What changed in this filing

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Item 1A. Risk Factors

2023-03-16 compared with 2022-02-28 · 160 added, 126 removed, 520 unchanged (35% of the section changed)

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Risks Related to Our Business, Operations and Strategy

• COVID-19 pandemic has, and is expected to continue to, materially affect our business, financial condition and results of operations, and any future outbreaks of new COVID-19 variants, other contagious diseases and other adverse public health developments could materially affect our business.

• Our strategy may be unsuccessful and may expose us to additional risks.

If our strategy does not achieve its expected benefits, there could be negative impacts to our business, financial condition and results of operations.

• Our restructuring plan could be disruptive to our operations and adversely affect our results of operations and financial condition, and we may not realize some or all of the anticipated benefits of this plan in the time frame anticipated or at all.

• Our operating results may vary significantly from quarter to quarter.

• Our international operations are subject to varied and evolving commercial, employment and regulatory challenges, and our inability to adapt to the diverse and changing landscapes of our international markets may adversely affect our business.

• Our international operations are subject to varied and evolving sociopolitical conditions as well as commercial, employment and regulatory challenges, and our inability to adapt to the diverse and changing landscapes of our international markets may adversely affect our business.

• Our future success depends upon our ability to attract and retain high quality merchants and third-party business partners.

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• An increase in our refund rates or estimated liabilities with respect to unredeemed vouchers could adversely affect our financial results.

• The loss of key members of our management team, or our failure to attract and retain other highly qualified personnel in the future could harm our business.

• The loss of key executives, members of our management team and employees across our organization, or our failure to attract and retain other highly qualified personnel in the future could harm our business.

• Failure to deal effectively with fraudulent transactions and customer disputes would increase our loss rate and harm our business.

• We are subject to payments-related risks.

• We have identified a material weakness in our internal control over financial reporting, which could, if not remediated or if we identify additional material weaknesses or other adverse findings in the future, impair our ability to report accurate and timely financial information, adversely affect investor confidence and have a material and adverse effect on our financial condition and results of operations.

Risks Related to Technology and Cybersecurity

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federal, state and international privacy laws and regulations, could adversely affect our business.

• Misclassification or reclassification of our independent contractors or employees could increase our costs and adversely impact our business.

• Misclassification or reclassification of our independent contractors, agency workers or employees could increase our costs and adversely impact our business.

• We may suffer liability as a result of information or content retrieved from or transmitted over the Internet and claims related to our service offerings.

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taxation could materially affect our financial position and results of operations.

• Our ability to use our tax attributes to reduce future U.S.

income taxes could be subject to certain limitations.

• Federal laws and regulations, such as the Bank Secrecy Act and the USA PATRIOT Act and similar foreign laws, could be expanded to include Groupon vouchers or other offerings.

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Risks Related to Our Capital Structure

• Our access to capital and ability to raise capital in the future may be limited, which could prevent us from growing, and our existing credit agreement could restrict our business activities.

• Our access to capital and ability to successfully manage and raise capital in the future may be limited, which could prevent us from growing, adversely impact our liquidity and our existing credit agreement could restrict our business activities.

• Our financial statements contain a statement regarding a substantial doubt about the Company’s ability to continue as a going concern.

• We may not have the ability to raise the funds necessary to settle conversions of the 2026 Notes in cash, to repurchase the 2026 Notes upon a fundamental change or to repay the 2026 Notes in cash at their maturity (if not earlier converted, redeemed or repurchased), and our current and future debt may contain limitations on our ability to pay cash upon conversions of the 2026 Notes or at their maturity or to repurchase the 2026 Notes.

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Risks Related to Our Business, Operations and Strategy

COVID-19 pandemic has, and is expected to continue to, materially affect our business, financial condition and results of operations, and any future outbreaks of new COVID-19 variants, other contagious diseases and other adverse public health developments could materially affect our business.

The ongoing COVID-19 pandemic has had a material impact on our business and results of operations.

COVID-19 has resulted in significant governmental measures being implemented to control the spread of the virus, including quarantines, travel restrictions, business shutdowns and restrictions on the movement and gathering of people in the United States and abroad.

Our business has been adversely affected in jurisdictions that have imposed closures of our merchants or imposed other restrictions on operations of our merchants and activities of consumers, and the continued implementation of such measures may further adversely affect our business.

Even where such measures are not implemented, the perceived risk of infection or significant health risk may adversely affect our business.

Further, the timing of continued global vaccination distribution and administration, vaccination rates and the long-term effectiveness of any vaccines against COVID-19 and any variants is not certain.

As the pandemic has evolved, new variants of COVID-19 have continued to emerge that have proven to be highly transmissible, spreading throughout the United States and abroad causing increased uncertainty.

The outbreak and the preventive or protective actions that governments or our merchants and consumers have taken and may take in the future in response to COVID-19 has resulted, and may continue to result, in periods of business disruption, reduced sales and increased refunds.

Further, any future outbreaks of new COVID-19 variants, other contagious diseases and other adverse public health developments could materially affect our business.

Such risks could also adversely affect consumers’ financial condition, resulting in reduced spending on our offerings and increased refunds.

COVID-19 and the related restrictions may also adversely affect our ability to implement our strategy to focus on growing our local marketplace.

The impact of COVID-19 as well as our cost-saving actions, remote working environment, and other actions we have taken to attempt to address and mitigate the effects of COVID-19 on our business may lead to disruptions in our business or workforce, inability to grow and evolve our brand, reduced employee morale, engagement and productivity, increased attrition, problems retaining existing and recruiting future employees, limited resources to complete projects efficiently or on anticipated timelines, and increased workload for employees all of which could negatively impact our business, results of operations, financial condition and such disruptions could create risks to the effectiveness of our internal controls.

Such disruption also could negatively impact our ability to realize the full benefits of our strategy.

These and other potential impacts of COVID-19 have and are expected to continue to adversely affect our business, financial condition and results of operations.

The ultimate extent of the impact of COVID-19 (or any epidemic, pandemic or other health crisis) will depend on future developments, which are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of COVID-19, emerging virus variants and the effectiveness of actions taken to contain COVID-19 and address its impact.

Further, we may continue to experience different or more prolonged impacts in certain locations where we operate, particularly in our International segment where restrictions have been more prolonged and stricter than in North America, and locations where surges in virus cases continue to occur or vaccination rates are low.

We also have been, and may continue to be, impacted by pandemic-related supply chain issues, staffing shortages, excess demand, cost inflation and other transient issues that affect our merchants and will continue to evolve during the pandemic recovery period.

The potential effects of COVID-19 also could intensify or otherwise affect many of our other risk factors that are described in this Annual Report, including, but not limited to, risks related to the execution of our strategy, customer and merchant acquisition and retention, macroeconomic factors beyond our control, risks of doing business outside of the United States, including risks relating to the staffing and effectiveness of our centralized shared service centers, and risks related to our indebtedness.

