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Gorilla Technology Group Inc.

Gorilla Technology Group Inc.GRRREarnings & Financial Report

Nasdaq

What changed in Gorilla Technology Group Inc.'s 20-F — 2022 vs 2023

Top changes in Gorilla Technology Group Inc.'s 2023 20-F

684 paragraphs added · 455 removed · 222 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

95 edited+73 added−49 removed396 unchanged
Investments and acquisitions entail uncertainties and risks, such as: ● we may fail to successfully achieve the intended objectives; ● our investments or acquisitions may be viewed negatively by customers, financial markets or investors; ● the costs of identifying and consummating these transactions may be significant; ● acquisitions and the subsequent integration of new assets and businesses into our own could require significant management attention and could divert resources from our existing businesses; ● we may have difficulty in transitioning and integrating the business, technologies, products, personnel or operations of the acquired businesses; ● we may face unforeseen operating challenges; ● our relationships with existing employees, customers and business partners of our group, or those of the target, may be impaired; ● we may assume pre-existing contractual relationships of an acquired company that we would not have otherwise entered into, the termination or modification of which may be costly or disruptive to our business; ● an acquisition may result in a delay or reduction of customer purchases for both us and the company acquired due to customer uncertainty about continuity and effectiveness of service from either company; ● we may face challenges associated with managing additional and/or geographically remote businesses; ● investments and acquisitions could result in the use of substantial amounts of cash or significant capital contributions, which could limit other potential uses for our cash; ● investments and acquisitions could result in increased leverage, dilutive issuances of equity securities, adverse tax consequences, goodwill impairment charges or write-offs, amortization expenses for other intangible assets; ● if we incur debt to fund any investments or acquisitions, such debt may subject us to material restrictions on our ability to conduct our business, including financial maintenance covenants; ● we may need to issue new shares as acquisition consideration or to raise additional capital to fund the acquisition consideration, which may dilute our existing investors’ interest in us; ● we may assume unknown material liabilities of acquired companies, or may be exposed to claims and disputes by shareholders and third parties, including intellectual property claims and disputes; ● we may be unsuccessful in accurately projecting revenue, cost or other metrics of the invested or acquired entity in the due diligence process; ● the invested or acquired assets or businesses may not generate the financial results we expect; and ● the market value of our investments or acquisitions may fluctuate, particularly in volatile markets, or they may become obsolete.
Investments and acquisitions entail uncertainties and risks, such as: ● we may fail to successfully achieve the intended objectives; ● our investments or acquisitions may be viewed negatively by customers, financial markets or investors; 5 ● the costs of identifying and consummating these transactions may be significant; ● acquisitions and the subsequent integration of new assets and businesses into our own could require significant management attention and could divert resources from our existing businesses; ● we may have difficulty in transitioning and integrating the business, technologies, products, personnel or operations of the acquired businesses; ● we may face unforeseen operating challenges; ● our relationships with existing employees, customers and business partners of our group, or those of the target, may be impaired; ● we may assume pre-existing contractual relationships of an acquired company that we would not have otherwise entered into, the termination or modification of which may be costly or disruptive to our business; ● an acquisition may result in a delay or reduction of customer purchases for both us and the company acquired due to customer uncertainty about continuity and effectiveness of service from either company; ● we may face challenges associated with managing additional and/or geographically remote businesses; ● investments and acquisitions could result in the use of substantial amounts of cash or significant capital contributions, which could limit other potential uses for our cash; ● investments and acquisitions could result in increased leverage, dilutive issuances of equity securities, adverse tax consequences, goodwill impairment charges or write-offs, amortization expenses for other intangible assets; ● if we incur debt to fund any investments or acquisitions, such debt may subject us to material restrictions on our ability to conduct our business, including financial maintenance covenants; ● we may need to issue new shares as acquisition consideration or to raise additional capital to fund the acquisition consideration, which may dilute our existing investors’ interest in us; ● we may assume unknown material liabilities of acquired companies, or may be exposed to claims and disputes by shareholders and third parties, including intellectual property claims and disputes; ● we may be unsuccessful in accurately projecting revenue, cost or other metrics of the invested or acquired entity in the due diligence process; ● the invested or acquired assets or businesses may not generate the financial results we expect; and ● the market value of our investments or acquisitions may fluctuate, particularly in volatile markets, or they may become obsolete.
Additionally, other facts relating to the operation of Gorilla’s business outside of the U.S. may have a material adverse effect on Gorilla’s business, financial condition and results of operations, including: ● international economic and political changes; ● the imposition of governmental controls or changes in government regulations, including tax laws, regulations and treaties; ● lack of familiarity and burdens of ongoing compliance with local laws, legal standards, regulatory requirements, tariffs, customs formalities and other barriers, including restrictions on advertising practices, regulations governing online services, restrictions on importation or shipping of specified or proscribed items, importation quotas, shopper protection laws, enforcement of intellectual property rights, laws dealing with shopper and data protection, privacy, encryption, denied parties and sanctions, and restrictions on pricing or discounts; ● heightened exposure to fraud; ● legal uncertainty in foreign countries with less developed legal systems; ● unexpected changes in regulatory requirements, taxes, trade laws, tariffs, export quotas, custom duties or customs formalities, embargoes, exchange controls, government controls or other trade restrictions; ● compliance with U.S. and international laws involving international operations, including the Foreign Corrupt Practices Act (“FCPA”), the U.K.
Additionally, other facts relating to the operation of Gorilla’s business outside of the U.S. may have a material adverse effect on Gorilla’s business, financial condition and results of operations, including: ● international economic and political changes; ● the imposition of governmental controls or changes in government regulations, including tax laws, regulations and treaties; ● lack of familiarity and burdens of ongoing compliance with local laws, legal standards, regulatory requirements, tariffs, customs formalities and other barriers, including restrictions on advertising practices, regulations governing online services, restrictions on importation or shipping of specified or proscribed items, importation quotas, shopper protection laws, enforcement of intellectual property rights, laws dealing with shopper and data protection, privacy, encryption, denied parties and sanctions, and restrictions on pricing or discounts; ● heightened exposure to fraud; ● legal uncertainty in foreign countries with less developed legal systems (including Egypt); ● unexpected changes in regulatory requirements, taxes, trade laws, tariffs, export quotas, custom duties or customs formalities, embargoes, exchange controls, government controls or other trade restrictions; ● compliance with U.S. and international laws involving international operations, including the Foreign Corrupt Practices Act (“FCPA”), the U.K.
Gorilla cannot assure you that the market price of the ordinary shares and warrants will not fluctuate widely or decline significantly in the future in response to a number of factors, including, among others, the following: ● the realization of any of the risk factors presented in this Annual Report; 34 ● actual or anticipated differences in Gorilla’s estimates, or in the estimates of analysts, for Gorilla’s revenues, results of operations, level of indebtedness, liquidity or financial condition; ● additions and departures of key personnel; ● failure to comply with the requirements of Nasdaq; ● failure to comply with the Sarbanes-Oxley Act or other laws or regulations; ● future issuances, sales, resales or repurchases or anticipated issuances, sales, resales or repurchases, of Gorilla’s securities including due to the expiration of contractual lock-up agreements; ● publication of research reports about Gorilla; ● the performance and market valuations of other similar companies; ● failure of securities analysts to initiate or maintain coverage of Gorilla, changes in financial estimates by any securities analysts who follow Gorilla or Gorilla’s failure to meet these estimates or the expectations of investors; ● new laws, regulations, subsidies, or credits or new interpretations of existing laws applicable to Gorilla; ● commencement of, or involvement in, litigation involving Gorilla; ● broad disruptions in the financial markets, including sudden disruptions in the credit markets; ● speculation in the press or investment community; ● actual, potential or perceived control, accounting or reporting problems; ● changes in accounting principles, policies and guidelines; and ● other events or factors, including those resulting from infectious diseases, health epidemics and pandemics (including the ongoing COVID-19 public health emergency), natural disasters, war, acts of terrorism or responses to these events.
Gorilla cannot assure you that the market price of the ordinary shares and warrants will not fluctuate widely or decline significantly in the future in response to a number of factors, including, among others, the following: ● the realization of any of the risk factors presented in this Annual Report; ● actual or anticipated differences in Gorilla’s estimates, or in the estimates of analysts, for Gorilla’s revenues, results of operations, level of indebtedness, liquidity or financial condition; ● additions and departures of key personnel; ● failure to comply with the requirements of Nasdaq; ● failure to comply with the Sarbanes-Oxley Act or other laws or regulations; ● future issuances, sales, resales or repurchases or anticipated issuances, sales, resales or repurchases, of Gorilla’s securities including due to the expiration of contractual lock-up agreements; ● publication of research reports about Gorilla; ● the performance and market valuations of other similar companies; ● failure of securities analysts to initiate or maintain coverage of Gorilla, changes in financial estimates by any securities analysts who follow Gorilla or Gorilla’s failure to meet these estimates or the expectations of investors; ● new laws, regulations, subsidies, or credits or new interpretations of existing laws applicable to Gorilla; ● commencement of, or involvement in, litigation involving Gorilla; 31 ● broad disruptions in the financial markets, including sudden disruptions in the credit markets; ● speculation in the press or investment community; ● actual, potential or perceived control, accounting or reporting problems; ● changes in accounting principles, policies and guidelines; and ● other events or factors, including those resulting from infectious diseases, health epidemics and pandemics (including the ongoing COVID-19 public health emergency), natural disasters, war, acts of terrorism or responses to these events.
Whether actual operating and financial results and business developments will be consistent with our expectations and assumptions as reflected in its forecast depends on a number of factors, many of which are outside of our control, including, but not limited to: ● whether we can obtain sufficient capital to begin production and grow our business; ● our ability to manage our growth; ● whether we can manage relationships with our partners and suppliers; ● whether we can rapidly deploy our facilities and successfully execute our production methodologies in such facilities; ● the ability to obtain necessary regulatory approvals and certifications; ● demand for our products and services; ● the timing and costs of new and existing marketing and promotional efforts; ● inflationary pressures in labor markets and for other resources ● competition, including from established and future competitors; ● our ability to retain existing key management, to integrate recent hires and to attract, retain and motivate qualified personnel; 33 ● the overall strength and stability of the economies in the markets in which we operate or intend to operate in the future; and ● regulatory, legislative and political changes.
Whether actual operating and financial results and business developments will be consistent with our expectations and assumptions as reflected in its forecast depends on a number of factors, many of which are outside of our control, including, but not limited to: ● whether we can obtain sufficient capital to begin production and grow our business; ● our ability to manage our growth; ● whether we can manage relationships with our partners and suppliers; ● whether we can rapidly deploy our facilities and successfully execute our production methodologies in such facilities; ● the ability to obtain necessary regulatory approvals and certifications; ● demand for our products and services; ● the timing and costs of new and existing marketing and promotional efforts; 29 ● inflationary pressures in labor markets and for other resources ● competition, including from established and future competitors; ● our ability to retain existing key management, to integrate recent hires and to attract, retain and motivate qualified personnel; ● the overall strength and stability of the economies in the markets in which we operate or intend to operate in the future; and ● regulatory, legislative and political changes.
Further, as a result of the recent movement of Russian military units into provinces in Ukraine, the United States, the European Union, the United Kingdom and other jurisdictions have imposed sanctions on certain Russian and Ukrainian persons and entities, including certain Russian banks, energy companies and defense companies, and have imposed restrictions on exports of various items to Russian and certain regions of Ukraine (including the self-proclaimed Donetsk People’s Republic and Luhansk People’s Republic and Crimea).
Further, as a result of the movement of Russian military units into provinces in Ukraine, the United States, the European Union, the United Kingdom and other jurisdictions have imposed sanctions on certain Russian and Ukrainian persons and entities, including certain Russian banks, energy companies and defense companies, and have imposed restrictions on exports of various items to Russian and certain regions of Ukraine (including the self-proclaimed Donetsk People’s Republic and Luhansk People’s Republic and Crimea).
Any changes to Taiwan, United Kingdom or the U.S. immigration policies that restrain the flow of technical key and professional talent may inhibit Gorilla’s ability to recruit and retain highly qualified employees. In addition, job candidates and existing employees often consider the value of the equity awards they receive in connection with their employment.
Any changes to Taiwan, United Kingdom, Egyptian or U.S. immigration policies that restrain the flow of technical key and professional talent may inhibit Gorilla’s ability to recruit and retain highly qualified employees. In addition, job candidates and existing employees often consider the value of the equity awards they receive in connection with their employment.
In either case, the resulting harm to our reputation could: ● cause certain customers to cease doing business with us; ● impair our ability to attract new customers, or to expand our relationships with existing customers; ● diminish our ability to hire or retain employees; 14 ● undermine our standing in professional communities to which we contribute and from which we receive expert knowledge; or ● prompt us to cease doing business with certain customers.
In either case, the resulting harm to our reputation could: ● cause certain customers to cease doing business with us; ● impair our ability to attract new customers, or to expand our relationships with existing customers; ● diminish our ability to hire or retain employees; ● undermine our standing in professional communities to which we contribute and from which we receive expert knowledge; or ● prompt us to cease doing business with certain customers.
If one or more of these analysts cease coverage of Gorilla or fail to publish reports on it regularly, Gorilla’s visibility in the financial markets could decrease, which in turn could cause the price of its securities or trading volume to decline. Gorilla’s failure to meet the continued listing requirements of Nasdaq could result in a delisting of its securities.
If one or more of these analysts cease coverage of Gorilla or fail to publish reports on it regularly, Gorilla’s visibility in the financial markets could decrease, which in turn could cause the price of its securities or trading volume to decline. 32 Gorilla’s failure to meet the continued listing requirements of Nasdaq could result in a delisting of its securities.
Our success and ability to compete depends, in part, on our ability to protect proprietary methods and technologies that we develop under a combination of patent and other intellectual property and proprietary rights in Taiwan, the United States and other jurisdictions so that we can prevent others from using our inventions and proprietary information and technology.
Our success and ability to compete depends, in part, on our ability to protect proprietary methods and technologies that we develop under a combination of patent and other intellectual property and proprietary rights in Taiwan, Egypt, the United States and other jurisdictions so that we can prevent others from using our inventions and proprietary information and technology.
Further, the cost to comply with such laws or regulations could be significant and would increase our operating expenses, which could adversely affect our business, financial condition and results of operations. Changes to the current regulations and currency restrictions in Hong Kong could materially and adversely affect Gorilla’s business operations in Hong Kong and Gorilla’s overall results of operation.
Further, the cost to comply with such laws or regulations could be significant and would increase our operating expenses, which could adversely affect our business, financial condition and results of operations. 23 Changes to the current regulations and currency restrictions in Hong Kong could materially and adversely affect Gorilla’s business operations in Hong Kong and Gorilla’s overall results of operation.
In addition, companies competing with us may have an entirely different pricing or distribution model. Increased competition could result in fewer customer orders, price reductions, reduced margins, and loss of market share, any of which could harm our business and results of operations.
In addition, companies competing with us may have an entirely different pricing or distribution model. Increased competition could result in fewer customer orders, price reductions, reduced margins, and loss of market share, any of which could harm our business and the results of operations.
Additionally, although Gorilla anticipates continued growth in the video intelligence, IoT technologies and cybersecurity markets, such growth may occur more slowly or not at all, and Gorilla may not benefit from its investments. Gorilla plans to fund growth opportunities with cash from operations or from future financings.
Additionally, although Gorilla anticipates continued growth in the video intelligence, IoT technologies and cybersecurity markets, such growth may occur more slowly or not at all, and Gorilla may not benefit from its investments. 2 Gorilla plans to fund growth opportunities with cash from operations or from future financings.
Our operations in Hong Kong are our gateway to business relationships with our clients in South East Asia. Generally, there are no restrictions on foreign ownership in companies in Hong Kong, except for ownership in licenses in the broadcasting and cable industry, which we are not involved in such business operations.
Our operations in Hong Kong are a gateway to business relationships with our clients in South East Asia. Generally, there are no restrictions on foreign ownership in companies in Hong Kong, except for ownership in licenses in the broadcasting and cable industry, which we are not involved in such business operations.
Though our technologies and business practices are designed to mitigate many of these risks, if we enable or offer AI solutions that are controversial because of their purported or real impact on human rights, privacy, employment, or other social issues, we may experience brand or reputational harm. 20 We depend on computing infrastructure operated by Amazon Web Services (“AWS”), and other third parties to support some of our customers and any errors, disruption, performance problems, or failure in their or our operational infrastructure could adversely affect our business, financial condition, and results of operations.
Though our technologies and business practices are designed to mitigate many of these risks, if we enable or offer AI solutions that are controversial because of their purported or real impact on human rights, privacy, employment, or other social issues, we may experience brand or reputational harm. 15 We depend on computing infrastructure operated by Amazon Web Services (“AWS”), and other third parties to support some of our customers and any errors, disruption, performance problems, or failure in their or our operational infrastructure could adversely affect our business, financial condition, and results of operations.
For example, Gorilla expects these rules and regulations to make it more difficult and more expensive for it to obtain director and officer liability insurance and it may be forced to accept reduced policy limits or incur substantially higher costs to maintain the same or similar coverage.
For example, these rules and regulations make it more difficult and more expensive to obtain director and officer liability insurance and Gorilla may be forced to accept reduced policy limits or incur substantially higher costs to maintain the same or similar coverage.
For example, in order to further enhance business relationships with current or potential customers or partners, Gorilla may issue equity or equity-linked securities to such current or potential customers or partners. 7 Gorilla may not be able to timely secure debt or equity financing on favorable terms, or at all.
For example, in order to further enhance business relationships with current or potential customers or partners, Gorilla may issue equity or equity-linked securities to such current or potential customers or partners. Gorilla may not be able to timely secure debt or equity financing on favorable terms, or at all.
Gorilla relies on proprietary information (such as trade secrets, know-how and confidential information) to protect intellectual property that may not be patentable or subject to copyright, trademark, trade dress or service mark protection, or that Gorilla believes is best protected by means that do not require public disclosure. 18 Gorilla generally seeks to protect this proprietary information by entering into confidentiality agreements, or consulting, services or employment agreements that contain non-disclosure and non-use provisions with its employees, consultants, contractors and third parties.
Gorilla relies on proprietary information (such as trade secrets, know-how and confidential information) to protect intellectual property that may not be patentable or subject to copyright, trademark, trade dress or service mark protection, or that Gorilla believes is best protected by means that do not require public disclosure. 13 Gorilla generally seeks to protect this proprietary information by entering into confidentiality agreements, or consulting, services or employment agreements that contain non-disclosure and non-use provisions with its employees, consultants, contractors and third parties.
Additionally, because many of our customers use our platforms to store, transmit, and otherwise process proprietary, confidential, or sensitive information, and complete mission critical tasks, they have a lower risk tolerance for security vulnerabilities in our platforms and services than for vulnerabilities in other, less critical, software products and services. 19 We, and the third-party vendors upon which we rely, have experienced, and may in the future experience, cybersecurity threats, including threats or attempts to disrupt our information technology infrastructure and unauthorized attempts to gain access to sensitive or confidential information.
Additionally, because many of our customers use our platforms to store, transmit, and otherwise process proprietary, confidential, or sensitive information, and complete mission critical tasks, they have a lower risk tolerance for security vulnerabilities in our platforms and services than for vulnerabilities in other, less critical, software products and services. 14 We, and the third-party vendors upon which we rely, have experienced, and may in the future experience, cybersecurity threats, including threats or attempts to disrupt our information technology infrastructure and unauthorized attempts to gain access to sensitive or confidential information.
A failure to maintain our relationships with our third-party providers (or obtain adequate replacements), and to receive services from such providers that do not contain any material errors or defects, could adversely affect our ability to deliver effective products and solutions to our customers and adversely affect our business and results of operations. 21 Our policies regarding customer confidential information and support for individual privacy and civil liberties could cause us to experience adverse business and reputational consequences.
A failure to maintain our relationships with our third-party providers (or obtain adequate replacements), and to receive services from such providers that do not contain any material errors or defects, could adversely affect our ability to deliver effective products and solutions to our customers and adversely affect our business and results of operations. 16 Our policies regarding customer confidential information and support for individual privacy and civil liberties could cause us to experience adverse business and reputational consequences.
Furthermore, attempts to enforce our intellectual property rights against third parties could also provoke these third parties to assert their own intellectual property or other rights against us, or result in a holding that invalidates or narrows the scope of our rights, in whole or in part. 22 We have been, and may in the future be, subject to intellectual property rights claims, which are extremely costly to defend, could require us to pay significant damages and could limit our ability to use certain technologies.
Furthermore, attempts to enforce our intellectual property rights against third parties could also provoke these third parties to assert their own intellectual property or other rights against us, or result in a holding that invalidates or narrows the scope of our rights, in whole or in part. 17 We have been, and may in the future be, subject to intellectual property rights claims, which are extremely costly to defend, could require us to pay significant damages and could limit our ability to use certain technologies.
