What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2023-03-13 compared with 2022-03-11 · 55 added, 89 removed, 541 unchanged (21% of the section changed)

5 unchanged sentences

• General economic conditions can have a material adverse effect on our business, financial conditions and result of operations.

• The ongoing COVID-19 pandemic may adversely affect our revenues, results of operations and financial condition.

• Global and national events, including, but not limited to the COVID-19 pandemic, increased inflation, rising interest rates, supply chain disruptions, labor conditions, and international conflict, may adversely affect our revenues, results of operations and financial condition.

• Failure to implement strategies to enhance our performance could have a material adverse effect on our business, results of operations and financial conditions.

13 unchanged sentences

RISKS RELATED TO OUR BUSINESS

Risks Related to the COVID-19 pandemic, natural disasters, public health epidemics, and other events beyond our control.

Risks related to the COVID-19 pandemic, natural disasters, public health epidemics, and other events beyond our control may adversely affect our business.

Our business has been adversely impacted by the COVID-19 pandemic which has affected more than 200 countries and has significantly disrupted the day-to-day activities of both individuals and companies.

We rely on individuals and third-party organizations around the world to supply components, manufacture and distribute our products, and execute our clinical trials.

We have and may continue to experience revenue loss, supply interruptions, time delays and incur unplanned expenses as a result of the impact of the ongoing COVID-19 pandemic.

The COVID-19 pandemic’s impact on global markets could affect our future access to liquidity and materially adversely affect our results of operations and financial condition.

The ongoing COVID-19 pandemic, and restrictions intended to prevent its spread, have had a significant adverse impact on economic and market conditions around the world, including the United States.

The impact of the COVID-19 pandemic continues to evolve.

While the economic impact brought by, and the duration of, COVID-19 is difficult to assess or predict, the COVID-19 pandemic could result in additional disruption of global financial markets, reducing our ability to access capital in the future, which could negatively affect our liquidity in the future and in ways that cannot be predicted potentially including a prolonged recessionary environment in the United States.

We have and may continue to experience revenue loss, supply interruptions, time delays and incur unplanned expenses as a result of the impact of the COVID-19 pandemic.

Global and national economic and other events, including, but not limited to increased inflation, rising interest rates, supply chain disruptions, labor conditions and international conflicts, could affect our future access to liquidity and materially adversely affect our results of operations and financial condition.

Ongoing global and national events including, but not limited to increased inflation, rising interest rates, supply chain disruptions, labor conditions and the war between Russia and Ukraine, have had a significant adverse impact on economic and market conditions around the world, including the United States.

While the economic impact brought by, and the duration of, such global events is difficult to assess or predict, such events could result in additional disruption of global financial markets, reducing our ability to access capital in the future, which could negatively affect our liquidity in the future and in ways that cannot be predicted potentially including a prolonged recessionary environment in the United States.

In the longer term, there could be significant new regulatory actions and other events that could limit our activities and investment opportunities or change the functioning of the capital markets, and there is the possibility of a severe worldwide economic downturn.

16 unchanged sentences

• Unforeseen or serious adverse effects outside of those specified in current product labeling being attributed to any of our approved products.

Acetadote may be used to treat acetaminophen overdosess.

Acetadote may be used to treat acetaminophen overdoses.

The FDA has previously requested prescribers and manufacturers of prescription combination products that contain acetaminophen to limit the amount of acetaminophen to no more than 325 milligrams (mg) in each tablet or capsule.

10 unchanged sentences

Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to review and approve new products and otherwise affect the FDA’s ability to perform routine functions.

Disruptions at the FDA and other agencies may also slow the time necessary for new drugs or modifications to approved drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.

Separately, in response to the continuing COVID-19 pandemic and the spread of the Omicron variant, on December 29, 2021, the FDA announced its intention to again postpone surveillance inspections of most foreign and domestic manufacturing facilities with no definitive target date for resuming routine inspection activities.

Regulatory authorities outside the United States may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic and emerging variants.

If a prolonged government shutdown occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

Disruptions at the FDA and other agencies may also slow the time necessary for new drugs or modifications to approved drugs to be reviewed and/or approved by necessary government agencies.

Such disruptions could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

If any manufacturer or partner we rely upon fails to supply our products in the amounts we require on a timely basis, or fails to comply with stringent regulations applicable to pharmaceutical drug manufacturers, we may be unable to meet demand for our products and may lose potential revenues.

