−Removed: We are subject to a number of risks potentially impacting our business, prospects, financial condition, results of operations, and cash flows, many of which are beyond our control.
−Removed: The risks and uncertainties described in this Form 10-K are those we currently believe to be material, but they are not the only ones we face.
−Removed: If any of the following risks, or any other risks and uncertainties that we have not identified or that we currently consider not to be material, actually occur or become material risks, our business, prospects, financial condition, results of operations and cash flows, and consequently the price of the Common Shares could be materially and adversely affected.
−Removed: In all these cases, the trading price of our securities could decline, and investors could lose all or part of their investment.
+Added: The Company is subject to a number of risks potentially impacting its business, prospects, financial condition, results of operations, and cash flows, many of which are beyond its control.
+Added: The risks and uncertainties described in this Form 10-K are those the Company currently believes to be material, but they are not the only ones faced by the Company.
+Added: If any of the following risks, or any other risks and uncertainties not identified or currently not considered to be material, actually occur or become material risks, the Company's business, prospects, financial condition, results of operations and cash flows, and consequently the price of the Common Shares could be materially and adversely affected.
+Added: In all these cases, the trading price of the Company's securities could decline, and investors could lose all or part of their investment.
Investors should carefully consider the risk factors set out below and consider all other information contained herein and in the Company’s other public filings when evaluating an investment decision.
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As of the date hereof, the USDA has approved over 90 state and tribal hemp production plans submitted after the USDA FR became effective.
−Removed: If a state does not elect to devise a Hemp regulatory program, the
−Removed: USDA’s program will govern licensees in such states.
+Added: If a state does not elect to devise a hemp regulatory program, the USDA’s program will govern licensees in such states.
Continued development of the hemp industry will depend on continued legislative authorization of hemp at the state level, and further amendment or supplementation of legislation at the federal level.
−Removed: Any number of events or occurrences could slow or halt progress all together in this space.
−Removed: While there appears to be ample public support for favorable legislative action at the state and federal levels, numerous factors may impact or negatively affect the legislative process(es) within the various states the Company has business interests in.
+Added: Any number of events or occurrences
+Added: could slow or halt progress all together in this space.
+Added: Numerous factors may impact or negatively affect the legislative process(es) within the various states the Company has business interests in.
Any one of these factors could slow or halt use of hemp or hemp cannabinoids such as CBD, which would negatively impact the Company’s business or growth, including possibly causing the Company to discontinue operations as a whole.
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The DEA IFR remains subject to change.
−Removed: FDA regulations have not been issued and it is not clear at this time how FDA will treat Hemp products.
−Removed: Additional unfavorable requirements from DEA or FDA may have a material adverse impact on Company’s business, financial condition and results of operations.
+Added: FDA regulations have not been issued and it is not clear at this time how the FDA will treat hemp products.
+Added: Additional unfavorable requirements from the DEA or FDA may have a material adverse impact on the Company’s business, financial condition and results of operations.
The Company’s products are subject to numerous and diverse regulatory requirements which may restrict the Company’s ability to sell its product, and regulatory compliance costs may affect the Company’s business and financial results.
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These governmental authorities may commence regulatory or legal proceedings, which could restrict the permissible scope of the Company’s product claims or the ability to sell its products in the future.
−Removed: The FDA regulates the Company’s products to ensure that the products are not adulterated or misbranded.
The Company is subject to regulation by various agencies as a result of the manufacture and sale of its hemp-based wellness products.
The shifting compliance environment, and the need to build and maintain robust systems to comply with different regulations in multiple jurisdictions, increases the possibility that the Company may violate one or more of the requirements.
−Removed: If the Company’s operations are found to be in violation of any of such laws or any other governmental regulations, or perceived to be in violation thereof, the Company may be subject to penalties or other negative effects, including, without limitation, civil and criminal penalties, damages, fines, the curtailment or restructuring of the Company’s operations or asset seizures and the denial of regulatory applications (including those regulatory regimes outside of the scope of FDA jurisdiction, but which may rely on the positions of the FDA in the application of its regulatory regime), any of which could adversely affect the Company’s business and financial results.
+Added: If the Company’s operations are found to be in violation of any of such laws or any other governmental regulations, or perceived to be in violation thereof, the Company may be subject to penalties or other negative effects, including, without limitation, civil and criminal penalties, damages, fines, the curtailment or restructuring of the Company’s operations or asset seizures and the denial of regulatory applications (including those regulatory regimes outside of the scope of the FDA's jurisdiction, but which may rely on the positions of the FDA in the application of its regulatory regime), any of which could adversely affect the Company’s business and financial results.
In addition, the FDA is expected to make determinations as to how certain CBD products will be regulated and is expected to, in the long term, consider modernization in its regulation of dietary supplements generally.
The FDA and/or Congress may also develop a new regulatory pathway or pursue legislation that imposes requirements beyond those currently applicable to dietary supplements.
−Removed: There can no assurance that any such new or additional regulations would not have a material adverse effect on the Company's business, financial condition and results of operations.
+Added: There can be no assurance that any such new or additional regulations would not have a material adverse effect on the Company's business, financial condition and results of operations.
Failure to comply with FDA requirements may result in, among other things, injunctions, product withdrawals, recalls, product seizures, fines and criminal prosecutions.
The Company’s advertising is subject to regulation by the Federal Trade Commission ("FTC") under the Federal Trade Commission Act ("FTC Act") as well as subject to regulation by the FDA under the DSHEA.
−Removed: In recent years, the FTC has initiated numerous investigations of dietary and nutritional supplement products and companies based on allegedly deceptive or misleading
−Removed: claims, and also released new guidance aimed at strengthening its substantiation requirements for health-related claims.
+Added: In recent years, the FTC has initiated numerous investigations of dietary and nutritional supplement products and companies based on allegedly deceptive or misleading claims, and also released guidance aimed at strengthening its substantiation requirements for health-related claims.
At any point, enforcement strategies of a given agency can change as a result of other litigation in the space or changes in political landscapes, and could result in increased enforcement efforts, which could materially impact the Company’s business.
−Removed: Additionally, some states also permit advertising and labeling laws to be enforced by state attorneys general, who may seek relief for consumers, class action certifications, class wide damages and product recalls of products sold by the Company.
−Removed: Private litigants may also seek relief for consumers, class action certifications, class wide damages and product recalls of products sold by the Company.
−Removed: Any actions against the Company by governmental authorities or private litigants could have a material adverse effect on the Company’s business, financial condition and results of operations.
+Added: Additionally, some states also permit
+Added: advertising and labeling laws to be enforced by state attorneys general, who may seek relief for consumers, class action certifications, class wide damages and recalls of products sold by the Company.
+Added: Private litigants may also seek relief for consumers, class action certifications, class wide damages and recalls of products sold by the Company.
+Added: Any actions against the Company by governmental authorities or private litigants could have a material adverse impact on the Company’s business, financial condition and results of operations.
Compliance with changes in legal, regulatory and industry standards may adversely affect the Company’s business.
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There can be no assurance that the Company is in compliance with all of these laws, regulations and other constraints, and changes to such laws, regulations and other constraints may have a material adverse effect on the Company’s operations.
−Removed: Through December 31, 2023, several states, including, but not limited to Alaska, Florida, Maryland, Minnesota, New York, Utah and Virginia, have adopted new regulations that may impact the Company's ability to sell certain of its products as currently formulated or packaged in these states.
+Added: Through December 31, 2024, several states have adopted new regulations that may impact the Company's ability to sell certain of its products as currently formulated or packaged in these states.
There is substantial uncertainty and different interpretations among federal, state and local regulatory agencies, legislators, academics and businesses as to the importation of derivatives from exempted portions of the cannabis plant and the emerging regulation of cannabinoids.
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The uncertainties cannot be resolved without further federal, and potentially state-level, legislation, regulation or a definitive judicial interpretation of existing legislation and rules.
−Removed: If these uncertainties continue, they may have an adverse effect upon Company's business, financial condition, operating results, cash flows or growth prospects, and the introduction of the Company's products in different markets.
+Added: If these uncertainties continue, they may have an adverse effect on the Company's business, financial condition, operating results, cash flows or growth prospects, and the introduction of its products in different markets.
The Company is subject to regulations that could impact its ability to sell its product internationally.
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In addition, the Company may avail itself of proposed legislative changes in certain jurisdictions to expand its product portfolio, which expansion may include business and regulatory compliance risks as yet undetermined.
−Removed: Failure by the Company to comply with the current or evolving regulatory framework in any jurisdiction could have a material adverse effect on the Company’s business, financial condition and results of operations.
+Added: Failure by the Company to comply with the current or evolving regulatory framework in any jurisdiction could have a material adverse impact on the Company’s business, financial condition and results of operations.
There is the possibility that any such international jurisdiction could determine that the Company was not or is not compliant with applicable local regulations.
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While the interpretations of these laws are unclear in some jurisdictions, financial benefit, directly or indirectly, arising from conduct that would be considered unlawful in such jurisdiction may be viewed to be within the purview of such laws, and persons receiving any such benefit, including investors in an applicable jurisdiction, may be subject to liability.
−Removed: Each prospective investor should contact his, her or its own legal advisor.
+Added: Each prospective investor should contact their own legal advisor.
There has been an increasing movement in certain markets to increase the regulation of natural health products, which will impose additional restrictions or requirements.
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Entry into international markets diverts management attention and requires financial resources that could be spent elsewhere and poses increased costs due to numerous banking, compliance, financial, legal, market, and reputational issues.
−Removed: The Company’s entry
−Removed: into new international markets requires management attention and financial resources that would otherwise be spent on other parts of its business.
+Added: The Company’s entry into new international markets requires management attention and financial resources that would otherwise be spent on other parts of its business.
The Company’s international sales could expose it to risks and expenses inherent in operating or selling products in foreign jurisdictions, and developing and emerging markets in particular where the risks may be heightened.
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• laws and business practices favoring local companies;
−Removed: • political, social or economic unrest or instability, including, without limitation, disruptions due to armed conflicts, such as the conflict between Ukraine and Russia or Israel and Hamas;
+Added: • political, social or economic unrest or instability, including, without limitation, disruptions due to armed conflicts;
• greater risk on credit terms, longer payment cycles and difficulties in enforcing agreements and collecting receivables through certain foreign legal systems;
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Furthermore, its experience with selling products in its current international markets may not be relevant or may not necessarily translate into favorable results if the Company sells in other international markets.
−Removed: If and when the Company enters into new markets in the future, it may experience different competitive conditions, less familiarity with the Company’s brands and/or different consumer tastes and discretionary spending patterns.
+Added: If and when the Company enters into new markets in the future, it may experience different competitive conditions, less familiarity with its brands and/or different consumer tastes and discretionary spending patterns.
As a result, the Company may be less successful than expected in expanding its sales in its current and targeted international markets.
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These, or one or more of the factors listed above, may harm the Company’s business, results of operations or financial condition.
−Removed: Any material decrease in
−Removed: the Company’s international sales or profitability could also adversely impact the Company’s business, results of operations or financial condition.
+Added: Any material decrease in the Company’s international sales or profitability could also adversely impact its business, results of operations or financial condition.
Additionally, the Company may expand its product offerings and/or expand into new international markets, each of which will require management attention and financial resources that would otherwise be spent on other parts of its business.
−Removed: Such expansion would expose the Company to risks and expenses inherent in selling new products and offering products in new foreign jurisdictions, which could increase the Company’s operational, regulatory, compliance, reputational and foreign exchange rate risks.
+Added: Such expansion would expose the Company to risks and expenses inherent in selling new products and offering products in new foreign jurisdictions, which could increase its operational, regulatory, compliance, reputational and foreign exchange rate risks.
The failure of the Company’s operating infrastructure to support such expansion could result in operational failures and regulatory fines or sanctions.
−Removed: Future product, market or international expansion could require the Company to incur a number of up-front expenses, including those associated with obtaining regulatory clearance or approvals, as well as additional ongoing expenses, including those associated with infrastructure, staff and regulatory compliance.
+Added: Future product, market or
+Added: international expansion could require the Company to incur a number of up-front expenses, including those associated with obtaining regulatory clearance or approvals, as well as additional ongoing expenses, including those associated with infrastructure, staff and regulatory compliance.
Any expansion efforts will be subject to various laws, regulations and guidelines that are subject to change over time, and result in increased costs and risk associated with regulatory compliance.
−Removed: In addition, product and market expansion could impact the Company’s current product offerings, brand, and reputation, any of which could have a material adverse effect on the Company’s business, financial condition and results of operations.
+Added: In addition, product and market expansion could impact the Company’s current product offerings, brand, and reputation, any of which could have a material adverse impact on its business, financial condition and results of operations.
The designation of cannabinoids as a New Dietary Ingredient (NDI) or as an impermissible adulterant are uncertain.
−Removed: The FD&C Act requires that manufacturers who wish to market dietary supplements that contain "new dietary ingredients" ("NDI") to notify the FDA with their basis for concluding that a dietary supplement containing such dietary ingredient will reasonably be expected to be safe.
