which will result in dilution to the then-existing holders of common stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market or the fact that such Warrants may be exercised could adversely affect the market price of our common stock.
The valuation of our Warrants could increase the volatility in our net income (loss) in our consolidated statements of earnings (loss).
The change in fair value of our Warrants is the result of changes in stock price and Warrants outstanding at each reporting period. The Change in Fair Value of Warrant Liabilities represents the mark-to-market fair value adjustments to the outstanding Warrants issued in connection with the initial public offering of ACMI and the concurrent private placement. Significant changes in our stock price or number of Warrants outstanding may adversely affect our net income (loss) in our consolidated statements of earnings (loss).

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ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. Unresolved Staff Comments.
None.

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ITEM 2. PROPERTIES
Item 2. Properties.
We lease approximately 3,400 square feet of offices located in Patras, Greece. The leases are set to expire on December 31, 2028. Through the Fischer Acquisition, we acquired property containing approximately 8,600 square feet of SerEnergy office, production and laboratory facilities located in Aalborg, Denmark. We also assumed a lease from Fischer in Aalborg, Denmark for approximately 7,000 square meters containing meeting rooms and a warehouse used by SerEnergy, and office, workshop, and warehouse spaces in two locations in Paranaque City, Philippines totaling approximately 12,700 square feet, which leases are no longer maintained as a result of the bankruptcy filing of our Denmark subsidiary. We entered into a lease in October 2022 for 21,401 square feet as a product development and manufacturing center at Hood Park in Charlestown, Massachusetts, which previously served as the Company’s principal executive office. In June 2024, the landlord and the Company agreed to terminate the Hood Park lease as of June 30, 2024. We entered into a lease dated February 5, 2021 for approximately 6,000 square feet of office space at 200 Clarendon Street, Boston, Massachusetts 02116. The term of the lease is five years (unless sooner terminated as provided in the lease agreement). On January 9, 2023, the Company entered into a sublease agreement for the office space at 200 Clarendon Street. The term of the sublease is four years.

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ITEM 3. LEGAL PROCEEDINGS
Item 3. Legal Proceedings.
We are from time to time subject to various claims, lawsuits and other legal and administrative proceedings arising in the ordinary course of business. Some of these claims, lawsuits and other proceedings may involve highly complex issues that are subject to substantial uncertainties, and could result in damages, fines, penalties, non-monetary sanctions or relief. However, we do not consider any such claims, lawsuits or proceedings that are currently pending, individually or in the aggregate, to be material to our business with one exception:
On June 7, 2023, the Company was served a Request for Arbitration from F.E.R. fischer Edelstahlrohre GmbH (“F.E.R.”), pursuant to the arbitration provisions of the Share Purchase Agreement dated June 25, 2021 whereby the Company acquired SerEnergy and FES, which acquisition closed on August 31, 2021. The arbitration was held in Frankfurt am Main, Germany in accordance with the Arbitration Rules of the German Arbitration Institute, and the parties presented closing arguments in May 2024. F.E.R. is asserting that it is due approximately 4.5 million euro based on the cap and corresponding value of the share consideration at the date of closing. The Company believes that the claim is without merit and has defended itself vigorously in these proceedings; although we cannot accurately predict the ultimate outcome of this matter.
By letter dated September 14, 2023, a purported shareholder of the Company made a demand to inspect the Company’s books and records pursuant 8 Del. C. § 220 (“Demand”). The Demand purported to request access to books and records of the Company and its predecessor, AMCI Acquisition Corp. (“AMCI”), to investigate possible alleged breaches of fiduciary duty by AMCI’s board of directors and officers in connection with its merger with the Company on February 4, 2021. As of May 24, 2024, the purported shareholder entered into a tolling agreement with the Company and the former directors of AMCI that tolled all claims for the period January 29, 2024 through June 30, 2024. On June 5, 2024, the purported shareholder filed a putative class action complaint (“Complaint”) on behalf of in the Delaware Court of Chancery alleging claims of breach of fiduciary duty and unjust enrichment in connection with the SPAC transaction against former officers and directors of AMCI. The Company is not named as a defendant in the Complaint. The Company is not aware as to whether the Complaint has been served on the defendants.

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ITEM 4. MINE SAFETY DISCLOSURE
Item 4. Mine Safety Disclosures.
Not applicable.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Certain Information Regarding the Trading of Our Common Stock
Our common stock and public warrants are listed on the Nasdaq Capital Market under the symbols “ADN” and “ADNW”, respectively.
Holders of Our Common Stock
As of August 7, 2024, there were approximately 27 holders of record of shares of our common stock and 2 holders of record of our warrants. Such numbers do not include DTC participants or beneficial owners holding shares through nominee names.
Dividends
We have never declared or paid any cash dividends on our common stock. We do not anticipate declaring or paying any cash dividends on our capital stock in the foreseeable future. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition. The payment of any cash dividends will be within the discretion of the board of directors at such time.
Securities authorized for issuance under equity compensation plans
See Part III, Item 12 for information regarding securities authorized for issuance under our equity compensation plans.
Recent sales of unregistered securities
None.
Purchases of Equity Securities
We did not purchase any shares of common stock during the year ended December 31, 2023.

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ITEM 6. SELECTED FINANCIAL DATA
Item 6. Reserved

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K.
Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the Item 1A. “Risk Factors” section of this Annual Report on Form 10-K, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
This MD&A generally discusses 2023 and 2022 items and year-over-year comparisons between 2023 and 2022. See Note 1 “Basis of Presentation” in the accompanying consolidated financial statements for additional information.
Overview
Advent is an advanced materials and technology development company operating in the fuel cell and hydrogen technology space. Advent develops, manufactures and assembles the critical components that determine the performance of hydrogen fuel cells and other energy systems. Advent’s core product offerings are full fuel cell systems and the Membrane Electrode Assembly (MEA) at the center of the fuel cell. The Advent MEA, which derives its key benefits from the properties of Advent’s engineered membrane technology, enables a more robust, longer-lasting and ultimately lower-cost fuel cell product.
Advent’s principal operations have been to develop and manufacture MEAs, and to design fuel cell stacks and complete fuel cell systems for a range of customers in the stationary power, portable power, automotive, aviation, energy storage and sensor markets. Advent has its headquarters in Livermore, California, and we have MEA fabrication and system production facilities in Livermore, California and Patras, Greece.
The majority of Advent’s current revenue derives from the sale and servicing of fuel cell systems and MEAs, as well as the sale of membranes and electrodes for specific applications in the iron flow battery and cellphone markets, respectively. While fuel cell systems and MEA sales and associated revenues are expected to provide the majority of Advent’s future income, both of these markets remain commercially viable and have the potential to generate material future revenues based on Advent’s existing customers. Advent has also secured grant funding for a range of projects from research agencies and other organizations. Advent expects to continue to be eligible for grant funding based on its product development activities over the foreseeable future.
Business Developments
Green HiPo Project approved by EU
On June 16, 2022, Advent announced the receipt of a notification from the Greek State informing the Company that the IPCEI Green HiPo was submitted for ratification by the EU for funding. On July 15, 2022, Advent received official ratification from the European Commission of the EU. The Green HiPo project is designed to bring the development, design, and manufacture of HT-PEM fuel cells and electrolysers for the production of power and green hydrogen to the Western Macedonia region of Greece.
In February 2024, the Company received a formal invitation from the Greek State for €24 million grant for the Green HiPo IPCEI project, however, due to the two-year delay in receiving a signed agreement from the Greek Ministry of Economy and Finance and the uncertainty in the Company’s ability to secure the additional €36 million in funding, the Company does not expect any disbursement of the state aid package in the near future.
Airbus Term Sheet to Launch a Joint Benchmarking Project
On November 6, 2023, Advent announced that it entered into a term sheet with Airbus, a global leader in aeronautics, space, and related services, for a joint benchmarking project regarding an optimized Ion Pair™ Membrane Electrode Assembly (“MEA”) for hydrogen fuel cells. Airbus will provide financial support to the project and its extensive knowledge of the aviation industry. Advent will invest in people, materials, hardware, and third-party research centers, to contribute to the goals of the project. The multi-million dollar collaboration is currently expected to take place over two years.
The goal of the project is to accelerate the development of Advent’s MEA and benchmark the Ion Pair MEA against aviation requirements and current/expected technological limits. HT-PEM MEAs operating at temperatures higher than 180°C (360°F) aim to solve one of the largest challenges in aviation fuel cell use: thermal management. High-temperature fuel cells allow increased performance, increased passenger carrying capability, and increased range compared to low-temperature fuel cell stack technology. Advent believes that HT-PEM is a superior option not only for aviation, but also for heavy-duty trucks, the automotive industry and marine use.
Purchase Agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”)
On April 10, 2023, Advent entered into a purchase agreement (the “Purchase Agreement”) with Lincoln Park, which provides that, upon the terms and subject to the conditions and limitations set forth therein, Advent has the right, but not the obligation, to sell to Lincoln Park up to $50 million worth of shares of its common stock from time to time over the 36 month term of the Purchase Agreement. Concurrently with entering into the Purchase Agreement, Advent also entered into a registration rights agreement with Lincoln Park, pursuant to which we agreed to register the resale of the shares of our common stock that have been and may be issued to Lincoln Park under the Purchase Agreement pursuant to a registration statement. Upon the execution of the Purchase Agreement, we issued 21,186 shares of common stock to Lincoln Park as consideration for its commitment to purchase shares of our common stock under the Purchase Agreement. Lincoln Park has agreed not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of our common stock. As of December 31, 2023, Lincoln Park had sold an aggregate of 10,490 shares for net proceeds to the Company of $5.5 million.
At the Market Offering Agreement
On June 2, 2023, Advent entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC, as sales agent (the “Agent”), to create an at-the-market equity program under which it may sell up to $50 million of shares of Advent’s Common Stock from time to time through the Agent (the “ATM Offering”). Under the ATM Agreement, the Agent will be entitled to a commission at a fixed rate of 3.0% of the gross proceeds from each sale of shares under the ATM Agreement.
Sales of Common Stock, if any, under the ATM Agreement may be made in transactions that are deemed to be “at-the-market equity offerings” as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), including sales made by means of ordinary brokers’ transactions, including on the Nasdaq Capital Market, at prevailing market prices at the time of sale or as otherwise agreed with the Agent. Advent has no obligation to sell, and the Agent is not obligated to buy or sell, any of the Common Stock under the Agreement and may at any time suspend offers under the Agreement or terminate the Agreement. The ATM Offering will terminate upon the termination of the ATM Agreement as permitted therein. As of December 31, 2023, the Agent had sold an aggregate of 5,877 shares for total consideration to the Company of $1.4 million.
Common Stock was issued pursuant to Advent’s previously filed Registration Statement on Form S-3 (File No. 333-271389) that was declared effective on May 2, 2023 and a prospectus supplement and accompanying prospectus relating to the ATM Offering filed with the Securities and Exchange Commission (“SEC”) on June 2, 2023.
Purchase Agreement with Joseph Gunnar & Co., LLC
On December 22, 2023, the Company entered into a Securities Purchase Agreement (the “Gunnar Purchase Agreement”) with those certain purchasers named therein (the “Purchasers”) pursuant to which the Company agreed to issue and sell, in a public offering, directly to the Purchasers (the “Registered Direct Offering”), 333,333 shares of common stock. The purchase price per share of Common Stock is $6.00, resulting in gross proceeds of $2,000,000.
As of the date of filing of this Annual Report on Form 10-K, the net proceeds to the Company are approximately $1.8 million, after deducting estimated expenses payable by the Company associated with the Registered Direct Offering.
The Company paid Gunnar an aggregate cash fee equal to 9.0% of the gross proceeds of the Registered Direct Offering, and agreed to reimburse Gunnar up to a total of $25,000 for actual fees and expenses of legal counsel and other out-of-pocket expenses.
Hood Park Facility
In March 2023, Advent announced that it had opened its new R&D and manufacturing facility at Hood Park in Boston, Massachusetts. On June 29, 2024, in an effort to reduce costs, the Company decided to abandon the facility at Hood Park and was able to find a new tenant to occupy the space. The Company and the landlord agreed to accelerate the expiration of the lease to occur on June 30, 2024. The Company had a letter of credit in the amount of $750 thousand in favor of the landlord and that letter of the credit was released to the landlord in satisfaction of any claims against the Company.
Collaboration with the Department of Energy
The efforts with the constellation of Department of Energy National Laboratories (Los Alamos National Laboratory, LANL; Brookhaven National Laboratory, BNL; National Renewable Energy Laboratory, NREL) continue to gain momentum. This group of leading scientists and engineers is working closely with Advent’s development and manufacturing teams and are furthering the understanding of breakthrough materials that will advance HT-PEM fuel cells. This next generation HT-PEM appears to be well suited for heavy duty transportation, marine, and aeronautical applications, as well as delivering benefits in cost and lifetime for stationary power systems used in telecom and other remote power markets.
Agreements with Hyundai Motor Company (“Hyundai”)
On April 6, 2022, Advent announced the signing of a technology assessment, sales, and development agreement with Hyundai, a leading multinational automotive manufacturer offering a range of world-class vehicles and mobility services in over 200 countries. Advent and Hyundai aim to deliver green energy solutions to current high carbon applications, using fuel cell technology. Under the agreement, Hyundai will provide catalysts to Advent for evaluation in its proprietary MEAs, while Advent intends to support Hyundai in fulfilling its fuel cell project needs, through:
● Developing inks and structures using Hyundai catalysts, which will then be evaluated by Hyundai. Following evaluation, Hyundai will determine whether their own or standard catalysts will be used for this project.
● Supplying MEAs throughout the development/commercialization cycle (“Advent MEAs”) for testing, evaluation, and optimization under conditions set by Hyundai.
● Assisting Hyundai with the use and specifications of MEAs as well as their implementation into Hyundai’s designs.
On March 23, 2023, Hyundai announced a successful technology assessment with Advent and following its success, Advent and Hyundai have entered into a Joint Development Agreement (“JDA”). Under the agreement, Hyundai and Advent will work together to further develop HMC-Advent Ion Pair™ MEA, establish commercial criteria for MEA supply, and evaluate Advent’s advanced fuel cell technology for Hyundai’s heavy-duty and/or stationary application. Additionally, the parties will introduce advanced cooling technologies for mobility HT-PEM fuel cell stacks. Advent will work closely as Hyundai evaluates these stack cooling technologies and ensure optimal performance under different operating conditions.
