What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2022-03-29 compared with 2021-03-31 · 585 added, 657 removed, 100 unchanged (93% of the section changed)

An investment in our common stock involves

a high degree of risk.

You should carefully consider the following risks and all of the other information contained in this Report

before deciding whether to invest in our common stock.

If any of the following risks are realized, our business, financial condition

and results of operations could be materially and adversely affected.

In that event, the trading price of our common stock could

decline and you could lose all or part of your investment in our common stock.

Additional risks of which we are not presently

aware or that we currently believe are immaterial may also harm our business and results of operations.

Some statements in this

Report, including such statements in the following risk factors, constitute forward-looking statements.

See the section entitled

“Forward-Looking Statements.”

investment in our common stock involves a high degree of risk.

You should carefully consider the following risks and all of the other

information contained in this report before deciding whether to invest in our common stock.

If any of the following risks are

realized, our business, financial condition and results of operations could be materially and adversely affected.

In that event, the

trading price of our common stock could decline and you could lose all or part of your investment in our common stock.

Additional risks

of which we are not presently aware or that we currently believe are immaterial may also harm our business and results of operations.

Some statements in this report, including such statements in the following risk factors, constitute forward-looking statements.

See the section entitled “Forward-Looking Statements.”

Related to Our Operations

COVID-19 pandemic could continue to materially adversely affect our business, financial condition, results of operations, cash

flows and day-to-day operations.

The outbreak of COVID-19,

a novel strain of coronavirus first identified in China, which has spread across the globe including the U.S., has had an adverse

impact on our operations and financial condition.

The response to this coronavirus by federal, state and local governments

has resulted in significant market and business disruptions across many industries and affecting businesses of all

This pandemic has also caused significant stock market volatility and further tightened capital access for most businesses.

Given that the COVID-19 pandemic and its disruptions are of an unknown duration, they could have an adverse effect on our liquidity

and profitability.

As a result of these

events, we assessed our near-term operations, working capital, finances and capital formation opportunities, and implemented,

in late March 2020, a downsizing of our operations and workforce to preserve cash resources and focus our operations on client-centric

sales and project management activities.

We have since rehired several employees who were impacted by the downsizing effort.

The pandemic and its effects resulted in temporary delays in our projects, however, work on all such projects has resumed.

factors related to this coronavirus that could negatively impact our ability to continue operations include the market

demand for our products and services, our ability to service the needs of our clients and prospects, potential contract cancellations,

project scope reductions and project delays, our ability to fulfill our current backlog, and the ability of our vendors to

continue to provide us with product to fulfill our customers’

In light of these extenuating circumstances, there

is no assurance that we will be successful in growing and maintaining our business with our clients.

If our clients or prospects

are unable to obtain project financing and we are unable to increase revenues, or otherwise generate cash flows from operations,

we will not be able to successfully execute on the various strategies and initiatives we have set forth in this Report to grow

our business.

ultimate magnitude of COVID-19, including the extent of its impact on our financial and operational results, which could be material,

will depend on the length of time that the pandemic continues, its effect on the demand for our products and our supply chain,

the effect of governmental regulations imposed in response to the pandemic, as well as uncertainty regarding all of the foregoing.

We cannot at this time predict the full impact of the COVID-19 pandemic, but it could have a larger material adverse effect on

our business, financial condition, results of operations and cash flows beyond what is discussed within this Report.

have a relatively limited history of operations, a history of losses, and our future earnings, if any, and cash flows may be volatile,

resulting in uncertainty about our ability to service and repay our debt when it comes due and uncertainty about our prospects

resulting in uncertainty about our prospects generally.

were initially organized as a limited liability company in the State of Colorado on March 20, 2014.

In March 2017, we converted

into a corporation with the expectation of becoming a public reporting company.

In March 2017, we converted into

a corporation with the expectation of becoming a public reporting company.

is a summary of our recent historical operating performance:

3 unchanged sentences

the year ended December 31, 2018, we generated revenue of $20.1 million and incurred a net loss of $3.9 million.

lack of a significant history and the evolving nature of the market in which we operate make it likely that there are risks inherent

to our business that are yet to be recognized by us or others, or not fully appreciated, and that could result in us suffering

further losses.

As a result of the foregoing, and concerns regarding the economic impact from COVID-19, an investment in our securities

necessarily involves uncertainty about the stability of our operating results, cash flows and, ultimately, our ability to service

and repay our debt and our prospects generally.

had negative cash flow for the fiscal years ended December 31, 2020 and 2019.

had negative operating cash flow of ($3.6) million and ($2.5) million for the fiscal years ended December 31, 2020 and 2019, respectfully.

To the extent that we have negative operating cash flow in future periods, we may need to allocate a portion of our cash reserves

to fund such negative cash flow.

Our lack of a significant history

and the evolving nature of the market in which we operate make it likely that there are risks inherent to our business that are yet to

be recognized by us or others, or not fully appreciated, and that could result in us suffering further losses.

As a result of the foregoing,

and concerns regarding the economic impact from COVID-19, an investment in our securities necessarily involves uncertainty about the

stability of our operating results, cash flows and, ultimately, our prospects generally.

We had negative

cash flow from operations for the fiscal years ended December 31, 2021 and December 31, 2020.

We had negative cash flow

from operations of ($1.6) million for the fiscal year ended December 31, 2021 and ($3.6) million for the fiscal year ended December 31,

To the extent that we have negative cash flow from operations in future periods, we may need to allocate a portion of our cash

reserves to fund such negative cash flow.

We may also be required to raise additional funds through the issuance of equity or debt securities.

There can be no assurance that we will be able to generate positive cash flow from our operations, that additional capital or

other types of financing will be available when needed or that these financings will be on terms favorable to us.

engineering and design services have been used and may continue to be contracted for use in emerging industries that may be subject

to quickly changing and inconsistent laws, regulations, practices and perceptions.

the demand for our engineering and design services may be negatively impacted depending on how laws, regulations, administrative

practices, judicial interpretations, and consumer perceptions develop, we cannot reasonably predict the nature of such developments

or the effect, if any, that such developments could have on our business.

There can be no assurance that we will be able to generate positive cash flow from our operations, that additional capital or other types

of financing will be available when needed or that these financings will be on terms favorable to us.

architecture, engineering and design services have been used and may continue to be contracted for use in emerging industries

that may be subject to quickly changing and inconsistent laws, regulations, practices and perceptions.

the demand for our architecture, engineering and design services may be negatively impacted depending on how laws, regulations,

administrative practices, judicial interpretations, and consumer perceptions develop, we cannot reasonably predict the nature of such

developments or the effect, if any, that such developments could have on our business.

We will continue to encounter risks and uncertainty

4 unchanged sentences

our reach to include the global CEA marketplace;

Extend our reach to use current services offering in the non-CEA

client demand with quality, timely services;

3 unchanged sentences

hire, motivate and retain qualified personnel.

may incur losses in the near future, which may impact our ability to implement our business strategy and adversely affect our

financial condition.

we have focused significantly on decreasing our operating expenses by reducing variable expenses, employee count, and marketing

activities in order to become cash flow positive, such decreases may adversely affect our operating results if we are unable to

support the business effectively.

We may continue to incur losses in the

near future, which may impact our ability to implement our business strategy and adversely affect our financial condition.

While we are focused

significantly on controlling our operating expenses by managing variable expenses, employee count, and marketing activities

in order to become cash flow positive, these measures may adversely affect our future operating results if we are unable

to support the business effectively.

In turn, this would have a negative impact on our financial condition and potentially our share

We also cannot make

any assurances that we will be profitable or generate sufficient profits from operations in the future.

If our revenues do

not grow or our gross margins deteriorate substantially, we are likely to continue to experience losses in future periods.

Collectively,

this may impact our ability to implement our business strategy and adversely affect our financial condition.

This potentially

would have a negative impact on our share price.

also cannot make any assurances that we will be profitable or generate sufficient profits from operations in the future.

If our revenues

do not continue to grow or our gross margins deteriorate substantially, we are likely to continue to experience losses in future

Collectively, this may impact our ability to implement our business strategy and adversely affect our financial condition.

potentially would have a negative impact on our share price.

may become subject to additional regulation of CEA facilities.

engineering and design services are focused on facilities that grow a wide variety of crops that are subject to regulation by

the United States Food and Drug Administration and other federal, state or foreign agencies.

Changes to any regulations and laws

that could complicate the engineering of these CEA facilities, such as waste water treatment and electricity-related mandates,

make it possible that potential related enforcement could decrease the demand for our services, and in turn negatively impact

our revenues and business opportunities.

engineering and design services are focused on facilities that grow a wide variety of crops that are subject to regulation by the United

States Food and Drug Administration and other federal, state or foreign agencies.

Changes to any regulations and laws that could complicate

the engineering of these CEA facilities, such as waste water treatment and electricity-related mandates, make it possible that potential

related enforcement could decrease the demand for our services, and in turn negatively impact our revenues and business opportunities.

in our industry is intense.

are many competitors in the horticulture industry, and in particular the cannabis industry, including many who offer somewhat

categorically similar products and services as those offered by us.

There can be no guarantees that in the future other companies

will not enter this arena by developing products that are in direct competition with us.

We anticipate the presence as well as

entry of other companies in this market space and acknowledge that we may not be able to establish, or if established to maintain,

a competitive advantage.

Some of these companies may have longer operating histories, greater name recognition, larger client

bases and significantly greater financial, technical, sales and marketing resources.

This may allow them to respond more quickly

than us to market opportunities.

It may also allow them to devote greater resources to the marketing, promotion and sale of their

products and/or services.

These competitors may also adopt more aggressive pricing policies and make more attractive offers to

existing and potential clients, employees, strategic partners, distribution channels and advertisers.

