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For example, the banning of plastic straws was triggered by a social media backlash, which caused corresponding legislative changes within a short time period, resulting in the ban of plastic straws in certain jurisdictions, and a movement toward eco-friendly packaging.
−Removed: If we are unable to quickly adapt to changes in consumer preferences and subsequent legislation, our financial condition and results of operations could be adversely affected.
+Added: If we are unable to quickly adapt to changes in consumer preferences and subsequent legislation, our business, financial condition, results of operations or cash flows could be adversely affected.
Supply chain disruptions could interrupt product manufacturing and increase product costs.
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to produce most of our products.
−Removed: Global industry-wide logistics challenges have negatively impacted us during 2021 when international shipping to the U.S.
−Removed: was disrupted and delayed due to congestion in west coast ports.
−Removed: Significantly higher freight costs and demurrage charges have dampened our margin in 2021.
+Added: Global industry-wide logistics challenges have negatively impacted us during these past several years when international shipping to the U.S.
+Added: was disrupted and delayed due to congestion at ports on the west coast.
+Added: Significantly higher freight costs and demurrage can dampen our margin.
Failure to adequately source and timely ship our products to customers could lead to lost potential revenue, failure to meet customer demand, strained relationships with customers, and diminished brand loyalty.
−Removed: We expect to still be impacted by global logistics challenges in 2022.
+Added: Although the global supply chain challenges have started to subside and Asia to the U.S.
+Added: ocean freight rates have started to stabilize in the later part of 2022, our business, financial condition, results of operations or cash flows could be adversely affected if the global industry-wide logistics worsen.
Raw material inflation or shortage of available materials could harm our financial condition and results of operations.
−Removed: Raw materials are subject to price fluctuations and availability, which could result from external factors, such as the COVID-19 pandemic, weather-related events, or other supply chain challenges, that are beyond our control.
+Added: Raw materials are subject to price fluctuations and availability, which could result from external factors, such as the nationwide inflation, weather-related events, or other supply chain challenges, that are beyond our control.
We typically do not enter into long-term fixed price contracts with our suppliers, and our suppliers could pass on raw material price increases to us.
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However, due to the lag between the sourcing or the manufacturing of our products and sales to our customers, margin could be negatively impacted in periods of rising raw materials until price actions are in place.
−Removed: Raw material shortages, especially with respect to polyethylene terephthalate, or PET, plastic resin, or our inability to timely pass through increased costs to our customers may adversely affect our business, financial condition and results of operations.
+Added: Raw material shortages, especially with respect to polyethylene terephthalate, or PET, plastic resin, or our inability to timely pass through increased costs to our customers may adversely affect our business, financial condition, results of operations or cash flows.
We operate in a highly competitive environment and may not be able to compete successfully.
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In addition, our current or potential competitors may offer products at a lower price, or products and services that are superior to ours.
−Removed: Our success depends upon successful research, development and engineering efforts to utilize emerging and legislatively mandated raw materials, our ability to expand or modify our manufacturing capacity, and the extent to which we are able to convince customers and consumers to accept our new products.
−Removed: If we fail to successfully innovate, introduce, market, and manufacture differentiated and price-competitive products relative to those of our
−Removed: competitors, our ability to maintain or expand our net sales and to maintain or enhance our industry position or profit margins could be adversely affected.
+Added: Our success depends upon successful research, development and engineering efforts to utilize emerging and legislatively mandated raw materials, our ability to expand or modify our manufacturing capacity, and the
+Added: extent to which we are able to convince customers and consumers to accept our new products.
+Added: If we fail to successfully innovate, introduce, market, and manufacture differentiated and price-competitive products relative to those of our competitors, our ability to maintain or expand our net sales and to maintain or enhance our industry position or profit margins could be adversely affected.
This, in turn, could materially adversely affect our business, financial condition, results of operations or cash flows.
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Any failure to obtain sufficient freight capacity on a timely basis or at favorable shipping rates will result in our inability to receive products from suppliers or deliver products to our customers in a timely and cost-effective manner, which will result in a material adverse impact on our business, financial condition, results of operations or cash flows.
+Added: We may experience delays or disruptions in the shipment of our goods through operational ports.
+Added: We rely on the timely and free flow of goods through open and operational ports, both domestic and international, from our suppliers and manufacturers.
+Added: Labor disputes or disruptions at ports, our common carriers, or our suppliers or manufacturers could create significant risks for our business, particularly if these disputes result in work slowdowns, lockouts, strikes, or other disruptions during periods of significant importing or manufacturing, potentially causing delayed or cancelled orders by customers, unanticipated inventory accumulation or shortages, and significant incremental demurrage charges.
+Added: Such disruptions could harm our business, results of operations, and financial condition.
+Added: Accordingly, we are subject to risks, including labor disputes, union organizing activity, inclement weather, and increased transportation costs, associated with our third-party contract manufacturers’ and carriers’ ability to provide products and services to meet our requirements.
+Added: In addition, if the cost of fuel and ocean freight rises, the cost to source and deliver products may rise, which could harm our profitability.
Our net sales and profits depend on the level of customer spending for our products, which is sensitive to general economic conditions and other factors.
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Any of these factors could harm discretionary consumer spending, resulting in a reduction in demand for our products, decreased prices, and harm to our business and results of operations.
+Added: Periods of significant or prolonged deflation may negatively impact our results of operations and overall profitability.
+Added: If the industry we operate in experiences a prolonged period of price decreases resulting from stabilizing ocean freight costs and decreased raw material input costs, we could see a reduction in our sales, gross margin and overall profitability.
+Added: Similarly, if our competitors lower their prices and expand their promotional activities, we may be forced to lower our prices as well and our operational results could be negatively impacted.
Changes in tax laws or changes in our geographic mix of earnings could have a material impact on our financial condition and results of operation.
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In addition, tax policy efforts to raise global corporate tax rates could adversely impact our tax rate and subsequent tax expense.
−Removed: We rely on a combination of purchase orders and supply contracts with our suppliers and manufacturers.
−Removed: Some of these relationships are not exclusive, which means that these suppliers and manufacturers could produce similar products for our competitors.
−Removed: We rely on a combination of purchase orders and supply contracts with our suppliers and manufacturers.
