What changed in this filing

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Item 1A. Risk Factors

2025-02-28 compared with 2024-02-26 · 196 added, 180 removed, 558 unchanged (40% of the section changed)

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The occurrence of any of the following risks may materially and adversely affect our business, financial condition, results of operations and future prospects.

In these circumstances, the market price of our Class A common stock could decline.

In these circumstances, the market price of our Class A common

stock could decline.

Other events that we do not currently anticipate or that we currently deem immaterial may also affect our business, prospects, financial condition and results of operations.

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● uncertainty or changes in tax policies and tax rates;

● uncertainty or changes in import/export policies, including tariffs;

● uncertainty due to national or international security concerns;

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We also rely on our store locations to attract and retain customers and to build our customer database.

If we close store locations, are unable to open or acquire new store locations on the timelines we anticipate or at all due to general economic conditions or otherwise, or experience declines in customer transactions in our existing store locations due to general economic conditions or otherwise, our ability to maintain and grow our customer database and our Active Customers will be limited, which could have a material adverse effect on our business, financial condition and results of operations.

Decreases in Active Customers, average spend per customer, or retention and renewal rates for our Good Sam services and plans has, at times, negatively affected and could in the future negatively affect our financial performance, and a prolonged period of depressed consumer spending could have a material adverse effect on our business.

If we close store locations, are unable to open new store locations, including greenfield locations and acquisitions, on the timelines we anticipate or at all due to general economic conditions or otherwise, or experience declines in customer transactions in our existing store locations due to general economic conditions or otherwise, our ability to maintain and grow our customer database and our Active Customers will be limited, which could have a material adverse effect on our business, financial condition and results of operations.

In addition, political conditions, including new and changing laws or tariffs, regulations, executive orders and enforcement priorities, may create uncertainty about how such laws and regulations will be interpreted and applied and, consequently, may create market uncertainty.

This may adversely impact customer demand, increase our costs and adversely impact our business.

effect on our business.

For instance, our Active Customers declined in 2024.

In prior years, promotional activities and decreased demand for consumer products affected our profitability and margins, and this negative impact could return or worsen in future periods.

In prior years and to some extent in 2024, promotional activities and decreased demand for consumer products affected our profitability and margins, and this negative impact could return or worsen in future periods.

In addition, adverse economic conditions may result in an increase in our operating expenses due to, among other things, higher costs of labor, energy, equipment and facilities, as well as higher tariffs.

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In addition, during recent periods we have faced, and may continue to face, increased competition from other businesses with similar product and service offerings.

For example, our competitors have listed RVs at or below cost and we have had little visibility into our competitors or manufacturers’ inventories.

As a result, we have responded and may need to further respond by establishing pricing, marketing and other programs or by seeking out additional strategic alliances or acquisitions that may be less favorable to us than we could otherwise establish or obtain in more favorable economic environments.

For example, our competitors have listed RVs at or below cost.

As a result, we responded and may need to further respond by establishing pricing, marketing and other programs or by seeking out additional strategic alliances or acquisitions that may be less favorable to us than we could otherwise establish or obtain in more favorable economic environments.

Such programs have adversely impacted our gross margin, operating margin and selling, general and administrative expenses.

In addition, declines in the national economy could cause partners or advertising customers who participate in our programs to go out of business.

Should the number of partners or advertising customers entering bankruptcy rise, it is likely that the number of uncollectible accounts would also rise.

In addition, declines in the national economy could cause partners and/or advertising customers who participate in our programs to go out of business.

Should the number of partners and/or advertising customers entering bankruptcy rise, it is likely that the number of uncollectible accounts would also rise.

These factors could have a material adverse effect on our business, financial condition and results of operations.

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Shortages of gasoline and diesel fuel have had a material adverse effect on the RV industry as a whole in the past and any such shortages or substantial increases in the price of fuel could have a material adverse effect on our business, financial condition or results of operations.

In the future, new government regulations could require us to sell RVs that rely on alternative energy sources or require consumers to purchase vehicles that rely on alternative energy sources, such as electric vehicles.

Such alternative energy sources could be less desirable to our customers or result in reduced towing capacity, which may reduce demand or lower margins and adversely affect our business, financial condition or results of operations.

In the future, new government regulations could require us to sell RVs and other products that rely on alternative energy sources or prohibit consumers from purchasing products that rely on fuel or other traditional energy sources.

For example, regulations passed in December 2021 by the California Air Resources Board (“CARB”) will prohibit the sale of gas-powered generators in California beginning in 2028.

Additionally, CARB approved the Advanced Clean Trucks regulation in March 2021, which places requirements on RV manufacturers that are expected to prevent many new diesel RV models from being sold in California (and in states that have adopted the California standard) beginning with the 2024 model year.

However, President Trump’s January 20, 2025 executive order titled “Unleashing American Energy” directs the United States Environmental Protection Agency (“EPA”) to revoke certain federal waivers that previously allowed California to adopt the Advanced Clean Truck regulation and other greenhouse gas (“GHG”) emissions regulations that are stricter than what is currently provided under federal law.

In addition, Trump’s executive order also calls for creation of a new, and likely less stringent, federal vehicle emissions standard and also preventing individual states from implementing regulations on vehicle and GHG emissions that are more stringent than the federal standard.

It is currently unclear whether such regulations implementing the executive order will be proposed or adopted and, if adopted, whether they would survive likely judicial challenges.

However, if current EPA and CARB regulations relating to vehicle emissions and energy sources remain in place, or become more stringent in the future, we may not have offerings available to satisfy such requirements or such alternative energy sources could be less desirable to our customers or result in reduced towing capacity, which may reduce demand or lower margins and adversely affect our business, financial condition or results of operations.

Our success depends to a significant extent on the well-being, as well as the continued popularity and reputation for quality, of our manufacturers, particularly Thor Industries, Inc.

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Similarly, an overall decrease in consumer leisure time may reduce consumers’ willingness to purchase our products.

During the COVID-19 pandemic, we experienced significant acceleration in our in-store traffic and revenue trends in May 2020 continuing into the quarter ended June 30, 2021 and demand in new and used vehicles remained elevated through the remainder of 2021 and into the beginning of 2022.

The industry saw an influx of new first-time participants because RVs allow people to travel in a safe and socially distant manner during the COVID-19 crisis.

These trends have slowed and may not continue in the future.

During the COVID-19 pandemic, we experienced significant acceleration in our in-store traffic and revenue trends in May 2020 continuing into the quarter ended June 30, 2021 and demand for new and used vehicles remained elevated through the remainder of 2021 and into the beginning of 2022.

The industry saw an influx of new first-time participants because RVs allowed people to travel in a safe and socially distant manner during the COVID-19 crisis.

These trends are no longer prevalent and may not recur in the future.

Over the past several years, we have seen a shift in our overall sales mix towards new travel trailer vehicles, which, prior to the COVID-19 pandemic, had led to declines in our average selling price of a new vehicle unit.

From 2015 to 2023, new vehicle travel trailer units as a percent of total new vehicles increased from 62% to 75% of total new vehicle unit sales but from 2015 to 2023, our average selling price of a new vehicle unit increased from $39,853 to $43,866.

As a result of the lower industry supply of travel trailers and motorhomes for much of 2021, both average cost and average sales price increased in 2022 and 2021, but average selling price began to decrease in 2023.

If supply chain costs decline over the next twelve months, as expected, average sales price may continue to decline and impact our same store revenue.

We have announced a strategic review of our Good Sam business, and any resulting transaction may introduce significant risks and uncertainties.

We have initiated a strategic review of our Good Sam business, which could include a potential sale, spin off or other disposition of the business.

No decision has been made whether to proceed with any particular alternative.

We have not set a deadline for the strategic alternatives review process, and there can be no assurance that this process will result in any particular outcome.

We expect to incur substantial costs associated with the strategic review.

We are also subject to other risks in connection with the uncertainty created by the strategic review process, including stock price volatility and the ability to retain qualified employees.

We do not currently intend to disclose further developments with respect to this process, unless and until our Board of Directors approves a specific transaction or otherwise concludes the review of strategic alternatives.

A strategic transaction involving our Good Sam business could create significant risks and uncertainties that could adversely affect our business, consolidated financial position and consolidated results of operations.

These include, among others, the inability to find potential buyers on favorable terms, disruption to our business and/or diversion of management attention from other business concerns, the potential loss of key employees, difficulties in separating the operations of the divested business, and retention of certain liabilities related to the divested business.

In addition, a strategic transaction may not be successful in achieving its intended benefits and could negatively impact our remaining business, for example through the loss of cross-selling opportunities, as any ongoing relationship with Good Sam could be uncertain.

Significant time and expenses could be incurred related to any resulting transaction and such transaction may require our continued financial involvement, such as through transition service agreements, guarantees, and indemnities or other current or contingent financial obligations and liabilities.

From 2015 to 2024, new vehicle travel trailer units as a percent of total new vehicles increased from 62% to 77% of total new vehicle unit sales.

From 2015 to 2024, our average selling price of a new vehicle unit increased 1%, from $39,853 to $40,089, as inflation over that period was partially offset by the higher mix of lower priced travel trailers.

Competition in the market for services, protection plans, products and resources targeting the RV lifestyle or RV enthusiast could reduce our revenues and profitability.

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● multi-channel retailers and mass merchandisers, warehouse clubs, discount stores, department stores and other retailers, such as Wal-Mart, Target and Amazon;

● distributors of RV furniture and accessories;

● online retailers;

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Our expansion into new, unfamiliar markets, businesses, product lines or categories presents increased risks that may prevent us from being profitable in these new markets, businesses, product lines or categories.

Delays in opening or acquiring new store locations, on anticipated timelines or at all, could have a material adverse effect on our business, financial condition and results of operations.

Delays in opening new store locations, including greenfield locations and acquisitions, on anticipated timelines or at all, could have a material adverse effect on our business, financial condition and results of operations.