Increased competition is

likely to result in price reductions, reduced gross margins and a potential loss of market share.

are many competitors in the horticulture industry, and in particular the cannabis industry, including many who offer somewhat categorically

similar products and services as those offered by us.

There can be no guarantees that in the future other companies will not enter this

arena by developing products that are in direct competition with us.

We anticipate the presence as well as entry of other companies in

this market space and acknowledge that we may not be able to establish, or if established to maintain, a competitive advantage.

of these companies may have longer operating histories, greater name recognition, larger client bases and significantly greater financial,

technical, sales and marketing resources.

This may allow them to respond more quickly than us to market opportunities.

It may also allow

them to devote greater resources to the marketing, promotion and sale of their products and/or services.

These competitors may also adopt

more aggressive pricing policies and make more attractive offers to existing and potential clients, employees, strategic partners, distribution

channels and advertisers.

Increased competition is likely to result in price reductions, reduced gross margins and a potential loss of

market share.

The COVID-19 pandemic could continue to

materially adversely affect our business, financial condition, results of operations, cash flows and day-to-day operations.

The outbreak of COVID-19,

a novel strain of coronavirus first identified in China, which has spread across the globe including the U.S., has had an adverse impact

on our operations and financial condition.

The response to this coronavirus by federal, state and local governments in the U.S.

in significant market and business disruptions across many industries and affecting businesses of all sizes.

This pandemic has also caused

significant stock market volatility and further tightened capital access for most businesses.

Given that the COVID-19 pandemic and its

disruptions are of an unknown duration, they could have an adverse effect on our liquidity and profitability.

At the onset of the pandemic,

it resulted in temporary delays in our projects, however, work on all such projects has resumed.

Other factors related to this coronavirus

that could negatively impact our ability to continue operations include the market demand for our products and services, our ability

to service the needs of our clients and prospects, potential contract cancellations, project scope reductions and project delays, our

ability to fulfill our current backlog, and the ability of our vendors to continue to provide us with product to fulfill our customers’

In light of these extenuating circumstances, there is no assurance that we will be successful in growing and maintaining our

business with our clients.

If our clients or prospects are unable to obtain project financing and we are unable to increase revenues,

or otherwise generate cash flows from operations, we will not be able to successfully execute on the various strategies and initiatives

we have set forth in this Report to grow our business.

The ultimate magnitude of

COVID-19, including the extent of its impact on our financial and operational results, which could be material, will depend on the length

of time that the pandemic continues, its effect on the demand for our products and our supply chain, the effect of governmental regulations

imposed in response to the pandemic, as well as uncertainty regarding all of the foregoing.

We cannot at this time predict the full impact

of the COVID-19 pandemic, but it could have a larger material adverse effect on our business, financial condition, results of operations

and cash flows beyond what is discussed within this Report.

are dependent upon third-party suppliers of products we sell.

are dependent on outside vendors for the products we sell.

For the year ended December 31, 2020, two vendors, Argus Control Systems

Limited (“Argus”), a provider of automated control systems, and Fluence Bioengineering, Inc.

(“Fluence”),

a provider of lighting systems, were particularly important to our integrated sales solutions.

Sales of Fluence’s LED lighting

systems accounted for 33% of our consolidated revenue for the year ended December 31, 2020.

We use Fluence LED systems in our

designs and then sell them to our clients as part of our overall package.

While we believe that there are sufficient sources of

supply available, if the third-party suppliers, such as Argus or Fluence, were to cease production or otherwise fail to supply

us with products in sufficient quantities on a timely basis and we were unable to contract on acceptable terms for these products

with alternative suppliers, our ability to sell these products would be materially adversely affected.

If a sole source supplier

was to go out of business, we may be unable to find a replacement for such source in a timely manner or at all.

If a sole source

supplier were to be acquired by a competitor, that competitor may elect not to sell to us in the future.

Any inability to secure

required products or to do so on appropriate terms could have a materially adverse impact on the business, financial condition,

results of operations or prospects of urban-gro.

We are dependent on outside

vendors for the products we sell.

For the year ended December 31, 2021, two vendors, Argus Control Systems Limited (“Argus”),

a provider of automated control systems, and Fluence Bioengineering, Inc.

(“Fluence”), a provider of lighting systems, were

particularly important to our integrated sales solutions.

We use Fluence as one of the LED lighting systems options, and

Argus as one of the environmental controls and fertigation systems options in our designs and then sell them to our clients

as part of our overall package.

While we believe that there are sufficient sources of supply available, if the third-party suppliers,

such as Argus or Fluence, were to cease production or otherwise fail to supply us with products in sufficient quantities on a timely

basis and we were unable to contract on acceptable terms for these products with alternative suppliers, our ability to sell these products

would be materially adversely affected.

If a sole source supplier was to go out of business, we may be unable to find a replacement for

such source in a timely manner or at all.

If a sole source supplier were to be acquired by a competitor, that competitor may elect not

to sell to us in the future.

Any inability to secure required products or to do so on appropriate terms could have a materially adverse

impact on the business, financial condition, results of operations or prospects of urban-gro.

indicated above, we continue to monitor the outbreak of the COVID-19 coronavirus.

Should the outbreak continue to become more

widespread, it could disrupt the businesses of our industry partners and third-party suppliers, which, in turn, could impact our

ability to procure equipment and raw materials from them and thereby negatively impact the business, financial condition, results

of operations or our prospects.

Should the outbreak continue to become more widespread,

it could disrupt the businesses of our industry partners and third-party suppliers, which, in turn, could impact our ability to procure

equipment and raw materials from them and thereby negatively impact the business, financial condition, results of operations or our prospects.

have historically been dependent on a small number of clients for a substantial portion of our revenue.

If we fail to retain or

expand our client relationships, or if a significant client were to terminate its relationship with us or reduce its purchases,

our revenue could decline significantly.

During the year ended

December 31, 2020, one client represented 25% of total revenue and another client represented 13% of total revenue.

During the year ended December 31, 2019, one client represented 21% of total revenue.

Substantially all of the revenue

derived from each of these separate clients were equipment sales.

Although we have been able to successfully generate substantial

sales to different clients over time, there can be no assurances that we will be able to continue to do this in the future.

Our operating results for the foreseeable future could continue to depend on substantial sales to a small number of clients.

clients have no purchase commitments and may cancel, change or delay purchases with little or no notice or penalty.

of this, our revenue could fluctuate materially and could be materially and disproportionately impacted by purchasing decisions

of any significant client.

There can be no assurances that clients who represented a substantial portion of our historical revenue

will continue to purchase products from us in the future, which could cause our revenue to decline materially and negatively

impact our financial condition and results of operations.

If we are unable to diversify our client base, we will continue

to be susceptible to risks associated with client concentration.

If we fail to retain or expand

our client relationships, or if a significant client were to terminate its relationship with us or reduce its purchases, our revenue

could decline significantly.

During the year ended December

31, 2021, one client represented 46% of total revenue.

During the year ended December 31, 2020 the same client represented

25% of total revenue and another client represented 13% of total revenue.

A substantial amount of the revenue derived from

each of these separate clients were equipment sales.

Although we have been able to successfully generate substantial sales to different

clients over time, there can be no assurances that we will be able to continue to do this in the future.

Our operating results for the

foreseeable future could continue to depend on substantial sales to a small number of clients.

Our clients have no purchase commitments

and may cancel, change or delay purchases with little or no notice or penalty.

As a result of this, our revenue could fluctuate materially

and could be materially and disproportionately impacted by purchasing decisions of any significant client.

There can be no assurances

that clients who represented a substantial portion of our historical revenue will continue to purchase products from us in the future,

which could cause our revenue to decline materially and negatively impact our financial condition and results of operations.

unable to diversify our client base, we will continue to be susceptible to risks associated with client concentration.

business is dependent on our clients obtaining appropriate licenses from various licensing agencies.

There can be no assurance

that any or all licenses necessary for our clients to operate their businesses will be obtained, retained or renewed.

If a licensing

body were to determine that one of our clients had violated applicable rules and regulations, there is a risk the license granted

to that client could be revoked, which could adversely affect future sales to that client and our operations.

There can be no

assurance that our existing clients will be able to retain their licenses going forward, or that new licenses will be granted

to existing and new market entrants.

security risks, data protection breaches, cyber-attacks and systems integration issues could disrupt our internal operations or

services provided to clients.

computer programmers and hackers may be able to penetrate our network security and misappropriate or compromise our confidential

information or that of third parties, create system disruptions or cause shutdowns.

Computer programmers and hackers also may

be able to develop and deploy viruses, worms, and other malicious software programs that attack or otherwise exploit any security

vulnerabilities of the products that we may sell in the future.

Such disruptions could adversely impact our ability to fulfill

orders and interrupt other processes.

Delayed sales, lower profits, or lost clients resulting from these disruptions could adversely

affect our financial results, stock price and reputation.

There can be no assurance that any

or all licenses necessary for our clients to operate their businesses will be obtained, retained or renewed.

If a licensing body were

to determine that one of our clients had violated applicable rules and regulations, there is a risk the license granted to that client

could be revoked, which could adversely affect future sales to that client and our operations.

There can be no assurance that our existing

clients will be able to retain their licenses going forward, or that new licenses will be granted to existing and new market entrants.

security risks, data protection breaches, cyber-attacks and systems integration issues could disrupt our internal operations or services

provided to clients.

computer programmers and hackers may be able to penetrate our network security and misappropriate or compromise our confidential information

or that of third parties, create system disruptions or cause shutdowns.

Computer programmers and hackers also may be able to develop

and deploy viruses, worms, and other malicious software programs that attack or otherwise exploit any security vulnerabilities of the

products that we may sell in the future.

Such disruptions could adversely impact our ability to fulfill orders and interrupt other processes.

Delayed sales, lower profits, or lost clients resulting from these disruptions could adversely affect our financial results, stock price

and reputation.