+Added: The FD&C Act requires that manufacturers who wish to market dietary supplements that contain "new dietary ingredients" ("NDI") notify the FDA with their basis for concluding that a dietary supplement containing such dietary ingredient will reasonably be expected to be safe.
There is substantial uncertainty and different interpretations among state and federal regulatory agencies, legislators, academics and businesses as to whether cannabinoids were present in the food supply and marketed prior to October 15, 1994, or whether such inclusion of cannabinoids are permissible dietary ingredients under the FD&C Act.
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For instance, on July 23, 2021, the Company was advised by the FDA of its objection to a New Dietary Ingredient Notification ("NDIN") submitted by the Company earlier in 2021.
−Removed: The Company's submission was objected to on the basis that a full spectrum hemp extract does not meet the definition of a dietary supplement because FDA has taken the position that CBD was not marketed as a dietary supplement or conventional food prior to its authorization for investigation as a new drug.
+Added: The Company's submission was objected to on the basis that a full-spectrum hemp extract does not meet the definition of a dietary supplement because the FDA has taken the position that CBD was not marketed as a dietary supplement or conventional food prior to its authorization for investigation as a new drug.
The Company disagrees with the FDA’s position that CBD was not marketed as dietary supplement or food prior to the investigation of CBD as a new drug, and believes there are arguments against this position.
−Removed: There is no guarantee that federal legislation, regulation, or judicial action will override FDA’s position and permit the use of CBD as an NDI, or as a dietary ingredient generally.
−Removed: If FDA’s position is not modified, this would have a materially adverse effect upon the Company and its business.
+Added: There is no guarantee that federal legislation, regulation, or judicial action will override the FDA’s position and permit the use of CBD as an NDI, or as a dietary ingredient generally.
+Added: If the FDA’s position is not modified, this would have a materially adverse effect upon the Company and its business.
The FDA interpretation of IND Preclusion could be disruptive to the Company’s ability to sell its products.
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Any attempt by the FDA to enforce the IND Preclusion could adversely impact the Company’s business and management focus as the Company would need to take appropriate actions to defend its position.
−Removed: FDA enforcement against the sale and marketing of CBD products under the FD&C Act could target the Company and adversely impact the Company’s business and financial position.
+Added: The FDA enforcement against the sale and marketing of CBD products under the FD&C Act could target the Company and adversely impact the Company’s business and financial position.
The FDA continues to enforce against violations of the FD&C Act by issuing warning letters to companies marketing and selling hemp-derived CBD products.
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While this is broad and may not be applicable in all instances, it nevertheless could materially and adversely impact the Company’s business and financial condition.
−Removed: Further, the FDA has recently stated that it will continue to police the market and enforce against CBD products, and on March 22, 2021, the agency issued warning letters to two companies for selling OTC products labeled as containing CBD, alleging the products were illegally marketed unapproved drugs and misbranded due to prominent featuring of CBD on the labeling,
−Removed: followed by additional warning letters issued in 2021 and 2022.
+Added: Further, the FDA has recently stated that it will continue to police the market and enforce against CBD products, and on March 22, 2021, the agency issued warning letters to two companies for selling OTC products labeled as containing CBD, alleging the products were illegally marketed unapproved drugs and misbranded due to prominent featuring of CBD on the labeling, followed by additional warning letters issued in 2021 and 2022.
The FDA’s enforcement against the unlawful sale and marketing of CBD products has to date been limited to the issuance of warning letters, but other enforcement means are available to the FDA, including civil and criminal penalties.
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On January 26, 2023, the FDA announced its conclusion that existing regulatory pathways are not appropriate for CBD and that a new regulatory pathway would benefit consumers by providing safeguards and oversight to manage and minimize risks related to CBD products.
−Removed: The agency also stated it is prepared to work with Congress on this matter and that it "will continue to take action against CBD and other cannabis-derived products to protect the public, in coordination with state regulatory partners, when appropriate" by "monitoring the marketplace, identifying products that pose risks and acting within our authorities." If the FDA does not work expeditiously with Congress to develop a new pathway, or if Congress does not proceed with its own legislative initiatives to advance a regulatory framework for CBD products, this could delay the development of a regulatory regime for CBD and have an adverse effect on the business of the Company.
−Removed: In addition, it is possible a new framework could impose additional regulatory requirements for the marketing of CBD products, which may have an adverse effect on the business of the Company.
+Added: The agency also stated it is prepared to work with Congress on this matter and that it "will continue to take action against CBD
+Added: and other cannabis-derived products to protect the public, in coordination with state regulatory partners, when appropriate" by "monitoring the marketplace, identifying products that pose risks and acting within our authorities." If the FDA does not work expeditiously with Congress to develop a new pathway, or if Congress does not proceed with its own legislative initiatives to advance a regulatory framework for CBD products, this could delay the development of a regulatory regime for CBD and have an adverse effect on the business of the Company.
+Added: In addition, it is possible a new framework could impose additional regulatory requirements for the marketing of CBD products, which may have an adverse impact on the business of the Company.
The FTC may take enforcement actions against companies selling CBD products, including the Company.
−Removed: FTC and FDA often coordinate enforcement efforts where the agencies have overlapping jurisdiction, including with respect to the advertising, labeling, and promotion of food, cosmetics, medical devices, and OTC drugs.
−Removed: In the CBD product marketplace, FTC has joined FDA in the issuance of a number of warning letters to companies warning that the company’s advertisements were not supported by competent and reliable scientific evidence and thus violate the FTC Act, 15 U.S.C.
−Removed: FTC has also issued independent warning letters to companies selling CBD products.
−Removed: These warning letters allege the companies make exaggerated or false and misleading claims about their CBD products without rigorous scientific evidence to substantiate the claims.
−Removed: While historically, FTC enforcement actions related to CBD have been limited to warning letters, in December 2020, the FTC initiated its first law enforcement administrative action against six companies selling CBD products.
+Added: The FTC and the FDA often coordinate enforcement efforts where the agencies have overlapping jurisdiction, including with respect to the advertising, labeling, and promotion of food, cosmetics, medical devices, and OTC drugs.
+Added: In the CBD product marketplace, the FTC has joined the FDA in the issuance of a number of warning letters to companies warning that the company’s advertisements were not supported by competent and reliable scientific evidence and thus violate the FTC Act, 15 U.S.C.
+Added: The FTC has also issued independent warning letters to companies selling CBD products.
+Added: These warning letters allege that companies make exaggerated or false and misleading claims about their CBD products without rigorous scientific evidence to substantiate the claims.
+Added: While historically, the FTC enforcement actions related to CBD have been limited to warning letters, in December 2020, the FTC initiated its first law enforcement administrative action against six companies selling CBD products.
These companies were alleged to have violated the FTC Act by allegedly making unsupported health claims.
−Removed: FTC entered into settlement agreements with these companies, which required, among other things, that the companies stop making such unsupported health claims and pay a monetary judgment to the FTC.
−Removed: The FTC’s enforcement was publicized by the agency as part of its ongoing effort to protect consumers from false, deceptive, and misleading health claims made in advertisements on websites and through social media companies such as Twitter.
+Added: The FTC entered into settlement agreements with these companies, which required, among other things, that the companies stop making such unsupported health claims and pay a monetary judgment to the FTC.
+Added: The FTC’s enforcement was publicized by the agency as part of its ongoing effort to protect consumers from false, deceptive, and misleading health claims made in advertisements on websites and through social media companies.
An additional enforcement action against a CBD company was announced in May 2021.
−Removed: Further, on December 20, 2022 the FTC released a new Health Products Compliance Guidance that covers all health-related product advertising and to substantiate health-related claims that emphasizes the need to support health-related claims with high quality randomized, placebo-controlled human clinical trials, which may signal the FTC is preparing to more closely scrutinize such claims compared to previous years.
+Added: Further, on December 20, 2022, the FTC released a Health Products Compliance Guidance that covers all health-related product advertising and to substantiate health-related claims that emphasizes the need to support health-related claims with high quality randomized, placebo-controlled human clinical trials, which may signal the FTC is preparing to more closely scrutinize such claims compared to previous years.
The unknowns and associated risks of potential future FTC enforcement actions create risk for the Company’s business.
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Additionally, enforcement of the DEA IFR could jeopardize the legality of the Company’s intermediate hemp products, such as in-process hemp extract that is incorporated in the Company’s finished products.
−Removed: Such enforcement would not only disrupt the Company’s operations, but it would also constrict the Company’s supply chains.
+Added: Such enforcement would not only disrupt the Company’s operations, but it would also constrict the Company’s supply chain.
Any inability to obtain required regulatory approval and permits could limit the Company’s ability to conduct its business.
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For example, the Company’s products and the raw materials used in its production processes are subject to numerous environmental laws and regulations.
−Removed: The Company may be required to
−Removed: obtain environmental permits from governmental authorities for certain of its current or proposed operations.
+Added: The Company may be required to obtain environmental permits from governmental authorities for certain of its current or proposed operations.
The Company may not have been, nor may it be able to be at all times, in full compliance with such laws, regulations and permits.
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Certain environmental laws impose strict and, in certain circumstances, joint and several liability on current or previous owners or operators of real property for the cost of the investigation, removal or remediation of hazardous substances as well as liability for related damages to natural resources.
−Removed: In addition, the Company may discover new facts or conditions that may change its expectations or be faced with changes in environmental laws or their enforcement that would increase its liabilities.
−Removed: The Company’s costs of complying with current and future environmental and health and safety laws, liabilities arising from past or future releases of, or exposure to, regulated materials, or more vigorous enforcement of environmental and employee health and safety laws, may have a material adverse effect on the Company’s business, financial condition and results of operations.
+Added: In addition, the Company may discover
+Added: new facts or conditions that may change its expectations, or be faced with changes in environmental laws or their enforcement that would increase its liabilities.
+Added: The Company’s costs of complying with current and future environmental and health and safety laws, liabilities arising from past or future releases of, or exposure to, regulated materials, or more vigorous enforcement of environmental and employee health and safety laws, may have a material adverse impact on the Company’s business, financial condition and results of operations.
Regulatory uncertainty with respect to anti-money laundering laws and regulations impact on the CBD and marijuana-related businesses, if revised or resolved unfavorably to the Company’s interests, may have an adverse effect on the Company’s business.
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Foreign Corrupt Practices Act and other similar anti-bribery laws.
−Removed: Our business is subject to the Corruption of Foreign Public Officials Act (Canada) and the U.S.
+Added: The Company's business is subject to the Corruption of Foreign Public Officials Act (Canada) and the U.S.
Foreign Corrupt Practices Act ("FCPA") and other similar laws which generally prohibit companies and employees from engaging in bribery or other prohibited payments to foreign officials for the purpose of obtaining or retaining business.
−Removed: we are or will be subject to the anti-bribery laws of any other countries in which we conduct business now or in the future.
−Removed: Our employees or other agents may, without our knowledge and despite our efforts, engage in conduct prohibited under our policies and procedures and under anti-bribery laws, for which we may be held responsible.
−Removed: Our policies mandate compliance with these anti-corruption and anti-bribery laws.
−Removed: However, there can be no assurance that our internal control policies and procedures will always protect us from recklessness, fraudulent behavior, dishonesty or other inappropriate acts committed by our affiliates, employees, contractors or agents.
−Removed: If our employees or other agents are found to have engaged in such practices, we could suffer severe penalties and other consequences that may have a material adverse effect on our business, financial condition and results of operations.
+Added: In addition, the Company is or will be subject to the anti-bribery laws of any other countries in which it conducts business now or in the future.
+Added: The Company's employees or other agents may, without its knowledge and despite its efforts, engage in conduct prohibited under its policies and procedures and under anti-bribery laws, for which it may be held responsible.
+Added: The Company's policies mandate compliance with these anti-corruption and anti-bribery laws.
+Added: However, there can be no assurance that the Company's internal control policies and procedures will always protect it from recklessness, fraudulent behavior, dishonesty or other inappropriate acts committed by the Company's affiliates, employees, contractors or agents.
+Added: If the Company's employees or other agents are found to have engaged in such practices, it could suffer severe penalties and other consequences that may have a material adverse impact on its business, financial condition and results of operations.
As a marijuana/cannabis related business, the Company may have difficulty accessing banking services due to the illegality of marijuana under federal law.
Since the production and possession of cannabis is currently illegal under U.S.
−Removed: federal law and the Company relies on exemptions promulgated pursuant to the 2018 Farm Bill, it is possible that banks may refuse to open bank accounts for the deposit of funds from businesses involved with the Cannabis industry.
+Added: federal law and the Company relies on exemptions promulgated pursuant to the 2018 Farm Bill, it is possible that banks may refuse to open bank accounts for the deposit of funds from businesses adjacent to the cannabis industry.
The inability to open bank accounts with certain institutions could materially and adversely affect the business of the Company.
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Although there has been an increase in the amount of financing available to companies in the cannabis industry over the last several years, there is neither a broad nor deep pool of institutional capital that is available to cannabis industry participants.