This partnership builds upon a commitment from both companies to develop sustainable energy solutions for carbon-intensive applications. Hyundai aims to accelerate the establishment of a hydrogen-based society based on its vision, Progress for Humanity, and this JDA aligns with that vision. The synergy generated by combining the two companies’ advanced technology in this JDA is expected to revolutionize the global MEA market by providing significant improvement in lifetime and an increase in power density versus current HT-PEM MEAs.
BASF Environmental Catalyst and Metal Solutions (“BASF”)
On May 9, 2023, Advent and BASF, a global leader in precious metals and catalysis, concluded on the terms of a new agreement to join efforts in building a closed loop component supply chain for fuel cells and enter discussions to extend the partnership into the field of water electrolysis. For 20 years, BASF has been a leader in membrane and MEA technology for HT-PEM fuel cells with a strong foundation in precious metal services and catalysis. HT-PEM fuel cells operate at 120 to 180°C, offer a broad operating window and tolerate impurities in the hydrogen fuel source. The fuel cells also enable simplified cooling and need no humidification. Advent offers competitive fuel cell systems for stationary and portable applications based on methanol and on-site reforming. In the future, HT-PEM fuel cells will also be available for heavy duty mobility and marine power. The scope of the agreement includes BASF’s role in scaling up MEA production at Advent’s planned state-of-the-art manufacturing facility in Western Macedonia, Greece, while offering Advent its full portfolio of products and services to enable circularity in key materials. Both companies will cooperate on BASF’s latest membrane development, Celtec®-Z, and the new Ion Pair™ MEA by Advent, aiming for improved performance, lifetime and cost competitiveness.
Advent and Safran Power Units Sign MoU to Advance HT-PEM Fuel Cell Technology for the Aerospace Sector
On May 31, 2023, Advent signed a memorandum of understanding (“MoU”) with Safran Power Units, a leader in auxiliary power systems and turbojet engines. Leveraging Advent’s proprietary Ion Pair™ MEA technology, and Safran Power Units’ knowledge and capabilities in aerospace, this new collaboration seeks to advance the development of next-generation HT-PEM fuel cell technology, specifically for the aerospace sector.
HT-PEM enables more efficient heat management versus low temperature-PEM (“LT-PEM”). HT-PEM is more adapted for applications requiring high amounts of power combined with strong integration constraints such as aviation. HT-PEM is also more robust and can withstand tougher operating conditions, such as extreme temperatures and pollution, versus LT-PEM.
As part of the MoU, Advent and Safran Power Units are exploring a joint development agreement for the advancement of HT-PEM fuel cells in aviation and for enhancing Advent’s supply capability.
Collaboration with Siemens Energy AG (“Siemens”)
On February 9, 2023, we announced a new maritime collaboration with Siemens, a globally renowned energy technology company, offering sustainable solutions across the entire energy value chain. Advent and Siemens will work together to develop a 50kW-500kW maritime fuel cell solution for a range of superyachts, which will provide a sustainable and reliable source of auxiliary power and offer improved power density. This maritime fuel cell solution is initially expected to be used as a hybrid power source, enabling clean electricity generation instead of using conventional diesel engines and generators for procedures such as anchoring and maneuvering. As part of the agreement, Siemens has placed an initial order for twenty of Advent’s methanol-powered Serene fuel cell systems. Following the completion of this project, the two parties will explore the potential of developing similar solutions for a wider range of business applications beyond maritime, such as industrial power solutions.
Collaboration with Alpha Laval
On January 10, 2023, Advent announced that it will collaborate with Alfa Laval, a global provider of heat transfer, separation, and fluid handling products, on a project to explore applications of Advent’s methanol-powered HT-PEM fuel cells in the marine industry.
Funded by the Danish Energy Technology Development and Demonstration Program (“EUDP”), the project is a joint effort between Advent, Alfa Laval and a group of Danish shipowners. The project will focus on testing Advent’s methanol-powered HT-PEM fuel cells as a source of marine auxiliary power. During the course of the project, the fuel cell system will undergo a risk assessment by a leading international classification society.
At the same time, the project aims to integrate the next generation of Advent’s fuel cells. These fuel cells will be based on Advent’s next-generation membrane electrode assembly, which is currently being developed within the framework of L’Innovator, the Company’s joint development program with the U.S. Department of Energy’s Los Alamos National Laboratory, Brookhaven National Laboratory, and the National Renewable Energy Laboratory. Aiming to meet the ever-growing power requirements of the maritime industry, Advent’s next-generation fuel cells are expected to demonstrate a significant increase in lifetime, efficiency, and electrical output.
Selection of Wearable Fuel Cell for the DOD 2021 Validation Program
On March 31, 2021, we announced that Advent’s 50 W Reformed Methanol Wearable Fuel Cell Power System (“Honey Badger”) had been selected by the DoD National Defense Center for Energy and Environment (“NDCEE”) to take part in its demonstration/validation program for 2021. The NDCEE is a DOD program that addresses high-priority environmental, safety, occupational health, and energy technological challenges that are demonstrated and validated at active installations for military application. The Company believes Advent’s Honey Badger 50™ (“HB50”) fuel cell is the only fuel cell that is part of this program that supports the U.S. Army’s goal of having a technology-enabled force by 2028.
Launch of the Honey Badger 50™ Fuel Cell System
On August 4, 2022, we announced the launch of our HB50 power system, a compact portable fuel cell system and quiet power supply for use in off-grid field applications such as military and rescue operations. The launch of Advent’s portable power system coincided with the Company’s fulfilment of its first shipment order from the U.S. Department of Defense. The HB50 power system can be fueled by biodegradable methanol, allowing near silent generation of up to 50W of continuous power with clean emissions. Designed for covert operations, HB50 can easily power radio and satellite communications gear, remote fixed and mobile surveillance systems, and laptop computers along with more general battery charging needs. HB50 is a unique technology that can provide 65% of weight savings versus batteries over a typical 72-hour mission. The weight savings benefit increases further for longer missions.
HB50’s unique design allows it to be used in soldier-worn configurations or operated inside a portable backpack or vehicle while charging batteries and powering soldier systems, while its thermal features allow it to operate within an ambient temperature range of -20°C to +55°C. Aside from its optimized compatibility with Integrated Visual Augmentation System (“IVAS”), HB50 can also power devices such as high frequency radios like the model 117G, as well as B-GAN and StarLink terminals. HB50’s durability allows it to be easily deployed in challenging conditions and climates while supporting mission mobility for three to seven days without the need to re-supply.
Since Honey Badger’s fuel cell technology can run on hydrogen or liquid fuels, the system can operate at a fraction of the weight of traditional military-grade batteries to meet the U.S. Department of Defense’s continuously evolving needs for ‘on-the-go’ electronics needs. As military adoption and use of IVAS equipment continues to evolve, the highly portable lightweight power solutions like Honey Badger and HB50 will become a mission critical necessity.
In September 2023, Advent secured a new $2.2 million contract with the U.S. DOD. This milestone achievement comes under the General Technical Services prime contract and will play a crucial role in supporting the demanding defense mission requirements of the U.S. Army. This contract is the continuation of a series of past contracts with the U.S. DOD and its primary objective is to further optimize Advent’s proprietary Honey Badger 50™ portable fuel cell system by integrating the Company’s innovative Ion Pair MEA technology. Upon the completion of this new 12-month contract, Advent and the U.S. DOD aim to reinforce their long-term collaboration by focusing on the manufacturing process of the enhanced HB50 fuel cell system, that will enable high-volume production manufacturing capacity. MEAs form the heart of the fuel cell, and their performance determines the lifetime, efficiency, weight, and to a large extent, the cost of the end electrochemistry products. Advent’s Ion Pair MEA technology is anticipated to significantly enhance HB50’s performance, resulting in higher power density and improved compact packaging, making it an ideal solution for off-grid field applications, including military and rescue operations.
In December 2023, Advent secured a new $2.8 million contract with the U.S. DOD. Under this new defense contract which comes under the umbrella of the Envision Innovative Solutions (‘‘EIS’’), Advent will develop advanced manufacturing processes to enable a substantial increase in the production capacity while maintaining quality of the HB50 system. This new project is aligned with Advent’s and the DOD’s shared objective to strengthen their long-term collaboration and transform HB50 into a portable and clean source of power.
Advent Technologies A/S declared bankrupt
On July 25, 2024, Advent Technologies A/S was declared bankrupt by the court in Aalborg, Denmark. The petition was brought by IDA, the union of engineers with a claim for €402,000. As the Company did not have the ability to pay the full amount due, the Danish court declared Advent Technologies A/S bankrupt. Advent Technologies A/S and its wholly-owned subsidiary Green Energy Philippines, Inc. will be liquidated by the court appointed trustee to settle all claims under the bankruptcy. The Company anticipates it will receive no residual assets and has prepared proforma financial information adjusting the Balance Sheet amounts as of December 31, 2023, for the Danish Subsidiary Bankruptcy. The remainder of the Company’s legal entities have no plans to declare bankruptcy and will continue as going concern entities.
Key Factors Affecting Our Results
Advent believes that its performance and future success depend on several factors that present significant opportunities for Advent but also pose risks and challenges, including those discussed below.
Increased Customer Demand
Based on conversations with existing customers and incoming inquiries from new customers, Advent anticipates substantial increased demand for its fuel cell systems and MEAs from a wide range of customers as it scales up its production facilities and testing capabilities, and as the awareness of its MEA capabilities becomes widely known in the industry. Advent expects both its existing customers to increase order volume, and to generate substantial new orders from major organizations, with some of whom it is already in discussions regarding prospective commercial partnerships and joint development agreements. As of December 31, 2023, Advent was still generating a low level of revenues compared to its future projections and has not made any commercial sales to these major organizations.
Successful development of the Advanced MEA product
Advent’s future success depends in large part on the increasing integration of the hydrogen fuel cell into the energy transition globally over the next decade. In order to become cost-competitive with existing renewable power generation and energy storage technology and achieve widespread adoption, fuel cells will need to achieve substantial improvement in the cost/kw performance ratio delivered to prospective fuel cell customers, predominantly OEMs, System Integrators and major energy companies. Advent expects to play an important enabling role in the adoption of hydrogen fuel cells, as its MEA technology is the critical determining factor in the cost/kw performance ratio of the fuel cells. In partnership with the Los Alamos National Laboratory, Advent is currently developing its next generation MEA technology (“Advanced MEA”) which is anticipated to deliver as much as three times the power output of its current MEA product. While Advent is already projecting being able to pass through cost benefits to its customers through economies of scale as it increases MEA production, the successful development of the Advanced MEA will be an important factor in delivering the required improvement in cost/kw performance to Advent’s customers.
Basis of Presentation
Advent’s consolidated financial statements have been prepared in accordance with U.S. GAAP. The Company has determined that it operates in one reportable segment. See Note 1 “Basis of Presentation” in the accompanying consolidated financial statements for more information.
Components of Results of Operations
Revenue
Revenues consist of sales of goods (MEAs, membranes, fuel cell stacks, fuel cell systems and electrodes) and servicing of those systems, as well as engineering fees. Advent expects revenues to increase materially and be weighted towards fuel cell systems and MEA sales over time.
Cost of Revenues
Cost of revenues consists of consumables, raw materials, inventory provision, processing costs and direct labor costs associated with the assembly, manufacturing, and servicing of MEAs, membranes, fuel cell stacks and systems and electrodes. Advent recognizes cost of revenues in the period that revenues are recognized.
Income from Grants
Income from grants consists of cash subsidies received from research agencies and other national and international organizations in support of Advent’s research and development activities. Advent expects to continue to be eligible for grant income and remains in discussion with a number of prospective grantors in relation to a number of product development activities.
Research and Development Expenses
Research and development expenses consist of costs associated with Advent’s research and development activities, such as laboratory costs and sample material costs. Advent expects its research and development activities to increase substantially as it invests in improved technology and products.
Administrative and Selling Expenses
Administrative and selling expenses consist of travel expenses, indirect labor costs, fees paid to consultants, third parties and service providers, taxes and duties, legal and audit fees, depreciation, business development salaries and limited marketing activities, and incentive and stock-based compensation expense. Advent expects to implement reductions to administrative and selling expenses to conserve cash until such time the business scales up and a shift in strategy to sell through strategic partnerships will further reduce selling expenses. The additional costs incurred are as a result of operating as a public company, including compliance with the rules and regulations of the SEC, legal, audit, additional insurance expenses, investor relations activities and other administrative and professional services.
Other Income / (Expenses), Net
Other income / (expenses) are mainly comprised of costs associated with the Lincoln Park equity line of credit and other de minimis incidental income / (expenses) incurred by the business.
Change in Fair Value of Warrant Liability
Change in fair value of warrant liability amounting to $0.4 million and $9.4 million for the year ended December 31, 2023 and 2022, respectively, represents the change in fair value of the Private Placement Warrants and Working Capital Warrants for the year ended December 31, 2023 and 2022, respectively.
Finance income / (expenses), Net
Finance income / (expenses) consist mainly of bank and interest charges.
Foreign Exchange Gains / (Losses), Net
Foreign exchange gains / (losses) consists of foreign exchange gains or losses on transactions denominated in foreign currencies and on translation of monetary items denominated in foreign currencies. As the Company scales up, its foreign exchange exposure is likely to increase given its revenues are denominated in both euros and dollars, and a portion of the Company’s costs are denominated in euros and Danish krone.
Amortization of Intangibles
The intangible assets of $4.7 million recognized on the acquisition of UltraCell is the Trade Name “UltraCell” ($0.4 million) and the Patented Technology ($4.3 million). The Trade Name has an indefinite useful life while the Patented Technology has a useful life of 10 years. Amortization expense of $0.2 million and $0.4 million has been recognized for the year ended December 31, 2023 and from 2022, respectively.
The intangible assets of $19.8 million recognized on the acquisition of SerEnergy and FES are the Patents amounting to $16.9 million, the Process know-how (IPR&D) amounting to $2.6 million and the Order backlog amounting to $0.3 million. The Patents have a useful life of 10 years, the Process know-how has a useful life of 6 years and the Order backlog has a useful life of 1 year. Amortization expense of $0.4 million has been recognized in relation to these intangibles for the year ended December 31, 2023. Amortization expense of $2.3 million has been recognized for the year ended December 31, 2022.
