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Item 1A. Risk Factors

2024-04-15 compared with 2023-03-16 · 231 added, 293 removed, 823 unchanged (39% of the section changed)

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and include, but are not limited to, risks related to the following:

We rely on a relatively

small number of customers for a significant portion of our sales, and the loss of, or material reduction in, sales to any of our

top customers could have an adverse effect on our business, results of operations, financial condition and prospects.

We are dependent on our

relationships with key suppliers to obtain equipment and other supplies for our business on acceptable terms.

The UK Government’s

impending review of the Gambling Act, together with other rules that may be considered in the UK in response to recent consultations,

could have a material negative impact on our business.

Data privacy and security

laws and regulations in the jurisdictions in which we do business could increase the cost of our operations and subject us to possible

sanctions and other penalties.

Our results of operations

fluctuate due to seasonality and other factors and, therefore, our periodic operating results are not guarantees of future performance.

Our industry is subject

to strict government regulations that could limit our existing operations and have a negative impact on our ability to grow.

Our industry is subject

to regulations that set parameters for levels of gaming or wagering duty, tax, stake, prize and return to player.

We may be adversely affected

by disruptions to our transaction gaming and lottery systems, as well as disruptions to our internal enterprise and information technology

Our directors and key personnel

are subject to the approval of certain regulatory authorities, which, if withheld, would require us to sever our relationship with

non-approved individuals, which could adversely impact our operations.

Licensing and gaming authorities

have significant control over our operations and ownership and could cause us to redeem certain stockholders on potentially disadvantageous

Certain of our executive

officers and directors are affiliated with entities engaged in business activities similar to those conducted by us (or may enter

into similar business activities in the future) and, accordingly, may have conflicts of interest in determining whether a particular

business opportunity should be presented to us or to another entity.

We have operations in a

variety of countries, which subjects us to additional risks.

We may have future capital

needs and may not be able to obtain additional financing on acceptable terms.

Because tax laws and regulations are subject to interpretation and uncertainty,

tax payments may ultimately differ from amounts currently recorded by the Company.

We may be unable to develop

sufficient new products and product lines and integrate them into our existing business, which may adversely affect our ability to

compete; our expansion into new sectors may present competitive and regulatory challenges that differ from current ones.

We may be required to recognize

impairment charges related to goodwill, identified intangible assets and property and equipment or to take write-downs or write-offs,

restructuring or other charges that could have a significant negative effect on our financial condition, results of operations and

stock price, which could have an adverse effect on your investment.

Volatility or disruption

in the financial markets could materially adversely affect our business and the trading price of our common stock.

Global economic conditions

could have an adverse effect on our business, operating results and financial condition.

We face risks and uncertainty

arising from the United Kingdom’s withdrawal from the European Union.

rely on a relatively small number of customers for a significant portion of our sales, and the loss of, or material reduction in,

sales to any of our top customers could have an adverse effect on our business, results of operations, financial condition and prospects.

We have identified material weaknesses in our disclosure

controls and procedures and internal control over financial reporting.

Failure to remediate the material weaknesses or any other material

weaknesses that we identify in the future could result in material misstatements in our financial statements.

are dependent on our relationships with key suppliers to obtain equipment and other supplies for our business on acceptable terms.

privacy and security laws and regulations in the jurisdictions in which we do business could increase the cost of our operations

and subject us to possible sanctions and other penalties.

results of operations fluctuate due to seasonality and other factors and, therefore, our periodic operating results are not guarantees

of future performance.

industry is subject to strict government regulations that could limit our existing operations and have a negative impact on our ability

industry is subject to regulations that set parameters for levels of gaming or wagering duty, tax, stake, prize and return to player.

may be adversely affected by disruptions to our transaction gaming and lottery systems, as well as disruptions to our internal enterprise

and information technology systems.

directors and key personnel are subject to the approval of certain regulatory authorities, which, if withheld, would require us to

sever our relationship with non-approved individuals, which could adversely impact our operations.

and gaming authorities have significant control over our operations and ownership and could cause us to redeem certain stockholders

on potentially disadvantageous terms.

of our executive officers and directors could be affiliated with entities engaged in business activities similar to those conducted by

us in the future and, accordingly, may have conflicts of interest in determining

whether a particular business opportunity should be presented to us or to another entity.

