What changed in this filing

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Item 1A. Risk Factors

2022-11-09 compared with 2022-08-09 · 81 added, 66 removed, 609 unchanged (19% of the section changed)

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Changes in labor laws related to employee hours, wages, job classification and benefits, including health care benefits, could adversely affect our business, financial condition or results of operations.

As of June 30, 2022, we employed approximately 72,000 associates, many of whom are paid above, but near, applicable minimum wages, and their wages may be affected by changes in minimum wage laws.

As of September 30, 2022, we employed approximately 75,000 associates, many of whom are paid above, but near, applicable minimum wages, and their wages may be affected by changes in minimum wage laws.

Additionally, many of our salaried associates are paid at rates that could be impacted by changes to minimum pay levels for exempt roles.

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An inability to hire, timely train and retain talented individuals for our workforce could slow our growth and adversely impact our ability to operate our business.

in the local markets in which we operate, prevailing unemployment rates and competitive wage rates in such markets.

Our ability to meet our workforce needs, while controlling associate-related costs, including salaries, wages and benefits, is subject to numerous external factors, including the availability of talented persons in the workforce in the local markets in which we operate, prevailing unemployment rates and competitive wage rates in such

We may find that there is an insufficient number of qualified individuals to fill our associate positions with the qualifications we seek.

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If we are unable to hire, timely train or retain talented individuals may result in higher turnover and increased labor costs, and could compromise the quality of our service, all of which could adversely affect our business.

Inflation may adversely affect our operating results .

Inflationary factors such as increases in the labor costs, material costs and overhead costs may adversely affect our operating results.

A high rate of inflation, including a continuation of inflation at the current rate, has had and may continue to have an adverse effect on our ability to maintain attractive levels of gross margin and general and administrative expenses as a percentage of total revenue, if we are unable to pass on these costs through increased prices, revised budget estimates, or offset them in other ways.

Our business and results of operations are affected by developments with and policies of retailers that are out of our control.

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Consolidation in the consumer goods and retail industries we serve could reduce aggregate demand for our services in the future and could adversely affect our business or our results of operations.

In October 2022, The Kroger Co.

and Albertsons Companies, Inc., two large retailers, announced an agreement to merge their businesses together with an anticipated closing in 2024.

When companies consolidate, the services they previously purchased separately are often purchased by the combined entity, leading to the termination of relationships with certain service providers or demands for reduced fees and commissions.

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Providing this education, training and support requires that our personnel who manage our online training resource or provide customer support have specific inbound experience domain knowledge and expertise, making it more difficult for us to hire qualified personnel and to scale up our support operations.

The importance of high-quality customer support will increase as we expand our business and pursue new customers.

The importance of high-quality customer support will increase as we expand our business and pursue

new customers.

If we do not help our customers use multiple applications and provide effective ongoing support, our ability to sell additional functionality and services to, or to retain, existing customers may suffer and our reputation with existing or potential customers may be harmed.

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As a result, we have devoted, and will continue to devote, significant management attention and resources to integrating acquired businesses.

The failure to meet the challenges involved in integrating businesses and to realize the anticipated benefits of any acquisition could cause an interruption of, or a loss of momentum in, the activities of our combined business and could adversely affect our results of operations.

business and could adversely affect our results of operations.

The difficulties of combining acquired businesses with our own include, among others:

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Joint venture agreements may place limitations or restrictions on our services.

As part of our joint venture with, and

investments in Smollan, we are restricted under certain circumstances from making direct acquisitions and otherwise expanding our service offerings into markets outside of North America and Europe.

As part of our joint venture with, and investments in Smollan, we are restricted under certain circumstances from making direct acquisitions and otherwise expanding our service offerings into markets outside of North America and Europe.

As a result of our acquisition of Daymon Worldwide Inc.

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Given the nature of our business and our international operations, political, economic, and other conditions in foreign countries and regions, including geopolitical risks such as those arising from the current conflict between Russia and Ukraine, may adversely affect our business and results of operations.