−Removed: With all of our suppliers and manufacturers, we face the risk that they may fail to produce and deliver supplies or our products on a timely basis, or at all.
−Removed: Furthermore, the products they manufacture for us may not comply with our quality standards.
−Removed: In addition, our suppliers and manufacturers may raise prices in the future, which would increase our costs and harm our margins.
−Removed: Even those suppliers and manufacturers with whom we have supply contracts may breach these agreements, and we may not be able to enforce our rights under these agreements or may incur significant costs attempting to do so.
−Removed: As a result, we cannot predict with certainty our ability to obtain supplies and finished products in adequate quantities, of required quality and at acceptable prices from our suppliers and manufacturers in the future.
−Removed: Any one of these risks could
−Removed: harm our ability to deliver our products on time, or at all, damage our reputation and our relationships with our customers, and increase our product costs thereby reducing our margins.
−Removed: In addition, our arrangements with our manufacturers and suppliers are not exclusive.
−Removed: As a result, our suppliers or manufacturers could produce similar products for our competitors, some of which could potentially purchase products in significantly greater volume.
−Removed: Our competitors could enter into restrictive or exclusive arrangements with our manufacturers or suppliers that could impair or eliminate our access to manufacturing capacity or supplies.
−Removed: Our manufacturers or suppliers could also be acquired by our competitors, and may become our direct competitors, thus limiting or eliminating our access to supplies or manufacturing capacity.
−Removed: If our independent suppliers and manufacturing partners do not comply with ethical business practices or with applicable laws and regulations, our reputation, business, and results of operations would be harmed.
−Removed: Our reputation and our customers’ willingness to purchase our products depend in part on our suppliers’ and manufacturers’ compliance with ethical employment practices, such as with respect to child labor, wages and benefits, forced labor, discrimination, safe and healthy working conditions, and with all legal and regulatory requirements relating to the conduct of their businesses.
−Removed: We do not exercise control over our suppliers and manufacturers and cannot guarantee their compliance with ethical and lawful business practices.
−Removed: If our suppliers or manufacturers fail to comply with applicable laws, regulations, safety codes, employment practices, human rights standards, quality standards, environmental standards, production practices, or other obligations, norms, or ethical standards, our reputation and brand image could be harmed and we could be exposed to litigation and additional costs that would harm our business, reputation, and results of operations.
Risks Related to Our Business
−Removed: The continuing effects of COVID-19 are highly unpredictable and could be significant, and may have an adverse effect on our business, operations and our future financial performance.
−Removed: Since COVID-19 was declared a global pandemic by the World Health Organization, our business, operations and financial performance have been, and may continue to be, affected by the macroeconomic impacts resulting from the efforts to control the spread of COVID-19.
−Removed: As a result of the scale of the ongoing pandemic, including the introduction of new variants of COVID-19 and vaccination and other efforts to control the spread, our revenue growth rate and expenses as a percentage of our revenues in future periods may differ significantly from our historical rates, and our future operating results may fall below expectations.
−Removed: We may also experience additional operating costs due to increased challenges with our workforce (including as a result of labor shortages, illness, absenteeism or government orders), and access to supplies and capital.
−Removed: Even after the COVID-19 pandemic has subsided, we may experience materially adverse impacts to our business due to any resulting supply chain disruptions and economic conditions.
−Removed: Furthermore, the impacts of potential worsening of global economic conditions, inflation pressures and continued disruptions to and volatility in the financial markets remain unknown.
−Removed: Our business is subject to the risk of earthquakes, fire, power outages, floods, pandemics, and other catastrophic events, and to interruption by problems such as terrorism, cyberattacks, or failure of key information technology systems.
−Removed: As we rely heavily on our manufacturing facilities, our business is particularly vulnerable to damage or interruption from earthquakes, fires, floods, pandemics, power losses, telecommunications failures, terrorist attacks, acts of war, human errors, criminal acts, and similar events.
−Removed: For example, a significant natural disaster, such as an earthquake, fire, or flood, could harm our business, results of operations, and financial condition, and our insurance coverage may be insufficient to compensate us for losses that may occur.
−Removed: Our corporate offices, distribution centers, and manufacturing facilities are located in California, a state that frequently experiences earthquakes and wildfires, and Texas, a state that frequently experiences floods and storms.
−Removed: In addition, the facilities of our suppliers and where our manufacturers produce our products are located in parts of Asia that frequently experience typhoons and earthquakes.
−Removed: Acts of terrorism could also cause disruptions in our or our suppliers’, manufacturers’, and logistics providers’ businesses or the economy as a whole.
−Removed: We may not have sufficient protection or recovery plans in some circumstances, such as natural disasters affecting California or Texas or other locations where we have operations or store significant inventory.
−Removed: Our servers may also be vulnerable to computer viruses, criminal acts, denial-of-service attacks, ransomware, and similar disruptions from unauthorized tampering with our computer systems, which could lead to interruptions, delays, or loss of critical data.
−Removed: As we rely heavily on our information technology and communications systems and the internet to conduct our business and provide high-quality customer service, these disruptions could harm our ability to run our business and either directly or indirectly disrupt our suppliers’ or manufacturers’ businesses, which could harm our business, results of operations, and financial condition.
−Removed: International political instability and terrorist activities could result in market instability, which could negatively impact our business results.
−Removed: Terrorist activities and armed conflicts, including recent escalation in regional conflicts, including the Russian invasion of Ukraine and increasing tensions between China and Taiwan, could result in economic sanctions that could impact our operational and financial results.
−Removed: If such events disrupt domestic or international air, ground or sea shipments, or the operation of the Company’s manufacturing facilities, the Company’s ability to obtain the materials necessary to manufacture its products and to deliver customer orders would be harmed, which would have a significant adverse effect on the Company’s results of operations, financial condition and cash flows.
−Removed: In addition, international conflict could result in increased energy costs, which could increase the cost of manufacturing, selling and delivering products and solutions;
−Removed: inflation, which could result in increases in the cost of manufacturing products and solutions, reduced customer purchasing power, decreased consumer demand, increased price pressure, and reduced or cancelled orders;
−Removed: increased risk of cyber-attacks;
−Removed: and market instability, which could adversely impact our overall business results.
−Removed: We may not have adequate insurance coverage.