Because the COVID-19 situation is unprecedented and continuously evolving, the other potential impacts to our risk factors that are further described in this Annual Report are uncertain.

Our strategy may be unsuccessful and may expose us to additional risks.

If our strategy does not achieve its expected benefits, there could be negative impacts to our business, financial condition and results of operations.

We are implementing a strategy to grow our local experiences marketplace and return the Company to growth.

We intend to execute our strategy by focusing on our priorities:

(i) expanding inventory and (ii) modernizing our marketplace by improving the merchant and customer experiences.

There are no assurances that our actions will be successful in building out a local experiences marketplace and returning the Company to growth.

Our efforts to execute our strategy may prove more difficult than we currently anticipate.

We are implementing a strategy to become the trusted marketplace where customers go to buy local services and experiences and return the Company to growth.

We intend to execute our strategy by building long-term relationships with local merchants to improve our inventory selection and improving the customer experience through inventory curation and improved convenience in order to drive customer demand and purchase frequency..

There are no assurances that our actions will be successful in executing our strategy and returning the Company to growth.

Our efforts may prove more difficult than we currently anticipate.

Further, we may not succeed in realizing the benefits of these efforts on our anticipated timeline or at all.

In addition, as we implement our strategy, COVID-19 related volatility and its impact on our merchants and customers may make it more difficult to effectively execute our strategy, including to quickly test, learn and scale initiatives relating to expanding inventory or improving the merchant and customer experiences.

Further, the data we obtain during the period impacted by COVID-19 may not ultimately be indicative of merchant and customer preferences or behavior in the future.

In addition, as we implement our strategy, the macroeconomic environment, including but not limited to, certain adverse consequences of the COVID-19 pandemic that continue to impact the macroeconomic environment, inflationary pressures, higher labor costs, labor shortages, supply chain challenges and resulting changes in consumer and merchant behavior may make it more difficult to effectively execute our strategy, including to quickly test, learn and scale initiatives relating to improving inventory selection or improving customer experience.

Even if fully implemented, our strategy may not result in a return to growth or the other anticipated benefits to our business, financial condition and results of operations.

If we are unable to effectively execute our strategy and realize its anticipated benefits, it could negatively impact our business, financial condition and results of operations.

Our restructuring plan could be disruptive to our operations and adversely affect our results of operations and financial condition, and we may not realize some or all of the anticipated benefits of this plan in the time frame anticipated or at all.

In August 2022, we initiated a multi-phase cost savings plan designed to reduce our expense structure and align with our go-forward business and financial objectives.

The cost savings plan included a restructuring plan, with the first phase of the plan approved by our Board of Directors on August 5, 2022 and the second phase approved by our Board of Directors on January 25, 2023.

The implementation of the restructuring plan, including the impact of workforce reductions and other non-payroll cost savings measures could be disruptive to our operations, make it difficult to attract or retain employees, result in higher than anticipated charges, and otherwise adversely affect our results of operations and financial condition.

In addition, our ability to complete the restructuring plan and achieve the anticipated benefits from the plan within the expected time frame or at all is subject to estimates and assumptions and may vary materially from our expectations, including as a result of factors that are beyond our control.

Furthermore, following completion of the restructuring plan, our business may not be more efficient or effective than prior to implementation of the restructuring plan.

Our operating results may vary significantly from quarter to quarter.

Our operating results may vary significantly from quarter to quarter due to the rapidly evolving nature of our business and other reasons, including seasonality.

Our operating results may vary significantly from quarter to quarter due to the rapidly evolving nature of our business and other reasons.

We believe that our ability to achieve and maintain revenue growth and profitability will depend, among other factors, on our ability to:

• recover from and respond to the impact of COVID-19;

• respond to macroeconomic challenges, including current or future inflation and the ability to optimize our supply to take into account consumer preferences at a particular point in time;

• respond to macroeconomic challenges, including but not limited to, certain adverse consequences of the COVID-19 pandemic that continue to impact the macroeconomic environment, inflationary pressures, higher labor costs, labor shortages, supply chain challenges and resulting changes in consumer and merchant behavior and the ability to optimize our supply to take into account consumer preferences at a particular point in time;

• acquire new customers, retain existing customers and increase customer purchase frequency;

• attract and retain high-quality merchants;

• retain and attract key employees, including attracting and retaining talent with an appropriate level of skill and experience, including product and technology expertise, GAAP knowledge and experience to create the proper control environment for effective internal control over financial reporting;

• maintain our current relationships with or attract new vendors, suppliers and service providers on agreeable terms;

• maintain contracts that are critical to our operations;

• attract and retain key employees, including attracting and retaining talent with an appropriate level of skill and experience, including product and technology expertise, cybersecurity expertise, GAAP knowledge and experience to create the proper control environment for effective internal control over financial reporting;

• effectively address and respond to challenges in international markets;

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• increase the awareness of, and evolve, our brand to a local experiences marketplace;

• maintain cost discipline to continue to benefit from our SG&A leverage;

• continue to reduce costs and maintain cost discipline to benefit from our reduced cost structure;

• performance of our Goods category following transition to a third party marketplace model;

• successfully achieve the anticipated benefits of business combinations or acquisitions, strategic investments, divestitures and restructuring activities;

• successfully achieve the anticipated benefits of business combinations or acquisitions, strategic investments and divestitures;

• complete the multi-phased cost savings plan and achieve the anticipated benefits from the plan;

• provide a superior customer service experience for our customers;

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• react to challenges from existing and new competitors;

• respond to seasonal changes in supply and demand;

• respond to periodic changes in supply and demand;

• address challenges from existing and new laws and regulations.

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Accordingly, our operating results and profitability may vary significantly from quarter to quarter.

Our international operations are subject to varied and evolving commercial, employment and regulatory challenges, and our inability to adapt to the diverse and changing landscapes of our international markets may adversely affect our business.

Our international operations are subject to varied and evolving sociopolitical conditions as well as commercial, employment and regulatory challenges, and our inability to adapt to the diverse and changing landscapes of our international markets may adversely affect our business.

Our international operations require management attention and resources and also require us to localize our services to conform to a wide variety of local cultures, business practices, laws and policies.