The broader consequences of this

conflict, which may include further sanctions, embargoes, regional instability, and geopolitical shifts;

The broader consequences of this conflict, which may include further sanctions, embargoes, regional instability, and geopolitical shifts;

disruptions to transportation and distribution routes, or strategic decisions to alter certain routes;

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Accordingly, we recorded pretax charges of $2.8 million in the first quarter of 2022, primarily consisting of our proportionate share of the net investment in our Russian interest in “Selling, general, and administrative expenses”

in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

To the extent the current conflict between Russia and Ukraine adversely affects our business, particularly in Russia, it may also have the effect of heightening many other risks disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021 and this Quarterly Report on Form 10-Q, any of which could materially and adversely affect our business and results of operations.

in the Condensed Consolidated Statements of Operations and Comprehensive Income.

To the extent the current conflict between Russia and Ukraine adversely affects our business, particularly in Russia, it may also have the effect of heightening many other risks disclosed in our 2021 Annual Report and this Quarterly Report, any of which could materially and adversely affect our business and results of operations.

Such risks include, but are not limited to, adverse effects on macroeconomic conditions, including inflation and business spending;

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We have made acquisitions to complement and expand the services we offer and intend to continue to do so when attractive acquisition opportunities exist in the market.

As a result of prior acquisitions, including the acquisition of our business in 2014 by our current parent entity, Topco, we have goodwill and intangible assets recorded on our balance sheet of $2.2 billion and $2.2 billion, respectively, as of June 30, 2022, as further described in Note 4 to our condensed consolidated financial statements for the three and six months ended June 30, 2022.

As a result of prior acquisitions, including the acquisition of our business in 2014 by our current parent entity, Topco, we have goodwill and intangible assets recorded on our balance sheet of $2.2 billion and $2.2 billion, respectively, as of September 30, 2022, as further described in Note 4 to our condensed consolidated financial statements for the three and nine months ended September 30, 2022.

Under accounting guidelines, we must assess, at least annually, whether the value of goodwill and other intangible assets has been impaired.

We have recognized non-cash goodwill and non-cash intangible asset impairment charges, and we can make no assurances that we will not record any additional impairment charges in the future.

We have recognized non-cash goodwill and non-cash intangible asset impairment charges, and we can make no assurances that we will not record any additional impairment charges in

Any future reduction or impairment of the value of goodwill or other intangible assets will similarly result in charges against earnings, which could adversely affect our reported financial results in future periods.

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Our disaster recovery plan or those of our third-party providers may be inadequate, and our business interruption insurance may not be sufficient to compensate us for the losses that could occur.

privacy, data protection and consumer protection, could adversely affect our business and our financial condition.

Failure to comply with federal, state and foreign laws and regulations relating to privacy, data protection and consumer protection, or the expansion of current or the enactment of new laws or regulations relating to privacy, data protection and consumer protection, could adversely affect our business and our financial condition.

A variety of federal, state and foreign laws and regulations govern the collection, use, retention, sharing and security of personal information.

The information, security and privacy requirements imposed by such governmental laws and regulations relating to privacy, data protection and consumer protection are increasingly demanding, quickly evolving and may be subject to differing interpretations.

These requirements may not be harmonized, may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another or may conflict with other rules or our practices.

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Our actual or perceived failure to comply with such laws and regulations could result in fines, investigations, enforcement actions, penalties, sanctions, claims for damages by affected individuals, and damage to our reputation, among other negative consequences, any of which could have a material adverse effect on its financial performance.

We are subject to the California Consumer Protection Act of 2018 (“CCPA”), which became effective in 2020 and regulates the collection, use and processing of personal information relating to California residents, and which grants certain privacy rights to California residents, including rights to request access to and to request deletion of personal information relating to such individuals under certain circumstances.

Certain aspects of our business and/or the data it collects is subject to the California Consumer Protection Act of 2018 (“CCPA”), which became effective in 2020 and regulates the collection, use and processing of personal information relating to California residents, and which grants certain privacy rights to California residents, including rights to request access to and to request deletion of personal information relating to such individuals under certain circumstances.

Compliance with the new obligations imposed by the CCPA depends in part on how its requirements are interpreted and applied by the California attorney general and courts.

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This private right of action may increase the likelihood of, and risks associated with, data breach litigation.

Further, in November 2020, the State of California adopted the California Privacy Rights Act of 2020 (“CPRA”) which goes into effect January 1, 2023 and provides for expansion and amendment to the CCPA, including additional and strengthened privacy rights for California residents, new requirements regarding sensitive data and data sharing for digital advertising, and tripled damages for violations involving children’s data.