−Removed: We may not have adequate insurance coverage.
−Removed: The successful assertion of one or more large claims against us that exceeds our available insurance coverage, or results in changes to our insurance policies (including premium increases or the imposition of large deductible or co-insurance requirements), could have an adverse effect on our business.
−Removed: In addition, we cannot be sure that our existing insurance coverage and coverage for errors and omissions will continue to be available on acceptable terms or that our insurers will not deny coverage as to any future claim.
Our business could be harmed if we are unable to accurately forecast demand for our products or our results of operations.
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Even if the markets in which we compete expand, we cannot assure you that our business will grow at similar rates, if at all.
−Removed: We may experience delays or disruptions in the shipment of our goods through operational ports.
−Removed: We rely on the timely and free flow of goods through open and operational ports, both domestic and international, from our suppliers and manufacturers.
−Removed: Labor disputes or disruptions at ports, our common carriers, or our suppliers or manufacturers could create significant risks for our business, particularly if these disputes result in work slowdowns, lockouts, strikes, or other disruptions during periods of significant importing or manufacturing, potentially causing delayed or cancelled orders by customers, unanticipated inventory accumulation or shortages, and significant incremental demurrage charges.
−Removed: Such disruptions could harm our business, results of operations, and financial condition.
−Removed: Accordingly, we are subject to risks, including labor disputes, union organizing activity, inclement weather, and increased transportation costs, associated with our third-party contract manufacturers’ and carriers’ ability to provide products and services to meet our requirements.
−Removed: In addition, if the cost of fuel and ocean freight rises, the cost to source and deliver products may rise, which could harm our profitability.
We may continue to incur significant capital expenditures which could affect our ability to meet our obligations and may otherwise restrict our growth.
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Such purchases and investments could affect our ability to service our existing debt obligations or limit our ability to respond to business opportunities, pursue acquisitions or otherwise restrict our continued growth and expansion.
−Removed: Labor cost inflation and the unavailability of skilled workers could disrupt our business.
−Removed: Labor is subject to cost inflation and availability, due to external factors, such as the COVID-19 pandemic and workforce participation rates, that are beyond our control.
−Removed: As a result, there can be no assurance we will be able to recruit, train, assimilate, motivate and retain employees in the future.
−Removed: The loss of a substantial number of these employees and our inability to hire and replace our workforce could disrupt our business and result in significant losses.
−Removed: Our growth depends, in part, on expanding into additional foodservice and geographic markets, and we may not be successful in doing so.
−Removed: We believe that our future growth depends not only on continuing to reach our current customer base and demographic, but also continuing to expand our business into other foodservice markets and geographies.
−Removed: The growth of our business will depend, in part, on our ability to continue to expand into additional foodservice markets including grocery stores, entertainment venues, airlines and other non-traditional foodservice venues.
−Removed: Additionally, we are expanding our sales and marketing efforts to further penetrate additional geographies across the United States, and we may encounter difficulties in attracting customers due to a lack of consumer familiarity with or acceptance of our brand.
−Removed: We continue to evaluate marketing efforts and other strategies to expand the customer base for our products.
−Removed: In addition, although we are investing in sales and marketing activities to further penetrate newer regions, including expansion of our dedicated sales force, we cannot assure you that we will be successful.
−Removed: If we are not successful, our business and results of operations may be harmed.
Because we have entered into a significant number of related party transactions through the course of our routine business operations, there is a risk of conflicts of interest involving our management, and that such transactions may not reflect terms that would be available from unaffiliated third parties.
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We may engage in additional related party transactions in the future, which will be subject to review and approval by our nominating and corporate governance committee pursuant to the Company’s related party transactions policy.
−Removed: We rely on third-party contract manufacturers and conflicts with, or loss of, our suppliers or an inability to obtain raw materials could harm our business and results of operations.
−Removed: Certain of our products are produced by third-party contract manufacturers.
−Removed: We face the risk that these third-party contract manufacturers may not produce and deliver our products on a timely basis, or at all.
−Removed: We may also experience the inability of our third-party contract manufacturers to meet the increased demand of our customers.
−Removed: These difficulties include reductions in the availability of production capacity, errors in complying with product specifications and regulatory and customer requirements, insufficient quality control, failures to meet production deadlines, failure to achieve our product quality standards, increases in costs of materials, and manufacturing or other business interruptions.
−Removed: The ability of our manufacturers to effectively satisfy our production requirements could also be impacted by manufacturer financial difficulty or disruption to their operations caused by fire, terrorist attack, natural disaster, or other events.
−Removed: The failure of any manufacturer to perform to our expectations could result in supply shortages or delays for certain products and harm our business.
−Removed: If we experience significantly increased demand, or if we need to replace an existing manufacturer due to lack of performance, we may be unable to supplement or replace their manufacturing capacity on a timely basis or on terms that are acceptable to us, which may increase our costs, reduce our margins, and harm our ability to deliver our products on time.
−Removed: For certain of our products, it may take a significant amount of time to identify and qualify a manufacturer that has the capability and resources to produce our products to our specifications in sufficient volume and satisfy our service and quality control standards.
+Added: We may not have adequate insurance coverage.
+Added: We may not have adequate insurance coverage.
+Added: The successful assertion of one or more large claims against us that exceeds our available insurance coverage, or results in changes to our insurance policies (including premium increases or the imposition of large deductible or co-insurance requirements), could have an adverse effect on our business.
+Added: In addition, we cannot be sure that our existing insurance coverage and coverage for errors and omissions will continue to be available on acceptable terms or that our insurers will not deny coverage as to any future claim.
If we are unable to successfully design and develop new products, our business may be harmed.
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Failure to detect, prevent, or fix defects could result in a variety of consequences, including a greater number of product returns than expected from customers, litigation, product recalls, and credit claims, among others, which could harm our sales and results of operations.
−Removed: The occurrence of real or perceived quality problems or material defects in our current and future products could expose us to product recalls, warranty, or other claims.
+Added: The occurrence of real or perceived quality problems or material defects in our current and future products could result in loss of revenue and expose us to product recalls, warranty, or other claims.
In addition, any negative publicity or lawsuits filed against us related to the perceived quality and safety of our products could also harm our brand and decrease demand for our products.