As a result of any future expansion into new, unfamiliar markets, businesses, product lines or categories, we may have less familiarity with local consumer preferences and less business, product or category knowledge with respect to new businesses, product lines or categories, and could encounter difficulties in attracting customers due to a reduced level of consumer familiarity with our brands or reduced product or category knowledge.

Other factors that may impact our ability to open or acquire new store locations in new markets and to operate them profitably or acquire new businesses, product lines or categories, many of which are beyond our control, include:

Other factors that may impact our ability to open new store locations, including greenfield locations and acquisitions, in new markets and to operate them profitably or acquire new businesses, product lines or categories, many of which are beyond our control, include:

● our ability to identify suitable acquisition opportunities or new locations, including our ability to gather and assess demographic and marketing data to determine consumer demand for our products in the locations we select or accurately assess profitability;

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To the extent that we are not able to meet these additional challenges, our sales could decrease, and our operating expenses could increase, which could have a material adverse effect on our business, financial condition and results of operations.

Finally, the size, timing, and integration of any future new store location openings or acquisitions or the acquisition of new businesses, product lines or categories may cause substantial fluctuations in our results of operations from quarter to quarter.

Finally, the size, timing, and integration of any future new store location openings, including greenfield locations and acquisitions, or the acquisition of new businesses, product lines or categories may cause substantial fluctuations in our results of operations from quarter to quarter.

Consequently, our results of operations for any quarter may not be indicative of the results that may be achieved for any subsequent quarter or for a full fiscal year.

These fluctuations could adversely affect the market price of our common stock.

As a result of the above factors, we cannot assure you that we will be successful in operating our store locations in new markets or acquiring new businesses, product lines or categories on a profitable basis, and our failure to do so could have a material adverse effect on our business, financial condition and results of operations.

our failure to do so could have a material adverse effect on our business, financial condition and results of operations.

Unforeseen expenses, difficulties, and delays encountered in connection with acquisitions could inhibit our growth and negatively impact our profitability.

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Our success depends upon our ability to successfully manage our inventory and to anticipate and respond to merchandise trends and consumer demands in a timely manner.

Our products are intended to appeal to consumers who are, or could become, RV owners and enthusiasts across North America.

Our products are intended to

appeal to consumers who are, or could become, RV owners and enthusiasts across North America.

The preferences of these consumers cannot be predicted with certainty and are subject to change.

Further, the retail consumer industry, by its nature, is volatile and sensitive to numerous economic factors, including

consumer preferences, competition, market conditions, general economic conditions and other factors outside of our control.

Further, the retail consumer industry, by its nature, is volatile and sensitive to numerous economic factors, including consumer preferences, competition, market conditions, general economic conditions and other factors outside of our control.

We typically order merchandise well in advance of the following selling season making it difficult for us to respond rapidly to new or changing product trends, increases or decreases in consumer demand or changes in prices.

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For example, in the normal course of business, we periodically will implement discounting to reduce our excess RV inventory.

During 2023, we discounted 2022 and 2023 model year RVs to reduce the mix of those model years compared to incoming 2024 model year RVs that we had procured at a lower cost, which also resulted in the need for us to discount certain used RVs.

This discounting resulted in a decrease in average selling prices of new and used vehicles in 2023.

During the fourth quarter of 2022 and in connection with our Active Sports Restructuring during 2023, we used clearance and discounted pricing on certain categories within our products, services, and other offerings to reduce our retail inventory levels.

During 2023 and early 2024, we discounted 2022 and 2023 model year RVs to reduce the mix of those model years compared to 2024 model year RVs that we had procured at a lower cost, which also resulted in the need for us to discount certain used RVs.

This discounting resulted in a decrease in average selling prices of new and used vehicles in 2023 and early 2024.

During the fourth quarter of 2022 and in connection with restructuring activities during 2023, we used clearance and discounted pricing on certain categories within our products, services, and other offerings to reduce our retail inventory levels.

In addition, we have exited certain non-RV retail categories because we felt those categories did not have sufficient demand or sales margins to justify our inventory levels.

These activities have negatively impacted our gross margin, operating margin and selling, general and administrative expenses.

These activities have negatively impacted our gross margin, operating margin and selling, general and administrative expenses and could materially adversely affect our future results of operations and financial condition.

Our same store revenue may fluctuate and may not be a meaningful indicator of future performance.

Our same store revenue may vary from quarter to quarter.

Our same store revenue may vary from period to period.

In addition to the above risk factors a number of additional factors have historically affected, and will continue to affect, our same store revenue results, including:

● changes or anticipated changes to regulations related to some of the products we sell or to the localities in which we operate, such as the regulations passed in December 2021 by the California Air Resources Board that will prohibit the sale of gas-powered generators in California beginning in 2028;

● changes or anticipated changes to regulations related to some of the products we sell or to the localities in which we operate, such as the regulations passed in December 2021 by CARB that will prohibit the sale of gas-powered generators in California beginning in 2028 or the Advanced Clean Trucks regulation approved by CARB in March 2021, which places requirements on RV manufacturers that are expected to prevent many new diesel RV models from being sold in states that have adopted the regulation beginning with the 2024 model year;

● our ability to provide quality customer service that will increase our conversion of shoppers into paying customers;

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● changes in our product mix;

● changes in sales of Good Sam services and plans and retention and renewal rates for our annually renewing Good Sam services and plans;

● changes in pricing and average unit sales.

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In addition, unusually severe weather conditions in some geographic areas may impact demand.

On average, over the three years ended December 31, 2023, we generated 30.5% and 27.4% of our annual revenue in the second and third fiscal quarters, respectively, which include the spring and summer

On average, over the three years ended December 31, 2024, we generated 30.5% and 27.5% of our annual revenue in the second and third fiscal quarters, respectively, which include the spring and summer months.

We have historically incurred additional expenses in the second and third fiscal quarters due to higher purchase volumes, increased staffing in our store locations and program costs.

If, for any reason, we miscalculate the demand for our products or our product mix during the second and third fiscal quarters, our sales in these quarters could decline, resulting in higher labor costs as a percentage of sales, lower margins and excess inventory, which could have a material adverse effect on our business, financial condition and results of operations.

Additionally, SG&A expenses as a percentage of gross profit tend to be higher in the first and fourth quarters due to the seasonality of our business.

Additionally, selling, general, and administrative (“SG&A”) expenses as a percentage of gross profit tend to be higher in the first and fourth quarters due to the seasonality of our business.

Due to our seasonality, the possible adverse impact from other risks associated with our business, including atypical weather, consumer spending levels and general business conditions, is potentially greater if any such risks occur during our peak sales seasons.

Our ability to operate and expand our business and to respond to changing business and economic conditions will depend on the availability of adequate capital.

The operation of our business, the rate of our expansion and our ability to respond to changing business and economic conditions depend on the availability of adequate capital, which in turn depends on cash flow generated by our business and, if necessary, the availability of additional equity or debt capital.

We also require sufficient cash flow to meet our obligations under our existing debt agreements.

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In an event of default, we may not have sufficient funds available, or we may not have access to sufficient capital from other sources, to repay any accelerated debt and our lenders could foreclose on liens which cover substantially all of our assets.

COVID-19 had, and could have in the future, certain negative impacts on our business, and such impacts may have a material adverse effect on our results of operations, financial condition and cash flows.

Other future pandemics or health crises may have similar material adverse impacts on our business.

The public health crisis caused by COVID-19 and the measures taken by governments, businesses, including us and our vendors, and the public at large to limit the impact of COVID-19 had, and could again have in the future, certain negative impacts on our business including, without limitation, the following:

Future pandemics or health crises may have negative impacts on our business, including disruptions to our operations that could have a material adverse effect on our results of operations, financial condition and cash flows.

Future pandemics or health crises may have negative impacts on our business, including, without limitation, the following:

● delays in the delivery of certain products from our vendors as a result of shipping delays;

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● increased product costs or shortages;

● traffic at our store locations or reduced demand for our products and services;

● reduced traffic at our store locations or reduced demand for our products and services;

● labor shortages including for key positions;

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● heightened cybersecurity risks during periods of increased remote working.

Other future pandemics or health crises may have similar material adverse impacts on our business.

We may not successfully execute or achieve the expected benefits of our cost cutting or restructuring initiatives.

The restructuring initiatives may result in further asset impairment charges and adversely affect the Company's business.

In the third fiscal quarter of 2019 and the second fiscal quarter of 2023, we announced the 2019 Strategic Shift and the Active Sports Restructuring, respectively.

As of December 31, 2023, the activities under each of the 2019 Strategic Shift and Active Sports Restructuring have been completed with the exception of certain lease termination costs and other associated costs relating to the leases of previously closed locations or facilities.

The process of identifying subtenants and negotiating lease terminations was delayed initially in part due to the COVID-19 pandemic.

The timing of these negotiations will vary as both subleases and terminations are contingent on landlord approvals and the costs may be greater than expected.

In addition, the Company may need to incur further impairment charges to its long-lived assets, including its operating lease assets, as a result of the 2019 Strategic Shift.

As of December 31, 2023, the Company had eight leases relating

to the 2019 Strategic Shift and one lease relating to Active Sports Restructuring that had not been terminated or sublet.

In addition, from time to time, we engage in cost cutting or restructuring initiatives to try to streamline our organizational footprint.

These and other disruptions to our business could have a material adverse effect on our results of operations, financial condition and cash flows.

We may not successfully execute or achieve the expected benefits of our cost cutting initiatives.

From time to time, we engage in cost cutting or restructuring initiatives to try to streamline our organizational footprint.

These initiatives may not have the intended benefits and may result in unintended consequences and costs, such as the loss of institutional knowledge and expertise, attrition beyond the intended number of employees impacted by any reduction in force, and decreased morale among our remaining employees.

We also may be unable to terminate or sublet applicable leases related to such initiatives, which has occurred in connection with recent restructuring initiatives.