Income taxes
Income tax (provision) amounting to $(0.7) million for the year ended December 31, 2023, mainly relate to management’s recoverability assessment of research and development tax credits in Denmark. Income tax benefits amounting to $2.0 million for the year ended December 31, 2022, mainly related to net operating loss carryforwards in Denmark that resulted in a deferred tax asset. As of December 31, 2023, and 2022, we provided a valuation allowance to offset the deferred tax asset related to the net operating loss carryforwards in Denmark.
Results of Operations
Comparison of the Years Ended December 31, 2023 and 2022
The following table sets forth a summary of our consolidated results of operations for the years ended December 31, 2023 and 2022, and the changes between periods.
Years Ended December 31,
(Amounts in thousands, except share and per share amounts)
$ change
% change
Revenue, net
$ 4,859
$ 7,837
$ (2,978 )
(38.0 )%
Cost of revenues
(18,287 )
(8,581 )
(9,706 )
113.1 %
Gross profit / (loss)
(13,428 )
(744 )
(12,684 )
1,704.8 %
Income from grants
2,504
1,460
1,044
71.5 %
Research and development expenses
(12,112 )
(9,796 )
(2,316 )
23.6 %
Administrative and selling expenses
(32,468 )
(35,915 )
3,447
(9.6 )%
Sublease income
-
N/A
Amortization of intangibles
(642 )
(2,764 )
2,122
(76.8 )%
Credit loss - customer contracts
(1,270 )
(1,116 )
(154 )
13.8 %
Gain from purchase price adjustment
-
2,370
(2,370 )
N/A
Impairment loss - intangible assets and goodwill
(13,468 )
(38,922 )
25,454
(65.4 )%
Operating loss
(70,341 )
(85,427 )
15,086
(17.7 )%
Fair value change of warrant liability
9,375
(8,981 )
(95.8 )%
Finance income / (expenses), net
42.3 %
Foreign exchange gains / (losses), net
(91 )
(206.6 )%
Other income / (expenses), net
(902 )
(216 )
(686 )
317.6 %
Loss before income tax
(70,678 )
(76,307 )
5,629
(7.4 )%
Income tax
(719 )
1,970
(2,689 )
(136.5 )%
Net loss
$ (71,397 )
$ (74,337 )
$ 2,940
(4.0 )%
Net loss per share
Basic loss per share
$ (37.24 )
$ (43.28 )
$ 6.04
N/A
Basic weighted average number of shares
1,917,179
1,717,623
N/A
N/A
Diluted loss per share
$ (37.24 )
$ (43.28 )
$ 6.04
N/A
Diluted weighted average number of shares
1,917,179
1,717,623
N/A
N/A
Revenue
Our total revenue decreased by approximately $(3.0) million or (38.0)% from approximately $7.8 million in the year ended December 31, 2022 to approximately $4.9 million in the year ended December 31, 2023. The decrease in revenue was driven by a decline in volume of fuel cell systems and components for the year ended December 31, 2023.
Cost of Revenues
Cost of revenues increased by approximately $9.7 million from approximately $8.6 million in the year ended December 31, 2022 to approximately $18.3 million in the year ended December 31, 2023. The increase in cost of revenues was primarily related to an increase in the provision for inventory.
Research and Development Expenses
Research and development expenses were approximately $12.1 million in the year ended December 31, 2023, and $9.8 million in the year ended December 31, 2022. Research and development expenses primarily relate to internal research and development costs, as well as our cooperative research and development agreement with the U.S. Department of Energy.
Administrative and Selling Expenses
Administrative and selling expenses were approximately $32.5 million in the year ended December 31, 2023, and $35.9 million in the year ended December 31, 2022. The decrease was primarily due to administrative cost reductions implemented throughout 2022 and a reduction in directors and officers insurance expense for the year ended December 31, 2023.
Amortization of Intangibles
Amortization of intangible assets was approximately $0.6 million in the year ended December 31, 2023, which was a decrease of $(2.1) million compared to the year ended December 31, 2022. The reduction in amortization expense is due to significant impairment charges that were recognized in the fourth quarter of 2022 and second and fourth quarters of 2023.
Credit Loss - Customer Contracts
We recognized credit losses on customer contracts during the years ended December 31, 2023, and December 31, 2022. Refer to Contract Assets and Contract Liabilities disclosure for further details.
Gain from Purchase Price Adjustment
During the year ended December 31, 2022, we recognized a gain from a purchase price adjustment related to our acquisition of SerEnergy and FES. See Note 3 in the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information about the purchase price adjustment.
Impairment Losses - Intangible Assets and Goodwill
We recognized impairment losses of $13.5 million in 2023, primarily related to goodwill and other intangible assets from the UltraCell and SerEnergy and FES acquisitions and the property, plant and equipment held by Advent Technologies A/S which was declared bankrupt in July 2024. Refer to Critical Accounting Policies and Estimates disclosure for further details.
Change in Fair Value of Warrant Liability
The change in fair value of warrant liability amounting to $0.4 million and $9.4 million was due to the change in fair value of the Private Placement Warrants and Working Capital Warrants for the year ended December 31, 2023 and 2022, respectively.
Liquidity and Capital Resources
At December 31, 2023, the Company had $3.6 million in cash and cash equivalents. During the years ended December 31, 2023 and 2022 the Company incurred net losses of $71.4 million and $74.3 million, respectively. At December 31, 2023, the Company had $8.8 million in current assets and $11.9 in current liabilities, leaving the Company a working capital deficit of $ (3.1) million.
A major financial challenge and significant risk facing the Company is a lack of positive cash flow and liquidity. The Company’s ability to meet its liquidity needs will largely depend on its ability to raise capital in the very short term and generate cash in the future. If the Company is unable to obtain sufficient funding, it could be required to delay its development efforts, limit activities, and further reduce research and development costs, which could adversely affect its business prospects and delivery of contractual obligations. A cash shortfall at any point in time over the next twelve months could result in the Company failing to meet its overdue and current obligations which could trigger action against the Company and/or its subsidiaries for liquidation by employees, authorities, or creditors. Because of the uncertainty in securing additional funding, delays in growth of revenue, failure to materialize cost-cutting efforts and the insufficient amount of cash and cash equivalents as of the consolidated financial statement filing date, management has concluded that substantial doubt exists with respect to the Company’s ability to continue as a going concern for one year from the date the consolidated financial statements are issued.
The following table sets forth a summary of our consolidated cash flows for the years ended December 31, 2023 and 2022, and the changes between periods.
Years Ended December 31,
(Amounts in thousands)
$ change
% change
Net Cash used in Operating Activities
$ (32,115 )
$ (32,125 )
$
(0.0 )%
Cash Flows from Investing Activities:
Proceeds from sale of property and equipment
-
N/A
Purchases of property and equipment
(3,371 )
(11,527 )
8,156
(70.8 )%
Purchases of intangible assets
-
(117 )
(100.0 )%
Advances for the acquisition of property and equipment
(1,255 )
(2,557 )
1,302
(50.9 )%
Acquisition of a subsidiary, net of cash acquired
(1,864 )
-
(1,864 )
N/A
Acquisition of available for sale financial assets
-
(316 )
(100.0 )%
Net Cash used in Investing Activities
$ (6,234 )
$ (14,517 )
$ 8,283
(57.1 )%
Cash Flows from Financing Activities:
Proceeds of issuance of common stock and paid-in capital
9,059
-
9,059
N/A
State refundable deposit repayment
-
(40 )
N/A
Net Cash (used in) provided by Financing Activities
$ 9,059
$ (40 )
$ 9,099
N/A
Net (decrease) / increase in cash, cash equivalents, restricted cash and restricted cash equivalents
$ (29,290 )
$ (46,682 )
$ 17,392
(37.3 )%
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents
(454 )
(84.5 )%
Cash, cash equivalents, restricted cash and restricted cash equivalents at the beginning of year
33,619
79,764
(46,145 )
(57.9 )%
Cash, cash equivalents, restricted cash and restricted cash equivalents at the end of year
$ 4,412
$ 33,619
$ (29,207 )
(86.9 )%
Cash flows used in Operating Activities
We have not generated positive cash flows from operating activities. Advent’s cash flows from operating activities reflect the income statement position adjusted for working capital movements in current assets and liabilities. As Advent grows, it expects that operating cash flows will be affected by increased working capital needs to support growth in personnel-related expenditures.
Net cash used in operating activities was approximately $(32.1) million for the year ended December 31, 2023, which related to outflows in connection with administrative and selling expenses, an increase in inventory, research and development expenses, and costs associated with insurances services and other personnel costs.
Net cash used in operating activities was approximately $(32.1) million for the year ended December 31, 2022, which related to outflows in connection with administrative and selling expenses, an increase in inventory, research and development expenses, and costs associated with insurances services and other personnel costs. These outflows were partially offset by $8.0 million of expense reimbursements by the landlord related to the build-out of our new R&D and product development facility at Hood Park in Boston, MA.
Cash Flows used in Investing Activities
Advent’s cash flows used in investing activities was approximately $(6.2) million for the year ended December 31, 2023, which primarily related to the acquisition of plant and equipment. Investing cash flow also included a $1.9 million payment to complete the acquisition of our fuel cell systems business in Denmark, Germany and the Philippines.
Advent’s cash flows used in investing activities were approximately $(14.5) million for the year ended December 31, 2022, which mostly related to the acquisition of plant and equipment, including approximately $10.5 million for the Hood Park facility.
Cash Flows from Financing Activities
Advent’s cash flows from financing activities were approximately $9.1 million for the year ended December 31, 2023, which related to the net cash proceeds from the sale of shares under the Lincoln Park facility, the At the Market Offering with H.C. Wainwright & Co., LLC and a private placement offering.
Reverse Stock Split
On April 29, 2024 and April 30, 2024, our stockholders and Board, respectively, approved a reverse stock split of our Common Stock, at a ratio of 1-for-30 (the “Reverse Stock Split”), as of the Effective Date. The Effective Date of the Reverse Stock Split with the Secretary of the Commonwealth of Massachusetts was 5:00 p.m. on May 13, 2024 and May 14, 2024 in the marketplace.
On the Effective Date, the total number of shares of our Common Stock held by each shareholder was converted automatically into the number of whole shares of Common Stock equal to (i) the number of issued and outstanding shares of Common Stock held by such shareholder immediately prior to the Reverse Stock Split, divided by (ii) 30.
No fractional shares were issued in connection with the Reverse Stock Split, and stockholders who would otherwise be entitled to a fractional share received a proportional cash payment.
The Company is authorized to issue 501,000,000 shares of Common Stock and that number did not change as a result of the Reverse Stock Split.
The Reverse Stock Split did not have any effect on the stated par value of our Common Stock. The rights and privileges of the holders of shares of Common Stock are unaffected by the Reverse Stock Split. All of our options, warrants and convertible securities outstanding immediately prior to the Reverse Stock Split have been appropriately adjusted by dividing the number of shares of Common Stock into which the options, warrants and convertible securities are exercisable or convertible by 30.
Contract Assets and Contract Liabilities
Contract assets reflect revenue recognized and performance obligations satisfied in advance of customer billing. As of December 31, 2023, and 2022, Advent recognized contract assets of $21 thousand and $52 thousand, respectively on the consolidated balance sheets. During the year December 31, 2022, Advent recognized a credit loss of $0.9 million related to the likelihood of realizing of a contract asset.
Advent recognizes contract liabilities when we receive customer payments or has the unconditional right to receive consideration in advance of the performance obligations being satisfied on our contracts. We receive payments from customers based on the terms established in our contracts. Contract liabilities are classified as either current or long-term liabilities in the consolidated balance sheets based on the timing of when we expect to recognize the related revenue. As of December 31, 2023, and 2022, Advent recognized contract liabilities of $2.0 million and $1.0 million, respectively, in the consolidated balance sheets. During the years ended December 31, 2023 and 2022, the Company recognized $0.4 million and $0.1 million in revenues.
Off-Balance Sheet Commitments and Arrangements
Since the date of our incorporation, Advent has not engaged in any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
Critical Accounting Policies and Estimates
Advent’s consolidated financial statements have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires Advent to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the balance sheet date, as well as the reported expenses incurred during the reporting period. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates, and such differences could be material to Advent’s financial statements.
Revenue Recognition from January 1, 2019
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), as amended, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. We adopted ASU No. 2014-09 on January 1, 2019, using the modified retrospective approach to all contracts not completed at the date of initial application.
In accordance with ASC 606, revenue is recognized when control of the promised goods or services are transferred to a customer in an amount that reflects the consideration that the Company expects to receive in exchange for those services. We apply the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its arrangements:
● identify the contract with a customer,
● identify the performance obligations in the contract,
● determine the transaction price,
● allocate the transaction price to performance obligations in the contract, and
● recognize revenue as the performance obligation is satisfied.
With significant and recurring customers, we negotiate written master agreements as framework agreements (general terms and conditions of trading), following individual purchase orders. For customers with no master agreements, the approved purchase orders form the contract. Effectively, contracts under the revenue standard have been assessed to be the purchase orders agreed with customers.
We have assessed that each product sold is a single performance obligation because the promised goods are distinct on their own and within the context of the contract. In cases where the agreement includes customization services for the contracted products, we are providing integrated services; therefore, the goods are not separately identifiable, but are inputs to produce and deliver a combined output and form a single performance obligation within the context of the contract. Furthermore, we assessed whether it acts as a principal or agent in each of its revenue arrangements and has concluded that in all sales transactions it acts as a principal. Additionally, we, taking into consideration the guidance and indicative factors provided by ASC 606, concluded that it provides assurance type warranties (warranty period is up to two years) as it does not provide a service to the customer beyond fixing defects that existed at the time of sale. We, based on historical performance, current circumstances, and projections of trends, estimated that no allowance for returns as per warranty policy should be recognized, at the time of sale, accounted for under ASC 460, Guarantees.
Under ASC 606, we estimate the transaction price, including variable consideration, at the commencement of the contract and recognize revenue over the contract term, rather than when fees become fixed or determinable. In other words, where contracts with customers include variable consideration (i.e. volume rebates), we estimate at contract inception the variable consideration and adjust the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Furthermore, no material rights or significant financing components have been identified in our contracts. Payment terms generally include advance payment requirements. The time between a customer’s payment and completion of the performance obligation is less than one year. Payment terms are in the majority fixed and do not include variable consideration, except from volume rebates.