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• our ability to maintain merchant and customer satisfaction such that our marketplace will continue to attract high quality merchants;

• our ability to successfully respond to macroeconomic challenges, including the impact of COVID-19, current or future inflation and the ability to optimize our supply to take into account consumer preferences at a particular point in time;

• our ability to successfully respond to macroeconomic challenges, including but not limited to, certain adverse consequences of the COVID-19 pandemic that continue to impact the macroeconomic environment, inflationary pressures, higher labor costs, labor shortages, supply chain challenges and resulting changes in consumer and merchant behavior and the ability to optimize our supply to take into account consumer preferences at a particular point in time;

• political, economic and civil instability and uncertainty (including acts of terrorism, civil unrest, labor unrest, violence and outbreaks of war and pandemics or other disease outbreaks);

• disruptions and instability in the international markets in which we operate, including Poland, as a result of the ongoing conflict in Ukraine;

• currency exchange rate fluctuations;

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• difficulties in integrating with local payment providers, including banks, credit and debit card networks and electronic funds transfer systems;

• the ability to quickly and effectively consult and negotiate with our international workers' councils and trade unions on various matters including restructuring actions, strategic decisions and other business critical matters, which could result in the delay of executing key actions or product delivery and increase costs;

• the ability to quickly and effectively consult with, negotiate and seek the consent or opinion of, various employee groups, our international workers' councils and trade unions that represent our international employees on various matters including restructuring actions, strategic decisions, any changes to our activities or employee benefits and other business critical matters, which could result in the delay of executing key actions or product delivery and increase costs;

• the local legal restrictions relating to employment and staffing;

• difficulty in staffing, including attracting and retaining talent with an appropriate level of skill and experience, including product and technology expertise, GAAP knowledge and experience to create the proper control environment for effective internal control over financial reporting, developing and managing foreign operations, including through centralized shared service centers, as a result of distance, language barriers and cultural differences;

• seasonal reductions in business activity;

• difficulty in staffing, including attracting and retaining talent with an appropriate level of skill and experience, including product and technology expertise, cybersecurity expertise, GAAP knowledge and experience to create the proper control environment for effective internal control over financial reporting, developing and managing foreign operations, including through centralized shared service centers, as a result of distance, language barriers and cultural differences;

• periodic reductions in business activity;

• expenses associated with localizing our products;

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We must continue to attract and retain high quality merchants in order to increase profitability and grow our marketplace.

A key priority of our strategy is to increase inventory on our marketplace, which depends on our ability to attract and retain merchants and increase volume and breadth of supply.

A key priority of our strategy is to improve inventory selection on our marketplace, which depends on our ability to attract and retain the right merchants .

We are also focused on improving the merchant experience on our platform, including improving tools available to merchants to help grow their businesses.

Further, COVID-19 has negatively impacted many of our merchants, including through staffing shortages and supply chain issues, and the ultimate effect on their businesses and post-COVID recovery is uncertain.

We may not be able to retain or re-acquire these merchants in the future.

Further, COVID-19 negatively impacted many of our merchants, including through staffing shortages and supply chain issues, and in some cases we have not been, and may not be able to retain or re-acquire these merchants in the future.

In addition, our Goods category utilizes a third-party marketplace model, and we may not be able to maintain vendor relationships on favorable payment terms, margins or at all.

If we are not able to effectively attract and retain merchants, third party partners or vendors, it could adversely affect our business and results of operations.

If we are not able to effectively attract and retain merchants or third party partners, it could adversely affect our business and results of operations.

In addition, in most instances, we do not have long-term arrangements to guarantee the availability of deals that offer attractive quality, value and variety to customers or favorable payment terms to us.

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We must continue to retain and acquire customers who make purchases on our platform in order to increase profitability and grow our marketplace.

COVID-19 has negatively impacted our ability to attract and retain customers, and the timing of recovery and the pandemic's impact on long-term customer behavior is uncertain.

Although we intend to focus on re-engaging and acquiring new customers as our business recovers from COVID-19, our efforts may not be successful.

Further, as our customer base evolves, the composition of our customers may change in a manner that makes it more difficult to generate revenue to offset the loss of existing customers and the costs associated with acquiring and retaining customers and to maintain or increase our customers’ purchase frequency.

COVID-19 negatively impacted our ability to attract and retain customers, and although we remain focused on re-engaging prior customers and acquiring new customers, our efforts may not be successful.

Further, as our customer base evolves, the composition of our customers may change in a manner that makes it more difficult to generate revenue to offset the loss of prior and existing customers and the costs associated with acquiring and retaining customers and to maintain or increase our customers’ purchase frequency.

If customers do not perceive our offerings to be attractive or if we fail to introduce new and more relevant deals or increase awareness and understanding of the offerings on our marketplace platform, we may not be able to retain or acquire customers at levels necessary to grow our business and profitability.

In addition, changes to search engine algorithms or similar actions are not within our control and could adversely affect traffic to our websites and mobile applications.

If we are unable to re-engage and acquire new customers in numbers sufficient to grow our business and offset the number of customers that have ceased to make purchases, or if new customers do not make purchases at expected levels, our revenue may decrease and our operating results may be adversely affected.

If we are unable to re-engage and acquire new

customers in numbers sufficient to grow our business and offset the number of customers that have ceased to make purchases, or if new customers do not make purchases at expected levels, our revenue may decrease and our operating results may be adversely affected.

We operate in a highly competitive industry with relatively low barriers to entry and must compete successfully in order to grow our business.

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We believe that our ability to compete successfully depends upon many factors both within and beyond our control, including the following:

• the continued impact of COVID-19 on our business and our ability to recover from such impact;

• the continued consequences of the macroeconomic environment, including but not limited to, certain adverse consequences of the COVID-19 pandemic that continue to impact the macroeconomic environment, inflationary pressures, higher labor costs, labor shortages, supply chain challenges and resulting changes in consumer and merchant behavior;

• the size, composition and retention of our customer and merchant bases;

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• our customer and merchant service and support efforts;

• our ability to maintain our current relationships with or attract new vendors, suppliers and service providers on agreeable terms;

• our ability to maintain contracts that are critical to our operations;

• selling and marketing efforts;

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• the quality and performance of our merchants;

• our ability to cost-effectively manage our operations;

• our ability to cost-effectively manage our operations and to complete the multi-phased cost savings plan and achieve the anticipated benefits from the plan;

• our reputation and brand strength relative to our competitors.

Some of our competitors have longer operating histories, greater financial, marketing and other resources and larger customer bases than we do.

These factors may allow our competitors to benefit from their existing customer base with lower customer acquisition costs or to respond more quickly than we can to new or emerging technologies and changes in consumer habits.

Further, COVID-19 may not have had or in the future have a comparable impact on these competitors' businesses.

These factors may allow our competitors to benefit from their existing customer base with lower customer acquisition costs or to respond more quickly than we can to new or emerging

technologies and changes in consumer habits.

Further, the macroeconomic environment may not have had or in the future have a comparable impact on these competitors' businesses.

In addition, our competitors may engage in more extensive research and development efforts, undertake more far-reaching marketing campaigns and adopt more aggressive pricing policies, which may allow them to build larger customer and/or merchant bases or generate revenue from their customer bases more effectively than we do.

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In the year ended December 31, 2022, over 80% of our global transactions were completed on mobile devices.

While the focus on mobile is key to our long-term strategy, currently average purchase prices and conversion rates on mobile tend to be significantly lower than desktop.