4 unchanged sentences

A long-term inability to meet demand for our products could result in impairment of our brands overall future and the carrying value of the assets associated with our brands.

The recent COVID-19 pandemic has and may continue to create issues for our third party-manufacturers and introduce delays in our manufacturing process.

We have an agreement with one manufacturer to provide commercial supply of Acetadote.

If this manufacturer is unable to produce marketable inventory in sufficient quantities, in the agreed upon time period, we could suffer an inability to meet demand for Acetadote.

We have agreements with multiple manufacturers for the supply of Caldolor and during 2021 we obtained commercial supplies from three of these manufacturers for our international and domestic Caldolor requirements.

We have agreements with multiple manufacturers for the supply of Caldolor.

If the manufacturers of Caldolor are unable to produce marketable inventory in sufficient quantities, in the agreed upon time period, we could suffer an inability to meet demand for Caldolor.

1 unchanged sentence

It would be particularly difficult to find a new manufacturer of the Kristalose active pharmaceutical ingredient on an expedited basis.

We also have manufacturing relationships with two packagers who provided finished supplies of Kristalose for commercial and sampling purposes during 2021.

We will be continuing the packaging of Kristalose with one of those packagers going forward.

If the manufacturing or packaging facilities are unable to produce useable or marketable inventory in sufficient quantities, in the agreed upon time period, we could suffer an inablty to meet demand for Kristalose.

We have manufacturing relationship with one packager who provided finished supplies of Kristalose for commercial and sampling purposes during 2022.

If the manufacturing

or packaging facilities are unable to produce useable or marketable inventory in sufficient quantities, in the agreed upon time period, we could suffer an inability to meet demand for Kristalose.

Omeclamox-Pak:

1 unchanged sentence

Cumberland is awaiting resumption of those operations while also exploring other alternatives to restart the product’s packaging.

In October 2020, we informed the FDA of a shortage of the Omeclamox-Pak which continues.

In October 2020, we informed the FDA of a shortage of Omeclamox-Pak which continues.

If we are unable to obtain marketable inventory in the future, we could suffer an inability to meet demand for Omeclamox-Pak.

1 unchanged sentence

We are currently working with a new manufacturer to provide us with long term supplies of the product.

In February 2022, we notified the FDA of a shortage of Vaprisol If we are unable to produce additional marketable inventory in sufficient quantities, in the required time frame, we could suffer an inability to meet demand for Vaprisol.

In February 2022, we notified the FDA of a shortage of Vaprisol.

If we are unable to produce additional marketable inventory in sufficient quantities, in the required time frame, we could suffer an inability to meet demand for Vaprisol.

Through our acquisition of Vibativ, we acquired a multi-year supply of raw material, work in process and finished goods inventory.

1 unchanged sentence

If we are unable to continue to obtain marketable inventory in sufficient quantities, in the agreed upon time period, we could suffer an inability to meet demand for Vibativ.

Under our licensing and distribution agreement for the product, our licensor is responsible for providing us the packaged and labeled commercial supply of the RediTrex product.

If we are unable to obtain marketable inventory in sufficient quantities, in the agreed upon time period, we could suffer an inability to meet demand for RediTrex.

As part of the acquisition of Sancuso in January 2022, we obtained an initial supply of finished goods inventory and work in progress.

The continued production of Sancuso is in the process of being moved to one of the current manufacturer’s other facilities.

Data is being developed to support the transfer which will require FDA approval.

If the FDA does not approve the new facility and we are unable to obtain marketable inventory n sufficient quantities, we could suffer an inability to meet demand for Sancuso.

On December 6, 2022, we received notification from Kyowa Kirin, Inc.

that the FDA approved a supplemental new drug application associated with a new site at Kindeva Drug Delivery L.P., for the manufacturing and primary packaging of the Sancuso brand.

In addition, all manufacturers of our products and product candidates must comply with current good manufacturing practices, ("GMPs"), enforced by the FDA through its facilities inspection program.

24 unchanged sentences

The introduction of new products could substantially reduce our market share or render our products obsolete.

The selling prices of pharmaceutical products tend to decline as competition increases, through new product introduction or otherwise, which could reduce our revenues and profitability.

The selling prices of pharmaceutical products tend to

decline as competition increases, through new product introduction or otherwise, which could reduce our revenues and profitability.

If generic products that compete with any of our branded pharmaceutical products are approved and sold, sales of our products will be adversely affected.