Revenue from satisfaction of performance obligations is recognized based on identified transaction price. The transaction price reflects the amount to which we have rights under the present contract. It is allocated to the distinct performance obligations based on standalone selling prices of the services promised in the contract. In cases of more than one performance obligation, we allocate transaction price to the distinct performance obligations in proportion to their observable stand-alone selling prices and recognize revenue as those performance obligations are satisfied.
In the majority of cases of product sales, revenue is recognized at a point in time when the customer obtains control of the respective goods that is, when the products are shipped from our facilities as control passes to the customer in accordance with agreed contracts and the stated shipping terms. In cases where the contract includes customization services, in which one performance obligation is identified, revenue is recognized over time as our performance does not create an asset with alternative use and we have an enforceable right to payment for performance completed to date. We use the input method (i.e., cost-to-cost method) to measure progress towards complete satisfaction of the performance obligation.
Income from grants and related deferred income
Grants include cash subsidies received from various institutions and organizations. Grants are recognized as other income. Such amounts are recognized in the consolidated statements of operations when all conditions attached to the grants are fulfilled.
Condition to the grants would not be fulfilled unless related costs have been characterized as eligible by the grantors, are actually incurred and there is certainty that costs are allowable. These grants are recognized as deferred income when received and recorded in income when the eligible and allowable related costs and expenses are incurred. Under all grant programs, a coordinator is specified. The coordinator, among other, receives the funding from the grantor and proceeds to its distribution to the parties agreed in the process specified in the program. We assessed whether it acts as a principal or agent in its role as a coordinator for specific grants and has concluded that in all related transactions it acts as an agent.
Goodwill
The Company allocates the fair value of purchase consideration transferred in a business acquisition to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration transferred over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired licenses, trade names, in process research and development (“R&D”), useful lives and discount rates, patents, customer clientele, customer contracts and know-how. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded in the consolidated statement of operations.
For significant acquisitions, the Company obtains independent appraisals and valuations of the intangible (and certain tangible) assets acquired and certain assumed obligations as well as equity. The Company analyzes each acquisition individually and all acquisitions within each reporting period in aggregate to determine if those are material acquisitions in the context of ASC 805-10-50.
The estimated fair values and useful lives of identified intangible assets are based on many factors, including estimates and assumptions of future operating performance and cash flows of the acquired business, estimates of cost avoidance, the nature of the business acquired, the specific characteristics of the identified intangible assets and our historical experience and that of the acquired business. The estimates and assumptions used to determine the fair values and useful lives of identified intangible assets could change due to numerous factors, including product demand, market conditions, regulations affecting the business model of our operations, technological developments, economic conditions and competition.
We conduct a goodwill impairment analysis annually in the fourth fiscal quarter, or more frequently, if changes in facts and circumstances indicate that the fair value of our reporting units may be less than their carrying amounts. In testing goodwill for impairment, the Company first assesses qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then additional impairment testing is not required. When the Company determines a fair value test is necessary, it estimates the fair value of a reporting unit and compares the result with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, an impairment is recorded equal to the amount by which the carrying value exceeds the fair value, up to the amount of goodwill associated with the reporting unit. Currently, we identify three reporting units.
As a part of the annual impairment assessment, the Company determined that a triggering event for two of our reporting units, UltraCell and SerEnergy / FES, had occurred which would require testing goodwill and long-lived assets, including definite-lived intangibles, for impairment.
The Company considered the triggering events related to current and expected future economic and market conditions and their impact on the Company, as well as the current revenue forecasts. Given certain market factors, the Company determined that these triggering events had occurred and would require a quantitative analysis to be performed.
As a part of the impairment assessment, the Company reviewed significant fair value input assumptions including revenues, margin, and capital expenditures to reflect current market conditions. Other changes in valuation assumptions included increases in interest rates and market volatility, resulting in higher discount rates.
UltraCell Reporting Unit
In the second quarter of 2023, the Company updated the forecasted future cash flows of UltraCell used in the fair value measurement of the intangible assets and goodwill using a combination of market, cost and income approach methods. The Company is phasing out use of the UltraCell trade name and therefore recognized an impairment charge of $0.4 million during the period. The Patented Technology was valued with the multi-period excess earnings method, which is an income approach. The discount rate used for the valuation of the Patented Technology increased to 17.7% from 11.6% at the time of the acquisition of UltraCell. The Company determined that the undiscounted cash flows related to the Patented Technology was less than the current carrying value and therefore recognized an impairment charge of $3.3 million during the period. The Company determined that the fair value of the reporting unit utilizing the updated forecast was less than its current carrying value. As a result, the Company recorded a goodwill impairment charge of $0.6 million during the year.
SerEnergy and FES Reporting Unit
In the second quarter of 2023, the Company updated the forecasted future cash flows of SerEnergy and FES used in the fair value measurement of the intangible assets and goodwill using a combination of market, cost and income approach methods. The Company acquired finite-lived intangible assets, including patents, process know-how, and order backlog in conjunction with the SerEnergy and FES acquisition. The Company determined the undiscounted cash flows attributable to the IPR&D was greater than the current carrying value. As a result, the Company believes that the updated long-term forecast did not indicate impairment related to IPR&D. All other finite-lived intangible assets related to the SerEnergy and FES acquisition were previously fully amortized or impaired. The Company determined that the fair value of the reporting unit was $13.6 million utilizing the updated forecast, which was less than its current carrying value. As a result, the Company recorded a goodwill impairment charge of $5.1 million during the year.
During the fourth quarter of 2023, the Company fully impaired IPR&D given it is unlikely to recognize a future benefit from the intangible asset.
Income Taxes
Advent follows the asset and liability method of accounting for income taxes under ASC 740, Income Taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. This method also requires the recognition of future tax benefits, such as net operating loss carry forwards, to the extent that it is more likely than not that such benefits will be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Valuation allowances are reassessed periodically to determine whether it is more likely than not that the tax benefits will be realized in the future and if any existing valuation allowance should be released.
Part of the Advent’s business activities are conducted through its subsidiaries outside of U.S. Earnings from these subsidiaries are generally indefinitely reinvested in the local businesses. Further, local laws and regulations may also restrict certain subsidiaries from paying dividends to their parents. Consequently, Advent generally does not accrue income taxes for the repatriation of such earnings in accordance with ASC 740, “Income Taxes.” To the extent that there are excess accumulated earnings that we intend to repatriate from any such subsidiaries, we recognize deferred tax liabilities on such foreign earnings.
Advent assesses its income tax positions and records tax benefits for all years subject to examination based on the evaluation of the facts, circumstances, and information available at each reporting date. For those tax positions with a greater than 50 percent likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information, Advent records a tax benefit. For those income tax positions that are not likely to be sustained, no tax benefit is recognized in the consolidated financial statements. Advent recognizes interest and penalties related to uncertain tax positions as part of the provision for income taxes.
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. For those income tax positions that are not likely to be sustained, no tax benefit is recognized in the consolidated financial statements. Advent recognizes interest and penalties related to uncertain tax positions as part of the provision for income taxes.
For the years ended December 31, 2023 and 2022, net income tax benefits (provisions) of $(0.7) million and $2.0 million, respectively, have been recorded in the consolidated statements of operations. Advent is currently not aware of any issues under review that could result in significant accruals or material deviation from its position. The Company is currently not aware of any issues under review that could result in significant accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities.
The Company and its U.S. subsidiaries may be subject to potential examination by U.S. federal, state and city, while the Company’s subsidiaries outside U.S. may be subject to potential examination by their taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with the U.S. federal, state and city, and tax laws in the countries where business activities of Company’s subsidiaries are conducted. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 was signed into legislation. As part of the legislation, the U.S. corporate income tax rate was reduced from 35% to 21%, among other changes.
Bond Loan
On May 25, 2022, Advent SA and UNI.FUND entered into an agreement to finance Cyrus with a Bond Loan of €1.0 million. As a part of this transaction, Advent SA offered €0.3 million in bond loans with an annual interest rate of 8.00%. The term of the loan is three years and there is a surcharge of 2.5% for overdue interest.
Mandatory conversion of the Bond Loan will occur in the event of qualified financing which is equivalent to a share capital increase by Cyrus in the first three years from the execution of the Bond Loan agreement with a total amount over €3 million which is covered by third parties unrelated to the basic shareholders or by investors related to them.
The Company classifies the Bond Loan as an available for sale financial asset on the consolidated balance sheets. The Company recognizes interest income within the consolidated statement of operations. For the year ended December 31, 2023, the Company recognized $26 thousand of interest income related to the Bond Loan within the consolidated statements of operations.
The Bond Loan is remeasured to its fair value at each reporting period and upon settlement. The estimated fair value of the Bond Loan is determined using Level 3 inputs by using a discounted cash flow model. The change in fair value is recognized within the consolidated statements of comprehensive loss. During the year ended December 31, 2023, the Company fully reserved the Bond Loan as an expected credit loss. The Company did not recognize any unrealized gain / (loss) on the Bond Loan for the year ended December 31, 2022.
Warrant Liability
The Company accounts for the 878,985 warrants (comprising of 813,314 Public Warrants and 65,671 Private Placement Warrants) issued in connection with the initial public offering and the 13,333 Working Capital Warrants issued at the consummation of the Business Combination in accordance with ASC 815-40-15-7D. If the warrants do not meet the criteria for equity treatment, they must be recorded as liabilities. We have determined that only the Private Placement Warrants and Working Capital Warrants must be recorded as liabilities and accordingly, the Company classifies these warrant instruments as liabilities at their fair value and adjusts the instruments to fair value at each reporting period. These liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s statement of operations. The fair value of the Private Placement Warrants and the Working Capital Warrants has been determined using either the quoted price, if available, or was based on a modified Black-Scholes-Merton model. The fair value of the Private Placement Warrants and the Working Capital Warrants has been determined based on a modified Black-Scholes-Merton model for the years ended December 31, 2023 and 2022.
Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by Advent as of the specified effective date. Unless otherwise discussed, Advent believes that the impact of recently issued standards that are not yet effective will not have a material impact on Advent’s financial position or results of operations under adoption.
See Note 2 in the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information about recent accounting pronouncements, the timing of their adoption and Advent’s assessment, to the extent Advent has made one, of their potential impact on Advent’s financial condition and results of operations.
Supplemental Non-GAAP Measures and Reconciliations
In addition to providing measures prepared in accordance with GAAP, we present certain supplemental non-GAAP measures. These measures are EBITDA, Adjusted EBITDA and Adjusted Net Income / (Loss), which we use to evaluate our operating performance, for business planning purposes and to measure our performance relative to that of our peers. These non-GAAP measures do not have any standardized meaning prescribed by GAAP and therefore may differ from similar measures presented by other companies and may not be comparable to other similarly titled measures. We believe these measures are useful in evaluating the operating performance of the Company’s ongoing business. These measures should be considered in addition to, and not as a substitute for net income, operating expense and income, cash flows and other measures of financial performance and liquidity reported in accordance with GAAP. The calculation of these non-GAAP measures has been made on a consistent basis for all periods presented.
EBITDA and Adjusted EBITDA
These supplemental non-GAAP measures are provided to assist readers in determining our operating performance. We believe this measure is useful in assessing performance and highlighting trends on an overall basis. We also believe EBITDA and Adjusted EBITDA are frequently used by securities analysts and investors when comparing our results with those of other companies. EBITDA differs from the most comparable GAAP measure, net income / (loss), primarily because it does not include interest, income taxes, depreciation of property, plant and equipment, and amortization of intangible assets. Adjusted EBITDA adjusts EBITDA for items such as one-time transaction costs, asset impairment charges, fair value changes in the warrant liability.
The following tables show a reconciliation of net loss to EBITDA and Adjusted EBITDA for the three months ended December 31, 2023 and 2022 and for the years ended December 31, 2023 and 2022.
EBITDA and Adjusted EBITDA
Three months ended December 31,
(Unaudited)
Years Ended December 31,
(in Millions of US dollars)
$ change
$ change
Net loss
$ (25.73 )
$ (47.63 )
21.90
$ (71.40 )
$ (74.34 )
2.94
Depreciation of property and equipment
$ 0.91
$ 0.36
0.55
$ 3.01
$ 1.49
1.52
Amortization of intangibles
$ 0.11
$ 0.65
(0.54 )
$ 0.64
$ 2.76
(2.12 )
Finance income / (expenses), net
$ 0.05
$ (0.06 )
0.11
$ (0.07 )
$ (0.05 )
(0.02 )
Other income / (expenses), net
$ 0.02
$ 0.00
0.02
$ 0.90
$ 0.22
0.68
Foreign exchange differences, net
$ 0.01
$ 0.04
(0.03 )
$ (0.10 )
$ 0.09
(0.19 )
Income taxes
$ -
$ (0.31 )
0.31
$ 0.72
$ (1.97 )
2.69
EBITDA
$ (24.63 )
$ (46.95 )
22.32
$ (66.30 )
$ (71.80 )
5.50
Net change in warrant liability
$ (0.03 )
$ (2.13 )
2.10
$ (0.39 )
$ (9.38 )
8.99
Gain from purchase price adjustment
$ -
$ (2.37 )
2.37
$ -
$ (2.37 )
2.37
Impairment loss - intangible assets and goodwill
$ 3.71
$ 38.92
(35.21 )
$ 13.47
$ 38.92
(25.45 )
Adjusted EBITDA
$ (20.95 )
$ (12.53 )
(8.42 )
$ (53.22 )
$ (44.63 )
(8.59 )
Adjusted Net Income/(Loss)
This supplemental non-GAAP measure is provided to assist readers in determining our financial performance. We believe this measure is useful in assessing our actual performance by adjusting our results from continuing operations for changes in warrant liability and one-time transaction costs. Adjusted Net Loss differs from the most comparable GAAP measure, net loss, primarily because it does not include one-time transaction costs, asset impairment charges and warrant liability changes. The following table shows a reconciliation of net income/(loss) for three months ended December 31, 2023 and 2022 and for the years ended December 31, 2023 and 2022.