−Removed: There can be no assurance that additional financing, if raised privately or publicly, will be available to the Company when needed or on terms which are acceptable.
+Added: There can be no assurance that additional financing, if raised privately or publicly, will be available to the Company when needed or on acceptable terms.
The Company’s inability to raise financing to fund capital expenditures or acquisitions could limit its growth and may have a material adverse effect upon future profitability.
−Removed: If the Company cannot achieve profitability, it may be forced to cease operations and you may suffer a total loss of your investment.
−Removed: The Company could be liable for fraudulent or illegal activity by its employees, contractors and consultants resulting in significant financial losses to claims against the Company.
+Added: If the Company cannot achieve profitability, it may be forced to cease operations and investors may suffer a total loss of investment.
+Added: The Company could be liable for fraudulent or illegal activity by its employees, contractors and consultants resulting in significant financial losses due to claims against the Company.
The Company is exposed to the risk that its employees, independent contractors and consultants may engage in fraudulent or other illegal activity.
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It is not always possible for the Company to identify and deter misconduct by its employees and other third parties, and the precautions taken by the Company to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting the Company from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.
−Removed: If any such actions are instituted against the Company, and it is not successful in defending itself or asserting its rights, those actions could have a significant impact on its business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, contractual damages, reputational harm, diminished profits and future earnings, the curtailment of the Company’s operations or asset seizures, any of which could have a material adverse effect on the Company’s business, financial condition and results of operations.
+Added: If any such actions are instituted against the Company, and it is not successful in defending itself or asserting its rights, those actions could have a significant impact on its business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, contractual damages, reputational harm, diminished profits and future earnings, the curtailment of the Company’s operations or asset seizures, any of which could have a material adverse impact on the Company’s business, financial condition and results of operations.
Risks Relating to the Company’s Business and Industry
The Company faces security risks related to its physical facilities.
−Removed: The Company may be an attractive target for criminals seeking to steal products, cash, or property, or to vandalize or destroy property or even cause physical harm to others.
+Added: The Company may be an attractive target for criminals seeking to steal product, cash, or property, or to vandalize or destroy property or even cause physical harm to others.
In particular, would-be criminals may confuse the Company’s products for marijuana, a controlled substance with an underground market, or take interest in the expensive equipment or technology used by the Company or its contract manufacturers.
−Removed: Accordingly, the Company’s operations may raise
−Removed: its profile and increase the probability of break-ins, thefts, or vandalism, and there can be no assurance that the measures employed by the Company to prevent theft, vandalism, attacks, or other criminal behavior will be successful.
+Added: Accordingly, the Company’s operations may raise its profile and increase the probability of break-ins, theft, or vandalism, and there can be no assurance that the measures employed by the Company to prevent theft, vandalism, attack, or other criminal behavior will be successful.
The Company may not be able to secure insurance coverage for losses incurred in connection with such activities on commercially reasonable terms, or at all.
Any criminal activities could have a negative impact on the Company and its businesses, and the inability or failure to obtain adequate insurance coverage would worsen the impact.
−Removed: The Company depends on the success of the Company’s products, and the Company’s products may not achieve market acceptance.
−Removed: If the products the Company sells are not perceived to have the effects intended by the end user, its business may suffer.
−Removed: Many of the Company’s products contain innovative ingredients or combinations of ingredients.
−Removed: There is little long-term data with respect to potential therapeutic use or safety in humans or animals.
−Removed: As a result, the Company’s products could have certain side effects if not taken as directed or if taken by an end user that has certain known or unknown medical conditions.
+Added: The Company depends on the success of its products, and those products may not achieve the desired market acceptance.
+Added: If the products the Company sells are not perceived to have the effects intended by the consumer, its business may suffer.
+Added: Many of the Company’s
+Added: products contain innovative ingredients or combinations of ingredients.
+Added: There is limited long-term data with respect to potential therapeutic use or safety in humans or animals.
+Added: As a result, the Company’s products could have certain side effects if not taken as directed or if taken by a consumer that has certain known or unknown medical conditions.
There is no assurance that the Company’s cash flows and debt or other financing will be sufficient to fund the Company’s operations.
As of December 31, 2024 and 2023, the Company had total current liabilities of $15,936 and $23,646 respectively, and cash and cash equivalents of $22,618 and $47,820, respectively, to meet its current obligations.
−Removed: The Company’s ability to fund operating expenses and capital expenditures will depend on its future operating performance and there are no assurances that the Company will be able to access its available debt financing or access additional debt or other financing.
−Removed: If the Company is unable to achieve targeted operating performance or are unable to access existing debt financing or raise additional capital or debt financing on favorable terms, if at all, the Company may be forced to decelerate or curtail certain of our operations until such time as additional debt or capital financing becomes available.
+Added: The Company’s ability to fund operating expenses and capital expenditures will depend on its future operating performance and there are no assurances that the Company will be able to access debt or other financing.
+Added: If the Company is unable to achieve targeted operating performance or raise additional capital or debt financing on favorable terms, if at all, the Company may be forced to decelerate or curtail certain of its operations until such time as additional debt or capital financing becomes available.
See " Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources" for additional discussion regarding its liquidity position.
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As such, it is imperative that the Company’s (and its service provider’s) quality control systems operate effectively and successfully.
−Removed: Quality control systems can be negatively impacted by the design of the quality control systems, the quality training program, and adherence by employees to quality control guidelines.
−Removed: Although the Company strives to ensure that all of its service providers have implemented and adhere to high caliber quality control systems, any significant failure or deterioration of such quality control systems could have a material adverse effect on the Company’s business and operating results.
−Removed: The Company depends on various third parties for the supply, manufacture, and testing of the Company’s products.
+Added: Quality control systems can be negatively impacted by their design, the quality training program, and adherence by employees to quality control guidelines.
+Added: Although the Company strives to ensure that all of its service providers have implemented and adhere to high caliber quality control systems, any significant failure or deterioration of such quality control systems could have a material adverse impact on the Company’s business and operating results.
+Added: The Company depends on various third parties for the supply, manufacture, and testing of some of the Company’s products.
No assurance can be given that these relationships will continue on favorable terms, or at all.
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Disruption of operations at any of these facilities could adversely affect inventory supplies and the Company’s ability to meet product delivery deadlines.
−Removed: The Company currently relies on a single manufacturer, Aidance, to manufacture its CBD CLINIC and CBDMEDIC products.
+Added: The Company currently relies on a single manufacturer, Aidance, to manufacture its CBD CLINIC and CBD MEDIC products.
Accordingly, the Company is highly dependent on the uninterrupted and efficient operation of Aidance’s manufacturing facility.
Aidance may not continue to maintain its FDA registration or continue or be willing or able to produce the products at reasonable prices, or at all.
−Removed: If for any reason Aidance discontinues production of the CBD CLINIC or CBDMEDIC products, it would likely result in significant delays in production of products and interruption of the Company’s sales as it seeks to establish a relationship and commence production with another manufacturer.
+Added: If for any reason Aidance discontinues production of the CBD CLINIC or CBD MEDIC products, it would likely result in significant delays in production of products and interruption of the Company’s sales as it seeks to establish a relationship and commence production with another manufacturer.
The Company may be unable to make satisfactory production arrangements with another manufacturer on a timely basis or at all.
−Removed: If operations at Aidance’s manufacturing plant were to be disrupted as a result of equipment failures, natural disasters, fires,
−Removed: accidents, work stoppages, power outages or other reasons, the Company’s business, financial condition and/or results of operations could be materially adversely affected.
+Added: If operations at Aidance’s manufacturing plant were to be disrupted as a result of equipment failures, natural disasters, fires, accidents, work stoppages, power outages or other reasons, the Company’s business, financial condition and/or results of operations could be materially adversely affected.
In addition, the Company depends on third parties to obtain certain raw materials, including CBD necessary to develop and produce its products.
−Removed: Global supply chains have been under increased pressure due to lingering effects of the COVID-19 pandemic, and the Company is not immune to such challenges.
The raw materials required to produce the Company’s products may not be available to the Company on favorable pricing terms in the future or at all when they are needed.
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This could also have a significant impact on the Company’s capacity to complete certain of its current or projected R&D projects and, accordingly, would negatively affect its projected commercial and financial growth.
−Removed: Any significant increase in the price of raw materials that cannot be passed on to the Company’s customers could have a material adverse effect on the Company’s results of operations or financial condition.
+Added: Any significant increase in the price of raw materials that cannot be passed on to the Company’s customers could have a material adverse impact on the Company’s results of
+Added: operations or financial condition.
While potential alternative suppliers of raw materials may be identified, they must first pass intensive validation tests to ensure their compliance with product specifications.
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The profit margins of the Company and the timely delivery of its products are dependent upon the ability of its outside suppliers and manufacturers to supply it with products in a timely and cost-efficient manner.
−Removed: The Company’s ability to develop its business and enter new markets and sustain satisfactory levels of sales in each market depends upon the ability of its outside suppliers and manufacturers to produce the ingredients and products and to comply with all applicable regulations.
+Added: The Company’s ability to develop its business, enter new markets, and sustain satisfactory levels of sales in each market depends upon the ability of its outside suppliers and manufacturers to produce the ingredients and products and comply with all applicable regulations.
The failure of the Company’s primary suppliers or manufacturers to supply ingredients or produce its products could adversely affect its business operations.
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If the safety of any products supplied to the Company is compromised due to a third-party manufacturer’s failure to adhere to applicable laws or for other reasons, the Company may not be able to successfully sell its products.
−Removed: The Company cannot assure you that its third-party manufacturers will continue to reliably supply products to the Company at the levels of quality, or the quantities, the Company requires, and in compliance with applicable laws and regulations, including cGMP requirements.
+Added: The Company cannot assure that its third-party manufacturers will continue to reliably supply products to the Company at the levels of quality or the quantities it requires and in compliance with applicable laws and regulations, including cGMP requirements.
The Company’s manufacturers and suppliers must remain in compliance with the hemp production and manufacturing laws of the states in which they operate.
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The Company’s products will be produced for sale directly to end consumers, and therefore there is an inherent risk of exposure to product liability claims, regulatory action and litigation if the products are alleged to have caused loss or injury.
−Removed: In addition, the production and sale of the Company’s products involves the risk of injury to end users due to tampering by unauthorized third parties or product contamination.
+Added: In addition, the production and sale of the Company’s products involves the risk of injury to end consumers due to tampering by unauthorized third parties or product contamination.
Previously unknown adverse reactions resulting from human or animal consumption of the Company’s products alone or in combination with other medications or substances could occur.
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The Company's operations and industry may be subject to reputational risk.
−Removed: Public opinion and perception on the use of CBD is inconsistent and may be negatively influenced by future clinical research or media reports that may be unfavorable to CBD, which may have an adverse effect on public opinion and the demand for the Company’s products.
+Added: Public opinion and perception on the use of CBD is inconsistent and may be negatively influenced by future clinical research or media reports that may be unfavorable to CBD, which may
+Added: have an adverse effect on public opinion and the demand for the Company’s products.
The Company believes that the CBD industry (and the cannabis industry in general) is highly dependent upon consumer perception regarding the safety, efficacy and quality of the products.
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There can be no assurance that future scientific research, findings, regulatory proceedings, litigation, media attention or other research findings or publicity will be favorable to the CBD or cannabis markets or any particular product, or consistent with currently held views.
−Removed: Future research reports, findings, regulatory proceedings, litigation, media attention or other publicity that are perceived as less favorable than, or that question, earlier research reports, findings or publicity could have a material adverse effect on the Cannabis industry and demand for its products and services, which could affect the Company’s business, financial condition and results of operations and cash flows.
−Removed: The Company’s dependence upon consumer perception means that adverse scientific research reports, findings, regulatory proceedings, litigation, media attention or other publicity, whether or not accurate or with merit, could have a material adverse effect on the Company, its business, financial condition, results of operations and cash flows.
+Added: Future research reports, findings, regulatory proceedings, litigation, media attention or other publicity that are perceived as less favorable than, or that question, earlier research reports, findings or publicity could have a material adverse effect on the cannabis industry and demand for its products and services, which could impact the Company’s business, financial condition and results of operations and cash flows.
+Added: The Company’s dependence upon consumer perception means that adverse scientific research reports, findings, regulatory proceedings, litigation, media attention or other publicity, whether or not accurate or with merit, could have a material adverse impact on the Company, its business, financial condition, results of operations and cash flows.
Further, adverse publicity, reports or other media attention regarding the safety, potential therapeutic use, and quality of CBD or cannabis in general, or the Company’s products specifically, or associating the consumption of CBD or cannabis with illness or other negative effects or events, could have a material adverse effect.
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This may cause confusion among customers, industry partners such as financial institutions, institutional investors, retailers and distributors as well as other parties upon whom the Company's business relies.
−Removed: The Company is dependent upon agricultural production of hemp for the Company’s operations, which are subject to seasonal and weather-related risks.