14 unchanged sentences

We may also experience delays associated with future required Phase IV clinical studies potentially resulting from, among other factors, difficulty enrolling patients.

could impact our ability to explore opportunities for label expansion and limit our ability to bring our products to new patient populations.

Such delays could impact our ability to explore opportunities for label expansion and limit our ability to bring our products to new patient populations.

In addition, we have largely obtained regulatory approval to market our products in the United States.

3 unchanged sentences

We have no control over these third parties and cannot be sure that marketing approval for our products will be obtained outside the United States.

Our future growth depends on our ability to identify and acquire rights to products.

If we do not successfully identify and acquire rights to products, our growth opportunities may be limited.

Our future growth depends on our ability to identify, acquire rights and successfully integrate new brands into our operations.

If we do not successfully identify and acquire rights to products or if we do not successfully integrate acquired product brands into our operations, our growth opportunities may be limited.

We have added six products to our portfolio of brands through acquisitions.

3 unchanged sentences

Many acquisition opportunities involve competition among several potential purchasers including large multi-national pharmaceutical companies and other competitors that have access to greater financial resources than we do.

With future acquisitions, we may face financial and operational risks and uncertainties.

future acquisitions, we may face financial and operational risks and uncertainties.

We may not be able to engage in future product acquisitions, and those we do complete may not be beneficial to us in the long term.

1 unchanged sentence

Any unforeseen issues or lack of FDA approval will negatively affect marketing and development plans for those products.

Our future growth depends on our ability to successfully integrate acquired product brands into our operations.

If we do not successfully integrate acquired product brands into our operations, our growth opportunities may be limited.

If we are unable to successfully integrate the marketing, sale and distribution of any other potential products into our current infrastructure or if they require significantly greater resources than originally anticipated, we may face financial and operational risks and uncertainties.

23 unchanged sentences

Adoption of such legislation could further limit reimbursement for pharmaceuticals.

In addition, as part of the Build Back Better Act (“BBBA”) proposed legislation, provisions intended to lower the price of prescription drugs, including permitting Medicare to negotiate the price of prescription drugs once they have been on the market for a fixed number of years, and imposing a tax penalty on drug manufacturers if the price of their drugs increase faster than the rate of inflation are possible At this time no assurances can be given that these measures, or subsequent legislative proposals, will not have an adverse effect on our revenues in the future.

In addition, as part of the Inflation Reduction Act legislation, provisions intended to lower the price of prescription drugs, including permitting Medicare to negotiate the price of prescription drugs once they have been on the market for a fixed number of years, and imposing a tax penalty on drug manufacturers if the price of their drugs increase faster than the rate of inflation.

At this time no assurances can be given that these measures, or subsequent legislative

proposals, will not have an adverse effect on our revenues in the future.

Future cost control initiatives, legislation, and regulations could decrease the price that we receive for our products, which would limit our revenue and profitability.

27 unchanged sentences

We are a relatively small company, and we depend to a great extent on principal members of our management, scientific staff, and sales representatives and managers.

If we lose the services of any key personnel, in particular, A.J.

If we lose the services of any key personnel, in particular,

Kazimi, our Chief Executive Officer, or other members of senior management it could have a material adverse effect on our business prospects.

6 unchanged sentences

If we experience difficulties in hiring and retaining personnel in key positions, we could suffer from delays in product development, loss of customers and sales and diversion of management resources, which could adversely affect operating results.

The recent COVID-19 pandemic has introduced additional challenges in the retention and hiring of key personnel.

In addition, we have recently observed an overall tightening and increasingly competitive labor market.

Our business could be adversely affected by an inability to retain personnel or upward pressure on wages as a result of the competitive labor market.

The size of our organization and our potential growth may lead to difficulties in managing operations.

22 unchanged sentences

If we are not able to obtain FDA approval for any desired future indications for our products, our ability to effectively market and sell our products may be reduced and our business may be adversely affected.

Our failure to follow FDA rules and guidelines relating to promotion and advertising may cause the FDA to suspend or withdraw an approved product from the market, require a recall or payment of fines, or could result in disgorgement of money, operating restrictions, injunctions or criminal prosecution, any of which could harm our business.

disgorgement of money, operating restrictions, injunctions or criminal prosecution, any of which could harm our business.

Our business and operations would suffer in the event of system failures, security breaches, including any cybersecurity incidents, adverse events or other disruptions within our information technology infrastructure at our corporate headquarters;

12 unchanged sentences

While we continue to invest in data protection and information technology, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions.