Adjusted Net Loss
Three months ended December 31,
(Unaudited)
Years Ended December 31,
(in Millions of US dollars)
$ change
$ change
Net loss
$ (25.73 )
$ (47.63 )
21.90
$ (71.40 )
$ (74.34 )
2.94
Net change in warrant liability
$ (0.03 )
$ (2.13 )
2.10
$ (0.39 )
$ (9.38 )
8.99
Gain from purchase price adjustment
$ -
$ (2.37 )
2.37
$ -
$ (2.37 )
2.37
Impairment loss - intangible assets and goodwill
$ 3.71
$ 38.92
(35.21 )
$ 13.47
$ 38.92
(25.45 )
Adjusted Net Loss
$ (22.05 )
$ (13.21 )
(8.84 )
$ (58.32 )
$ (47.17 )
(11.15 )

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Advent is exposed to a variety of market and other risks, including the effects of changes in interest rates and inflation, as well as risks to the availability of funding sources, hazard events and specific asset risks.
Interest Rate Risk
Advent holds cash and cash equivalents for working capital, investment and general corporate purposes. As of December 31, 2023, Advent had an unrestricted cash balance of approximately $3.6 million, consisting of operating and savings accounts which are not affected by changes in the general level of U.S. interest rates. Advent is not expected to be materially exposed to interest rate risk in the future as it intends to take on limited debt finance.
Inflation Risk
Advent does not believe that inflation currently has a material effect on its business. To mitigate cost increases caused by inflation, Advent has taken steps such as searching for alternative supplies at a lower cost and pre-buying materials and supplies at a more advantageous price in advance of its intended use.
Foreign Exchange Risk
Advent has costs and revenues denominated in Euros, Danish krone and Philippine pesos, and therefore is exposed to fluctuations in exchange rates. To date, Advent has not entered into any hedging transactions to mitigate the effect of foreign exchange due to the relatively low exposure. As we increase in scale, we expect to continue to realize a portion of our revenues and costs in foreign currencies, and therefore expect to put in place appropriate foreign exchange risk mitigation features in due course.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. Financial Statements and Supplementary Data.
This information required by this item may be found on pages through of this annual report on Form 10-K.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.

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ITEM 9A. CONTROLS AND PROCEDURES
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer (currently also serving as Acting Chief Financial Officer) has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Annual Report on Form 10-K.
The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As described below, based on the evaluation of our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K, management identified material weaknesses in our internal control over financial reporting. As a result of the material weaknesses, our Chief Executive Officer (currently also serving as Acting Chief Financial Officer) has concluded that, as of December 31, 2023, our disclosure controls and procedures were not effective to provide reasonable assurance that information required to be disclosed in the reports we file and submit under the Exchange Act is recorded, processed, summarized, and reported as and when required.
Notwithstanding this material weaknesses identified, our management, including our Chief Executive Officer (currently also serving as Acting Chief Financial Officer), has concluded that our financial statements included in this Annual Report on Form 10-K present fairly, in all material respects, our financial position, results of operations, and cash flows for the periods presented in accordance with U.S. GAAP.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) or 15d-15(f) of the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP, and includes those policies and procedures that:
(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013).
Based on this assessment and the evaluation of those criteria, management, including our Chief Executive Officer (currently also serving as Acting Chief Financial Officer), concluded that our internal control over financial reporting was not effective as of December 31, 2023, due to the material weaknesses described below.
A material weakness (as defined in Rule 12b-2 under the Exchange Act) is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.
Entity-Level Control Environment
The entity-level control environment did not adequately support the prevention, detection or correction of material misstatements. We identified deficiencies in all five components of the entity-level control environment, including the control environment, control activities, information and communication, monitoring and risk assessment that aggregated into material weaknesses. Overall, we did not sufficiently establish internal control policies and procedures in our material business processes related to the financial reporting process.
Financial Statement Close and Reporting Process
We did not adequately design and execute controls that addressed the relevant financial statement assertions over the close and reporting process including review controls, journal entries and adjustments during the period-end reporting, changes to general ledger master data. We lacked in certain instances sufficient and appropriate documentation, reconciliation controls and segregation of duties controls.
IT Processes
Internal controls that address the IT risks of applications were not adequately designed and implemented. Management did not adequately perform controls or retain sufficient and appropriate evidence over 1) user access controls 2) application change controls and 3) the timeliness of segregation of duties access monitoring procedures.
To mitigate the potential impact of material weaknesses, and prior to filing this annual report, we performed additional analysis and other post-closing procedures to determine that our consolidated financial statements are prepared in accordance with U.S. GAAP. These material weaknesses did not result in any material misstatements and there were no changes to previously released financial statements. Notwithstanding our material weaknesses, we have concluded that the financial statements and other financial information included in this Annual Report on Form 10-K fairly present in all material respects our financial position, results of operations, and cash flows for the periods presented in conformity with U.S. GAAP.
Remediation Plan
Following the identification of the material weaknesses in our internal control over financial reporting as of December 31, 2023, and with the oversight of the Audit Committee of our Board of Directors, we will commence remediation efforts to enhance our control environment.
● Hiring and augmenting our team with knowledgeable and qualified IT, accounting, and finance professionals.
● Enhancing the robustness and effectiveness of our IT systems and control environment.
● Enhancing related policies and process documentation, implementing new controls or redesigning existing ones, and improving the skills of process owners.
● Training process owners, evaluating the adoption of revised policies and procedures, and monitoring results.
● Increasing the frequency and independence of testing the design and operating effectiveness of controls.
Management are committed to successfully implementing the remediation plan as promptly as possible. Our plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects. See “Risk Factors-Risks Related to Our Operations and Business - We have identified material weaknesses in our system of internal controls pursuant to Section 404 of the Sarbanes-Oxley Act of 2002. If not remediated, these material weaknesses could result in material misstatements in our consolidated financial statements. We may be unable to develop, implement and maintain appropriate controls in future periods.”
Changes in Internal Control over Financial Reporting
Except as otherwise noted above under “Remediation Plan,” including the on-going remediation efforts described, there were no changes in our internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) during the year ended December 31, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Our plans for remediating the material weaknesses, described above, will constitute changes in our internal control over financial reporting, prospectively, when such remediation plans are effectively implemented

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ITEM 9B. OTHER INFORMATION
Item 9B. Other Information.
None.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10.
Directors, Executive Officers and Corporate Governance.
Executive Officers and Board of Directors
Our business and affairs are managed by or under the direction of our Board. The table below lists the persons who currently serve as executive officers and directors.
Name
Age
Position
Vassilios Gregoriou
Chairman, Chief Executive Officer, Acting Chief Financial Officer and Director
Christos Kaskavelis
Chief Strategy Officer
Emory De Castro
Chief Technology Officer and Director
James F. Coffey
Chief Operating Officer and General Counsel
Panoraia ‘Nora’ Gourdoupi
Director
Anggelos Skutaris
Director
Lawrence Epstein
Director
Wayne Threatt
Director
Von McConnell
Director
The following is a brief biography of each executive officer and director:
Vassilios Gregoriou has been Chairman and CEO of Advent since inception. Dr. Gregoriou cofounded Advent Technologies Inc. in 2012. Dr. Gregoriou is also currently serving as Acting Chief Financial Officer. In addition, Dr. Gregoriou is an internationally known scientist with research and/or managerial positions in both the U.S. (Northeastern, MIT, Polaroid, Princeton) and Greece (NHRF, FORTH) over his 30-year career so far in the technology sector. His research activity extends over a wide area of subjects in the renewable energy space that include the areas of flexible photovoltaics based on organic semiconductors, optically active materials based on conjugated oligomers and polymer nanocomposites. His published work as co-author includes three books and more than 100 scientific papers. He is also co-inventor of 15 patents. Dr. Gregoriou has more than 25 years of experience in the U.S. market. He has extensive experience in the technical development of new products and in the management of such activities. He holds a Ph.D. in Physical Chemistry from Duke University and he has attended the MBA program at Northeastern University. He was also a NRSA award recipient at Princeton University. He also served as President of Society for Applied Spectroscopy(SAS) in 2001. Dr. Gregoriou is well-qualified to serve on the board of directors due to his extensive scientific, managerial and industry experience.
Christos Kaskavelis joined Advent as Chief Marketing Officer in 2019. From 2015 to 2016 he served as Managing Director of Mamaya IKE, a Greek publishing and media consulting company. From 2016 to 2018, he was a research scholar at the MIT Media Lab in Boston, Massachusetts. He has been a seed investor in the Company, an angel investor, and has served on its board of directors. He is a serial entrepreneur in the tech industry and primarily digital marketing, with successful exits in both Nasdaq and London Stock Exchanges. He has designed and been responsible for enterprise software systems designed for Pratt & Whitney, Analog Devices, General Electric and Lucent Technologies in the areas of Just-In-Time (JIT) manufacturing, Supply Chain Management and Production Scheduling. He holds a Ph.D. in Supply Chain Management as well as an M.Sc. in Manufacturing Engineering from Boston University, a B.Sc. in Electrical Engineering and a B.A. in Business Economics from Brown University.
Emory De Castro has been Advent’s Chief Technology Officer since 2013. Dr. De Castro is responsible for the overall technical, manufacturing and business development operations for Advent. Prior to joining Advent, Dr. De Castro was a Vice President, Business Management and the site manager for BASF Fuel Cell Inc. in Somerset NJ. At BASF Dr. De Castro led marketing and sales, business development, quality control, and R&D direction all cumulating in nearly a four-fold increase in revenues. As the Executive Vice President at the E-TEK Division, De Nora North America he managed operations, created a global brand, and expanded the organization’s fuel cell component business in Asia and Europe. Dr. De Castro has over 20 patent applications spanning fuel cell materials and catalysts, electrochemical technology, sensors, and a beer bottle cap that extends shelf life. He is the recipient of the 2013 Department of Energy Award for Manufacturing R&D in lowering the cost of gas diffusion electrodes and the 2005 ECS New Technology Award to E-TEK Division, for introducing and commercializing a new electrolysis technology. Emory De Castro received his Ph.D. from the Department of Chemistry at the University of Cincinnati and a B.S. in Chemistry from Duke University. Dr. De Castro is well-qualified to serve on our board of directors due to his extensive scientific and technological experience.
James F. Coffey has served as General Counsel and Corporate Secretary of Advent since March 2020. Beginning in 2018, while a partner at a national Am Law 100 law firm, Jim served as Advent’s outside legal counsel. Mr. Coffey has over thirty years of experience in corporate and securities law, mergers and acquisitions, venture capital and corporate finance, and intellectual property law. He has extensive international experience having closed transactions in both North and South America, Europe, and China. Throughout the course of his career, Jim has developed strong relationships and strategic contacts within the clean energy and technology sectors and specific experience in the fuel cell industry. From 2013 to 2017, he served as general counsel to another HT PEM fuel cell company that was a customer of Advent. Mr. Coffey was a Gerald L. Wallace Scholar at New York University School of Law where he received an LL.M. in Corporate Law. He received his J.D. from the New England School of Law, and his B.A., cum laude, from Providence College. Mr. Coffey is listed in The Best Lawyers in America® for Mergers and Acquisitions. He is recognized for his work in intellectual property law by the IAM Patent 1000. Mr. Coffey was named a Massachusetts Super Lawyer by Law and Politics magazine. He is AV® rated by Martindale-Hubbell. Mr. Coffey is a fellow of the Boston Bar Foundation and the American Bar Foundation.
Nora Gourdoupi was appointed as a director in July 2022 and, since February 2021, has served as SVP, Corporate Business Development of the Company’s Greek branch overseeing daily operations while being also engaged in product development, government projects and technical sales. Dr. Gourdoupi joined Advent in 2006, became a Senior Scientist in 2012 and is co-inventor in 18 patents. Being part of a fast-growing Small Medium Enterprise from its foundation, she has been involved in several key business processes including materials R&D as well as project management. Dr. Gourdoupi holds a BSc in Chemistry and a PhD from the University of Patras specializing in the synthesis and characterization of polymers for fuel cell applications. Dr. Gourdoupi is well-qualified to serve on our board of directors due to her extensive scientific and technological experience.
Anggelos Skutaris has been a director of Advent since February 2021. Mr. Skutaris has a BSc in Economics from Arizona State University and an MBA from the Thunderbird School of Global Management. He has more than 30 years of international experience in banking, finance, management, treasury and investments. In February 2023, Mr. Skutaris became Chief Investment Officer for Al Khor Holding, a Family Office managing investments for the Al Mesnad family of Qatar. Prior to that, since November 2019, he was a member of the Incorporation Committee and Chief Investment Officer for Power Bank, a Qatar-based financial institution with a mission to provide Islamic financing to the global energy sector. Between August 2017 and November 2019, he served as the Chief Investment Officer for Janus Continental Group. Other key positions he held in the past include: Head of Treasury Operations & Transformation (Qatar Airways), Managing Partner (New Symbol Global Advisors), Chief Executive Officer (Piraeus Capital Management), Founder & CEO (OliveTree Management Associates), Group Treasurer (Titan Cement), Head of Equity Financing (Calyon Securities) and Director of Equity Financing (Credit Suisse). Whilst at Titan cement, Mr. Skutaris was instrumental in issuing the largest corporate syndicated facility in Greece, a 5-year, €800 million transaction. Mr. Skutaris is well-qualified to serve on the board of directors due to his extensive business development and financial experience.
Lawrence Epstein has been a director of Advent since April 2022. Mr. Epstein has over two decades of experience in commercial real estate transactions, driving over one billion dollars in transactional value since 2016. Since October 2021, he has been a Senior Managing Director for Savills. Savills is an international leader in promoting sustainability in building operations and design, offering expertise to its worldwide real estate clients in sustainable design, energy infrastructure, strategic advisory, impact assessment, and reporting, offsets and environmental land management and general operational sustainability support. The company was founded in the UK in 1855 and is one of the world’s leading brokerage firms. Savills’ experience and expertise spans the globe, with offices across Europe, the Americas, Asia Pacific, Africa, and the Middle East. Mr. Epstein focuses exclusively on representing tenants in both the U.S. and international markets. Previously, from May 2016 to September 2021, he was a principal at Avison Young, a commercial real estate company. He is a graduate of Bates College, where he received a BA in History. Mr. Epstein is a member of the Commercial Brokers Association. He formerly served on the Direct Federal Credit Union Board and the Greater Boston Real Estate Association. His volunteer efforts include Call2Talk, a mental health services hotline. Mr. Epstein is well-qualified to serve on the board of directors due to his business experience in the international commercial real estate industry.