+Added: The Company is dependent upon agricultural production of hemp for part of the Company’s operations, which are subject to seasonal and weather-related risks.
The Company’s business can be affected by unusual weather patterns.
−Removed: The production of some of the Company’s products relies on the availability and use of live plant material, which is grown in Colorado, Kentucky and Oregon, and may be grown in Canada.
+Added: The production of some of the Company’s products relies on the availability and use of live plant material, which is grown in Arizona, Colorado, Kentucky and Canada.
Growing periods can be impacted by weather patterns and these unpredictable weather patterns may impact the Company's ability to harvest its industrial hemp and produce products.
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If the Company is unable to harvest hemp through its proprietary operations or contract farming arrangements, its ability to meet customer demand, generate sales, and maintain operations could be impacted.
−Removed: Given the proprietary nature of the Company’s crops, it may not be practicable for the Company to source adequate, or any, replacement Hemp to produce its downstream products.
+Added: Given the proprietary nature of the Company’s crops, it may not be practicable for the Company to source adequate, or any, replacement hemp to produce some downstream products.
The Company’s business is dependent on the outdoor growth and production of hemp, an agricultural product.
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Climate change may increase the frequency or intensity of extreme weather such as storms, floods, heat waves, droughts and other events that could affect the quality, volume and cost of seed produced for sale as well as demand and product mix.
−Removed: Climate change may also affect the availability and
−Removed: suitability of arable land and contribute to unpredictable shifts in the average growing season and types of crops produced.
+Added: Climate change may also affect the availability and suitability of arable land and contribute to unpredictable shifts in the average growing season and types of crops produced.
The Company may also encounter difficulties with the importation of agro-inputs and securing a supply of spares and maintenance items.
In the event of a delay in the delivery from suppliers of agro-inputs and machinery, the Company may be unable to achieve its production targets.
−Removed: There can be no guarantee that an agricultural event will not adversely affect the business and operating results.
+Added: There can be no guarantee that an agricultural event will not adversely impact the business and operating results.
There may be adverse consequences to the Company's end users should they test positive for trace amounts of THC attributed to use of the Company's products.
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THC is considered a banned substance in many jurisdictions.
−Removed: Moreover, regulatory framework for legal amounts of consumed THC is evolving.
+Added: Moreover, the regulatory framework for legal amounts of consumed THC is evolving.
Whether or not ingestion of THC (at low levels or otherwise) is permitted in a particular jurisdiction, there may be adverse consequences to end users who test positive for trace amounts of THC attributed to use of the Company's products.
In addition, certain metabolic processes in the body may cause certain molecules to convert to other molecules which may negatively affect the results of drug tests.
−Removed: Positive tests may adversely affect the end user's reputation, ability to obtain or retain employment and participation in certain athletic or other activities.
+Added: Positive tests may adversely affect the end user's reputation, ability to obtain or retain
+Added: employment and participation in certain athletic or other activities.
A claim or regulatory action against the Company based on such positive test results could adversely affect the Company's reputation and could have a material adverse effect on its business and operational results.
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As a result, the Company may have limited or no recourse in the event of a failed crop or other event that standard crop insurance would typically insure against.
−Removed: Such inability may adversely affect the Company’s business and operating results.
+Added: Such inability may adversely impact the Company’s business and operating results.
The Company may be unable to obtain or maintain high quality farmland sufficient for its hemp cultivation needs.
−Removed: The Company may not be able to maintain or obtain high quality farmland in sufficient acreage to support production levels or sustained accelerated growth.
+Added: The Company may be unable to maintain or obtain high quality farmland in sufficient acreage to support production levels or sustained accelerated growth.
Moreover, where farmland is available in sufficient acreage, it may not be available at rental rates or otherwise on acceptable economic terms.
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The agricultural landscape continues to evolve as a result of factors including farm and industry consolidation, agricultural productivity and development, and climate change.
−Removed: Farm consolidation in the United States and other developed markets has been ongoing for decades and is expected to continue as grower demographics shift and advancements in innovative technology and equipment enables farmers to manage larger operations to create economies of scale in a lower-margin, more capital-intensive environment.
−Removed: Increased consolidation in the crop nutrient industry has resulted in greater resources dedicated to expansion, R&D opportunities, leading to increased competition in advanced product offerings and innovative technologies.
−Removed: Some of these competitors have greater total resources or are state-supported, which make them less vulnerable to industry downturns and better positioned to pursue new expansion and development opportunities.
−Removed: The advancement and adoption of technology and digital innovations in agriculture and across the value chain has increased and is expected to further accelerate as grower demographics shift and pressures from consumer preferences, governments and climate change initiatives evolve.
+Added: Farm consolidation in the United States and other developed markets has been ongoing for decades, It is expected to continue as grower demographics shift and advancements in innovative technology and equipment enable farmers to manage larger operations to create economies of scale in a lower-margin, more capital-intensive environment.
+Added: Increased consolidation in the crop nutrient industry has resulted in greater resources dedicated to expansion and R&D opportunities, leading to increased competition in advanced product offerings and innovative technologies.
+Added: Some of these competitors have greater total resources or are state-supported, which makes them less vulnerable to industry downturns and better positioned to pursue new expansion and development opportunities.
+Added: The advancement and adoption of technology and digital innovations in agriculture and across the value chain have increased and are expected to further accelerate as grower demographics shift and pressures from consumer preferences, governments and climate change initiatives evolve.
The development of seeds that require less crop nutrients, development of full or partial substitutes for the Company’s products or developments in the application of crop nutrients such as improved nutrient use or efficiency through use of precision agriculture could also emerge, all of which have the potential to adversely affect the demand for the Company’s products and results of operations.
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A number of governments or governmental bodies have introduced or are introducing regulatory changes in response to concerns about the potential impact of climate change.
−Removed: The Company faces the risk that its operations could be subject to government initiatives aimed at
−Removed: countering climate change, which could impose constraints on the Company’s operations, for example due to increased costs for fossil fuels, electricity and transportation and costs associated with monitoring and reporting.
+Added: The Company faces the risk that its operations could be subject to government initiatives aimed at countering climate change, which could impose constraints on the Company’s operations, for example, due to increased costs for fossil fuels, electricity and transportation and costs associated with monitoring and reporting.
Hemp is subject to specific agricultural risks, which could negatively impact the Company’s cultivation efforts.
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Furthermore, hemp is cultivated in agricultural growing regions across the US, which plant heavily in seed, row and vegetable crops.
−Removed: While the Company uses certified organic practices, conventional neighbors may use harmful chemicals that can cause drift or water contamination risk of unwanted contaminants in the companies harvested hemp biomass.
+Added: While the Company uses certified organic practices, conventional neighbors may use harmful chemicals that can cause drift or water contamination risk of unwanted contaminants in the Company's harvested hemp biomass.
Various regulatory agencies have established maximum limits for pathogens, toxins, chemicals and other compounds that may be present in agricultural materials.
If the Company’s hemp is found to have levels of pathogens, toxins, chemicals or other undesirable compounds that exceed established limits, the Company may have to destroy the applicable portions of its hemp crop.
−Removed: Furthermore, if the Company’s crops in any state in which it operates are tested by a regulator and found to contain more than 0.3% THC on a dry weight basis, significant portions of the crops may be ordered to be destroyed.
−Removed: Should the Company’s crops be lost due to pathogens, toxins, chemicals, other undesirable compounds, or regulatory enforcement, it may have a material adverse effect on its business and financial condition.
−Removed: The Company relies on third-parties for the transportation of its hemp and hemp derived products, any delay or failure by these third-parties to meet the Company’s transport needs could impact the Company’s operations and financial performance.
−Removed: In order for customers of the Company to receive their product, the Company relies on third-party transportation services.
−Removed: This can cause logistical problems with, and delays in, end users obtaining their orders which the Company cannot control.
+Added: Furthermore, if the Company’s crops in any state in which it operates are tested by a regulator and found to contain more than
+Added: 0.3% THC on a dry weight basis, significant portions of the crops may be ordered to be destroyed.
+Added: Should the Company’s crops be lost due to pathogens, toxins, chemicals, other undesirable compounds, or regulatory enforcement, it may have a material adverse impact on its business and financial condition.
+Added: The Company relies on third-parties for the transportation of its hemp and hemp-derived products;
+Added: any delay or failure by these third-parties to meet the Company’s transport needs could impact the Company’s operations and financial performance.
+Added: In order for the Company's customers to receive its product, the Company relies on third-party transportation services.
+Added: This can cause logistical problems with, and delays in, end consumers obtaining fulfillment of their orders, which the Company cannot control.
Any delay by third-party transportation services may adversely affect the Company’s financial performance.
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Some of the Company’s current and potential competitors may have longer operating histories, greater financial, marketing and other resources, and larger customer bases.
−Removed: Given the rapid changes affecting the global, national, and regional economies generally and the hemp industry, in particular, the Company may not be able to create and maintain a competitive advantage in the marketplace.
−Removed: The Company faces competition from companies outside the CBD and hemp oil industry from legitimate companies with more experience and financial resources than the Company has and by unlicensed and unregulated participants.
+Added: Given the rapid changes affecting the global, national, and regional economies generally, and the hemp industry in particular, the Company may be unable to create and maintain a competitive advantage in the marketplace.
+Added: The Company faces competition from companies outside the CBD and hemp oil industry from legitimate companies with more experience and financial resources than the Company has and from unlicensed and unregulated participants.
In addition, the broader market for hemp-based products may soften, contract or remain stable, any of which may result in increased competition among market participants, including the Company.
−Removed: The Company’s success will depend on its ability to keep pace with any changes in the markets in which it operates, especially in light of legal and regulatory changes and shifting consumer behavior.
+Added: The Company’s success will depend on its ability to keep pace with any changes in the markets in which it operates, especially legal and regulatory changes and shifting consumer behavior.
The Company’s success will also depend on its ability to respond to, among other things, changes in the economy, market conditions, and regulatory and competitive pressures.
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The introduction of a recreational model for marijuana production and distribution in various jurisdictions may cause producers in those jurisdictions to expand beyond the medical marijuana market and compete with the Company’s products.
−Removed: The impact of this potential development may be negative for the Company and could result in increased levels of competition in its existing market and/or the entry of new competitors in the overall Hemp market in which the Company operates.
−Removed: There is potential that the Company will face intense competition from other companies, some of which can be expected to have longer operating histories and more financial resources and manufacturing and marketing experience than the Company.
−Removed: Increased competition by larger and better financed competitors could materially and adversely affect the business, financial condition and results of operations of the Company.
+Added: The impact of this potential development may be negative for the Company and could result in increased levels of competition in its existing market and/or the entry of new competitors into the overall hemp market in which the Company operates.
+Added: There is potential that the Company will face intense competition from other companies, some of which can be expected to have longer operating histories, more financial resources, and more manufacturing and marketing experience than the Company.
+Added: Increased competition from larger and better-financed competitors could materially and adversely affect the business, financial condition and results of operations of the Company.
The Company also faces competition from producers who may not comply with applicable regulations.
As a result, such producers may have lower operating costs, make impermissible claims and utilize other competitive advantages based on circumvention of regulatory requirements.
−Removed: To remain competitive, the Company will require continued significant investment in R&D, marketing, sales, and customer support.
−Removed: The Company may not have sufficient resources to maintain R&D, marketing, sales, and customer support efforts on a competitive basis which could materially and adversely affect the business, financial condition and results of operations of the Company.
+Added: The Company will require continued significant investment in R&D, marketing, sales, and customer support to remain competitive.
+Added: The Company may not have sufficient resources to maintain R&D, marketing, sales, and customer support efforts on a competitive basis, which could materially and adversely affect its business, financial condition and results of operations.
The legal landscape for the Company’s products is changing internationally.
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Changing consumer preferences could impact the Company’s ability to attract and retain customers.
−Removed: As a result of changing consumer preferences, many dietary supplements and other innovative products attain financial success for a limited period of time.
+Added: As a result of changing consumer preferences, many dietary supplements and other innovative products attain financial success for a time.
Even if the Company’s products find retail success, there can be no assurance that any of its products will continue to see extended financial success.
−Removed: The Company’s success will be dependent upon its ability to price, develop new, and improve product lines.
−Removed: Even if the Company is successful in introducing new products or further developing current products, a failure to properly price or update products with compelling content could cause a decline in its products’ popularity that could reduce revenues and harm the Company’s business, operating results and financial condition.
−Removed: Failure to introduce new features and product lines and to achieve and sustain market acceptance could result in the Company being unable to meet consumer preferences and generate revenue which would have a material adverse effect on its profitability and financial results from operations.
+Added: The Company’s success will be depend on its ability to price, develop new, and improve product lines.
+Added: Even if the Company successfully introduces new products or further develops current products, a failure to properly price or update products with compelling content could cause a decline in its popularity, reducing revenues and harming the Company’s business, operating results and financial condition.
+Added: Failure to introduce new features and product lines and to achieve and sustain market acceptance could result in the Company being unable to meet consumer preferences and generate revenue, which would have a material adverse impact on its profitability and financial results from operations.