have operations in a variety of countries, which subjects us to additional risks.

may have future capital needs and may not be able to obtain additional financing on acceptable terms.

tax laws and regulations are subject to interpretation and uncertainty, tax payments may ultimately differ from amounts currently

recorded by the Company.

may be unable to develop sufficient new products and product lines and integrate them into our existing business, which may adversely

affect our ability to compete; our expansion into new sectors may present competitive and regulatory challenges that differ

from current ones.

may be required to recognize impairment charges related to goodwill, identified intangible assets and property and equipment or to

take write-downs or write-offs, restructuring or other charges that could have a significant negative effect on our financial condition,

results of operations and stock price, which could have an adverse effect on your investment.

or disruption in the financial markets could materially adversely affect our business and the trading price of our common stock.

economic conditions could have an adverse effect on our business, operating results and financial condition.

Relating to Our Business and Industry

have identified material weaknesses in our disclosure controls and procedures and internal control over financial reporting.

to remediate the material weaknesses or any other material weaknesses that we identify in the future could result in material misstatements

in our financial statements.

Pursuant to Section 404 of the

Sarbanes-Oxley Act of 2002, as amended, our management is required to report on, and our independent registered public accounting firm

is required to attest to, the effectiveness of our internal control over financial reporting.

The rules governing the standards that must

be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing

and possible remediation.

Annually, we perform activities that include reviewing, documenting and testing our internal control over financial

In addition, if we fail to maintain the adequacy of our internal control over financial reporting, we will not be able to conclude

on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley

If we fail to achieve and maintain an effective internal control environment, we could suffer misstatements in our financial

statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial

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 a company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Our management

may be unable to conclude in future periods that our disclosure controls and procedures are effective due to the effects of various factors,

which may, in part, include unremediated material weaknesses in internal control over financial reporting.

For further discussion of the

material weaknesses, see Item 4, Controls and Procedures.

Management is committed to maintaining a strong internal control environment and is working towards achieving effective controls.

Management anticipates that the new controls, as implemented and

when tested for a sufficient period of time, will remediate the material weaknesses.

We may not be successful in promptly remediating

the material weaknesses identified by management, or be able to identify and remediate additional control deficiencies, including material

weaknesses, in the future.

If not remediated, our failure to establish and maintain effective disclosure controls and procedures and internal

control over financial reporting could result in material misstatements in our financial statements and a failure to meet our reporting

and financial obligations, each of which could have a material adverse effect on our financial condition and a s

a result, our stockholders could lose confidence in our financial results, which could harm our business and the value of our shares.

of our supply chain or distribution capabilities have an adverse effect on our business, financial condition, and results of operations.

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termination under certain circumstances or to reduce machines volumes in certain circumstances, and we may face pressure to renew or

upgrade terminals during the lives of these contracts, which could adversely affect revenues or our return on capital and leave us with

upgrade terminals during the lives of these contracts, which could adversely affect revenue or our return on capital and leave us with

surplus terminals.

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us to lose substantial revenue.

in applicable gambling regulations or taxation regimes may affect the revenues or profits generated by the contracts we enter into with

in applicable gambling regulations or taxation regimes may affect the revenue or profits generated by the contracts we enter into with

our customers.

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key customers, including certain UK, Italian and Greek gaming terminal customers and certain Virtual Sports customers, make a significant

contribution to our revenues and profitability.

Our top ten customers generated approximately 56% of total revenues and one customer

generated more than 10% of total revenues in the year ended December 31, 2022.

contribution to our revenue and profitability.

Our top ten customers generated approximately 57% of total revenue and two customers

generated more than 10% of total revenue in the year ended December 31, 2023.

We expect that these customers will continue to represent

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However, the loss of any of our top customers, whether through contract expiry and

non-renewal, breach of contract or other adverse factors could materially adversely affect our revenues or return on capital and leave

non-renewal, breach of contract or other adverse factors could materially adversely affect our revenue or return on capital and leave

us with surplus terminals.