+Added: Labor cost inflation and the unavailability of skilled workers could disrupt our business.
+Added: Labor is subject to cost inflation and availability, due to external factors, such as the continuing impacts of the COVID-19 pandemic and workforce participation rates, that are beyond our control.
+Added: As a result, there can be no assurance we will be able to recruit, train, assimilate, motivate and retain employees in the future.
+Added: The loss of a substantial number of these employees and our inability to hire and replace our workforce could disrupt our business and result in significant losses.
+Added: Our growth depends, in part, on expanding into additional foodservice and geographic markets, and we may not be successful in doing so.
+Added: We believe that our future growth depends not only on continuing to reach our current customer base and demographic, but also continuing to expand our business into other foodservice markets and geographies.
+Added: The growth of our business will depend, in part, on our ability to continue to expand into additional foodservice markets including grocery stores, entertainment venues, airlines and other non-traditional foodservice venues.
+Added: Additionally, we are expanding our sales and marketing efforts to further penetrate additional geographies across the United States, and we may encounter difficulties in attracting customers due to a lack of consumer familiarity with or acceptance of our brand.
+Added: We continue to evaluate marketing efforts and other strategies to expand the customer base for our products especially our eco-friendly line.
+Added: In addition, although we are investing in sales and marketing activities such as upgrading our e-commerce platform and presence to further penetrate newer regions and customers, we cannot provide assurances that these efforts will be successful.
+Added: If we are not successful, our business, results of operations, financial condition and cash flows may be harmed.
+Added: We rely on third-party contract manufacturers and conflicts with, or loss of, our suppliers or an inability to obtain raw materials could harm our business and results of operations.
+Added: Certain of our products are produced by third-party contract manufacturers.
+Added: We face the risk that these third-party contract manufacturers may not produce and deliver our products on a timely basis, or at all.
+Added: We may also experience the inability of our third-party contract manufacturers to meet the increased demand of our customers.
+Added: These difficulties include reductions in the availability of production capacity, errors in complying with product specifications and regulatory and customer requirements, insufficient quality control, failures to meet production deadlines, failure to achieve our product quality standards, increases in costs of materials, and manufacturing or other business interruptions.
+Added: The ability of our manufacturers to effectively satisfy our production requirements could also be impacted by manufacturer financial difficulty or disruption to their operations caused by fire, terrorist attack, natural disaster, or other events.
+Added: The failure of any manufacturer to perform to our expectations could result in supply shortages or delays for certain products and harm our business.
+Added: If we experience significantly increased demand, or if we need to replace an existing manufacturer due to lack of performance, we may be unable to supplement or replace their manufacturing capacity on a timely basis or on terms that are acceptable to us, which may increase our costs, reduce our margins, and harm our ability to deliver our products on time.
+Added: For certain of our products, it may take a significant amount of time to identify and qualify a manufacturer that has the capability and resources to produce our products to our specifications in sufficient volume and satisfy our service and quality control standards.
+Added: We rely on a combination of purchase orders and supply contracts with our suppliers and manufacturers.
+Added: Some of these relationships are not exclusive, which means that these suppliers and manufacturers could produce similar products for our competitors.
+Added: We rely on a combination of purchase orders and supply contracts with our suppliers and manufacturers.
+Added: With all of our suppliers and manufacturers, we face the risk that they may fail to produce and deliver supplies or our products on a timely basis, or at all.
+Added: Furthermore, the products they manufacture for us may not comply with our quality standards.
+Added: In addition, our suppliers and manufacturers may raise prices in the future, which would increase our costs and harm our margins.
+Added: Even those suppliers and manufacturers with whom we have supply contracts may breach these agreements, and we may not be able to enforce our rights under these agreements or may incur significant costs attempting to do so.
+Added: As a result, we cannot predict with certainty our ability to obtain supplies and finished products in adequate quantities, of required quality and at acceptable prices from our suppliers and manufacturers in the future.
+Added: Any one of these risks could harm our ability to deliver our products on time, or at all, damage our reputation and our relationships with our customers, and increase our product costs thereby reducing our margins.
+Added: In addition, our arrangements with our manufacturers and suppliers are not exclusive.
+Added: As a result, our suppliers or manufacturers could produce similar products for our competitors, some of which could potentially purchase products in significantly greater volume.
+Added: Our competitors could enter into restrictive or exclusive arrangements with our manufacturers or suppliers that could impair or eliminate our access to manufacturing capacity or supplies.
+Added: Our manufacturers or suppliers could also be acquired by our competitors, and may become our direct competitors, thus limiting or eliminating our access to supplies or manufacturing capacity.
+Added: If our independent suppliers and manufacturing partners do not comply with ethical business practices or with applicable laws and regulations, our reputation, business, and results of operations would be harmed.
+Added: Our reputation and our customers’ willingness to purchase our products depend in part on our suppliers’ and manufacturers’ compliance with ethical employment practices, such as with respect to child labor, wages and benefits, forced labor, discrimination, safe and healthy working conditions, and with all legal and regulatory requirements relating to the conduct of their businesses.
+Added: We do not exercise control over our suppliers and manufacturers and cannot guarantee their compliance with ethical and lawful business practices.
+Added: If our suppliers or manufacturers fail to comply with applicable laws, regulations, safety codes, employment practices, human rights standards, quality standards, environmental standards, production practices, or other obligations, norms, or ethical standards, our reputation and brand image could be harmed and we could be exposed to litigation and additional costs that would harm our business, reputation, and results of operations.
We incur significant expenses to maintain our manufacturing equipment and any interruption in the operations of our facilities may harm our operating performance.
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We depend on our information technology systems, as well as those of third parties, to design and develop new products, operate our website, host and manage our services, store data, process transactions, respond to user inquiries, manage inventory and our supply chain as well as to conduct and manage other activities.
−Removed: Any material disruption or slowdown of our systems or those of third parties that we depend upon, including a disruption or slowdown caused by our failure to successfully manage significant increases in user volume or successfully upgrade systems, system failures, viruses, ransomware, security breaches, or other causes, could cause information, including data related to orders, to be lost or delayed, which could result in delays in the delivery of products to retailers and customers or lost sales, which could
−Removed: reduce demand for our products, harm our brand and reputation, and cause our sales to decline.
