Item 1A. Risk Factors
Item
1A. Risk Factors.
Except
as set forth below, as of the date of this Quarterly Report, there have been no material changes with respect to those risk factors previously
disclosed in described in our Form S-4 and Closing Form 8-K. Any of these factors could result in a significant or material adverse effect
on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial
may also impair our business or results of operations.
Business
disruptions could have serious adverse consequences on our future revenue and financial condition and result in losses that may not be
covered by insurance.
Our
operations, particularly our operations in Puerto Rico, could be subject to the impact of natural or man-made disasters or other business
disruptions, which include, but are not limited to, earthquakes, hurricanes, typhoons, floods, water shortages, wildfires and fires,
blizzards and other extreme weather conditions as well as power outages, telecommunications, transportation or infrastructure failure,
cybersecurity incidents or physical security breaches related to such catastrophes, public health crises, such as pandemics and epidemics,
and geopolitical conflicts, including acts of terrorism, war and civil disorder. We carry insurance against certain risks and in such
amounts as we believe are customary for businesses of our kind. However, as the costs and availability of insurance change, we may decide
not to be covered against certain losses, including losses resulting from such natural and man-made disasters or environmental liabilities
where, in the judgment of management, the insurance is not warranted due to cost or availability of coverage or the remoteness of perceived
risk. Furthermore, there are certain types of losses that are generally not insured because they are either uninsurable or not economically
insurable. Moreover, the cost of insurance has increased significantly, including as a result of the impact of climate change and inflation,
and we may not be able to obtain sufficient coverage at a reasonable cost to protect us against losses.
Our
wholly-owned subsidiary in Puerto Rico has been granted certain incentives under Act 60 (described below), and the validity of these
incentives are conditioned on our continuous compliance with the terms and conditions of the grant.
Our
Puerto Rican subsidiary has been granted various incentives under Act 60, including a reduced 1% income tax rate on its industrial development
income and a 15 year exemption term from (i) December 23, 2024 for income tax purposes, (ii) January 1, 2024 for real and personal property
tax purposes, and (iii) January 1, 2025 for municipal license tax purposes. The validity of these tax incentives is conditioned
on our Puerto Rican subsidiary’s continuous compliance with the terms and conditions of the grant.
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