Moreover, if any of these customers experience reduced revenue, such reduction could adversely affect any

revenue-sharing arrangements we have with those customers, reduce our own revenues and adversely affect our financial results.

revenue-sharing arrangements we have with those customers, reduce our own revenue and adversely affect our financial results.

are dependent on our relationships with key suppliers to obtain equipment and other supplies for our business on acceptable terms.

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expenditure during the term for new or replacement hardware.

UK Government’s impending review of the Gambling Act, together with other rules that may be considered in the UK in response to

recent consultations, could have a material negative impact on our business.

December 2020, DCMS announced that it is reviewing the Gambling Act, the consultation period for which closed on March 31, 2021 with

the objective of (i) examining whether changes are needed to the system of gambling regulation in Great Britain to reflect changes to

the gambling landscape since 2005, particularly due to technological advances (ii) ensuring there is an appropriate balance between consumer

freedoms and choice on the one hand, and prevention of harm to vulnerable groups and wider communities on the other and (iii) making

sure customers are suitably protected whenever and wherever they are gambling, and that there is an equitable approach to the regulation

of the online and the land based industries.

There have a been a number of similar consultations launched, including a DCMS consultation

in relation to fees which closed on March 25, 2021 and a Gambling Commission consultation in relation to Remote Customer Interaction

which closed on February 9, 2021.

The potential outcomes of such reviews are not currently known but new legislation or regulations could

adversely affect our business.

A recent example of legislative change implemented by the UK Government which adversely affected our business

was the reduction of maximum permitted bets from £100 to £2 on B2 Gaming Machines which became effective as of April 1, 2019.

As a result of this change, a number of land-based operators commenced a rationalization of their retail operations, which among other

measures led to the closure of certain land-based operator shops.

business depends on our ability to prevent or mitigate the effects of a cybersecurity attack.

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The risk of cyber attacks may also increase owing to the current war in Ukraine.

the company continuously takes significant steps to mitigate cybersecurity risk across a range of functions, such measures can never

eliminate the risk entirely or provide absolute security, and the Company has experienced and expects to continue to experience cyberattacks

on its information systems.

While there have not been cybersecurity incidents or vulnerabilities that have had a material adverse effect

on the company, there is no assurance that there will not be cybersecurity incidents or vulnerabilities that will have a material adverse

effect in the future.

business depends upon the protection of our intellectual property and proprietary information.

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of future performance.

revenues are subject to a number of variations.

Equipment sales and software license revenues usually reflect a limited number of large

revenue is subject to a number of variations.

Equipment sales and software license revenue usually reflect a limited number of large

transactions, which may not recur on an annual basis.

Consequently, revenues and operating results can vary substantially from period

Consequently, revenue and operating results can vary substantially from period

to period as a result of the timing of equipment sales and software licensing.

In addition, revenues may vary depending on the timing

In addition, revenue may vary depending on the timing

of contract awards and renewals, changes in customer budgets and general economic conditions.

A proportion of our revenues are subject

A proportion of our revenue is subject

to regular seasonal variations of the sort often related to seasonal consumer behavior, income from the Leisure business segment is generally

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results of operations or business in general.

Moreover, there can be no assurance that the operation of Server Based Gaming terminals,

Moreover, there can be no assurance that the operation of SBG terminals,

Video Lottery Terminals or other Terminals, Virtual Sports betting, betting online, lottery or other forms of wagering systems will be

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in its sector.

Any such developments could adversely affect such operator’s revenues and in turn adversely affect our earnings

Any such developments could adversely affect such operator’s revenue and in turn adversely affect our earnings

from such operator.

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The failure to obtain or retain a required license or approval

in any jurisdiction would decrease the geographic area where we may operate and generate revenues, decrease our share in the gaming marketplace

in any jurisdiction would decrease the geographic area where we may operate and generate revenue, decrease our share in the gaming marketplace

and put us at a disadvantage compared with our competitors.

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not be affected by a malicious or unintentional breach or technical error, failure or lapse which could have an adverse impact on payout

ratios which would consequently have an adverse effect on our business in the form of lost revenues or penalty payments to players or

ratios which would consequently have an adverse effect on our business in the form of lost revenue or penalty payments to players or

Gaming regulators may take enforcement action against us (including the imposition of significant fines) where the payout

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by the Company.