The CPRA establishes a dedicated privacy regulator under California law, with rulemaking and enforcement responsibilities.

Regulations implementing the CPRA are expected in draft and final form in 2022, which will need to be accounted for in time for the CPRA’s January 1, 2023 effective date.

Two other states, Virginia and Colorado, have passed their own comprehensive privacy laws to go into effect on January 1, 2023.

Like the CCPA and CPRA, Virginia’s Consumer Data Protection Act (“CDPA”) and the Colorado Privacy Act (“CPA”) regulates the collection, use and processing of personal information relating to Virginia and Colorado residents respectively, and grants certain privacy rights to those residents.

The CDPA and CPA also have key differences, such as requiring affirmative consent before businesses may process sensitive personal information and requiring data protection assessments.

Further, in November 2020, the State of California adopted the California Privacy Rights Act of 2020 (“CPRA”) which goes into effect January 1, 2023 and is enforceable starting on July 1, 2023.

The CPRA expands and amends the CCPA, including additional and strengthened privacy rights for California residents, new requirements regarding sensitive data and data sharing for digital advertising, and tripled damages for violations involving children’s data.

Also on January 1, 2023, the CCPA –

as amended by the CPRA –

will be newly applicable to personal information collected for employment-related purposes as well as from business-to-business contacts, creating new regulatory obligations as to datasets that until then had been largely exempt from the CCPA.

The CPRA includes a 12-month “look-back”

provision that requires businesses to map out all information retained since January 1, 2022.

The CPRA also establishes a dedicated privacy regulator under California law, with rulemaking and enforcement responsibilities.

Certain regulations implementing the CPRA are expected in draft and final form by the end of 2022, with potentially additional regulations to be proposed following the CPRA’s January 1, 2023 effective date.

Four other states –

Virginia, Colorado, Connecticut, and Utah –

have passed their own comprehensive privacy laws to go into effect in 2023.

Like the CCPA and CPRA, these laws regulate the collection, use, processing, and sharing of personal information relating to residents of each state respectively, and grants certain privacy rights to those residents.

The new state laws also have key differences from the CCPA and CPRA, such as requiring affirmative consent before businesses may process sensitive personal information, requiring data protection assessments, and requiring contracts between data controllers and data processors that direct data processors to assist data controllers in performing their obligations, as well as other differences among them.

Each law is enforceable by its own state’s attorney general –

for example, violation of the Virginia or Utah laws will cost up to $7,500 per violation –

and none include an explicit private right of action.

Other states are expected to consider and potentially pass similar privacy laws in 2023.

We are also subject to international privacy laws and regulations, many of which, such as the General Data Privacy Regulation (“GDPR”) and national laws implementing or supplementing the GDPR, such as the United Kingdom Data Protection Law 2018 (which retains key features of GDPR post-Brexit), are significantly more stringent than those currently enforced in the United States.

Certain aspects of our business and/or the data it collects is may also be subject to international privacy laws and regulations, many of which, such as the General Data Privacy Regulation (“GDPR”) and national laws implementing or supplementing the GDPR, such as the United Kingdom Data Protection Law 2018 (which retains

key features of GDPR post-Brexit), as well as the EU’s Privacy and Electronic Communications Directive (“ePrivacy Directive”), are significantly more stringent than those currently enforced in the United States.

The GDPR requires companies to meet requirements regarding the handling of personal data of individuals located in the European Economic Area (the “EEA”).

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The GDPR also includes significant penalties for noncompliance, which may result in monetary penalties of up to the higher of €20.0 million or 4% of a group’s worldwide turnover for the preceding financial year for the most serious violations.

The GDPR and other similar regulations require companies to give specific types of notice and informed consent is required for the placement of a cookie or similar technologies on a user’s device for online tracking for behavioral advertising and other purposes and for direct electronic marketing, and the GDPR also imposes additional conditions in order to satisfy such consent, such as a prohibition on pre-checked tick boxes and bundled consents.

The GDPR and other similar regulations such as the ePrivacy Directive and related member state regulations and directives require companies to give specific types of notice and informed consent is in many cases required for the placement of a cookie or similar technologies on a user’s device for online tracking for behavioral advertising and other purposes and for direct electronic marketing, and the GDPR also imposes additional conditions in order to satisfy such consent, such as a prohibition on pre-checked tick boxes and bundled consents.