In order to continue to grow our mobile transactions and improve mobile conversion rates, it is critical that our applications are compatible with a range of mobile technologies, systems, networks and standards and that we provide a good, modern customer experience.

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An increase in our refund rates or estimated liabilities with respect to unredeemed vouchers could adversely affect our financial results.

COVID-19 has had a significant impact on refunds.

A further downturn in general economic conditions or extended period of low consumer confidence (including the continued impact of and recovery from COVID-19) could also increase our refund rates.

In prior years, COVID-19 had a significant impact on refunds and any downturns in general economic conditions or extended period of low consumer confidence in the future could also increase our refund rates.

An increase in our refund rates could significantly reduce our liquidity, profitability and financial results.

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If our refund reserves are not adequate to cover future refund claims, this inadequacy could have a material adverse effect on our financial results.

In addition, we may not be able to obtain reimbursement from merchants (particularly those negatively impacted by COVID-19) for refunds that we issue, which could have an adverse effect on our financial results.

In addition, we may not be able to obtain reimbursement from merchants for refunds that we issue, which could have an adverse effect on our financial results.

We primarily use redemption payment terms with our merchants globally, and we are required under the applicable revenue recognition standard to estimate variable consideration from unredeemed vouchers.

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If the estimates that we use in projecting the likelihood of vouchers being redeemed prove to be inaccurate, our liabilities with respect to unredeemed vouchers may be materially different than the amounts shown in our financial statements, and our revenue and net income could be materially affected.

The loss of key members of our management team, or our failure to attract and retain other highly qualified personnel in the future could harm our business.

The loss of key executives, members of our management team and employees across our organization, or our failure to attract and retain other highly qualified personnel in the future could harm our business.

In order to be successful, we must attract, retain and motivate executives and other key employees, including those in managerial, technical, accounting and sales positions.

Hiring and retaining qualified executives, engineers and qualified sales representatives are critical to our success, and competition can be intense for experienced and well qualified executives and employees, particularly in recent periods.

In 2020 and 2021, we experienced significant leadership changes, including the appointment of a new Chief Executive Officer in December 2021.

In addition, we currently have multiple interim roles in senior management, including our Interim Chief Financial Officer and Interim Chief Accounting Officer.

We need to identify and hire individuals for these permanent roles, and there are no assurances we will be able to fill these roles quickly.

Furthermore, we may experience additional changes in key roles in the future.

Executive leadership transitions can be time consuming, difficult to manage and could cause disruption to our business.

Further, continued disruption in our business due to COVID-19 may make it more difficult to attract and retain talent.

Hiring and retaining qualified executives, engineers, sales representatives and other key personnel are critical to our success, and competition can be intense for experienced and well qualified executives and employees, particularly in recent periods.

In 2021 and 2022, we experienced significant leadership changes, including the appointment of a new Chief Executive Officer in December 2021, as well as appointing our Interim Chief Financial Officer and Interim Chief Accounting Officer into such roles permanently in November 2022 and May 2022, respectively.

Additionally, in February 2023, our Chief Administrative Officer, General Counsel and Corporate Secretary resigned.

Furthermore, we have experienced continued disruption in our business due to the announcement of our cost savings plan and significant turnover in our senior management team.

Reductions in our workforce have led to employees filling certain key roles and we

may experience additional changes in key roles in the future.

Executive leadership and senior management transitions, reductions in workforce and significant employee turnover can be time consuming, difficult to manage, create instability, cause disruption to our business, impede our day-to-day operations and our ability to fully implement our business and growth strategy.

These impacts also make it more difficult to attract and retain talent.

In addition, such transitions, reductions in workforce and turnover cause the loss of institutional knowledge, which can negatively impact the execution of our day-to-day operations and the ability to carry out our business strategy.

In order to attract and retain key executives and employees in a competitive marketplace, we must provide a competitive compensation package, including cash and equity-based compensation.

We typically utilize restricted stock units and performance share units as our forms of share-based incentive compensation.

If the anticipated value of such equity-based incentive awards does not materialize, if our equity-based compensation otherwise ceases to be viewed as a valuable benefit or if our total compensation package is not viewed as competitive, our ability to attract, retain and motivate key executives and employees could be weakened.

The failure to successfully hire and retain key executives and employees or the loss of any key executives and employees could have a significant impact on our operations, including declining product identity and competitive differentiation, eroding employee morale and productivity or an inability to maintain internal controls, regulatory or other compliance related requirements.

If the anticipated value of such equity-based compensation does not materialize, if our equity-based compensation otherwise ceases to be viewed as a valuable benefit or if our total compensation package is not viewed as competitive, our ability to attract, retain and motivate key executives and employees could be weakened.

The failure to successfully hire and retain key executives and employees or the further loss of any key executives, senior management and employees could have a significant impact on our operations, including declining product identity and competitive differentiation, eroding employee morale and productivity or an inability to maintain internal controls, regulatory or other compliance related requirements.

Failure to deal effectively with fraudulent transactions and customer disputes would increase our loss rate and harm our business.

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For certain payment methods, including credit and debit cards, we pay interchange and other fees, which may increase over time and raise our operating costs and lower profitability.

In addition, our credit card and other payment processors generally have broad discretion to impose receivable holdback or reserve requirements based on changes to our business model or material changes in our financial condition, and could do so in the future.

Any material increase in receivable holdback or reserve requirements could have a material impact on our cash flow and available liquidity.

In the event our strategy is unsuccessful or our business deteriorates significantly due to COVID-19 or other factors, these payment processors could increase holdback amounts due to concerns with our financial condition, which could adversely affect our liquidity.

We rely on third parties to provide payment processing services, including the processing of credit cards and debit cards, and it could disrupt our business if these companies become unwilling or unable to provide these services to us.

In addition, our credit card and other payment processors generally have broad discretion to impose receivable holdbacks or reserve requirements based on changes to our business model or material changes in our financial condition, and could do so in the future.

Any material increase in receivable holdbacks or reserve requirements could have a material impact on our cash flow and available liquidity.

In the event our strategy is unsuccessful or our business and financial condition deteriorates significantly, these payment processors could increase holdback amounts or reserve requirements due to concerns with our financial condition, which could adversely affect our liquidity.

Additionally, if any of our payment processors, who we rely on for processing of credit cards and debit cards, were to become unwilling or unable to provide these services to us, including by terminating its relationship with us, whether as a result of a failure by us to meet our contractual obligations or for other reasons, or if any of them were to refuse to renew or renegotiate its agreement

with us on commercially acceptable terms, it could disrupt our business, which could adversely impact our financial condition and reputation.

We are also subject to payment card association operating rules, certification requirements and rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply.

If we fail to comply with these rules or requirements, we may be subject to fines and higher transaction fees and lose our ability to accept credit and debit card payments from customers or facilitate other types of online payments, and our business and operating results could be adversely affected.