We are subject to income taxes as well as non-income based taxes, in both

the United States and numerous foreign jurisdictions.

The determination of the Company’s worldwide provision for income taxes and other

tax liabilities requires judgment and is based on diverse legislative and regulatory structures that exist in the various jurisdictions

where the company operates.

The ultimate tax outcome may differ from the amounts recorded in the Company’s financial statements and may

adversely affect the Company’s financial results for the period when such determination is made.

Tax authorities may disagree with certain

positions we have taken and assess additional taxes via tax audit.

We work with local tax experts to support our tax provisions in line

with our tax strategy.

However, there can be no assurance that we will not be subject to challenge and the future outcome of any potential

audits could adversely affect our results of operations, financial condition and cash flows.

are subject to income taxes as well as non-income based taxes, in both the United States and numerous foreign jurisdictions.

The determination

of the Company’s worldwide provision for income taxes and other tax liabilities requires judgment and is based on diverse legislative

and regulatory structures that exist in the various jurisdictions where the company operates.

The ultimate tax outcome may differ from

the amounts recorded in the Company’s financial statements and may adversely affect the Company’s financial results for the

period when such determination is made.

Tax authorities may disagree with certain positions we have taken and assess additional taxes

via tax audit.

We work with local tax experts to support our tax provisions in line with our tax strategy.

However, there can be no assurance

that we will not be subject to challenge and the future outcome of any potential audits could adversely affect our results of operations,

financial condition and cash flows.

opponents persist in their efforts to curtail legalized gaming, which, if successful, could limit our existing operations.

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political unrest, war or terrorism.

revenues can vary substantially from period to period and you should not rely upon our periodic operating results as indications of future

revenue can vary substantially from period to period and you should not rely upon our periodic operating results as indications of future

revenues are subject to variations.

Wagering equipment sales and software license revenues usually reflect a limited number of large

Wagering equipment sales and software license revenue usually reflect a limited number of large

transactions, which may not recur on an annual basis.

Consequently, revenues and operating results can vary substantially from period

Consequently, revenue and operating results can vary substantially from period

to period as a result of the timing of major equipment sales and software license revenue.

In addition, revenues may vary depending on

In addition, revenue may vary depending on

the timing of contract awards and renewals, changes in customer budgets and general economic conditions.

Revenues may also vary based

Revenue may also vary based

on adverse sequences of payouts of prizes, unusual jackpot wins, and other variations in game margin.

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us to risks customarily associated with such operations, including:

foreign withholding taxes

on, or bank regulatory restrictions on expatriating, our subsidiaries’ earnings that could reduce cash flow available to meet

our required debt service and other obligations;

the complexity of foreign

laws, regulations and markets;

the impact of foreign labor

laws and disputes;

potential risks relating

to our ability to manage our foreign operations, monitor our customers’ activities or our partners’ activities which

may subject us to risks involving such other entities’ financial condition or to inconsistent interests or goals;

recent gaming tax increases

other economic, tax and

regulatory policies of foreign governments;

the ability to attract

and retain key personnel in foreign jurisdictions.

withholding taxes on, or bank regulatory restrictions on expatriating, our subsidiaries’ earnings that could reduce cash flow

available to meet our required debt service and other obligations;

complexity of foreign laws, regulations and markets;

impact of foreign labor laws and disputes;

risks relating to our ability to manage our foreign operations, monitor our customers’ activities or our partners’ activities

which may subject us to risks involving such other entities’ financial condition or to inconsistent interests or goals;

gaming tax increases in Italy;

economic, tax and regulatory policies of foreign governments;

ability to attract and retain key personnel in foreign jurisdictions.

consolidated financial results are significantly affected by foreign currency exchange rate fluctuations.

Foreign currency exchange rate

exposures arise from current transactions and anticipated transactions denominated in currencies other than U.S.

Dollars, and from the

translation of foreign currency balance sheet accounts into GBP-denominated or USD-denominated balance sheet accounts.

Exposure to currency

exchange rate fluctuations exists and will continue because a significant portion of our revenues are denominated in currencies other

than the USD, particularly GBP and the Euro.

Exchange rate fluctuations have in the past adversely affected operating results and cash

flows and may continue to adversely affect our results of operations and cash flows and the value of assets.