Enforcement of the GDPR and related regulations varies by each EU Member State and is ongoing.

Further laws and regulations on these topics are forthcoming, including the Regulation on Privacy and Electronic Communications (“ePrivacy Regulation”), Digital Services Act (“DSA”), and Digital Markets Act (“DMA”).

GDPR may increase our responsibility and liability in relation to personal data that we process where that processing is subject to the GDPR.

Further laws and regulations on these topics are forthcoming, including the ePrivacy Directive’s proposed successor, the Regulation on Privacy and Electronic Communications (“ePrivacy Regulation”), as well as the Digital Services Act (“DSA”) and Digital Markets Act (“DMA”).

The GDPR may increase our responsibility and liability in relation to personal data that we process where that processing is subject to the GDPR.

In addition, we may be required to put in place additional mechanisms to ensure compliance with the GDPR, including GDPR requirements as implemented by individual countries.

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Privacy Shield Framework, a means that previously permitted transfers of personal data from the EEA to companies in the United States that certified adherence to the Privacy Shield Framework.

It is currently unclear what, if any, arrangement may replace the Privacy Shield Framework.

While the Biden Administration issued an executive order in October 2022 mandating new legal safeguards over U.S.

national security agencies’

access and use of EU and U.S.

personal data, it is currently unclear what, if any, formal arrangement may replace the Privacy Shield Framework.

Standard contractual clauses approved by the European Commission to permit transfers from the EU to third countries currently remain as a basis on which to transfer personal data from the EEA to other countries.

However, the standard contractual clauses are also subject to legal challenge, and in November 2020, the European Commission published a draft of updated standard contractual clauses.

Standard contractual clauses are also subject to legal challenge, and in November 2020, the European Commission published a draft of updated standard contractual clauses.

In January 2022, for example, Austria’s data protection authority determined that the use of Google Analytics violated the GDPR and the Court of Justice of the European Union’s “Schrems II”

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business, results of operations or financial condition.

For example, we may find it necessary to establish alternative systems to maintain personal data in the EEA, which may involve substantial expense and may cause us to divert resources from other aspects of our business, all of which may adversely affect our results from operations.

our business, all of which may adversely affect our results from operations.

Further, any inability to adequately address privacy concerns in connection with our solutions, or comply with applicable privacy or data protection laws, regulations and policies, could result in additional cost and liability to us, and adversely affect our ability to offer our solutions.

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We cannot yet determine the impact such future laws, regulations and standards may have on our business.

Complying with these evolving obligations is challenging, time consuming and expensive, and federal regulators, state attorneys general and plaintiff’s attorneys have been, and will likely continue to be,

active in this space.

Expanding definitions and interpretations of what constitutes “personal data”

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In addition, if we do not prevail in any litigation or governmental investigation related to these matters, we could be subject to costs related to such litigation or governmental investigation, including equitable relief, civil monetary damages, treble damages, repayment or criminal penalties, which may not be covered by insurance or may materially increase our insurance costs.

We have incurred and will continue to incur additional substantial professional fees regardless of the outcome of any such litigation or governmental investigation.

We have incurred and will continue to incur additional substantial professional fees regardless of the outcome of any such litigation or governmental

investigation.

In addition, there can be no assurance to what degree, if any, we will be able to recover any such costs or damages from the former owners of Take 5 or whether such former owners of Take 5 engaged in further unknown improper activities that may subject us to further costs or damages, including potential reputational harm.

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If certain competitors were to combine into integrated sales, marketing and merchandising services companies, additional sales, marketing and merchandising service companies were to enter the market or existing participants in this industry were to become more competitive, including through technological innovation such as social media and crowdsourcing, it could have a material adverse effect on our business, financial condition or results of operations.

Inflation may adversely affect our operating results .

Inflationary factors such as increases in the labor costs, material costs and overhead costs may adversely affect our operating results.

Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation, including a continuation of inflation at the current rate, may have an adverse effect on our ability to maintain current levels of gross margin and general and administrative expenses as a percentage of total revenue, if we are unable to pass on these costs through increased prices, revised budget estimates, or offset them in other ways.