The Company’s success depends on its ability to attract and retain customers.
−Removed: There are many factors which could impact the Company’s ability to attract and retain customers, including but not limited to the Company’s ability to continually produce desirable product, the successful implementation of the Company’s customer acquisition plan and the continued growth in the aggregate number of people selecting CBD wellness products.
−Removed: The Company’s failure to acquire and retain customers could have a material adverse effect on the Company’s business, operating results and financial position.
−Removed: The Company’s customers may not adequately support its products or its relationships with such retailers may deteriorate.
−Removed: The Company places a significant degree of reliance on retailers to display, present and sell its products to consumers in their brick-and-mortar stores and through their online e-commerce sites.
−Removed: The Company’s retailers stock and display its products, and, in certain health food and other specialty stores, explain its product attributes and health benefits.
−Removed: The Company’s relationships with these retailers and with e-commerce platforms are important for maintaining and building consumer trust in its brands and for executing the advertising and educational programs the Company continues to deploy.
+Added: Many factors could impact the Company’s ability to attract and retain customers, including but not limited to the Company’s ability to continually produce desirable products, the successful implementation of the Company’s customer acquisition plan, and the continued growth in the aggregate number of people selecting CBD and botanical-based wellness products.
+Added: The Company’s failure to acquire and retain customers could have a material adverse effect on its business, operating results and financial position.
+Added: The Company’s retail customers may not adequately support its products or its relationships with such retailers may deteriorate.
+Added: The Company relies significantly on retailers to display, present and sell its products to consumers in their brick-and-mortar stores and through their online e-commerce sites.
+Added: The Company’s retailers stock and display its products, and, in certain health food and other specialty stores, also explain the attributes and health benefits of its products.
+Added: The Company’s relationships with these retailers and their e-commerce platforms are important for maintaining and building consumer trust in its brands and for executing the advertising and educational programs the Company continues to deploy.
The Company’s failure to maintain these relationships with its retailers and platforms, or difficulties experienced by these groups, could harm the Company’s business.
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Furthermore, there can be no assurance that the Company will be able, in the future, to continue to sell its products to its retail customers on favorable trading terms or at all.
−Removed: The Company may be obligated to stop shipments to its retail customers or such customers may refuse shipments from the Company in the course of negotiating the resolution of trading issues with such customers.
+Added: The Company may be obligated to stop shipments to its retail customers, or such customers may refuse shipments from the Company while negotiating the resolution of trading issues with such customers.
Factors that could affect the Company’s ability to maintain or expand its sales to these retailers include:
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and (v) new, well-received product introductions by competitors.
−Removed: The Company’s sales depend, in part, on retailers effectively displaying its products, including providing attractive space in their stores, including online e-commerce platforms, and, in certain channels, having knowledgeable employees that can explain the Company’s products and their benefits.
+Added: In part, the Company’s sales depend on retailers effectively displaying its products, including providing attractive space in their stores, including online e-commerce platforms, and, in certain channels, having knowledgeable employees that can explain the Company’s products and their benefits.
If the Company loses any of its key retailers, or if any key retailer reduces their purchases of the Company’s existing or new products, reduces their number of stores or operations, promotes products of competitors over the Company, or suffers financial difficulty or insolvency, the Company may experience reduced sales of its products, resulting in lower revenue and gross profit margin, which would harm the Company’s profitability and financial condition.
The Company depends on the popularity and acceptance of its brand portfolio.
−Removed: Management believes that maintaining and promoting the Company’s brand is critical to expanding its customer base.
+Added: Management believes maintaining and promoting the Company’s brand is critical to expanding its customer base.
Maintaining and promoting the Company’s brand will depend largely on its ability to continue to provide quality, reliable and innovative products, which it may not do successfully.
The Company may introduce new products that customers do not like, which may negatively affect the brands and reputation.
−Removed: Maintaining and enhancing the Company’s brands may require it to make substantial investments, and these investments may not achieve the desired goals.
−Removed: If the Company fails to successfully promote and maintain its brand or if there are excessive expenses in this effort, its business and financial results from operations could be materially adversely affected.
+Added: Maintaining and enhancing the Company’s brands may require it to make substantial investments, which may not achieve the desired goals.
+Added: If the Company fails to promote and maintain its brand successfully, or if there are excessive expenses in this effort, its business and financial results from operations could be materially adversely affected.
Supply chain issues, including significant price fluctuations or shortages of materials, and distribution challenges may increase the Company’s cost of goods sold and cause its results of operations and financial condition to suffer.
If the Company is unable to secure materials at a reasonable price, it may have to alter or discontinue selling some of its products or attempt to pass along the cost to its customers, any of which could adversely affect its results of operations and financial condition.
−Removed: Additionally, any significant interruption in, or increasing costs of, labor, freight and energy could increase the Company’s and its suppliers’ cost of goods and have a material impact on the Company’s financial condition and results from operations.
−Removed: If the Company’s suppliers are affected by increases in their costs of labor, freight and energy, they may attempt to pass these cost increases on to the Company.
−Removed: If the Company pays such increases, it may not be able to offset them through increases in its pricing.
−Removed: The direct and indirect impacts of Company’s ability to secure materials and move products could adversely affect its results of operations and financial condition.
+Added: Additionally, any significant interruption in or increasing labor, freight and energy costs could increase the Company’s and its suppliers’ cost of goods and have a material impact on the Company’s financial condition and results from operations.
+Added: If the Company’s suppliers are affected by increases labor, freight and energy costs, they may attempt to pass these cost increases on to the Company.
+Added: If the Company
+Added: pays such increases, it may not be able to offset them through increases in its pricing.
+Added: The direct and indirect impacts of the Company’s ability to secure materials and move products could adversely affect its results of operations and financial condition.
The Company may not be able to successfully implement its growth strategy on a timely basis, or at all.
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• maintain and expand brand loyalty and brand recognition by effectively implementing its marketing strategy and advertising initiatives;
−Removed: • maintain and improve its competitive position with the Company’s brands in the channels in which it competes through growth of availability and customer facing initiatives;
+Added: • maintain and improve its competitive position with the Company’s brands in the channels in which it competes through the growth of availability and customer-facing initiatives;
• identify and successfully enter and market the Company’s products in new consumer channels, geographic markets, and market segments and categories;
enter into successful distribution arrangements with new distributors and retailers of its products;
−Removed: • selectively develop and expand in new and existing international markets in an efficient and cost-effective manner with supportive distribution partners;
+Added: • selectively develop and expand in new and existing international markets efficiently and cost-effectively with supportive distribution partners;
• maintain and, to the extent necessary, improve the Company’s high standards for product quality, safety and integrity;
2 unchanged sentences
• maintain sources for the required supply of quality raw ingredients to meet the Company’s growing demand.
−Removed: The Company may not be able to successfully implement the Company's growth strategy and reach the Company's revenue and profitability improvement targets.
+Added: The Company may not be able to successfully implement its growth strategy and reach its revenue and profitability improvement targets.
The market for the Company's products and industry is difficult to forecast due to limited and unreliable market data.
−Removed: The Company will need to rely largely on its own market research to forecast industry trends and statistics as detailed forecasts are, with certain exceptions, not generally available from other sources at this early stage of the Cannabis industry.
+Added: The Company will need to rely largely on its own market research to forecast industry trends and statistics as detailed forecasts are, with certain exceptions, not generally available from other sources at this stage of the hemp industry.
A failure in the demand for the Company’s products to materialize as a result of competition, technological change, change in the regulatory or legal landscape, or other factors could have a material adverse effect on the Company’s business, financial condition and results of operations.
4 unchanged sentences
Competition for qualified technical, scientific, sales, and marketing staff, as well as officers and directors, can be intense, and no assurance can be provided that the Company will be able to attract or retain key personnel in the future.
−Removed: From time to time, share-based compensation may comprise a significant component of the Company’s compensation for key personnel, and if the price of the Common Shares declines, it may be difficult to recruit and retain such individuals.
−Removed: Executive and other management transitions can be inherently difficult to manage, may cause significant and costly disruption to our business, might lead to additional departures of existing personnel, and could have a material adverse effect on our business, operating results, financial condition and internal controls over financial reporting.
−Removed: From time to time, the Company may rely on debt financing for some of its business activities and there can be no assurance the Company will be able to continue to access such credit, or that it will be able to comply with the terms of such credit.
−Removed: From time to time, the Company may rely on debt financing for a portion of its business activities, including capital and operating expenditures.
−Removed: There are no assurances that the Company will be able to comply at all times with the covenants applicable under its debt arrangements;
+Added: From time to time, share-based compensation may comprise a significant component of the
+Added: Company’s compensation for key personnel.
+Added: If the price of the Common Shares declines, it may be challenging to recruit and retain such individuals.
+Added: Executive and other management transitions can be inherently difficult to manage, cause significant and costly disruption to the Company's business, lead to additional departures of existing personnel, and have a material adverse effect on its business, operating results, financial condition and internal controls over financial reporting.
+Added: From time to time, the Company may rely on debt financing for some of its business activities, and there can be no assurance the Company will be able to access such credit, or that it will be able to comply with the terms of such credit.
+Added: From time to time, the Company may attempt to rely on debt financing for a portion of its business activities, including capital and operating expenditures.
+Added: There are no assurances that the Company will be able to comply at all times with the covenants applicable under such types of debt arrangements;
nor are there assurances that the Company will be able to secure new financing that may be necessary to finance its operations and capital growth program.
−Removed: Any failure of the Company to secure financing or refinancing, to obtain new financing or to comply with applicable covenants under its borrowings could have a material adverse effect on the Company’s financial results.
+Added: Any failure of the Company to secure financing, to obtain new financing or to comply with applicable covenants could have a material adverse effect on the Company’s financial results.
Further, any inability of the Company to obtain new financing may limit its ability to support future growth.
6 unchanged sentences
The ability of the Company to manage growth effectively will require it to continue to implement and improve its operational and financial systems and to expand, train and manage its employee base.
−Removed: The inability of the Company to deal with this growth may have a material adverse effect on the Company’s business, financial condition, results of operations and prospects.
−Removed: In addition, there are specific risks inherent in growth of the Company’s business-to-business distribution and direct-to-consumer sales, including, among others, increased competition and risks related to the use of the Company’s information systems.
−Removed: The Company may acquire other companies which could divert management’s attention, result in additional dilution to the Company’s Shareholders and otherwise disrupt the Company’s and harm its operating results.
+Added: The inability of the Company to deal with this growth may have a material adverse effect on its business, financial condition, results of operations, and prospects.
+Added: In addition, specific risks are inherent in the growth of the Company’s business-to-business distribution and direct-to-consumer sales, including increased competition and risks related to the use of the Company’s information systems.
+Added: The Company may acquire other companies, which could divert management’s attention, result in additional dilution to the Company’s Shareholders and otherwise disrupt the Company and harm its operating results.
The Company may acquire, partner, or otherwise transact with other companies in the future, and there are risks inherent in any such activities.
1 unchanged sentence
Any such unknown or undisclosed risks or liabilities could materially and adversely affect the Company’s financial performance and results of operations.
−Removed: Company could encounter additional transaction and integration related costs or experience an impact to its operations or results of operation as a result of the failure to realize all of the anticipated benefits from such acquisitions or partnerships, or an inability to successfully integrate an acquisition as anticipated.
−Removed: All of these factors could cause dilution to the Company’s earnings per Common Share or decrease or delay the anticipated accretive effect of the acquisition or partnership and cause a decrease in the market price of the Company’s securities, or have a material adverse effect on the Company’s operations or results from operations.
−Removed: The Company may not be able to successfully integrate and combine the operations, personnel and technology infrastructure of any such acquired company with its existing operations.
+Added: The Company could encounter additional transaction and integration-related costs or experience an impact on its operations or results of operation as a result of the failure to realize all of the anticipated benefits from such acquisitions or partnerships or an inability to integrate an acquisition as anticipated successfully.
+Added: All of these factors could cause dilution to the Company’s earnings per Common Share or decrease or delay the anticipated accretive effect of the acquisition or partnership and cause a decrease in the market price of the Company’s securities or have a material adverse impact on the Company’s operations or results from operations.
+Added: The Company may be unable to successfully integrate and combine the operations, personnel, and technology infrastructure of any such acquired company with its existing operations.
As a result of integration efforts, the Company may experience interruptions in its business activities, deterioration in its employee and customer relationships, increased costs of integration and harm to its reputation, all of which could have a material adverse effect on the Company’s business, financial condition and results of operations.
−Removed: The Company may experience difficulties in combining corporate cultures, maintaining employee morale and retaining key employees.
−Removed: The integration of any such acquired companies may also impose substantial demands on management of the Company.
−Removed: There is no assurance that these acquisitions will be successfully integrated in a timely manner or without additional expenses incurred.
−Removed: In addition, the Company may be responsible for any legacy liabilities of businesses its acquire or be subject to additional liability in connection with other strategic transactions.
−Removed: The existence or amount of these liabilities may not be known at the time of acquisition, or other strategic transaction, and may have a material adverse effect on our business.