We may be unable to recoup the funds that were taken from us in fraudulent

wire transfers or our expenses related to efforts to recover such funds.

While we have been advised by counsel

that we have acted in good faith and followed appropriate policies and governance and that our bank is at fault, we may not be able to

recoup the entire amount taken from us or related expenses with respect to the wire fraud described in Part I, Item 3, “Legal Proceedings.”

Our attempts to recoup these funds could be very costly and could distract our management from focusing on operating our business.

of the date of this report, we have successfully recouped $0.9 million of

the $5.1 million lost.

may be forced to litigate to defend our intellectual property rights, or to defend against claims by third parties against urban-gro

relating to intellectual property rights.

may be forced to litigate to enforce or defend our intellectual property rights, to protect our trade secrets or to determine

the validity and scope of other parties’

proprietary rights.

Any such litigation could be very costly and could distract

our management from focusing on operating our business.

may be forced to litigate to enforce or defend our intellectual property rights, to protect our trade secrets or to determine the validity

and scope of other parties’ proprietary rights.

Any such litigation could be very costly and could distract our management from

focusing on operating our business.

The existence and/or outcome of any such litigation could harm our business.

2 unchanged sentences

of our business strategy includes pursuing synergistic acquisitions.

We have expanded, and plan to continue to expand, our business

by making strategic acquisitions and regularly seeking suitable acquisition targets to enhance our growth.

Material acquisitions,

dispositions and other strategic transactions involve a number of risks, including:

(i) the potential disruption of our ongoing

(ii) the distraction of management away from the ongoing oversight of our existing business activities;

(iii) incurring

additional indebtedness;

(iv) the anticipated benefits and cost savings of those transactions not being realized fully, or at

all, or taking longer to realize than anticipated;

We have expanded, and plan to continue to expand, our business by

making strategic acquisitions and regularly seeking suitable acquisition targets to enhance our growth.

Material acquisitions, dispositions

and other strategic transactions involve a number of risks, including:

(i) the potential disruption of our ongoing business;

distraction of management away from the ongoing oversight of our existing business activities;

(iii) incurring indebtedness;

(iv) the anticipated benefits and cost savings of those transactions not being realized fully, or at all, or taking longer to realize

than anticipated;

(v) an increase in the scope and complexity of our operations;

loss or reduction of control over certain of our assets.

and (vi) the loss or reduction of control over certain

of our assets.

pursuit of acquisitions may pose certain risks to us.

We may not be able to identify acquisition candidates that fit our criteria

for growth and profitability.

Even if we are able to identify such candidates, we may not be able to acquire them on terms or

financing satisfactory to us.

We will incur expenses and dedicate attention and resources associated with the review of acquisition

opportunities, whether or not we consummate such acquisitions.

We may not be able to identify acquisition candidates that fit our criteria for

growth and profitability.

Even if we are able to identify such candidates, we may not be able to acquire them on terms or financing satisfactory

We will incur expenses and dedicate attention and resources associated with the review of acquisition opportunities, whether or

not we consummate such acquisitions.

Additionally,

even if we are able to acquire suitable targets on agreeable terms, we may not be able to successfully integrate their operations

Achieving the anticipated benefits of any acquisition will depend in significant part upon whether we integrate such

acquired businesses in an efficient and effective manner.

We may not be able to achieve the anticipated operating and cost synergies

or long-term strategic benefits of our acquisitions within the anticipated timing or at all.

The benefits from any acquisition

will be offset by the costs incurred in integrating the businesses and operations.

We may also assume liabilities in connection

with acquisitions to which we would not otherwise be exposed.

An inability to realize any or all of the anticipated synergies

or other benefits of an acquisition as well as any delays that may be encountered in the integration process, which may delay

the timing of such synergies or other benefits, could have an adverse effect on our business, results of operations and financial

even if we are able to acquire suitable targets on agreeable terms, we may not be able to successfully integrate their operations with

Achieving the anticipated benefits of any acquisition will depend in significant part upon whether we integrate such acquired businesses

in an efficient and effective manner.

We may not be able to achieve the anticipated operating and cost synergies or long-term strategic

benefits of our acquisitions within the anticipated timing or at all.

The benefits from any acquisition will be offset by the costs incurred

in integrating the businesses and operations.

We may also assume liabilities in connection with acquisitions to which we would not otherwise

An inability to realize any or all of the anticipated synergies or other benefits of an acquisition as well as any delays

that may be encountered in the integration process, which may delay the timing of such synergies or other benefits, could have an adverse

effect on our business, results of operations and financial condition.

Related to the Cannabis Industry

business is focused on providing engineering design, and equipment integration into facilities prior to the facility becoming

We do not know for certain how much of our revenues to date have been generated from clients in the legal cannabis

however, we believe the majority of our revenues to date have been generated from clients that operate in the legal

cannabis industry.

are broadening our market reach beyond the legal cannabis industry and are placing a substantial sales effort on expansion into

the rapidly growing non-cannabis CEA vertical farming segment.

However, on a historic basis, we believe our clients to whom we

provide facility engineering design and equipment integration prior to the facility becoming operational have primarily been in

the legal cannabis industry.

In addition to selling to these clients, we also sell our equipment solutions to third parties, such

as general contractors, and other intermediaries, like equipment leasing companies.

While we do not know for certain how much

of these solutions are resold into the legal cannabis industry, we believe that to date the majority of these solutions have been

resold into the legal cannabis industry.

that the non-cannabis CEA segment is gaining strong momentum, and since most all of the equipment systems that we sell originate

in the general horticulture industry and are agnostic to the crop grown in the facility, we believe that the proportion of non-cannabis

revenues will increase.

However, we do not control to who such third parties resell our solutions, and notwithstanding our expansion

plans, a decrease in demand in the legal cannabis industry could have a material adverse effect on our revenues and the success

of our business.

cannabis industry is an emerging industry and has only been legalized in some states and remains illegal in others and under U.S.

federal law, making it difficult to accurately forecast the demand for our solutions in this specific industry, and losing clients

from this industry may have a material adverse effect on our revenues and the success of our business.

cannabis industry is immature in the United States and has only been legalized in some states and remains illegal in others and

To date, the majority of our revenues have

come from providing architecture and engineering design services and selling equipment systems

into facilities prior to the facility becoming operational.

The majority of our revenues to date have been generated from

clients that operate in the legal cannabis industry.

We are broadening our market

reach beyond the legal cannabis industry and are placing a substantial sales effort on expansion into the rapidly growing non-cannabis

CEA vertical farming segment.

However, on a historic basis, the majority of our clients to whom we provide facility architecture and

engineering design services and sell equipment systems prior to the facility becoming operational have primarily

been in the legal cannabis industry.

In addition to selling directly to these clients, we also sell our equipment solutions to

third parties, such as general contractors and other intermediaries, like equipment leasing companies.

The majority of these solutions

have been resold into the legal cannabis industry.

Now that the non-cannabis CEA

segment is gaining strong momentum, and since most all of the equipment systems that we sell originate in the general horticulture industry

and are agnostic to the crop grown in the facility, we believe that the proportion of non-cannabis revenues will increase.

a decrease in demand in the legal cannabis industry could have a material adverse effect on our revenues and the success of our business.

The cannabis industry is an emerging industry

and has only been legalized in some states and remains illegal in others and under U.S.

federal law, making it difficult to accurately

forecast the demand for our solutions in this specific industry.

Losing clients from this industry may have a material adverse

effect on our revenues and the success of our business.

cannabis industry is not mature in the United States and has only been legalized in some states and remains illegal in others

and under U.S.

federal law, making it difficult to accurately predict and forecast the demand for our solutions.

of Justice (“DOJ”) did take action against the cannabis industry, those of our clients operating in the legal cannabis

industry would be lost to us.

of Justice (“DOJ”) did take action against the cannabis industry, those of our clients operating in the legal cannabis industry

would be lost to us.

analyze this risk, we are relying heavily upon the various U.S.

federal governmental memos issued in the past (including the memorandum

issued by the DOJ on October 19, 2009, known as the “Ogden Memorandum”, the memorandum issued by the DOJ on August

29, 2013, known as the “Cole Memorandum”

and other guidance), to remain acceptable to those state and federal entities

that regulate, enforce, or choose to defer enforcement of certain current regulations regarding cannabis and that the U.S.

government will not change its attitude to those practitioners in the cannabis industry as long as they comply with their state

and local jurisdictional rules and authorities.

legal cannabis industry is not yet well-developed, and many aspects of this industry’s development and evolution cannot

be accurately predicted, and therefore losing any clients may have a material adverse effect on our business.

While we have attempted

to identify our business risks in the legal cannabis industry, you should carefully consider that there are other risks that cannot

be foreseen or are not described in this Report, which could materially and adversely affect our business and financial performance.

issued by the DOJ on October 19, 2009, known as the “Ogden Memorandum”, the memorandum issued by the DOJ on August 29, 2013,

known as the “Cole Memorandum” and other guidance), to remain acceptable to those state and federal entities that regulate,

enforce, or choose to defer enforcement of certain current regulations regarding cannabis and that the U.S.

federal government will not

change its attitude to those practitioners in the cannabis industry as long as they comply with their state and local jurisdictional

rules and authorities.

legal cannabis industry is not yet well-developed, and many aspects of this industry’s development and evolution cannot be accurately

predicted, and therefore losing any clients may have a material adverse effect on our business.

While we have attempted to identify our

business risks in the legal cannabis industry, you should carefully consider that there are other risks that cannot be foreseen or are

not described in this Report, which could materially and adversely affect our business and financial performance.

is heightened scrutiny by Canadian regulatory authorities related to the cannabis industry.

existing operations in the United States, and any future operations or investments, may become the subject of heightened scrutiny

by regulators and other authorities in Canada.