Damage to our reputation could negatively impact our business, financial condition and results of operations.

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These suppliers of data may impose restrictions on our use of such data, fail to adhere to our quality control standards, increase the price they charge us for this data or refuse altogether to license the data to us.

If we are unable to use such third-party data and services or if we are unable to contract with third parties, when necessary, our business, financial condition or our results of operations could be adversely affected.

If we are unable to use such third-party data and services or if we are unable to contract with third parties, when necessary,

our business, financial condition or our results of operations could be adversely affected.

In the event that such data and services are unavailable for our use or the cost of acquiring such data and services increases, our business could be adversely affected.

We may be unable to timely and effectively respond to changes in digital practices and policies, which could adversely affect our business, financial condition or results of operations.

metrics that can be collected or used by us and our clients or reduce the value of our digital services.

Changes to practices and policies of operating systems, websites and other digital platforms, including, without limitation, Apple’s or Android’s transparency policies, may reduce the quantity and quality of the data and metrics that can be collected or used by us and our clients or reduce the value of our digital services.

These limitations may adversely affect both our and our clients’

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If we choose to go to court to stop a third party from infringing our intellectual property, that third party may ask the court to rule that our intellectual property rights are invalid and/or should not be enforced against that third party.

Even if the action that we take to protect our intellectual property rights is successful, any infringement may still have a material adverse effect on our business, financial condition and results of operations.

Even if the action that we take to protect

our intellectual property rights is successful, any infringement may still have a material adverse effect on our business, financial condition and results of operations.

We may be subject to claims of infringement of third-party intellectual property rights that are costly to defend, result in the diversion of management’s time and efforts, require the payment of damages, limit our ability to use particular technologies in the future or prevent us from marketing our existing or future products and services.

Third parties may assert that we infringe, misappropriate or otherwise violate their intellectual property, including with respect to our digital solutions and other technologies that are important to our business, and may

sue us for intellectual property infringement.

We may not be aware of whether our products or services do or will infringe existing or future patents or the intellectual property rights of others.

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For these products, we could be subject to potential claims for misbranded, adulterated, contaminated, damaged or spoiled products, or could be subject to liability in connection with claims related to infringement of intellectual property, product liability, product recalls or other liabilities arising in connection with the sale or marketing of these products.

As a result, we could be subject to claims or lawsuits (including potential class action lawsuits), and

we could incur liabilities that are not insured or exceed our insurance coverage or for which the manufacturer of the product does not indemnify us.

As a result, we could be subject to claims or lawsuits (including potential class action lawsuits), and we could incur liabilities that are not insured or exceed our insurance coverage or for which the manufacturer of the product does not indemnify us.

Even if product claims against us are not successful or fully pursued, these claims could be costly and time consuming and may require our management to spend time defending the claims rather than operating our business.

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Further, tax legislation may be enacted in the future which could negatively impact our current or future tax structure and effective tax rates.

We may be subject to audits of our income, sales and other transaction taxes by U.S.

We may be subject to audits of

our income, sales and other transaction taxes by U.S.

federal, state, local and foreign taxing authorities.

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We are controlled by Topco, the Advantage Sponsors, and the CP Sponsor, whose economic and other interests in our business may be different from yours.

Our authorized capital stock consists of 3,290,000,000 shares of common stock and 10,000,000 shares of preferred stock, and as of August 8, 2022, certain equityholders of Topco (the “Advantage Sponsors”), Topco and Conyers Park II Sponsor LLC, an affiliate of Centerview Capital Management, LLC, which was Conyers Park’s sponsor prior to the Merger (the “CP Sponsor”), collectively own 254,310,000 shares, or 79.85% (including 65.54% held by Topco), of our outstanding common stock.

Our authorized capital stock consists of 3,290,000,000 shares of Class A common stock, and as of November 8, 2022, certain equityholders of Topco (the “Advantage Sponsors”), Topco and Conyers Park II Sponsor LLC, an affiliate of Centerview Capital Management, LLC, which was Conyers Park’s sponsor prior to the Merger (the “CP Sponsor”), collectively own 254,310,000 shares, or 79.55% (including 65.30% held by Topco), of our outstanding Class A common stock.