The PRC government has recently published new policies that significantly affect certain industries such as the education and internet industries, and we cannot rule out the possibility that it will in the future release regulations or policies regarding our industry that could require us to seek permission from the relevant governmental authorities to commence or continue to operate our business in Hong Kong, which may adversely affect our business, financial condition and results of operations.
The PRC government has published policies that significantly affect certain industries such as the education and internet industries, and we cannot rule out the possibility that it will in the future release regulations or policies regarding our industry that could require us to seek permission from the relevant governmental authorities to commence or continue to operate our business in Hong Kong, which may adversely affect our business, financial condition and results of operations.
Any business partner bankruptcy or insolvency, or any breach or default by a business partner, or the loss of any significant business partner relationships, could result in material adverse impacts on our current and/or projected business operations and financial condition. 17 We are dependent on our senior management team and other highly skilled personnel, and if we are not successful in attracting or retaining highly qualified personnel, we may not be able to successfully implement our business strategy.
Any business partner bankruptcy or insolvency, or any breach or default by a business partner, or the loss of any significant business partner relationships, could result in material adverse impacts on our current and/or projected business operations and financial condition. 12 We are dependent on our senior management team and other highly skilled personnel, and if we are not successful in attracting or retaining highly qualified personnel, we may not be able to successfully implement our business strategy.
We and our customers are at risk of enforcement actions taken by European regulators until such point in time that we are able to ensure that all data transfers to the United States (and other countries deemed to be “third countries”) from the EU are legitimized. 25 We are also subject to evolving EU and U.K. privacy laws on cookies and e-marketing.
We and our customers are at risk of enforcement actions taken by European regulators until such point in time that we are able to ensure that all data transfers to the United States (and other countries deemed to be “third countries”) from the EU are legitimized. 20 We are also subject to evolving EU and U.K. privacy laws on cookies and e-marketing.
Any such reincorporation and the international nature of our business will likely subject us to foreign regulation. 29 Risks Related to Gorilla’s Substantial Presence in Taiwan Conditions in Taiwan could materially and adversely affect Gorilla’s business. Many of Gorilla’s employees, including certain management members operate from its offices that are located in Neihu District of Taipei City, Taiwan.
Any such reincorporation and the international nature of our business will likely subject us to foreign regulation. Risks Related to Gorilla’s Substantial Presence in Taiwan and Egypt Conditions in Taiwan could materially and adversely affect Gorilla’s business. Many of Gorilla’s employees, including certain management members operate from its offices that are located in Neihu District of Taipei City, Taiwan.
Gorilla has and continues to invest time and resources, including the review of its technology and systems to ensure its taking into consideration the requirements of applicable data privacy laws. 24 Gorilla and its data providers and data consumers may be subject to privacy and data protection-related laws and regulations that impose obligations in connection with the collection, processing and use of personal data.
Gorilla has and continues to invest time and resources, including the review of its technology and systems to ensure its taking into consideration the requirements of applicable data privacy laws. 19 Gorilla and its data providers and data consumers may be subject to privacy and data protection-related laws and regulations that impose obligations in connection with the collection, processing and use of personal data.
We may also exit from certain markets or cease certain operations in certain markets due to a variety of factors. 8 Our operations and expansions in new markets may become subject to risks associated with: ● lack of experience operating in these new markets, including our ability to understand different user behaviors and/or culture in new markets and roll-out relevant products and services localized to each market’s needs or preferences; ● challenges in adapting our approach and strategies in existing markets to new markets; ● recruiting and retaining talented and capable management and employees in various markets; ● our ability to appropriately deploy resources and management attention that otherwise would be focused on the development of our existing markets and businesses; ● our ability to integrate our product offering in markets with limited technological infrastructure; ● challenges caused by distance, language and cultural differences, and local and regional competitive landscapes; ● providing content and services that appeal to the tastes and preferences of users in a larger number of markets; ● implementing our businesses in a manner that complies with local laws and practices, which may differ significantly from market to market, including laws regarding data protection, privacy, network security, cybersecurity, encryption and payments; ● maintaining adequate internal and accounting control across various markets; ● compliance with privacy laws and data security laws and compliance costs across different legal systems; ● currency exchange rate fluctuations; ● protectionist laws and business practices that could, among other things, hinder our ability to execute our business strategies and put us at a competitive disadvantage relative to domestic companies, including restrictions on foreign ownership or foreign currency exchange; ● actions by governments or others to restrict access to our products and services, whether these actions are taken for political, security or other reasons, or that may cause us to discontinue our operations in a particular market; ● complex local tax regimes; ● differing, complex and potentially adverse customs, import/export laws, tax rules and regulations or other trade barriers or restrictions which may be applicable to cross-border transactions, related compliance obligations and consequences of non-compliance, and any new developments in these areas; ● establishing strategic partnerships, as well as maintaining our relationships with any of our existing or future strategic partners; ● potential political, economic and social instability, including the current tension between Russia and Ukraine and other future major geopolitical events, and related actions taken by other countries in response, or perceived, threatened or actual security concerns; and ● higher costs associated with doing business in a larger number of markets.
Our operations and expansions in new markets may become subject to risks associated with: ● lack of experience operating in these new markets, including our ability to understand different user behaviors and/or culture in new markets and roll-out relevant products and services localized to each market’s needs or preferences; ● challenges in adapting our approach and strategies in existing markets to new markets; ● recruiting and retaining talented and capable management and employees in various markets; 4 ● our ability to appropriately deploy resources and management attention that otherwise would be focused on the development of our existing markets and businesses; ● our ability to integrate our product offering in markets with limited technological infrastructure; ● challenges caused by distance, language and cultural differences, and local and regional competitive landscapes; ● providing content and services that appeal to the tastes and preferences of users in a larger number of markets; ● implementing our businesses in a manner that complies with local laws and practices, which may differ significantly from market to market, including laws regarding data protection, privacy, network security, cybersecurity, encryption and payments; ● maintaining adequate internal and accounting control across various markets; ● compliance with privacy laws and data security laws and compliance costs across different legal systems; ● currency exchange rate fluctuations; ● protectionist laws and business practices that could, among other things, hinder our ability to execute our business strategies and put us at a competitive disadvantage relative to domestic companies, including restrictions on foreign ownership or foreign currency exchange; ● actions by governments or others to restrict access to our products and services, whether these actions are taken for political, security or other reasons, or that may cause us to discontinue our operations in a particular market; ● complex local tax regimes; ● differing, complex and potentially adverse customs, import/export laws, tax rules and regulations or other trade barriers or restrictions which may be applicable to cross-border transactions, related compliance obligations and consequences of non-compliance, and any new developments in these areas; ● establishing strategic partnerships, as well as maintaining our relationships with any of our existing or future strategic partners; ● potential political, economic and social instability, including the current tension between Russia and Ukraine and other future major geopolitical events, and related actions taken by other countries in response, or perceived, threatened or actual security concerns; and ● higher costs associated with doing business in a larger number of markets.
Hackers or other malicious parties could circumvent our or our customers’ security measures, and customers may misuse our platforms resulting in a security breach or perceived product failure. 23 Real or perceived errors, failures, or bugs in our platforms and services, or dissatisfaction with our services and outcomes, could result in customer terminations and/or claims by customers for losses sustained by them.
Hackers or other malicious parties could circumvent our or our customers’ security measures, and customers may misuse our platforms resulting in a security breach or perceived product failure. 18 Real or perceived errors, failures, or bugs in our platforms and services, or dissatisfaction with our services and outcomes, could result in customer terminations and/or claims by customers for losses sustained by them.
Further, there is no guarantee that the exemptions available to Gorilla under the JOBS Act will result in significant savings. To the extent that Gorilla chooses not to use exemptions from various reporting requirements under the JOBS Act, it will incur additional compliance costs, which may impact Gorilla’s financial condition. 36
Further, there is no guarantee that the exemptions available to Gorilla under the JOBS Act will result in significant savings. To the extent that Gorilla chooses not to use exemptions from various reporting requirements under the JOBS Act, it will incur additional compliance costs, which may impact Gorilla’s financial condition. 33
Gorilla’s relationship with these entities was built largely upon winning bids, of which these entities set out the specifications and the requirements of services or products, pursuant to Taiwan’s Government Procurement Act, which strictly governs the bidding process and the performance of the relevant obligations and agreements.
Gorilla’s relationship with these entities was built largely upon winning bids, of which these entities set out the specifications and the requirements of services or products, pursuant to the GoE’s project bidding process and Taiwan’s Government Procurement Act, which strictly governs the bidding process and the performance of the relevant obligations and agreements.
We are subject in certain jurisdictions where we have operations, such as certain countries in Asia and the MENA region, to the risk that regulatory authorities in or outside such jurisdictions may impose exchange controls or restrictions on the movement of capital, including on transactions involving transfers of funds from such jurisdictions, as well as restrictions on repatriation of funds or repatriation of profits on subsidiaries from such jurisdictions, which may restrict the amount of funds that can be transferred or dividends that can be paid upstream to us from such jurisdictions.
We are subject in certain jurisdictions where we have operations, such as certain countries in Asia and Egypt, to the risk that regulatory authorities in or outside such jurisdictions may impose exchange controls or restrictions on the movement of capital, including on transactions involving transfers of funds from such jurisdictions, as well as restrictions on repatriation of funds or repatriation of profits on subsidiaries from such jurisdictions, which may restrict the amount of funds that can be transferred or dividends that can be paid upstream to us from such jurisdictions.
Bribery Act”), which correlates with the scope of our sales and operations in foreign jurisdictions and operations in certain industries, such that an increase in such operations would increase risk of non-compliance with the aforementioned laws, and export control laws; ● fluctuations in exchange rates that may increase our foreign exchange exposure; ● potentially adverse tax consequences, including the complexities of foreign tax laws (including with respect to value added taxes) and restrictions on the repatriation of earnings; ● difficulties in achieving headcount reductions due to unionized labor and works councils; ● restrictions on transfers of funds and assets between jurisdictions; and ● China — Taiwan geo-political instability.
Bribery Act”), which correlates with the scope of our sales and operations in foreign jurisdictions and operations in certain industries, such that an increase in such operations would increase risk of non-compliance with the aforementioned laws, and export control laws; ● fluctuations in exchange rates, including the exchange rate of the Egyptian Pound, that may increase our foreign exchange exposure; 25 ● potentially adverse tax consequences, including the complexities of foreign tax laws (including with respect to value added taxes) and restrictions on the repatriation of earnings; ● difficulties in achieving headcount reductions due to unionized labor and works councils; ● restrictions on transfers of funds and assets between jurisdictions; and ● China — Taiwan geo-political instability.
The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter, and, accordingly, the next determination will be made with respect to Gorilla on June 30, 2023.
The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter, and, accordingly, the next determination will be made with respect to Gorilla on June 30, 2024.
In connection with the preparation of our consolidated financial statements as of and for the years ended December 31, 2022 and 2021, we identified material weaknesses in our internal control over financial reporting, as defined in the standards established by the PCAOB.
In connection with the preparation of our consolidated financial statements as of and for the years ended December 31, 2023 and 2022, we identified material weaknesses in our internal control over financial reporting, as defined in the standards established by the PCAOB.
The loss of any of these customers could result in a significant reduction of Gorilla’s anticipated revenues, which could materially and adversely affect our business, results of operations and financial condition. In Gorilla’s ordinary course of business, it has entered into multiple agreements with the two governmental entities pursuant to which revenue was generated during fiscal year 2022.
The loss of any of these customers could result in a significant reduction of Gorilla’s anticipated revenues, which could materially and adversely affect our business, results of operations and financial condition. 6 In Gorilla’s ordinary course of business, it has entered into multiple agreements with the two governmental entities pursuant to which revenue was generated during fiscal year 2023.
Our systems and the third-party systems upon which we and our customers rely are also vulnerable to damage or interruption from catastrophic occurrences such as earthquakes, floods, fires, power loss, telecommunication failures, cybersecurity threats, terrorist attacks, natural disasters, public health crises such as the COVID-19 pandemic, geopolitical and similar events, or acts of misconduct.
Our systems and the third-party systems upon which we and our customers rely are also vulnerable to damage or interruption from catastrophic occurrences such as earthquakes, floods, fires, power loss, telecommunication failures, cybersecurity threats, terrorist attacks, natural disasters, public health crises, geopolitical and similar events, or acts of misconduct.
Gorilla would also have to mandatorily comply with U.S. federal proxy requirements, commence reporting its financials in accordance with U.S. GAAP and its officers, directors and principal shareholders will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act.
Gorilla would also have to mandatorily comply with U.S. federal proxy requirements, commence reporting its financial statements in accordance with U.S. GAAP and its officers, directors and principal shareholders will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act.
Failure to (1) meet or maintain the qualifications specified in the tender documentations; (2) provide a competitive pricing with respect to certain project; or (3) perform obligations under the tender documentations or agreements with governmental agencies (such as CIB) would lead to loss of bid and loss of customer or termination or cancellation of existing agreements with governmental agencies.
Failure to (1) meet or maintain the qualifications specified in the tender documentations; (2) provide a competitive pricing with respect to certain project; or (3) perform obligations under the tender documentations or agreements with governmental agencies would lead to loss of bid and loss of customer or termination or cancellation of existing agreements with governmental agencies.
Gorilla’s business depends on expanding our base of clients and our clients increasing their use of our services, and our inability to expand our base of, or lose any of, our clients or decline in their use of our services could materially and adversely affect its business, results of operations and financial condition.
Gorilla’s business depends on expanding our base of clients and our clients increasing their use of our services, and our inability to expand our base of clients, or a loss of any of our clients or decline in their use of our services, could materially and adversely affect its business, results of operations and financial condition.
Historically, with the exception of the most recent fiscal year, the first quarter of Gorilla’s fiscal year generally has relatively lower sales, and sales generally increase in each subsequent quarter with substantial increases during the fourth quarter ending December 31.
Historically, the first quarter of Gorilla’s fiscal year generally has relatively lower sales, and sales generally increase in each subsequent quarter with substantial increases during the fourth quarter ending December 31.
If these assumptions and analyses prove to be incorrect, our actual operating and financial results may be significantly below our forecasts. The projected financial and operating information appearing elsewhere in this proxy statement reflects current estimates of future performance.
If these assumptions and analyses prove to be incorrect, our actual operating and financial results may be significantly below our forecasts. The projected financial and operating information appearing elsewhere in this annual report reflects current estimates of future performance.
Hong Kong is a special administrative region of PRC. Therefore, the PRC government has significant oversight and discretion over the conduct of our business and may intervene or influence our operations in Hong Kong as the PRC government deems appropriate to further achieve its regulatory, political and societal goals.
Therefore, the PRC government has significant oversight and discretion over the conduct of our business and may intervene or influence our operations in Hong Kong as the PRC government deems appropriate to further achieve its regulatory, political and societal goals.
Unfavorable regulations, laws, decisions or enforcement actions could cause us to incur substantial costs, expose us to unanticipated civil and criminal liability or penalties (including substantial monetary fines), diminish the demand for, or availability of, our products and services, increase our cost of doing business, require us to change our business practices in a manner materially adverse to our business, damage our reputation, impede our growth or monetization strategy, or otherwise have a material adverse effect on our operations. 9 Existing or future investments or acquisitions may not be successful.
Unfavorable regulations, laws, decisions or enforcement actions could cause us to incur substantial costs, expose us to unanticipated civil and criminal liability or penalties (including substantial monetary fines), diminish the demand for, or availability of, our products and services, increase our cost of doing business, require us to change our business practices in a manner materially adverse to our business, damage our reputation, impede our growth or monetization strategy, or otherwise have a material adverse effect on our operations.
Any of these risks may materially and adversely affect our business, financial condition and results of operations. 10 Historically, a single customer has accounted for a material portion of Gorilla’s revenues and another customer is anticipated to account for a material portion of Gorilla’s future revenues, and, therefore, the loss of either customer could materially and adversely affect its business, results of operations and financial condition.
Historically, a single customer has accounted for a material portion of Gorilla’s revenues and another customer is anticipated to account for a material portion of Gorilla’s future revenues, and, therefore, the loss of either customer could materially and adversely affect its business, results of operations and financial condition.
Because our Company is located outside of the U.S., Gorilla is subject to the risks of doing business internationally, including periodic foreign economic downturns and political instability, which may adversely affect Gorilla’s revenue and cost of doing business in Taiwan. Gorilla’s offices and employees are located in Taiwan. Foreign economic downturns may affect our results of operations in the future.
Because our Company is located outside of the U.S., Gorilla is subject to the risks of doing business internationally, including periodic foreign economic downturns and political instability, which may adversely affect Gorilla’s revenue and cost of doing business in Taiwan. Gorilla’s offices and employees are primarily located in Taiwan, although Gorilla’s headquarters are located in the UK.
As Gorilla continues to operate its business, its success will depend in part, on its ability to anticipate and effectively manage these risks. The impact of any one or more of these factors could materially adversely affect Gorilla’s business, financial condition and results of operations. Gorilla may be exposed to liabilities under the U.S.
As Gorilla continues to operate its business, its success will depend in part, on its ability to anticipate and effectively manage these risks. The impact of any one or more of these factors could materially adversely affect Gorilla’s business, financial condition and results of operations.
Gorilla’s research and development expenses were approximately US$14.11 million and US$15.05 million during the years ended December 31, 2022 and 2021, respectively, and are likely to grow in the future. Future research and development expenses will adversely affect Gorilla’s future results of operations.
Gorilla’s research and development expenses were approximately US$3.70 million and US$14.11 million during the years ended December 31, 2023 and 2022, respectively, and are likely to grow in the future. Future research and development expenses will adversely affect Gorilla’s future results of operations.
Factors that may cause these quarterly fluctuations include, without limitation, those listed below: ● The timing of revenues generated in any quarter; ● Pricing changes Gorilla may adopt to drive market adoption or in response to competitive pressure; Gorilla’s ability to retain its existing customers and attract new customers; ● Gorilla’s ability to develop, introduce and sell services and products in a timely manner that meet customer requirements; ● Disruptions in Gorilla’s sales channels or termination of its relationship with partners; ● Delays in customers’ purchasing cycles or deferments of customers’ purchases in anticipation of new services or updates from Gorilla or its competitors; ● Fluctuations in demand pressures for Gorilla’s products; ● The mix of services sold in any quarter; ● The duration of the global COVID-19 pandemic and the time it takes for economic recovery; ● Political and economic instability, including instabilities associated with the armed conflict in Ukraine and any conflict or threat of conflict that may affect Taiwan; ● The timing and rate of broader market adoption of Gorilla’s data service platform; ● Market acceptance of Gorilla’s services and further technological advancements by Gorilla’s competitors and other market participants; ● Any change in the competitive dynamics of Gorilla’s markets, including consolidation of competitors, regulatory developments and new market entrants; 15 ● Changes in the source, cost, availability of and regulations pertaining to materials Gorilla uses; ● Adverse litigation, judgments, settlements or other litigation-related costs, or claims that may give rise to such costs; and ● General economic, industry and market conditions, including trade disputes.
Factors that may cause these quarterly fluctuations include, without limitation, those listed below: ● The timing of revenues generated in any quarter; ● Pricing changes Gorilla may adopt to drive market adoption or in response to competitive pressure; Gorilla’s ability to retain its existing customers and attract new customers; ● Gorilla’s ability to develop, introduce and sell services and products in a timely manner that meet customer requirements; ● Disruptions in Gorilla’s sales channels or termination of its relationship with partners; ● Delays in customers’ purchasing cycles or deferments of customers’ purchases in anticipation of new services or updates from Gorilla or its competitors; ● Fluctuations in demand pressures for Gorilla’s products; ● The mix of services sold in any quarter; ● Political and economic instability, including instabilities associated with the armed conflict in Ukraine and any conflict or threat of conflict that may affect Taiwan or Egypt; ● The timing and rate of broader market adoption of Gorilla’s data service platform; ● Market acceptance of Gorilla’s services and further technological advancements by Gorilla’s competitors and other market participants; ● Any change in the competitive dynamics of Gorilla’s markets, including consolidation of competitors, regulatory developments and new market entrants; ● Changes in the source, cost, availability of and regulations pertaining to materials Gorilla uses; ● Adverse litigation, judgments, settlements or other litigation-related costs, or claims that may give rise to such costs; and ● General economic, industry and market conditions, including trade disputes. 11 Adverse global economic conditions, geopolitical issues and other conditions that impact our increasingly global operations could have a negative effect on our business, results of operations and financial condition and liquidity.
Recently introduced economic substance legislation of the Cayman Islands may adversely impact us or our operations. The Cayman Islands, together with several other non-European Union jurisdictions, have recently introduced legislation aimed at addressing concerns raised by the Council of the European Union as to offshore structures engaged in certain activities which attract profits without real economic activity.
The Cayman Islands, together with several other non-European Union jurisdictions, have recently introduced legislation aimed at addressing concerns raised by the Council of the European Union as to offshore structures engaged in certain activities which attract profits without real economic activity.
If Gorilla is unable to successfully enhance its existing services to meet evolving data consumer requirements, increase adoption and usage of its services, develop new services, or if its efforts to increase the usage of its services are more expensive than Gorilla expects, then its business, results of operations and financial condition would be adversely affected. 6 If Gorilla is unsuccessful at investing in growth opportunities, its business could be materially and adversely affected.