Specifically, we are required to meet certain Payment Card Industry (“PCI”) Data Security Standards issued by the Payment Card Industry Security Standards Council.

If we fail to maintain PCI compliance or compliance with other related rules or requirements, we may be subject to fines and higher transaction fees and lose our ability to accept credit and debit card payments from customers or facilitate other types of online payments, and our business and operating results could be adversely affected.

We are also subject to or voluntarily comply with a number of other laws and regulations relating to money laundering, international money transfers, privacy and information security and electronic fund transfers.

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In addition, events affecting our third-party payment processors or our integration with them, including cyber-attacks, Internet or other infrastructure or communications impairment or other events that could interrupt the normal operation of our payment processors or our integration with them, or result in unauthorized access to customer information, could have a material adverse effect on our business.

We have identified a material weakness in our internal control over financial reporting which could, if not remediated or if we identify additional material weaknesses or other adverse findings in the future, impair our ability to report accurate and timely financial information, adversely affect investor confidence and have a material and adverse effect on our financial condition and results of operations.

Management evaluated an immaterial accounting error related to accrued merchant payables.

Although the error did not affect payments to merchants, an incorrect calculation caused the accrued merchant payable balance to be understated by an immaterial amount, and there is a reasonable possibility our existing controls would not have detected the error in a timely manner if it were to be material.

As a result of the accounting error, we identified a material weakness in our internal control over financial reporting.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

A material weakness exists due to inadequate preventative and detective controls over complex manual calculations used to record certain month-end balances.

Management is committed to maintaining a strong internal control environment and believes its remediation efforts will represent an improvement to the control environment.

Management anticipates that the new controls, as implemented and when tested for a sufficient period of time, will remediate the material weakness.

We may not be successful in implementing these remediation measures or in developing other internal controls, which may impair our ability to report accurate and timely financial information.

These remediation measures may be time consuming and costly and there is no assurance that the measures we have taken to date, or any measures we may take in the future, will remediate the material weakness identified or be sufficient to avoid potential future material weaknesses.

Further, we will not be able to fully assess whether the steps we are taking will remediate the material weakness in our internal control over financial reporting until we have completed our implementation efforts and sufficient time passes in order to evaluate their effectiveness.

In addition, until we remediate the material weakness, or if we identify additional material weaknesses in our internal control over financial reporting, we may not detect errors on a timely basis and our financial statements may be materially misstated.

In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and our stock price may decline as a result.

For further discussion of the material weakness, see Item 9A.

Controls and Procedures.

Risks Related to Technology and Cybersecurity

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In addition, if we are placed on "spam" lists or lists of entities that have been involved in sending unwanted, unsolicited emails, our operating results and financial condition could be substantially harmed.

In addition, Apple released iOS 15, which updated its privacy practices and policies, limiting the ability of email senders to track recipients' email activity.

In addition, in 2021, Apple released an iOS update, which updated its privacy practices and policies, limiting the ability of email senders to track recipients' email activity.

Additionally, in 2022, Google announced plans to adopt new privacy related changes to its Android advertising identifiers.

Such actions, and similar actions in the future, could adversely impact our email open rates, our ability to drive traffic to our marketplace and the effectiveness and efficiency of our email marketing, any of which could have a negative impact on our business and results of operations.

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In addition, a search engine could, for competitive or other purposes, alter its search algorithms or results causing our websites to place lower in search query results.

If a major Internet search engine changes its algorithms in a manner that negatively affects the search engine ranking it could create additional traffic headwinds for us and negatively affect our results of operations.

If a major Internet search engine changes its algorithms in a manner that negatively affects our search engine ranking it could create additional traffic headwinds for us and negatively affect our results of operations.

Furthermore, web browser providers have implemented and may continue to implement changes in their browsers.

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We may be subject to breaches of our information technology systems, which could harm our relationships with our customers, merchants, employees and third-party business partners, subject us to negative publicity and litigation, and cause substantial harm to our business or brand.

In operating a global online business, we and our third-party service providers maintain significant proprietary information and manage large amounts of personal data and confidential information about our employees, customers and merchants.

In operating a global online business, we and our third-party service providers maintain significant proprietary information and maintain large amounts of personal data and confidential information about our employees, customers and merchants.

We and such service providers are at constant risk of cyber-attacks or cyber intrusions via the Internet, computer viruses, break-ins, malware, ransomware, phishing attacks, hacking, denial-of-service attacks or other attacks and similar disruptions from the unauthorized use of or access to computer systems (including from internal and external sources).

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We also may be subject to additional vulnerabilities as we utilize third parties to provide various services for our operations (e.g., cloud services) and integrate the systems, computers, software and data of acquired businesses and third-party business partners into our networks and separate the systems, computers, software and data of disposed businesses from our networks.

We maintain a cybersecurity risk management program that is overseen by our Chief Information Security Officer.

Our Chief Information Security Officer regularly reports to the Audit Committee on the state of our cybersecurity program and provides updates on cybersecurity matters.

We maintain a cybersecurity risk management program that is overseen by our IT and Information Security teams.

A member of our IT and Information Security teams regularly reports to the Audit Committee on the state of our cybersecurity program and provides updates on cybersecurity matters.

We also conduct an annual cybersecurity review with our Board .

As part of our cybersecurity risk management program, we employ security practices to protect and maintain the systems located at our data centers and hosting providers, invest in intrusion, anomaly, and vulnerability detection tools and engage third-party security firms to test the security of our websites and systems.

In addition, we regularly evaluate and assess our systems and the controls, processes and practices to protect those systems and also conduct penetration testing against our own system.

The evaluations, assessments and testing identify areas of potential weakness in, and suggested improvements to, the maturity of our systems, processes, and risk management framework as well as vulnerabilities in those systems, processes, and risk management framework that could be attacked and exploited to access and acquire proprietary and confidential information, including information about our customers and merchants.

There are no assurances that our cybersecurity risk mitigation program or actions and investments to improve the maturity of our systems, processes

and risk management framework or remediate vulnerabilities will be sufficient or completed quickly enough to prevent or limit the impact of any cyber intrusion or related attack.

As part of our cybersecurity risk management program, we employ security practices to protect and maintain the systems located at our hosting providers, invest in intrusion, anomaly, and vulnerability detection tools and engage third-party security firms to test the security of our websites and systems.

In addition, we regularly evaluate and assess our systems and the controls, processes and practices to protect those systems and also conduct penetration testing against our own systems.

framework that could be attacked and exploited to access and acquire proprietary and confidential information, including information about our customers and merchants.

There are no assurances that our cybersecurity risk mitigation program or actions and investments to improve the maturity of our systems, processes and risk management framework or remediate vulnerabilities will be sufficient or completed quickly enough to prevent or limit the impact of any cyber intrusion or related attack.