Subject to applicable law, the Advantage Sponsors, through their direct ownership of our common stock and their ownership of equity interests of Topco, and the CP Sponsor are able to exert significant influence in the election of our directors and control actions to be taken by our stockholders, including amendments to our third amended and restated certificate of incorporation and approval of mergers, sales of substantially all of our assets, and other significant corporate transactions.

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In November 2021, our board of directors authorized a share repurchase program, under which we may repurchase up to $100 million of our outstanding Class A common stock (the “2021 Share Repurchase Program”).

As of June 30, 2022, the remaining amount available for repurchase pursuant to the 2021 Share Repurchase Program is $87.4 million.

As of September 30, 2022, the remaining amount available for repurchase pursuant to the 2021 Share Repurchase Program is $87.4 million.

However, we are not obligated to make any further purchases under the 2021 Share Repurchase Program and we may suspend or permanently discontinue this program at any time or significantly reduce the amount of repurchases under the program.

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The change in fair value of warrant liability represents the mark-to-market fair value adjustments to the outstanding private placement warrants issued in connection with the initial public offering of Conyers Park.

Significant changes in share price of the public warrants may adversely affect the volatility in our net income (loss) in our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Significant changes in share price of the public warrants may adversely affect the volatility in our net income (loss) in our Condensed Consolidated Statements of Operations and Comprehensive Income.

Risks Related to Indebtedness

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We have a significant amount of indebtedness.

As of June 30, 2022, we had total indebtedness of $2.1 billion, excluding debt issuance costs, with an additional $54.5 million of letters of credit outstanding under our revolving credit facility.

As of September 30, 2022, we had total indebtedness of $2.1 billion, excluding debt issuance costs, with an additional $54.5 million of letters of credit outstanding under our revolving credit facility.

The agreements governing our indebtedness contain customary covenants that restrict us from taking certain actions, such as incurring additional debt, permitting liens on pledged assets, making investments, paying dividends or making distributions to equity holders, prepaying junior debt, engaging in mergers or restructurings, and selling assets, among other things, which may restrict our ability to successfully execute on our business plan.

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We and our subsidiaries may be able to incur additional indebtedness in the future because the terms of our indebtedness do not fully prohibit us or our subsidiaries from doing so.

Subject to covenant compliance and certain conditions, as of June 30, 2022, the agreements governing our indebtedness would have permitted us to borrow up to an additional $300.5 million under our revolving credit facility.

In addition, we and our subsidiaries have, and will have, the ability to incur additional indebtedness as incremental facilities under our credit agreement and we or

our subsidiaries may issue additional notes in the future.

Subject to covenant compliance and certain conditions, as of September 30, 2022, the agreements governing our indebtedness would have permitted us to borrow up to an additional $345.5 million under our revolving credit facility.

In addition, we and our subsidiaries have, and will have, the ability to incur additional indebtedness as incremental facilities under our credit agreement

and we or our subsidiaries may issue additional notes in the future.

If additional debt is added to our current debt levels and our subsidiaries’

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If interest rates were to increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease.

On a pro forma basis, assuming no other prepayments of the credit facility and that our revolving credit facility is fully drawn (and to the extent that LIBOR is in excess of the 0.00% and 0.75% floors applicable to our revolving credit facility and our term loan credit facility, respectively), each one-eighth percentage point change in interest rates would result in an approximately $0.6 million change in interest expense, net of gains from interest rate caps, for the three months ended June 30, 2022.

On a pro forma basis, assuming no other prepayments of the credit facility and that our revolving credit facility is fully drawn (and to the extent that LIBOR is in excess of the 0.00% and 0.75% floors applicable to our revolving credit facility and our term loan credit facility, respectively), each one-eighth percentage point change in interest rates would result in an approximately $1.0 million change in interest expense, net of gains from interest rate caps, for the nine months ended September 30, 2022.

In the future, we may enter into interest rate swaps that involve the exchange of floating- for fixed-rate interest payments in order to reduce interest rate volatility or risk.

However, we may not maintain interest rate swaps with respect to any of our variable rate indebtedness, and any swaps we enter into may not fully or effectively mitigate our interest rate risk.

We are subject to risks related to recent proposals for reform regarding LIBOR.