Wayne Threatt has been a director of Advent since June 2022. Mr. Threatt has extensive experience in financing, from angel startups through venture capital investments and initial public offerings. He has negotiated and designed all manner of financings, acquisitions, divestitures and strategic alliances, and has conducted nine figure private placement financings. Mr. Threatt is currently the managing principal at WBT Strategy Consulting, where he has worked since 2001, and was formerly a principal at SPC Capital Management, a diversified private equity fund with more than of $100 million under management. He has years of general management, marketing, and business development experience in both corporate and entrepreneurial environments, in industries spanning from technology to branded consumer goods. Mr. Threatt was previously CEO of Androx Corporation and EMUMAIL, VP Marketing and Sales at Scientific Computing Associates, VP Corporate Development Cambridge SoundWorks, and VP and General Manager Sapphire Audio. He has been a consultant providing strategic capital and operational insight for high-tech industries such as energy, biotechnology, information technology, and photonics. He is a graduate of the University of Chicago, where he received his degree in Physics. Mr. Threatt holds a Master of Science in Physics awarded by the University of Pittsburgh and received his MBA from the Harvard Business School. His volunteer commitments include serving as a board member to Synergy Services, an organization dedicated to helping families in crisis. Mr. Threatt is well qualified to serve on the Advent Board of Directors due to his extensive experience as an executive and with technology companies.
Von McConnell has been a director since November 2022. Mr. McConnell has nearly four decades of experience in leading technology firms, including Sprint Corporation (now T-Mobile). His positions included serving as the Chief Operating Officer and Executive Director of Operations for Sprint’s 4G business unit and he also served as Sprint’s Executive Director of Advanced Labs & Innovation, where he was responsible for research and development, systems and network design, engineering, product evaluation, customer trials, and quality certification for all wireless systems and products. Mr. McConnell is currently the founder and president of the TM Group, a successful technology consulting firm which has been engaged in venture capital acquisitions, 5G network rollouts, Division 1 university artificial intelligence programs, and other cutting edge technological commitments. He has served as a director of incubator level and growth stage tech companies and served as a director of a non-profit economic development entity. Mr. McConnell is responsible for dozens of patent innovations. Mr. McConnell has been an advisor and mentor to numerous companies affiliated with the SparkLabKC incubator and served on the Board of Advisors for the Business IT School at the University of Missouri, where he was also an Adjunct Professor. Mr. McConnell holds an executive MBA from AJI Network and a Masters in Telecommunications from George Washington University. He also holds a bachelors degree in economics from Emory & Henry College and is a graduate of economic modeling at George Mason University. Mr. McConnell is well-qualified to serve on the board of directors due to his business experience in the technology sector and his expertise within the field.
Board Composition
Our authorized board of directors consists of seven members. In accordance with the second amended and restated certificate of incorporation, our board of directors is divided into three classes, Classes I, II and III, each to serve a three-year term. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following the election. Directors will not be able to be removed during their term except for cause. The directors are divided among the three classes as follows:
● the Class I directors are Anggelos Skutaris and Von McConnell, and their terms will expire at the annual meeting of stockholders to be held in 2024;
● the Class II directors are Lawrence Epstein and Wayne Threatt, and their terms will expire at the annual meeting of stockholders to be held in 2025; and
● the Class III directors are Vassilios Gregoriou, Nora Gourdoupi and Emory De Castro, and their terms will expire at the annual meeting of stockholders to be held in 2026.
We expect that any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. The division of the board of directors into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control.
Director Independence
The board of directors has determined that each of Mr. Skutaris, Mr. Epstein, Mr. Threatt and Mr. McConnell are independent directors as defined in Nasdaq rules and the applicable SEC rules. For further information, see “Item 13. Certain Relationships and Related Transactions, and Director Independence.”
Board Leadership Structure
The leadership of the Board is currently structured so that it is led by the Chairman, Vassilios Gregoriou, who also serves as the Company’s Chief Executive Officer and as the Acting Chief Financial Officer. When the Chairman of the Board is not an independent director, a Lead Director may be elected annually by the Board. The Board has elected Mr. Skutaris to serve as Lead Director.
Our Board has concluded that our current leadership structure is appropriate at this time. However, our Board will continue to periodically review our leadership structure and may make such changes in the future as it deems appropriate.
Committees of the Board of Directors
The board of directors has the authority to appoint committees to perform certain management and administration functions. The Board has established an audit committee, compensation committee and nominating and corporate governance committee.
Audit Committee
Our audit committee consists of Mr. Skutaris, Mr. Epstein and Mr. Threatt. The board of directors has determined that each member is independent under the Nasdaq Capital Market listing standards and Rule 10A-3(b)(1) under the Exchange Act. The chairperson of our audit committee is Mr. Skutaris. Our board of directors has determined that Mr. Skutaris qualifies as an “audit committee financial expert” as such term is defined in Item 407(d)(5) of Regulation S-K and possesses financial sophistication, as defined under the rules of Nasdaq Capital Market.
The primary purpose of the audit committee is to discharge the responsibilities of the board of directors with respect to our accounting, financial, and other reporting and internal control practices and to oversee our independent registered accounting firm. Specific responsibilities of our audit committee include:
● selecting a qualified firm to serve as the independent registered public accounting firm to audit our financial statements;
● helping to ensure the independence and performance of the independent registered public accounting firm;
● discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants, our interim and year-end operating results;
● developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters;
● reviewing policies on risk assessment and risk management;
● reviewing related party transactions;
● obtaining and reviewing a report by the independent registered public accounting firm at least annually, that describes our internal quality-control procedures, any material issues with such procedures, and any steps taken to deal with such issues when required by applicable law; and
● by the independent registered public accounting firm
Compensation Committee
The compensation committee consists of Mr. Epstein and Mr. Skutaris. The chairperson of the compensation committee is Mr. Epstein. The primary purpose of the compensation committee is to discharge the responsibilities of the board of directors to oversee its compensation policies, plans and programs and to review and determine the compensation to be paid to its executive officers, directors and other senior management, as appropriate.
Specific responsibilities of the compensation committee include:
● reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation;
● reviewing and approving the compensation of our other executive officers;
● reviewing and recommending to our board of directors the compensation of our directors;
● reviewing our executive compensation policies and plans;
● reviewing and approving, or recommending that our board of directors approve, incentive compensation and equity plans, severance agreements, change-of-control protections and any other compensatory arrangements for our executive officers and other senior management, as appropriate;
● selecting independent compensation consultants and assessing whether there are any conflicts of interest with any of the committee’s compensation advisors;
● assisting management in complying with our proxy statement and Annual Report disclosure requirements;
● if required, producing a report on executive compensation to be included in our annual proxy statement;
● reviewing and establishing general policies relating to compensation and benefits of our employees; and
● reviewing our overall compensation philosophy.
Role of the Compensation Consultant
In accordance with the Compensation Committee Charter, the Compensation Committee has the authority to engage, retain and terminate a compensation consultant. The Compensation Committee also has the sole authority to approve the fees of such consultant. The Compensation Committee engaged ClearBridge Compensation Group LLC (“ClearBridge”) as its independent compensation consultant. ClearBridge reports directly to the Compensation Committee, which has authority under the Compensation Committee Charter to retain compensation consultants, although its representatives may also meet with management from time to time.
Services performed by ClearBridge for the Compensation Committee include, but are not limited to:
1. reviewing the Company’s compensation philosophy;
2. providing market context for Compensation Committee decisions
a. In 2023, the Company elected to forgoe establishing a compensation peer group, and as a result relied on survey data for benchmark purposes (as needed), scoped to the Company’s size;
3. review of cash bonuses paid to executive officers;
4. review of long-term incentive awards;
5. review and determine go-forward non-employee director compensation program; and
6. analysis of current trends in executive compensation, and updates regarding applicable legislative and governance activity.
The Compensation Committee determined that the services provided by ClearBridge to the Compensation Committee did not give rise to any conflicts of interest. The Compensation Committee made this determination by assessing the independence of ClearBridge under the applicable rules adopted by the SEC and incorporated into the Nasdaq Corporate Governance Requirements. In making this assessment, the Compensation Committee also considered ClearBridge’s written correspondence to the Compensation Committee that affirmed the independence of ClearBridge and the consultants and employees who provide services to the Compensation Committee on executive compensation matters.
Nominating and Corporate Governance Committee
Our nominating and corporate governance committee consists of Mr. Threatt and Mr. Epstein. The board of directors has determined each proposed member is independent under Nasdaq listing standards. The chairperson of our nominating and corporate governance committee is Mr. Threatt.
Specific responsibilities of our nominating and corporate governance committee include:
● identifying, evaluating and selecting, or recommending that our board of directors approve, nominees for election to our board of directors;
● evaluating the performance of our board of directors and of individual directors;
● reviewing developments in corporate governance practices;
● evaluating the adequacy of our corporate governance practices and reporting;
● reviewing management succession plans; and
● developing and making recommendations to our board of directors regarding corporate governance guidelines and matters.
Code of Business Conduct and Ethics
The Company’s Code of Business Conduct and Ethics applies to all of its employees, officers and directors, including those officers responsible for financial reporting. The Code of Business Conduct and Ethics is available on its website at www.advent.energy. Information contained on or accessible through such website is not a part of this Annual Report, and the inclusion of the website address in this Annual Report is an inactive textual reference only. The Company intends to disclose any amendments to the Code of Business Conduct and Ethics, or any waivers of its requirements, on its website to the extent required by the applicable rules and exchange requirements.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires the Company’s directors and executive officers and persons who beneficially own more than 10% of the Company’s common stock to file with the SEC reports showing initial ownership of and changes in ownership of the Company’s common stock and other registered equity securities. Based solely upon our review of the copies of such forms or written representations from certain reporting persons received by us with respect to fiscal year 2023, the Company believes that its directors and executive officers and persons who own more than 10% of a registered class of its equity securities have complied with all applicable Section 16(a) filing requirements for fiscal year 2023, except for the following: Nora Gourdoupi did not timely file one Form 4 reporting one transaction.

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ITEM 11. EXECUTIVE COMPENSATION
Item 11. Executive Compensation.
Summary Compensation Table
The following table sets forth certain information about the compensation paid or accrued during the years ended December 31, 2023 and 2022 to our Chief Executive Officer and each of our two most highly compensated executive officers other than our Chief Executive Officer who were serving as executive officers at December 31, 2023, and whose annual compensation exceeded $100,000 during such year or would have exceeded $100,000 during such year if the executive officer were employed by the Company for the entire fiscal year (collectively the “named executive officers” or “NEOs”).
Name and Principal Position
Fiscal
Year
Salary
($)
Bonus
($)
Stock
Awards
($)
Option
Awards
($)
Non-Equity
Incentive Plan
Compensation
($)
All Other Compensation
($)
Total
($)
Vassilios Gregoriou
$ 800,000
-
-
-
-
-
$ 800,000
Chairman of the Board of Directors, Chief Executive Officer and Acting Chief Financial Officer
$ 800,000
-
479,500
418,250
-
-
$ 1,697,750
James Coffey
$ 475,000
-
-
-
-
-
$ 475,000
Chief Operating Officer and General Counsel
$ 475,000
-
-
-
-
-
$ 475,000
Kevin Brackman
$ 375,000
-
-
-
-
-
$ 375,000
Former Chief Financial Officer
$ 375,000
-
-
-
-
-
$ 375,000
Narrative Disclosure to Summary Compensation Table
Compensation Philosophy and Objectives
The Company operates in a dynamic and rapidly evolving environment, which requires a highly-skilled and technical workforce. As a result, the Company places great emphasis on its ability to attract, retain, and motivate top talent in the industry. The Company achieves these objectives by creating an appropriate balance between achieving short-term results and creating long-term sustainable value to shareholders that reinforces the linkage between pay and performance.
Elements of Executive Compensation
The compensation of executives of the Company includes three main elements: (i) base salary; (ii) an annual bonus; and (iii) long-term equity incentives. Perquisites and personal benefits are not a significant element of compensation for the Company’s executive officers.
Base Salaries
Base salary is provided as a fixed source of compensation for the Company’s executive officers. Adjustments to base salaries are reviewed annually and as warranted throughout the year to reflect promotions or other changes in the scope of an executive officer’s role or responsibilities, as well as to maintain market competitiveness.
Dr. Gregoriou’s annual base salary was $800,000; Mr. Coffey’s annual base salary was $475,000; and Mr. Brackman’s annual base salary was $375,000 for the year ended December 31, 2023.
Annual Bonuses
In 2023, the named executive officers were each eligible to receive an annual cash incentive award, based on the achievement of pre-approved key performance objectives determined by the Compensation Committee.
As provided in their respective employment agreements, the target bonus amount for Dr. Gregoriou was 150% of his base salary and for Messrs. Coffey and Brackman were 100% of their base salaries. Actual bonus payouts vary based on Compensation Committee assessment of executive performance versus pre-established key performance indicators.
Management, at its discretion, decided there will not be performance related bonus payouts for fiscal year 2023.
Equity Compensation
In 2021, the Company adopted the Advent Technologies Holdings, Inc. 2021 Incentive Plan (the “2021 Equity Incentive Plan”). The 2021 Equity Incentive Plan advances the Company’s interests by providing for the grant to our employees, directors, consultants and advisors of stock options, SARs, restricted and unrestricted stock and stock units, performance awards and other awards that are convertible into or otherwise based on our common stock. On April 29, 2024, the Company’s stockholders approved an amendment to the 2021 Equity Incentive Plan to increase the number of shares of common stock issuable under the 2021 Equity Incentive Plan from 230,530 to 569,306.
Following the Business Combination, on June 11, 2021, the Compensation Committee made grants to select senior executives. The grants were made to recognize each executive’s role and contributions to date, including outstanding efforts towards a successful transaction, as well as to incentivize and to retain the executives, and to further align them with the post-Business Combination stockholders. As a result of the Business Combination grants, and Mr. Brackman’s sign-on award in 2021, the Compensation Committee elected to not make any additional annual grants in 2022 and 2023 to the NEOs.
In recognition of Dr. Gregoriou’s role and contributions related to the ratification of GreenHiPo by the EU, the Compensation Committee, in July 2022, granted a one-time special award of 5,833 time-vested restricted stock units (“RSUs”) and stock options to purchase 5,833 shares of common stock to Dr. Gregoriou.
Employment Agreements
Advent is a party to certain offer letters with each of the named executive officers that set forth the initial terms and conditions of the officer’s employment with Advent, each of which has since been superseded by new employment agreements as described in “Executive Compensation-Employment Agreements and Other Arrangements with Executive Officers and Directors-Employment and Consulting Arrangements with Executive Officers and Directors” below. The material terms of these offer letters are summarized below.