If we are unable to realize the anticipated benefits from our cost cutting or restructuring initiatives, or if we experience significant adverse consequences from such initiatives, our business, financial condition, and results of operations may be materially adversely affected.

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Properties” under Part I of this Form 10-K).

We closed one of these fulfillment and distribution facilities in January 2023.

Any natural disaster or other serious disruption at any such facility due to fire, tornado, earthquake, flood or any other cause could damage our on-site inventory or impair our ability to use such distribution and fulfillment center.

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Natural disasters, whether or not caused by climate change, unusual weather conditions, epidemic outbreaks, terrorist acts and political events could disrupt business and result in lower sales and otherwise adversely affect our financial performance.

The occurrence of one or more natural disasters, such as tornadoes, hurricanes, fires, droughts, floods, hail storms and earthquakes, unusual weather conditions, epidemic outbreaks such as Ebola, Zika virus, novel coronavirus or measles, terrorist attacks or disruptive political events in certain regions where our stores are located could adversely affect our business and result in lower sales, or could impact the degree to which travel and recreational activities remain attractive, either of which could have a material adverse effect on our business, financial condition, and results of operations.

The occurrence of one or more natural disasters, such as tornadoes, hurricanes, fires, droughts, floods, hail storms and earthquakes, unusual weather conditions, epidemic outbreaks such as Ebola, Zika virus, bird flu, novel coronavirus or measles, or other public health crises, terrorist attacks or disruptive political events in certain regions where our stores are located could adversely affect our business and result in lower sales, or could impact the degree to which travel and recreational activities remain attractive, either of which could have a material adverse effect on our business, financial condition, and results of operations.

Severe weather, such as heavy snowfall or extreme temperatures, may discourage or restrict customers in a particular region from traveling to our stores or utilizing our products, thereby reducing our sales and profitability.

Natural disasters including tornadoes, hurricanes, droughts, floods, hailstorms and earthquakes may damage our stores or other operations, which may materially adversely affect our consolidated financial results.

The public health crisis caused by COVID-19 and the measures taken by governments, businesses, including us and our vendors, and the public at large to limit COVID-19's spread had, and could again have in the future, certain negative impacts on our business including product shortages and reduced customer demand for our products.

In addition to business interruption, our retail business is subject to substantial risk of property loss due to the concentration of property at our store locations.

Climate change may impact the frequency and/or intensity of such events as well as cause chronic changes, such as changes in temperature or precipitation patterns or sea-level rise, that may also have an adverse impact on our operations, including but not limited to a change in consumer behavior, including with respect to the degree to which travel and recreational activities remain attractive.

Climate change and other environmental and social pressures may impact the frequency and/or intensity of such events as well as cause chronic changes, such as changes in temperature or precipitation patterns or sea-level rise, that may also have an adverse impact on our operations, including but not limited to a change in consumer behavior, including with respect to the degree to which travel and recreational activities remain attractive.

To the extent these events also impact one or more of our key suppliers or result in the closure of one or more of our distribution centers or our corporate headquarters, we may be unable to maintain inventory balances, maintain delivery schedules or provide other support functions to our stores.

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Additionally, we rely on certain third-party providers to support our services, protection plans, products and resources, including insurance carriers for our property and casualty insurance and extended service contracts, banks and captive financing companies for vehicle financing and refinancing, Comenity Capital Bank as the issuer of our co-branded credit card, and a tow provider network for our roadside assistance programs.

We cannot accurately predict when, or the extent to which, we will experience any disruption in the supply of products from our vendors or services from our third-party providers.

We cannot accurately predict when, or the extent to which, we will experience any disruption in the supply of products from our vendors or suppliers or services from our third-party providers.

Any such disruption could negatively impact our ability to market and sell our services, protection plans, products and resources, which could have a material adverse effect on our business, financial condition and results of operations.

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If we lose one or more key vendors or are unable to promptly replace a vendor that is unwilling or unable to satisfy our requirements with a vendor providing equally appealing products at comparable prices, we may not be able to offer products that are important to our merchandise assortment.

We also are subject to risks, such as the price and availability of raw materials, shipping delays, labor disputes, union organizing activity, strikes, inclement weather, natural disasters, war and terrorism and adverse general economic and political conditions that might limit our vendors’ ability to provide us with quality merchandise on a timely and cost-efficient basis.

We also are subject to risks, such as the price and availability of raw materials, shipping delays, labor disputes, trade restrictions, union organizing activity, strikes, inclement weather, natural disasters, war and terrorism and adverse general economic and political conditions that might limit our vendors’ ability to provide us with quality merchandise on a timely and cost-efficient basis.

We may not be able to develop relationships with new vendors, and products from alternative sources, if any, may be of a lesser quality and more expensive than those we currently purchase.

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Because certain of the products that we sell are manufactured abroad, we may face delays, new or increased tariffs, increased cost or quality control deficiencies in the importation of these products, which could reduce our net sales and profitability.

A portion of the products that we purchase for resale, including those purchased from domestic suppliers, is manufactured abroad in China and other countries.

In addition, we believe most of our private label merchandise is manufactured abroad.

Trade tensions between the United States and China, Russia and other countries has escalated in recent years.

We may not be able to mitigate the impacts of any future tariffs, and our business, results of operations and financial position would be materially adversely affected.

As a result, our foreign imports, in particular imports from China, subject us to the risks of changes in, or the imposition of new import tariffs, duties or quotas, new restrictions on imports, loss of “most favored nation” status with the United States for a particular foreign country, antidumping or countervailing duty orders, retaliatory actions in response to illegal trade practices, work stoppages, delays in shipment, trade route challenges due to global political tensions, freight expense increases, product cost increases due to foreign currency fluctuations or revaluations and economic uncertainties.

If any of these or other factors were to cause a disruption of trade from the countries in which the suppliers of our vendors are located or impose additional costs in connection with the purchase of our products, we may be unable to obtain sufficient quantities of products to satisfy our requirements and our results of operations could be adversely affected.

A portion of the products that we purchase for resale, including those purchased from domestic suppliers, is manufactured abroad in China, Mexico and other countries.

In addition, we believe most of our non-RV private label merchandise is manufactured abroad.

Additionally, many of our U.S.-based suppliers source some of their components from these countries, which could result in higher procurement costs from U.S.-based suppliers.

In 2024, our costs applicable to revenue included the costs of directly sourced inventory from China, Mexico, and Canada of approximately $27.0 million, $10.0 million and $2.0 million, respectively.

Trade tensions between the United States and China, Mexico, Canada, Russia and other countries has escalated in recent years.

We may not be able to mitigate the impacts of any future tariffs or trade restrictions, and our business, results of operations and financial position would be materially adversely affected.

As a result, our foreign imports, in particular imports from China and Mexico, subject us to the risks of changes in, or the imposition of new import tariffs, duties or quotas, new restrictions on imports, loss of “most favored nation” status with the United States for a particular foreign country, antidumping or countervailing duty orders, retaliatory actions in response to illegal trade practices, work stoppages, delays in shipment, trade route challenges due to global political tensions, freight expense increases, product cost increases due to foreign currency fluctuations or revaluations and economic uncertainties.

If any of these or other factors were to cause a disruption of trade from the countries in which our vendors or the suppliers of our vendors are located or

impose additional costs in connection with the purchase of our products, we may be unable to obtain sufficient quantities of products to satisfy our requirements and our results of operations could be adversely affected.

Additionally, there are increasing expectations that companies monitor the environmental and/or social performance of their suppliers, including compliance with a variety of labor practices.

There is also increased attention regarding the end of life considerations for products like ours, and we could experience increased expectations and regulations that effect our ability to manufacture and sell our products.

Compliance with emerging expectations and regulations can be costly, require us to establish or augment programs to diligence or monitor our suppliers, or, in the case of legislation such as the Uyghur Forced Labor Prevention Act, to design supply chains to avoid certain regions altogether.

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Retail installment sales contracts are typically assigned by us to third-party lenders simultaneously with the execution of the retail installment sales contracts.

Contracts in transit represent amounts due from third-party lenders from whom

pre-arranged assignment agreements have been determined, and to whom the retail installment sales contracts have been assigned.

Contracts in transit represent amounts due from third-party lenders from whom pre-arranged assignment agreements have been determined, and to whom the retail installment sales contracts have been assigned.

We recognize revenue from the sale of new and used vehicles upon completion of the sale to the customer.

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We may be unsuccessful in attracting and retaining the personnel we require to conduct our operations successfully and, in such an event, our business could be materially and adversely affected.

Our success also depends to a significant extent on the continued service and performance of our senior management team, including our Chairman and Chief Executive Officer, Marcus Lemonis.

The loss of any member of our senior management team could impair our ability to execute our business plan and could therefore have a material adverse effect on our business, results of operations and financial condition.

Our success also depends to a significant extent on the continued service and performance of our senior management team, including our Chairman and Chief Executive Officer, Marcus A.

The loss of any member of our senior management team, or our failure to successfully manage any retirements or transitions in senior management or the integration of senior management into new roles could impair our ability to execute our business plan and could therefore have a material adverse effect on our business, results of operations and financial condition.

For example, on June 1, 2024, Brent L.

Moody, our President at the time, and Karin L.

Bell, our Chief Financial Officer at the time, announced their resignations from their respective roles effective July 1, 2024, following which each transitioned to a role of Senior Advisor through their retirement dates of December 31, 2024 (for Mr.

Moody) and the date that we file our Form 10-K with the SEC for the year ended December 31, 2024 (for Ms.

Moody continues to serve as a member of our Board of Directors following his retirement.

Effective July 1, 2024, Matthew D.

Wagner was appointed as our President and will continue to serve as our principal operating officer.

Additionally, effective July 1, 2024, Thomas E.

Kirn was appointed as our Chief Financial Officer and principal financial officer.

He will continue to serve as our principal accounting officer.

Additionally, certain members of our management team, including Mr.

Lemonis, currently pursue and may continue to pursue other business ventures, which could divert their attention from executing on our business plan and objectives.