+Added: Any material disruption or slowdown of our systems or those of third parties that we depend upon, including a disruption or slowdown caused by our failure to successfully manage significant increases in user volume or successfully upgrade systems, system failures, viruses, ransomware, security breaches, or other causes, could cause information, including data related to orders, to be lost or delayed, which could result in delays in the delivery of products to retailers and customers or lost sales, which could reduce demand for our products, harm our brand and reputation, and cause our sales to decline.
If changes in technology cause our information systems, or those of third parties that we depend upon, to become obsolete, or information systems are inadequate to handle our growth, particularly as we increase sales through our online sales channel, we could damage our customer and business partner relationships and our business and results of operations could be harmed.
Our future success depends on the continuing efforts of our management and key employees, and on our ability to attract and retain highly skilled personnel and senior management.
−Removed: In addition, our management team has limited experience managing a public company.
We depend on the talents and continued efforts of our senior management and key employees.
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There can be no assurance that our current management team, or any new members of our management team, will be able to successfully execute our business and operating strategies.
−Removed: Most of our management and other personnel have little experience managing a public company and preparing public filings.
−Removed: In addition, we expect that our management and other personnel will need to divert attention from other business matters to devote substantial time to the reporting and other requirements of being a public company.
−Removed: In particular, we expect to incur significant expense and devote substantial management effort to complying with the reporting requirements for publicly-traded companies.
−Removed: We may need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge.
−Removed: These factors could cause adverse effects on our business and results of operations.
We may not be able to effectively manage our growth.
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We expect to make significant investments in our research and development and sales and marketing organizations, expand our operations and infrastructure both domestically and internationally, design and develop new products, and enhance our existing products.
−Removed: In addition, in connection with operating as a public company, we will incur significant additional legal, accounting, and other expenses that we did not incur as a private company.
+Added: In addition, in connection with operating as a public company, we will incur significant additional legal, accounting, and other expenses.
If our sales do not increase at a sufficient rate to offset these increases in our operating expenses, our profitability may decline in future periods.
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We have only a limited history operating our business at its current scale.
−Removed: Our management team does not have substantial tenure working together.
Consequently, if our operations continue to grow at a rapid pace, we may experience difficulties in managing this growth and building the appropriate processes and controls.
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Our business requires compliance with many laws and regulations, including labor and employment, sales and other taxes, customs, and consumer protection laws and ordinances that regulate retailers generally and/or govern the importation, promotion, and sale of merchandise, and the operation of stores and warehouse facilities.
−Removed: Failure to comply with these laws and regulations could subject us to lawsuits and other proceedings, and could also lead to damage awards, fines, and penalties.
+Added: Failure to comply
+Added: with these laws and regulations could subject us to lawsuits and other proceedings, and could also lead to damage awards, fines, and penalties.
We may become involved in a number of legal proceedings and audits, including government and agency investigations, and consumer, employment, tort, and other litigation.
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We are subject to payment-related risks.
−Removed: For our online sales, as well as for sales to our customers, we accept a variety of payment methods, including credit cards, debit cards, electronic funds transfers, electronic payment systems, and gift certificates.
+Added: For our online sales, as well as for sales to our offline customers, we accept a variety of payment methods, including credit cards, debit cards, electronic funds transfers, and electronic payment systems.
Accordingly, we are, and will continue to be, subject to significant and evolving regulations and compliance requirements, including obligations to implement enhanced authentication processes that could result in increased costs and liability, and reduce the ease of use of certain payment methods.
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We provide credit to our customers in the ordinary course of our business and perform ongoing credit evaluations.
−Removed: While we believe that our exposure to concentrations of credit risk with respect to trade receivables is mitigated by our large retail partner base, and we make allowances for doubtful accounts, we nevertheless run the risk of our customers not being able to meet their payment obligations, particularly in a future economic downturn.
+Added: While we believe that our exposure to concentrations of credit risk with respect to trade receivables is mitigated by our large retail partner base, and we make allowances for sales and doubtful accounts, we nevertheless run the risk of our customers not being able to meet their payment obligations, particularly in a future economic downturn.
If a material number of our customers were not able to meet their payment obligations, our results of operations could be harmed.
+Added: Security incidents and attacks on our information technology systems could lead to significant costs and disruptions that could harm our business, financial results, and reputation.
+Added: We rely extensively on information technology systems to conduct our business, some of which are managed by third-party service providers.
+Added: Information technology supports several aspects of our business, including among others, product sourcing, pricing, customer service, transaction processing, financial reporting, collections and cost management.
+Added: Our ability to operate effectively on a day-to-day basis and accurately report our results depends on a solid technological infrastructure, which is inherently susceptible to internal and external threats.
+Added: We are vulnerable to interruption by power loss, telecommunication failures, internet failures, security breaches and other catastrophic events.
+Added: Exposure to various types of cyber-attacks such as malware, computer viruses, worms or other malicious acts, as well as human error, could also potentially disrupt our operations or result in a significant interruption in the delivery of our goods and services.
We have identified material weaknesses in our internal control over financial reporting.
If we are unable to remediate these material weaknesses, or if we experience additional material weaknesses or deficiencies in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial results, in which case our business may be harmed, investors may lose confidence in the accuracy and completeness of our financial reports and the price of our common stock may decline.
+Added: Our management is responsible for establishing and maintaining adequate internal control over financial reporting.
+Added: Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.
+Added: The rules governing the standards that must be met for management to determine that our internal control over financial reporting is effective are complex and require significant documentation, testing and possible remediation to meet the detailed standards under the rules.
Our management has identified material weaknesses in our internal control over financial reporting.
A material weakness is defined as a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected and corrected on a timely basis.
−Removed: For a description of the identified material weaknesses, see Part II, Item 9A, “Controls and Procedures.” In connection with management’s identification of these material weaknesses, management has concluded that our disclosure controls and procedures were not effective as of December 31, 2021.
+Added: For a description of the identified material weaknesses, see Part II, Item 9A, “Controls and Procedures.”
As further described in Item 9A “Controls and Procedures,” we have undertaken steps to improve our internal control over financial reporting.
−Removed: We expect that we will need to improve existing procedures and controls, and implement new ones, to remediate the material weaknesses.