As a result, we may be subject to significant direct and indirect interaction with

public officials.

No assurance can be provided that this heightened scrutiny will not in turn lead to the imposition of certain

restrictions on our ability to operate or invest in the United States, in addition to those described herein.

had been reported in Canada that the Canadian Depository for Securities Limited considered a policy shift that would see its subsidiary,

CDS, refuse to settle trades for cannabis issuers or issuers with cannabis related activities that have investments in the United

CDS is Canada’s central securities depository, clearing and settling trades in the Canadian equity, fixed income

and money markets.

The TMX Group, the owner and operator of CDS, subsequently issued a statement on August 17, 2017 reaffirming

that there is no CDS ban on the clearing of securities of issuers with cannabis-related activities in the United States, despite

media reports to the contrary and that the TMX Group was working with regulators to arrive at a solution that will clarify this

matter, which would be communicated at a later time.

On February 8, 2018, following discussions with the Canadian Securities Administrators

and recognized Canadian securities exchanges, the TMX Group announced the signing of the TMX Memorandum of Understanding (“MOU”)

with Aequitas NEO Exchange Inc., the Canadian Securities Exchange (“CSE”), the Toronto Stock Exchange, and the TSXV.

The TMX MOU outlines the parties’

understanding of Canada’s regulatory framework applicable to the rules, procedures,

and regulatory oversight of the exchanges and CDS as it relates to issuers with cannabis-related activities in the United States.

The MOU confirms, with respect to the clearing of listed securities, that CDS relies on the exchanges to review the conduct of

listed issuers.

As a result, there is no CDS ban on the clearing of securities of issuers with cannabis-related activities in

the United States.

However, there can be no guarantee that this approach to regulation will continue in the future.

ban were to be implemented at a time when our securities are listed on a stock exchange, it would have a material adverse effect

on the ability of holders of our securities to make and settle trades.

In particular, our securities would become highly illiquid

until an alternative was implemented, and investors would have no ability to effect a trade of our securities through the facilities

marijuana remains illegal under United States federal law, it is possible that we may have to stop providing products and services

to companies who are engaged in marijuana cultivation and other marijuana-related activities.

is currently classified as a Schedule I controlled substance under the Controlled Substances Act and is illegal under United States

It is illegal under United States federal law to grow, cultivate, sell or possess marijuana for any purpose or to

assist or conspire with those who do so.

existing operations in the United States, and any future operations or investments, may become the subject of heightened scrutiny by

regulators and other authorities in Canada.

As a result, we may be subject to significant direct and indirect interaction with public

No assurance can be provided that this heightened scrutiny will not in turn lead to the imposition of certain restrictions

on our ability to operate or invest in the United States.

On February 8, 2018, following discussions with the Canadian Securities Administrators and recognized Canadian securities

exchanges, the TMX Group announced the signing of the TMX Memorandum of Understanding (“MOU”) with Aequitas NEO Exchange

Inc., the Canadian Securities Exchange (“CSE”), the Toronto Stock Exchange, and the TSXV.

The TMX MOU outlines the parties’

understanding of Canada’s regulatory framework applicable to the rules, procedures, and regulatory oversight of the exchanges and

CDS as it relates to issuers with cannabis-related activities in the United States.

The MOU confirms, with respect to the clearing of

listed securities, that CDS relies on the exchanges to review the conduct of listed issuers.

As a result, there is no CDS ban on the

clearing of securities of issuers with cannabis-related activities in the United States.

However, there can be no guarantee that this

approach to regulation will continue in the future.

If such a ban were to be implemented at a time when our securities are listed on

a stock exchange, it would have a material adverse effect on the ability of holders of our securities to make and settle trades.

In particular,

our securities would become highly illiquid until an alternative was implemented, and investors would have no ability to effect a trade

of our securities through the facilities of the CSE.

marijuana remains illegal under United States federal law, it is possible that we may have to stop providing products and services to

companies who are engaged in marijuana cultivation and other marijuana-related activities.

is currently classified as a Schedule I controlled substance under the Controlled Substances Act and is illegal under United States federal

It is illegal under United States federal law to grow, cultivate, sell or possess marijuana for any purpose or to assist or conspire

with those who do so.

Additionally, 21 U.S.C.

856 makes it illegal to “knowingly open, lease, rent, use,

or maintain any place, whether permanently or temporarily, for the purpose of manufacturing, distributing, or using any controlled

substance.”

Even in those states in which the use of marijuana has been authorized under state law, its use remains a violation

of federal law.

Since federal law criminalizing the use of marijuana is not preempted by state laws that legalize its use, strict

enforcement of federal law regarding marijuana would likely result in the inability of our clients that are involved in the cannabis

industry to proceed with their operations, which would adversely affect our operations.

856 makes it illegal to “knowingly open, lease, rent, use, or maintain any place,

whether permanently or temporarily, for the purpose of manufacturing, distributing, or using any controlled substance.” Even in

those states in which the use of marijuana has been authorized under state law, its use remains a violation of federal law.

Since federal

law criminalizing the use of marijuana is not preempted by state laws that legalize its use, strict enforcement of federal law regarding

marijuana would likely result in the inability of our clients that are involved in the cannabis industry to proceed with their operations,

which would adversely affect our operations.

solutions are used by cannabis growers.

1 unchanged sentence

against any supplier of equipment that might be used for cannabis growing, law enforcement authorities, in their attempt to regulate

the illegal use of marijuana, may seek to bring an action or actions against us under the Controlled Substances Act for assisting

or conspiring with persons engaged in the cultivation of marijuana.

is also a risk that our activities could be deemed to be facilitating the selling or distribution of cannabis in violation of

the Controlled Substances Act.

Although federal authorities have not focused their resources on such tangential or secondary violations

of the Controlled Substances Act, nor have they threatened to do so, with respect to the sale of equipment that might be used

by cannabis cultivators, or with respect to any supplies marketed to participants in the medical and recreational cannabis industry,

if the federal government were to change its practices, or were to expend its resources investigating and prosecuting providers

of equipment that could be usable by participants in the medical or recreational cannabis industry, such actions could have a

materially adverse effect on our operations, our clients that operate in the cannabis industry, or the sales of our products and

the illegal use of marijuana, may seek to bring an action or actions against us under the Controlled Substances Act for assisting or

conspiring with persons engaged in the cultivation of marijuana.

is also a risk that our activities could be deemed to be facilitating the selling or distribution of cannabis in violation of the Controlled

Substances Act.

Although federal authorities have not focused their resources on such tangential or secondary violations of the Controlled

Substances Act, nor have they threatened to do so, with respect to the sale of equipment that might be used by cannabis cultivators,

or with respect to any supplies marketed to participants in the medical and recreational cannabis industry, if the federal government

were to change its practices, or were to expend its resources investigating and prosecuting providers of equipment that could be usable

by participants in the medical or recreational cannabis industry, such actions could have a materially adverse effect on our operations,

our clients that operate in the cannabis industry, or the sales of our products and services.

a company with clients operating in the cannabis industry, we face many particular and evolving risks associated with that industry,

including uncertainty of United States federal enforcement and the need to renew temporary safeguards.

January 4, 2018, former Attorney General Sessions rescinded the previously issued memoranda (known as the Cole Memorandum) from

the DOJ that had de-prioritized the enforcement of federal law against marijuana users and businesses that comply with state marijuana

laws, adding uncertainty to the question of how the U.S.

January 4, 2018, former Attorney General Sessions rescinded the previously issued memoranda (known as the Cole Memorandum) from the DOJ

that had de-prioritized the enforcement of federal law against marijuana users and businesses that comply with state marijuana laws,

adding uncertainty to the question of how the U.S.

federal government will choose to enforce federal laws regarding marijuana.

Former Attorney General Sessions issued a memorandum to all United States Attorneys in which the DOJ affirmatively rescinded the

previous guidance as to marijuana enforcement, calling such guidance “unnecessary.”

This one-page memorandum was vague

in nature, stating that federal prosecutors should use established principles in setting their law enforcement priorities.

previous administrations, the DOJ indicated that those users and suppliers of medical marijuana who complied with state laws,

which required compliance with certain criteria, would not be prosecuted.

As a result, it is now unclear if the DOJ will seek

to enforce the Controlled Substances Act against those users and suppliers who comply with state marijuana laws.

Attorney General Sessions’

rescission of the Cole Memorandum, the Department of the Treasury, Financial Crimes Enforcement

Network, has not rescinded the “FinCEN Memo”

dated February 14, 2014, which de-prioritizes enforcement of the Bank

Secrecy Act against financial institutions and marijuana related businesses which utilize them.

This memorandum appears

to be a standalone document and is presumptively still in effect.

At any time, however, the Department of the Treasury, Financial

Crimes Enforcement Network, could elect to rescind the FinCEN Memo.

This would make it more difficult for our clients and potential

clients to access the U.S.

banking systems and conduct financial transactions, which would adversely affect our operations.

2014, Congress passed a spending bill (“2015 Appropriations Bill”) containing a provision (“Appropriations Rider”)

blocking federal funds and resources allocated under the 2015 Appropriations Bill from being used to “prevent such States

from implementing their own State medical marijuana law.”

The Appropriations Rider seemed to have prohibited the federal

government from interfering with the ability of states to administer their medical marijuana laws, although it did not codify

federal protections for medical marijuana patients and producers.

Moreover, despite the Appropriations Rider, the Justice Department

maintains that it can still prosecute violations of the federal marijuana ban and continue cases already in the courts.

Additionally,

the Appropriations Rider must be re-enacted every year.

While it was continued in 2016, 2017, 2018, 2019 and 2020, and remains

in effect, continued re-authorization of the Appropriations Rider cannot be guaranteed.

If the Appropriation Rider is no longer

in effect, the risk of federal enforcement and override of state marijuana laws would increase.