For example, Mr.

Lemonis currently serves as the Executive Chairman of Beyond, Inc., a publicly traded company.

We do not currently maintain key-man life insurance policies on any member of our senior management team or other key employees.

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Our private brand offerings expose us to various risks.

We expect to continue to grow our exclusive private brand offerings through a combination of brands that we own and brands that we license from third parties.

We expect to continue to grow our exclusive private brand offerings, sometimes referred to as contract manufacturing, through a combination of brands that we own and brands that we license from third parties.

We have invested in our development and procurement resources and marketing efforts relating to these private brand offerings.

Although we believe that our private brand products offer value to our customers at each price point and provide us with higher gross

margins than comparable third-party branded products we sell, the expansion of our private brand offerings also subjects us to certain specific risks in addition to those discussed elsewhere in this section, such as:

Although we believe that our private brand products offer value to our customers at each price point and provide us with higher gross margins than comparable third-party branded products we sell, the expansion of our private brand offerings also subjects us to certain specific risks in addition to those discussed elsewhere in this section, such as:

● potential mandatory or voluntary product recalls;

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Our determination of future cash flows, future recoverability and fair value of our long-lived assets as well as the reporting unit fair value used in our goodwill analysis include significant estimates and assumptions.

Changes in those estimates or assumptions or lower than anticipated future financial performance may result in the identification of an impaired asset and a non-cash impairment charge, which could be material.

Changes in those estimates or assumptions or lower than anticipated future financial performance may result in the identification of an impaired asset and a noncash impairment charge, which could be material.

See Note 5 — Restructuring and Long-Lived Asset Impairment to our consolidated financial statements included in Item 8 of Part II of this Form 10-K for a discussion of impairment charges for the year ended December 31, 2024.

We may in the future identify additional impairment charges and any such charges could adversely affect our business, financial condition and results of operations.

If we redeem or repurchase shares of our stock in the future, we could be subject to a newly enacted excise tax.

The Inflation Reduction Act of 2022 among other things, imposes a 1% excise tax on the fair market value of stock redeemed or repurchased by publicly traded corporations on or after January 1, 2023, subject to certain exceptions.

The Company maintains a stock repurchase program.

If we redeem or repurchase shares of our stock in the future, under our current stock repurchase program or otherwise, we could be subject to this excise tax, unless the redemptions or repurchases qualify for any of the exceptions that are provided in the Inflation Reduction Act or in future regulations or rules.

Any such excise tax would be a liability of the Company and could increase the amount of tax that we are required to pay.

Risks related to Regulation and Litigation

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New regulatory efforts may be proposed from time to time that have a material adverse effect on our ability to operate our businesses or our results of operations.

For example, in the past a principal source of leads for our direct response marketing efforts was new vehicle registrations provided by motor vehicle departments in various states.

For example, in the past a principal source of leads for our direct response marketing efforts was new vehicle registrations

provided by motor vehicle departments in various states.

Currently, all states restrict access to motor vehicle registration information.

We receive, store, handle, transmit, use, and otherwise process information related to individuals, including from and about actual and prospective customers as well as our employees and service providers.

We also depend on a number of third party vendors in relation to the operation of our business, a number of which process data on our behalf.

We, and our vendors, are subject to a number of laws, regulations, industry standards, and other requirements relating to consumer protection, information security and, data protection and privacy, including those that apply generally to the handling of information about individuals, and those that are specific to certain industries, sectors, contexts, or locations.

We receive, store, handle, transmit, use, and otherwise process information that relates to individuals and/or constitutes “personal data,” “personal information,” “personally identifiable information,” or similar terms under applicable data privacy laws (collectively, “Personal Information”), as well as Personal Information from and about actual and prospective customers, club members, associates, employees, suppliers and service providers and proprietary information belonging to our business or to our business partners (collectively, “Confidential Information”).

We also depend on a number of third party vendors in relation to the operation of our business, a number of which process Confidential Information on our behalf.

We, and our vendors, are subject to a number of laws, regulations, industry standards, and other requirements relating to consumer protection, information security and, data protection and privacy, including those that apply generally to the handling of Confidential Information about individuals, and those that are specific to certain industries, sectors, contexts, or locations.

Many of these laws and regulations are still evolving and could be interpreted in ways that could harm our business or limit the services we are able to offer.

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Further, in order to comply with the varying state laws around data breaches, we must maintain adequate security measures, which require significant investments in resources and ongoing attention.

Further, laws, regulations, and standards covering marketing, advertising, and other activities conducted by telephone, email, mobile devices, and the internet may be or become applicable to our business, such as the Federal Communications Act, the Federal Wiretap Act, the Electronic Communications Privacy Act, the Telephone Consumer Protection Act (the “TCPA”), the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (the “CAN-SPAM Act”), and similar state consumer protection and communication privacy laws, such as California’s Invasion of Privacy Act.

Further, laws, regulations, and standards covering marketing, advertising, and other activities conducted by telephone, email, mobile devices, and the internet may be or become applicable to our business, such as the Federal Communications Act, the Federal Wiretap Act, the Electronic Communications Privacy Act, the Telephone Consumer Protection Act, the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, and similar state consumer protection and communication privacy laws, such as California’s Invasion of Privacy Act.

Additionally, we may be considered a “financial institution” under the Gramm-Leach Bliley Act (the “GLBA”).

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We could incur significant costs in investigating and defending such claims and, if found liable, pay significant damages or fines or be required to make changes to our business.

Further, these proceedings and any subsequent adverse

outcomes may subject us to significant negative publicity and an erosion of trust.

Further, these proceedings and any subsequent adverse outcomes may subject us to significant negative publicity and an erosion of trust.

If any of these events were to occur, our business, results of operations, and financial condition could be materially adversely affected.

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Federal and state authorities also have various environmental control standards relating to air, water, noise pollution and hazardous waste generation and disposal which affect our business and operations.

We and the RVs we sell are subject to environmental regulations that may adversely impact us.

For example, regulations passed in December 2021 by the CARB will prohibit the sale of gas-powered generators in California beginning in 2028.

Additionally, CARB approved the Advanced Clean Trucks regulation in March 2021, which places requirements on RV manufacturers that are expected to prevent many new diesel RV models from being sold in states that have adopted the regulation beginning with the 2024 model year.

See Item 1A, “Risk Factors ― Fuel shortages, high prices for fuel, or changes in energy sources could have a negative effect on our business.” for additional information on these regulations and recent executive orders impacting such regulations.

We may not have offerings available to satisfy any such requirements or such alternative energy sources could be less desirable to our customers or result in reduced towing capacity, which may reduce demand or lower margins and adversely affect our business, financial condition or results of operations.

Our business is also affected by other laws and regulations including, but not limited to, labor (including federal and state minimum wage and overtime requirements), advertising, real estate, promotions, quality of services, intellectual property, tax, import and export, anti-corruption, anti-competition, environmental, health and safety.

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Several states currently have laws in effect that are similar to, and in certain cases, more restrictive than, these federal laws.

Compliance with all of these regulations is costly and time-consuming.

Compliance with these regulations is costly and time-consuming.

Inadvertent violation of any of these regulations could cause us to incur fines and penalties and may also lead to restrictions on our ability to manufacture and sell our products and services and to import or export the products we sell.

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However, there can be no assurance that we or our employees, contractors, vendors or our agents will not violate such laws and regulations or our policies and procedures.

Compliance with these laws and others may be onerous and costly, at times, and may be inconsistent from jurisdiction to jurisdiction which further complicates compliance efforts.

Compliance with these laws and others may

be onerous and costly, at times, and may be inconsistent from jurisdiction to jurisdiction which further complicates compliance efforts.

The Company is subject to litigation related to these laws and others and has experienced an increase in wage and hour litigation.

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Business—Laws and Regulations” under Part I of this Form 10-K.

Our failure to comply with certain environmental regulations could adversely affect our business, financial condition and results of operations.

We are subject to environmental, health and safety laws and regulations, violations of which could adversely affect our business, financial condition and results of operations.

Our operations involve the use, handling, storage and contracting for recycling and/or disposal/discharge of materials such as motor oil and filters, transmission fluids, antifreeze, refrigerants, paints, thinners, batteries, cleaning products, lubricants, degreasing agents, tires and propane.

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Our failure to comply with these regulations could cause us to become subject to fines and penalties or otherwise have an adverse impact on our business.

In addition, we have indemnified certain of our landlords for any hazardous waste which may be found on or about property we lease.

Certain environmental laws may prescribe liability to us for environmental contamination without regard to fault or legality of the action at the time of its occurrence.

If any such hazardous waste were to be found on property that we occupy, a significant claim giving rise to our indemnity obligation could have a negative effect on our business, financial condition and results of operations.

In addition, we indemnify certain of our landlords for any hazardous waste which may be found on or about property we lease that may become the subject of a claim arising during or after our lease term.

Certain environmental laws impose liability on us, as the owner or operator, for environmental contamination at our properties without regard to whether we knew of or caused the contamination or the legality of the release or disposal action at the time of its occurrence.

If any such hazardous waste were to be found on property that we occupy, a claim giving rise to our liability could have a negative effect on our business, financial condition and results of operations.

Our operations are subject to a series of risks related to climate change and other environmental, social, and governance (“ESG”) matters.

Regulatory, market, and other changes to respond to climate change may adversely impact our business, financial condition, or results of operations.

The United States Environmental Protection Agency has adopted rules under existing provisions of the federal Clean Air Act that require a reduction in emissions of greenhouse gases from motor vehicles.

California has also adopted more stringent rules in many cases, which certain other states also elected to follow.

Both EPA and California standards may become more stringent over time.

The adoption of any laws or regulations requiring significant increases in fuel economy requirements or new federal or state restrictions on vehicles and automotive fuels in the United States could adversely affect demand for those vehicles and could have a material adverse effect on our business, financial condition and results of operations.

Additionally, there is increasing environmental consciousness among consumers, which may result in decreased demand for certain of our current product or service offerings.