In addition, in the future we may be required to expend significant additional resources to modify or enhance our protective measures, controls and systems or to improve the maturity of our systems, processes and risk management framework, or investigate or remediate any information security vulnerabilities.

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If our websites or mobile applications are unavailable when users attempt to access them, or if they do not load as quickly as expected, users may not return as often in the future, or at all.

We have spent and expect to continue to spend substantial amounts on data centers and equipment, cloud-based technology and related network infrastructure and services to handle the traffic on our websites and mobile applications and to help shorten the time of or prevent system interruptions.

The operation of these systems is expensive and complex and could result in operational failures.

We have spent and expect to continue to spend substantial amounts on cloud-based technology and related network infrastructure and services to handle the traffic on our websites and mobile applications and to help shorten the time of or prevent system interruptions.

The operation of these systems is expensive, complex and not immune to operational failures.

While resiliency and redundancy are considerations in the design and operation of Groupon's systems, interruptions, delays or failures in these systems, whether due to earthquakes, adverse weather conditions, other natural disasters, power loss, computer viruses, cybersecurity attacks, physical break-ins, terrorism, errors in our software or otherwise, could be prolonged and could affect the security or availability of our websites and applications, and prevent our customers from accessing our services.

If we do not maintain or expand our network infrastructure successfully or if we experience operational failures or prolonged disruptions or delays in the availability of our systems, we could lose current and potential customers and merchants, which could harm our operating results and financial condition.

In addition, a portion of our network infrastructure is hosted by third-party providers.

If we do not maintain or expand our infrastructure successfully or if we experience operational failures or prolonged disruptions or delays in the availability of our systems, we could lose current and potential customers and merchants, which could harm our operating results and financial condition.

In addition, a portion of our infrastructure is hosted by third-party providers.

We also rely on a variety of tools and third-party commercial partners to provide certain services and offerings (e.g., booking and ticketing tools).

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We rely on cloud-based applications and platforms for critical business functions.

We also are migrating a significant portion of our computing infrastructure to third party hosted cloud-based computing platforms.

If we are not able to complete this migration on our expected timeline, we could incur additional costs.

Further, these migrations can be risky and may cause disruptions to the availability of our products due to service outages, downtime or other unforeseen issues that could increase our costs.

We also may be subject to additional risk of cybersecurity breaches or other improper access to our data or confidential information during or following migrations to cloud-based computing platforms.

In addition, cloud computing services may operate differently than

anticipated when introduced or when new versions or enhancements are released.

In early 2023, we completed the migration of our public-facing websites, internal applications and services, as well as our back-end business intelligence systems from being hosted at our data centers to a multi-cloud infrastructure.

If we are not able to realize the anticipated benefits of our migration to this multi-cloud infrastructure, our business could be

Further, there may be unforeseen issues as a result of these migrations that may cause disruptions to the availability of our products due to service outages, downtime or other similar issues that could harm our business.

We also may be subject to additional risk of cybersecurity breaches or other improper access to our data or confidential information following our migration to cloud-based computing platforms.

In addition, cloud computing services may operate differently than anticipated when introduced or when new versions or enhancements are released.

As we increase our reliance on cloud-based computing services, our exposure to damage from service interruptions may increase.

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These circumstances could lead to delayed decisions or disputes and litigation with those other investors, all of which could have a material adverse impact on our reputation, business, financial condition and results of operations.

If these entities seek additional financing, such financing or other transactions may result in further dilution of our ownership stakes and such transactions have and in the future may occur at lower valuations than the investment transactions through which we acquired such interests, which could significantly decrease the fair values of our investments in those entities.

of our investments in those entities.

Alternatively, if any such financing or other transactions occur at higher valuations in the future, we may not be able to realize the potential benefits of such higher valuation.

forecasted results, which also could significantly decrease the fair values of our investments in those entities.

In addition, the lack of availability of financing on commercially reasonable terms or a decline in the business performance, financial condition and competitive environment of any of our minority investments could result in lower financial results or forecasted results, which also could significantly decrease the fair values of our investments in those entities.

Further, we have made an irrevocable election to account for our investments in Monster Holdings LP and Nearby Pte Ltd at fair value with changes in fair value reported in earnings.

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For additional information, see Item 8, Note 9, Commitments and Contingencies , to the Consolidated Financial Statements.

The ongoing COVID-19 pandemic may also result in additional litigation including disputes with merchants, customers, vendors, and others over refunds, payments, and contract terms.

The COVID-19 pandemic may also result in additional litigation including disputes with merchants, customers, vendors, and others over refunds, payments, and contract terms.

We may also be the target of tort or negligence claims relating to incidents, injuries or illnesses incurred by customers visiting merchants.

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European countries continue to expand the scope of its application of GDPR within their local legislation.

The California Consumer Privacy Act (the "CCPA") similarly regulates the collection and use of consumers' data, and the California Privacy Rights Act, (the "CPRA"), which expands on the CCPA, will go into effect in 2023, includes additional protection for sensitive personal data.

The Virginia Consumer Data Protection Act (the "CDPA") and the Colorado Privacy Act (the "CPA"), which will also go into effect in 2023 provide new data privacy rights to their respective residents.

The California Privacy Rights Act (the "CPRA"), which expands on and effectively replaces the California Consumer Privacy Act (the "CCPA") that became effective January 1, 2023, similarly regulates the collection and use of consumers' data, and includes additional protection for sensitive personal data.

The Virginia Consumer Data Protection Act (the "CDPA") and the Colorado Privacy Act (the "CPA"), which will both go into effect in 2023 provide new data privacy rights to their respective residents.

Complying with the GDPR, CCPA, CPRA, CDPA, CPA and similar laws and regulations may cause us to incur substantial operational costs or require us to change our business practices.

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Noncompliance could result in proceedings against us by governmental entities or others and fines.

For example, fines under GDPR could be up to the greater of €20 million or 4% of annual global revenue and damage our reputation and brand.

For example, fines under GDPR could be up to the greater of €20 million or 4% of annual global revenue and damage our reputation and brand and non-compliance with CPRA could result in fines of up to $7,500 per violation in addition to providing consumers with a private right of action.

As a result of GDPR, CCPA, CPRA and similar laws and regulations, we may experience difficulty retaining or obtaining new customers due to the compliance cost, potential risk exposure and portability of customer data.

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The regulation of web trackers and other current online advertising practices could adversely affect our business.

Misclassification or reclassification of our independent contractors or employees could increase our costs and adversely impact our business.

In the United States, our workers are classified as either employees or independent contractors, and if employees, as either exempt from overtime or non-exempt (and therefore overtime eligible).

United States regulatory authorities and private parties have recently asserted within several industries that some independent contractors should be classified as employees and that some exempt employees, including those in sales-related positions, should be classified as non-exempt based upon the applicable facts and circumstances and their interpretations of existing rules and regulations.