Any such breach could compromise our networks and the information stored there could be accessed,

publicly disclosed, lost or stolen.

Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen.

If we are subject to cyber-attacks or security breaches, this could result in business interruptions and delays;

11 unchanged sentences

We believe that our subcontractors and vendors take precautionary measures to prevent problems that could affect our business operations as a result of failure or disruption to their information systems.

However, there is no guarantee such efforts will be successful in preventing a disruption, and it is possible that we may be impacted by information system failures.

However, there is no guarantee such efforts will be successful in preventing a disruption, and it is possible that we may be impacted by

information system failures.

The occurrence of any information system failures could result in interruptions, delays, loss or corruption of data and cessations or interruptions in the availability of these systems.

45 unchanged sentences

In addition, if we choose to issue shares of our stock as consideration for any acquisition, dilution to our shareholders could result.

The acquisitions we have made or make in the future may make us the subject of lawsuits from either an acquired company’s shareholders, an acquired company’s previous shareholders, or our current shareholders.

We may be the subject of lawsuits from either an acquired company’s shareholders, an acquired company’s previous shareholders, or our current shareholders.

These lawsuits could result from the actions of the acquisition target prior to the date of the acquisition, from the acquisition transaction itself, or from actions after the acquisition.

Defending potential lawsuits could cost us significant expense and distract management’s attention from the operation of the business.

Additionally, these lawsuits could result in the cancellation of, or the inability to renew, certain insurance coverage that would be necessary to protect our assets.

We may be required to modify our business practices, pay fines and significant expenses or experience other losses due to governmental investigations or other enforcement activities.

30 unchanged sentences

Certain regulatory changes or decisions could make it more difficult for us to sell our products and could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Manufacturers of drug products and their facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities for compliance with GMP and other applicable regulations.

Manufacturers of

drug products and their facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities for compliance with GMP and other applicable regulations.

If we or a regulatory agency discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with a facility where the product is manufactured, a regulatory agency may impose restrictions on that product or the manufacturer, including withdrawal of the product from the market or suspension of manufacturing.

23 unchanged sentences

If our competitors engage in these practices, they may receive preferential treatment from officials or agencies in some countries, giving our competitors an advantage in securing business from government officials who might give them priority in obtaining new licenses, which would put us at a disadvantage.

We have established formal policies or procedures for prohibiting or monitoring this conduct, but we cannot assure you that our employees or other agents will not engage in such conduct for which we might be held responsible.

We have established formal policies or

procedures for prohibiting or monitoring this conduct, but we cannot assure you that our employees or other agents will not engage in such conduct for which we might be held responsible.

If our employees or other agents are found to have engaged in such practices, we could suffer severe penalties.

6 unchanged sentences

Cumberland has also established a system to ensure that data was reported completely, in the correct format, and on time.

Despite these

policies, procedures and systems, we cannot assure you that we will collect and report all data accurately.

Despite these policies, procedures and systems, we cannot assure you that we will collect and report all data accurately.

If we fail to accurately report this information, we could suffer severe penalties.

14 unchanged sentences

These laws and regulations are evolving and subject to interpretation and may impose limitations on our activities or otherwise adversely affect our business.

Similarly, there are a number of legislative proposals in the European Union, the United States, at both the federal and state level, as well as other jurisdictions that could impose new obligations or limitations in areas affecting our business.

Similarly, there are a number of legislative proposals in the European Union, the United States, at both the federal

and state level, as well as other jurisdictions that could impose new obligations or limitations in areas affecting our business.

These changes may lead to additional costs and increase our overall risk exposure.

26 unchanged sentences

While any such licensor is expected to be contractually obligated to diligently pursue its patent applications and allow us the opportunity to consult, review and comment on patent office communications, we cannot be sure that it will perform as required.

If a licensor does not perform and if we do not assume the maintenance of the licensed patents in sufficient time to make required payments or filings with the appropriate governmental agencies, we risk losing the benefit of all or some of those patent rights.

If a licensor does not perform and if we do not assume the

maintenance of the licensed patents in sufficient time to make required payments or filings with the appropriate governmental agencies, we risk losing the benefit of all or some of those patent rights.

If the use of our technology conflicts with the intellectual property rights of third parties, we may incur substantial liabilities, and we may be unable to commercialize products based on this technology in a profitable manner or at all.