There is scrutiny from investors, customers, policymakers, and other stakeholders regarding companies’ management of ESG matters, such as climate change and human capital.

For example, regulatory, market, and other changes to respond to climate change, such as the fuel economy and GHG emissions regulations promulgated by EPA and CARB (see above "—Fuel shortages, high prices for fuel, or changes in energy sources could have a negative effect on our business”), may adversely impact our business, financial condition, or results of operations.

We may not have offerings available to satisfy such requirements or such alternative energy sources could be less desirable to our customers or result in reduced towing capacity, which may reduce demand or lower margins and adversely affect our business, financial condition or results of operations.

Developing alternatives that satisfy the market’s evolving expectations of, among other things, vehicle emissions profiles may require us to incur significant costs.

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electricity, hydrogen, and compressed and/or renewable gas.

To the extent potential customers prefer technologies different from those used in the vehicles we offer for sale, or are prohibited by law in certain jurisdictions from purchasing vehicles that we sell (i.e., new vehicles that use gasoline fuel), then demand for such vehicles may not develop as quickly as we expect, or at all.

Reporting expectations for various ESG topics are also increasing, with a variety of customers, capital providers, and regulators seeking increased information on ESG-related risks.

For example, various policymakers, including the Securities and Exchange Commission and the State of California, have adopted (or are considering adopting) requirements for the disclosure of a range of climate-related data and risks, which may require us to incur additional costs or otherwise adversely impact our business.

While we may at times engage in voluntary initiatives (such as voluntary disclosures, certifications, or goals, among others) or commitments to improve the ESG profile of our company and/or products, such initiatives or achievements of such commitments may be costly and may not have the desired effect.

Expectations around the company’s management of ESG matters continues to evolve rapidly, in many instances due to factors that are out of our control.

If we do not, or are perceived to not, take sufficient action to address ESG matters and related stakeholder expectations, we may suffer reputational damage and may be subject to investor or regulator engagement, even if our efforts are currently voluntary.

Simultaneously, there are efforts by some stakeholders to reduce companies’ efforts on certain ESG-related matters.

Both advocates

and opponents to certain ESG matters are increasingly resorting to a range of activism forms, including media campaigns and litigation, to advance their perspectives.

To the extent we are subject to such activism, it may require us to incur costs or otherwise adversely impact our business.

Any voluntary efforts we engage in (including disclosures, certifications, goals, or others) to improve the ESG profile of our company and/or products may be costly and may not have the desired effect.

Moreover, various stakeholders have different, and at times conflicting, expectations.

For example, while some policymakers (such as the State of California) have adopted requirements for various disclosures or actions on environmental and social matters, policymakers in other jurisdictions have sought to constrain companies’ consideration of such matters in certain circumstances.

advocates and opponents to certain ESG matters are increasingly resorting to a range of activism forms, including media campaigns and litigation, to advance their perspectives.

We may be required to incur costs to manage ESG matters or navigate stakeholder expectations regarding same, and any failure to sufficiently or appropriately do so, including any divergent legal requirements or novel interpretations of existing requirements, may result in reputational damage, as well as impacts to our ability to attract and retain employees or customers, regulatory or investor engagement, or other adverse impacts.

This and other stakeholder expectations will likely lead to increased costs as well as scrutiny that could heighten all of the risks identified in this risk factor.

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Other parties also may claim that we infringe their proprietary rights.

Such claims, whether or not meritorious, may result in the expenditure of significant financial and managerial resources, injunctions against

us or the payment of damages.

Such claims, whether or not meritorious, may result in the expenditure of significant financial and managerial resources, injunctions against us or the payment of damages.

These claims could have a material adverse effect on our business, financial condition and results of operations.

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Additionally, because we accept debit and credit cards for payment, we are subject to the Payment Card Industry Data Security Standard (“PCI-DSS”), issued by the Payment Card Industry Security Standards Council.

Costs and potential problems and interruptions associated with the implementation of new or upgraded systems and technology such as those necessary to maintain compliance with the PCI-DSS or with maintenance or adequate support of existing systems could also disrupt or reduce the efficiency of our operations (for additional discussion of risks related to PCI-DSS, see – “Disruptions or breaches involving our or our third-party providers’ information technology systems or network security could interrupt our operations, compromise our reputation, expose us to litigation, government enforcement actions and costly response measures and could have a material adverse effect on our business, financial condition and results of operations”).

Costs and potential problems and interruptions associated with the implementation of new or upgraded systems and technology such as those necessary to maintain compliance with the PCI-DSS or with maintenance or adequate support of existing systems could also disrupt or reduce the efficiency of our operations (for additional discussion of risks related to PCI-DSS, see – “Disruptions or breaches involving our or our third-party providers’ IT Systems or Confidential Information could interrupt our operations, compromise our reputation, expose us to litigation, government enforcement actions and costly response measures and could have a material adverse effect on our business, financial condition and results of operations”).

Any material interruptions or failures in our payment-related systems could have a material adverse effect on our business, financial condition and results of operations.

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We also use IT Systems to report and audit our operational results.

In addition, we and our third-party providers have access to, collect, process, use and maintain personal and confidential information regarding our customers, club members, associates, employees and suppliers, as well as proprietary information belonging to our business or to our business partners (collectively, “Confidential Information”).

In addition, we and our third-party providers have access to, collect, process, use and maintain Confidential Information.

We and our third-party providers experience cyberattacks and security incidents.

For example, in February 2022, we announced the occurrence of a cybersecurity incident that resulted in the encryption of certain IT Systems and theft of certain data and information, including Confidential Information (the “Cybersecurity Incident”).

The Cybersecurity Incident resulted in our temporary inability to access certain of our IT Systems, caused by the disabling of some of our IT Systems by the threat actor and our temporarily taking certain other IT Systems offline as a precautionary measure.

We engaged outside forensics and cybersecurity experts, and launched containment and remediation efforts and a forensic investigation, which was completed as of September 30, 2022.

Through our investigation, we identified that personal information of approximately 30,000 individuals was acquired without authorization, including, depending on the individual, dates of birth, Social Security numbers, and driver’s license numbers.

We have incurred and expect to continue to incur costs related to the Cybersecurity Incident, including legal and other professional fees, and investments related to the security of our IT Systems.

Other actual and potential consequences include, but are not limited to, negative publicity, reputational damage, lost trust with customers, and regulatory enforcement action.

In December 2022, three putative class action complaints were filed against us and certain of our subsidiaries arising out of the Cybersecurity Incident.

The Company and

plaintiffs executed a settlement agreement to resolve the putative class action complaints for an immaterial amount subject to court approval.

As such, we expect to pay a settlement amount, and this litigation could also result in other financial judgments or disputes with insurance carriers concerning coverage.

We continue to face numerous and evolving cybersecurity risks that threaten the confidentiality, integrity, and availability of our IT Systems and Confidential Information.

For example, we previously experienced a security incident in February 2022 (the “Cybersecurity Incident”), that resulted in a temporary disruption to our operations and caused the Company to incur costs, including legal and other professional fees and investments related to the security of our IT Systems.

Additionally, we were subject to certain litigation, including class action lawsuits, arising out of the Cybersecurity Incident which we settled for an immaterial amount.

Both we and our vendors continue to face numerous and evolving cybersecurity risks that threaten the confidentiality, integrity, and availability of our IT Systems and Confidential Information.

We are vulnerable to cybersecurity risks from diverse threat actors such as state sponsored organizations and opportunistic hackers and hacktivists, as well as through diverse attack vectors, (for example, ransomware, viruses, advanced persistent threats, misconduct by external or inside actors, social engineering/phishing, human error by associates and contractors, and malicious code embedded in open source software), as well as from bugs, misconfigurations and vulnerabilities in commercial software that is integrated into our (or our suppliers’ or service providers’) IT Systems, products, or services.

Thus, we remain vulnerable to further successful cyberattacks, security breaches and disruptions to our IT Systems and our Confidential Information, in addition to damage or interruption to our IT Systems and Confidential Information from earthquakes, acts of war or terrorist attacks, floods, fires, tornadoes, hurricanes, power loss and outages, computer and telecommunications failures and similar incidents.

Thus, we and our vendors remain vulnerable to further successful cyberattacks, security breaches and disruptions to our IT Systems and our Confidential Information,

in addition to damage or interruption to our IT Systems and Confidential Information from earthquakes, acts of war or terrorist attacks, floods, fires, tornadoes, hurricanes, power loss and outages, computer and telecommunications failures and similar incidents.

Some of our systems are not fully redundant, and our disaster recovery planning cannot account for all eventualities.

The COVID-19 pandemic also presented additional operational and cybersecurity risks due to the prevalence of work-from-home arrangements.

Remote employees and vendors located in foreign countries also present additional operational and cybersecurity risks.

We expect cyberattacks to accelerate going forward.

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Because we make extensive use of third party suppliers and service providers, such as cloud services that support our internal and customer-facing operations, successful cyberattacks that disrupt or result in unauthorized access to third party IT Systems can materially impact our operations and financial results.

Any adverse impact to the availability, integrity, or confidentiality of our IT Systems, or Confidential Information could result in interruptions in our services, noncompliance with certain laws and regulations, substantial negative media attention, damage to our club member, customer and supplier relationships and our reputation, exposure to litigation (including class actions), regulatory investigations, and lost sales, fines, penalties, lawsuits, and increased remediation costs, any or all of which could have a material adverse effect on our business, financial condition and results of operations.

Any adverse impact to the availability, integrity, or confidentiality of our IT Systems, or Confidential Information could result in interruptions in our services, noncompliance with dynamic laws and regulations, substantial negative media attention, damage to our club member, customer and supplier relationships and our reputation, exposure to litigation (including class actions), regulatory investigations, and lost sales, fines, penalties, lawsuits, and increased remediation costs, any or all of which could have a material adverse effect on our business, financial condition and results of operations.

We cannot guarantee that any costs and liabilities incurred in relation to an attack or incident will be covered by our existing insurance policies or that applicable insurance will be available to us in the future on economically reasonable terms or at all.

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In addition, we may be subject to specific data security frameworks and/or laws that require us to maintain a certain level of security, and the regulatory environment surrounding information security and privacy is increasingly demanding, with the frequent imposition of new and constantly changing requirements across our business.

For example, amendments to the Safeguards Rule of the Gramm-Leach-Bliley Act require covered financial institutions to adopt specific data security measures as of June 9, 2023.

In addition, customers have a high expectation that we will adequately protect their personal information from cyberattack or other security breaches.

A significant breach of Confidential Information, including personal information, could attract a substantial amount of negative media attention, damage our club member, customer and supplier relationships and our reputation, and result in lost sales, fines and/or lawsuits, and new laws such as the CCPA impose statutory damages for certain types of data breaches that affect the personal information of consumers.

For example, amendments to the Safeguards Rule of the GLBA require covered financial institutions to adopt specific data security measures as of June 9, 2023.

In addition, customers have a high expectation that we will adequately protect their Personal Information from cyberattacks or other security breaches.

Any failure to comply with current or contemplated cybersecurity and data protection laws and regulations or a significant breach of Confidential Information could attract a substantial amount of negative media attention, damage our club member, customer and supplier relationships and our reputation, and result in lost sales, fines and/or lawsuits, and laws such as the California Consumer Privacy Act impose statutory damages for certain types of data breaches that affect the Personal Information of consumers.

Moreover, as we accept debit and credit cards for payment, we are subject to the PCI-DSS, issued by the Payment Card Industry Security Standards Council.

PCI-DSS contains compliance guidelines with regard to our security surrounding the physical and electronic storage, processing and transmission of cardholder data.

If we or our service providers are unable to comply with the security standards established by banks and the

payment card industry, we may be subject to fines, restrictions and expulsion from card acceptance programs, which could materially and adversely affect our business.

If we or our service providers are unable to comply with the security standards established by banks and the payment card industry, we may be subject to fines, restrictions and expulsion from card acceptance programs, which could materially and adversely affect our business.

We may be subject to product liability claims if people or property are harmed by the products we sell.

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In addition, some of our agreements with our vendors and sellers do not indemnify us from product liability.

Even if a product liability claim is not successful or is not fully pursued, the negative publicity surrounding a product recall or any assertion that our products caused property damage or personal injury could damage our brand identity and our reputation with existing and potential consumers and have a material adverse effect on our business, financial condition and results of operations.

reputation with existing and potential consumers and have a material adverse effect on our business, financial condition and results of operations.

Any increase in the frequency and size of these claims, as compared to our experience in prior years, may cause the premium that we are required to pay for insurance to increase significantly and may negatively impact future insurance costs.

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For information regarding these lawsuits, refer to Note 14, Commitments and Contingencies – Litigation of our consolidated financial statements included in Part II, Item 8 of this Form 10-K.

The results of the securities class action lawsuits, stockholder derivative lawsuits, and any other future legal proceedings cannot be predicted with certainty.

The results of the securities class action lawsuits, stockholder derivative lawsuits, and any other current or future legal proceedings cannot be predicted with certainty.

Regardless of their subject matter or merits, such legal proceedings have resulted in and are likely to continue to result in significant cost to us, which may not be covered by insurance, may divert the attention of management or may otherwise have an adverse effect on our business, financial condition and results of operations.

Negative publicity from litigation, whether or not resulting in a substantial cost, could materially damage our reputation and could have a material adverse effect on our business, financial condition, results of operations, and the price of our Class A common stock.

Negative publicity or negative outcomes from litigation, whether or not resulting in a substantial cost, could materially damage our reputation, could limit our operations and could have a material adverse effect on our business, financial condition, results of operations, and the price of our Class A common stock.

In addition, such legal proceedings may make it more difficult to finance our operations.

Risks Relating to Our Organizational Structure

Marcus Lemonis, through his beneficial ownership of our shares directly or indirectly held by ML Acquisition and ML RV Group, has substantial control over us, including over decisions that require the approval of stockholders, and his interests, along with the interests of our other Continuing Equity Owners, in our business may conflict with yours.

As discussed in Note 19 ─ Stockholders’ Equity to our consolidated financial statements included in Item 8 of Part II of this Form 10-K, we entered into a voting agreement in connection with our IPO with ML Acquisition Company, LLC, a Delaware limited liability company, which is indirectly owned by each of Stephen Adams and our Chairman and Chief Executive Officer, Marcus Lemonis (“ML Acquisition”), ML RV Group, LLC, a Delaware limited liability company, wholly owned by our Chairman and Chief Executive Officer, Marcus Lemonis (“ML RV Group”), CVRV Acquisition LLC and CVRV Acquisition II LLC (the “Voting Agreement”).

Subject to the Voting Agreement, Marcus Lemonis, through his beneficial ownership of our shares directly or indirectly held by ML Acquisition and ML RV Group, may approve or disapprove substantially all transactions

and other matters requiring approval by our stockholders, such as a merger, consolidation, dissolution or sale of all or substantially all of our assets, the issuance or redemption of certain additional equity interests, and the election of directors including transactions that may not be in the best interests of holders of our Class A common stock or, conversely, prevent the consummation of transactions that may be in the best interests of holders of our Class A common stock.

Lemonis, through his beneficial ownership of our shares directly or indirectly held by ML Acquisition and ML RV Group, has substantial control over us, including over decisions that require the approval of stockholders, and his interests, along with the interests of our other Continuing Equity Owners, in our business may conflict with yours.

We entered into a voting agreement in connection with our IPO with ML Acquisition Company, LLC, a Delaware limited liability company, which is indirectly owned by each of the estate of our former director, Stephen Adams, and our Chairman and Chief Executive Officer, Marcus A.

Lemonis (“ML Acquisition”), ML RV Group, LLC, a Delaware limited liability company, wholly owned by our Chairman and Chief Executive Officer, Marcus A.

Lemonis (“ML RV Group”), CVRV Acquisition LLC and CVRV Acquisition II LLC (the “Voting Agreement”).

Subject to the Voting Agreement, Marcus A.

Lemonis, through his beneficial ownership of our shares directly or indirectly held by ML Acquisition and ML RV Group, may approve or disapprove substantially all transactions and other matters requiring approval by our stockholders, such as a merger, consolidation, dissolution or sale of all or substantially all of our assets, the issuance or redemption of certain additional equity interests, and the election of directors including transactions that may not be in the best interests of holders of our Class A common stock or, conversely, prevent the consummation of transactions that may be in the best interests of holders of our Class A common stock.

We have been made aware of the potential dissolution of ML Acquisition and its wholly-owned subsidiary, CWGS Holding, LLC (“CWGS Holding”), although the date of any such dissolution has not been determined.

If a dissolution occurs, the Company expects that Common Units of CWGS Enterprises, LLC and Class B Common Stock of the Company held by CWGS Holding would be distributed to the members of ML Acquisition (such distributees, the “ML Related Parties” and such transactions, the “Distribution”).

In addition, pursuant to the Voting Agreement, Crestview Advisors, L.L.C., a registered investment adviser to private equity funds, including funds affiliated with Crestview Partners II GP, L.P.

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The Voting Agreement allows for the Board of Directors to reject the nomination, appointment or election of a particular director if such nomination, appointment or election would constitute a breach of the Board of Directors’ fiduciary duties to the Company’s stockholders or does not otherwise comply with any requirements of our amended and restated certificate of incorporation or our amended and restated bylaws or the charter for, or related guidelines of, the Board of Directors’ Nominating and Corporate Governance Committee.

The Voting Agreement further provides that, for so long as the ML Related Parties, directly or indirectly, beneficially own, in the aggregate, 22.5% or more of our Class A common stock (assuming that all outstanding common units in CWGS, LLC are redeemed for newly-issued shares of our Class A common stock on a one-for-one basis), the approval of the ML Related Parties will be required for certain corporate actions.

Based on current beneficial ownership of the Company’s securities by ML Acquisition, immediately following any Distribution, the ML Related Parties collectively would continue to be entitled to designate four (4) directors to the Board.

The ML Related Parties would no longer be obligated to vote, or cause to be voted, all outstanding shares of Class B Common Stock previously held by ML Acquisition at any annual or special meeting of stockholders of the Company at which directors of the Company are to be elected so as to cause the election of the director designated to serve by Crestview.

However, ML RV Group would be required to vote, or cause to be voted, its share of Class C Common Stock at any annual or special meeting of stockholders of the Company at which directors of the Company are to be elected so as to cause the election of the Crestview Director.

In addition, the ML Related Parties would not have any voting obligations relating to the directors designated by the ML Related Parties.

While the Crestview Stockholders would still be obligated to vote for the ML Acquisition Directors and the director designated to serve on the Board by ML RV Group, there would no longer be an individual, group or company that holds more than 50% of the voting power for the election of the Company’s directors and the Company would therefore no longer qualify as a “controlled company” under the rules of the New York Stock Exchange, absent an agreement between the ML Acquisition Members and Crestview as to future director elections.

For additional information, see “We are a “controlled company” within the meaning of the NYSE listing requirements and, as a result, qualify for exemptions from certain corporate governance requirements.

Our stockholders do not have the same protections afforded to stockholders of companies that are subject to such corporate governance requirements.”

The Voting Agreement further provides that, for so long as the ML Related Parties, directly or indirectly, beneficially own, in the aggregate, 22.5% or more of our Class A common stock (assuming that all outstanding common units in CWGS, LLC are redeemed for newly-issued shares of our Class A common stock on a one-for-one basis), the approval of ML Acquisition will be required for certain corporate actions.

These actions include:

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and (5) any change in the size of the Board of Directors.