−Removed: In respect of potential future acquisitions or partnerships, there can be no assurance that the Company will be able to identify acquisition or partnership opportunities that meet its strategic objectives, or to the extent such opportunities are identified, that it will be able to negotiate acceptable terms.
+Added: The Company may experience difficulties combining corporate cultures, maintaining employee morale and retaining key employees.
+Added: Integrating any such acquired companies may also impose substantial demands on the management of the Company.
+Added: There is no assurance that these acquisitions will be successfully integrated in a timely manner or without additional expenses being incurred.
+Added: In addition, the Company may be responsible for any legacy liabilities of businesses it acquires or be subject to additional liability in connection with other strategic transactions.
+Added: The existence or amount of these liabilities may not be known at the time of acquisition or other strategic transactions and may have a material adverse effect on the Company's business.
+Added: In respect of potential future acquisitions or partnerships, there can be no assurance that the Company will be able to identify acquisition or partnership opportunities that meet its strategic objectives or that it will be able to negotiate acceptable terms to the extent such opportunities are identified.
The Company’s intellectual property may be difficult to protect.
4 unchanged sentences
There can be no assurances that the steps taken by the Company to protect its intangible property, technology and information will be adequate to prevent misappropriation or independent third-party development of the Company’s intangible property, technology or processes.
−Removed: It is likely that other companies can duplicate a production process similar to the Company’s.
+Added: Other companies can likely duplicate a production process similar to the Company’s.
Other companies may also be able to materially duplicate the Company’s proprietary plant strains.
−Removed: To the extent that any of the above would occur, revenue could be negatively affected, and in the future, the Company may have to litigate to enforce its intangible property rights, which could result in substantial costs and divert management’s attention and Company resources.
+Added: To the extent that any of the above would occur, revenue could be negatively affected.
+Added: In the future, the Company may have to litigate to enforce its intangible property rights, which could result in substantial costs and divert management’s attention and the Company's resources.
The Company’s ability to successfully implement its business plan depends in part on its ability to obtain, maintain and build brand recognition using its trademarks, service marks, trade dress, domain names and other intellectual property rights, including the Company’s names and logos.
If the Company’s efforts to protect its intellectual property are unsuccessful or inadequate, or if any third party misappropriates or infringes on its intellectual property, the value of its brands may be harmed, which could have a material adverse effect on the Company’s business and might prevent its brands from achieving or maintaining market acceptance.
−Removed: The Company may be unable to obtain registrations for its intellectual property rights for various reasons, including refusal by regulatory authorities to register trademarks or other intellectual property protections, prior registrations of which it is not aware, or it may encounter claims from prior users of similar intellectual property in areas where it operates or intends to conduct operations.
+Added: The Company may be unable to obtain registrations for its intellectual property rights for various reasons, including refusal by regulatory authorities to register trademarks or other intellectual property protections, prior registrations of which it is not aware, or it may encounter claims from previous users of similar intellectual property in areas where it operates or intends to conduct operations.
This could harm its image, brand or competitive position and cause the Company to incur significant penalties and costs.
1 unchanged sentence
Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations.
−Removed: In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained.
+Added: In addition to increasing uncertainty with regard to the Company's ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained.
Depending on actions by the U.S.
−Removed: Congress, the federal courts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce patents that we have licensed or that we might obtain in the future.
−Removed: Similarly, changes in patent law and regulations in other countries or jurisdictions or changes in the governmental bodies that enforce them or changes in how the relevant governmental authority enforces patent laws or regulations may weaken our ability to obtain new patents or to enforce patents that we have licensed or that we may obtain in the future.
+Added: Congress, the federal courts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken the Company's ability to obtain new patents or to enforce patents that it has licensed or that it might obtain in the future.
+Added: Similarly, changes in patent law and regulations in other countries or jurisdictions or changes in the governmental bodies that enforce them or changes in how the relevant governmental authority enforces patent laws or regulations may weaken the Company's ability to obtain new patents or to enforce patents that it has licensed or that it may obtain in the future.
For example, the complexity and uncertainty of European patent laws have also increased in recent years.
−Removed: In Europe, a new unitary patent system will likely be introduced by the end of 2023, which would
−Removed: significantly impact European patents, including those granted before the introduction of such a system.
−Removed: Under the unitary patent system, European applications will soon have the option, upon grant of a patent, of becoming a Unitary Patent which will be subject to the jurisdiction of the Unitary Patent Court (UPC).
+Added: In Europe, a new unitary patent system was introduced in 2023, significantly impacting European patents, including those granted before the introduction of the new system.
+Added: Under the unitary patent system, European applications can become a Unitary Patent upon the grant of a patent, which will be subject to the jurisdiction of the Unitary Patent Court (UPC).
As the UPC is a new court system, there is no precedent for the court, increasing the uncertainty of any litigation.
−Removed: Patents granted before the implementation of the UPC will have the option of opting out of the jurisdiction of the UPC and remaining as national patents in the UPC countries.
−Removed: Patents that remain under the jurisdiction of the UPC will be potentially vulnerable to a single UPC-based revocation challenge that, if successful, could invalidate the patent in all countries who are signatories to the UPC.
−Removed: We cannot predict with certainty the long-term effects of any potential changes.
−Removed: Further, under certain circumstances, patent term covering our products or product candidates may be extended for time spent during the pendency of the patent application in the U.S.
+Added: Patents granted before the implementation of the UPC have the option of opting out of the jurisdiction of the UPC and remaining as national patents in the UPC countries.
+Added: Patents that remain under the jurisdiction of the UPC will be potentially vulnerable to a single UPC-based revocation challenge that, if successful, could invalidate the patent in all countries that are signatories to the UPC.
+Added: The Company cannot predict with certainty the long-term effects of these changes.
+Added: Further, under certain circumstances, patent term covering the Company's products or product candidates may be extended for time spent during the pendency of the patent application in the U.S.
PTO (referred to as PTA, or Patent Term Adjustment).
−Removed: The laws and regulations underlying how the PTO calculates the PTA is subject to change and any such PTA could be challenged by a third-party.
−Removed: If we do not prevail under such a challenge, the PTA may be reduced or eliminated, resulting in a shorter patent term, which may negatively impact our ability to exclude competitors.
−Removed: Recently, the U.S.
−Removed: Court of Appeals for the Federal Circuit handed down a decision in the In re Cellect case that introduces particular uncertainty around PTA calculations.
−Removed: In that case, the court determined that patents with a term that exceeded the term of other patents in the same family—due to PTA extension—were invalid for obvious-type double patenting.
−Removed: If that decision is not overturned, or reversed by Congress, then any PTA in a patent that we have or obtain in the future could be vulnerable to similar invalidity challenges based on other earlier-expiring patents.
−Removed: While the In re Cellect case focused on such challenges from patents in the same family, the court did not address challenges to PTA from patents in other families that we or others may own, and this creates additional uncertainty with respect to PTA calculations.
−Removed: Because PTA added to the term of patents covering biological or pharmaceutical products, and methods of their use has particular value, our business may be adversely affected if the PTA is successfully challenged by a third party and our ability to exclude competitors is reduced or eliminated.
−Removed: In addition, for issued patents where we have PTA we may determine that it is prudent not to file additional applications in that family to preserve that PTA.
−Removed: Such a decision would negatively impact our ability to obtain patents with different scope from the same patent family even though we could be otherwise entitled to such patent protection.
−Removed: If we do not obtain patents on all the subject matter in our patent applications that we are entitled to, our ability to exclude competitors may be harmed.
−Removed: In addition to changes in patents laws, geopolitical dynamics, including Russia’s recent incursion into Ukraine, may also impact our ability to obtain and enforce patents in particular jurisdictions.
−Removed: If we are unable to obtain and enforce patents as needed in particular markets, our ability to exclude competitors in those markets may be reduced.
+Added: The laws and regulations underlying how the PTO calculates the PTA are subject to change, and a third party could challenge any such PTA.
+Added: If the Company does not prevail under such a challenge, the PTA may be reduced or eliminated, resulting in a shorter patent term, which may negatively impact its ability to exclude competitors.
+Added: Court of Appeals for the Federal Circuit recently handed down a decision in the In re Cellect case that introduces particular uncertainty around PTA calculations.
+Added: In that case, the court determined that patents with a term that exceeded the term of other patents in the same family—due to a PTA extension—were invalid for obvious-type double patenting.
+Added: If that decision is not overturned or reversed by Congress, then any PTA in a patent that the Company has or will obtain in the future could be
+Added: vulnerable to similar invalidity challenges based on other earlier-expiring patents.
+Added: While the In re Cellect case focused on such challenges from patents in the same family, the court did not address challenges to a PTA from patents in other families that the Company or others may own, and this creates additional uncertainty with respect to PTA calculations.
+Added: Because a PTA added to the term of patents covering biological or pharmaceutical products and methods of their use have particular value, the Company business may be adversely affected if a third party successfully challenges the PTA, and its ability to exclude competitors is reduced or eliminated.
+Added: In addition, for issued patents where the Company has a PTA, it may determine that it is prudent not to file additional applications in that family to preserve that PTA.
+Added: Such a decision would negatively impact the Company's ability to obtain patents with a different scope from the same patent family, even though the Company could be otherwise entitled to such patent protection.
+Added: If the Company does not obtain patents on all the subject matter that it is entitled to in its patent applications, the Company's ability to exclude competitors may be harmed.
+Added: In addition to changes in patents laws, geopolitical dynamics may also impact the Company's ability to obtain and enforce patents in particular jurisdictions.
+Added: If the Company is unable to obtain and enforce patents as needed in particular markets, its ability to exclude competitors in those markets may be reduced.
Companies in the retail and wholesale consumer packaged goods industries frequently own trademarks and trade secrets and often enter into litigation based on allegations of infringement or other violations of intangible property rights.
The Company may be subject to intangible property rights claims in the future, and its products may not be able to withstand any third-party claims or rights against their use.
−Removed: Any intangible property claims, with or without merit, could be time consuming, expensive to litigate or settle and could divert management resources and attention.
−Removed: An adverse determination also could prevent the Company from offering its products to others and may require that the Company procure substitute products or services for these members.
−Removed: With respect to any intangible property rights claim, the Company may have to pay damages or stop using intangible property found to be in violation of a third party’s rights.
+Added: Any intangible property claims, with or without merit, could be time-consuming and expensive to litigate or settle and could divert management resources and attention.
+Added: An adverse determination also could prevent the Company from offering its products to others and may require it to procure substitute products or services for these members.
+Added: With respect to any intangible property rights claim, the Company may have to pay damages or stop using intangible property found to violate a third party’s rights.
The Company may have to seek a license for the intangible property, which may not be available on reasonable terms and may significantly increase operating expenses.
1 unchanged sentence
As a result, the Company may also be required to pursue alternative options, which could require significant effort and expense.
−Removed: If the Company cannot license or obtain an alternative for the infringing aspects of its business, it may be forced to limit product offerings and may be unable to compete effectively.
−Removed: Any of these results could harm the Company’s brand and prevent it from generating sufficient revenue or achieving profitability.
−Removed: The Company is involved in litigation, including class action litigation matters, and there may be additional litigation in the future in which it will be involved.
−Removed: The Company is currently involved in litigation.
−Removed: An adverse decision in the litigation could have a material adverse effect on the Company’s business, financial condition or results of operations.
+Added: If the Company cannot license or obtain an alternative for the infringing aspects of its business, it may be forced to limit product offerings and be unable to compete effectively.
+Added: These results could harm the Company’s brand and prevent it from generating sufficient revenue or achieving profitability.
+Added: The Company is involved in litigation, including class action litigation, and there may be additional litigation in the future in which it will be involved.
+Added: The Company is currently involved in ordinary litigation.
+Added: An adverse decision in any litigation could have a material adverse effect on the Company’s business, financial condition or results of operations.
The Company may become party to litigation from time to time in the ordinary course of business, which could adversely affect the Company’s business.
Should any litigation in which the Company becomes involved be determined against it, such a decision could materially adversely affect the Company’s ability to continue operating and the market price for the Common Shares and could use significant resources.
−Removed: Furthermore, as a manufacturer, processor and distributor of products designed to be ingested by humans, the Company faces an inherent risk of exposure to product liability claims, regulatory action and litigation if its products are alleged to have caused significant loss or
−Removed: In addition, the manufacture and sale of the Company’s products involves the risk of injury to consumers due to tampering by unauthorized third parties or product contamination.
−Removed: Previously unknown adverse reactions resulting from human consumption of the Company’s products alone or in combination with other medications or substances could occur.
−Removed: Although the Company will have quality control procedures in place, it may be subject to various product liability claims, including, among others, that the products produced by the Company, or the products that will be purchased by the Company from third-party licensed producers, caused injury, illness or death, include inadequate instructions for use or include inadequate warnings concerning possible side effects or interactions with other substances.