57 unchanged sentences

See also “Management’s discussion and analysis of financial condition and results of operations—Liquidity and capital resources.” Fluctuation in operating results, particularly if not anticipated by investors and other members of the financial community, could add to volatility in our stock price.

The COVID-19 coronavirus has negatively impacted the financial markets and may create additional risk for our customers and their ability to pay for our products.

Our focus on acquisitions as a growth strategy has created intangible assets whose amortization could negatively affect our results of operations.

8 unchanged sentences

We may also seek to raise capital through a debt financing, which would result in ongoing debt-service payments and increased interest expense.

Furthermore, the terms of any additional debt securities we may issue in the future may impose restrictions on our operations, which may include limiting our ability to incur additional indebtedness, pay dividends on or repurchase our common shares, or make certain acquisitions or investments.

In addition, we may be subject to covenants requiring us to satisfy certain financial tests and ratios, and our ability to satisfy such covenants may be affected by events outside of our control.

Any financings would also likely involve operational and financial restrictions being imposed on us.

If we are unable to obtain any needed additional funding, we may be required to reduce the scope of, delay, or eliminate some or all of, our planned research, development and commercialization activities or to license to third parties the rights to develop and/or commercialize products or technologies that we would otherwise seek to develop and/or commercialize ourselves or on terms that are less attractive than they might otherwise be, any of which could materially harm our business.

We might also seek to sell assets or rights in one or more commercial products or product development programs.

2 unchanged sentences

If we are unable to raise additional capital when needed due to the reasons listed above and lack of creditworthiness, bank failures, or price decline in market investments, we could be forced to scale back our operations to conserve cash.

If we are unable to maintain appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the restatement of our financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors to lose confidence in our reported financial information and have a negative effect on the market price for shares of our common stock.

Effective internal controls are necessary for us to provide reliable financial reports and mitigate the risk of fraud.

We maintain a system of internal control over financial reporting, which is defined as a process designed by, or under the supervision of, our principal executive officer and principal financial officer, and affected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

We cannot assure you that we will not, in the future, identify areas requiring improvement in our internal control over financial reporting.

We cannot assure you that the measures we will take to improve these controls will be successful or that we will implement and maintain adequate controls over our financial processes and reporting in the future as we continue to expand.

If we are unable to establish appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the restatement of our financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors to lose confidence in our reported financial information and have a negative effect on the market price for shares of our common stock.

In addition, we maintain a system of internal controls and provide training to employees designed to provide reasonable assurance that unlawful and fraudulent activity, including misappropriation of assets, fraudulent financial reporting, and unauthorized access to sensitive or confidential data is either prevented or timely detected.

However, in the event that our employees engage in such fraudulent behavior, we could suffer material adverse consequences.

Changes in, or interpretations of, accounting principles could have a significant impact on our financial position and results of operations.

We prepare our consolidated financial statements in accordance with GAAP.

These principles are subject to interpretation by the SEC and various bodies formed to interpret and create appropriate accounting principles.

A change in these principles can have a significant effect on our reported results and may even retroactively affect previously reported transactions.

For example, in recent years, the U.S.-based Financial Accounting Standards Board, ("FASB"), has worked together with the International Accounting Standards Board, ("IASB"), on several projects to further align accounting principles and facilitate more comparable financial reporting between companies who are required to follow GAAP under SEC regulations and those who are required to follow International Financial Reporting Standards, ("IFRS"), outside of the U.S.

These efforts by the FASB and IASB may result in different accounting principles under GAAP that may result in materially different financial results for us in certain areas.

We may incur losses in the future and we may not achieve or maintain profitability.

4 unchanged sentences

We cannot be certain whether or when we will achieve profitability because of the significant uncertainties relating to our ability to generate commercially successful drug products.

Even if we are successful in obtaining regulatory approvals for manufacturing and commercializing additional drug products, we may incur losses if our drug products do not generate significant revenues.

Even if we are successful in obtaining regulatory approvals for manufacturing and commercializing additional drug products, we may incur losses if our

drug products do not generate significant revenues.

If we achieve profitability, we may not be able to sustain or increase profitability.

We may seek to obtain future financing through the issuance of debt or equity, which may have an adverse effect on our shareholders or may otherwise adversely affect our business.

If we raise funds through the issuance of additional equity, whether through private placements or public offerings, such an issuance would dilute ownership of our current shareholders that do not participate in the issuance.