If we are found to have misclassified employees as independent contractors or non-exempt employees as exempt, we could face penalties and have additional exposure under federal and state tax, workers’ compensation, unemployment benefits, labor, employment and tort laws, including for prior periods, as well as potential liability for employee overtime and benefits and tax withholdings.

Legislative, judicial, or regulatory (including tax) authorities could also introduce proposals or assert interpretations of existing rules and regulations that would change the classification of a significant number of independent contractors doing business with us from independent contractor to employee and a significant number of exempt employees to non-exempt.

Misclassification or reclassification of our independent contractors, agency workers or employees could increase our costs and adversely impact our business.

Our workers are classified as either employees or non-employees (including as independent contractors or agency workers), and if employees in the U.S., as either exempt from overtime or non-exempt (and therefore overtime eligible).

United States, certain foreign regulatory authorities and private parties have recently asserted within several industries that some non-employee classified individuals should be classified as employees and that some exempt employees, including those in sales-related positions, should be classified as non-exempt based upon the applicable facts and circumstances and their interpretations of existing rules and regulations.

If we are found to have misclassified employees including as independent contractors, agency workers or non-exempt employees as exempt, we could face penalties and have additional exposure under U.S.

federal and state tax, workers’ compensation, unemployment benefits, labor, employment and tort laws, as well as similar international laws, including for prior periods, as well as potential liability for employee overtime and benefits and tax withholdings.

or foreign legislative, judicial, or regulatory (including tax) authorities could also introduce proposals or assert interpretations of existing rules and regulations that would change the classification of a significant number of independent contractors doing business with us from independent contractor to employee and a significant number of exempt employees to non-exempt.

A reclassification in either case could result in a significant increase in employment-related costs such as wages, benefits and taxes as well as punitive damages in any related litigation.

The costs associated with employee classification, including any related regulatory action or litigation, could have a material adverse effect on our results of operations and our financial position.

The costs associated with employee classification, including any related regulatory action or litigation could have a significant impact on our flexibility in managing costs and responding to market changes, and, could have a material adverse effect on our results of operations and our financial position.

We may suffer liability as a result of information or content retrieved from or transmitted over the Internet and claims related to our service offerings.

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In addition, we could incur significant costs in investigating and defending such claims, even if we ultimately are not found liable.

If any of these events occurs, our business could be materially and adversely affected.

If any of these events occur, our business could be materially and adversely affected.

We are subject to risks associated with information disseminated through our websites and mobile applications, including consumer data, content that is produced by our editorial staff and errors or omissions related to the offerings on our marketplaces.

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Any of these events could have an adverse effect on our business and results of operations.

Currently, there are several pending U.S.

legislative proposals relating to federal tax laws and it is likely that there will be further changes to U.S.

federal tax law in the future.

The details of any proposed changes are still unknown.

While these changes could impact Groupon's worldwide effective tax rate, it is difficult to determine the extent of the impact until further details of the proposed changes are issued.

Our ability to use our tax attributes to reduce future U.S.

income taxes could be subject to certain limitations.

Under Sections 382 and 383 of the United States Internal Revenue Code of 1986, as amended (the “Code”), a corporation that undergoes an “ownership change” (as defined by the Code) may be subject to limitations on its ability to utilize its pre-change net operating loss ("NOLs") and other tax attributes such as research tax credits to offset future income taxes.

If we undergo one or more ownership changes as a result of transactions in our stock, then our ability to utilize NOLs and other pre-change tax attributes could be limited by Sections 382 and 383 of the Code, and similar U.S.

state provisions.

Future changes in our stock ownership, many of which are outside of our control, could result in an ownership change under Section 382 or 383 of the Code.

For these reasons, we might not be able to utilize our NOLs and other tax attributes, even if we maintain profitability.

Federal laws and regulations, such as the Bank Secrecy Act and the USA PATRIOT Act and similar foreign laws, could be expanded to include Groupon vouchers or other offerings.

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Risks Related to Our Capital Structure

Our access to capital and ability to raise capital in the future may be limited, which could prevent us from growing, and our existing credit agreement could restrict our business activities.

Our access to capital and ability to successfully manage and raise capital in the future may be limited, which could prevent us from growing, adversely impact our liquidity and our existing credit agreement could restrict our business activities.

We may need additional capital in the future and to seek additional financing or covenant relief.

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We have outstanding $230.0 million in aggregate principal amount of 1.125% convertible senior notes (the "2026 Notes") due March 2026.

In addition, we are party to a $225.0 million amended and restated credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, dated as of May 14, 2019, as amended by the First Amendment to the Second Amended and Restated Credit Agreement, dated as of July 17, 2020 and as further amended by the Second Amendment to the Second Amended and Restated Credit Agreement, dated as of March 22, 2021 (the "Amended Credit Agreement"), which matures in May 2024.

In addition, we are party to a $75.0 million amended and restated credit

agreement with JPMorgan Chase Bank, N.A., as administrative agent, dated as of May 14, 2019, as amended by the First Amendment to the Second Amended and Restated Credit Agreement, dated as of July 17, 2020 (the "First Amendment"), as further amended by the Second Amendment to the Second Amended and Restated Credit Agreement, dated as of March 22, 2021 (the "Second Amendment"), as further amended by the Third Amendment to the Second Amended and Restated Credit Agreement, dated as of September 28, 2022 (the "Third Amendment" and the revolving credit agreement, as amended the "Third Amendment Credit Agreement") and as further amended by the Fourth Amendment to the Second Amended and Restated Credit Agreement, dated as of March 13, 2023 (the "Fourth Amendment" and the revolving credit agreement, as amended the "Amended Credit Agreement"), which matures in May 2024.

The Amended Credit Agreement contains financial and other covenants that may restrict our business activities or our ability to execute our strategic objectives.

Due to the impact of COVID-19 on our business, we entered into amendments to the Amended Credit Agreement to provide, among other things, covenant relief through

the fourth quarter of 2021.

We voluntarily elected to early terminate this covenant relief period as of the third quarter of 2021 and are again subject to the ordinary course covenants under the Amended Credit Agreement (beginning in the third quarter of 2021).

Due to the impact of COVID-19 on our business, we entered into the First Amendment and Second Amendment to provide, among other things, covenant relief through the fourth quarter of 2021.

We voluntarily elected to early terminate this covenant relief period as of the third quarter of 2021 and became subject to the ordinary course covenants under the Amended Credit Agreement (beginning in the third quarter of 2021).

On September 28, 2022, we entered into the Third Amendment and subsequently on March 13, 2023, we entered into the Fourth Amendment, in each case to modify certain financial covenants, amongst other changes and provide for additional flexibility in our operations.

In the future, these covenants could restrict our ability to access the full capacity of our credit facility or require us to repay amounts borrowed.

In addition, if we are not able to comply with these covenants, we may need to seek additional covenant relief in the future, which may be impacted by the duration and volatility of the recovery of our business from the ongoing COVID-19 pandemic.

