What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2023-03-09 compared with 2022-03-09 · 90 added, 92 removed, 438 unchanged (29% of the section changed)

21 unchanged sentences

• unstable economic and political conditions, lack of legal regulation enforcement, civil unrest and potential accompanying shifts in laws and regulations;

• restructuring and integration of the Company's European operations;

The occurrence of negative events related to any of the foregoing may adversely impact the Company’s results of operations and financial condition .

The Company must successfully manage the demand, supply, and operational challenges associated with the actual or perceived effects of the COVID-19 pandemic.

Any failure to do so could have a material adverse impact on the Company’s business, financial condition, results of operations, cash flows, and competitive position.

The COVID-19 pandemic has negatively impacted the global economy and disrupted global supply chains.

Continuing concerns over economic and business prospects in the U.S.

and other countries have contributed to increased volatility and diminished expectations for the global economy.

These factors, coupled with the prospect of decreased business and consumer confidence and increased unemployment resulting from the ongoing COVID-19 pandemic, may precipitate a prolonged economic slowdown and recession.

Given the ongoing and dynamic nature of the COVID-19 virus and the worldwide response related thereto, including the emergence of new variants, the distribution and availability of vaccines and the efficacy thereof, it is difficult to predict the full impact of the ongoing COVID-19 pandemic on the Company’s business.

The Company’s business may be unfavorably impacted by the fear of exposure to or actual effects of the COVID-19 pandemic, such as reduced travel or recommendations or mandates from governmental authorities to cease particular business activities.

These risks include, but are not limited to:

• Reductions in demand or volatility in demand for one or more of the Company’s products, which may be caused by, among other things:

the temporary inability of consumers to purchase the Company’s products due to illness, or brick and mortar retailers closing or reducing their store operations, which has occurred as a result of reduced demand from such customers, quarantine or other travel restrictions, or financial hardship for customers and consumers;

• Inability to meet the Company’s customers’ needs and achieve cost targets due to disruptions in the Company's supply chain arrangements caused by limited container capacity, increased demand for containers, and backlog at U.S.

and International ports as well as distribution centers caused by the loss or disruption of transportation, trucking availability, workforce, or other distribution capability;

• Failure of third parties on which the Company relies, including the Company’s suppliers, third-party manufacturers, distributors, and external business partners, to meet their obligations to the Company, including due to a lack of manufacturing capacity, or significant disruptions in their ability to do so, which may be caused by their own financial or operational difficulties;

• Customers' inability to make payments due to the Company pursuant to existing payment terms as a result of store closures or reduced operations resulting from the COVID-19 pandemic;

• Significant changes in the political and labor conditions in markets in which the Company sells, or distributes products, including quarantines, governmental or regulatory actions, closures or other restrictions that limit or close the Company’s distribution facilities, restrict the Company’s employees’ ability or willingness to travel or perform necessary business functions, or otherwise prevent the Company's facilities or its third-party partners, suppliers, or customers from sufficiently staffing operations, including operations necessary for the production, distribution, sale, and support of the Company's products;

• Increased cybersecurity threats that could result from many of the Company’s key employees working remotely;

new and preexisting cybersecurity threats that arise from reliance on home networks, virtual workspaces, videoconferencing, and other forms of remote work practices to support this temporary working environment, which may expose additional cybersecurity threats and vulnerabilities to the Company's network, and increase the exposure of the Company to electrical or internet outages;

• Negative impact on the Company’s workforce that could result if executive officers or other key employees or a large number of its workers fall ill.

The temporary or permanent loss of any of the Company’s executive officers or other key employees could harm the Company’s business and negatively affect the Company’s ability to timely achieve its strategic initiatives.

Moreover, the Company may not be successful in finding or integrating suitable successors in the event of the loss of executive officers or other key employees or if such persons become unavailable for a prolonged period of time.

There are no comparable recent events that provide guidance as to the effect the ongoing spread of COVID-19 as a global pandemic may have, and, as a result, the ultimate impact of the pandemic is highly uncertain and subject to change.