If Gorilla is unable to successfully enhance its existing services to meet evolving data consumer requirements, increase adoption and usage of its services, develop new services, or if its efforts to increase the usage of its services are more expensive than Gorilla expects, then its business, results of operations and financial condition would be adversely affected.
Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions.
Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.
Taiwanese courts might not enforce judgments rendered outside Taiwan, which may make it difficult to collect on judgments rendered against Gorilla or its non-U.S. officers and directors. 31 Moreover, among other reasons, including but not limited to, fraud or absence of due process, or the existence of a judgment which is at variance with another judgment that was given in the same matter if a suit in the same matter between the same parties was pending before a court or tribunal in Taiwan, a Taiwanese court will not enforce a non-Taiwanese judgment if it was given in a state whose laws do not provide for the enforcement of judgments of Taiwanese courts (subject to exceptional cases) or if its enforcement is likely to prejudice its sovereignty or security.
Moreover, among other reasons, including but not limited to, fraud or absence of due process, or the existence of a judgment which is at variance with another judgment that was given in the same matter if a suit in the same matter between the same parties was pending before a court or tribunal in Taiwan, a Taiwanese court will not enforce a non-Taiwanese judgment if it was given in a state whose laws do not provide for the enforcement of judgments of Taiwanese courts (subject to exceptional cases) or if its enforcement is likely to prejudice its sovereignty or security.
In addition, a number of Gorilla’s officers and directors are residents of Taiwan. Accordingly, political, economic and military conditions in Taiwan and the surrounding region, including any escalation of tensions between China and Taiwan, may directly affect Gorilla’s business and operations.
Accordingly, political, economic and military conditions in Taiwan and the surrounding region, including any escalation of tensions between China and Taiwan, may directly affect Gorilla’s business and operations.
Any failure or perceived failure by Gorilla, its platform or operations, or Gorilla’s data providers and data consumers, to comply with new or existing U.S., EU or other applicable privacy or data security laws, regulations, policies, industry standards or legal obligations, or any security incident that results in the unauthorized access to, or acquisition, share or transfer of, personal data or other customer data may result in governmental investigations, inquiries, enforcement actions and prosecutions, private litigation, fines and penalties, adverse publicity or potential loss of business. 26 Gorilla is subject to complex, evolving regulatory requirements that may be difficult and expensive to comply with and that could negatively impact its business.
Any failure or perceived failure by Gorilla, its platform or operations, or Gorilla’s data providers and data consumers, to comply with new or existing U.S., EU or other applicable privacy or data security laws, regulations, policies, industry standards or legal obligations, or any security incident that results in the unauthorized access to, or acquisition, share or transfer of, personal data or other customer data may result in governmental investigations, inquiries, enforcement actions and prosecutions, private litigation, fines and penalties, adverse publicity or potential loss of business. 21 We are subject to privacy laws and regulations in Egypt, and compliance with these laws and regulations could impose significant compliance burdens.
The agreements between Gorilla and these entities govern the establishment of facilities and/or utilization of Gorilla’s technologies by these entities, the contents of which are in some or all cases subject to confidentiality provided in those agreements.
The agreements between Gorilla and these entities govern the establishment of facilities and/or utilization of Gorilla’s technologies by these entities, the contents of which are in some or all cases subject to confidentiality provided in those agreements. Gorilla’s largest customer is the GoE, who is also anticipated to be the Gorilla’s largest customer in 2024.
From time to time, we may test the waters for certain businesses in new markets where we believe there may be an opportunity to use our experience in highly diverse environments to reach underserved buyers and sellers.
From time to time, we may test the waters for certain businesses in new markets where we believe there may be an opportunity to use our experience in highly diverse environments to reach underserved buyers and sellers. We may also exit from certain markets or cease certain operations in certain markets due to a variety of factors.
As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the Board of Directors or controlling shareholders than they would as public shareholders of a United States company.
As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the Board of Directors or controlling shareholders than they would as public shareholders of a United States company. 24 Economic substance legislation of the Cayman Islands may adversely impact us or our operations.
Foreign Corrupt Practices Act (“FCPA”) and Chinese anti-corruption law. Gorilla is subject to the FCPA, the U.K. Bribery Act, and other laws that prohibit improper payments or offers of payments to foreign governments, foreign government officials and political parties by U.S. persons as defined by the statute for purposes of obtaining or retaining businesses.
Bribery Act, and other laws that prohibit improper payments or offers of payments to foreign governments, foreign government officials and political parties by U.S. persons as defined by the statute for purposes of obtaining or retaining businesses.
While some of the transactions through our platform are denominated in U.S. dollars, Gorilla has transacted in foreign currencies and may transact in additional foreign currencies in the future. Gorilla also has expenses denominated in currencies other than the U.S. dollar.
Exposure to foreign currency exchange rate fluctuations could negatively impact our results of operations. While some of the transactions through our platform are denominated in U.S. dollars, Gorilla has transacted in foreign currencies and may transact in additional foreign currencies in the future. Gorilla also has expenses denominated in currencies other than the U.S. dollar.
Many of our existing competitors have, and some of our potential competitors could have, substantial competitive advantages such as: ● Greater name recognition, longer operating histories, and larger customer bases; ● Larger sales and marketing budgets and resources and the capacity to leverage their sales efforts and marketing expenditures across a broader portfolio of products; ● Broader, deeper, or otherwise more established relationships with technology, channel and distribution partners, and customers; ● Wider geographic presence or greater access to larger potential customer bases; ● Greater focus in specific geographies; ● Lower labor and research and development costs; ● Larger and more mature intellectual property portfolios; and ● Substantially greater financial, technical and other resources to provide services, to make acquisitions and to develop and introduce new products and capabilities. 13 In addition, some of our larger competitors have substantially broader and more diverse product and service offerings and may be able to leverage their relationships with distribution partners and customers based on other products or incorporate functionality into existing products to gain business in a manner that discourages customers from purchasing our platforms, including by selling at zero or negative margins, product bundling or offering closed technology platforms.
Many of our existing competitors have, and some of our potential competitors could have, substantial competitive advantages such as: ● Greater name recognition, longer operating histories, and larger customer bases; ● Larger sales and marketing budgets and resources and the capacity to leverage their sales efforts and marketing expenditures across a broader portfolio of products; ● Broader, deeper, or otherwise more established relationships with technology, channel and distribution partners, and customers; ● Wider geographic presence or greater access to larger potential customer bases; ● Greater focus in specific geographies; ● Lower labor and research and development costs; ● Larger and more mature intellectual property portfolios; and ● Substantially greater financial, technical and other resources to provide services, to make acquisitions and to develop and introduce new products and capabilities.
Federal courts may be limited. We are an exempted company incorporated under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within the United States upon our directors or officers, or enforce judgments obtained in the United States courts against our directors or officers.
As a result, it may be difficult for investors to effect service of process within the United States upon our directors or officers, or enforce judgments obtained in the United States courts against our directors or officers.
If there is substantial turnover of Gorilla or customer personnel responsible for procurement and use of our platforms, our platforms may go unused or be adopted less broadly, and our ability to make additional sales may be substantially limited, which could negatively impact our business, results of operations and growth prospects.
If there is substantial turnover of Gorilla or customer personnel responsible for procurement and use of our platforms, our platforms may go unused or be adopted less broadly, and our ability to make additional sales may be substantially limited, which could negatively impact our business, results of operations and growth prospects. 8 Any failure to offer high quality customer support to our clients may adversely affect Gorilla’s relationships with its clients and prospective clients, and adversely affect its business, results of operations and financial condition.
Although we endeavor to do business with customers and governments that are aligned with our mission and values, we cannot predict how the activities and values of our government and private sector customers will evolve over time, and they may evolve in a manner inconsistent with our mission.
Although we endeavor to do business with customers and governments that are aligned with our mission and values, we cannot predict how the activities and values of our government and private sector customers will evolve over time, and they may evolve in a manner inconsistent with our mission. 10 We do not work with the Chinese communist party and have chosen not to host our platforms in China, which may limit our growth prospects.
You may be unable to sell your securities unless a market can be established or sustained. Gorilla qualifies as an emerging growth company within the meaning of the Securities Act, and Gorilla takes advantage of certain exemptions from disclosure requirements available to emerging growth companies, which makes Gorilla’s securities less attractive to investors.
Gorilla qualifies as an emerging growth company within the meaning of the Securities Act, and Gorilla takes advantage of certain exemptions from disclosure requirements available to emerging growth companies, which makes Gorilla’s securities less attractive to investors.
Moreover, Gorilla expects these rules and regulations to substantially increase its legal and financial compliance costs and to make some activities more time-consuming and costly. The increased costs will increase Gorilla’s net loss.
Moreover, these rules and regulations have substantially increased Gorilla’s legal and financial compliance costs and made some activities more time-consuming and costly. The increased costs may reduce Gorilla’s net income or increase its net loss.
Further, the proper use of our platforms may require training of the customer and the initial or ongoing services of our technical personnel as well as operations and maintenance services over the contract term.
Further, the proper use of our platforms may require training of the customer and the initial or ongoing services of our technical personnel as well as operations and maintenance services over the contract term. If training and/or ongoing services require more of our expenditures than we originally estimated, our margins will be lower than projected.
Gorilla also continues to invest significantly in growth opportunities outside the Asia-Pacific and in particular the European Union and United States. Gorilla considers its presence in these markets to be an important component of its growth strategy. There is no assurance that Gorilla’s growth strategy will be successful or will produce a sufficient or any return on its investments.
Gorilla considers its presence in these markets to be an important component of its growth strategy. There is no assurance that Gorilla’s growth strategy will be successful or will produce a sufficient or any return on its investments.
Gorilla may lose its foreign private issuer status in the future, which could result in significant additional costs and expenses. As discussed above, Gorilla is a foreign private issuer and, therefore, is not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act.
As discussed above, Gorilla is a foreign private issuer and, therefore, is not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act.
We may also be required to restate our financial statements from prior periods. 32 Risks Related to Being a Public Company Gorilla incurs increased costs as a result of operating as a public company, and its management devotes substantial time to new compliance initiatives.
Risks Related to Being a Public Company Gorilla incurs increased costs as a result of operating as a public company, and its management devotes substantial time to new compliance initiatives.
Gorilla’s growth in recent years may obscure the extent to which seasonality trends have affected its business and may continue to affect its business. We expect that seasonality will continue to materially impact Gorilla’s business in the future and may become more pronounced over time.
Otherwise, we expect that seasonality will continue to materially impact Gorilla’s business in the future and may become more pronounced over time.
Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, requires that we include a report of management on our internal control over financial reporting in our annual report on Form 20-F beginning with our second annual report on Form 20-F.
Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, requires that we include a report of management on our internal control over financial reporting in this Annual Report. This assessment includes disclosures of any material weaknesses identified by our management in our internal control over financial reporting.
If Gorilla is unable to respond to these changes in a cost-effective manner, our services may become less marketable and less competitive or obsolete, and our business, results of operations and financial condition could be adversely affected. 11 The market for Gorilla’s edge AI services and products is relatively new, and may decline or experience limited growth, and our business is dependent on our clients’ continuing adoption and use our services and products.
If Gorilla is unable to respond to these changes in a cost-effective manner, our services may become less marketable and less competitive or obsolete, and our business, results of operations and financial condition could be adversely affected.
If changes are made to the current restrictions on foreign ownership of companies in Hong Kong, the foreign exchange controls or later amendments to NSL, our business operations in Hong Kong and the results of operation may be materially and adversely affected. 27 The PRC government may intervene or influence our operations in Hong Kong at any time, which could result in a material change in our Hong Kong operations and adversely impact our financial condition and the value of our ordinary shares.
If changes are made to the current restrictions on foreign ownership of companies in Hong Kong, the foreign exchange controls or later amendments to NSL, our business operations in Hong Kong and the results of operation may be materially and adversely affected.
Any failure to offer high quality customer support to our clients may adversely affect Gorilla’s relationships with its clients and prospective clients, and adversely affect its business, results of operations and financial condition. Many of Gorilla’s clients depend on our customer support team to assist them with implementing our services effectively, resolving post-implementation issues quickly and providing ongoing technology support.
Many of Gorilla’s clients depend on our customer support team to assist them with implementing our services effectively, resolving post-implementation issues quickly and providing ongoing technology support.
We have invested in or acquired, and may in the future invest in or acquire, teams, businesses, services, assets or technologies from time to time. We may fail to select appropriate investment or acquisition targets, or we may not be able to negotiate optimal arrangements, including arrangements to finance such investments or acquisitions.
Existing or future investments or acquisitions may not be successful. We have invested in or acquired, and may in the future invest in or acquire, teams, businesses, services, assets or technologies from time to time.
Gorilla continues to invest time and resources in reviewing our technology and systems to meet the evolving data privacy regulations, be they GDPR, CCPA or others.
The CPRA went into effect on January 1, 2023, applying to information collected by businesses on or after January 1, 2022. Gorilla continues to invest time and resources in reviewing our technology and systems to meet the evolving data privacy regulations, be they GDPR, CCPA or others.
In addition, because Gorilla’s decision to issue debt or equity in the future will depend on market conditions and other factors beyond its control, it cannot predict or estimate the amount, timing, nature or success of its future capital raising efforts.
In addition, because Gorilla’s decision to issue debt or equity in the future will depend on market conditions and other factors beyond its control, it cannot predict or estimate the amount, timing, nature or success of its future capital raising efforts. 3 Gorilla has experienced strong growth in the last year, and if Gorilla fails to effectively manage its growth, then its business, results of operations and financial condition could be adversely affected.
It is possible that our platforms may also be intentionally misused or abused by customers or their employees or third parties who obtain access and use of our platforms. Similarly, our platforms sometimes used by customers with smaller or less sophisticated IT departments, potentially resulting in sub-optimal performance at a level lower than anticipated by the customer.
Similarly, our platforms sometimes used by customers with smaller or less sophisticated IT departments, potentially resulting in sub-optimal performance at a level lower than anticipated by the customer.
Our remediation efforts may not enable us to avoid material weaknesses in our internal control over financial reporting in the future. Our management may conclude that our internal control over financial reporting is not effective.
Our remediation efforts may not enable us to avoid material weaknesses in our internal control over financial reporting in the future. Our management has concluded that our internal control over financial reporting is not effective as of December 31, 2023 as disclosed in more details in Item 15 of this Annual Report.
Furthermore, California voters approved the California Privacy Rights Act (“CPRA”) on November 3, 2020, which will amend and expand the CCPA, including by providing consumers with additional rights with respect to their personal data. The CPRA went into effect on January 1, 2023, applying to information collected by businesses on or after January 1, 2022.
Broad federal privacy legislation has also been proposed. Furthermore, California voters approved the California Privacy Rights Act (“CPRA”) on November 3, 2020, which will amend and expand the CCPA, including by providing consumers with additional rights with respect to their personal data.
If Gorilla does not develop enhancements to its services and introduce new services that achieve market acceptance, its growth, business, results of operations and financial condition could be adversely affected.
This could temporarily impact Gorilla’s free cash for use in operations and prolong its working capital cycle and liquidity (notwithstanding the GoE’s payments to Gorilla in 2023). If Gorilla does not develop enhancements to its services and introduce new services that achieve market acceptance, its growth, business, results of operations and financial condition could be adversely affected.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Scenarios Benefits AI plug-in instrument for vertical based scenario (production line, operation/medical process) Automatically vehicle/people access control & management Risk prediction and real-time alerting ● ● ● ● Best Cost & Performance: - Improve predictive maintenance & provide performance operation management Low Latency: - Edge AI & data analytics to shorten data transform latency & response time (detect dangerous/abnormal situations on time) Advanced Security - Big data collection & analytics for prediction and instant response & decision making High Reliability - AI Appliance & SaaS for easy plug & play, and provide AI training/machine learning eco-system 40 Commercial ● Retail ● Healthcare ● Education ● Financial & Banking ● Telecommunication ● Data Center & ISP Scenarios Benefits ● Shopper Behavior Analysis - Shopper Demographics - Number of Passers/Visitors - Shopper Path ● Heatmap - Customer Stay Time - Best Sellers ● Membership/VIP - Loyal customer target based special service - Watch list ● POS/Merchandise - Customer type/behavior and shopping item connection & analytics ● Loss Prevention - Prevent money loss from improper operation & robbery ● Best Cost & Performance - Increase customer loyalty - Precise marketing and promotion - Less human resource since customer self-service POS/Kiosk ● Low Latency - Interactive & real time response for customer service - Real-time alert when abnormal physical/cyber behavior occurs ● Advanced Security - Lost prevention: prevent money loss and intrusion - Prevent malware/ransomware attack ● High Reliability - Easy Plug & play AI Appliance with high stability - Multi-tenancy AI SaaS with data backup mechanism Intelligent video analytics are used by Gorilla’s Commercial Solutions to safely manage personnel.
Scenarios Benefits AI plug-in instrument for vertical based scenario (production line, operation/medical process) ● Best Cost & Performance: - Improve predictive maintenance & provide performance operation management Automatically vehicle/people access control & management ● Low Latency: - Edge AI & data analytics to shorten data transform latency & response time (detect dangerous/abnormal situations on time) Risk prediction and real-time alerting ● Advanced Security - Big data collection & analytics for prediction and instant response & decision making ● High Reliability - AI Appliance & SaaS for easy plug & play, and provide AI training/machine learning eco-system Commercial ● Retail ● Healthcare ● Education 37 ● Financial & Banking ● Telecommunication ● Data Center & ISP Scenarios Benefits ● Shopper Behavior Analysis - Shopper Demographics - Number of Passers/Visitors - Shopper Path ● Best Cost & Performance - Increase customer loyalty - Precise marketing and promotion - Less human resource since customer self-service POS/Kiosk ● Heatmap - Customer Stay Time - Best Sellers ● Low Latency - Interactive& real time response for customer service - Real-time alert when abnormal physical/cyber behavior occurs ● Membership/VIP - Loyal customer target based special service - Watch list ● Advanced Security - Lost prevention: prevent money loss and intrusion - Prevent malware/ransomware attack ● POS/Merchandise - Customer type/behavior and shopping item connection & analytics ● High Reliability - Easy Plug & play AI Appliance with high stability - Multi-tenancy AI SaaS with data backup mechanism ● Loss Prevention - Prevent money loss from improper operation & robbery Intelligent video analytics are used by Gorilla’s Commercial Solutions to safely manage personnel.
We believe that the marketplace has recognized us for our innovative design, best-in-class edge computing products and our consistent performance in creating facial recognition technology. Diverse product portfolio which easily integrates with existing system infrastructure of clients Gorilla has strong, market-exclusive technology that may be applied across a wide range of industries and sectors.
We believe that the marketplace has recognized us for our innovative design, best-in-class edge computing products and our consistent performance in creating facial recognition technology. 45 Diverse product portfolio which easily integrates with existing system infrastructure of clients Gorilla has strong, market-exclusive technology that may be applied across a wide range of industries and sectors.
Scenarios Benefits ● ● ● ● Enhanced Post-pandemics management (ID & temperature checking, AI social distancing) Public space customers entrance control Traffic violation & abnormal situation notification Intelligent Transportation System connected with road site unit (includes traffic light signal) ● ● ● ● Best Cost & Performance: - Improve predictive maintenance & performance operation management Low Latency: - Edge AI & data analytics to shorten data transform latency & response time (detect dangerous situations and respond on time) Advanced Security: - On-site big data collection & analytics for instant response & decision making High Reliability: - Vertical certificated AI appliance & SaaS, and provide AI training/machine learning eco-system Industrial ● Automobiles ● Energy & Oil ● Manufacturing & Robotics ● Architecture & Construction ● Medical Instruments ● Defense To efficiently manage people and spaces, Gorilla Industrial Solutions delivers AI-based video surveillance and OT security.
Scenarios Benefits ● Enhanced Post-pandemic management (ID & temperature checking, AI social distancing) ● Best Cost & Performance: - Improve predictive maintenance & performance operation management ● Public space customers entrance control ● Low Latency: - Edge AI & data analytics to shorten data transform latency & response time (detect dangerous situations and respond on time) ● Traffic violation & abnormal situation notification ● Advanced Security: - On-site big data collection & analytics for instant response & decision making ● Intelligent Transportation System connected with road site unit (includes traffic light signal) ● High Reliability: - Vertical certificated AI appliance & SaaS, and provide AI training/machine learning eco-system Industrial ● Automobiles ● Energy & Oil ● Manufacturing & Robotics ● Architecture & Construction ● Medical Instruments ● Defense To efficiently manage people and spaces, Gorilla Industrial Solutions delivers AI-based video surveillance and OT security.
In almost every retail or commercial scenario, business intelligence dashboards that present data about numerous business activities are a valuable asset. 43 IT-OT Security Convergence Industrial systems are becoming increasingly connected in order to create powerful, networked businesses, but they are also becoming more vulnerable to cyber assaults.
In almost every retail or commercial scenario, business intelligence dashboards that present data about numerous business activities are a valuable asset. IT-OT Security Convergence Industrial systems are becoming increasingly connected in order to create powerful, networked businesses, but they are also becoming more vulnerable to cyber assaults.
Gorilla is committed to introducing new product features, capabilities and solutions in response to our customers’ requirements and preferences. We plan to utilize a strong intellectual property framework to secure the valuable, unique technology we develop. We are committed to thoughtfully deploying capital and scaling investment as we seek market penetration in new geographies.
Gorilla is committed to introducing new product features, capabilities and solutions in response to our customers’ requirements and preferences. We plan to utilize a strong intellectual property framework to secure the valuable, unique technology we develop. 46 We are committed to thoughtfully deploying capital and scaling investment as we seek market penetration in new geographies.
Furthermore, the growing use of third-party suppliers to gain remote access to OT networks widens the attack surface and introduces new vulnerabilities. The enormous cost of industrial equipment, as well as the potential for a cyber-attack to destroy businesses and communities, are important considerations for companies trying to define their industrial networks.
Furthermore, the growing use of third-party suppliers to gain remote access to OT networks widens the attack surface and introduces new vulnerabilities. 40 The enormous cost of industrial equipment, as well as the potential for a cyber-attack to destroy businesses and communities, are important considerations for companies trying to define their industrial networks.
Supply Chain Restrictions As there are national security concerns that the hardware devices might automatically collect, process and transmit data to People’s Republic of China, in many service contracts with Taiwan government agencies and state-owned companies, it is expressly stated that no hardware or equipment supplied by People’s Republic of China’s manufacturers is allowed for the services. 51 Legal Proceedings Gorilla may become involved in actions, claims, litigation, and other legal proceedings occurring in the ordinary course of its business from time to time, including assertions by third parties relating to intellectual property infringement, contract or warranty breaches, or employment-related matters.
Supply Chain Restrictions As there are national security concerns that the hardware devices might automatically collect, process and transmit data to People’s Republic of China, in many service contracts with Taiwan government agencies and state-owned companies, it is expressly stated that no hardware or equipment supplied by People’s Republic of China’s manufacturers is allowed for the services. 48 Legal Proceedings Gorilla may become involved in actions, claims, litigation, and other legal proceedings occurring in the ordinary course of its business from time to time, including assertions by third parties relating to intellectual property infringement, contract or warranty breaches, or employment-related matters.
We divided our products and services into two segments, namely Video IoT and Security Convergence, each containing the video intelligence and Internet of Things (IoT) and convergence of information technology (IT) and operational technology (OT) security solutions, respectively. History Gorilla was incorporated in 2001 as a Cayman Islands exempted company.
We divided our products and services into two segments, namely Video IoT and Security Convergence, each containing the video intelligence and Internet of Things (“IoT”) and convergence of information technology (IT) and operational technology (OT) security solutions, respectively. History Gorilla was incorporated in 2001 as a Cayman Islands exempted company.
Gorilla’s technology is deployed by market leaders thanks to strategic collaborations with other important companies in several fields. 48 Diverse customer base including government (from state to municipal level), transportation, enterprise and retail administrators Gorilla engages with both private and public sector customers.
Gorilla’s technology is deployed by market leaders thanks to strategic collaborations with other important companies in several fields. Diverse customer base including government (from state to municipal level), transportation, enterprise and retail administrators Gorilla engages with both private and public sector customers.
In Taiwan, the major market where Gorilla’s revenues come from, the facial recognition technology is comprehensively used by Gorilla’s customers to collect and process PII, therefore Gorilla and its customers are subject to Taiwan’s Personal Data Protection Act and the Enforcement Rules thereof.
In Taiwan, a major market where Gorilla’s revenues come from, the facial recognition technology is comprehensively used by Gorilla’s customers to collect and process PII, therefore Gorilla and its customers are subject to Taiwan’s Personal Data Protection Act and the Enforcement Rules thereof.
It adopts AI-based technology detects suspicious activities in your networks. It can also isolate and control cyber risks before they occur, preventing internal users or devices from connecting to hostile IPs with or without their awareness.
It adopts AI-based technology that detects suspicious activities in your networks. It can also isolate and control cyber risks before they occur, preventing internal users or devices from connecting to hostile IPs with or without their awareness.
Pursue geographic diversity to capitalize on the global opportunity While some competitors are focused on specific regions, Gorilla offers global coverage and a large ecosystem of partners across the world that pr ovides our product and service offerings and help customers integrate these offerings. ● Gorilla’s solutions meet a variety of market needs without the need to engage additional partners, allowing for faster scaling and lower costs. ● In geographic regions where Gorilla does not have an operating subsidiary, we provide our product and service solutions through a suite of non-exclusive agreements that appoint sales representatives, resellers and distributors to engage with end customers. ● Sales representatives are granted rights to use our products and services to market, promote and solicit orders of products on a non-transferable, non-sub-licensable and limited basis in designated regions.
Pursue geographic diversity to capitalize on the global opportunity While some competitors are focused on specific regions, Gorilla offers global coverage and a large ecosystem of partners across the world that provides our product and service offerings and help customers integrate these offerings. ● Gorilla’s solutions meet a variety of market needs without the need to engage additional partners, allowing for faster scaling and lower costs. ● In geographic regions where Gorilla does not have an operating subsidiary, we provide our product and service solutions through a suite of non-exclusive agreements that appoint sales representatives, resellers and distributors to engage with end customers. ● Sales representatives are granted rights to use our products and services to market, promote and solicit orders of products on a non-transferable, non-sub-licensable and limited basis in designated regions.
The additional stages of verification protect IT and OT systems from identity theft and brute force attacks. 45 AI SaaS Platform Smart Retail SaaS Smart Retail is a comprehensive, real-time, analytical tool for single/multi-store operations and retail marketers, incorporating camera and IoT-gathered data to store information relating to traffic, shopper identification, revenue and conversion rates to deliver insights for more targeted advertising and efficient staffing management.
The additional stages of verification protect IT and OT systems from identity theft and brute force attacks. 42 AI SaaS Platform Smart Retail SaaS Smart Retail is a comprehensive, real-time, analytical tool for single/multi-store operations and retail marketers, incorporating camera and IoT-gathered data to store information relating to traffic, shopper identification, revenue and conversion rates to deliver insights for more targeted advertising and efficient staffing management.
Gorilla believes that its reputation as a reliable and proven partner in Asia, as well as its well-publicized ties with top firms like Intel and Telstra, will allow for further worldwide brand recognition.
Gorilla believes that its reputation as a reliable and proven partner in Asia, as well as its well-publicized ties with top firms like Intel, will allow for further worldwide brand recognition.
Smart Attendance makes use of IVAs to allow businesses to track employee health and safety, work hours, clock-ins/outs, absenteeism and HR management departments in a secure environment, ensuring the protection of company assets and intellectual property. 44 Smart Attendance’s primary features include: ● contactless access via facial recognition and RFID/card recognition; ● biometric security temperature detection; and ● two-factor authentication.
Smart Attendance makes use of IVAs to allow businesses to track employee health and safety, work hours, clock-ins/outs, absenteeism and HR management departments in a secure environment, ensuring the protection of company assets and intellectual property. 41 Smart Attendance’s primary features include: ● contactless access via facial recognition and RFID/card recognition; ● biometric security temperature detection; and ● two-factor authentication.
Interest in the solution is expected to continue to rise as industries understand the potential of these devices to improve their day-to-day lives, as well as their businesses and overall safety. 38 AI Big Data Platform Edge AI devices not only process various types of structured data but can also analyze and transform the unstructured video and image data into structured data via deep learning, a form of AI technology.
Interest in the solution is expected to continue to rise as industries understand the potential of these devices to improve their day-to-day lives, as well as their businesses and overall safety. 35 AI Big Data Platform Edge AI devices not only process various types of structured data but can also analyze and transform unstructured video and image data into structured data via deep learning, a form of AI technology.
Gorilla provides a variety of AI solutions and services that combines video analytics and IoT technology to deliver business intelligence insights for improving performance in sales, operations and understanding of customer needs. Smart cities, commercial and major enterprise settings, in retail and hospitality, and academia are just a few of the key industries where this technology is already implemented.
Gorilla provides a variety of AI solutions and services that combine video analytics and IoT technology to deliver business intelligence insights for improving performance in sales, operations and understanding of customer needs. Smart cities, commercial and major enterprise settings, in retail and hospitality, and academia are just a few of the key industries where this technology is already implemented.
Business for Major Verticals Smart City & Transportation ● Stadium and Public Spaces ● Airports, Ports & Stations ● Traffic & Parking Management ● Highway, Street & Intersection ● Power Plants & Key Infrastructure Projects ● Environmental Monitoring 39 Government, smart parking, campus and arena administrators can use Gorilla Smart City and Safe City solutions to better monitor, manage and make large-scale decisions.
Business for Major Verticals Smart City & Transportation ● Stadium and Public Spaces ● Airports, Ports & Stations ● Traffic & Parking Management ● Highway, Street & Intersection ● Power Plants & Key Infrastructure Projects ● Environmental Monitoring 36 Government, smart parking, campus and arena administrators can use Gorilla Smart City and Safe City solutions to better monitor, manage and make large-scale decisions.
The IoT market will continue to grow as more devices become equipped to handle the bandwidth capabilities provided by 5G networks. 47 The adoption of 5G networks and the increased bandwidth provided is expected to transform industries from all business sectors, exponentially increasing the agility of such companies to process and share data.
The IoT market will continue to grow as more devices become equipped to handle the bandwidth capabilities provided by 5G networks. 44 The adoption of 5G networks and the increased bandwidth provided is expected to transform industries from all business sectors, exponentially increasing the agility of such companies to process and share data.
There are four primary advantages to moving AI processing to the edge: ● Highly economical and cost-effective. Moving AI processing to the edge reduces the quantity of data processed by larger devices, which have become computationally more powerful, and reduces the volume of data being transferred to the cloud. 37 ● Faster speeds for processing and storage.
There are four primary advantages to moving AI processing to the edge: ● Highly economical and cost-effective. Moving AI processing to the edge reduces the quantity of data processed by larger devices, which have become computationally more powerful, and reduces the volume of data being transferred to the cloud. 34 ● Faster speeds for processing and storage.
Additionally, increased usage of video analysis solutions in retail, healthcare, building & construction, and other sectors is offering attractive prospects for market participants. 46 Despite the rising cloud computing market, the demand for more efficient and responsive systems has grown significantly.
Additionally, increased usage of video analysis solutions in retail, healthcare, building & construction, and other sectors is offering attractive prospects for market participants. 43 Despite the rising cloud computing market, the demand for more efficient and responsive systems has grown significantly.
All of the data is encrypted, and the service is protected by our endpoints and network security solution. Edge AI is the corner stone of our product and service offerings, and it underlies our entire array of solutions. AI Models, AI Appliances and AI SaaS Platforms are among our products and services we offer to our customers.
All of the data is encrypted, and the service is protected by our endpoints and network security solution. Edge AI is the cornerstone of our product and service offerings, and it underlies our entire array of solutions. AI Models, AI Appliances and AI SaaS Platforms are among our products and services we offer to our customers.
Intellectual Property The ability of Gorilla to develop and maintain proprietary IT and OT is crucial to our success. Gorilla currently holds 21 patents.
Intellectual Property The ability of Gorilla to develop and maintain proprietary IT and OT is crucial to our success. Gorilla currently holds 28 patents.
ORGANIZATIONAL STRUCTURE The following diagram shows the current structure of Gorilla Technology Group Inc. and all subsidiaries thereof. 4.D. PROPERTY, PLANTS AND EQUIPMENT Facilities Our headquarters are located in London, United Kingdom, with leased office. Additionally, we own an office in Taipei, Taiwan, with approximately 1,910.4 square meters.
ORGANIZATIONAL STRUCTURE The following diagram shows the current structure of Gorilla Technology Group Inc. and all subsidiaries thereof. 4.D. PROPERTY, PLANTS AND EQUIPMENT Facilities Our headquarters are located in London, United Kingdom, with leased office. Additionally, we own an office in Taipei, Taiwan, with approximately 1,910.4 square meters. Our headquarters houses our Chief Executive Officer’s office and operations.
Gorilla is not currently a party to any actions, claims, suits, or other legal procedures whose conclusion, if not determined in its favor, would have a major adverse effect on Gorilla’s business, financial condition, or results of operations, either individually or in the aggregate. 4.C.
Except as otherwise disclosed above, Gorilla is not currently a party to any actions, claims, suits, or other legal procedures whose conclusion, if not determined in its favor, would have a major adverse effect on Gorilla’s business, financial condition or results of operations, either individually or in the aggregate. 4.C.
Also, Gorilla currently holds 11 different domain names covering our business operations, 8 of which are currently not in use. 50 Regulation Data Privacy Gorilla primarily deals with significant amounts of data, including vehicle data and personal identifiable information (“PII”), which are subject to emerging regulatory federal, state, national and international frameworks that are prone to constant change.
Gorilla currently holds 7 different domain names covering our business operations, 3 of which are currently not in use. Regulation Data Privacy Gorilla primarily deals with significant amounts of data, including vehicle data and personal identifiable information (“PII”), which are subject to emerging regulatory federal, state, national and international frameworks that are prone to constant change.
Organizations can effectively control and monitor traffic in crucial locations by using license plate recognition and vehicle detection analytics. 41 Scenarios Benefits Target vehicle/people search & tracking Watch list target monitoring & alerting Abnormal behavior detection Criminal investigation big data analytics National level cyber security ● ● ● ● Best Cost & Performance: - Easy integration with existing device/Infrastructure — provide performance operation management Low Latency: - Edge AI & data analytics to shorten data transform latency & response time (detect dangerous target/situations on time) Advanced Security: - Big data collection for criminal investigation & public safety analytics - Intelligent data/device/network/s cyber security High Reliability: - AI Appliance & SaaS for easy plug & play - Stable E2E solution with AI training/machine learning eco-system Gorilla’s Suite of Products and Services By creating and modifying our unique technology to meet industry standards, we hope to distinguish ourselves from our competition.
Scenarios Benefits Target vehicle/people search & tracking ● Best Cost & Performance: Watch list target monitoring & alerting - Easy integration with existing device/Infrastructure — provide performance operation management Abnormal behavior detection ● Low Latency: Criminal investigation big data analytics - Edge AI & data analytics to shorten data transform latency & response time (detect dangerous target/situations on time) National level cyber security ● Advanced Security: - Big data collection for criminal investigation & public safety analytics - Intelligent data/device/network/s cyber security ● High Reliability: - AI Appliance & SaaS for easy plug & play - Stable E2E solution with AI training/machine learning eco-system 38 Gorilla’s Suite of Products and Services By creating and modifying our unique technology to meet industry standards, we hope to distinguish ourselves from our competition.
Behavior analytics algorithms search for changes from frame to frame over time in frames to detect a very particular and predefined event or activity. 42 The following behavior analytics algorithms are used in our solutions: ● The People Counting IVA detects and counts people for a specified amount of time as they enter a zone and/or cross a line that users define in the software. ● The Line Crossing IVA detects when people cross a line (or lines) of user-defined length and position. ● The Intrusion Detection IVA monitors user-created zones to detect any activity or entries by moving objects (like people). ● The Direction Detection IVA monitors a user-created zone for people moving within the zone and in the marked direction.
The following behavior analytics algorithms are used in our solutions: ● The People Counting IVA detects and counts people for a specified amount of time as they enter a zone and/or cross a line that users define in the software. ● The Line Crossing IVA detects when people cross a line (or lines) of user-defined length and position. ● The Intrusion Detection IVA monitors user-created zones to detect any activity or entries by moving objects (like people). 39 ● The Direction Detection IVA monitors a user-created zone for people moving within the zone and in the marked direction.
As of December 31, 2022, we had more than 99 employees within our R&D department, and approximately 65% of the R&D employees hold master degrees or philosophy doctor degrees in ICT, Physics or Math. Approximately 46% of our R&D employees have over 10 years of professional experience in the relevant vertical fields.
As of December 31, 2023, we had more than 44 employees within our R&D department, and approximately 80% of the R&D employees hold master degrees or philosophy doctor degrees in ICT, Physics or Math. Approximately 68% of our R&D employees have over 10 years of professional experience in the relevant vertical fields.
Our development process takes place in Taipei, Taiwan and, as of December 31, 2022, our expenses for R&D activities constitute approximately 63.0% of our revenue.
Our development process takes place in Taipei, Taiwan and, as of December 31, 2023, our expenses for R&D activities constitute approximately 6.1% of our revenue.
We are strategically hiring key sales heads in important regions in Europe and the Middle East, with a focus on backend infrastructure. As a part of Gorilla’s anticipated international expansion strategy, Gorilla recently moved its headquarters to United Kingdom.
We are strategically hiring key sales heads in important regions in Europe and the Middle East, with a focus on backend infrastructure. As a part of Gorilla’s anticipated international expansion strategy, Gorilla recently moved its headquarters to United Kingdom. In Asia, we are growing market access and promoting innovation by building on existing ties in the Asia Pacific region.
A behavior might be characterized as action over time. As a result, each behavior analytics algorithm requires more than one frame from the video to identify whether or not an event or behavior has occurred.
A behavior might be characterized as action over time. As a result, each behavior analytics algorithm requires more than one frame from the video to identify whether or not an event or behavior has occurred. Behavior analytics algorithms search for changes from frame to frame over time in frames to detect a very particular and predefined event or activity.
The movement of AI and computing closer to the network edge ensures lower bandwidth requirements, enables more agile transfer and response times and allows close physical proximity to the end-user to ensure secure and private data retention.
The Intelligent Edge Despite the aforementioned growing cloud computing market, the need for more efficient and responsive systems has increased considerably. The movement of AI and computing closer to the network edge ensures lower bandwidth requirements, enables more agile transfer and response times and allows close physical proximity to the end-user to ensure secure and private data retention.
As of December 31, 2022, we have been deploying our products and solutions in over 300 retail stores, 50 offices, 50 construction sites (pending completion of our pilot program), 6 highways, several train stations in 6 metro city areas, 107 parking buildings, 2 international airports, 9 ports, 25 city traffic, 6 logistics of air-freight and container ships, 7 city police departments, 5 national law enforcement agencies, one national weather bureau, one national ocean affairs council, and 15 correctional facilities, among many other vertical entities to collect, process, and analyze raw data in order to create actionable data points for our customers, among many other vertical businesses.
As of December 31, 2023, we have been deploying our products and solutions in offices, highways, train stations, parking buildings, airports, ports, city traffic, logistics of air-freight and container ships, city police departments, national law enforcement agencies, a national weather bureau, a national ocean affairs council, and correctional facilities, among many other vertical entities to collect, process, and analyze raw data in order to create actionable data points for our customers, among many other vertical businesses.
BUSINESS OVERVIEW Gorilla is a provider of video intelligence, Internet of Things (“IoT”) security, edge AI data analytics and operational technology (“OT”) security solutions and services in Asia Pacific with operations and established distribution and sales channels in other key regions around the world, including the United States, Europe, the Middle East and Latin America.
BUSINESS OVERVIEW Gorilla is a global solution provider in Security Intelligence, Network Intelligence, Business Intelligence and IoT technology, with operations and established distribution and sales channels in Asia Pacific and other key regions around the world, including the United States, Europe, the Middle East and Latin America.
Gorilla’s processing and sharing of data with such customers are subject to local laws and regulations regarding human right protection. Gorilla ensures that all services and data provided to its customers are authorized by applicable laws and/or court writs. For example, Gorilla has entered into multiple agreements with CIB, a criminal investigation agency in Taiwan, during fiscal year 2022.
Gorilla’s processing and sharing of data with such customers are subject to local laws and regulations regarding human right protection. Gorilla ensures that all services and data provided to its customers are authorized by applicable laws and/or court writs.
With machine learning and AI no longer limited to the realm of supercomputers and prohibitively expensive technology, businesses and individuals are increasingly exposed to, and have increased access to, the capabilities of these technologies. The Intelligent Edge Despite the aforementioned growing cloud computing market, the need for more efficient and responsive systems has increased considerably.
This growing market has expanded the range of solutions required by end-users from edge to cloud. With machine learning and AI no longer limited to the realm of supercomputers and prohibitively expensive technology, businesses and individuals are increasingly exposed to, and have increased access to, the capabilities of these technologies.
Such agreements were either for the provision of integrated systems which the duration were ranging from 1 to 2 years or system maintenance projects which were mostly on a one-year basis.
For example, Gorilla has entered into multiple agreements with CIB, a criminal investigation agency in Taiwan, during fiscal year 2022 and 2023. Such agreements were either for the provision of integrated systems with the duration ranging from 1 to 2 years or system maintenance projects which were mostly on a one-year basis.
Our headquarters houses our Chief Executive Officer’s office and Global HR, R&D and operations. We also have material business units in Taiwan, which include Video IoT & Security Convergence, R&D, general administrative, human resources and finance & accounting. We lease additional offices around the world, including in New Taipei City, Taiwan, Hong Kong and Japan.
We also have material business units in Taiwan, which include Video IoT & Security Convergence, R&D, general administrative, human resources and finance & accounting. In addition, we have business units in India (R&D, Customer Success, Business Operations) and Egypt (Sales, Procurement). We lease additional offices around the world, including in India and Egypt.
In addition to our patents, Gorilla relies on copyright and trademarks to protect our software and marketing materials. Gorilla currently holds 18 trademarks, all of which are granted. Out of the total 18 trademarks, 11 are located in Taiwan, 3 in the United States, 1 in China, 2 in Australia, 1 in Japan and 1 in Europe.
Gorilla currently holds 27 trademarks, all of which are granted. Out of the total 27 trademarks, 13 are located in Taiwan, 4 in the United States, 1 in China, 2 in Australia, 2 in Japan, 4 in United Kingdom, and 1 in Europe.
Access control, attendance, scheduling and behavior tracking may all be simply linked into current departmental or corporate systems.
Access control, attendance, scheduling and behavior tracking may all be simply linked into current departmental or corporate systems. Organizations can effectively control and monitor traffic in crucial locations by using license plate recognition and vehicle detection analytics.
The automation of processing vast amounts of data is a key concern of many businesses, organizations and individuals globally and helps stakeholders make sense of data to realize potential. This growing market has expanded the range of solutions required by end-users from edge to cloud.
Recent growth in the use of large language models, or LLMs, brought public attention to the capabilities of AI. The automation of processing vast amounts of data is a key concern of many businesses, organizations and individuals globally and helps stakeholders make sense of data to realize potential.
The majority of Gorilla’s global sales forces are based in Taiwan, Tokyo, Japan and Bangkok, Thailand (covering Thailand, Indonesia, Philippines, Vietnam, Singapore and Malaysia). We plan to expand our sales force in United Kingdom to cover European business opportunities, as well as in certain regions of the United States to expand our business into North America.
The majority of Gorilla’s global sales forces are based in Taiwan, Bangkok, Thailand, London, UK, and Cairo, Egypt. We plan to expand our sales force in strategically selected regions such as EMEA, where we find higher new business growth.
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In Asia, we are growing market access and promoting innovation by building on existing ties in the Asia Pacific region. 49 Our sales and marketing expenditures have begun to grow, with a significant increase in staff specializing in such operations, increasing from 82 to 92 employees from 2020 to 2021.
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Of the total 28 patents, 14 are located in Taiwan (expiring between 2030 and 2039), 7 are located in China (expiring between 2029 and 2037), 1 is located in United Kingdom (expiring in 2024), and 6 are located in the United States (expiring between 2031 and 2040).
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Of the total 21 patents, 12 are located in Taiwan (expiring between 2028 and 2038), 6 are located in PRC (expiring between 2029 and 2035) and 3 are located in the United States (expiring between 2031 and 2035). Our application in Europe is still pending. Our patents relate to hardware platforms, AI models, AI appliances and AI SaaS modules.
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Our applications in China, the United States, Europe, and Hong Kong with Patent Cooperation Treaty (“PCT”) are still pending. Our patents relate to hardware platforms, AI models, AI appliances and AI SaaS modules. 47 In addition to our patents, Gorilla relies on copyright and trademarks to protect our software and marketing materials.
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Gorilla currently holds 5 software copyrights in China.
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In January 2024, SeeQuestor Limited (“SeeQuestor”) filed a breach of contract claim against Gorilla and Gorilla Technology UK Limited (“Gorilla UK”) in the Chancery Division of the High Court of England & Wales, seeking approximately $2.5 million in connection with an agreement to assign certain intellectual property rights of SeeQuestor to Gorilla UK.
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In February 2024, Gorilla and Gorilla UK filed their defence and counterclaims against SeeQuestor for breach of contract, fraudulent misrepresentation and deceit. Gorilla and Gorilla UK cannot predict the ultimate outcome of this proceeding. An adverse ruling or decision in this proceeding may negatively affect Gorilla and Gorilla UK’s business, financial condition, liquidity or results of operations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

64 edited+181 added−35 removed40 unchanged
Working Capital Year Ended December 31, 2022 As of December 31, 2022, we had a working capital of $19.50 million.
Year Ended December 31, 2022 As of December 31, 2022, we had a working capital of $19.50 million.
Reseller Under our typical reseller agreement, resellers purchase Gorilla products and sets their own prices for the end customer’s license of our product line. Resellers earn the difference on the purchase price from Gorilla and the price they set to provide the products and services to end customers. Warranty coverage is maintained by Gorilla.
Reseller Under our typical reseller agreement, resellers purchase Gorilla products and set their own prices for the end customer’s license of our product line. Resellers earn the difference on the purchase price from Gorilla and the price they set to provide the products and services to end customers. Warranty coverage is maintained by Gorilla.
Gorilla expects increases in sales and marketing expenses with: ● the establishment of sales support operations for AI manufacturer ecosystems in Taiwan, Indonesia, Thailand, Malaysia, Singapore, US, Europe and MENA; and ● enhancement of technical support for AI models to device manufacture, AI Appliances to distributors and system integrators, and AI SaaS to telecommunication and managing service providers in US, Europe, Middle East and Africa, Latin America, India and expand the local support in Australia, Thailand, Indonesia, Singapore, Malaysia, Vietnam and Japan.
Gorilla expects increases in sales and marketing expenses with: ● the establishment of sales support operations for AI manufacturer ecosystems in Taiwan, Indonesia, Thailand, Malaysia, Singapore, US, Europe and Egypt; and ● enhancement of technical support for AI models to device manufacture, AI Appliances to distributors and system integrators, and AI SaaS to telecommunication and managing service providers in US, Europe, Middle East and Africa, Latin America, India and expand the local support in Australia, Thailand, Indonesia, Singapore, Malaysia, Vietnam, Egypt and Japan.
Gorilla expects that our sales and marketing expenses will grow in absolute dollars as well as a percentage of its revenue over time as Gorilla grows its business. 56 General and Administrative General and administrative expenses consist primarily of personnel-related expenses for Gorilla’s finance, legal, human resources, facilities and administrative personnel, including salaries, benefits, bonuses, and share-based compensation.
Gorilla expects that our sales and marketing expenses will grow in absolute dollars as well as a percentage of its revenue over time as Gorilla grows its business. 53 General and Administrative General and administrative expenses consist primarily of personnel-related expenses for Gorilla’s finance, legal, human resources, facilities and administrative personnel, including salaries, benefits, bonuses, and share-based compensation.
As such, increases or decreases in such multi-year contracts with new or existing customers may not immediately be reflected as revenue for that period. Recent Accounting Pronouncements For information on recently issued accounting pronouncements, refer to Note 3 to our consolidated financial statements included elsewhere in this Form 20-F.
As such, increases or decreases in such multi-year contracts with new or existing customers may not immediately be reflected as revenue for that period. Recent Accounting Pronouncements For information on recently issued accounting pronouncements, refer to Note 3 to our consolidated financial statements included elsewhere in this Form 20-F. 5.B.
CRITICAL ACCOUNTING ESTIMATES Our consolidated financial statements for the year ended December 31, 2022 and 2021 have been prepared in accordance with IFRS as issued by the IASB. The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events.
CRITICAL ACCOUNTING ESTIMATES Our consolidated financial statements for the year ended December 31, 2023 and 2022 have been prepared in accordance with IFRS as issued by the IASB. The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events.
Gorilla expects these costs to increase over time as our expansion into different markets continues and additional tools and personnel are implemented. In addition to the costs paid to our directly employed sales and marketing staff, we contract with sales representatives to support marketing activities for Gorilla in specific regions and territories.
Gorilla expects these costs, in the long run, to increase over time as our expansion into different markets continues and additional tools and personnel are implemented. In addition to the costs paid to our directly employed sales and marketing staff, we contract with sales representatives to support marketing activities for Gorilla in specific regions and territories.
Our treasury monitors rolling forecasts of our liquidity requirements to ensure it has sufficient cash to meet operational needs while maintain sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants on any of its borrowing facilities.
Our treasury monitors rolling forecasts of our liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants on any of its borrowing facilities.
We believe that the benefits of our platform put it in a strong position to capture the significant market opportunity ahead. 53 Recurring revenue from existing customers Gorilla’s diverse base of customers represents a significant opportunity for further adoption of our broad product and service offerings.
We believe that the benefits of our platform put it in a strong position to capture the significant market opportunity ahead. 50 Recurring revenue from existing customers Gorilla’s diverse base of customers represents a significant opportunity for further adoption of our broad product and service offerings.
We expect that our general and administrative expenses will increase in absolute dollars as our business grows. Financial Income (Expense), Net Financial income (expense), net consists primarily of interest expenses relating to Gorilla’s short-term and long-term borrowings and bank facilities, as well as interest income relating to bank deposits.
We expect that our general and administrative expenses, in the long run, will increase in absolute dollars as our business grows. Financial Income (Expense), Net Financial income (expense), net consists primarily of interest expenses relating to Gorilla’s short-term and long-term borrowings and bank facilities, as well as interest income relating to bank deposits.
Gorilla expects that our research and development expenses will increase as a percentage of our annual sales as our business grows and related labor cost increases due to the inflation and competitive employment market demands for talented people and will continue to maintain a relatively large expenditure to maintain our innovative approach to the market.
Gorilla expects that our research and development expenses, in the long run, will increase as a percentage of our annual sales as our business grows and related labor cost increases due to the inflation and competitive employment market demands for talented people and will continue to maintain a relatively large expenditure to maintain our innovative approach to the market.
Following the closing of this Merger, Gorilla expects to incur additional expenses as a result of becoming a public company, including costs to comply with the rules and regulations applicable to companies listed on a national securities exchange, costs related to compliance and reporting obligations, and increased expenses for insurance, investor relations, and professional services.
Following the closing of this Merger, Gorilla has incurred additional expenses as a result of becoming a public company, including costs to comply with the rules and regulations applicable to companies listed on a national securities exchange, costs related to compliance and reporting obligations, and increased expenses for insurance, investor relations, and professional services.
For additional information regarding our debt and refinancing activities, see Note 16 (Short-term borrowings), Note 18 (Long-term borrowings) and Note 41 (Capital management) to the accompanying consolidated Financial Statements. 62 5.C.
For additional information regarding our debt and refinancing activities, see Note 16 (Short-term borrowings), Note 18 (Long-term borrowings) and Note 42 (Capital management) to the accompanying consolidated Financial Statements. 59 5.C.
However, there are a number of factors that may negatively impact our available sources of funds. The amount of cash generated from operations will be dependent upon factors such as the successful execution of our business plan, general economic conditions and working capital management.
However, there are a number of factors that may negatively impact our available sources of funds. The amount of cash generated from operations will be dependent upon factors such as the prompt receipt of customer payment of the Egypt Contract, successful execution of our business plan, general economic conditions and working capital management.
While Gorilla sees growing demand for our platform, particularly from large enterprises, seeking access to our product and service offerings, it is difficult to predict customer adoption rates and future demand.
While Gorilla sees growing demand for our platform, particularly from government entities, seeking access to our product and service offerings, it is difficult to predict customer adoption rates and future demand.
The primary factors affecting operating cash flows between these years were from our accounts receivable collection efforts and timing of payments for the vendors, and transaction costs for business combination and additional annual expenses as a public company. Investing Activities Cash used in investing activities for the year ended December 31, 2022 was $1.93 million.
The primary factors affecting operating cash flows between these years were our accounts receivable collection efforts and timing of payments for the vendors, and transaction costs for business combination and additional annual expenses as a public company. Investing Activities Cash used in investing activities for the year ended December 31, 2023 was ($38.69) million.
Because we recognize the majority of our revenue ratably over the contractual term with respect to the multi-year contracts, a substantial portion of revenue recognized each period is from agreements that we entered into during previous periods.
Because we recognize the majority of our revenue based on project phase completion over the contractual term with respect to the multi-year contracts, a substantial portion of revenue recognized each period is from agreements that we entered into during previous periods.
RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES As of December 31, 2022, we had more than 99 employees within our R&D department, and approximately 65% of the R&D employees hold master degrees or philosophy doctor degrees in ICT, Physics or Math. Approximately 46% of our R&D employees have over 10 years of professional experience in the relevant vertical fields.
RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES As of December 31, 2023, we had more than 44 employees within our R&D department, and approximately 80% of the R&D employees hold master degrees or philosophy doctor degrees in ICT, Physics or Math. Approximately 68% of our R&D employees have over 10 years of professional experience in the relevant vertical fields.
Expansion of Gorilla’s geographic coverage and customer base/Acquiring new customers We believe there is a substantial opportunity to further grow our customer base by continuing to make significant investments in sales, marketing and brand awareness.
The Egypt Contract is governed by Egyptian law. 51 Expansion of Gorilla’s geographic coverage and customer base/Acquiring new customers We believe there is a substantial opportunity to further grow our customer base by continuing to make significant investments in sales, marketing and brand awareness.
The primary factors affecting the investing cash flows were purchases of property, plant and equipment, the acquisition of intangible assets and the investment in financial assets at amortized cost.
The primary factors affecting the investing cash flows were purchases of intangible asset, property, plant and equipment, acquisition of financial assets at amortized cost, and increase in guarantee deposits.
Disposal of financial assets at amortized cost is the decrease in the time deposits as collateral to secure the provision of the performance guarantee and deposit letter of credit issued by the relevant banks as bid bond or performance bond. Cash used in investing activities for the year ended December 31, 2021 was $9.91 million.
Disposal of financial assets at amortized cost is the decrease in the time deposits as collateral to secure the provision of the performance guarantee and deposit letter of credit issued by the relevant banks as bid bond or performance bond. Financing Activities Cash provided by financing activities for the year ended December 31, 2023 was $29.73 million.
To the extent we choose to seek additional financing in the future (whether for development, acquisition opportunities as they arise or the refinancing of the financing facilities when due at more favorable terms), we expect to fund such activities through cash generated from operations and through securing further debt financing from banks and the capital markets.
To the extent we choose to seek additional financing in the future (whether for the Egypt Contract, development, acquisition opportunities as they arise or the refinancing of the financing facilities when due at more favorable terms), we expect to fund such activities through cash generated from operations and through securing further debt or equity financing from banks and the capital markets. 57 Our cash, cash equivalents as of December 31, 2023 was $5.31 million.
We have been trying to change in business focus to our security convergence segment starting from 2021 to pursue larger projects with higher gross margins and to reduce hardware infrastructure and service for the Video IoT segment. The shifting of focus to security convergence segment continues to grow in 2022.
We have been trying to change in business focus to our security convergence segment starting from 2021 to pursue larger projects with higher gross margins and to reduce hardware infrastructure and service for the Video IoT segment, the increase in costs in security convergence segment and the decrease in costs in the Video IoT segment in 2023 was the result of our shifting of business focuses.
The following table shows a summary of Gorilla’s cash flows for the years presented (dollars in thousands): Year Ended December 31 2022 2021 Net cash used in operating activities $ (8,774 ) $ 1,623 Net cash used in investing activities $ (1,926 ) $ (9,910 ) Net cash provided by financing activities $ 23,607 $ 5,988 Net decrease in cash and cash equivalents $ 13,052 * $ (2,209 )* * The amounts included the effect of foreign exchange rate changes.
The following table shows a summary of Gorilla’s cash flows for the years presented (dollars in thousands): Year Ended December 31 2023 2022 Net cash used in operating activities $ (9,429 ) $ (8,774 ) Net cash used in investing activities $ (38,694 ) $ (1,926 ) Net cash provided by financing activities $ 29,733 $ 23,607 Net decrease in cash and cash equivalents $ (17,690 )* $ 13,052 * * The amounts included the effect of foreign exchange rate changes.
You should carefully review and consider the information regarding our financial condition and results of operations set forth under the section titled “Gorilla’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Form F-4 filed with the Securities and Exchange Commission on June 27, 2022, for an understanding of our operating results and liquidity discussions and analysis comparing fiscal year 2021 to fiscal year 2020. 5.A.
You should carefully review and consider the information regarding our financial condition and results of operations set forth under the section titled “Operating and Financial Review and Prospects” in our Form 20-F filed with the Securities and Exchange Commission on April 28, 2023, for an understanding of our operating results and liquidity discussions and analysis comparing fiscal year 2022 to fiscal year 2021. 5.A.
Research and development expenses were $14.1 million, $15.1 million and $14.3 million in 2022, 2021 and 2020, respectively, and accounted for 14.9%, 62.9%, and 59.2% of our operating expenses in 2022, 2021 and 2020 respectively. Our success depends, in part, on our ability to protect the proprietary methods and technologies that we develop or otherwise acquire.
Research and development expenses were $3.70 million and $14.11 million in 2023 and 2022, respectively, and accounted for 13.4% and 14.9% of our operating expenses in 2023 and 2022, respectively. Our success depends, in part, on our ability to protect the proprietary methods and technologies that we develop or otherwise acquire.
We believe that we will have sufficient cash flows, after taking into the amount of cash and cash equivalent, time deposits recognized under financial assets at amortized cost (restricted cash), current, unused credit lines from bank loans and shareholder loans to meet our obligations on a timely basis for the next 12 months from the date our financial statements as of and for the year ended December 31, 2022 was authorized for issuance.
After taking into the amount of anticipated cash from operations, cash and cash equivalent, time deposits recognized under financial assets at amortized cost (restricted cash), current and unused credit lines from bank loans, we anticipate raising cash or some other form of financing to meet our obligations on a timely basis for the next 12 months from the date our financial statements as of and for the year ended December 31, 2023 was authorized for issuance.
This was due to the following: ● Our cash and cash equivalents and our current account of financial assets at amortized cost were $4.01 million lower than short-term borrowings, and ● Our accounts receivable of $34.82 million was $26.76 million more than the accounts and notes payable.
This was due to the following: ● Our cash and cash equivalents and our current account of financial assets at amortized cost were $16.69 million more than short-term borrowings, and ● Our accounts receivable of $1.45 million was $9.60 million lower than the accounts and notes payable.
Credit Facilities As of December 31, 2022, we had total unsecured and secured indebtedness of $23.85 million. At December 31, 2022, we were in compliance with the covenants under our credit agreements and indentures.
Credit Facilities As of December 31, 2023, we had total unsecured and secured indebtedness of $25.40 million and unused credit facility of $4.48 million. At December 31, 2023, we were in compliance with the covenants under our credit agreements and indentures.
This was due to the following: ● Our cash and cash equivalents and our current account of financial assets at amortized cost were $16.37 million more than short-term borrowings, and ● Our accounts receivable of $14.04 million was $7.37 million more than the accounts and notes payable. 61 Year Ended December 31, 2021 As of December 31, 2021, we had a working capital of $17.83 million.
This was due to the following: ● Our cash and cash equivalents and our current account of financial assets at amortized cost were $16.37 million more than short-term borrowings, and ● Our accounts receivable of $14.04 million was $7.37 million more than the accounts and notes payable.
Research and Development Research and development expenses consist primarily of personnel-related expenses associated with Gorilla’s research and development and product development teams, including salaries, benefits, bonuses, and share-based compensation.
Personnel costs are the most significant component of operating expenses and consist of salaries, benefits, bonuses, share-based compensation, and sales commissions. Research and Development Research and development expenses consist primarily of personnel-related expenses associated with Gorilla’s research and development and product development teams, including salaries, benefits, bonuses, and share-based compensation.
Historically, we have generated negative cash flows from operations and have financed our operations through the borrowings under our credit facilities, equity contributions and payments received from our customers. We anticipate funding our future capital requirements and debt service payments with cash generated from our operations, funds received through capital markets and future borrowings.
Historically, we have generated negative cash flows from operations and have financed our operations through the borrowings under our credit facilities, equity contributions and payments received from our customers.
For more information on critical accounting estimates, refer to Note 4 to our consolidated financial statements included elsewhere in this Form 20-F. 63
For more information on critical accounting estimates, refer to Note 4 to our consolidated financial statements included elsewhere in this Form 20-F. 60 Item 6: DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 6.A.
For segment disclosure, our cost of revenue increased by $3.46 million, or 62.6% in security convergence and decreased by $15.86 million, or -75.8% in Video IoT for the year ended December 31, 2022, compared to the year ended December 31, 2021.
For segment disclosure, our cost of revenue increased by $9.23 million, or 102.6% in security convergence and decreased by $3.33 million, or -65.6% in Video IoT for the year ended December 31, 2023, compared to the year ended December 31, 2022.
System integrators Under our typical sales agreement, system integrators purchase our products and data services and are permitted to integrate our products and services with theirs to sell directly to their customers in their respective regions of operations.
These contracts are automatically renewed for a year unless prior notice otherwise is given. 52 System integrators Under our typical sales agreement, system integrators purchase our products and data services and are permitted to integrate our products and services with theirs to sell directly to their customers in their respective regions of operations.
Capital Expenditures Gorilla books its capital expenditures of $3.01 million and $8.40 million for the year ended December 31, 2022 and 2021, respectively, on acquisition of property, plants and equipment as well as intangible assets. The acquired equipment and intangible assets are mainly for the purpose of research and development of new technology and services.
Capital Expenditures Gorilla books its capital expenditures of $3.82 million and $3.01 million for the year ended December 31, 2023 and 2022, respectively, on acquisition of property, plants and equipment as well as intangible assets.
For segment disclosure, our revenue increased by $0.66 million, or 5.4% in security convergence and decreased by $20.49 million, or -67.9% in Video IoT for the year ended December 31, 2022, compared to the year ended December 31, 2021.
For segment disclosure, our revenue increased by $49.08 million, or 386.1% in security convergence and decreased by $6.79 million, or -70.0% in Video IoT for the year ended December 31, 2023, compared to the year ended December 31, 2022.
The increase was primarily due to temporary tax difference for deferred assets or liabilities. Quarterly Revenue Trends Gorilla’s revenue generally increased sequentially in each of the quarterly periods presented due to the fiscal year and procurement cycle of our customers.
The increase was primarily due to significant increase of net income for the year ended December 31, 2023. Quarterly Revenue Trends Gorilla’s revenue generally increased sequentially in each of the quarterly periods presented due to the fiscal year and procurement cycle of our customers.
Financial Income (Expense), Net Year Ended December 31 2022 2021 Change Change Dollars in Thousands $ % Financial income (expense), net $ (599 ) $ (628 ) $ 29 -4.6 % Financial expense decreased by $0.03 million, or 4.6%, to $0.60 million for the year ended December 31, 2022, compared to $0.63 million, for the year ended December 31, 2021.
Financial Income (Expense), Net Year Ended December 31 2023 2022 Change Change Dollars in Thousands $ % Financial income (expense), net $ (48 ) $ (599 ) $ 551 -92.0 % Financial income (expense), net decreased by $0.55 million, or -92.0%, to $0.05 million for the year ended December 31, 2023, compared to $0.60 million, for the year ended December 31, 2022.
Gross Margin: Gross margin by segment, in dollars and as a percentage of total net revenue, and the year-over-year dollar and percentage change in gross margin are as follows: Year Ended December 31 2022 2021 Dollars in Thousands Percentage of Net Revenue Dollars in Thousands Percentage of Net Revenue Change $ Change % Security Convergence $ 3,714 29.2 % $ 6,521 54.1 % $ (2,807 ) -43.1 % Video IoT $ 4,623 47.7 % $ 9,253 30.7 % $ (4,630 ) -50.0 % Total $ 8,337 37.2 % $ 15,774 37.3 % $ (7,437 ) -47.2 % 58 Our gross margin decreased by $7.44 million to $8.34 million for the year ended December 31, 2022, compared to $15.77 million for the year ended December 31, 2021.
Gross Margin: Gross margin by segment, in dollars and as a percentage of total net revenue, and the year-over-year dollar and percentage change in gross margin are as follows: Year Ended December 31 2023 2022 Dollars in Percentage of Dollars in Percentage of Change Change Thousands Net Revenue Thousands Net Revenue $ % Security Convergence $ 43,562 70.5 % $ 3,714 29.2 % $ 39,848 1,072.9 % Video IoT $ 1,157 39.8 % $ 4,623 47.7 % $ (3,466 ) -75.0 % Total $ 44,719 69.1 % $ 8,337 37.2 % $ 36,382 436.4 % 55 Our gross margin increased by $36.38 million to $44.72 million for the year ended December 31, 2023, compared to $8.34 million for the year ended December 31, 2022.
General and Administrative General and administrative expenses increased by $5.76 million, or 168%, to $9.19 million for the year ended December 31, 2022, compared to $3.43 million, for the year ended December 31, 2021.
General and Administrative General and administrative expenses increased by $7.37 million, or 80.1%, to $16.56 million for the year ended December 31, 2023, compared to $9.19 million, for the year ended December 31, 2022.
The following table sets forth Gorilla’s consolidated results of operations data for the years presented: Year Ended December 31, 2022 Compared with to Year Ended December 31, 2021 The following table summarizes our historical results of operations for the years indicated: Year Ended December 31 2022 2021 Dollars in Thousands Percentage of Net Revenue Dollars in Thousands Percentage of Net Revenue Change $ Change % Revenue $ 22,409 100.0 % $ 42,243 100.0 % $ (19,834 ) -47.0 % Cost of revenue (14,072 ) -62.8 % (26,469 ) -62.7 % 12,397 -46.8 % Gross profit 8,337 37.2 % 15,774 37.3 % (7,437 ) -47.1 % Operating expense 94,844 423.2 % 23,932 56.7 % 70,912 296.3 % Financial income (expense), net (599 ) -2.7 % (628 ) -1.5 % 29 -4.6 % Loss for the year $ (87,537 ) -390.6 % $ (8,548 ) -20.2 % $ (78,989 ) 924.1 % Total comprehensive loss for the year $ (89,202 ) -398.1 % $ (8,082 ) -19.1 % $ (81,120 ) 1003.7 % Net Revenue: Net revenue by segment, in dollars and as a percentage of total net revenue, and the year-over-year dollar and percentage change in net revenue are as follows: Year Ended December 31 2022 2021 Dollars in Thousands Percentage of Net Revenue Dollars in Thousands Percentage of Net Revenue Change $ Change % Security Convergence $ 12,711 56.7 % $ 12,055 28.5 % $ 656 5.4 % Video IoT $ 9,698 43.3 % $ 30,188 71.5 % $ (20,490 ) -67.9 % Total $ 22,409 100.0 % $ 42,243 100.0 % $ (19,834 ) -47.0 % 57 Our revenue decreased by $19.83 million, or -47.0%, to $22.41 million for the year ended December 31, 2022 compared to approximately $42.24 million for the year ended December 31, 2021.
The following table sets forth Gorilla’s consolidated results of operations data for the years presented: Year Ended December 31, 2023 Compared with to Year Ended December 31, 2022 The following table summarizes our historical results of operations for the years indicated: Year Ended December 31 2023 2022 Dollars in Percentage of Dollars in Percentage of Change Change Thousands Net Revenue Thousands Net Revenue $ % Revenue $ 64,695 100.0 % $ 22,409 100.0 % $ 42,286 188.7 % Cost of revenue (19,976 ) -30.9 % (14,072 ) -62.8 % (5,904 ) 42.0 % Gross profit 44,719 69.1 % 8,337 37.2 % 36,382 436.4 % Operating expense 27,660 42.8 % 94,844 423.2 % (67,184 ) -70.8 % Financial income (expense), net (48 ) -0.1 % (599 ) -2.7 % 551 -92.0 % Income (loss) for the year $ 13,496 20.9 % $ (87,537 ) -390.6 % $ 101,033 -115.4 % Total comprehensive income (loss) for the year $ 12,821 19.8 % $ (89,202 ) -398.1 % $ 102,023 -114.4 % Net Revenue: Net revenue by segment, in dollars and as a percentage of total net revenue, and the year-over-year dollar and percentage change in net revenue are as follows: Year Ended December 31 2023 2022 Dollars in Percentage of Dollars in Percentage of Change Change Thousands Net Revenue Thousands Net Revenue $ % Security Convergence $ 61,790 95.5 % $ 12,711 56.7 % $ 49,079 386.1 % Video IoT $ 2,905 4.5 % $ 9,698 43.3 % $ (6,793 ) -70.0 % Total $ 64,695 100.0 % $ 22,409 100.0 % $ 42,286 188.7 % 54 Our revenue increased by $42.29 million, or 188.7%, to $64.70 million for the year ended December 31, 2023 compared to approximately $22.41 million for the year ended December 31, 2022.
Gorilla expects to incur additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance, director fees and additional internal and external accounting and legal and administrative resources, including increased audit and legal fees.
Gorilla is incurring additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance, director fees and additional internal and external accounting and legal and administrative resources, including increased audit and legal fees. Trends and Key Factors Affecting Gorilla’s Performance The performance of our business depends on a number of factors, such as the following.
Cost of Revenue: Cost of revenue by segment, in dollars and as a percentage of total net revenue, and the year-over-year dollar and percentage change in cost of revenue are as follows: Year Ended December 31 2022 2021 Dollars in Thousands Percentage of Net Revenue Dollars in Thousands Percentage of Net Revenue Change $ Change % Security Convergence $ 8,997 70.8 % $ 5,534 45.9 % $ 3,463 62.6 % Video IoT $ 5,075 52.3 % $ 20,935 69.3 % $ (15,860 ) -75.8 % Total $ 14,072 62.8 % $ 26,469 62.7 % $ (12,397 ) -46.8 % Our cost of revenue decreased by $12.4 million, or -46.8%, to $14.07 million for the year ended December 31, 2022, compared to $26.47 million for the year ended December 31, 2021.
Cost of Revenue: Cost of revenue by segment, in dollars and as a percentage of total net revenue, and the year-over-year dollar and percentage change in cost of revenue are as follows: Year Ended December 31 2023 2022 Dollars in Percentage of Dollars in Percentage of Change Change Thousands Net Revenue Thousands Net Revenue $ % Security Convergence $ 18,228 29.5 % $ 8,997 70.8 % $ 9,231 102.6 % Video IoT $ 1,748 60.2 % $ 5,075 52.3 % $ (3,327 ) -65.6 % Total $ 19,976 30.9 % $ 14,072 62.8 % $ 5,904 42.0 % Our cost of revenue increased by $5.90 million, or 42.0%, to $19.98 million for the year ended December 31, 2023, compared to $14.07 million for the year ended December 31, 2022.
OPERATING RESULTS Overview Gorilla Technology Group Inc. (Gorilla, the “Company” or the “Group”) is a market-leading provider of video intelligence, Internet of Things (IoT) security and edge content management in the Asia Pacific region with operations and established distribution and sales channels in other key regions across the globe.
OPERATING RESULTS Overview Gorilla Technology Group Inc. (Gorilla, the “Company” or the “Group”) is a global solution provider in Security Intelligence, Network Intelligence, Business Intelligence and IoT technology, with operations and established distribution and sales channels in Asia Pacific and other key regions around the world, including the United States, Europe, the Middle East and Latin America.
Financing Activities Cash provided by financing activities for the year ended December 31, 2022 and 2021 was $23.61 million and $5.99 million, respectively, primarily as a result of proceeds from PIPE investment and capital reorganization related to the Merger, repayment or proceeds from short term and long term borrowings for the purpose of supporting the working capital needs.
The primary factors affecting the financing cash flows were the proceeds from sales of Series A Preference Shares, exercise of warrants and restricted share units, and repayment and proceeds from short-term and long-term borrowings for the purpose of supporting the working capital needs. Cash provided by financing activities for the year ended December 31, 2022 was $23.61 million.
As a percentage of net revenue, gross margin of our video IoT segment increased 1,702 basis points to 47.7% for the year ended December 31, 2022. The increase in gross margin was primarily driven by the composition of more software and less hardware and service demanded by the customers.
The increase in gross margin was primarily driven by higher margin from the primarily service driven revenue in the Egypt Contract, which was the primary driver for the increase of revenue in 2023. As a percentage of net revenue, gross margin of our video IoT segment decreased 7.9% to 39.8% for the year ended December 31, 2023.
The decrease was primarily due to less short-term and long-term borrowing facilities. 59 Income Tax Benefit (Expense) Year Ended December 31 2022 2021 Change Change Dollars in Thousands $ % Income tax benefit (expenses) $ (430 ) $ 238 $ (668 ) 280.7 % Income tax expense increased by $0.67 million, or 280.7%, to $0.43 million for the year ended December 31, 2022, compared to $0.24 million of income tax benefit, for the year ended December 31, 2021.
Income Tax Benefit (Expense) Year Ended December 31 2023 2022 Change Change Dollars in Thousands $ % Income tax benefit (expenses) $ (3,516 ) $ (430 ) $ (3,086 ) 717.7 % Income tax expenses increased by $3.08 million, or 717.7%, to $3.52 million for the year ended December 31, 2023, compared to $0.43 million, for the year ended December 31, 2022.
Operating Expenses: Year Ended December 31 2022 2021 Change Change Dollars in Thousands $ % Research and development $ 14,110 $ 15,053 $ (943 ) -6.3 % Sales and marketing $ 3,644 $ 4,962 $ (1,318 ) -26.6 % General and administrative $ 9,192 $ 3,430 $ 5,762 168.0 % Share listing expenses $ 70,105 $ - $ 70,105 $ - Expected credit losses $ - $ 404 $ (404 ) -100.0 % Other (income) loss, net $ (984 ) $ (44 ) $ (940 ) 2136.4 % Other (gain) loss, net $ (1,223 ) $ 127 $ (1,350 ) -1063.0 % Operating expense $ 94,844 $ 23,932 $ 70,912 296.3 % Financial income (expense), net $ (599 ) $ (628 ) $ 29 -4.6 % Loss for the year $ (87,537 ) $ (8,548 ) $ (78,989 ) 924.1 % Total comprehensive loss for the year $ (89,202 ) $ (8,082 ) $ (81,120 ) 1003.7 % Research and Development Research and development expenses decreased by $0.94 million, or 6.3%, to $14.11 million for the year ended December 31, 2022, compared to $15.05 million, for the year ended December 31, 2021.
Operating Expenses: Year Ended December 31 2023 2022 Change Change Dollars in Thousands $ % Research and development $ 3,702 $ 14,110 $ (10,408 ) -73.8 % Sales and marketing $ 1,563 $ 3,644 $ (2,081 ) -57.1 % General and administrative $ 16,558 $ 9,192 $ 7,366 80.1 % Share listing expenses $ - $ 70,105 $ (70,105 ) -100.0 % Expected credit losses $ 12,153 $ - $ 12,153 100.0 % Other (income) loss, net $ (283 ) $ (984 ) $ 701 -71.2 % Other (gain) loss, net $ (6,033 ) $ (1,223 ) $ (4,810 ) 393.3 % Operating expense $ 27,660 $ 94,844 $ (67,184 ) -70.8 % Financial income (expense), net $ (48 ) $ (599 ) $ 551 -92.0 % Income (loss) for the year $ 13,496 $ (87,537 ) $ 101,033 -115.4 % Total comprehensive income (loss) for the year $ 12,821 $ (89,202 ) $ 102,023 -114.4 % Research and Development Research and development expenses decreased by $10.41 million, or -73.8%, to $3.70 million for the year ended December 31, 2023, compared to $14.11 million, for the year ended December 31, 2022.
Cost of Revenue Cost of revenue consists primarily of expenses associated with salaries, labor, health insurance fees, benefits for personnel, outsourcing costs, warranties and hardware such as servers and storage devices needed for total solutions. We expect that cost of revenue will increase in absolute dollars as our revenue grows and will vary from year-to-year as a percentage of revenue.
However, the reseller provides maintenance services to customers. These contracts are automatically renewed for an additional year unless prior notice otherwise is given. Cost of Revenue Cost of revenue consists primarily of expenses associated with salaries, labor, health insurance fees, benefits for personnel, outsourcing costs, warranties and hardware such as servers and storage devices needed for total solutions.
However, the reseller provides maintenance services to customers. These contracts are automatically renewed for an additional year unless prior notice otherwise is given. 55 Distributors Under our typical distribution and software license agreement, distributors purchase our products and are permitted to distribute, sell, bundle, promote and advertise our products directly to end customers.
Distributors Under our typical distribution and software license agreement, distributors purchase our products and are permitted to distribute, sell, bundle, promote and advertise our products directly to end customers. Distributors receive a discount on the purchase price and earn an agreed margin on the resale price.
Although we have been trying to change in business focus to our security convergence segment starting from 2021 to pursue larger projects with higher gross margins and to reduce hardware infrastructure and service for the Video IoT segment, the increase in costs in security convergence segment and the decrease in costs in the Video IoT segment in 2022 was not as expected but we continue to adjust our sales portfolios and price strategy.
The primary reasons for the increase in the revenue from the security convergence segment are due to the Egypt Contract initiated in 2023, while the primary reasons for the decrease in the revenue from the Video IoT segment is our business focus shift to our security convergence segment since 2021 to pursue larger projects with higher gross margins and to reduce hardware infrastructure and service for the Video IoT segment.
Operating Activities Gorilla’s primary uses of cash from operating activities are for personnel-related expenses, sales and marketing expenses and overhead expenses. Gorilla has generated negative cash flows and has supplemented working capital through short- and long-term bank borrowings during the year ended December 31, 2022.
Gorilla has generated negative cash flows and has supplemented working capital through short- and long-term bank borrowings, exercise of warrants and restricted share units, and proceeds from Series A Preference Shares during the year ended December 31, 2023. During the year ended December 31, 2023 and 2022, net cash used in operating activities was approximately $(9.43) and $(8.77) million, respectively.
(2) Share listing expense represents non-cash IFRS 2 charges recorded in connection with the consummation of the SPAC merger. 60 5.B. LIQUIDITY AND CAPITAL RESOURCES Liquidity and Capital Resources Our capital requirements have primarily been for capital expenditures related to the research and development, debt service, and operating expenses.
LIQUIDITY AND CAPITAL RESOURCES Liquidity and Capital Resources Our capital requirements have primarily been for the short-term working capital required for the Egypt Contract, capital expenditures related to research and development, debt service, and operating expenses.
The number of partnerships will influence the dissemination of our product and service offering and will impact future revenue and gross margins. 54 Overview The results of certain key business metrics are as follows: Year Ended December 31 Items 2022 2021 (dollars in thousands) Revenue $ 22,409 $ 42,243 Cost of revenue (14,072 ) (26,469 ) Gross margin 8,337 15,774 Operating expense 94,844 23,932 Operating loss (86,507 ) (8,158 ) Net loss $ (87,537 ) $ (8,548 ) Number of contracts of sales 254 297 Impact of COVID-19 Our financial performance has been affected by the outbreak of COVID-19.
Overview The results of certain key business metrics are as follows: Year Ended December 31 Items 2023 2022 (dollars in thousands) Revenue $ 64,695 $ 22,409 Cost of revenue (19,976 ) (14,072 ) Gross margin 44,719 8,337 Operating expense 27,660 94,844 Operating income (loss) 17,059 (86,507 ) Net income (loss) $ 13,496 $ (87,537 ) Number of contracts of sales 197 254 Components of Results of Operations Revenue Our primary sources of revenue are derived from the sale of hardware, software and services to customers directly under sales contracts, through resellers and distributors under reseller agreements and distribution and software license agreements, and through partnerships with system integrators under sales agreements.
The increase was primarily due to additional professional expenses incurred to service provider for business combination project and incurred additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance, director fees and additional internal and external accounting and legal and administrative resources, including increased audit and legal fees..
The increase was primarily due to increased traveling, rental, and amortization expenses, and additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance, executive salaries, and increased legal fees. Share Listing Expenses Share listing expense represents non-cash IFRS 2 charges recorded in connection with the consummation of the SPAC merger.
Sales and Marketing Sales and marketing expenses decreased by $1.32 million, or -26.6%, to $3.64 million for the year ended December 31, 2022, compared to $4.96 million, for the year ended December 31, 2021. The decrease was primarily due to no new material services being rendered and less marketing efforts in promoting our AI appliances due to the COVID-19 pandemic.
Sales and Marketing Sales and marketing expenses decreased by $2.08 million, or -57.1%, to $1.56 million for the year ended December 31, 2023, compared to $3.64 million, for the year ended December 31, 2022.
In addition, changes in spending policies, budget priorities and funding levels, including current and future stimulus packages, are key factors influencing the purchasing levels of Government customers. As the duration and ongoing economic impacts of the COVID-19 pandemic remain uncertain, current and future budget priorities and funding levels for Government customers may be adversely affected.
In addition, changes in spending policies, budget priorities and funding levels, including current and future stimulus packages, are key factors influencing the purchasing levels of Government customers. Egypt Contract On June 26, 2023, Gorilla entered into a Firm-Fixed Price Contract for building a secure governmental air-gapped network (the “Egypt Contract”) with the Government of the Arab Republic of Egypt (“GoE”).
The primary reason for the increase in the cost of revenue from the security convergence segment is an increase in hardware cost associated with a few oversea sales which were requested by our customers to bundle the software integration service with the hardware equipment. The bundle of hardware equipment drove the higher costs.
The primary reason for the increase in the cost of revenue from the security convergence segment is the progress cost incurred for the Egypt Contract associated with the increase of revenue.
For segment disclosure, as a percentage of net revenue, gross margin of our security convergence segment decreased 2,487 basis points to 29.2% for the year ended December 31, 2022. The decrease in gross margin was primarily driven by higher hardware costs from vendors due to shortage of supplies in the markets, leading to decreased gross margin.
As a percentage of net revenue, gross margin increased 31.92% to 69.1% for the year ended December 31, 2023. For segment disclosure, as a percentage of net revenue, gross margin of our security convergence segment increased 41.3% to 70.5% for the year ended December 31, 2023.
Our cash, cash equivalents as of December 31, 2022 was $23.00 million. Restricted cash and time deposits with maturity over three months were $6.87 million. We had $7.50 million of availability for borrowings under our revolving loan facility. Our short-term bank borrowings as of December 31, 2022 was $12.49 million.