−Removed: A product liability claim or regulatory action against the Company could result in increased costs, could adversely affect the Company’s reputation with its customers and consumers generally and could have a material adverse effect on the Company’s business, results of operations and financial condition.
−Removed: There can be no assurances that the Company will be able to obtain or maintain product liability insurance on acceptable terms or with adequate coverage against potential liabilities.
+Added: Furthermore, as a manufacturer, processor and distributor of products designed to be ingested by humans, the Company faces an inherent risk of exposure to product liability claims, regulatory action and litigation if its products are alleged to have caused significant loss or injury.
+Added: In addition, the manufacture and sale of the Company’s products involve the risk of consumer injury due to tampering by unauthorized third parties or product contamination.
+Added: Previously unknown adverse reactions resulting from human consumption of the Company’s products alone or combined with other medications or substances could occur.
+Added: Although the Company will have quality control procedures in place, it may be subject to various product liability claims, including, among others, that the products produced by the Company, or the products the Company will purchase from third-party licensed producers, caused injury, illness or death, include inadequate instructions for use or include inadequate warnings concerning possible side effects or interactions with other substances.
+Added: A product liability claim or regulatory action against the Company could result in increased costs, adversely affect the Company’s reputation with its customers and consumers generally, and have a material adverse effect on its business, results of operations and financial condition.
+Added: There can be no assurances that the Company can obtain or maintain product liability insurance on acceptable terms or with adequate coverage against potential liabilities.
Such insurance is expensive and may not be available in the future on acceptable terms, or at all.
The inability to obtain sufficient insurance coverage on reasonable terms or to otherwise protect against potential product liability claims could prevent or inhibit the commercialization of the Company’s potential products.
−Removed: Monitoring and defending against legal actions, whether or not meritorious, is time-consuming for management and detracts from management’s ability to fully focus internal resources on business activities.
−Removed: In addition, legal fees and costs incurred in connection with such activities may be significant and the Company could, in the future, be subject to judgments or enter into settlements of claims for significant monetary damages.
−Removed: A decision adverse to the interests of the Company could result in the payment of substantial damages and could have a material adverse effect on cash flow, results of operations and financial position.
−Removed: With respect to any litigation, the Company’s insurance may not reimburse or may not be sufficient to reimburse the Company for the expenses or losses it may suffer in contesting and concluding such litigation.
+Added: Monitoring and defending against legal actions, whether or not meritorious, is time-consuming for management and detracts from management’s ability to focus internal resources on business activities fully.
+Added: In addition, legal fees and costs incurred in connection with such activities may be significant.
+Added: In the future, the Company could be subject to judgments or enter into settlements of claims for
+Added: significant monetary damages.
+Added: A decision adverse to the interests of the Company could result in the payment of substantial damages.
+Added: It could have a material adverse effect on cash flow, results of operations and financial position.
+Added: With respect to any litigation, the Company’s insurance may not reimburse or be sufficient to reimburse the Company for the expenses or losses it may suffer in contesting and concluding such litigation.
Even if successful, substantial litigation costs may adversely impact the Company’s business, operating results or financial condition.
Trade Secrets may be difficult to protect.
−Removed: The Company’s success depends upon the skills, knowledge and experience of its scientific and technical personnel, consultants, and advisors, as well as contractors.
+Added: The Company’s success depends upon the skills, knowledge and experience of its scientific and technical personnel, consultants, advisors, and contractors.
Because the Company operates in a highly competitive industry, it relies in part on trade secrets to protect its proprietary products and processes.
1 unchanged sentence
The Company enters into confidentiality or non-disclosure agreements with its corporate partners, employees, consultants, outside scientific collaborators, developers, and other advisors.
−Removed: These agreements generally require that the receiving party keep confidential, and not disclose to third parties, confidential information developed by the receiving party or made known to the receiving party by the Company during the course of the receiving party’s relationship with the Company.
−Removed: These agreements also generally provide that inventions conceived by the receiving party in the course of rendering services to the Company will be its exclusive property, and the Company enters into assignment agreements to perfect its rights.
+Added: These agreements generally require that the receiving party keep confidential and not disclose to third parties confidential information developed by the receiving party or made known to the receiving party by the Company during the receiving party’s relationship with the Company.
+Added: These agreements also generally provide that inventions conceived by the receiving party wihle rendering services to the Company will be its exclusive property, and the Company enters into assignment agreements to perfect its rights.
These confidentiality, inventions and assignment agreements, where in place, may be breached and may not effectively assign intellectual property rights to the Company.
−Removed: The Company’s trade secrets could also be independently discovered by competitors, in which case the Company would not be able to prevent the use of such trade secrets by its competitors.
+Added: The Company’s trade secrets could also be independently discovered by competitors, in which case the Company would not be able to prevent its competitors' use of such trade secrets.
The enforcement of a claim alleging that a party illegally obtained and was using the Company’s trade secrets could be difficult, expensive, and time-consuming, and the outcome could be unpredictable.
3 unchanged sentences
There is no assurance, however, that the expected positive impact from being a benefit company will be realized.
−Removed: As a benefit company, the Company is required to disclose to Shareholders an annual benefit report outlining how the Company conducts its business in a responsible and sustainable manner and how it promotes its public benefit.
−Removed: In addition, the Company’s directors and officers are required to act honestly and in good faith with a view to conducting business in a responsible and sustainable manner and promoting the company’s public benefits, which must be balanced with their duty under the BCBCA to act honestly and in good faith with a view to the best interests of the Company.
+Added: As a benefit company, the Company is required to disclose to Shareholders an annual benefit report outlining how the Company conducts its business responsibly and sustainably and how it promotes its public benefit.
+Added: In addition, the Company’s directors and officers are required to act honestly and in good faith conduct business responsibly and sustainably and promote the Company’s public benefits, which must be balanced with their duty under the BCBCA to act honestly and in good faith in the best interests of the Company.
If the Company is unable to provide this report in a timely manner, or if the report is not viewed favorably by the parties with which the Company does business, its regulators, or others reviewing its credentials, its reputation and status as a benefit company may be harmed.
−Removed: In addition to being a benefit company, the Company has been certified by B Lab as a "Certified B Corp.", which refers to companies that are certified as meeting certain levels of social and environmental performance, accountability and transparency.
−Removed: The standards for
−Removed: Certified B Corporation certification are set by B Lab, and may change over time, and the Company’s continued certification is at the sole discretion of B Lab.
+Added: In addition to being a benefit company, the Company has been certified by B Lab as a "Certified B Corp," referring to companies that are certified as meeting certain levels of social and environmental performance, accountability and transparency.
+Added: The standards for Certified B Corporation certification are set by B Lab and may change over time.
+Added: The Company’s continued certification is at the sole discretion of B Lab.
To maintain certification, the Company is required to update its assessment and verify its updated score with B Lab every three years.
−Removed: The Company was first certified in August 2020.
−Removed: There is no guarantee that the Company will be recertified.
−Removed: The Company’s reputation could be harmed if it loses its status as a Certified B Corp, whether by its choice or by its failure to continue to meet the certification requirements.
+Added: The Company was first certified in August 2020 and re-certified in April 2024.
+Added: There is no guarantee that the Company will continue to be re-certified.
+Added: The Company’s reputation could be harmed if it loses its status as a Certified B Corp, whether by its choice or its failure to continue to meet the certification requirements.
Likewise, the Company’s reputation could be harmed if its publicly reported Certified B Corp score declines.
2 unchanged sentences
Accordingly, being a benefit company and complying with the related obligations could negatively impact the Company’s ability to provide the highest possible return to its Shareholders.
−Removed: As a benefit company under British Columbia law, the Company’s directors and officers are required to act honestly and in good faith with a view to conducting business in a responsible and sustainable manner and promoting the company’s public benefits, which must be balanced with their duty under the BCBCA to act honestly and in good faith with a view to the best interests of the Company.
−Removed: While the Company believes its public benefit designation and obligation will benefit Shareholders, in balancing these interests the Board of Directors may take actions that do not maximize Shareholder value.
+Added: As a benefit company under British Columbia law, the Company’s directors and officers are required to act honestly and in good faith with a view to conducting business responsibly and sustainably and promoting the Company’s public benefits, which must be balanced with their duty under the BCBCA to act honestly and in good faith with a view to the best interests of the Company.
+Added: While the Company believes its public benefit designation and obligation will benefit Shareholders, in balancing these interests, the Board of Directors may
+Added: take actions that do not maximize Shareholder value.
Any benefits to Shareholders resulting from the Company’s public benefit purposes may not materialize within the expected timeframe, or at all, and may have negative effects.
6 unchanged sentences
The Company may be unable or slow to realize the benefits it expects from actions taken to benefit its stakeholders, including farmers, suppliers, crew members and local communities, which could adversely affect the Company’s business, financial condition and results of operations, which in turn could cause the Company’s share price to decline.
−Removed: In the event of a conflict or dispute regarding the Company’s Board of Directors’ balancing of interests and the duty to act in a responsible and sustainable manner, there is uncertainty as to how such a conflict may be resolved as British Columbia courts have not yet developed as substantive a body of law on this topic as with traditional director duties.
+Added: In the event of a conflict or dispute regarding the Company’s Board of Directors’ balancing of interests and the duty to act responsibly and sustainably, there is uncertainty as to how such a conflict may be resolved as British Columbia courts have not yet developed as substantive a body of law on this topic as with traditional director duties.
As a public benefit company, the Company may be subject to increased legal proceedings concerning its duty to balance Shareholder and public benefit interests, the occurrence of which may have an adverse impact on the Company’s financial condition and results of operations.
−Removed: As a British Columbia benefit company, the Company’s Shareholders (if they, individually or collectively, own at least 2% of the Company’s outstanding capital stock or shares having at least C$2 million in market value (whichever is less)) are entitled to commence a legal proceeding claiming that the Company’s directors failed to balance Shareholder and public benefit interests, although the BCBCA clarifies that despite any rule of law to the contrary, a court may not order monetary damages in relation to any breach by the Company’s directors of these additional duties.
+Added: As a British Columbia benefit company, the Company’s Shareholders (if they, individually or collectively, own at least 2% of the Company’s outstanding capital stock or shares having at least C$2 million in market value (whichever is less)) are entitled to commence a legal proceeding claiming that the Company’s directors failed to balance Shareholder and public benefit interests.
+Added: However, the BCBCA clarifies that despite any rule of law to the contrary, a court may not order monetary damages in relation to any breach by the Company’s directors of these additional duties.
This potential liability does not exist for traditional corporations.
As a new class of corporate entity, there is uncertainty over how British Columbia courts would view a board’s balancing of interests as little jurisprudence exists to offer insights or guidance.
−Removed: Therefore, the Company may be subject to the possibility of increased legal proceedings, which would
−Removed: require the attention of management and, as a result, may adversely impact management’s ability to effectively execute the Company’s strategy.
+Added: Therefore, the Company may be subject increased legal proceedings, which would require management's attention and, as a result, may adversely impact management’s ability to execute the Company’s strategy effectively.
Any such derivative litigation may be costly and have an adverse impact on the Company’s financial condition and results of operations.
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should a third party be subject to insolvency or otherwise be unable or unwilling to perform their obligations to the Company, it could negatively impact the Company's operations.
−Removed: The Company's business relies on full compliance under applicable laws and regulations relating to the sale of its products across the United States and internationally.
−Removed: The regulation of third-party suppliers may have a significant impact upon the Company's business.
−Removed: Any enforcement activity or any additional uncertainties which may arise in the future could cause substantial interruption or cessation of the Company's business, including adverse impacts to the Company's supply chain and distribution channels, and other civil and/or criminal penalties at the federal level.
+Added: The Company's business relies on full compliance under applicable laws and regulations relating to selling its products across the United States and internationally.
+Added: The regulation of third-party suppliers may significantly impact the Company's business.
+Added: Any enforcement activity or any additional uncertainties that may arise in the future could cause substantial interruption or cessation of the Company's business, including adverse impacts to the Company's supply chain and distribution channels and other civil and/or criminal penalties at the federal level.
The Company is party to business relationships, transactions and contracts with various third parties, pursuant to which such third parties have performance, payment and other obligations to the Company.
If any of these third parties were to become subject to bankruptcy, receivership or similar proceedings, the Company's rights and benefits in relation to its business relationships, contracts and transactions with such third parties could be terminated, modified in a manner adverse to the Company, or otherwise impaired.
−Removed: The Company cannot make any assurances that it would be able to arrange for alternate or replacement business relationships, transactions or contracts on terms as favorable as existing business relationships, transactions or contracts if at all.
+Added: The Company cannot make any assurances that it could arrange alternate or replacement business relationships, transactions or contracts on terms as favorable as
+Added: existing business relationships, transactions or contracts, if at all.
Any inability on the Company's part to do so could have a material adverse effect on its business and results of operations.
−Removed: While discussing potential business relationships or other transactions with third parties, the Company may disclose confidential information relating to the business, operations or affairs of the Company.
−Removed: Although confidentiality agreements are to be signed by third parties prior to the disclosure of any confidential information, a breach of such confidentiality agreement could put the Company at competitive risk and may cause significant damage to its business.