Foreign currency exchange

rate exposures arise from current transactions and anticipated transactions denominated in currencies other than U.S.

from the translation of foreign currency balance sheet accounts into GBP-denominated or USD-denominated balance sheet accounts.

Exposure to currency exchange rate fluctuations exists and will continue because a significant portion of our revenue is denominated

in currencies other than the USD, particularly the British pound (“GBP”) and the Euro.

Exchange rate fluctuations have in the past

adversely affected operating results and cash flows and may continue to adversely affect our results of operations and cash flows

and the value of assets.

a result of the geographic concentration of our operations in the UK, Italy and Greece, our operating results and cash flow depend significantly

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could be negatively affected if any of our customers were sold to or merged with other customers, or if consolidation in the gaming industry

were otherwise effected.

were otherwise affected.

Consolidation among gaming operators could result in our customers using more products and services of our competitors

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business is capital intensive and our ability to retain customers may be influenced by our ability to deploy additional capital.

of our server based gaming products may request us to incur capital expenditures to provide gaming terminals to support their land-based

of our SBG products may request us to incur capital expenditures to provide gaming terminals to support their land-based

While we seek to obtain what we believe to be satisfactory rates of return on such investments, these capital expenditures

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existing borrowings, and any other indebtedness we may enter into, may limit our ability to, among other things:

incur or guarantee additional

make distributions or dividends

on or redeem or repurchase shares of common stock;

make certain investments

and acquisitions;

make capital expenditures;

incur certain liens or

permit them to exist;

enter into certain types

of transactions with affiliates;

acquire, merge or consolidate

with another company; and

transfer, sell or otherwise

dispose of all or substantially all of our assets.

or guarantee additional debt;

distributions or dividends on or redeem or repurchase shares of common stock;

certain investments and acquisitions;

capital expenditures;

certain liens or permit them to exist;

into certain types of transactions with affiliates;

merge or consolidate with another company; and

sell or otherwise dispose of all or substantially all of our assets.

provisions of our existing borrowings may affect our ability to obtain future financing and pursue attractive business opportunities

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an interest rate of 7.875% per annum, and maturing on June 1, 2026), and we had £20.0 million ($25.5 million) of credit facility

borrowings available under the RCF Agreement (see Note 13).

borrowings available under the RCF Agreement, with £15.0 million ($19.1 million) drawn as of December 31, 2023 (see Note 13).

Indenture governing the Senior Secured Notes contains incurrence covenants that limit the ability of the Company and the Company’s

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on a number of factors, including our ability to:

effectively market our

games to our customers and to existing and new players;

adapt to changing customer

needs and player preferences;

adapt to new technologies;

adapt game features and

contents for an increasingly diverse set of devices and specifications;

minimize launch delays

and cost overruns on the development of new products and features;

expand and enhance games

and content after their initial release;

attract, retain and motivate

talented and experienced game designers, product managers and engineers;

achieve and maintain player

develop games that can

build upon or become franchise games;

maintain quality content

and game experience;

compete successfully against

a large and growing number of market participants;

integrate new products

and product lines into our existing business;

minimize and quickly resolve

bugs or outages.

market our games to our customers and to existing and new players;

to changing customer needs and player preferences;

to new technologies;

game features and contents for an increasingly diverse set of devices and specifications;

launch delays and cost overruns on the development of new products and features;

and enhance games and content after their initial release;

retain and motivate talented and experienced game designers, product managers and engineers;

and maintain player engagement;

games that can build upon or become franchise games;

quality content and game experience;

successfully against a large and growing number of market participants;

new products and product lines into our existing business;

and quickly resolve bugs or outages.

addition, if new technologies are protected by the intellectual property rights of others, including our competitors, we may be prevented

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financial success is dependent on our customers’ ability to attract and maintain players.

have a participation-driven business model, whereby a significant amount of our revenues are generated from the gaming revenue of our

have a participation-driven business model, whereby a significant amount of our revenue is generated from the gaming revenue of our

customers, typically as a percentage of gross revenue.

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affecting the trading price of the Company’s securities may include:

market conditions affecting

the gaming industry;

quarterly variations in

our results of operations;

changes in government regulations;

the announcement of acquisitions

by us or our competitors;

changes in general economic

and political conditions;

volatility in the financial

results of our operations

and the operations of others in our industry;

changes in interest rates;

threatened or actual litigation

and government investigations;

the addition or departure

of key personnel;

actions taken by our stockholders,

including the sale or disposition of their shares of our common stock; and

differences between our

actual financial and operating results and those expected by investors and analysts and changes in analysts’ recommendations

conditions affecting the gaming industry;

variations in our results of operations;

in government regulations;

announcement of acquisitions by us or our competitors;

in general economic and political conditions;

in the financial markets;

of our operations and the operations of others in our industry;

in interest rates;

or actual litigation and government investigations;

addition or departure of key personnel;

taken by our stockholders, including the sale or disposition of their shares of our common stock; and

between our actual financial and operating results and those expected by investors and analysts and changes in analysts’ recommendations

or projections.

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series, any one of the following securities of our company, for total gross proceeds up to $300,000,000:

common stock;

preferred stock;

secured or unsecured debt

securities consisting of notes, debentures or other evidences of indebtedness which may be senior debt securities, senior subordinated

debt securities or subordinated debt securities, each of which may be convertible into equity securities;

warrants to purchase our

rights to purchase any

of the foregoing securities;

units comprised of, or

other combinations of, the foregoing securities.

or unsecured debt securities consisting of notes, debentures or other evidences of indebtedness which may be senior debt securities,

senior subordinated debt securities or subordinated debt securities, each of which may be convertible into equity securities;

to purchase our securities;

to purchase any of the foregoing securities;

comprised of, or other combinations of, the foregoing securities.

Anti-takeover

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These provisions include:

no cumulative voting in

the election of directors, which limits the ability of minority stockholders to elect director candidates;

the exclusive right of

our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation,

death, or removal of a director with or without cause by stockholders, which prevents stockholders from being able to fill vacancies

on our board of directors;

the ability of our board

of directors to determine whether to issue shares of our preferred stock and to determine the price and other terms of those shares,

including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership

of a hostile acquirer;

limiting the liability

of, and providing indemnification to, our directors and officers;

designating the Court of

Chancery of the State of Delaware as the exclusive forum for adjudication of disputes;

controlling the procedures

for the conduct and scheduling of stockholder meetings; and

advance notice procedures

that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon

at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to

elect the acquirer’s own slate of directors or otherwise attempting to obtain control of the Company.

cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

exclusive right of our Board of Directors to elect a director to fill a vacancy created by the expansion of the Board of Directors

or the resignation, death, or removal of a director with or without cause by stockholders, which prevents stockholders from being

able to fill vacancies on our Board of Directors;

ability of our Board of Directors to determine whether to issue shares of our preferred stock and to determine the price and other

terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly

dilute the ownership of a hostile acquirer;

the liability of, and providing indemnification to, our directors and officers;

the Court of Chancery of the State of Delaware as the exclusive forum for adjudication of disputes;

the procedures for the conduct and scheduling of stockholder meetings; and

notice procedures that stockholders must comply with in order to nominate candidates to our Board of Directors or to propose matters

to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation

of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of the Company.

provisions, alone or together, could delay hostile takeovers and changes in control of the Company or changes in our Board of Directors

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We are exposed to the impact of any global or domestic economic disruption, including any potential impact of the decision

by the United Kingdom to exit the EU and the sovereign debt crises in certain Eurozone countries where we do business.

by the UK to exit the EU and the sovereign debt crises in certain Eurozone countries where we do business.

Our ability to

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an adverse effect on the trading price of our common stock.

exchange rate fluctuations could result in lower revenues, higher costs and decreased margins and earnings.

conduct purchase and sale transactions in various currencies, which increases our exposure to fluctuations in foreign currency exchange

rates globally.

Additionally, there has been, and may continue to be, volatility in currency exchange rates as a result of the United

Kingdom’s June 23, 2016 referendum in which voters approved Brexit and subsequent entry into and ratification of a withdrawal agreement

as of January 29, 2021 followed by an agreement of the terms of a trade and cooperation agreement effective as of December 31, 2021.

It is possible that sovereign debt crises in certain Eurozone countries could lead to the abandonment of the Euro and the reintroduction

of national currencies in those countries.