Net working capital as of December 31, 2023 was $23.2 million. We had $4.48 million of availability for borrowings under our revolving loan facility. Our short-term bank borrowings as of December 31, 2023 was $13.45 million. In addition, as of December 31, 2023, our shareholders’ loans were $3.00 million and our long-term bank borrowings, including current portion, was $8.64 million.
In addition, as of December 31, 2022, our shareholders’ loans were $1.00 million and our long-term bank borrowings, including current portion, was $10.36 million. Our management minimizes liquidity risk through credit facilities and ongoing future cash flow management and planning.
Our management minimizes liquidity risk through credit facilities and ongoing future cash flow management and planning.
We intend to pursue additional intellectual property protection to the extent we believe it would be beneficial and cost effective. 5.D. TREND INFORMATION As of 2023, Gorilla has been engaged by a governmental entity in the MENA region to provide security convergence services. We anticipate that this entity will be our largest customer in 2023 and possibly beyond.
We intend to pursue additional intellectual property protection to the extent we believe it would be beneficial and cost effective. 5.D. TREND INFORMATION On April 15, 2024, the Reverse Split was implemented. As a result, every ten (10) shares of our issued and outstanding ordinary shares combined into one (1) issued and outstanding ordinary share.
The revenue from new customers increased by $1.16 million, or 16.69%, to $8.11million for the year ended December 31, 2022 compared to approximately $6.95 million, for the year ended December 31, 2021.
The increase was due to full reserve of long past due receivable balance from selective customers. Other (Gain) Loss, Net Other gain increased by 393% to $6.03 million for the year ended December 31, 2023, compared to $1.22 million for the year ended December 31, 2022.
Removed
Trends and Key Factors Affecting Gorilla’s Performance The performance of our business depends on a number of factors, such as the following.
Added
The Egypt Contract, which is denominated in Egyptian pounds (“EGP”), entitles Gorilla to receive approximately EGP 8.4 billion (the “Contract Price”) (over $270 million at the time of entry into the Egypt Contract, based on the exchange rate at the time of entry into the Egypt Contract, or $272 million, based on the exchange rate as of December 31, 2023) over a four-year term for delivery of certain goods and services to the GoE.
Removed
Number of strategic partnerships with industry leaders Gorilla will monitor the number of partnerships held with leading companies within the cloud infrastructure providers, telecoms, chipset vendors and storage manufacturers for the provision of our technology.
Added
Gorilla would receive an advance payment of EGP 600 million (or $19 million, based on the exchange rate as of December 31, 2023) at signing (which has been received), and the payment plan provides that Gorilla would receive approximately EGP 1.0 billion in 2023 (which has been delayed), EGP 3.0 billion in 2024, EGP 3.1 billion in 2025, and EGP 740 million in 2026, due upon delivery of certain milestones (or $32 million, $97 million, $100 million and $24 million, respectively, assuming such exchange rate).
Removed
The Group’s significant operation is in Taiwan, which has been affected by the spread of COVID-19 since 2020. More broadly, the COVID-19 pandemic has affected almost all countries of the world, and resulted in border closures, production stoppages, workplace closures, movement controls and other measures imposed by the various governments.
Added
Pursuant to the Egypt Contract, Gorilla shall provide certain enumerated goods and services (collectively, the “Products”) to the GoE. The Products are subject to inspection by the GoE at Gorilla’s expense in accordance with procedures outlined in the Egypt Contract.
Removed
Resultantly, COVID-19 has disrupted our operations and the operations of our suppliers, customers, and other business partners and may continue to do so for an indefinite period of time, including as a result of travel restrictions and/or business shutdowns.
Added
Many of the Products consist of hardware and software developed by approved third-party vendors procured by Gorilla (which Gorilla is obligated to deliver), while other Products rely on Gorilla’s proprietary technologies. Gorilla is generally responsible for integrating and installing all technologies into an operational system.
Removed
Gorilla has experienced, and may continue to experience, an adverse impact on certain parts of its business following the implementation of shelter-in-place orders to mitigate the outbreak of COVID-19, including a lengthening of the sales cycle for some prospective customers and delays in the delivery of professional services and trainings to Gorilla’s customers.
Added
Goods delivered under the Egypt Contract are subject to a warranty that expires 12 months after delivery by default, with certain Products subject to separate warranties.
Removed
While a reduction in operating expenses may have an immediate positive impact on our results of operations, we do not yet have visibility into the full impact this will have on our business. We cannot predict how long we will continue to experience these impacts as shelter-in-place orders and other related measures are expected to change over time.
Added
Gorilla’s performances under the Egypt Contract are secured by two letters of guarantee pursuant to which Gorilla induced bank(s) chartered in Egypt to guarantee an amount initially equal to 12% of the total value of the Contract Price. The first letter (the “LGAP”) has been issued by a bank.
Removed
Our results of operations, cash flows, and financial condition have not been adversely impacted to date.
Added
The LGAP guarantees the amount due and payable to Gorilla at signing of the Egypt Contract (EGP 600 million, or 7% of the Contract Price). To issue the LGAP, the bank required that Gorilla reserve the EGP 600 million payment from the GoE in a collateralized account while the LGAP remains outstanding.
Removed
However, as certain of our customers or partners experience downturns or uncertainty in their own business operations or revenue resulting from the spread of COVID-19, they may continue to decrease or delay their spending, request pricing discounts, or seek renegotiations of their contracts, any of which may result in decreased revenue and cash receipts for Gorilla.
Added
The amount subject to the LGAP may be reduced by an amount equal to 7% of the contract value of the Products provided to the GoE prior to such reduction (after offsetting for any prior reductions by Gorilla); and increased by an amount equal to 7% of any payment (excluding the payment due at signing) by the GoE under the Egypt Contract.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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SHARE OWNERSHIP For information regarding the share ownership of directors and officers, see Item 7. “ Major Shareholders and Related Party Transactions – 7.A. Major Shareholders. ” For information as to our equity incentive plans, see Item 6.B. “ Director, Senior Management and Employees – Compensation – Equity Incentive Plans. ” 6.F.
For further information regarding Gorilla’s compensation of its Board and executive officers, we refer you to see Item 6.B. “ Director, Senior Management and Employees – Compensation ” of this Annual Report. Employment Agreements with Our Named Executive Officers Below is a description of the material terms of our employment agreements with our named executive officers.
Removed
Item 6: DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 6.A. DIRECTORS AND SENIOR MANAGEMENT Board of Directors and Senior Management The following table sets forth information regarding our executive officers and directors, including their ages as of the date of this Annual Report: Name Age Position Jayesh Chandan 49 Chief Executive Officer/Executive Chairman Daphne Huang 51 Chief Financial Officer Dr.
Added
Item 6.C. Directors, Senior Management and Employees – Compensation – Non-Employee Director Compensation Policy. In addition, summaries of additional material contracts not described elsewhere in this Annual Report are provided below: Exchange Agreement On December 5, 2022, we entered into an Exchange Agreement with Dr.
Removed
Rajesh “Raj” Natarajan 49 Chief Innovation Officer Dr. Evan Medeiros 51 Director Yoichiro Hirano 59 Director Rt. Hon.
Added
Sih-Ping Koh, our former CEO, pursuant to which he agreed to exchange 2,814,895 shares and forfeit 1,566,788 Earnout Shares (which were subject to certain vesting conditions) in exchange for certain accounts receivable and assets of the Company which at the time had a book value of approximately $30.8 million.
Removed
Ruth Kelly 53 Director Gregg Walker 51 Director Jayesh “Jay” Chandan is the Executive Chairman of the Board as of the date of the Closing, and he became Chairman and Chief Executive Officer of the Company in September 2022, following the concurrent retirement of Dr. Sih-Ping “Spincer” Koh, the founder of Gorilla. Since April 2021, Mr.
Added
On the date this agreement was executed, the closing price for the Company’s ordinary shares on the Nasdaq Stock Market LLC was $10.23 per ordinary share.
Removed
Chandan has been the Chairman of Global SPAC Partners Co., a blank check company which completed a $168 million IPO in April 2021, and which announced in December 2021, its intention to merge with Gorilla. Since 2019, Mr.
Added
Securities Purchase Agreements and Lock-up Agreements On September 19, 2023, the Company entered into a securities purchase agreement with certain investors relating to the issuance and sale of an aggregate of (a) 25,000 Series A Preference Shares, with such preferences, rights, and limitations as set forth in the Series A Certificate of Designation and (b) Series A Warrants to purchase 20,000,000, ordinary shares of the Company to certain of such investors.
Removed
Chandan has been the Founder & Managing Partner of KASS Capital, an investment advisory firm that invests globally in the technology industry and provide alternative liquidity solutions to equity investors, debt holders, founders and management teams. Since 2017, Mr. Chandan has also been the Co-Founder and a Partner of Shackleton-Victoria, an investment firm where Mr.
Added
Such investors may also participate in an amount of up to 50% of any equity financing by the Company within 12 months of closing. The agreement contains customary representations and warranties, conditions to closing, termination provisions and indemnification obligations, including for liabilities under the Securities Act of 1933, as amended.
Removed
Chandan led the firm’s investment in FinLeap, a financial technology accelerator and incubator. Since 2014, Mr. Chandan has also been the Co-Founder and a Director of Mathern Ltd., an investment firm focused on investing in UK companies. From 2010 to 2012, Mr.
Added
Series A Warrants issued in connection with the securities purchase agreement are exercisable at any time after the date of issuance at an exercise price of $1.50 per ordinary share.
Removed
Chandan was a Co-Founder and Partner at Cortis Capital LLP, a transformation and project management firm focused on global mergers & acquisitions, where he worked on the Minna Airport City, an urban regeneration project in Nigeria. From 2007 to 2008, Mr. Chandan served as the CEO of Invensis (UK) Ltd., a business process outsourcing company. From 2005 to 2007, Mr.
Added
A holder of a Series A Warrant may not exercise such warrant if the holder, together with its affiliates, would beneficially own more than 4.99% (or, at the election of the holder, 9.99%) of the number of the Company’s ordinary shares outstanding immediately after giving effect to such exercise. 87 On February 14, 2024, the Company entered into a securities purchase agreement with certain investors relating to the issuance and sale of an aggregate of (a) 10,000 Series B Preference Shares, with such preferences, rights, and limitations as set forth in the Series B Certificate of Designation and (b) Series B Warrants to purchase 8,250,000 (825,000, after giving effect to the Reverse Split), ordinary shares of the Company to certain of such investors.
Removed
Chandan served as Director of Business Development of EXLservice (UK) Ltd., a data analytics company that is now publicly traded on the Nasdaq with approximately $1 billion in revenues and approximately $3 billion in market cap. From 2004 to 2005, Mr.
Added
Such investors may also participate in an amount of up to 50% of any equity financing by the Company within 24 months of closing. The agreement contains customary representations and warranties, conditions to closing, termination provisions and indemnification obligations, including for liabilities under the Securities Act of 1933, as amended.
Removed
Chandan served as Director of Sales & Strategic Accounts at Exevo (UK) Ltd., a global market research & outsourcing firm that was later acquired by Copal Partners and is now part of Moody’s Corporation. From 1995 to 2004, Mr. Chandan served as the Co-Founder and Executive Director of NPL, an IT services business in Southeast Asia. Mr.
Added
Series B Warrants issued in connection with the securities purchase agreement are exercisable at any time after the date of issuance at an exercise price of $1.50 per ordinary share.
Removed
Chandan serves as an Advisory Board Member of ConsolFreight LLC, a Fintech FreightTech ecosystem. Mr. Chandan graduated from Madras University, India, with an Engineering Degree, majoring in Computer Sciences. We believe Mr. Chandan is well qualified to serve as a director of our company given his extensive investment and operational experience in emerging markets.
Added
A holder of a Series B Warrant may not exercise such warrant if the holder, together with its affiliates, would beneficially own more than 4.99% (or, at the election of the holder, 9.99%) of the number of the Company’s ordinary shares outstanding immediately after giving effect to such exercise.
Removed
Daphne Huang has served as the Chief Financial Officer of the Company since July 2022. Ms. Huang has over 20 years of senior executive experience in finance within which more than ten years as chief financial officer of global manufacturing, pharmaceutical, and technology sector companies. Ms.
Added
In addition, in connection with each securities purchase agreement described above, the Company and directors and executive officers of the Company entered into lock-up agreements, which each provided for a 60-day lockup period, subject to customary exceptions.
Removed
Huang most recently served as Chief Financial Officer of Go-For Industries Inc., a technology platform-based logistics company, and prior to that, as Chief Financial Officer and Chief Accounting Officer of Taro Pharmaceutical Industries Ltd., a NYSE listed global pharmaceutical company. Prior to her career as a chief financial officer, Ms.
Added
Controlled Equity Offering Sales Agreement On August 17, 2023, we entered into a Controlled Equity Offering Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor”), referred to as the agent. In accordance with the terms of the Sales Agreement, we may issue and sell, from time to time, ordinary shares, through the agent, acting as agent or principal.
Removed
Huang held positions of increasing responsibilities in the financial service and debt capital markets sectors working for such companies as PriceWaterhouseCoopers, FleetBoston, GE Capital and HSBC. Dr. Rajesh “Raj” Natarajan has served as Chief Innovation Officer of Gorilla since March 2022. Since 2005, Dr.
Added
Sales of ordinary shares, if any, will be made by any method permitted that is deemed an “at the market offering” as defined in Rule 415 under the Securities Act.
Removed
Natarajan has been leading multiple efforts inside of Microsoft in various roles ranging from Engineering to Product Management. Prior to joining Gorilla, Dr. Natarajan served as a Senior Director of Product Management at Microsoft, when he was developing a new product portfolio within Dynamics focused on helping contact centers realize their Digital Transformation goals.
Added
Under the Sales Agreement, the agent is not required to sell any specific amount but will act as our sales agent using commercially reasonable efforts consistent with each of their normal trading and sales practices, on mutually agreed terms between the agent and us.
Removed
Prior to that, he has built and managed various products like Data Analytics for Windows Phone, Microsoft Push Notification Service, Windows Media enablement for Streaming and mobile Digital Rights Management, Zune to name a few. Prior to joining Microsoft in 2005, Dr.
Added
Upon delivery of a placement notice and subject to the terms and conditions of the Sales Agreement, Cantor may sell our ordinary shares by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act.
Removed
Natarajan ran the professional services division at Loudeye Corporation where he oversaw the commercialization of Loudeye’s B2B music and video infrastructure, launching notable music stores like O2 Germany, MSN Music, Wurlitzer Jukebox etc. Much of his work there translated into the foundation for Nokia’s own music service infrastructure. From 2004 to 2005, Dr.
Added
We may instruct the agent not to sell our ordinary shares if the sales cannot be effected at or above the price designated by us from time to time. We or the agent may suspend the offering of our ordinary shares upon notice and subject to other conditions.
Removed
Natarajan served as the VP of Mobile solutions at Vidiator Technologies, a fully owned subsidiary of Hutchison. Dr. Natarajan helped create industry leading solutions for Video streaming based on H.264 with dynamic bandwidth adaptation, which powered the network operators 3’s core multimedia delivery system across Europe.
Added
We will pay Cantor a commission, in cash, for its services in acting as agent in the sale of our ordinary shares. Cantor will be entitled to compensation at a commission rate of up to 3.0% of the gross sales price per share sold through it under the Sales Agreement.
Removed
He also launched services in Hong Kong and the UK based on real-time 3D rendering for mobile delivering news snippets and horoscopes on 3’s platform. From 2001 to 2004, Dr. Natarajan was instrumental in establishing and running engineering for LockStream Corporation who specialized in Digital Rights Management for mobile multimedia devices.
Added
Because there is no minimum offering amount required as a condition to close this offering, the actual total public offering amount, commissions and proceeds to us, if any, are not determinable at this time.
Removed
He helped create a Content Management system that was central to rights protecting content and delivering the requisite content and licenses to mobile devices on the fly. This was accompanied by SDK’s and applications that were developed and embedded into Motorola devices and Ti Chipsets.
Added
In connection with the sale of the ordinary shares on our behalf, Cantor will be deemed to be an “underwriter” within the meaning of the Securities Act and the compensation of Cantor will be deemed to be underwriting commissions or discounts.
Removed
Commercialization of this technology was witnessed by Emma.FM and widely deployed across the network operator 3’s European subsidiaries. Dr. Natarajan is an alumnus of Seattle University where in he completed his Management of Business Administration (2010) and his Doctoral dissertation in Education and Leadership (2018). Dr.
Added
We have agreed to provide indemnification and contribution to Cantor with respect to certain civil liabilities, including liabilities under the Securities Act.
Removed
Natarajan serves as an Adjunct Faculty at Seattle University’s Albers School of Management since 2016, teaching Information Systems, Advanced Python Programming for Data Analytics and courses on Teams Creativity and Decision Making. He has a Bachelor of Engineering (1995) from the University of Madras in Computer Science. 64 Dr. Evan Medeiros is a renowned expert in international politics and business.
Added
Settlement for sales of our ordinary shares will occur on the second business day following the date on which any sales are made, or on some other date that is agreed upon by us and Cantor in connection with a particular transaction, in return for payment of the net proceeds to us.
Removed
A former White House senior advisor to President Obama, he has been the Penner Family Chair in Asia Studies at Georgetown University’s School of Foreign Service since 2018. His research and teaching focuses on the international politics of East Asia, U.S.-China relations and China’s foreign and national security policies.
Added
Sales of our ordinary shares as contemplated in this prospectus will be settled through the facilities of The Depository Trust Company or by such other means as we and Cantor may agree upon. There is no arrangement for funds to be received in an escrow, trust or similar arrangement.
Removed
Since 2020, he has served on the board of Blackberry Government Solutions, a wholly owned subsidiary of Blackberry Corporation. From 2015 to 2018, Dr. Medeiros was Managing Director and Asia Practice Head of Eurasia Group. Dr.
Added
Cantor will use its commercially reasonable efforts, consistent with its sales and trading practices, to solicit offers to purchase our ordinary shares under the terms and subject to the conditions set forth in the Sales Agreement.
Removed
Medeiros has also served for six years on the staff of the National Security Council as Director for China, Taiwan and Mongolia before serving as Special Assistant to the President and Senior Director for Asia.
Added
In connection with the sale of our ordinary shares on our behalf, Cantor will be deemed to be an “underwriter” within the meaning of the Securities Act and the compensation of the agent will be deemed to be underwriting commissions or discounts.
Removed
He was President Obama’s top advisor on Asia-Pacific and was responsible for coordinating U.S. policy toward the region across diplomacy, defense, economics and intelligence, including all aspects of U.S.-China relations.
Added
We have agreed to provide indemnification and contribution to Cantor against certain civil liabilities, including liabilities under the Securities Act. The offering of our ordinary shares pursuant to the Sales Agreement will terminate upon the termination of the Sales Agreement as permitted therein.
Removed
Prior to joining the White House, he served as a senior political scientist at the RAND Corporation and also served in the US Treasury Department as a policy advisor to Secretary of the Treasury Henry Paulson.
Added
We and Cantor may terminate the Sales Agreement at any time subject to the terms of the Sales Agreement. 88 Gorilla Registration Rights Agreement In connection with the closing of the Merger, certain Gorilla shareholders entered into a Registration Rights Agreement (the “Gorilla Registration Rights Agreement”) pursuant to which Gorilla granted certain registration rights to such Gorilla shareholders with respect to the Company’s ordinary shares.
Removed
He holds master’s degrees from the University of Cambridge (International Relations) and SOAS London (China Studies) and a Ph.D. in International Relations from the London School of Economics and Political Science. Yoichiro Hirano served as a director prior to the closing of the Merger, and continued in the same capacity after the Merger in July 2022. Mr.
Added
The Gorilla Registration Rights Agreement provided, among other things, certain Gorilla shareholders with certain demand rights in the event of an underwritten offering, as well as piggyback rights in the event Gorilla or any holder of Gorilla’s ordinary shares conducts a registered offering.
Removed
Hirano is the founder of Asteria Corporation (TSE:3853) and has been the Chief Executive Officer since 1998. He also serves as a director and Chairman of the Board of the company. Mr. Hirano has over thirty (30) years of experience in the software industry, beginning in 1998 when he founded the Infoteria Corporation, the predecessor to Asteria.
Added
Global Registration Rights Agreement The holders of the Class B ordinary shares of Global (“Founder Shares”), representative shares, private units sold to the Sponsor and I-Bankers in connection with the Global IPO (including securities contained therein) and units (including securities contained therein) that could have been issued upon conversion of loans made by the Sponsor or one of its affiliates, and their permitted transferees, had registration rights to require the Company to register a sale of any of the securities held by them (in the case of the Founder Shares, only after conversion to the Class A ordinary shares) pursuant to a registration rights agreement signed on April 8, 2021 (as amended on December 21, 2021).
Removed
He has served as a Visiting Professor at Aoyama Gakuin University, Graduate School of Social Informatics from 2008 to 2011. Prior to founding Asteria, he led the Marketing and Strategic Planning team for ten (10) years at Lotus Development Corporation, which was acquired by IBM. Mr. Hirano attended Kumamoto University where he studied Applied Chemistry. Rt. Hon.