Attorney General Sessions issued a memorandum to all United States Attorneys in which the DOJ affirmatively rescinded the previous guidance

as to marijuana enforcement, calling such guidance “unnecessary.” This one-page memorandum was vague in nature, stating that

federal prosecutors should use established principles in setting their law enforcement priorities.

Under previous administrations, the

DOJ indicated that those users and suppliers of medical marijuana who complied with state laws, which required compliance with certain

criteria, would not be prosecuted.

As a result, it is now unclear if the DOJ will seek to enforce the Controlled Substances Act against

those users and suppliers who comply with state marijuana laws.

Attorney General Sessions’ rescission of the Cole Memorandum, the Department of the Treasury, Financial Crimes Enforcement Network,

has not rescinded the “FinCEN Memo” dated February 14, 2014, which de-prioritizes enforcement of the Bank Secrecy Act against

financial institutions and marijuana related businesses which utilize them.

This memorandum appears to be a standalone document and is

presumptively still in effect.

At any time, however, the Department of the Treasury, Financial Crimes Enforcement Network, could elect

to rescind the FinCEN Memo.

This would make it more difficult for our clients and potential clients to access the U.S.

banking systems

and conduct financial transactions, which would adversely affect our operations.

2014, Congress passed a spending bill (“2015 Appropriations Bill”) containing a provision (“Appropriations Rider”)

blocking federal funds and resources allocated under the 2015 Appropriations Bill from being used to “prevent such States from

implementing their own State medical marijuana law.” The Appropriations Rider seemed to have prohibited the federal government

from interfering with the ability of states to administer their medical marijuana laws, although it did not codify federal protections

for medical marijuana patients and producers.

Moreover, despite the Appropriations Rider, the Justice Department maintains that it can

still prosecute violations of the federal marijuana ban and continue cases already in the courts.

Additionally, the Appropriations Rider

must be re-enacted every year.

While it was continued in 2016, 2017, 2018, 2019, 2020 and 2021, and remains in effect, continued

re-authorization of the Appropriations Rider cannot be guaranteed.

If the Appropriation Rider is no longer in effect, the risk of federal

enforcement and override of state marijuana laws would increase.

legislative development beneficial to our operations is not guaranteed.

other things, the business of our clients in the cannabis industry involves the cultivation, distribution, manufacture, storage,

transportation and/or sale of medical and adult use cannabis products in compliance with applicable state law.

The success of

our business with respect to these clients depends on the continued development of the cannabis industry and the activity of commercial

business and government regulatory agencies within the industry.

The continued development of the cannabis industry is dependent

upon continued legislative and regulatory authorization of cannabis at the state level and a continued laissez-faire approach

by federal enforcement agencies.

Any number of factors could slow or halt progress in this area.

Further regulatory progress beneficial

to the industry cannot be assured.

While there may be ample public support for legislative action, numerous factors impact the

legislative and regulatory process, including election results, scientific findings or general public events.

Any one of these

factors could slow or halt progressive legislation relating to cannabis and the current tolerance for the use of cannabis by consumers,

which could adversely affect our operations.

other things, the business of our clients in the cannabis industry involves the cultivation, distribution, manufacture, storage, transportation

and/or sale of cannabis products in compliance with applicable state law.

The success of our business with respect

to these clients depends on the continued development of the cannabis industry and the activity of commercial business and government

regulatory agencies within the industry.

The continued development of the cannabis industry is dependent upon continued legislative and

regulatory authorization of cannabis at the state level and a continued laissez-faire approach by federal enforcement agencies.

of factors could slow or halt progress in this area.

Further regulatory progress beneficial to the industry cannot be assured.

there may be ample public support for legislative action, numerous factors impact the legislative and regulatory process, including election

results, scientific findings or general public events.

Any one of these factors could slow or halt progressive legislation relating to

cannabis and the current tolerance for the use of cannabis by consumers, which could adversely affect our operations.

cannabis industry could face strong opposition from other industries.

believe that established businesses in other industries may have a strong economic interest in opposing the development of the

cannabis industry.

Cannabis may be seen by companies in other industries as an attractive alternative to their products, including

recreational marijuana as an alternative to alcohol, and medical marijuana as an alternative to various commercial pharmaceuticals.

Many industries that could view the emerging cannabis industry as an economic threat are well established, with vast economic

and United States federal and state lobbying resources.

It is possible that companies within these industries could use their

resources to attempt to slow or reverse legislation legalizing cannabis.

Any inroads these companies make in halting or impeding

legislative initiatives that would be beneficial to the cannabis industry could have a detrimental impact on our clients and,

in turn on our operations.

believe that established businesses in other industries may have a strong economic interest in opposing the development of the cannabis

Cannabis may be seen by companies in other industries as an attractive alternative to their products, including recreational

marijuana as an alternative to alcohol, and medical marijuana as an alternative to various commercial pharmaceuticals.

Many industries

that could view the emerging cannabis industry as an economic threat are well established, with vast economic and United States federal

and state lobbying resources.

It is possible that companies within these industries could use their resources to attempt to slow or reverse

legislation legalizing cannabis.

Any inroads these companies make in halting or impeding legislative initiatives that would be beneficial

to the cannabis industry could have a detrimental impact on our clients and, in turn on our operations.

legality of marijuana could be reversed in one or more states.

voters or legislatures of states in which marijuana has already been legalized could potentially repeal applicable laws which

permit the operation of both medical and retail marijuana businesses.

These actions might force us to cease operations in one

or more states entirely.

voters or legislatures of states in which marijuana has already been legalized could potentially repeal applicable laws which permit

the operation of both medical and retail marijuana businesses.

These actions might force us to cease operations in one or more states

legislation and evolving interpretations of law, which could negatively impact our clients and, in turn, our operations.

and regulations affecting the medical and adult-use marijuana industry are constantly changing, which could detrimentally affect

our clients involved in that industry and, in turn, our operations.

Local, state and federal marijuana laws and regulations are

often broad in scope and subject to constant evolution and inconsistent interpretations, which could require our clients and ourselves

to incur substantial costs associated with modification of operations to ensure compliance.

In addition, violations of these laws,

or allegations of such violations, could disrupt our clients’

business and result in a material adverse effect on our operations.

In addition, it is possible that regulations may be enacted in the future that will limit the amount of cannabis growth or related

products that our commercial clients are authorized to produce.

We cannot predict the nature of any future laws, regulations,

interpretations or applications, nor can it determine what effect additional governmental regulations or administrative policies

and procedures, when and if promulgated, could have on our operations.

and regulations affecting the medical and adult-use marijuana industry are constantly changing, which could detrimentally affect our

clients involved in that industry and, in turn, our operations.

Local, state and federal marijuana laws and regulations are often broad

in scope and subject to constant evolution and inconsistent interpretations, which could require our clients and ourselves to incur substantial

costs associated with modification of operations to ensure compliance.

In addition, violations of these laws, or allegations of such

violations, could disrupt our clients’ business and result in a material adverse effect on our operations.

In addition, it is possible

that regulations may be enacted in the future that will limit the amount of cannabis growth or related products that our commercial clients

are authorized to produce.

We cannot predict the nature of any future laws, regulations, interpretations or applications, nor can we

determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could

have on our operations.

scrutiny of the cannabis industry may negatively impact our ability to raise additional capital.

1 unchanged sentence

These laws and regulations are rapidly evolving and subject to change with minimal notice.

Regulatory changes may adversely affect

our profitability or cause us to cease operations entirely.

The cannabis industry may come under the scrutiny or further scrutiny

by the United States Food and Drug Administration, the SEC, the DOJ, the Financial Industry Regulatory Authority or other federal,

state or nongovernmental regulatory authorities or self-regulatory organizations that supervise or regulate the production, distribution,

sale or use of cannabis for medical or nonmedical purposes in the United States.

It is impossible to determine the extent of the

impact of any new laws, regulations or initiatives that may be proposed, or whether any proposals will become law.

The regulatory

uncertainty surrounding the industry that we service may adversely affect our business and operations, including without limitation,

the costs to remain compliant with applicable laws and the impairment of our ability to raise additional capital.

Regulatory changes may adversely affect our

profitability or cause us to cease operations entirely.

The cannabis industry may come under the scrutiny or further scrutiny by the

United States Food and Drug Administration, the SEC, the DOJ, the Financial Industry Regulatory Authority or other federal, state or

nongovernmental regulatory authorities or self-regulatory organizations that supervise or regulate the production, distribution, sale

or use of cannabis for medical or nonmedical purposes in the United States.

It is impossible to determine the extent of the impact of

any new laws, regulations or initiatives that may be proposed, or whether any proposals will become law.

The regulatory uncertainty surrounding

the industry that we service may adversely affect our business and operations, including without limitation, the costs to remain compliant

with applicable laws and the impairment of our ability to raise additional capital.

regulations could limit access to banking services.

the use of marijuana is illegal under federal law, federally chartered banks will not accept deposit funds from businesses involved

with marijuana.

Consequently, businesses involved in the cannabis industry often have trouble finding a bank willing to accept

their business.

The inability to open bank accounts may make it difficult for our clients in the cannabis industry to operate

and their reliance on cash can result in a heightened risk of theft, which could harm their businesses and, in turn, harm our

Additionally, some courts have denied marijuana-related businesses bankruptcy protection, thus, making it very difficult

for lenders to recoup their investments, which may limit the willingness of banks to lend to our clients and to us.

A drop in the retail pri ce

of cannabis products may negatively impact our business.

fluctuations in economic and market conditions that impact the prices of commercially grown cannabis, such as increases in the

supply of cannabis and decreases in demand for cannabis, could have a negative impact on our clients that are cannabis producers,

and therefore could negatively impact our business.

the use of marijuana is illegal under federal law, federally chartered banks will not accept deposit funds from businesses involved with

Consequently, businesses involved in the cannabis industry often have trouble finding a bank willing to accept their business.

The inability to open bank accounts may make it difficult for our clients in the cannabis industry to operate and their reliance on cash

can result in a heightened risk of theft, which could harm their businesses and, in turn, harm our business.

Additionally, some courts

have denied marijuana-related businesses bankruptcy protection, thus, making it very difficult for lenders to recoup their investments,

which may limit the willingness of banks to lend to our clients and to us.

drop in the retail price of cannabis products may negatively impact our business.

fluctuations in economic and market conditions that impact the prices of commercially grown cannabis, such as increases in the supply

of cannabis and decreases in demand for cannabis, could have a negative impact on our clients that are cannabis producers, and therefore

could negatively impact our business.

contracts may not be legally enforceable in the United States.

2 unchanged sentences

federal law and under some state laws.

As a result, we may face difficulties

in enforcing our contracts in U.S.

As a result, we may face difficulties in enforcing

our contracts in U.S.

federal and certain state courts.

Related to Ownership of Our Common Stock

active, liquid trading market for our common stock may not develop in the future, and as a result, you may not be able to sell

your common stock at an attractive price, or at all.

to the completion of the initial public offering of our common stock in February 2021, shares of our common stock were quoted

on the OTC Markets Group, Inc.

OTCQX Marketplace under the symbol “UGRO.”

Trading on the OTCQX marketplace was infrequent

and in limited volume.

Although our shares are now listed on the Nasdaq Capital Market, an active trading market for shares of

our common stock may never develop or be sustained.

If an active trading market does not develop, you may have difficulty selling

your shares of common stock at an attractive price, or at all.

An inactive market may also impair our ability to raise capital

by selling our common stock and may impair our ability to expand our business by using our common stock as consideration in an

Our stock price could be extremely volatile.

you may not be able to resell your shares at or above the price you paid for them.

Even if an active

trading market for our common stock develops, the market price of our common stock may be highly volatile and could be subject

to wide fluctuations.

Volatility in the market price of our common stock, as well as general economic, market or political conditions,

may prevent you from being able to sell your shares at or above the price you paid for your shares and may otherwise negatively

affect the liquidity of our common stock.

You may experience a decrease, which could be substantial, in the value of your stock,

including decreases unrelated to our operating performance or prospects, and you could lose part or all of your investment.

price of our common stock has been, and could continue to be, subject to wide fluctuations in response to a number of factors,

including those described elsewhere in this Report and others such as:

stock price could be extremely volatile.

As a result, you may not be able to resell your shares at or above the price you paid for them.

The market price of our

common stock may be highly volatile and could be subject to wide fluctuations.

Volatility in the market price of our common stock, as

well as general economic, market or political conditions, may prevent you from being able to sell your shares at or above the price you

paid for your shares and may otherwise negatively affect the liquidity of our common stock.

You may experience a decrease, which could

be substantial, in the value of your stock, including decreases unrelated to our operating performance or prospects, and you could lose

part or all of your investment.

The price of our common stock has been, and could continue to be, subject to wide fluctuations in response

to a number of factors, including those described elsewhere in this Report and others such as:

effect of the COVID-19 pandemic on our business and operations;

3 unchanged sentences

on significant clients and third-party suppliers;

the ability of our principal stockholders to

significantly influence or control matters requiring a stockholder

ability to successfully identify and complete acquisitions and effectively integrate those acquisitions into our operations;

indebtedness and potential increases in our indebtedness;

actual or anticipated operating and financial results, including how those results vary from the expectations of management,

securities analysts and investors;

in financial estimates or publication of research reports and recommendations by financial analysts or actions taken by rating

agencies with respect to us or other industry participants;

actual or anticipated operating and financial results, including how those results vary from the expectations of management, securities

analysts and investors;

in financial estimates or publication of research reports and recommendations by financial analysts or actions taken by rating agencies

with respect to us or other industry participants;

in our business or operations or our industry sectors generally;

future offerings by us of our common stock;

coordinated trading activities or large derivative positions in our common stock, for example, a “short squeeze”

(a short squeeze occurs when a number of investors take a short position in a stock and have to buy the borrowed securities

to close out the position at a time that other short sellers of the same security also want to close out their positions,

resulting in a surge in stock prices, i.e., demand is greater than supply for the stock sold short);

coordinated trading activities or large derivative positions in our common stock, for example, a “short squeeze” (a short

squeeze occurs when a number of investors take a short position in a stock and have to buy the borrowed securities to close out the

position at a time that other short sellers of the same security also want to close out their positions, resulting in a surge in

stock prices, i.e., demand is greater than supply for the stock sold short);

or regulatory changes affecting our industry generally or our business and operations specifically;

2 unchanged sentences

of strategic developments, acquisitions, restructurings, dispositions, financings and other material events by us or our competitors;

by our current stockholders, including future sales of common shares by existing stockholders, including our

directors and executive officers;

by our current stockholders, including future sales of common shares by existing stockholders, including our directors and executive

or final regulatory changes or developments;

or pending regulatory investigations, proceedings, or litigation that may involve or affect us;

other factors described under Part I, Item 1A “Risk Factors.”

response to any one or more of these events, the market price of shares of our common stock could decrease significantly.

past, securities class action litigation has often been initiated against companies following periods of volatility in their stock

This type of litigation could result in substantial costs and divert our management’s attention and resources and

could also require us to make substantial payments to satisfy judgments or to settle litigation.

securities class action litigation has often been initiated against companies following periods of volatility in their stock price.

type of litigation could result in substantial costs and divert our management’s attention and resources and could also require

us to make substantial payments to satisfy judgments or to settle litigation.

may be diluted by future issuances of preferred stock or additional common stock in connection with our incentive plans, acquisitions

or otherwise;

future sales of such shares in the public market, or the expectations that such sales may occur, could lower our

certificate of incorporation authorizes us to issue shares of our common stock and options, rights, warrants and appreciation

rights relating to our common stock for the consideration and on the terms and conditions established by our Board of Directors

(the “Board”) in its sole discretion.

We could issue a significant number of shares of common stock in the future

in connection with investments or acquisitions.

Any of these issuances could dilute our existing stockholders, and such dilution

could be significant.

Moreover, such dilution could have a material adverse effect on the market price for the shares of our common

future issuance of shares of preferred stock with voting rights may adversely affect the voting power of the holders of shares

of our common stock, either by diluting the voting power of our common stock if the preferred stock votes together with the common

stock as a single class, or by giving the holders of any such preferred stock the right to block an action on which they have

a separate class vote, even if the action were approved by the holders of our shares of our common stock.

future issuance of shares of preferred stock with dividend or conversion rights, liquidation preferences or other economic terms

favorable to the holders of preferred stock could adversely affect the market price for our common stock by making an investment

in the common stock less attractive.

For example, investors in the common stock may not wish to purchase common stock at a price

above the conversion price of a series of convertible preferred stock because the holders of the preferred stock would effectively

be entitled to purchase common stock at the lower conversion price, causing economic dilution to the holders of common stock.

significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the

This could cause the market price of our common stock to drop significantly, even if our business is doing well.

to certain exceptions, without the prior written consent of ThinkEquity, a division of Fordham Financial Management, Inc., as

representative of the underwriters of our initial public offering, we, during the period ending May 12, 2021 (90 days after the

date of the of the final prospectus for our initial public offering), and our officers and directors and our 5% or greater stockholders,

during the period ending August 10, 2021 (180 days after the date of the final prospectus for our initial public offering), have

agreed not to or are otherwise restricted in their ability to:

(1) offer, sell, contract to sell, pledge, grant any option to

purchase, make any short sale or otherwise transfer or dispose of, directly or indirectly, any shares of common stock or any securities

convertible into, exchangeable for or that represent the right to receive shares of common stock;

(2) file any registration statement

with the SEC relating to the offering of any shares of common stock or any securities convertible into or exercisable or exchangeable

for common stock;

or (3) enter into any swap or other arrangement that transfers, in whole or in part, any of the economic consequences

of ownership of common stock, subject to certain exceptions.

ThinkEquity, in its sole discretion, may release the common stock

and other securities subject to the lock-up provisions described above in whole or in part at any time with or without notice.

market price of our common stock may decline significantly when the restrictions on resale by our existing stockholders lapse.

A decline in the market price of our common stock might impede our ability to raise capital through the issuance of additional

shares of common stock or other equity securities.

future sales of such shares in the public market, or the expectations that such sales may occur, could lower our stock

certificate of incorporation authorizes us to issue shares of our common stock and options, rights, warrants and appreciation rights

relating to our common stock for the consideration and on the terms and conditions established by our Board of Directors (the “Board”)

in its sole discretion.

We could issue a significant number of shares of common stock in the future in connection with investments or

acquisitions.

Any of these issuances could dilute our existing stockholders, and such dilution could be significant.

Moreover, such dilution

could have a material adverse effect on the market price for the shares of our common stock.

future issuance of shares of preferred stock with voting rights may adversely affect the voting power of the holders of shares of our

common stock, either by diluting the voting power of our common stock if the preferred stock votes together with the common stock as

a single class, or by giving the holders of any such preferred stock the right to block an action on which they have a separate class

vote, even if the action were approved by the holders of our shares of our common stock.

future issuance of shares of preferred stock with dividend or conversion rights, liquidation preferences or other economic terms favorable

to the holders of preferred stock could adversely affect the market price for our common stock by making an investment in the common

stock less attractive.

For example, investors in the common stock may not wish to purchase common stock at a price above the conversion

price of a series of convertible preferred stock because the holders of the preferred stock would effectively be entitled to purchase

common stock at the lower conversion price, causing economic dilution to the holders of common stock.

do not anticipate paying any cash dividends on our common stock in the foreseeable future.

currently intend to retain our future earnings, if any, for the foreseeable future, to repay indebtedness and to fund the development

currently intend to retain our future earnings, if any, for the foreseeable future, to fund the development

and growth of our business.

We do not intend to pay any dividends to holders of our common stock in the foreseeable future.

decision to declare and pay dividends in the future will be made at the discretion of our Board taking into account various factors,

including our business, operating results and financial condition, current and anticipated cash needs, plans for expansion, any

legal or contractual limitations on our ability to pay dividends under our loan agreements or otherwise.

As a result, if our Board

does not declare and pay dividends, the capital appreciation in the price of our common stock, if any, will be your only source

of gain on an investment in our common stock, and you may have to sell some or all of your common stock to generate cash flow

from your investment.

securities or industry analysts do not publish research or reports about our business, or if they downgrade their recommendations

regarding our common stock, its trading price and volume could decline.

expect the trading market for our common stock to be influenced by the research and reports that industry or securities analysts

publish about us, our business or our industry.

As a new public company, we do not currently have and may never obtain research

coverage by securities and industry analysts.

If no securities or industry analysts commence coverage of our company, the trading

price for our stock may be negatively impacted.

If we obtain securities or industry analyst coverage and if one or more of these

analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets,

which in turn could cause our stock price or trading volume to decline and our common stock to be less liquid.

Moreover, if one

or more of the analysts who cover us downgrades our stock or publishes inaccurate or unfavorable research about our business,

or if our results of operations do not meet their expectations, our stock price could decline.

advantage of the reduced disclosure requirements applicable to “emerging growth companies”

may make our common stock

less attractive to investors.

qualify as an “emerging growth company”

as defined in the Jumpstart Our Business Startups Act of 2012, or JOBS

An emerging growth company may take advantage of certain reduced reporting and other requirements that are otherwise generally

applicable to public companies, as described above.

to declare and pay dividends in the future will be made at the discretion of our Board taking into account various factors, including

our business, operating results and financial condition, current and anticipated cash needs, plans for expansion, any legal or contractual

limitations on our ability to pay dividends under our loan agreements or otherwise.

As a result, if our Board does not declare and pay

dividends, the capital appreciation in the price of our common stock, if any, will be your only source of gain on an investment in our

common stock, and you may have to sell some or all of your common stock to generate cash flow from your investment.

securities or industry analysts do not publish research or reports about our business, or if they downgrade their recommendations regarding

our common stock, its trading price and volume could decline.

expect the trading market for our common stock to be influenced by the research and reports that industry or securities analysts publish

about us, our business or our industry.

If no additional securities or industry analysts commence coverage of our company, the

trading price for our stock may be negatively impacted.

If one or more of our covering analysts cease coverage of our company

or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price

or trading volume to decline and our common stock to be less liquid.

Moreover, if one or more of the analysts who cover us downgrades

our stock or publishes inaccurate or unfavorable research about our business, or if our results of operations do not meet their expectations,

our stock price could decline.

advantage of the reduced disclosure requirements applicable to “emerging growth companies” may make our common stock less

attractive to investors.

qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or JOBS Act.

growth company may take advantage of certain reduced reporting and other requirements that are otherwise generally applicable to public

companies, as described above.

We currently intend to take advantage of each of these exemptions.

elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different

application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at

the time private companies adopt the new or revised standard.

This may make a comparison of our financial statements with the

financial statements of a public company that is not an emerging growth company, or the financial statements of an emerging growth

company that has opted out of using the extended transition period, difficult or impossible because of the potential differences

in accounting standards used.

We could be an emerging growth company until December 31, 2023.

We cannot predict if investors will

find our common stock less attractive if we elect to rely on these exemptions, or if taking advantage of these exemptions would

result in less active trading or more volatility in the price of our common stock.

We have elected not to opt out of such

extended transition period, which means that when a standard is issued or revised and it has different application dates for public or

private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new

or revised standard.

This may make a comparison of our financial statements with the financial statements of a public company that is

not an emerging growth company, or the financial statements of an emerging growth company that has opted out of using the extended transition

period, difficult or impossible because of the potential differences in accounting standards used.

We could be an emerging growth company

until December 31, 2023.

We cannot predict if investors will find our common stock less attractive if we elect to rely on these exemptions,

or if taking advantage of these exemptions would result in less active trading or more volatility in the price of our common stock.

of our certificate of incorporation and bylaws may delay or prevent a take-over that may not be in the best interests of our stockholders.

of our certificate of incorporation and bylaws may be deemed to have anti-takeover effects, which include when and by whom special

meetings of our stockholders may be called, and may delay, defer or prevent a takeover attempt.

addition, our certificate of incorporation authorizes the issuance of up to 10,000,000 shares of preferred stock with such rights

and preferences determined from time to time by our Board.

None of our preferred shares are currently issued or

Our Board may, without stockholder approval, issue additional preferred shares with dividends, liquidation, conversion,

voting or other rights that could adversely affect the voting power or other rights of the holders of our common stock.

requirements of being a public company may strain our resources, divert management’s attention and affect our ability to

attract and retain executive management and qualified board members.

a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank

Act, and other applicable securities rules and regulations.

Compliance with these rules and regulations involves significant legal

and financial compliance costs, may make some activities more difficult, time-consuming or costly and may increase demand on our

systems and resources, particularly after we are no longer an “emerging growth company,”

as defined in the JOBS Act.

The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business

and operating results.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and

procedures and internal control over financial reporting.

In order to maintain and, if required, improve our disclosure controls

and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight

may be required.

As a result, management’s attention may be diverted from other business concerns, which could adversely

affect our business and operating results.

We may need to hire more employees in the future or engage outside consultants, which

will increase our costs and expenses.

addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty

for public companies, increasing legal and financial compliance costs and making some activities more time consuming.

regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result,

their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies.

result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure

and governance practices.

We intend to invest resources to comply with evolving laws, regulations and standards, and this investment

may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating

activities to compliance activities.

If our efforts to comply with new laws, regulations and standards differ from the activities

intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities

may initiate legal proceedings against us, and our business may be adversely affected.

for as long as we remain an “emerging growth company,”

we may take advantage of certain exemptions from various reporting

requirements that are applicable to public companies that are not “emerging growth companies”

including, but not limited

of our certificate of incorporation and bylaws may be deemed to have anti-takeover effects, which include when and by whom special meetings

of our stockholders may be called, and may delay, defer or prevent a takeover attempt.

addition, our certificate of incorporation authorizes the issuance of up to 10,000,000 shares of preferred stock with such rights and

preferences determined from time to time by our Board.

None of our preferred shares are currently issued or outstanding.

Our Board may,

without stockholder approval, issue additional preferred shares with dividends, liquidation, conversion, voting or other rights that

could adversely affect the voting power or other rights of the holders of our common stock.

requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract

and retain executive management and qualified board members.

a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, and other

applicable securities rules and regulations.

Compliance with these rules and regulations involves significant legal and financial compliance

costs, may make some activities more difficult, time-consuming or costly and may increase demand on our systems and resources, particularly

after we are no longer an “emerging growth company,” as defined in the JOBS Act.

The Exchange Act requires, among other things,

that we file annual, quarterly and current reports with respect to our business and operating results.

The Sarbanes-Oxley Act requires,

among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.

to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this

standard, significant resources and management oversight may be required.

As a result, management’s attention may be diverted from

other business concerns, which could adversely affect our business and operating results.

We may need to hire more employees in the future

or engage outside consultants, which will increase our costs and expenses.

addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for

public companies, increasing legal and financial compliance costs and making some activities more time consuming.

These laws, regulations

and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application

in practice may evolve over time as new guidance is provided by regulatory and governing bodies.

This could result in continuing uncertainty

regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative

expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities.

efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due

to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us, and our business

may be adversely affected.

for as long as we remain an “emerging growth company,” we may take advantage of certain exemptions from various reporting

requirements that are applicable to public companies that are not “emerging growth companies” including, but not limited

to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes Oxley Act, reduced disclosure

obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements

of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not

previously approved.

We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.”

We would cease to be an “emerging growth company”

upon the earliest of:

(i) the last day of the fiscal year following

the fifth anniversary of the first sale of our common stock under an effective Securities Act registration statement, which will

occur on December 31, 2023;

obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding

a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.” We would cease to

be an “emerging growth company” upon the earliest of:

(i) the last day of the fiscal year following the fifth anniversary

of the first sale of our common stock under an effective Securities Act registration statement, which will occur on December 31, 2023;

(ii) the first fiscal year after our annual gross revenues are $1.07 billion or more;

(iii) the date

on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities;

(iv) as of the end of any fiscal year in which the market value of the common stock held by non-affiliates exceeded $700 million

as of the end of the second quarter of that fiscal year.

(iii) the date on which we have, during the previous

three-year period, issued more than $1.0 billion in non-convertible debt securities;

or (iv) as of the end of any fiscal year in which

the market value of the common stock held by non-affiliates exceeded $700 million as of the end of the second quarter of that fiscal

a result of disclosure of information in this Report and in filings required of a public company, our business and financial condition

are highly visible, which may result in threatened or actual litigation, including by competitors and other third parties.

such claims are successful, our business and operating results could be adversely affected, and even if the claims do not result

in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the

resources of our management and adversely affect our business and operating results.

If such claims

are successful, our business and operating results could be adversely affected, and even if the claims do not result in litigation or

are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management

and adversely affect our business and operating results.

may be subject to additional regulatory burdens resulting from our public listing.

3 unchanged sentences

corporate controls, disclosure controls and procedures and financial reporting and accounting systems.

We have made, and will

continue to make, changes in these and other areas, including our internal controls over financial reporting.

However, we cannot

assure holders of our common stock that these and other measures that we might take will be sufficient to allow us to satisfy

our obligations as a public company listed on Nasdaq on a timely basis.