+Added: While discussing potential business relationships or other transactions with third parties, the Company may disclose confidential information relating to its business, operations or affairs.
+Added: Although confidentiality agreements are to be signed by third parties before disclosing confidential information, a breach of such an agreement could put the Company at competitive risk and cause significant damage to its business.
The harm to the Company's business from a breach of confidentiality cannot presently be quantified but may be material and may not be compensable in damages.
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The Company has a history of losses and may continue to incur losses in the future.
−Removed: The Company has incurred both operating and net losses in each of its last fiscal years, has incurred losses through the first part of the current fiscal year, and may continue to incur losses in the future as it continues to build its brand and invest in its products.
+Added: The Company has incurred both operating and net losses in each of its last fiscal years, and may continue to incur losses in the future as it continues to build its brand and invest in its products.
This lack of profitability limits the resources available to the Company to fund its operations and to invest in new products and services and otherwise improve its business operations.
−Removed: The Company cannot assure you that it will be able to operate profitably or generate positive cash flows.
−Removed: If the Company cannot achieve profitability, it may be forced to cease operations and you may suffer a total loss of your investment.
−Removed: Debt and Convertible Debenture Agreement that the Company has in Place may limit other future potential strategic investor interests.
+Added: The Company cannot assure that it will be able to operate profitably or generate positive cash flows.
+Added: If the Company cannot achieve profitability, it may be forced to cease operations and investors may suffer a total loss of investment.
+Added: Debt and the Convertible Debenture Agreement that the Company has in place may limit other future potential strategic investor interests.
Effective as of November 14, 2022, the Company entered into the Subscription Agreement with BT DE Investments, Inc.
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The material investment by BT DE Investments, Inc.
−Removed: and the resulting significant ownership interest in the Company may have the effect of delaying or preventing change of control transactions, including transactions that some or all of our shareholders might consider to be desirable.
−Removed: The Company has required, and in the future may require additional financing to operate its business and it may face difficulties acquiring additional financing on terms acceptable to the Company or at all.
−Removed: Given its lack of profitability, the Company has required, and in the future may require, additional capital to continue operations at its cultivation and production facilities, expansion of its product
−Removed: lines, development of its intellectual property base, increasing production capabilities and expanding its operations in states where it currently operates and states where it currently does not have operations.
+Added: and the resulting significant ownership interest in the Company may have the effect of delaying or preventing change of control transactions, including transactions that some or all of the Company's Shareholders might consider to be desirable.
+Added: The Company has required and, in the future, may require additional financing to operate its business, and it may face difficulties acquiring additional financing on terms acceptable to the Company, if at all.
+Added: Given its lack of profitability, the Company has required, and in the future may require, additional capital to continue operations at its cultivation and production facilities, expansion of its product lines, development of its intellectual property base, increasing production capabilities and expanding its operations in states where it currently operates and states where it currently does not have operations.
The Company may not be able to obtain additional financing on terms acceptable to it, or at all.
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Generally, when the Company issues securities, management of the Company will have broad discretion with respect to the application of net proceeds received by the Company from the sale of the securities and may spend such proceeds in ways that do not improve the Company’s results of operations or enhance the value of the securities issued and outstanding from time to time.
−Removed: Any failure by management to apply these funds effectively could result in financial losses that could have a material adverse effect on the Company’s business or cause the price of the securities of the Company issued and outstanding from time to time to decline.
−Removed: There is a limited market for the Company’s Common Shares and warrants.
+Added: Any failure by management to apply these funds effectively could result in
+Added: financial losses that could have a material adverse effect on the Company’s business or cause the price of the securities of the Company issued and outstanding from time to time to decline.
+Added: There is a limited market for the Company’s Common Shares.
The Common Shares are listed on the TSX under the symbol "CWEB".
−Removed: The 2019 Warrants are listed on the TSX under the symbol "CWEB.WT".
−Removed: The 2020 Warrants are listed on the TSX under the symbol "CWEB.WR".
−Removed: The Replacement Warrants are listed on the TSX under the symbol "CWEB.WS".
However, there can be no assurance that an active and liquid market for the Common Shares or warrants will be maintained and an investor may find it difficult to resell any securities of the Company.
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• the public’s reaction to the Company’s press releases, announcements and filings with regulatory authorities and those of its competitors;
−Removed: • fluctuations in broader stock market prices and volumes or adverse changes in general market conditions or economic trends or as a result of the COVID-19 pandemic and/or social unrest generally;
+Added: • fluctuations in broader stock market prices and volumes or adverse changes in general market conditions or economic trends;
• changes in market valuations of similar companies;
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• short-term fluctuation in share price caused by changes in general conditions in the domestic and worldwide economies or financial markets;
−Removed: • consequences of government action in response to COVID-19;
−Removed: • changes in global financial markets and global economics and general market conditions, such as interest rates and product price volatility, and including those caused by COVID-19;
+Added: • changes in global financial markets and global economics and general market conditions, such as interest rates and product price volatility;
• the other risk factors described in this Form 10-K.
The realization of any of these risks and other factors beyond the Company’s control could cause the market price of the Common Shares to decline significantly.
−Removed: In addition, broad market and societal factors, as well as political, social and economic instability globally or in the markets we serve may harm the market price of the Common Shares and other listed securities of the Company.
+Added: In addition, broad market and societal factors, as well as political, social and economic instability globally or in the markets the Company serves may harm the market price of the Common Shares and other listed securities of the Company.
Hence, the price of the Common Shares and such other securities could fluctuate based upon factors that have little or nothing to do with the Company, and these fluctuations could materially reduce the price of the Common Shares or such other securities regardless of the Company’s operating performance.
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The Company is a holding company and substantially all of its assets consist of shares of Charlotte’s Web, Inc.
−Removed: and Abacus (including the subsidiaries of Abacus).
+Added: and Abacus Health Products, Inc.
+Added: (including its subsidiaries).
As a result, investors are subject to the risks attributable to Charlotte’s Web, Inc.
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These provisions and the resulting costs may also discourage the Company from bringing a lawsuit against directors and officers for breaches of their fiduciary duties, and may similarly discourage the filing of derivative litigation by the Company’s Shareholders against the Company’s directors and officers even though such actions, if successful, might otherwise benefit the Company and its Shareholders.
−Removed: There may be difficulty in enforcing judgments and effecting service of process on directors and officers that are not citizens of the United States.
+Added: There may be difficulty in enforcing judgments and effecting service of process on directors and officers who are not citizens of the United States.
Certain of the Company’s directors and officers reside outside of the United States and some or all of the assets of such persons are located outside of the United States.
−Removed: Therefore, it may not be possible for Shareholders to collect or to enforce judgments or liabilities against them under U.S.
+Added: Therefore, it may not be possible for Shareholders to collect or to enforce judgments or
+Added: liabilities against them under U.S.
securities laws.
49 unchanged sentences
There can be no assurance that the Company’s estimates and assumptions made for purposes of the impairment will prove to be accurate predictions of the future.
−Removed: Adverse market conditions, including a decrease in the Company’s market capitalization, adverse impacts of the COVID-19 pandemic, temporary or permanent loss of key customers and distribution channels, among other factors, could have a material adverse effect on the Company's business, financial condition and results of operations and could result in impairment of the Company's intangible and long-lived assets.
+Added: Adverse market conditions, including a decrease in the Company’s market capitalization, temporary or permanent loss of key customers and distribution channels, among other factors, could have a material adverse effect on the Company's business, financial condition and results of operations and could result in impairment of the Company's intangible and long-lived assets.
Certain employees or directors of the Company may have interests that conflict with those of the Company.
7 unchanged sentences
There can be no assurance that advertising and promotional expenditures will result in revenues in the future or will generate awareness of the Company’s technologies, products or services.
−Removed: Specifically, ineffective marketing could reduce
−Removed: e-commerce traffic, which will reduce new consumer acquisition place overreliance on existing consumers.
+Added: Specifically, ineffective marketing could reduce e-commerce traffic, which will reduce new consumer acquisition place overreliance on existing consumers.
In addition, no assurance can be given that the Company will be able to manage its advertising and promotional expenditures on a cost-effective basis.
14 unchanged sentences
In addition, as data privacy and marketing laws change, the Company may incur additional costs to ensure it remains in compliance.
−Removed: If applicable data privacy and marketing laws become more restrictive at the international, federal, provincial or state levels, the Company’s compliance costs may increase, its ability to effectively engage customers via personalized marketing may decrease, its investment in its e-commerce platform may not be fully realized, its opportunities for growth may be curtailed by its compliance burden and its potential reputational harm or liability for security breaches may increase.
+Added: If applicable data privacy and marketing laws become more restrictive at the international, federal, provincial or state levels, the Company’s compliance costs may increase, its ability to effectively engage customers
+Added: via personalized marketing may decrease, its investment in its e-commerce platform may not be fully realized, its opportunities for growth may be curtailed by its compliance burden and its potential reputational harm or liability for security breaches may increase.
The Company faces risks related to its information technology systems and potential cyber-attacks and security and privacy breaches.
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As a result, the Company may become subject to more extensive requirements to protect the customer information that it processes in connection with the purchase of its products, resulting in increased compliance costs.
−Removed: The Company’s information technology systems and on-line activities, including its e-commerce websites, also may be subject to denial of service, malware or other forms of cyber-attacks.
−Removed: While the Company has taken measures to protect against those types of attacks, those
−Removed: measures may not adequately protect its on-line activities from such attacks.
+Added: The Company’s information technology systems and online activities, including its e-commerce websites, also may be subject to denial of service, malware or other forms of cyber-attacks.
+Added: While the Company has taken measures to protect against those types of attacks, those measures may not adequately protect its online activities from such attacks.
If a denial-of-service attack or other cyber event were to affect the Company’s e-commerce sites or other information technology systems, its business could be disrupted, it may lose sales or valuable data, and its reputation may be adversely affected.
5 unchanged sentences
In particular, global economic conditions remain constrained, and if such conditions continue, recur or worsen, this may have a material adverse effect on the Company’s business, financial condition and results of operations.
−Removed: Additionally, the recent trends towards rising inflation may also materially adversely our business and corresponding financial position and cash flows.
+Added: Additionally, the recent trends towards rising inflation may also materially adversely the Company's business and corresponding financial position and cash flows.
Furthermore, such economic conditions have produced downward pressure on share prices and on the availability of credit for financial institutions and corporations.
4 unchanged sentences
The costs of being a public company in both Canada and the United States are high and may strain the Company’s resources.
−Removed: The Company incurs significant legal, accounting, insurance and other expenses as a result of being a public company in both Canada and the United States, which may negatively impact its performance and could cause its results of operations and financial condition to suffer.
+Added: The Company incurs significant legal, accounting, insurance and other expenses as a result of being a public company in both Canada and the
+Added: United States, which may negatively impact its performance and could cause its results of operations and financial condition to suffer.
Compliance with applicable securities laws in Canada and the United States and the rules of the TSX and the U.S.
26 unchanged sentences
Any or all of these events could harm the business and financial performance of the Company.
−Removed: Recent macroeconomic trends, including inflation, a recession or slowed economic growth, may adversely affect our business, financial condition and results of operations.
+Added: Recent macroeconomic trends, including inflation, a recession or slowed economic growth, may adversely affect the Company's business, financial condition and results of operations.
Rising inflation could have an adverse impact on expenses, as these costs could increase at a higher rate than revenues.
−Removed: Our costs are subject to fluctuations, particularly due to changes in the prices of raw product and packaging materials and the costs of labor, transportation and energy.
+Added: The Company's costs are subject to fluctuations, particularly due to changes in the prices of raw
+Added: product and packaging materials and the costs of labor, transportation and energy.
Inflation pressures could also result in increases in these input costs.
−Removed: Therefore, our business results depend, in part, on our continued ability to manage these fluctuations through pricing actions, cost saving projects and sourcing decisions, while maintaining and improving margins and market share.
−Removed: Failure to manage these fluctuations could adversely impact our results of operations or cash flows.
+Added: Therefore, The Company's business results depend, in part, on its continued ability to manage these fluctuations through pricing actions, cost saving projects and sourcing decisions, while maintaining and improving margins and market share.
+Added: Failure to manage these fluctuations could adversely impact the Company's results of operations or cash flows.
In addition, unfavorable macroeconomic conditions, such as a recession or continued slowed economic growth, could negatively affect consumer demand for cannabis products, which consequently, may negatively affect the results of operations.
−Removed: Under difficult economic conditions, consumers may seek to reduce discretionary spending by forgoing purchases of cannabis products, negatively impacting our net sales and margins.
−Removed: Softer consumer demand for cannabis products could reduce our profitability and could negatively affect our overall financial performance.
+Added: Under difficult economic conditions, consumers may seek to reduce discretionary spending by forgoing purchases of cannabis products, negatively impacting the Company's net sales and margins.
+Added: Softer consumer demand for cannabis products could reduce the Company's profitability and could negatively affect its overall financial performance.
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.