Dr. Gregoriou entered into an employment agreement with the Company on October 12, 2020 to receive an annual base salary of $800,000, a one-time signing bonus of $500,000, and eligibility to receive an annual performance bonus of cash. Dr. Gregoriou is eligible to participate in the Company’s 2021 Equity Incentive Plan.
Mr. Coffey and Mr. Brackman. As described in further detail in the “Executive Compensation-Employment Agreements and Other Arrangements with Executive Officers and Directors-Employment and Consulting Arrangements with Executive Officers and Directors” section of this report, in connection with the announcement of the Business Combination, Mr. Coffey entered into an employment agreement with Advent, which became effective as of the consummation of the Business Combination. Mr. Brackman entered into an employment agreement with Advent on August 13, 2021, which was effective as of July 2, 2021, and superseded certain offer letter entered into between the Company and Mr. Brackman dated July 2, 2021. Mr. Brackman resigned on January 5, 2024.
Employee Benefits
The Company sponsors an employee savings plan under Section 401(k) of the Internal Revenue Code. Subsequent to the Business Combination, the Company made matching contributions equal to 100% of the participant’s pre-tax contribution up to a maximum of 5% of the participant’s eligible earnings for U.S employees. Total expense related to the Company’s defined contribution plan was $0.2 million and $0.3 million for the years ended December 31, 2023 and 2022.
As described in Note 2 of the Company’s audited consolidated financial statements for fiscal years 2023 and 2022, pursuant to Greek Labor Law 2112/1920, employees in Greece are entitled to an indemnity in the event of dismissal or retirement, though as a director, Dr. Gregoriou is not eligible for such indemnity.
Pay versus Performance
The following tables and related disclosures provide information about (i) the “total compensation” of our principal executive officer (“PEO”), and our other named executive officers (the “Other NEOs” or the “Non-PEO NEOs”) as presented in the table under “Executive Compensation - Summary Compensation”, (ii) the “compensation actually paid” to our PEO and our Other NEOs, as calculated pursuant to the SEC’s pay-versus-performance rules, (iii) certain financial performance measures, and (iv) the relationship of the “compensation actually paid” to those financial performance measures.
This disclosure has been prepared in accordance with Item 402(v) of Regulation S-K under the Securities Exchange Act of 1934, as amended, and does not necessarily reflect value actually realized by the executives or how our compensation committee evaluates compensation decisions in light of company or individual performance.
Summary
Compensation
Table Total for
PEO(1)
Compensation
Actually Paid
to PEO(3)
Average Summary
Compensation Table
Total for
Non-PEO
NEOs(2)
Average
Compensation Actually
Paid to
Non-PEO
NEOs(3)
Value of Initial
Fixed $100
Investment Based On
Total Shareholder
Return(4)
Net
Loss(5)
$ 800,000
$ (1,263,182 )
$ 425,000
$ (95,031 )
$ (86.73 )
$ (71,397 )
$ 1,697,750
$ (4,533,070 )
$ 425,000
$ (1,589,095 )
$ (73.77 )
$ (74,337 )
(1) The dollar amounts reported are the amounts of total compensation reported for Vassilios Gregoriou, our Chief Executive Officer/PEO, for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation-Summary Compensation Table.”
(2) The dollar amounts reported represent the average of the amounts reported for our company’s Non-PEO NEOs as a group (excluding Mr. Gregoriou) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the named executive officers (excluding Mr. Gregoriou) included for purposes of calculating the average amounts in each applicable year are as follows: Mr. Coffey and Mr. Brackman for 2023 and 2022.
(3) The dollar amounts reported represent the amount of “compensation actually paid” to our PEO and Non-PEO NEOs as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to total compensation for each year to determine the compensation actually paid:
● Stock Awards
● Option Awards
(4) Cumulative total shareholder return (“TSR”) is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between our company’s share price at the end and the beginning of the measurement period by our company’s share price at the beginning of the measurement period. No dividends were paid on stock or option awards in 2022 or 2023.
(5) The dollar amounts reported represent the amount of net loss reflected in our consolidated audited financial statements for the applicable year.
PEO
Average
Non-PEO
NEOs
PEO
Average
Non-PEO
NEOs
Summary Compensation Table Totals for Non-PEO NEOs
$ 800,000
$ 425,000
$ 1,697,750
$ 425,000
Add (Subtract):
Fair value of equity awards granted during the year from the Summary Compensation Table
-
-
(897,750 )
-
Fair value at year end of equity awards granted during the year
-
-
537,133
-
Change in fair value of equity awards granted in prior years that were unvested as of the end of the year
(1,415,428 )
(346,687 )
(4,402,652 )
(1,510,571 )
Change in fair value of equity awards granted in prior years that vested during the year
(647,754 )
(173,344 )
(1,467,551 )
(503,524 )
Compensation Actually Paid Totals
$ (1,263,182 )
$ (95,031 )
$ (4,533,070 )
$ (1,589,095 )
Analysis of the Information Presented in the Pay Versus Performance Table
In accordance with Item 402(v) of Regulation S-K, the graphs below compare the compensation actually paid to our PEO and the average of the compensation actually paid to our remaining NEOs, with (i) our TSR, and (ii) our net loss, in each case, for the fiscal years ended December 31, 2022 and 2023. TSR amounts reported in the graph assume an initial fixed investment of $100.
A portion of our PEOs’ compensation consists of equity awards. As a result, the change between the values disclosed in our Summary Compensation Table and Compensation Actually Paid tends to be directionally aligned with changes in our TSR.
While we are required by SEC rules to disclose the relationship between our net income and Compensation Actually Paid to our NEOs, this is not a metric our compensation committee currently uses in evaluating our NEOs’ compensation as we are a company that has not generated any gross profit.
All information provided above under the “Pay Versus Performance” heading will not be deemed to be incorporated by reference in any filing of our company under the Securities Act of 1933, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
Other Compensation Policies
Stock Ownership/Holding Policy
The Company maintains meaningful stock ownership guidelines to reinforce the importance of stock ownership. These guidelines are intended to align the interests of executives and shareholders and to focus the executives on our long-term success. Under these guidelines, each of our active executives and non-employee directors must own shares in accordance with the following schedule:
Role Required Ownership Level
Chief Executive Officer and Chairman 6.0x Base Salary
Other Executive Officers 3.0x Base Salary
Non-Employee Directors 3.0x Annual Cash Retainer
Shares that count towards satisfying the ownership requirements include:
● Shares owned by the executive/director, including those obtained through the vesting of restricted stock units and performance stock units;
● Shares owned jointly by the executive/director and spouse or held in trust established by the; executive/director for the benefit of the executive/director and/or family members;
● Unvested time-based restricted stock units;
● Note: Unvested performance stock units and unexercised stock options do not count towards satisfying stock ownership requirements.
Each executive or non-employee director has 5 years to meet the ownership guidelines starting from when the executive/director first becomes subject to the policy. Executives/directors who do not meet the ownership guidelines after 5 years of being subject to the guidelines are expected to retain 50% of net shares (i.e., shares remaining after payment of taxes) upon vesting or exercise of stock options until they meet the guidelines. Executive and Non-Employee Directors are either already in compliance with the stock ownership guidelines or expected to be within the 5-year timeframe.
Prohibition on Pledging and Hedging
The Company maintains a comprehensive Insider Trading Policy that includes a prohibition on pledging Company securities or holding Company securities in a margin account. Additionally, the policy prohibits engaging in hedging, monetization and similar transactions in respect of Company securities. This policy, applicable to all officers, directors and associates, was put in place to ensure that the interests of these individuals remain aligned with those of stockholders, and that they continue to have the incentive to execute the Company’s long-term plans and achieve the performance for which their equity awards are intended.
Employment Agreements and Other Arrangements with Executive Officers and Directors
Employment Agreements
On October 12, 2020, in connection with the execution of the Merger Agreement and the announcement of the Business Combination Advent entered into employment agreements, with each of Dr. Gregoriou and Mr. Coffey. The material terms of these employment agreements are set forth below:
● Dr. Gregoriou serves as our Chief Executive Officer (currently also serving as Acting Chief Financial Officer) and Chairman of our board of directors, with an initial annual base salary of $800,000, a one-time signing bonus of $500,000, and beginning in fiscal year 2021, eligibility to earn an annual performance bonus with a target equal to 150% of his annual base salary.
● Mr. Coffey serves as our Chief Operating Officer and General Counsel, with an annual base salary of $475,000, a one-time signing bonus of $250,000, and beginning in fiscal year 2021, eligibility to earn an annual performance bonus with a target equal to 100% of his annual base salary.
The sign-on bonuses were paid in two installments: (i) 50% on the first payroll date following the consummation of the Business Combination and (ii) 50% on the first payroll date following the one year anniversary of the consummation of the Business Combination, subject to the applicable executive’s employment through the relevant payment date.
On August 13, 2021, Advent entered into employment agreement with Mr. Brackman, which was effective as of July 2, 2021 and superseded certain offer letter entered into between the Company and Mr. Brackman dated July 2, 2021. The material terms of this employment agreement are set forth below:
● Mr. Brackman served as our Chief Financial Officer, with an annual base salary of $375,000, a one-time relocation expense payment of $40,000, and beginning in fiscal year 2021, eligibility to earn an annual performance bonus with a target equal to 100% of his annual base salary.
The employment agreements provide that if an executive’s employment terminates without “cause” or by him for “good reason,” (as such terms are defined in the employment agreement or term sheet, as applicable), the executive will be entitled to (i) up to 12 months’ subsidized medical, dental and vision benefits continuation (18 months for Dr. Gregoriou) and (ii) payment of one times (two times for Dr. Gregoriou) the sum of such executive’s annual base salary and target bonus, payable over 12 months. If such termination of employment without “cause” or resignation for “good reason” occurs within 60 days prior to, or 12 months following, a “change in control” (as such term is defined in the 2021 Equity Incentive Plan), severance is enhanced and provides for (i) up to 18 months’ subsidized medical, dental and vision benefits continuation for all executives, (ii) two times (three times for Dr. Gregoriou) the sum of such executive’s annual base salary and target bonus, payable over 12 months, and (iii) the initial grant of stock options and restricted stock units issued pursuant to the 2021 Equity Incentive Plan, shall become fully vested, and such options will remain exercisable for a period of one year following such termination of employment. Moreover, if the acquirer in such “change in control” does not agree to assume or substitute for equivalent stock options, any unvested portion of the initial grant of stock options shall become fully vested and exercisable at the time of such transaction.
The employment agreements for Dr. Gregoriou, Messrs. Coffey and Brackman each contain (i) a perpetual confidentiality covenant, (ii) an assignment of intellectual property covenant, (iii) a non-competition covenant for one year post-termination of employment (subject to, for Dr. Gregoriou, the Executive’s receipt of at least 50% of the Executive’s highest annualized base salary within the two (2) year period preceding termination) for the entire year, (iv) a covenant not to solicit any of our customers, vendors, suppliers or other business partners during the eighteen (18)-month period following termination and (v) a covenant not to solicit any of our employees or independent contractors during the eighteen (18)-month period following termination.
Mr. Brackman resigned from his position as Chief Financial Officer of the Company on January 5, 2024.
Non-Competition Agreements
Simultaneously with the execution and delivery of the Merger Agreement, certain insider Advent stockholders entered into non-competition and non-solicitation agreements for the benefit of the Company, Advent and each of their respective present and future affiliates, successors and subsidiaries (each, a “Non-Competition Agreement”), to become effective at the Closing, pursuant to which the Advent stockholder party thereto agreed not to compete with the Company, Advent and their respective affiliates during the three (3) year period following the Closing in North America or the European Union (including Greece) or in any other markets in which the Company and Advent are engaged. The Advent stockholder party thereto also agreed during such three (3) year restricted period to not solicit employees or customers of such entities. The Non-Competition Agreement also contains customary confidentiality and non-disparagement provisions.
Outstanding Equity Awards at Fiscal Year End
The following table provides information with respect to awards held by the named executive officers as of December 31, 2023.
Option Awards
Stock Awards
Name
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
Option
Exercise
Price ($)
Option
Expiration
Date
Number of
Shares or
Units of Stock
that Have Not
Vested (#)
Market
Value of
Shares or
Units of Stock
That Have Not
Vested ($)(7)
Vassilios Gregoriou(1)(2)
15,369
15,369
$ 310.80
6/11/2031
15,369
$ 102,816
Vassilios Gregoriou(3)(4)
1,458
4,375
$ 82.20
7/12/2032
4,375
$ 29,269
James Coffey(1)(2)
5,763
5,763
$ 310.80
6/11/2031
5,763
$ 38,556
Kevin Brackman(5)(6)
3,842
3,842
$ 228.60
8/24/2031
3,842
$ 25,704
(1) Option awards vest 25% upon each anniversary of February 4, 2021, the vesting commencement date, until the fourth anniversary of the vesting commencement date.
(2) Stock awards consist of grants of restricted stock units that vest 25% upon each anniversary of February 4, 2021, the vesting commencement date, until the fourth anniversary of the vesting commencement date.
(3) Option awards vest 25% upon each anniversary of July 12, 2022, the vesting commencement date, until the fourth anniversary of the vesting commencement date.
(4) Stock awards consist of grants of restricted stock units that vest 25% upon each anniversary of July 12, 2022, the vesting commencement date, until the fourth anniversary of the vesting commencement date.
(5) Option awards vest 25% upon each anniversary of August 24, 2021, the vesting commencement date, until the fourth anniversary of the vesting commencement date.
(6) Stock awards consist of grants of restricted stock units that vest 25% upon each anniversary of August 24, 2021, the vesting commencement date, until the fourth anniversary of the vesting commencement date.
(7) Market value of restricted stock unit awards is based on the closing price of $6.60 per share on December 29, 2023 on the Nasdaq Capital Market.
Director Compensation
Pursuant to offer letters with each of the Company’s non-employee directors (the “Director Offer Letters”), each director receives an annual retainer of $100,000, to be paid quarterly in arrears. In addition, each non-employee director is eligible to receive an annual grant of stock awards for a number of shares of Company common stock determined by dividing $100,000 by the closing price per share of Company common stock on the applicable grant date. While each of Drs. Gregoriou, De Castro, Gourdoupi, and Christos Kaskavelis, the Company’s Chief Marketing Officer, served as members of the board of directors of the Company in 2023, none received additional compensation for director services. Dr. Gregoriou’s compensation earned with respect to his employment with Advent is set forth in the “Summary Compensation Table” above.