The elimination of LIBOR after June 2023 may affect our financial results

Certain of our financial arrangements, including the Senior Secured Credit Facilities, were made at variable rates that use the London Interbank Offered Rate, or LIBOR (or metrics derived from or related to LIBOR), as a benchmark for establishing the interest rate.

LIBOR is the subject of recent proposals for reform.

On July 27, 2017, the United Kingdom’s Financial Conduct Authority announced that it intends to stop persuading or compelling banks to submit LIBOR rates after 2021.

However, in November 2020, the Intercontinental Exchange Benchmark Administration, the administrator of LIBOR, announced that it intends to extend the cessation date for most LIBOR tenors to June 30, 2023.

In the United States, efforts to identify a set of alternative U.S.

dollar reference interest rates include proposals by the Alternative Reference Rates Committee (the “ARRC”) of the Federal Reserve Board and the Federal Reserve Bank of New York.

On July 29, 2021, the ARRC formally recommended the SOFR as its preferred alternative to LIBOR in derivatives and other financial contracts.

However, there continues to be uncertainty regarding the nature of potential changes to and future utilization of specific LIBOR tenors, the development and acceptance of alternative reference rates, and other reforms.

All LIBOR tenors relevant to us will cease to be published or will no longer be representative after June 30, 2023.

This means that any of our LIBOR-based borrowings that extend beyond June 30, 2023 will need to be converted to a replacement rate.

In the U.S., the Alternative Reference Rates Committee (the “ARRC”) convened by the Federal Reserve Board and the Federal Reserve Bank of New York has recommended the Secured Overnight Financing Rate (“SOFR”) plus a recommended spread adjustment as LIBOR’s replacement.

There are significant differences between LIBOR and SOFR, such as LIBOR being an unsecured lending rate while SOFR is a secured lending rate, and SOFR being an overnight rate while LIBOR reflects term rates at different maturities.

If our LIBOR-based financing arrangements are converted to SOFR, the differences between LIBOR and SOFR, plus the recommended spread adjustment, could result in interest costs that are higher than if LIBOR remained available, which could adversely impact our operating results.

Although SOFR is the ARRC’s recommended replacement rate, it is also possible that lenders and other counterparties may instead choose alternative replacement rates that may differ from LIBOR in ways similar to SOFR or in other ways that would result in higher interest costs for us.

There is no assurance that any alternative reference rate, including SOFR, will be similar to, or produce the same value or economic equivalence as, LIBOR, and there continues to be uncertainty regarding the nature of potential changes to and future utilization of specific LIBOR tenors, the development and acceptance of SOFR or alternative reference rates, and other reforms.

These consequences cannot be entirely predicted and could have an adverse impact on the market value for or value of LIBOR-linked securities, loans and other financial obligations or extensions of credit held by or due to us.

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compensation, personal and property injury, disputes relating to acquisitions (including contingent consideration), governmental investigations and other proceedings.

Some historical and current legal proceedings and future legal proceedings may purport to be brought as class actions or

representative basis on behalf of similarly situated parties including with respect to employment-related matters.

Some historical and current legal proceedings and future legal proceedings may purport to be brought as class actions or representative basis on behalf of similarly situated parties including with respect to employment-related matters.

We cannot be certain of the ultimate outcomes of any such claims, and resolution of these types of matters against us may result in significant fines, judgments or settlements, which, if uninsured, or if the fines, judgments and settlements exceed insured levels, could adversely affect our business or financial results.

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Our executive officers have limited experience in the management of a publicly traded company.

Our management team may not successfully or effectively manage our transition to a public company that will be subject to significant regulatory oversight and reporting obligations under federal securities laws.

Our management team may not successfully or effectively manage our transition to a public company that will be

subject to significant regulatory oversight and reporting obligations under federal securities laws.

Their limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage in that it is likely that an increasing amount of their time may be devoted to these activities which will result in less time being devoted to the management and growth of the Company.

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The development and implementation of the standards and controls necessary for the Company to achieve the level of accounting standards required of a public company in the United States may require costs greater than expected.

It is possible

that we will be required to expand our employee base and hire additional employees to support our operations as a public company which will increase our operating costs in future periods.

It is possible that we will be required to expand our employee base and hire additional employees to support our operations as a public company which will increase our operating costs in future periods.

If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our common stock, the price of our Class A common stock could decline.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors