Item 1A. Risk Factors
Item 1A. Risk Factors
Reference is made to Part I Item 1A. Risk Factors in our Annual Report on Form 10–K for the year ended December 31, 2021 and Part II Item 1A. in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, which sets forth information relating to important risks and uncertainties that could materially adversely affect our business, financial condition or operating results. The Annual Report on Form 10-K for the year ended December 31, 2021, also includes the risk factor titled “The market prices and trading volume that our shares of Common Stock have recently experienced, and may continue to experience, extreme volatility, which could cause purchasers of our Common Stock could incur substantial losses”, which risk factor continues to apply to our Common Stock and may also apply to our Preferred Equity Units. Except as set forth below, there have been no material changes to the risk factors contained in our Annual Report on Form 10-K for the year ended December 31, 2021 and Part II Item 1A. in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022.
Our business is subject to international economic, political and other risks that could negatively affect our business, results of operations and financial condition.
As a result of our international operations, 24.6% of our revenues were derived from countries outside the United States for the six months ended June 30, 2022. The success of our international operations is subject to risks that are beyond our control. Accordingly, our business is subject to risks associated with doing business internationally, including:
● difficulties and costs of staffing and managing international operations among diverse geographies, languages and cultures;
● the impact of regional or country-specific business cycles and economic instability;
● the potential for political, social, or economic unrest, terrorism, hostilities, cyber-attacks or war, including the conflict between Russia and Ukraine and that Sweden and Finland (countries where we operate approximately 100 theatres) completed accession talks at NATO headquarters in Brussels on July 4, 2022
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and NATO ambassadors signed the accession protocols on July 5, 2022, which could cause a deterioration in the relationship each country has with Russia, and the potential impact of financial and economic sanctions on the regional and global economy;
● fluctuations in foreign currency exchange rates which could lead to fluctuations in our reported results of operations or result in significant decreases in the value of our international investments as denominated in U.S. Dollars;
● increased foreign interest rates, foreign exchange fees and other bank charges as a result of financing our foreign operations;
● exposure to anti-corruption laws, including the Foreign Corrupt Practices Act (“FCPA”) and the U.K. Bribery Act (the “Bribery Act”), and export-control regulations and economic sanctions regulations, including those promulgated by the Office of Foreign Assets Control, United States Department of Treasury (“OFAC”);
● exposure to local economic conditions and local laws and regulations;
● exposure to local labor and employment laws;
● relationships with local labor unions and works councils;
● limited borrowing capabilities relating to activities in non-U.S. countries;
● economic and/or credit conditions abroad;
● potential adverse changes in the political and/or economic stability of foreign countries or in their diplomatic relations with the United States;
● restrictions on the withdrawal of foreign investment and earnings;
● government policies against businesses owned by foreigners;
● investment restrictions or requirements;
● diminished ability to legally enforce our contractual rights in foreign countries;
● difficulty in protecting our brand, reputation and intellectual property;
● restrictions on the ability to obtain or retain licenses required for operation;
● foreign exchange restrictions;
● adverse changes in regulatory or tax requirements;
● restrictions on foreign ownership of subsidiaries;
● data protection and privacy laws, including GDPR and other restrictions on transferring personally identifiable information outside of a jurisdiction; and
● tariffs and other trade barriers.
If we are unable to manage the complexity of our global operations successfully, it could have a material adverse effect on our business, financial condition and results of operations.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
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