In addition, if we are not able to comply with these covenants, we may need to seek additional covenant relief or modifications in the future.

Failure to comply with the covenants contained in our Amended Credit Agreement (if not waived or further amended) could give rise to an event of default and, if not cured, entitle the lenders to accelerate the indebtedness outstanding thereunder and terminate our ability to borrow in the future under the Amended Credit Agreement.

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Any termination of our ability to borrow or event of default under our Amended Credit Agreement would have a material adverse impact on our liquidity.

Additionally, other general economic conditions and our future operating performance, could ultimately limit our access to funding under our Amended Credit Agreement.

Additionally, other general economic conditions and our future operating performance, could ultimately limit our access to funding under our Amended Credit Agreement and adversely affect our liquidity.

Although we plan to continue to actively manage and optimize our cash balances and liquidity, working capital and operating expenses, there can be no assurances that we will be able to do so successfully.

If we encounter unforeseen circumstances that place further constraints on our capital resources, including our access to funding under our Amended Credit Agreement, management will be required to take various additional measures to conserve liquidity, which could include, but not necessarily be limited to, reducing capital expenditures, controlling overhead expenses and raising additional sources of capital, such as monetizing certain existing assets.

Furthermore, additional equity financing may dilute the interests of our common stockholders, and debt financing, if available, may involve restrictive covenants that could further restrict our business activities or our ability to execute our strategic objectives and could reduce our profitability.

If we cannot access the full capacity of our credit facility or raise or borrow funds on acceptable terms or at all, it could adversely affect our liquidity, and we may not be able to grow our business or respond to competitive pressures.

Our financial statements contain a statement regarding a substantial doubt about the Company’s ability to continue as a going concern.

Our Consolidated Financial Statements as of and for the year ended December 31, 2022 are prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

We have evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the Consolidated Financial Statements are issued and based on an evaluation of the conditions described in Item 7, Liquidity and Capital Resources, such conditions raise substantial doubt about our ability to continue as a going concern.

In January 2023, our Board approved the second phase of the 2022 Restructuring Plan, which includes an overall reduction of approximately 500 positions globally.

A substantial portion of these reductions occurred in January 2023 and the remaining are expected to occur by the end of the second quarter 2023.

We estimate that the second phase of our 2022 Restructuring plan and related costs savings initiatives will result in approximately $100.0 million in annualized cost savings.

Further, following the completion of our cloud migration project in February 2023, we have begun to accelerate our efforts to optimize our technology stack and cloud workloads resulting in additional cost savings and we plan to improve the efficiency of our marketing investment resulting in reductions to marketing

expense for the remainder of 2023.

Management will also take steps to minimize the risk certain payment processors will require reserves or holdback receivables.

Based on the actions we have taken and those we plan to take, we believe we have alleviated the substantial doubt previously described and have sufficient liquidity to meet our obligations as they become due over the next twelve months, however, there can be no assurance, that we will be successful in completing such actions and realizing the anticipated cost savings.

We are also currently evaluating several different strategies to enhance our liquidity position.

These strategies may include, but are not limited to, pursuing additional actions under our multi-phase cost-savings plan, seeking additional financing from both the public and private markets through the issuance of equity or debt securities, and monetizing certain assets.

The substantial doubt about our ability to continue as a going concern may affect the price of our common stock, may impact our relationship with third parties with whom we do business, including our customers, vendors, lenders and employees, may impact our ability to raise additional capital and may impact our ability to comply going forward with covenants in our debt agreements.

The actions we have taken and plan to take in the future to reduce operating costs, including as part of our 2022 Restructuring Plan, may negatively affect our brand reputation, ability to attract and retain employees, and our reputation and performance may suffer as a result.

We may not have the ability to raise the funds necessary to settle conversions of the 2026 Notes in cash, to repurchase the 2026 Notes upon a fundamental change or to repay the 2026 Notes in cash at their maturity (if not earlier converted, redeemed or repurchased), and our current and future debt may contain limitations on our ability to pay cash upon conversions of the 2026 Notes or at their maturity or to repurchase the 2026 Notes.

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In the event the conditional conversion feature of the 2026 Notes is triggered, holders of the 2026 Notes will be entitled to convert their 2026 Notes at any time during specified periods at their option.

If one or more holders elect to convert their 2026 Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation in cash, which could adversely affect our liquidity.

If one or more holders

elect to convert their 2026 Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation in cash, which could adversely affect our liquidity.

In addition, even if holders of the 2026 Notes do not elect to convert their 2026 Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 2026 Notes, as a current rather than long-term liability, which would result in a material reduction of our net working capital.

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• the public's response to press releases or other public announcements by us or others, including our filings with the SEC and announcements relating to litigation;

• the impact of COVID-19 on our business;

• the impact of macroeconomic conditions on our business;

• speculation about our business or investments in the press or the investment community;

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• our ability to execute our strategy;

• our ability to complete the multi-phased cost savings plan and achieve the anticipated benefits from the plan;

• our executive leadership transitions;

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We do not have any control over these analysts, and in the past, we have had changes in analyst ratings that have affected our stock price.

If one or more of the analysts who cover us should downgrade our shares or change their opinion of our shares, industry sector or products, our share price would likely decline.

If one or more of the analysts who cover us should downgrade our shares or change their opinion of our shares, industry sector or products, our share price

would likely decline.

If one or more of these analysts ceases coverage of our company or fails to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.

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They are likely to do so on each exercise date for the capped call transactions, which are expected to occur during each 20 trading day period beginning on the 21st scheduled trading day prior to the maturity date of the 2026 Notes, or following any termination of any portion of the capped call transactions in connection with any repurchase, redemption or early conversion of the 2026 Notes.

This activity could also cause or prevent an increase or decrease in the price of our common stock or the 2026 Notes, which could affect holders’ ability to convert the 2026 Notes, and, to the extent the activity occurs during any observation period related to a conversion of the 2026 Notes, it could affect the amount and value of the consideration that holders will receive upon conversion of the 2026 Notes.

This activity could also cause or prevent an increase or decrease

in the price of our common stock or the 2026 Notes, which could affect holders’ ability to convert the 2026 Notes, and, to the extent the activity occurs during any observation period related to a conversion of the 2026 Notes, it could affect the amount and value of the consideration that holders will receive upon conversion of the 2026 Notes.

The potential effect, if any, of these transactions on the price of our common stock or the 2026 Notes will depend in part on market conditions and cannot be ascertained at this time.

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UNRESOLVED STAFF COMMENTS

As of December 31, 2021, we owned no property and leased 26 offices and data centers throughout the world.

As of December 31, 2022, we owned no property and leased 24 facilities throughout the world.

Our corporate headquarters is located in Chicago, Illinois.

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

What changed 10-K

Item 1A. Risk Factors