The following table sets forth all compensation paid to or earned by each non-employee director of the Company during fiscal year 2023.
Year Ended December 31, 2023
Name
Fees Earned or
Paid in
Cash ($)
Stock
Awards
($)(1)(2)
Total ($)
Anggelos Skutaris
$ 100,000
$ 30,050
$ 130,050
Lawrence Epstein
$ 100,000
$ 30,050
$ 130,050
Wayne Threatt
$ 100,000
$ 30,050
$ 130,050
Von McConnell
$ 100,000
$ 30,050
$ 130,050
(1) The amounts disclosed above reflect the full grant date fair values in accordance with FASB ASC Topic 718. See “Note 17 - Share Based Compensation” to our consolidated financial statements for the year ended December 31, 2023.
(2) On June 28, 2023, the Company granted to each non-employee director a total of 1,667 restricted stock units which vest on June 29, 2024.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table sets forth information known to the Company regarding the beneficial ownership of our common stock as of August 7, 2024 by:
● each person known to us to be the beneficial owner of more than 5% of outstanding common stock;
● each of our named executive officers and directors; and
● all executive officers and directors as a group
Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days. Stock issuable upon exercise of options and warrants currently exercisable within 60 days are deemed outstanding solely for purposes of calculating the percentage of total voting power of the beneficial owner thereof.
The beneficial ownership of Company common stock is based on 2,636,508 shares of common stock outstanding as of August 7, 2024.
Unless otherwise indicated, the Company believes that each person named in the table below has sole voting and investment power with respect to all shares of Company common stock beneficially owned by them.
Name and Address of Beneficial Owner
Number of
Shares
%
Directors and Executive Officers
Vassilios Gregoriou(1)
212,256
8.1
Emory De Castro(2)
80,450
3.1
James Coffey(2)
29,247
1.1
Nora Gourdoupi(3)
12,650
*
Christos Kaskavelis(2)
134,997
5.1
Anggelos Skutaris
4,461
*
Lawrence Epstein
3,921
*
Wayne Threatt
3,817
*
Von McConnell
1,667
*
All directors and executive officers as a group (nine individuals)(4)
483,466
18.3
* Less than one percent.
(1) Share amount includes 24,511 shares issuable upon exercise of options.
(2) Share amount includes an aggregate of 8,645 shares issuable upon exercise of options.
(3) Share amount includes an aggregate of 2,708 shares issuable upon exercise of options.
(4) Share amount includes an aggregate of 53,154 shares issuable upon exercise of options. Unless otherwise indicated, the business address of each of the individuals is 5637 La Ribera St., Suite A, Livermore, CA 94550.
Equity Compensation Plan Table
The following table summarizes our equity compensation plan information as of December 31, 2023. Information is included for equity compensation plans approved by our stockholders and equity compensation plans not approved by our stockholders.
Plan Category
(a)
Number of securities
to be issued upon
exercise of outstanding options,
warrants and rights
(b)
Weighted-average
exercise price per
share of outstanding options,
warrants and rights
(c)
Number of securities
remaining available
for future issuance
under equity compensation
plans
Equity compensation plans approved by stockholders
105,661
$ 228.90
1,148
Equity compensation plans not approved by stockholders
-
$ -
-
Total
105,661
$ 228.90
1,148

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. Certain Relationships and Related Transactions, and Director Independence.
There have been no transactions since January 1, 2023 to which we have been a participant in which the amount involved, exceeded or will exceed $120,000, and in which any of our directors, executive officers or holders of more than 5% of our capital stock, or any members of their immediate family, had or will have a direct or indirect material interest, other than compensation arrangements which are described under “Executive Officer and Director Compensation.”
Director Independence
Our Board has determined that four (4) of our directors, Messrs. Skutaris, Epstein, Threatt, and McConnell are independent directors in accordance with the listing requirements of the Nasdaq Capital Market, or Nasdaq. Under the rules of the Nasdaq Capital Market, independent directors must comprise a majority of a listed company’s board of directors within one year of the completion of its initial public offering. In addition, the rules of the Nasdaq Capital Market require that, subject to specified exceptions, each member of a listed company’s audit and compensation committees be independent and that director nominees be selected or recommended for the board’s selection by independent directors constituting a majority of the independent directors or by a nominating and corporate governance committee comprised solely of independent directors. Under the rules of the Nasdaq Capital Market, a director will only qualify as “independent” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that such person is “independent” as defined by the applicable rules of the Nasdaq Capital Market and the Exchange Act.
Audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act. In order to be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors or any other board committee: (1) accept, directly or indirectly, any consulting, advisory or other compensatory fee from the listed company or any of its subsidiaries or (2) be an affiliated person of the listed company or any of its subsidiaries.
Based upon information requested from and provided by each director concerning his background, employment and affiliations, including family relationships, our board of directors has determined that four of our directors are “independent directors” as defined under applicable rules of the Nasdaq Capital Market, including, in the case of all the members of our audit committee, the independence criteria set forth in Rule 10A-3 under the Exchange Act, and in the case of all the members of our compensation committee, the independence criteria set forth in Rule 10C-1 under the Exchange Act. In making such determination, our board of directors considered the relationships that each such non-employee director has with our Company and all other facts and circumstances that our board of directors deemed relevant in determining his or her independence, including the beneficial ownership of our capital stock by each non-employee director. Dr. Gregoriou is not an independent director under these rules because he is our Chief Executive Officer (currently also serving as Acting Chief Financial Officer). Emory De Castro is not an independent director under these rules because he is our Chief Technology Officer. Nora Gourdoupi is not an independent director under these rules because she is our SVP of Business Development.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. Principal Accounting Fees and Services.
Ernst & Young (Hellas) Certified Auditors Accountants S.A. (“EY”) has served as the Company’s independent registered public accounting firm since February 9, 2021.
The following is a summary of fees paid or to be paid to EY, for services rendered for the years ended December 31, 2023 and 2022.
Audit Fees. Audit fees consist of fees for professional services rendered for the audit of our year-end financial statements and services that are normally provided by EY in connection with regulatory filings. The aggregate fees of EY related to audit and review services totaled $778,745 for the year ended December 31, 2023 and $660,790 for the year ended December 31, 2022. The above amounts include interim procedures and audit fees, as well as attendance at audit committee meetings.
Audit-Related Fees. Audit-related fees consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards. During the years ended December 31, 2023 and December 31, 2022, we paid EY $100,736 and $95,750, respectively, in audit-related fees.
Tax Fees. Tax Fees consist of $19,464 for tax compliance services performed by EY for Advent Technologies GmbH for the year ended December 31, 2023.
All Other Fees. We did not pay EY for any other services for each of the year ended December 31, 2023 and December 31, 2022.
Pre-Approval Policy
Our audit committee is responsible for approving or pre-approving all auditing services (including comfort letters and statutory audits) and all permitted non-audit services by the independent auditor and pre-approve the related fees. Pursuant to its charter, the audit committee delegated to each of its members, acting singly, the authority to pre-approve any audit services if the need for consideration of a pre-approval request arises between regularly scheduled meetings, with such approval presented to the audit committee at its next scheduled meeting or as soon as practicable thereafter.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. Exhibits, Financial Statement Schedules.
(1) Financial Statements
For a list of the financial information included herein, see Index to the Financial Statements on page.
(2) Financial Statement Schedules:
All financial statement schedules have been omitted because they are not applicable, not required or the information required is shown in the financial statements or the notes thereto.
(3) Exhibits.
The following is a list of exhibits filed as part of this Annual Report on Form 10-K.
Exhibit Number
Description
2.1
Agreement and Plan of Merger, dated as of October 12, 2020 by and among AMCI, our sponsor, in its capacity as Purchaser Representative thereunder, Advent and Vassilios Gregoriou in his capacity as Seller Representative thereunder (incorporated by reference to Exhibit 2.1 of AMCI Acquisition Corp.’s Registration Statement on Form S-4/A (Reg. No. 333-250946), filed with the SEC on January 14, 2021).
2.2
First Amendment to Agreement and Plan of Merger, dated as of October 19, 2020, by and among AMCI, our sponsor, in its capacity as Purchaser Representative thereunder, Advent and Vassilios Gregoriou in his capacity as Seller Representative thereunder (incorporated by reference to Exhibit 2.2 of AMCI Acquisition Corp.’s Registration Statement on Form S-4/A (Reg. No. 333-250946), filed with the SEC on January 14, 2021).
2.3
Second Amendment to Agreement and Plan of Merger, dated as of December 31, 2020, by and among AMCI, our sponsor, in its capacity as Purchaser Representative thereunder, Advent and Vassilios Gregoriou in his capacity as Seller Representative thereunder (incorporated by reference to Exhibit 2.3 of AMCI Acquisition Corp.’s Registration Statement on Form S-4/A (Reg. No. 333-250946), filed with the SEC on January 14, 2021).
3.1
Second Amended and Restated Certificate of Incorporation of Advent Technologies Holdings, Inc. (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K, filed with the SEC on February 9, 2021).
3.2
Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Advent Technologies Holdings, Inc. (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K, filed with the SEC on June 20, 2023).
3.3
Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Advent Technologies Holdings, Inc. (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K, filed with the SEC on May 16, 2024).
3.4
Second Amended and Restated Bylaws of Advent Technologies Holdings, Inc. (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K, filed with the SEC on September 9, 2022).
4.1
Warrant Agreement, dated November 15, 2018 by and between AMCI Acquisition Corp. and Continental Stock Transfer & Trust company, as warrant agent (incorporated by reference to Exhibit 4.1 of AMCI Acquisition Corp.’s Registration Statement on Form S-4/A (Reg. No. 333-250946), filed with the SEC on January 14, 2021).
4.2
Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.2 of AMCI Acquisition Corp.’s Registration Statement on Form S-1/A (Reg. No. 333-227994), filed with the SEC on November 9, 2018).
4.3
Specimen Warrant Certificate (incorporated by reference to Exhibit 4.3 of AMCI Acquisition Corp.’s Registration Statement on Form S-1/A (Reg. No. 333-227994), filed with the SEC on November 9, 2018).
4.4
Description of Securities (incorporated by reference to Exhibit 4.4 of the Company’s Annual Report on Form 10-K, filed with the SEC on May 20, 2021).
10.1
Registration Rights Agreement, dated November 15, 2018, by and among AMCI, our sponsor and the holders party thereto (incorporated by reference to Exhibit 10.3 of AMCI Acquisition Corp’s Current Report on Form 8-K, filed with the SEC on November 20, 2018).
10.2+
Employment Agreement, dated as of October 12, 2020, by and between Advent Technologies Inc. and Vassilios Gregoriou (incorporated by reference to Exhibit 10.7 of the Company’s Current Report on Form 8-K, filed with the SEC on February 9, 2021).
10.3+
Employment Agreement, dated as of December 31, 2020, by and between Advent Technologies SA and Christos Kaskavelis (incorporated by reference to Exhibit 10.9 of the Company’s Current Report on Form 8-K, filed with the SEC on February 9, 2021).
10.4+
Employment Agreement, dated as of October 12, 2020, by and between Advent Technologies Inc. and Emory De Castro (incorporated by reference to Exhibit 10.10 of the Company’s Current Report on Form 8-K, filed with the SEC on February 9, 2021).
10.5+
Employment Agreement, dated as of October 12, 2020, by and between Advent Technologies, Inc. and James F. Coffey (incorporated by reference to Exhibit 10.11 of the Company’s Current Report on Form 8-K, filed with the SEC on February 9, 2021).
10.6+
Form of Indemnification Agreement (incorporated by reference to Exhibit 10.13 of the Company’s Current Report on Form 8-K, filed with the SEC on February 9, 2021).
10.7+
Form of Director Offer Letters (incorporated by reference to Exhibit 10.14 of the Company’s Current Report on Form 8-K, filed with the SEC on February 9, 2021).
10.8+
Employment Agreement, dated as of August 13, 2021, by and between Advent Technologies, Inc. and Kevin Brackman (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on August 18, 2021).
10.9
Lease Agreement, dated as of March 8, 2021, by and between Advent Technologies, Inc. and Hood Park LLC (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K/A, filed with the SEC on March 26, 2021).
10.10
2021 Equity Incentive Plan (incorporated by reference to Exhibit 10.12 of the Company’s Current Report on Form 8-K filed with the SEC on February 9, 2021)
10.11
Lease Agreement, dated as of September 2, 2019, by and between Advent Technologies S.A. and Patras Science Park S.A. (English summary of Greek original) (incorporated by reference to Exhibit 10.5 of the Company’s Current Report on Form 8-K, filed with the SEC on February 9, 2021).
10.12
Lease Agreement, dated as of September 25, 2019, by and between Advent Technologies S.A. and Patras Science Park S.A. (English summary of Greek original) (incorporated by reference to Exhibit 10.6 of the Company’s Current Report on Form 8-K, filed with the SEC on February 9, 2021).
10.13
Lease Agreement, dated as of August 30, 2021, by and between Advent Technologies GmbH and fisher group SE & Co.,KG (English summary of German original) (incorporated by reference to Exhibit 10.21 of the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2022).
10.14
Purchase Agreement, dated as of April 10, 2023, by and between Advent Technologies Holdings, Inc. and Lincoln Park Capital Fund, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on April 11, 2023).
10.15
Registration Rights Agreement, dated as of April 10, 2023, by and between Advent Technologies Holdings, Inc. and Lincoln Park Capital Fund, LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on April 11, 2023).
10.16
Form of Securities Purchase Agreement, dated December 22, 2023, by and between Advent Technologies Holdings, Inc. and those certain purchasers named therein (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on December 27, 2023).
21.1*
List of Subsidiaries
23.1*
Consent of Independent Registered Public Accounting Firm
31.1*
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a)
31.2*
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a)
32.1**
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350
32.2**
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350
97.1*
Advent Technologies Holdings, Inc. Clawback Policy
101.INS*
Inline XBRL Instance
101.SCH*
Inline XBRL Taxonomy Extension Schema
101.CAL*
Inline XBRL Taxonomy Extension Calculation
101.LAB*
Inline XBRL Taxonomy Extension Labels
101.PRE*
Inline XBRL Taxonomy Extension Presentation
104*
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
* Filed herewith.
** Furnished herewith
+ Indicated a management or compensatory plan, contract or arrangement.