Item 1A. Risk Factors
Item 1A.
Risk Factors
As a smaller reporting company, we are not required
to provide the information required by this Item; however, the discussion of our business and operations should be read together with
the Risk Factors set forth in our Annual Report on Form 10-K filed with the SEC on March 10, 2021 and the risk factor set forth below.
Such risks and uncertainties, including those set forth below, have the potential to affect our business, financial condition, results
of operations, cash flow, strategies or prospects in a material and adverse manner.
A global shortage of semiconductor chips
utilized in digital displays is adversely impacting the Company’s ability to procure hardware to sell and support its digital solutions,
and it is unknown how long such shortage will occur.
There is currently a worldwide shortage of semiconductor
chips and the Company’s suppliers of digital displays, the primary hardware component in the Company’s digital systems, have
informed the Company that, due to component shortages in the industry, such suppliers expect delays and potentially increased costs for
the Company to obtain digital displays necessary to fulfil and install the Company’s digital solutions. Historically, such digital
displays have been readily available for purchase and delivery, to be purchased by the Company from distributors from such distributor’s
existing inventory. Such delays will likely result in a longer sales cycles and prolonged periods in which the Company will be able to
recognize revenues compared to historical time periods. The increased costs for such displays may also reduce the margins in which the
Company has received on account of the purchase and installation of such displays as part the Company’s digital signage product
offerings. Although we believe that such shortage will be alleviated in the future, the Company is not aware of how long such delays may
exist, the effect such delays and increased demand may have on the cost to procure such digital screens, or the adverse impacts on our
financial results.
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3.
Defaults Upon Senior Securities
None.
Item
4. Mine Safety Disclosures
Not
applicable.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.