International revenues and expenses generally are derived from sales and operations in various

foreign currencies, and these revenues and expenses could be affected by currency fluctuations, specifically amounts recorded in foreign

currencies and translated into USD for consolidated financial reporting, as weakening of foreign currencies relative to the USD will

adversely affect the USD value of the Company’s foreign currency-denominated sales and earnings.

Currency exchange rate fluctuations

could also disrupt the business of the independent manufacturers that produce our products by making their purchases of raw materials

more expensive and more difficult to finance.

Foreign currency fluctuations could have an adverse effect on our results of operations

and financial condition.

exchange rate fluctuations could result in lower revenue, higher costs and decreased margins and earnings.

conduct purchase and sale transactions in various currencies, which increases our exposure to fluctuations in foreign currency

exchange rates globally.

Additionally, there has been, and may continue to be, volatility in currency exchange rates as a result of

the UK’s June 23, 2016 referendum in which voters approved Brexit and subsequent entry into and ratification of a withdrawal

agreement as of January 29, 2021 followed by an agreement of the terms of a trade and cooperation agreement effective as of December

It is possible that sovereign debt crises in certain Eurozone countries could lead to the abandonment of the Euro and the

reintroduction of national currencies in those countries.

International revenue and expenses generally are derived from sales and

operations in various foreign currencies, and this revenue and these expenses could be affected by currency fluctuations,

specifically amounts recorded in foreign currencies and translated into USD for consolidated financial reporting, as weakening of

foreign currencies relative to the USD will adversely affect the USD value of the Company’s foreign currency-denominated sales

and earnings.

Currency exchange rate fluctuations could also disrupt the business of the independent manufacturers that produce our

products by making their purchases of raw materials more expensive and more difficult to finance.

Foreign currency fluctuations

could have an adverse effect on our results of operations and financial condition.

may hedge other foreign currency exposures to lessen and delay, but not to completely eliminate, the effects of foreign currency fluctuations

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effect on our business, operating results and financial condition:

Slower consumer spending

may result in reduced demand for our products, reduced orders from retailers for our products, order cancellations, lower revenues,

higher discounts, increased inventories and lower gross margins;

In the future, we may be

unable to access financing in the credit and capital markets at reasonable rates in the event we find it desirable to do so;

We conduct transactions

in various currencies, which increases our exposure to fluctuations in foreign currency exchange rates relative to the USD.

volatility in the markets and exchange rates for foreign currencies and contracts in foreign currencies could have a significant

impact on our reported operating results and financial condition;

Continued volatility in

the availability and prices for commodities and raw materials we use in our products and in our supply chain could have an adverse

effect on our costs, gross margins and profitability;

If operators or distributors

of our products experience declining revenues or experience difficulty obtaining financing in the capital and credit markets to purchase

our products, this could result in reduced orders for our products, order cancellations, late retailer payments, extended payment

terms, higher accounts receivable, reduced cash flows, greater expense associated with collection efforts and increased bad debt

If operators or distributors

of our products experience severe financial difficulty, some may become insolvent and cease business operations, which could negatively

affect the sale of our products to consumers;

If contract manufacturers

of our products or other participants in our supply chain experience difficulty obtaining financing in the capital and credit markets

to purchase raw materials or to finance capital equipment and other general working capital needs, it may result in delays or non-delivery

of shipments of our products.

consumer spending may result in reduced demand for our products, reduced orders from retailers for our products, order cancellations,

lower revenue, higher discounts, increased inventories and lower gross margins;

the future, we may be unable to access financing in the credit and capital markets at reasonable rates in the event we find it desirable

conduct transactions in various currencies, which increases our exposure to fluctuations in foreign currency exchange rates relative

Continued volatility in the markets and exchange rates for foreign currencies and contracts in foreign currencies could

have a significant impact on our reported operating results and financial condition;

volatility in the availability and prices for commodities and raw materials we use in our products and in our supply chain could

have an adverse effect on our costs, gross margins and profitability;

operators or distributors of our products experience declining revenue or experience difficulty obtaining financing in the capital

and credit markets to purchase our products, this could result in reduced orders for our products, order cancellations, late retailer

payments, extended payment terms, higher accounts receivable, reduced cash flows, greater expense associated with collection efforts

and increased bad debt expense;

operators or distributors of our products experience severe financial difficulty, some may become insolvent and cease business operations,

which could negatively affect the sale of our products to consumers;

contract manufacturers of our products or other participants in our supply chain experience difficulty obtaining financing in the

capital and credit markets to purchase raw materials or to finance capital equipment and other general working capital needs, it

may result in delays or non-delivery of shipments of our products.

