Item 1A. Risk Factors
ITEM
1A. RISK FACTORS
The
COVID-19 pandemic has had, and we expect will continue to have, certain negative impacts on our business and operations, and such
impacts may have a material adverse effect on our business and results of operations.
The
current COVID-19 pandemic has presented a substantial public health and economic challenge around the world and is affecting our
employees, communities and business operations, as well as the global economy and financial markets. The human and economic consequences
of the COVID-19 pandemic as well as the measures being taken by governments, businesses (including the Company and our suppliers,
bottlers/distributors, co-packers and other service providers) and the public at large to limit the COVID-19 pandemic, have and
will, directly and indirectly impact our business and results of operations, including, without limitation, the following:
●
Deteriorating
economic conditions and financial uncertainties in many of our major markets due to the COVID-19 pandemic, such as increased
and prolonged unemployment, decreases in per capita income and the level of disposable income, declines in consumer confidence,
or economic slowdowns or recessions, could affect consumer purchasing power and consumers ability to purchase our products,
thereby reducing demand for our products. In addition, public concern among consumers regarding the risk of contracting COVID-19
may also reduce demand for our products.
●
The
closure of on-premise retailers and other establishments that sell our products as a result of the COVID-19 pandemic may also
adversely impact our sales and results of operations.
●
Our
advertising, marketing, promotional, sponsorship and endorsement activities have been, and will continue to be, disrupted
by reduced opportunities for such activities due to measures taken to limit the spread of the COVID-19 pandemic and the cancellations
of sporting events, concerts and other events may result in decreased demand for our products. Our product sampling programs,
which are part of our strategy to develop brand awareness, have been, and will continue to be, disrupted by the COVID-19 pandemic.
If we are unable to successfully adapt to the changing landscape of advertising, marketing, promotional, sponsorship and endorsement
opportunities created by the COVID-19 pandemic, our sales, volume growth and overall financial results could be negatively
affected.
●
Our
innovation activities, including our ability to introduce new products in certain markets, have been delayed and/or adversely
impacted by the COVID-19 pandemic. If such innovation activities are disrupted and we continue to delay the launch of new
products and/or we are unable to secure sufficient distribution levels for such new products, our business and results of
operations could be adversely affected.
●
Some
of our suppliers, bottlers/distributors and co-packers may experience plant closures, production slowdowns and disruptions
in operations as a result of the impact of the COVID-19 pandemic. This could result in a disruption to our operations.
●
We
may experience delays in the sourcing of certain raw materials as a result of shipping delays due to, among other things,
additional safety requirements imposed by port authorities, closures of or congestion at ports, reduced availability of commercial
transportation, border restrictions and capacity constraints.
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●
As
a result of the COVID-19 pandemic, including related governmental measures, restrictions, directives and guidance, we have
required most of our office-based employees to work remotely. We may experience reductions in productivity and disruptions
to our business routines while our remote work policy remains in place. If our employees working remotely do not maintain
appropriate measures to mitigate potential risks to our technology and operations from information technology-related disruptions,
we may face cybersecurity threats. Employees of our third-party service providers who are working remotely, with whom we may
share data, are subject to similar cybersecurity risks.
●
Governmental
authorities at the U.S. federal, state and/or municipal level and in certain foreign jurisdictions may increase or impose
new income taxes, indirect taxes or other taxes or revise interpretations of existing tax rules and regulations as a means
of financing the costs of stimulus or may take other measures to protect populations and economies from the impact of the
COVID-19 pandemic. Increases in direct and indirect tax rates could affect our net income, and increases in consumer taxes
could affect our products affordability and reduce our sales.
●
We
may be required to record significant impairment charges with respect to goodwill or intangible assets whose fair values may
be negatively affected by the effects of the COVID-19 pandemic.
●
The
financial impact of the COVID-19 pandemic may cause one or more of the financial institutions we do business with to fail
or default in their obligations to us or to become insolvent or file for bankruptcy, which could cause us to incur significant
losses and negatively impact our results of operations and financial condition.
●
Actions
we have taken or may take, or decisions we have made or may make, as a consequence of the COVID-19 pandemic may result in
negative publicity and the Company becoming a party to litigation claims and/or legal proceedings, which could consume significant
financial and managerial resources, result in decreased demand for our products and injury to our reputation.
●
The
resumption of normal business operations after the disruptions caused by the COVID-19 pandemic may be delayed or constrained
by its lingering effects on our suppliers, bottlers/distributors, co-packers, contractors, business partners and other service
providers.
Any
of the negative impacts of the COVID-19 pandemic, including those described above, alone or in combination with others, may have
a material adverse effect on our business, reputation, operating results and/or financial condition. The full extent to which
the COVID-19 pandemic will negatively affect our business, reputation, operating results and/or financial condition will depend
on future developments that are highly uncertain and cannot be predicted, including the scope and duration of the COVID-19 pandemic
and actions taken by governmental authorities and other third parties in response to the COVID-19 pandemic.
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ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM
3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM
4. MINE SAFETY DISCLOSURES
No
disclosure required.
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