+Added: We expect that we will need to improve existing procedures and controls, and implement new
+Added: ones, to remediate the material weaknesses.
We may not be successful in making the improvements necessary to remediate the material weaknesses identified by management or be able to do so in a timely manner.
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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 the prices of our common stock may decline as a result.
−Removed: Risks Related to the International Nature of Our Operations
+Added: If our goodwill, other intangible assets, or our property and equipment become impaired, we may be required to record a charge to our earnings.
+Added: We may be required to record future impairments of goodwill, other intangible assets, or long-lived assets to the extent the fair value of these assets falls below their book value.
+Added: Our estimates of fair value are based on assumptions regarding future cash flows, gross margins, expenses, discount rates applied to these cash flows, and current market estimates of value.
+Added: Estimates used for future sales growth rates, gross profit performance, and other assumptions used to estimate fair value are subject to significant judgment.
+Added: Although impairments are non-cash expenses, they could materially affect our future financial results and financial condition.
+Added: If our estimates or judgments relating to our critical accounting policies prove to be incorrect or change significantly, our results of operations could be harmed.
+Added: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.
+Added: We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section of this Form 10-K titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements, and related notes included elsewhere in this Form 10-K.
+Added: These estimates form the basis for making judgments about the carrying values of assets, liabilities, and equity and the amount of sales and expenses that are not readily apparent from other sources.
+Added: Our results of operations may be harmed if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, and could result in a decline in our stock price.
+Added: Risks Related to Societal and Environmental Factors
+Added: The continuing effects of COVID-19 are highly unpredictable and could be significant, and may have an adverse effect on our business, operations and our future financial performance.
+Added: Since COVID-19 was declared a global pandemic by the World Health Organization, our business, operations and financial performance have been, and may continue to be, affected by the macroeconomic impacts resulting from the efforts to control the spread of COVID-19.
+Added: As a result of the scale of the pandemic, including the introduction of new variants of COVID-19 and vaccination and other efforts to control the spread, our revenue growth rate and expenses as a percentage of our revenues in future periods may differ significantly from our historical rates, and our future operating results may fall below expectations.
+Added: We may also experience additional operating costs due to increased challenges with our workforce (including as a result of labor shortages, illness, absenteeism or government orders), and access to supplies and capital.
+Added: Even after the COVID-19 pandemic has subsided, we may experience materially adverse impacts to our business due to any resulting supply chain disruptions and economic conditions.
+Added: Furthermore, the impacts of potential worsening of global economic conditions, inflation pressures and continued disruptions to and volatility in the financial markets remain unknown.
+Added: Our business is subject to the risk of earthquakes, fire, power outages, floods, pandemics, and other catastrophic events, and to interruption by problems such as terrorism, cyberattacks, or failure of key information technology systems.
+Added: As we rely heavily on our manufacturing facilities, our business is particularly vulnerable to damage or interruption from earthquakes, fires, floods, pandemics, power losses, telecommunications failures, terrorist attacks, acts of war, human errors, criminal acts, and similar events.
+Added: For example, a significant natural disaster, such as an earthquake, fire, or flood, could harm our business, results of operations, and financial condition, and our insurance coverage may be insufficient to compensate us for losses that may occur.
+Added: Our corporate offices, distribution centers, and manufacturing facilities are located in California, a state that frequently experiences earthquakes and wildfires, Texas, a state that frequently experiences floods and storms and Hawaii, a state that frequently experiences hurricanes and tsunamis.
+Added: In addition, the facilities of our suppliers and where our manufacturers produce our products are located in parts of Asia that frequently experience typhoons and earthquakes.
+Added: Acts of terrorism could also cause disruptions in our or our suppliers’,
+Added: manufacturers’, and logistics providers’ businesses or the economy as a whole.
+Added: We may not have sufficient protection or recovery plans in some circumstances, such as natural disasters affecting California, Texas or Hawaii or other locations where we have operations or store significant inventory.
+Added: Our servers may also be vulnerable to computer viruses, criminal acts, denial-of-service attacks, ransomware, and similar disruptions from unauthorized tampering with our computer systems, which could lead to interruptions, delays, or loss of critical data.
+Added: As we rely heavily on our information technology and communications systems and the internet to conduct our business and provide high-quality customer service, these disruptions could harm our ability to run our business and either directly or indirectly disrupt our suppliers’ or manufacturers’ businesses, which could harm our business, results of operations, and financial condition.
+Added: Climate change and sustainability initiatives may result in significant operational changes and expenditures and adversely affect our business.
+Added: Continuing political and social attention to carbon emissions and sustainability may result in the imposition of additional regulations or restrictions to which we may become subject.
+Added: Such policies could result in increased production costs including higher energy and raw materials prices, which could negatively impact our financial condition and results of operations.
+Added: Additionally, changing weather patterns could also cause disruptions or the complete shutdown of our operations and facilities, thereby impacting our business and consolidated financial statements.
+Added: We are subject to environmental laws and regulations that expose us to a number of risks and could result in significant liabilities and costs.
+Added: We operate manufacturing facilities in the United States, and are therefore subject to certain environmental regulations with respect to the operation of those facilities.
+Added: If we were to experience a material adverse environmental event at any of our facilities, or we were to experience any material product safety issue with respect to our products or our business, our results of operations, financial condition and cash flow could be materially adversely affected.
+Added: Furthermore, concern over plastics products may result in new or increased legal and regulatory requirements to reduce or mitigate impacts to the environment.
+Added: Increased regulatory requirements, including in relation to various aspects of ESG including disclosure requirements, or environmental causes may result in increased compliance or input costs of raw materials, which may cause disruptions in the manufacture of our products or an increase in operating costs.
+Added: If we do not adapt to or comply with new regulations, or fail to meet the needs of the evolving investor, industry, or stakeholder expectations and standards, or if we are perceived to have not responded appropriately to the growing concern for ESG issues, customers and consumers may choose to stop purchasing our products or purchase products from another company or a competitor, and our reputation, business, results of operations, and financial condition may be adversely affected.
+Added: Risks Related to the World Events and International Nature of Our Operations
If additional tariffs or other restrictions are placed on foreign imports or any related counter-measures are taken by other countries, our business and results of operations could be harmed.