The Voting Agreement also provides that, for so long as the ML Related Parties, directly or indirectly, beneficially own, in the aggregate, 28% or more of our Class A common stock (assuming that all outstanding common units of CWGS, LLC are redeemed for newly-issued shares of our Class A common stock, on a one-for-one basis), the approval of the ML Related Parties, as applicable, will be required for the hiring and termination of our Chief Executive Officer;

provided, however, that the approval of the ML Related Parties is only required at such time as Marcus Lemonis no longer serves as our Chief Executive Officer.

The Voting Agreement also provides that, for so long as the ML Related Parties, directly or indirectly, beneficially own, in the aggregate, 27.5% or more of our Class A common stock (assuming that all outstanding common units of CWGS, LLC are redeemed for newly-issued shares of our Class A common stock, on a one-for-one basis), the approval of ML

Acquisition, as applicable, will be required for the hiring and termination of our Chief Executive Officer;

provided, however, that the approval of the ML Related Parties is only required at such time as Marcus A.

Lemonis no longer serves as our Chief Executive Officer.

These rights may prevent the consummation of transactions that may be in the best interests of holders of our Class A common stock.

Following any Distribution, the ML Related Parties would no longer have the foregoing consent rights described above that are currently held by ML Acquisition.

Our amended and restated certificate of incorporation provides that the doctrine of “corporate opportunity” does not apply with respect to any director or stockholder who is not employed by us or our affiliates.

that is reasonably incident to the present or prospective business of the corporation or in which the corporation has a present or expectancy interest, unless that opportunity is first presented to the corporation and the corporation chooses not to pursue that opportunity.

The doctrine of corporate opportunity generally provides that a corporate fiduciary may not develop an opportunity using corporate resources, acquire an interest adverse to that of the corporation or acquire property that is reasonably incident to the present or prospective business of the corporation or in which the corporation has a present or expectancy interest, unless that opportunity is first presented to the corporation and the corporation chooses not to pursue that opportunity.

The doctrine of corporate opportunity is intended to preclude officers or directors or other fiduciaries from personally benefiting from opportunities that belong to the corporation.

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Accordingly, we may lose a corporate opportunity or suffer competitive harm, which could negatively impact our business or prospects.

We are a “controlled company” within the meaning of the NYSE listing requirements and, as a result, qualify for, and rely on, exemptions from certain corporate governance requirements.

We are a “controlled company” within the meaning of the NYSE listing requirements and, as a result, qualify for exemptions from certain corporate governance requirements.

Our stockholders do not have the same protections afforded to stockholders of companies that are subject to such corporate governance requirements.

Pursuant to the terms of the Voting Agreement, Marcus Lemonis, through his beneficial ownership of our shares directly or indirectly held by ML Acquisition and ML RV Group, and certain funds controlled by Crestview Partners II GP, L.P., in the aggregate, have more than 50% of the voting power for the election of directors, and, as a result, we are considered a “controlled company” for the purposes of the New York Stock Exchange (the “NYSE”) listing requirements.

As such, we qualify for, and rely on, exemptions from certain corporate governance requirements, including the requirements to have a majority of independent directors on our Board of Directors, an entirely independent Nominating and Corporate Governance Committee, an entirely independent Compensation Committee or to perform an annual performance evaluation of the Nominating and Corporate Governance and Compensation Committees.

Pursuant to the terms of the Voting Agreement, Marcus A.

Lemonis, through his beneficial ownership of our shares directly or indirectly held by ML Acquisition and ML RV Group, and certain funds controlled by Crestview Partners II GP, L.P., in the aggregate, have more than 50% of the voting power for the election of directors, and, as a result, we are considered a “controlled company” for the purposes of the New York Stock Exchange (the “NYSE”) listing requirements.

As such, we qualify for, and may rely on, exemptions from certain corporate governance requirements, including the requirements to have a majority of independent directors on our Board of Directors, an entirely independent Nominating and Corporate Governance Committee, an entirely independent Compensation Committee or to perform an annual performance evaluation of the Nominating and Corporate Governance and Compensation Committees.

The corporate governance requirements and specifically the independence standards are intended to ensure that directors who are considered independent are free of any conflicting interest that could influence their actions as directors.

We have utilized, and intend to continue to utilize, certain exemptions afforded to a “controlled company.” As a result, we are not subject to certain corporate governance requirements, including that a majority of our Board of Directors consists of “independent directors,” as defined under the rules of the NYSE.

In addition, we are not required to have a Nominating and Corporate Governance Committee or Compensation Committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities or to conduct annual performance evaluations of the Nominating and Corporate Governance and Compensation Committees and currently we do not have an entirely independent Nominating and Corporate Governance Committee.

Accordingly, our stockholders do not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE.

We have utilized, and may continue to utilize, certain exemptions afforded to a “controlled company.” As a result, we are not subject to certain corporate governance requirements, including that a majority of our Board of Directors consists of “independent directors,” as defined under the rules of the NYSE.

Accordingly, our stockholders may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE.

Following any Distribution, the Company anticipates that it would no longer be considered a “controlled company” under the rules of the NYSE, and therefore we would no longer be able to rely on the exemptions from corporate governance requirements that are afforded to controlled companies.

Our principal asset is our interest in CWGS, LLC, and accordingly, we depend on distributions from CWGS, LLC to pay dividends, taxes and expenses, including payments under the Tax Receivable Agreement.

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We have no independent means of generating revenue or cash flow, and our ability to pay dividends in the future, if any, will be dependent upon the financial results and cash flows of CWGS, LLC and its subsidiaries and distributions we receive from CWGS, LLC.

There can be no assurance that our subsidiaries will generate

sufficient cash flow to dividend or distribute funds to us or that applicable state law and contractual restrictions, including negative covenants in our debt instruments, will permit such dividends or distributions.

There can be no assurance that our subsidiaries will generate sufficient cash flow to dividend or distribute funds to us or that applicable state law and contractual restrictions, including negative covenants in our debt instruments, will permit such dividends or distributions.

CWGS, LLC is treated as a partnership for U.S.

federal income tax purposes and, as such, is not subject to any entity-level U.S.

federal income tax purposes and, as such, generally is not subject to any entity-level U.S.

federal income tax.

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equal to 85% of the tax benefits, if any, that we actually realize, or in some circumstances are deemed to realize as a result of (i) increases in tax basis resulting from the purchase of common units from Crestview Partners II GP, L.P.

in exchange for Class A common stock in connection with the consummation of the IPO and the related corporate reorganization transactions and any future redemptions that are funded by Camping World Holdings, Inc.

in exchange for Class A common stock in connection with the consummation of the IPO and the related corporate reorganization transactions and any

future redemptions that are funded by Camping World Holdings, Inc.

or redemption of common units and (ii) certain other tax benefits attributable to payments under the Tax Receivable Agreement.

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Nonpayment for a specified period may constitute a material breach of a material obligation under the Tax Receivable Agreement and therefore may accelerate payments due under the Tax Receivable Agreement.

Furthermore, our future obligation to make payments under the Tax Receivable Agreement could make us a less attractive target for an acquisition, particularly in the case of an acquirer that cannot use some or all of the tax benefits that may be deemed realized under the Tax Receivable

The payments under the Tax Receivable Agreement are also not conditioned upon the Continuing Equity Owners or Crestview Partners II GP, L.P.

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Such amounts of cash payments that the Company may be required to make under the Tax Receivable Agreement for such future redemptions could be significant.

The amount of liabilities to be recorded in the future for such redemptions is dependent on a variety of factors including future stock prices, tax rates in effect, and the Company’s ability to utilize the tax benefits created as a result of the futures of CWGS, LLC units.

The significance of these factors and related uncertainty associated with the related liabilities makes estimation of future potential amounts under the Tax Receivable Agreement impractical to determine.

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Our organizational structure may cause us to be subject to IRS audit, which may result in the assessment of interest and penalties.

We consolidate CWGS, LLC, which, as a limited liability company, is not subject to U.S.

We consolidate CWGS, LLC, which, as a limited liability company, generally is not subject to U.S.

federal income taxes.

Rather, the partnership’s taxable income flows through to the owners, who are responsible for paying the applicable income taxes on the income allocated to them.

For tax years beginning on or after January 1, 2018, the Company is subject to partnership audit rules enacted as part of the Bipartisan Budget Act of 2015 (the “Centralized Partnership Audit Regime”).

Rather, as a partnership for U.S.

tax purposes, CWGS, LLC’s taxable income flows through to the owners, including us, who are responsible for paying the applicable income taxes on the income allocated to them.

However, the Company is subject to partnership audit rules enacted as part of the Bipartisan Budget Act of 2015 (the “Centralized Partnership Audit Regime”).

Under the Centralized Partnership Audit Regime, any IRS audit of CWGS, LLC would be conducted at the CWGS, LLC level, and if the IRS determines an adjustment is necessary, the default rule is that CWGS, LLC would pay an “imputed underpayment” including interest and penalties, if applicable.

CWGS, LLC may instead elect to make a “push-out” election, in which case the partners for the year that is under audit would be required to take into account the adjustments on their own personal income tax returns.

CWGS, LLC may instead elect to make a “push-out” election, in which case the members or partners for the year that is under audit would be required to take into account the adjustments on their own personal income tax returns.

Our operating agreement stipulates that CWGS, LLC is indemnified by members for any payment made to relevant taxing authorities under the Centralized Partnership Audit Regime.

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The Continuing Equity Owners may exercise such redemption right for as long as their common units remain outstanding.

In connection with our IPO, we also entered into a Registration Rights Agreement pursuant to which the shares of Class A common stock issued upon such redemption and the shares of Class A common stock issued to the Former Equity Owners in connection with the corporate reorganization transactions entered into in connection therewith will be eligible for resale, subject to certain limitations set forth therein.

In connection with our IPO, we also entered into a Registration Rights Agreement pursuant to which the shares of Class A common stock issued upon such

redemption and the shares of Class A common stock issued to the Former Equity Owners in connection with the corporate reorganization transactions entered into in connection therewith will be eligible for resale, subject to certain limitations set forth therein.