In addition, compliance with reporting and other requirements

applicable to public companies listed on Nasdaq will create additional costs for us and will require the time and attention of

We cannot predict the amount of the additional costs that we might incur, the timing of such costs or the impact that

management’s attention to these matters will have on our business.

are highly dependent on our management team, and the loss of our senior executive officers or other key employees could harm our

ability to implement our strategies, impair our relationships with clients and adversely affect our business, results of operations

and growth prospects.

success depends, in large degree, on the skills of our management team and our ability to retain, recruit and motivate key officers

and employees.

Our active senior executive leadership team, including Jonathan Nassar, Mark Doherty, Dan Droller, Brian Zimmerman,

and particularly Bradley Nattrass, James Dennedy and Richard Akright, have significant experience, and their knowledge and relationships

would be difficult to replace.

Leadership changes will occur from time to time, and we cannot predict whether significant resignations

will occur or whether we will be able to recruit additional qualified personnel.

Competition for senior executives and skilled

personnel in the horticulture industry is intense, which means the cost of hiring, paying incentives and retaining skilled personnel

may continue to increase.

need to continue to attract and retain key personnel and to recruit qualified individuals to succeed existing key personnel to

ensure the continued growth and successful operation of our business.

In addition, as a provider of custom-tailored horticulture

solutions, we must attract and retain qualified personnel to continue to grow our business, and competition for such personnel

can be intense.

Our ability to effectively compete for senior executives and other qualified personnel by offering competitive

compensation and benefit arrangements may be restricted by cash flow and other operational restraints.

The loss of the services

of any senior executive or other key personnel, or the inability to recruit and retain qualified personnel in the future, could

have a material adverse effect on our business, financial condition or results of operations.

In addition, to attract and retain

personnel with appropriate skills and knowledge to support our business, we may offer a variety of benefits, which could reduce

our earnings or have a material adverse effect on our business, financial condition or results of operations.

We have made, and will continue

to make, changes in these and other areas, including our internal controls over financial reporting.

However, we cannot assure holders

of our common stock that these and other measures that we might take will be sufficient to allow us to satisfy our obligations as a public

company listed on Nasdaq on a timely basis.

In addition, compliance with reporting and other requirements applicable to public companies

listed on Nasdaq will create additional costs for us and will require the time and attention of management.

We cannot predict the amount

of the additional costs that we might incur, the timing of such costs or the impact that management’s attention to these matters

will have on our business.

are highly dependent on our management team, and the loss of our executive officers or other key employees could harm our ability

to implement our strategies, impair our relationships with clients and adversely affect our business, results of operations and growth

Our success depends, in large

degree, on the skills of our management team and our ability to retain, recruit and motivate key officers and employees.

Our active senior

executive leadership team, comprised of Bradley Nattrass, James Dennedy and Richard Akright, have significant experience, and

their knowledge and relationships would be difficult to replace.

Leadership changes will occur from time to time, and we cannot predict

whether significant resignations will occur or whether we will be able to recruit additional qualified personnel.

Competition for senior

executives and skilled personnel in the horticulture industry is intense, which means the cost of hiring, paying incentives and retaining

skilled personnel may continue to increase.

need to continue to attract and retain key personnel and to recruit qualified individuals to succeed existing key personnel to ensure

the continued growth and successful operation of our business.

In addition, as a provider of custom-tailored horticulture solutions,

we must attract and retain qualified personnel to continue to grow our business, and competition for such personnel can be intense.

ability to effectively compete for senior executives and other qualified personnel by offering competitive compensation and benefit arrangements

may be restricted by cash flow and other operational restraints.

The loss of the services of any senior executive or other key personnel,

or the inability to recruit and retain qualified personnel in the future, could have a material adverse effect on our business, financial

condition or results of operations.

In addition, to attract and retain personnel with appropriate skills and knowledge to support our

business, we may offer a variety of benefits, which could reduce our earnings or have a material adverse effect on our business, financial

condition or results of operations.

insurance may not adequately cover our operating risk.

have insurance to protect our assets, operations and employees.

While we believe our insurance coverage addresses all material

risks to which we are exposed and is adequate and customary in our current state of operations, such insurance is subject to coverage

limits and exclusions and may not be available for the risks and hazards to which we are exposed.

In addition, no assurance can

be given that such insurance will be adequate to cover our liabilities or will be generally available in the future or, if available,

that premiums will be commercially justifiable.

If we were to incur substantial liability and such damages were not covered by

insurance or were in excess of policy limits, or if we were to incur such liability at a time when we are not able to obtain liability

insurance, our business, results of operations and financial condition could be materially adversely affected.

While we believe our insurance coverage addresses all material risks

to which we are exposed and is adequate and customary in our current state of operations, such insurance is subject to coverage limits

and exclusions and may not be available for the risks and hazards to which we are exposed.

In addition, no assurance can be given that

such insurance will be adequate to cover our liabilities or will be generally available in the future or, if available, that premiums

will be commercially justifiable.

If we were to incur substantial liability and such damages were not covered by insurance or were in

excess of policy limits, or if we were to incur such liability at a time when we are not able to obtain liability insurance, our business,

results of operations and financial condition could be materially adversely affected.

may be exposed to currency fluctuations.

our revenues and expenses are expected to be predominantly denominated in United States dollars, we may be exposed to currency

exchange fluctuations.

Recent events in the global financial markets have been coupled with increased volatility in the currency

Fluctuations in the exchange rate between the U.S.

dollar, the Canadian dollar, the Euro, the Swiss franc, and the currency

of other regions in which we may operate may have a material adverse effect on our business, financial condition and operating

We may, in the future, establish a program to hedge a portion of our foreign currency exposure with the objective of

minimizing the impact of adverse foreign currency exchange movements.

However, even if we develop a hedging program, there can

be no assurance that it will effectively mitigate currency risks.

in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters

could significantly affect our financial results.

generally accepted accounting principles (“GAAP”) and related pronouncements, implementation guidelines and interpretations

with regard to a wide variety of matters that are relevant to our business, such as, but not limited to, revenue recognition,

stock-based compensation, trade promotions, and income taxes are highly complex and involve many subjective assumptions, estimates

and judgments by our management.

Changes to these rules or their interpretation or changes in underlying assumptions, estimates

or judgments by our management could significantly change our reported results.

ability to maintain our reputation is critical to the success of our business, and the failure to do so may materially adversely

affect our business and the value of our common stock.

our revenues and expenses are expected to be predominantly denominated in United States dollars, we may be exposed to currency exchange

fluctuations.

Recent events in the global financial markets have been coupled with increased volatility in the currency markets.

in the exchange rate between the U.S.

dollar, the Canadian dollar, the Euro, the Swiss franc, and the currency of other regions in which

we may operate may have a material adverse effect on our business, financial condition and operating results.

We may, in the future,

establish a program to hedge a portion of our foreign currency exposure with the objective of minimizing the impact of adverse foreign

currency exchange movements.

However, even if we develop a hedging program, there can be no assurance that it will effectively mitigate

currency risks.

in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could

significantly affect our financial results.

generally accepted accounting principles (“GAAP”) and related pronouncements, implementation guidelines and interpretations

with regard to a wide variety of matters that are relevant to our business, such as, but not limited to, revenue recognition, stock-based

compensation, trade promotions, and income taxes are highly complex and involve many subjective assumptions, estimates and judgments

by our management.

Changes to these rules or their interpretation or changes in underlying assumptions, estimates or judgments by our

management could significantly change our reported results.

ability to maintain our reputation is critical to the success of our business, and the failure to do so may materially adversely affect

our business and the value of our common stock.

reputation is a valuable component of our business.

Threats to our reputation can come from many sources, including adverse sentiment

about our industry generally, unethical practices, employee misconduct, failure to deliver minimum standards of service or quality,

compliance deficiencies, and questionable or fraudulent activities of our clients.

Negative publicity regarding our business,

employees, or clients, with or without merit, may result in the loss of clients, investors and employees, costly litigation, a

decline in revenues and increased governmental regulation.

If our reputation is negatively affected, by the actions of our employees

or otherwise, our business and, therefore, our operating results and the value of our common stock may be materially adversely

indebtedness could adversely affect our financial condition and prevent us from fulfilling our debt service and other obligations.

indebtedness could have significant effects on our business.

For example, it could:

it more difficult for us to satisfy our financial obligations, including with respect to our indebtedness, and any failure

to comply with the obligations of any of our debt agreements, including financial and other restrictive covenants, could result

in an event of default under the agreements governing our indebtedness;

our vulnerability to general adverse economic, industry and competitive conditions;

our ability to borrow additional funds;

our financial flexibility.

of these factors may have a material and adverse effect on our financial condition and viability.

Our ability to make payments

with respect to our indebtedness and to satisfy any other debt obligations will depend on our future operating performance, which

will be affected by prevailing economic conditions and financial, business and other factors affecting us and our industry, many

of which are beyond our control.

about our industry generally, unethical practices, employee misconduct, failure to deliver minimum standards of service or quality, compliance

deficiencies, and questionable or fraudulent activities of our clients.

Negative publicity regarding our business, employees, or clients,

with or without merit, may result in the loss of clients, investors and employees, costly litigation, a decline in revenues and increased

governmental regulation.

If our reputation is negatively affected, by the actions of our employees or otherwise, our business and, therefore,

our operating results and the value of our common stock may be materially adversely affected.

The current political climate and

military actions in Eastern Europe could result in disruption to our operations, especially as it relates to our European

Expansion into Europe to meet the demand for our

services could be disrupted by the ongoing military actions in Eastern Europe.

If we are unable to continue our expansion into Europe,

or our expansion requires greater capital than we have budgeted, our operating results and the value of our common stock may be materially

adversely affected.

UNRESOLVED STAFF COMMENTS

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