Historically, there have been tariffs and other trade restrictions and various alterations to trade agreements and terms between the United States and China, the European Union, Canada, and Mexico, among others, including limiting trade and/or imposing tariffs on imports from such countries.
−Removed: If additional tariffs or other restrictions are placed on foreign imports, including on any of our products manufactured overseas for sale in the United States, or any related counter-measures are taken by other countries, our business and results of operations may be materially harmed.
+Added: If additional tariffs or other restrictions are placed on foreign imports, including on any of our products manufactured overseas for sale in the United States, or any related counter-measures are taken by other countries, our business, results of operations, financial condition and cash flows may be materially harmed.
These tariffs have the potential to significantly raise the cost of our products.
In such a case, there can be no assurance that we will be able to shift manufacturing and supply agreements to non-impacted countries, including the United States, to reduce the effects of the tariffs.
−Removed: As a result, we may suffer margin erosion or be required to raise our prices, which may result in the loss of customers, negatively impact our results of operations, or otherwise harm our business.
+Added: As a result, we may suffer margin erosion or be required to raise our prices, which may result in the loss of customers.
+Added: Tariffs imposed by the U.S.
+Added: government or a global trade war could increase the cost of our products, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.
+Added: International political instability and terrorist activities could result in market instability, which could negatively impact our business results.
+Added: Terrorist activities and armed conflicts, including recent escalation in regional conflicts, including the Russian invasion of Ukraine and increasing tensions between China and Taiwan, could result in economic sanctions that could impact our operational and financial results.
+Added: If such events disrupt domestic or international air, ground or sea shipments, or the operation of the Company’s manufacturing facilities, the Company’s ability to obtain the materials necessary to manufacture its products and to deliver customer orders would be harmed, which would have a significant adverse effect on the Company’s business, results of operations, financial condition and cash flows.
+Added: In addition, international conflict could result in increased energy costs, which could increase the cost of manufacturing, selling and delivering products and
+Added: inflation, which could result in increases in the cost of manufacturing products and solutions, reduced customer purchasing power, decreased consumer demand, increased price pressure, and reduced or cancelled orders;
+Added: increased risk of cyber-attacks;
+Added: and market instability, which could adversely impact our overall business results.
If we fail to timely and effectively obtain shipments of products from our overseas manufacturers, our business and results of operations could be harmed.
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and (f) the imposition of tariffs on components and products that we import into the United States or other markets.
−Removed: We cannot assure you that our directors, officers, employees, representatives, manufacturers, or suppliers have not engaged and will not engage in conduct for which we may be held responsible, nor can we assure you that our manufacturers, suppliers, or other business partners have not engaged and will not engage in conduct that could materially harm their ability to perform their contractual obligations to us or even result in our being held liable for such conduct.
−Removed: Violations of the FCPA, the Bribery Act, OFAC restrictions, or other export control, anti-corruption, anti-money laundering, and anti-terrorism laws or regulations may result in severe criminal or civil sanctions, and we may be subject to other related liabilities, which could harm our business, financial condition, cash flows, and results of operations.
+Added: We cannot provide assurance that our directors, officers, employees, representatives, manufacturers, or suppliers have not engaged and will not engage in conduct for which we may be held responsible, nor can we provide assurance that our manufacturers, suppliers, or other business partners have not engaged and will not engage in conduct that could materially harm their ability to perform their contractual obligations to us or even result in our being held liable for such conduct.
+Added: Violations of the FCPA, the Bribery Act, OFAC restrictions, or other export control, anti-corruption, anti-money laundering, and anti-terrorism laws or regulations may result in severe criminal or civil sanctions, and we may be subject to other related liabilities, which could harm our business, results of operations, financial condition and cash flows.
Foreign exchange rate fluctuations could affect our results of operations.
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Dollar, and in particular the exchange rates of the New Taiwan Dollar, could increase our costs, and have a material adverse impact on our business, financial condition, cash flows and results of operations.
−Removed: Risks Related to Ownership of Our Common Stock
+Added: Risks Related to Ownership of Our Common Stock and Our Capital Structure
Our directors, executive officers, and significant stockholders have substantial control over us and could delay or prevent a change in corporate control.
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As a result, these stockholders, acting together or in some cases individually, have the ability to control the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation, or sale of all or substantially all of our assets.
−Removed: In addition, these stockholders, acting together or in some cases individually, have the ability to control the management and affairs of our company.
+Added: In addition, these stockholders, acting together or in some cases individually, have the ability
+Added: to control the management and affairs of our company.
Accordingly, this concentration of ownership might decrease the market price of our common stock by:
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In the past, stockholders of other public companies have instituted securities class action litigation following periods of market volatility.
−Removed: If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and harm our business, results of operations, financial condition, reputation, and cash flows.
−Removed: As a result, you may be unable to resell your shares of common stock at or above the initial public offering price.
+Added: If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and harm our business, results of operations, financial condition and cash flows.
Acquisitions could result in operating difficulties and may materially adversely affect our business, financial condition, results of operations and growth prospects.
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Future acquisitions may require us to obtain additional equity or debt financing, which may not be available on favorable terms or at all.
−Removed: Substantial future sales, or the perception or anticipation of future sales, of shares of our common stock could cause our stock price to decline.
−Removed: Our stock price could decline as a result of substantial sales of our common stock, or the perception or anticipation that such sales could occur, particularly sales by our directors, executive officers, and significant stockholders, a large number of shares of our common stock becoming available for sale, or the perception in the market that holders of a large number of shares intend to sell their shares.
−Removed: As of March 25, 2022, we have 19,809,424 shares of our common stock outstanding.
−Removed: In addition, there are up to 2,000,000 shares of common stock that we may issue under our Stock Incentive Plan, and they will be eligible to be sold freely in the public market upon issuance, subject to volume limitations applicable to affiliates and the existing lock-up agreements.
+Added: Substantial future sales, or the perception or anticipation of future sales, of shares of our common stock may cause our stock price to decline.
+Added: In addition, a significant portion of our common stock is restricted from immediate resale but may be sold into the market in the near future.
+Added: This could cause the market price of our common stock to drop significantly, even if our business is doing well.
+Added: Our stock price could decline as a result of substantial sales of our common stock, or the perception or anticipation that such sales could occur, particularly sales by our directors, executive officers, and significant stockholders.