The market price of shares of our Class A common stock could decline as a result of these redemptions or sales, or as a result of the perception that they could occur.

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We have reserved shares for issuance under our 2016 Incentive Award Plan (the “2016 Plan”) in an amount equal to 8,473,492 shares of Class A common stock as of December 31, 2024, including shares of Class A common stock issuable pursuant to 155,029 stock options and 1,651,929 restricted stock units that were granted to certain of our directors and certain of our employees.

Any Class A common stock that we issue,

including under our 2016 Plan or other equity incentive plans that we may adopt in the future, would dilute the percentage ownership of holders of our Class A common stock.

Any Class A common stock that we issue, including under our 2016 Plan or other equity incentive plans that we may adopt in the future, would dilute the percentage ownership of holders of our Class A common stock.

In the future, we may also issue additional securities if we need to raise capital, including, but not limited to, in connection with acquisitions, which could constitute a material portion of our then-outstanding shares of Class A common stock.

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However, the payment of future dividends on our Class A common stock will be subject to our discretion as the sole managing member of CWGS, LLC, the discretion of our Board of Directors and will depend on, among other things, our results of operations, financial condition, level of indebtedness, capital requirements, contractual restrictions, restrictions in our debt agreements and in any preferred stock, business prospects and other factors that our Board of Directors may deem relevant.

Additionally, our ability to distribute any Excess Tax Distribution will also be subject to no early termination or amendment of the Tax Receivable Agreement, as well as the amount of tax distributions actually paid to us and our actual tax liability, which will be affected by the conversion of certain subsidiaries, including Camping World, Inc., to limited liability companies (see Note 12 – Income Taxes to our consolidated financial statements included in Part II, Item 8 of this Form 10-K).

Additionally, our ability to distribute any Excess Tax Distribution will also be subject to no early termination or amendment of the Tax Receivable Agreement, as well as the amount of tax distributions actually paid to us and our actual tax liability, which is affected by the conversion of certain subsidiaries, including Camping World, Inc., to limited liability companies (see Note 12 – Income Taxes to our consolidated financial statements included in Part II, Item 8 of this Form 10-K).

As a consequence of these limitations and restrictions, we may not be able to make, or may have to reduce or eliminate, the payment of dividends on our Class A common stock.

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We are a Delaware corporation, and the anti-takeover provisions of Delaware law impose various impediments to the ability of a third party to acquire control of us, even if a change of control would be beneficial to our existing stockholders.

In addition, our amended and restated certificate of incorporation and our amended and restated bylaws contain provisions that may make the acquisition of our Company more difficult without the approval of our Board of Directors, including, but not limited to, the following:

In addition, our amended and restated certificate of incorporation and our amended

and restated bylaws contain provisions that may make the acquisition of our Company more difficult without the approval of our Board of Directors, including, but not limited to, the following:

● our Board of Directors is classified into three classes, each of which serves for a staggered three-year term;

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● we have authorized undesignated preferred stock, the terms of which may be established and shares of which may be issued without stockholder approval;

● any action required or permitted to be taken by our stockholders at an annual meeting or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a written consent is signed by the holders of our outstanding shares of common stock representing not less than the minimum number of votes that would be necessary to authorize such action at a meeting at which all outstanding shares of common stock entitled to vote thereon, and at such time as the ML Related Parties, directly or indirectly, beneficially own in the aggregate, less than 27.5% of all of the outstanding common units of CWGS, LLC, any action required or permitted to be taken

by our stockholders at an annual meeting or special meeting of stockholders may not be taken by written consent in lieu of a meeting;

● our amended and restated certificate of incorporation may be amended or repealed by the affirmative vote of a majority of the votes which all our stockholders would be eligible to cast in an election of directors and our amended and restated bylaws may be amended or repealed by a majority vote of our Board of Directors or by the affirmative vote of a majority of the votes which all our stockholders would be eligible to cast in an election of directors, and at such time as the ML Related Parties, directly or indirectly, beneficially own in the aggregate, less than 27.5% of all of the outstanding common units of CWGS, LLC, our amended and restated certificate of incorporation and our amended and restated bylaws may be amended or repealed by the affirmative vote of the holders of at least 66 2 / 3 % of the votes which all our stockholders would be entitled to cast in any annual election of directors and our amended and restated bylaws may also be amended or repealed by a majority vote of our Board of Directors;

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In addition, because our Board of Directors is responsible for appointing the members of our management team, these provisions could in turn affect any attempt by our stockholders to replace current members of our management team.

Please see “— Risks Relating to Our Organizational Structure — Marcus Lemonis, through his beneficial ownership of our shares directly or indirectly held by ML Acquisition and ML RV Group, has substantial control over us, including over decisions that require the approval of stockholders, and his interests, along with the interests of our other Continuing Equity Owners, in our business may conflict with yours.”

Please see “— Risks Relating to Our Organizational Structure — Certain of our stockholders have significant control over us, including with respect to the election of directors, and the interests of our other Continuing Equity Owners in our business may conflict with yours.”

Our amended and restated certificate of incorporation provides, subject to certain exceptions, that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, and our amended and restated bylaws designate the federal district courts of the United States as the exclusive forum for actions arising under the Securities Act of 1933, as amended, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.

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The potential issuance of preferred stock may delay or prevent a change in control of us, discouraging bids for our Class A common stock at a premium to the market price, and materially and adversely affect the market price and the voting and other rights of the holders of our Class A common stock.

General Risk Factors

Material weaknesses in our internal control over financial reporting could have a significant adverse effect on our business and the price of our common stock.

In the past we have identified material weakness in our internal control over financial reporting.

In future periods, if additional material weaknesses in our internal control over financial reporting are identified, we may be required to restate our financial statements and could be subject to regulatory scrutiny, a loss of public and investor confidence, and to litigation from investors and stockholders, which could have a material adverse effect on our business and the price of our Class A common stock.

As a public reporting company, we are subject to the rules and regulations established from time to time by the SEC and NYSE.

These rules and regulations require, among other things, that we have, and periodically evaluate, procedures with respect to our internal control over financial reporting.

Reporting obligations as a public company are likely to continue to place a considerable strain on our financial and management systems, processes and controls, as well as on our personnel.

In addition, as a public company we are required to document and test our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act so that our management can certify as to the effectiveness of our internal control over financial reporting.

Likewise, our independent registered public accounting firm is required to provide an attestation report on the effectiveness of our internal control over financial reporting.

In connection with the preparation of our financial statements and the audit of our financial results for the year ended December 31, 2024, we identified a material weakness in our internal controls in the design and operation of our controls over the review of the measurement of the realizable portion of the Company’s outside basis difference deferred tax asset in the operating partnership, CWGS, LLC.

This material weakness remained unremediated as of December 31, 2024.

As a result, management concluded that our internal control over financial reporting as of December 31, 2024 was not effective.

As described in Part II, Item 9A of this Form 10-K, management is taking steps to remediate the material weakness in our internal controls.

There can be no assurance that any measures we take will remediate the material weakness identified, nor can there be any assurance as to how quickly we will be able to remediate this material weakness.

In future periods, if our senior management is unable to remediate the material weakness such that they cannot conclude that we have effective internal control over financial reporting, or to certify the effectiveness of such controls, or if our independent registered public accounting firm cannot render an unqualified opinion on management’s assessment and the effectiveness of our internal control over financial reporting, or if additional material weaknesses in our internal control over financial reporting are identified, we may be required to restate our financial statements and could be subject to regulatory scrutiny, a loss of public and investor confidence, and litigation from investors and stockholders, which could have a material adverse effect on our business and the price of our Class A common stock.

Furthermore, the steps to remediate any such material weaknesses, including the ones noted above, could require additional remedial measures, including additional personnel, which could be costly and time-consuming.

In addition, we may encounter problems or delays in completing the implementation of any required improvements and receiving a favorable attestation report from our independent registered public accounting firm.

In addition, if we do not maintain adequate financial and management personnel, processes and controls, we may not be able to manage our business effectively or accurately report our financial performance on a timely basis, which could cause a decline in our common stock price and adversely affect our results of operations and financial condition.

Failure to comply with the Sarbanes-Oxley Act could potentially subject us to sanctions or investigations by the SEC, the NYSE or other regulatory authorities, which would require additional financial and management resources.

General Risk Factors

Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our operating results and financial condition.

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● expected timing and amount of the release of any tax valuation allowances;

● tax effects of equity-based compensation;

● tax effects of stock-based compensation;

● costs related to intercompany restructurings;

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federal and state authorities.

We are currently under California state audit (see Note 12 – Income Taxes to our consolidated financial statements included in Part II, Item 8 of this Form 10-K).

We are currently under New York state audit (see Note 12 – Income Taxes to our consolidated financial statements included in Part II, Item 8 of this Form 10-K).

Outcomes from these audits could have an adverse effect on our operating results and financial condition.

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Volatility in the market price of our Class A common stock may prevent you from being able to sell your shares at or above the price you paid for such shares.

Many factors, which are outside our control, may cause the market price of our Class A common stock to fluctuate significantly, including those described elsewhere in this “Risk Factors” section and this Form 10-K, as well as the following:

Many factors, which are outside our control, may cause

the market price of our Class A common stock to fluctuate significantly, including those described elsewhere in this “Risk Factors” section and this Form 10-K, as well as the following:

● our operating and financial performance and prospects;

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● adverse resolution of new or pending litigation against us;

● changes in general market, economic and political conditions in the United States and global economies or financial markets, including those resulting from natural disasters, terrorist attacks, acts of war and responses to such events.

● changes in general market, economic and political conditions in the United States and global economies or financial markets, including those resulting from international trade policy, natural disasters, terrorist attacks, acts of war and responses to such events.

If securities analysts do not publish research or reports about our company, or if they issue unfavorable commentary about us or our industry or downgrade our Class A common stock, the price of our Class A common stock could decline.

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

What changed 10-K

Item 1A. Risk Factors