Added
These holders were entitled to make up to three demands, excluding short form registration demands, that the Company registers such securities for sale under the Securities Act.
Removed
Ruth Kelly has been a director since the closing of the Merger on July 13, 2022. Since March 2023, Ms. Kelly has been non-executive Chair of Water UK, a trade body representing water companies in England, Wales and Scotland. Since November 2021, Ms.
Added
In addition, these holders had “piggy-back” registration rights to include such securities in other registration statements filed by the Company and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act.
Removed
Kelly has been non-executive Chair of Thames Freeport, a private-sector led, UK government sponsored regeneration initiative, north of the Thames Estuary. Since September 2020, Ms. Kelly has been a member of the Vatican’s Council for the Economy, which oversees the Holy See’s finances.
Added
Subscription Agreements In connection with the business combination between Global and Gorilla, Global and Gorilla entered into the Original Subscription Agreements with the investors named therein (the “PIPE Investors”), pursuant to which the PIPE Investors agreed to purchase an aggregate of 5,000,000 units (the “Units”) of Global, each Unit consisting of one Global Class A ordinary share and one-quarter of redeemable Global warrant, at a price of $10.10 per Unit in a private placement to be consummated concurrently with the Closing (the “PIPE Investment”).
Removed
Since April 2019, Ms Kelly has also been a non-executive Director of Heathrow Airport and a member of the airport’s Audit and Finance committees. From April 2016 to March 2019, Ms.
Added
On May 18, 2022, Global, Gorilla, and PIPE Investors amended the Subscription Agreements (the “Amended Subscription Agreements”), pursuant to which the PIPE Investors were given the right to reduce their $50.5 million subscription amount to a minimum of $30.3 million for any reason whatsoever, in their sole discretion.
Removed
Kelly served as a non-executive director of the Financial Conduct Authority, the regulator of the conduct of financial services in the UK; throughout that time, she also served as Chair of the regulator’s Audit Committee and member of its Risk Committee. Between October 2011 and July 2017, Ms.
Added
On July 13, 2022, immediately prior to the Closing of the Merger, the PIPE Investment was closed. Gross proceeds from the PIPE Investment were $30.3 million. Class A Contingent Value Rights Upon the Closing, each PIPE Investor received one Class A CVR for each PIPE Subunit.
Removed
Kelly was a non-executive director of National Grid, one of the world’s largest publicly listed utilities focused on transmission and distribution of electricity and gas across the UK and US, serving on its finance, audit and nomination committees. From September 2015 to August 2019, Ms.
Added
Each Class A CVR entitles the holder to receive, in the event that any Earnout Shares are forfeited by Gorilla shareholders in accordance with the Business Combination Agreement, from Gorilla a pro rata portion (along with the holders of Class B CVRs with respect to Revenue Protection Shares only) of newly issued ordinary shares and other securities or property in the escrow account that are forfeited by Gorilla shareholders with respect to the Earnout Shares.
Removed
Kelly served as Pro Vice Chancellor of St Mary’s University, Twickenham, London, overseeing the development, enterprise and research agendas. From May 2010-August 2015, Ms. Kelly worked as a Managing Director at HSBC Bank, during which time she became Global Head of Client Strategy in HSBC Global Asset Management, overseeing global marketing and managing global relationships across the banking group.
Added
The Class A CVRs were issued pursuant to the Contingent Value Rights Agreement. Class B Contingent Value Rights Upon the Closing, each PIPE Investor received one-half (1/2) of a Class B CVR for each PIPE Subunit.
Removed
From May 1997 to April 2010, Ms. Kelly was a UK politician, serving in various ministerial capacities including as Economic Secretary to the Treasury, Financial Secretary to the Treasury, Minister of State in the Cabinet Office, Secretary of State for Education, Secretary of State for Communities and Local Government and Secretary of State for Transport.
Added
Each Class B CVR entitles the holder to receive, in the event that any Revenue Protection Shares are forfeited by Gorilla shareholders in accordance with the Business Combination Agreement, from Gorilla a pro rata portion (along with the holders of Class A CVRs) of newly issued Gorilla Ordinary Shares and other securities or property in the escrow account that are forfeited by Gorilla shareholders with respect to such Revenue Protection Shares, provided, that a Class B CVR does not have any rights with respect to any Price Protection Shares.
Removed
From September 1994 to April 1997, Ms. Kelly worked as an economist at the Bank of England. From August 1990 to September 1994, Ms. Kelly was an economics journalist on The Guardian newspaper. In 1992, Ms. Kelly received a Master of Science from the London School of Economics. Ms.
Added
The Class B CVRs were issued pursuant to the Contingent Value Rights Agreement. Offer Letter with Dr. Rajesh “Raj” Natarajan On March 2, 2022, we entered into an offer letter with Dr. Natarajan to serve as our Chief Innovation Officer. The offer letter provides for an annual base salary of $180,000. Under the offer letter, Dr.
Removed
Kelly graduated from The Queen’s College, Oxford, in 1989 in Philosophy, Politics and Economics. 65 Gregg Walker has been a director since the closing of the Merger on July 13, 2022. Mr.
Added
Natarajan is entitled to a lump sum cash severance payment in an amount equal to 12 months of his monthly salary if his employment is terminated by the Company other than for fraud, willful misconduct, or gross negligence. The letter provided that Dr.
Removed
Walker joined Muller & Monroe Asset Management as a Partner and Managing Director in July 2021 and leads the co-investment efforts of the firm as well as the firm’s New York City office. Mr. Walker founded G.A.
Added
Natarajan’s employment would continue until the closing of the Merger, after which the parties would enter into a more formal employment agreement. 89 Notwithstanding the foregoing, the Company makes no representation that the terms of Dr. Natarajan’s offer letter reflect or can be used to infer the compensation Dr.
Removed
Walker, LLC in July 2016 when he left his position as the Senior Vice President for Corporate Development at Sony Corporation of America (Sony), a position he had held since March 2009, and he has been the Managing Member of G.A. Walker, LLC since its inception. Mr.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

19 edited+9 added−4 removed9 unchanged
Koh acts as joint guarantor for eight credit facilities having entered into the relevant facility agreements or promissory notes, as applicable, in the capacity as a joint guarantor. For the details of the credit facilities, please refer to the section titled “ Item 5.B.
Koh acts as joint guarantor for one credit facilities having entered into the relevant facility agreements or promissory notes, as applicable, in the capacity as a joint guarantor. For the details of the credit facilities, please refer to the section titled “ Item 5.B.
On December 5, 2022, Gorilla and Dr. Koh also entered into an Exchange Agreement, under which Dr. Koh agreed to deliver certain shares held by him to the Company in exchange for certain accounts receivable and assets of Gorilla.
On December 5, 2022, Gorilla and Dr. Koh also entered into an Exchange Agreement, under which Dr. Koh agreed to deliver certain shares held by him to the Company in exchange for certain accounts receivable and assets of Gorilla. Exculpation, Indemnification and Insurance.
The principal amount and accrued interest under the loan have been repaid in full on or before the maturity date. Other Arrangements with Related Party As of December 31, 2022, Gorilla has 15 credit facilities. Dr.
The principal amount and accrued interest under the loan have been repaid in full on or before the maturity date. 71 Other Arrangements with Related Party As of December 31, 2023, Gorilla has 12 credit facilities. Dr.
Under such rule, beneficial ownership includes any ordinary shares as to which the holder has sole or shared voting power or investment power and also any ordinary shares which the holder has the right to acquire within 60 days of July 13, 2022 through the exercise of any option, conversion or any other right.
Under such rule, beneficial ownership includes any ordinary shares as to which the holder has sole or shared voting power or investment power and also any ordinary shares which the holder has the right to acquire within 60 days of April 30, 2024 through the exercise of any option, conversion or any other right.
The principal amount and accrued interest under the loan have been repaid in full on or before the maturity date. On March 13, 2023, Gorilla entered into a loan and promissory agreement with Asteria Corporation.
Koh on August 23, 2021. Gorilla has drawn down $3,000,000 under the loan with Asteria Corporation. The principal amount and accrued interest under the loan have been repaid in full on or before the maturity date. On March 13, 2023, Gorilla entered into a loan and promissory agreement with Asteria Corporation.
Pursuant to the agreement, Asteria Corporation agreed to provide a loan to Gorilla for the principal amount of $3,000,000 by subscribing the promissory note issued by Gorilla. Gorilla has drawn down $3,000,000 under this loan with Asteria Corporation. The principal amount and accrued interest under the loan remain outstanding.
Pursuant to the agreement, Asteria Corporation agreed to provide a loan to Gorilla for the principal amount of $3,000,000 by subscribing the promissory note issued by Gorilla. Gorilla drew down $3,000,000 under this loan with Asteria Corporation. The principal amount and accrued interest under the loan were paid off in April 2024.
Name and Address of Beneficial Owner Number of Shares Beneficially Owned Percentage Outstanding Named Executive Officers and Directors: Yoichiro Hirano — — Evan Medeiros — — Jayesh Chandan, Chief Executive Officer and Chairman of the Board 738,282 1.1 % Gregg Walker — — Ruth Kelly — — Daphne Huang, Chief Financial Officer (1) — — Dr.
Name and Address of Beneficial Owner Number of Shares Beneficially Owned Percentage Outstanding Named Executive Officers and Directors: Evan Medeiros 1,144 * Jayesh Chandan, Chief Executive Officer and Chairman of the Board 127,802 1.5 % Gregg Walker 2,257 * Ruth Kelly 1,550 * Daphne Huang, Chief Financial Officer (1) 6,090 * Dr.
MAJOR SHAREHOLDERS The following table shows the beneficial ownership of ordinary shares as of April 13, 2023 by: ● each person known by Gorilla to beneficially own more than 5% of the outstanding ordinary shares; ● each of Gorilla named executive officers and directors; and ● all of Gorilla named executive officers and directors as a group.
MAJOR SHAREHOLDERS The following table reflects implementation of the Reverse Split (except as otherwise noted in the footnotes) and shows the beneficial ownership of ordinary shares as of April 30, 2024 by: ● each person known by Gorilla to beneficially own more than 5% of the outstanding ordinary shares; ● each of Gorilla named executive officers and directors; and ● all of Gorilla named executive officers and directors as a group.
Chang-Yi Hsu granting him exclusive voting and dispositive power over the 4,436,452 ordinary shares held by K-May. Reich is controlled by its sole director, Rivetel. The registered address is 1F., No. 106, Ln. 737, Sec. 1, Neihu Rd., Neihu Dist., Taipei City, Taiwan (R.O.C.). 73 (3) The information reported is based on a Schedule 13G filed on August 12, 2022.
Sun’s sole director entered into an arrangement with Mr. Chang-Yi Hsu granting him exclusive voting and dispositive power over the 4,436,452 ordinary shares held by K-May. Reich is controlled by its sole director, Rivetel. The registered address is 1F., No. 106, Ln. 737, Sec. 1, Neihu Rd., Neihu Dist., Taipei City, Taiwan (R.O.C.).
K-May is a wholly-owned subsidiary of April Dew Co., Ltd., which is a wholly-owned subsidiary of Sun Finance International Inc. (“Sun”) whose sole director controls the entity. Reich is a wholly-owned subsidiary of Rivetel. Rivetel is controlled by its sole director/chairman, Mr. Chang-Yi Hsu. Sun’s sole director entered into an arrangement with Mr.
Such figures do not give effect to the Reverse Split. K-May is a wholly-owned subsidiary of April Dew Co., Ltd., which is a wholly-owned subsidiary of Sun Finance International Inc. (“Sun”) whose sole director controls the entity. Reich is a wholly-owned subsidiary of Rivetel. Rivetel is controlled by its sole director/chairman, Mr. Chang-Yi Hsu.
Pursuant to the agreement, Asteria Corporation agreed to provide a loan to Gorilla for the principal amount of $3,000,000 by subscribing the promissory note issued by Gorilla. The loan was guaranteed by a letter of guarantee made by Dr. Koh on August 23, 2021. Gorilla has drawn down $3,000,000 under the loan with Asteria Corporation.
Related Party Loans On September 6, 2021, Gorilla entered into a loan and promissory agreement with Asteria Corporation. Pursuant to the agreement, Asteria Corporation agreed to provide a loan to Gorilla for the principal amount of $3,000,000 by subscribing the promissory note issued by Gorilla. The loan was guaranteed by a letter of guarantee made by Dr.
As of April 13, 2023, there were 68,923,092 ordinary shares issued and outstanding, not including 2,814,895 treasury shares held by the company. Unless otherwise noted, the business address of each beneficial owner is c/o Gorilla Technology Group Inc., Meridien House, 42 Upper Berkeley Street, Marble Arch, London, United Kingdom W1H 5QJ.
As of April 30, 2024, there were 8,780,785 ordinary shares issued and outstanding, not including 281,489 treasury shares held by the company. All figures give effect to the Reverse Split. Unless otherwise noted, the business address of each beneficial owner is c/o Gorilla Technology Group Inc., Meridien House, 42 Upper Berkeley Street, Marble Arch, London, United Kingdom W1H 5QJ.
The business address is 4 th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands. SBI & Capital 22 Management II Co. Ltd. is controlled by its directors. 5,986,421 Gorilla ordinary shares were issued to SBI Investment Co., Ltd., as general partner for and on behalf of SBI AI & Blockchain Investment LPS.
Ltd., as general partner for and on behalf of SBI & Capital 22 JV Fund II, L.P. The business address is 4 th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands. SBI & Capital 22 Management II Co.
Rajesh “Raj” Natarajan, Chief Innovation Officer — — All executive officers and directors as a group (7 individuals) 738,282 1.1 % Five Percent or More Holders: Rivetel Inv. Co., Ltd and affiliates (2) 8,367,875 11.7 % Asteria Vision Fund I, L.P.
Rajesh “Raj” Natarajan, Chief Innovation Officer 12,043 * Mohan Raj Kumar, Chief Delivery Officer (2) 0 * All executive officers and directors as a group (7 individuals) 150,886 1.7 % Five Percent or More Holders: (3) Rivetel Inv. Co., Ltd and affiliates (4) 802,609 9.1 % Asteria Vision Fund I, L.P.
Pursuant to Gorilla’s articles of association in effect immediately prior to the closing of the Merger, certain of Gorilla’s shareholders, including related parties, had rights to appoint directors. Related Party Loans On September 6, 2021, Gorilla entered into a loan and promissory agreement with Asteria Corporation.
RELATED PARTY TRANSACTIONS Rights of Appointment Gorilla’s board of directors previously consisted of seven directors. Pursuant to Gorilla’s articles of association in effect immediately prior to the closing of the Merger, certain of Gorilla’s shareholders, including related parties, had rights to appoint directors.
(2) The information reported is based on a Schedule 13G filed on August 25, 2022. The number of shares represents (i) 1,662,539 ordinary shares held by Rivetel Inv. Co., Ltd (“Rivetel”), (ii) 4,436,452 ordinary shares held by K-May Inv. Ltd. (“K-May”), and (iii) 2,268,884 ordinary shares held by Reich Holding Co., Ltd (“Reich”).
Co., Ltd (“Rivetel”), (ii) 4,436,452 ordinary shares held by K-May Inv. Ltd. (“K-May”), and (iii) 2,268,884 ordinary shares held by Reich Holding Co., Ltd (“Reich”). The table above gives effect to the forfeiture of 67,865, 181,097 and 92,616 Forfeited Earnout Shares previously beneficially owned of record by Rivetel, K-May and Reich, respectively.
The business address is 1-6-1, Roppongi, Minato Ward, Tokyo 106-0032 Japan. SBI Investment Co., Ltd. is controlled by its directors. (6) The information reported is based on information from the company’s transfer agent as of April 13, 2023. Berwick Resources Limited is controlled by its sole director, Chen, Hsiu-Hsia.
Ltd. is controlled by its directors. 5,694,953 Gorilla ordinary shares are held by SBI Investment Co., Ltd., as general partner for and on behalf of SBI AI & Blockchain Investment LPS. The business address is 1-6-1, Roppongi, Minato Ward, Tokyo 106-0032 Japan.
(3) 9,152,995 12.8 % Telstra Ventures Pty Ltd (4) 4,527,383 6.3 % SBI AB Fund and affiliate (5) 6,907,409 9.7 % Berwick Resources Ltd. (6) 3,725,439 5.4 % * Less than 1%. (1) In July 2022, Ms. Daphne Huang joined Gorilla as the Chief Financial Officer.
(5) 721,787 8.2 % Highbridge Capital Management, LLC (6) 869,297 9.9 % SBI AB Fund and affiliate (7) 714,834 8.1 % * Less than 1%. (1) In July 2022, Ms. Daphne Huang joined Gorilla as the Chief Financial Officer. (2) In March 2024, Mohan Raj Kumar was promoted to Chief Delivery Officer.
The number of shares represents 6,907,409 Gorilla ordinary shares held by SBI & Capital 22 JV Fund II, L.P. and SBI AI & Blockchain Investment LPS. 920,988 Gorilla ordinary shares were issued to SBI & Capital 22 Management II Co. Ltd., as general partner for and on behalf of SBI & Capital 22 JV Fund II, L.P.
Such filing reflects 7,148,346 Gorilla ordinary shares held by collectively SBI & Capital 22 JV Fund II, L.P., SBI AI & Blockchain Investment LPS and SBI Hong Kong Holdings Co., Limited. 883,393 Gorilla ordinary shares are held by SBI & Capital 22 Management II Co.
Removed
(4) The information reported is based on a Schedule 13G filed on August 23, 2022. T Ventures Fund II, GP, Ltd., as general partner for and on behalf of Telstra Ventures Fund II, L.P. T Ventures Fund II, GP, Ltd. is controlled by its board of directors.
Added
(3) As of the date of this filing, without giving effect to the Reverse Split, 2,522,528 Earnout Shares (the “Forfeited Earnout Shares”) have been forfeited to holders of CVRs. Prior to such forfeiture, certain holders identified below had voting rights and unvested economic rights to a portion of the Forfeited Earnout Shares.
Removed
The registered office of T Ventures Fund II, GP Ltd. is Langham Hall (Guernsey) Limited North Suite 2, Town Mills Rue Du Pre, St Peter Port Guernsey, GY1 1LT. (5) The information reported is based on a Schedule 13G filed on August 23, 2022.
Added
The amounts in this table reflect such forfeitures (as noted below) even if such forfeiture is not reflected in any filing by such shareholder. This table does not give effect to any other forfeiture of Earnout Shares or any potential forfeiture of Earnout Shares that may take place in the next 60 days.
Removed
The business address of Berwick Resources Limited is 7F, No. 320, Sec. 4, Chung Hsiao E Rd., Taipei, Taiwan, R.O.C.. 7.B. RELATED PARTY TRANSACTIONS Rights of Appointment Gorilla’s board of directors previously consisted of seven directors.
Added
This table gives effect to the Reverse Split; however, unless otherwise noted, the figures identified in footnotes to this table do not give effect to the Reverse Split. 70 (4) The information reported is based on a Schedule 13G filed on August 25, 2022. Such filing reflects (i) 1,662,539 ordinary shares held by Rivetel Inv.
Removed
For additional details related to the Exchange Agreement, please refer to the section titled “ Item 16.E. - Purchases of Equity Securities by the Issuer and Affiliated Purchasers. ” 74 Exculpation, Indemnification and Insurance.
Added
(5) The information reported is based on a Schedule 13G filed on August 12, 2022 and a Form 144 filed on March 7, 2024. In addition, this figure gives effect to the forfeiture of 373,626 Earnout Shares, which reflects Asteria Vision Fund Inc.’s share of the Forfeited Earnout Shares. Such figures do not give effect to the Reverse Split.
Added
(6) The information reported is based on a Schedule 13G filed on February 13, 2024. Such filing reflects 5,000,000 Gorilla ordinary shares beneficially owned by Highbridge Capital Management, LLC (“Highbridge”) and 10,331,375 Gorilla ordinary shares underlying “warrants” (which are Series A Warrants) beneficially owned by Highbridge. Such figures do not reflect the Reverse Split.
Added
The filing notes that the warrants are subject to “the 9.90% Blocker,” which prevents exercise of such warrants if such exercise would cause the holder to beneficially own in excess of 9.90% of the Gorilla ordinary shares.
Added
Consequently, the table above assumes that Highbridge may be deemed to beneficially own 369,297 ordinary shares underlying such warrants (such figure giving effect to the Reverse Split). The business address of Highbridge is 277 Park Avenue, 23rd Floor, New York, New York 10172. (7) The information reported is based on a Schedule 13G/A filed on October 5, 2023.
Added
SBI Investment Co., Ltd. is controlled by its directors. 570,000 Gorilla ordinary shares are held by SBI Hong Kong Holdings Co. Limited. Such filing and figures do not give effect to the Reverse Split. The business address Suite 2704, 27th Floor, Tower 6, The Gateway, Harbour City, Kowloon, Hong Kong. 7.B.
Added
INTERESTS OF EXPERTS AND COUNSEL Not applicable. 72