+Added: Possible sales also may make it more difficult for us to sell equity or equity-related securities in the future at a time and price we deem necessary or appropriate.
+Added: Additionally, if we issue a large number of shares in connection with future acquisitions, financings or other circumstances, the market price of our common stock could decline significantly.
+Added: We cannot predict the size of future issuances of our common stock or the effect, if any, that future issuances or sales of our shares will have on the market price of such shares.
+Added: In addition, as of December 31, 2022, we had 420,000 stock options and 82,146 unvested restricted stock units outstanding.
+Added: The additional shares issued upon vesting will be eligible to be sold freely in the public market, subject to volume limitations applicable to affiliates and the existing lock-up agreements.
Our bylaws designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain actions, which could limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with the Company and its directors, officers, or other employees and may discourage lawsuits with respect to such claims.
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Our certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designations, preferences, limitations and relative rights, including preferences over our common stock respecting dividends and distributions, as our board of directors may determine.
−Removed: The terms of one or more classes or series of preferred stock could adversely impact the voting power or value of our common stock.
+Added: The terms of one or
+Added: more classes or series of preferred stock could adversely impact the voting power or value of our common stock.
For example, we might grant holders of preferred stock the right to elect some number of our directors in all events or on the happening of specified events or the right to veto specified transactions.
Similarly, the repurchase or redemption rights or liquidation preferences we might assign to holders of preferred stock could affect the residual value of the common stock.
−Removed: We do not intend to pay dividends for the foreseeable future.
+Added: We do not intend to pay quarterly dividends for the foreseeable future.
If our stock price does not appreciate after you purchase our shares, you may lose some or all of your investment.
−Removed: We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future.
+Added: Although we declared and paid a special cash dividend of $0.35 per share in November 2022, we do not currently intend to pay quarterly dividends and may not declare any special dividend in the foreseeable future.
Any future determination to declare cash dividends will be made at the discretion of our board of directors, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, general business conditions, and other factors that our board of directors may deem relevant.
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We do not control these analysts.
−Removed: As a newly public company, we may be slow to attract research coverage and the analysts who publish information about our common stock will have had relatively little experience with us or our industry, which could affect their ability to accurately forecast our results and could make it more likely that we fail to meet their estimates.
+Added: As a relatively new public company, we may be slow to attract research coverage and the analysts who publish information about our common stock will have had relatively little experience with us or our industry, which could affect their ability to accurately forecast our results and could make it more likely that we fail to meet their estimates.
In the event we obtain securities or industry analyst coverage, if any of the analysts who cover us provide inaccurate or unfavorable research or issue an adverse opinion regarding our stock price, our stock price could decline.
If one or more of these analysts cease to regularly cover us or fail to publish reports, we could lose visibility in the market, which in turn could cause our stock price or trading volume to decline.
−Removed: Risks Related to Our Capital Structure
Outstanding indebtedness may reduce our available funds.
We have approximately $42.5 million in outstanding indebtedness as of December 31, 2022.
−Removed: The loans are held at multiple banks and are secured by the Company’s property and equipment as the collateral for the debt.
+Added: The loans are held at multiple banks and are collateralized by substantially all of Global Well's assets.
There can be no guarantee that we will be able to pay all amounts when due or to refinance the amounts on terms that are acceptable to us or at all.
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The terms of the debt agreements impose significant operating and financial restrictions on us.
−Removed: These restrictions could also have a negative impact on our business, financial condition and results of operations by significantly limiting or prohibiting us from engaging in certain transactions, including but not limited to:
+Added: These restrictions could also have a negative impact on our business, results of operations, financial condition and cash flows by significantly limiting or prohibiting us from engaging in certain transactions, including but not limited to:
incurring or guaranteeing additional debt financing;
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As we expand our business, we will need significant cash resources to fund operations to purchase inventory, increase our product development, expand our manufacturer and supplier relationships, pay personnel, pay for the increased costs associated with operating as a public company, expand geographically, and to further invest in our sales, manufacturing and marketing efforts and our e-commerce platform.
−Removed: If we are unable to secure additional outside funding or if our business does not generate sufficient
−Removed: cash flow from operations to fund these activities and sufficient funds are not otherwise available, our business will be negatively impacted and restricted.
+Added: If we are unable to secure additional outside funding or if our business does not generate sufficient cash flow from operations to fund these activities and sufficient funds are not otherwise available, our business will be negatively impacted and restricted.
If such outside financing is not available to us on satisfactory terms, our ability to operate and expand our business or respond to competitive pressures would be harmed.
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Any indebtedness we incur may subject us to covenants that restrict our operations and will require interest and principal payments that would create additional cash demands and financial risk for us.
−Removed: If our goodwill, other intangible assets, or our property and equipment become impaired, we may be required to record a charge to our earnings.
−Removed: We may be required to record future impairments of goodwill, other intangible assets, or fixed assets to the extent the fair value of these assets falls below their book value.
−Removed: Our estimates of fair value are based on assumptions regarding future cash flows, gross margins, expenses, discount rates applied to these cash flows, and current market estimates of value.
−Removed: Estimates used for future sales growth rates, gross profit performance, and other assumptions used to estimate fair value are subject to significant judgment.
−Removed: Although impairments are non-cash expenses, they could materially affect our future financial results and financial condition.
−Removed: If our estimates or judgments relating to our critical accounting policies prove to be incorrect or change significantly, our results of operations could be harmed.
−Removed: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.
−Removed: We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section of this Form 10-K titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements, and related notes included elsewhere in this Form 10-K.
−Removed: These estimates form the basis for making judgments about the carrying values of assets, liabilities, and equity and the amount of sales and expenses that are not readily apparent from other sources.
−Removed: Our results of operations may be harmed if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, and could result in a decline in our stock price.
General Risk Factors
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Although we have already hired additional employees to comply with these requirements, we will need to hire more employees in the future or engage outside consultants, which will increase our costs and expenses.
−Removed: In addition, changing laws, regulations, and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs, and making some activities more time consuming.
+Added: In addition, changing laws, regulations, and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs, and making some activities
+Added: more time consuming.
These laws, regulations, and standards are subject to varying interpretations, in many cases due to their lack of specificity and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies.
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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.