International

1 unchanged sentence

effectively serving our customers and thus adversely affect our results of operations.

of terrorist violence, cyber-terrorism, political unrest, armed regional and international hostilities and international responses

to these hostilities, natural disasters, including hurricanes or floods, global health risks or pandemics (such as COVID-19) or the

threat of or perceived potential for these events could have a negative impact on us.

These events could adversely affect our

customers’ levels of business activity (or involve government mandated shutdowns of our venues) and precipitate sudden

significant changes in regional and global economic conditions and cycles.

These events also pose significant risks to our employees

and our physical facilities and operations around the world, whether the facilities are ours or those of our third-party service

providers or customers.

By disrupting communications and travel and increasing the difficulty of obtaining and retaining highly

skilled and qualified personnel, these events could make it difficult or impossible for us to deliver products and services to our

Extended disruptions of electricity, other public utilities or network services at our facilities, as well as system

failures at our facilities or otherwise, could also adversely affect our ability to serve our customers.

We may be unable to protect

our employees, facilities and systems against all such occurrences.

We generally do not have insurance for losses and interruptions

caused by terrorist attacks, conflicts and wars.

If these disruptions prevent us from effectively serving our customers, our results

of operations could be adversely affected.

face risks and uncertainty arising from the United Kingdom’s withdrawal from the European Union.

from the United Kingdom’s public referendum vote to exit from the European Union in June 2016, a withdrawal agreement was signed

by both the United Kingdom and European Union and formally ratified as of January 29, 2021.

In accordance with the terms of the agreement,

the terms of a trade and cooperation agreement were agreed between officials from the European Union and United Kingdom on December 31,

As with other businesses operating in the UK and Europe, the measures could potentially have corporate structural consequences,

adversely affect manufacturing and other costs, adversely change tax benefits or liabilities in these or other jurisdictions and could

disrupt some of the markets and jurisdictions in which we operate.

In addition, Brexit could lead to legal uncertainty and potentially

divergent national laws and regulations as the United Kingdom determines which European Union laws to replace or replicate.

the announcement of Brexit has caused significant volatility in global stock markets and currency exchange rate fluctuations, including

the strengthening of the USD against some foreign currencies, and the Brexit negotiations may continue to cause significant volatility.

The outcomes of these provisional and further trade deal negotiations also may create global economic uncertainty, which may cause customers

and potential customers to monitor their costs and reduce their budgets for products and services.

Any of these effects of Brexit, among

others, could materially adversely affect the business, business opportunities, results of operations, financial condition and cash flows

of our Company.

UNRESOLVED STAFF COMMENTS.

of terrorist violence, cyber-terrorism, political unrest, armed regional and international hostilities and international responses to

these hostilities, natural disasters, including hurricanes or floods, global health risks or pandemics (such as COVID-19) or the threat

of or perceived potential for these events could have a negative impact on us.

These events could adversely affect our customers’

levels of business activity (or involve government mandated shutdowns of our venues) and precipitate sudden significant changes in regional

and global economic conditions and cycles.

These events also pose significant risks to our employees and our physical facilities and

operations around the world, whether the facilities are ours or those of our third-party service providers or customers.

By disrupting

communications and travel and increasing the difficulty of obtaining and retaining highly skilled and qualified personnel, these events

could make it difficult or impossible for us to deliver products and services to our customers.

Extended disruptions of electricity,

other public utilities or network services at our facilities, as well as system failures at our facilities or otherwise, could also adversely

affect our ability to serve our customers.

We may be unable to protect our employees, facilities and systems against all such occurrences.

We generally do not have insurance for losses and interruptions caused by terrorist attacks, conflicts and wars.

If these disruptions

prevent us from effectively serving our customers, our results of operations could be adversely affected.

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