In addition, we may be subject to covenants requiring us to satisfy certain financial tests and ratios, and our ability to satisfy such covenants may be affected by events outside of our control.

Our officers, directors, and principal shareholders, acting as a group, could significantly influence corporate actions.

2 unchanged sentences

The interests of this group may not always coincide with our interests or the interests of other shareholders and may prevent or delay a change in control.

This significant concentration of share ownership may adversely affect the

trading price of our common stock because many investors perceive disadvantages to owning stock in companies with controlling shareholders.

This significant concentration of share ownership may adversely affect the trading price of our common stock because many investors perceive disadvantages to owning stock in companies with controlling shareholders.

Research analysts may not continue to provide or initiate coverage of our common stock or may issue negative reports.

13 unchanged sentences

Any such securities litigation brought against us could result in substantial costs and a diversion of management’s attention and resources, which could negatively impact our business, operating results and financial condition.

The recent COVID-19 pandemic may cause increased risk to our common stock’s liquidity and trading price.

Unstable market conditions may have serious adverse consequences on our business.

3 unchanged sentences

There is a risk that one or more of our current service providers, manufacturers and other partners may encounter difficult economic circumstances, which would directly affect our ability to attain our operating goals on schedule and on budget.

The equity and lending markets have been and will most likely continue to be negatively impacted for an unknown period of time due to the COVID-19 pandemic.

We experience costs and regulatory risk as a result of operating as a public company, and our management is required to devote time to compliance initiatives.

We have and will continue to incur costs as a result of operating as a public company, and our management is required to devote time to compliance initiatives.

As a public company, we have and will continue to incur legal, accounting and other expenses that we did not incur as a private company.

In addition, the Sarbanes-Oxley Act of 2002, or Sarbanes-Oxley Act, Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and other rules and regulations subsequently implemented by the SEC and Nasdaq, have imposed various requirements on public companies, including the establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices.

These rules and regulations have and will continue to result in legal and financial compliance costs and render some activities more time-consuming and costly.

Despite the internal controls and procedures put in place to maintain compliance with securities laws and regulations, our employees may still fail to comply with all SEC disclosure and reporting requirements.

Such failure could lead to administrative and civil penalties, criminal penalties, and private litigation with shareholders.

The consequences could have a material effect on our ability to effectively market our products and operate our business.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal controls for financial reporting and disclosure controls and procedures.

In particular, we must perform system and process evaluation and testing of our internal controls over financial reporting to allow management to report on the effectiveness of our internal controls over financial reporting.

Our testing may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses.

Our compliance with Section 404 of the Sarbanes-Oxley Act requires that we incur substantial accounting expense and expend significant management efforts.

Moreover, if we are not able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, or if we identify deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses, the market price of our stock could decline and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities, which would require additional financial and management resources.

The equity and lending markets have been and will most likely continue to be negatively impacted for an unknown period of time due to global events such as the COVID-19 pandemic, increased inflation and the U.S.

government’s response thereto.

We may not be able to maintain our listing on the NASDAQ Global Select Market (“NASDAQ”), which could have a material adverse effect on us and our stockholders.

The standards for continued listing on NASDAQ include, among other things, that the minimum bid price for the listed securities not fall below $1.00 for a period in excess of thirty consecutive business days.

If the closing bid price of our common stock were to fail to meet NASDAQ’s minimum closing bid price requirement, or if we otherwise fail to meet any other applicable requirements of NASDAQ and we are unable to regain compliance, NASDAQ may make a determination to delist our common stock.

If the closing bid

price of our common stock were to fail to meet NASDAQ’s minimum closing bid price requirement, or if we otherwise fail to meet any other applicable requirements of NASDAQ and we are unable to regain compliance, NASDAQ may make a determination to delist our common stock.

The delisting of our common stock from NASDAQ could negatively impact us by (i) reducing the liquidity and market price of our common stock;

24 unchanged sentences

Our Revolving Credit Agreement contains specified quarterly financial maintenance covenants.

As of December 31, 2021, we were in compliance with the Tangible Capital Ratio financial covenant of the Revolving Credit Agreement.

As of December 31, 2022, we were in compliance with the Maximum Funded Debt Ratio financial covenant of the Revolving Credit Agreement.

However, we can make no assurance that we will be able to comply with the restrictive and financial covenants contained in the Revolving Credit Agreement in the future.

9 unchanged sentences

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-K

Item 1A. Risk Factors