The Company does not yet know the full extent of the continued impact of COVID-19 on the global economy.

Although disruptions from the COVID-19 pandemic may continue to occur, the long-term economic impact and near-term financial impact on the Company, including but not limited to, any possible impairment, restructuring and other charges, cannot be reliably quantified or estimated at this time due to the uncertainty of future developments.

Despite efforts to manage and remedy the impact of COVID-19, the ultimate impact of COVID-19 could materially and adversely affect the Company’s business, financial condition, results of operations, cash flows and competitive position, and depends on factors beyond the Company’s knowledge or control, including the duration and severity of the COVID-19 pandemic as well as third-party actions taken in response thereto.

The Company's results of operations could be negatively impacted by inflation or deflation in supply chain costs, including raw materials, sourcing, transportation and energy

1 unchanged sentence

The Company also relies on third parties for transportation and is exposed to fluctuations in freight costs to transport goods as well as the price of fuel and gasoline.

These prices may fluctuate based on a number of factors beyond the Company’s control, including from geopolitical conditions such as the military conflict in Ukraine and resulting sanctions imposed the U.S.

and other countries.

Inflation could also result in significant cost increases.

Inflation has resulted and could continue to result in significant cost increases.

If the Company is unable to mitigate any cost increases from the foregoing factors through various customer pricing actions and cost reduction initiatives, its financial condition may be adversely affected.

1 unchanged sentence

There can be no assurance that the Company would be able to reduce its cost base to offset any such price concessions, which could adversely impact its results of operations and cash flows.

The Company’s U.K.

operations and sales may be materially adversely affected by the exit of the U.K.

The Company may be materially adversely affected by the exit of the U.K.

from the European Union.

On January 31, 2020, the U.K.

left the European Union ("Brexit").

In December 2020, the U.K and European Union announced the agreement of a new Trade and Cooperation Agreement that will govern the ongoing relationship between the U.K.

and the European Union.

The U.K.’s exit from the European Union is unprecedented and it remains unclear what long-term impact this will have on the U.K.’s access to the EU Single Market and on the legal and regulatory environment in which the Company operates, as well as its effect on the global macroeconomic environment.

Net sales attributable to U.K.

Net sales attributable to the Company's U.K.

domiciled businesses were $45.7 million for the year ended December 31, 2022 and represent approximately 6% of the Company’s consolidated net sales for the period.

These operations continue to face risks and potential disruptions related to the withdrawal of the U.K.

from the European Union, commonly referred to as “Brexit.” Although the U.K.

and the European Union have entered into a trade and cooperation agreement, the long-term nature of the U.K.’s relationship with the European Union remains unclear.

For example, Brexit could lead to potentially divergent laws and regulations, such as with respect to data protection and data transfer laws, that could be costly and complicate compliance efforts.

While we continue to monitor these developments, the full effect of Brexit on our operations is uncertain and our business could be harmed by trade disputes or political differences between the U.K.

and the European Union in the future.

Significant uncertainty remains regarding the impact of the U.K.’s exit from the European Union.

5 unchanged sentences

and other governments.

During the last few years, the U.S.

government has announced and, in some cases, implemented additional tariffs on certain foreign goods, including finished products and raw materials such as steel and aluminum.

These tariffs and potential tariffs have resulted or may result in increased prices for these imported goods and materials and may limit the amount of these goods and materials that may be imported into the U.S.

A majority of the Company’s products are sourced from vendors in China.

Both the U.S.

and China have implemented several rounds of tariffs and retaliations with respect to certain products imported from the other country.

For example, in 2018 and 2019, tariffs were imposed by the United States Trade Representative on certain finished products imported by the Company into the U.S.

from China, which have not been lifted by the current administration.

During the last few years there have also been significant changes to U.S.

trade policies, sanctions, legislation, treaties and tariffs, including, but not limited to, trade policies and tariffs affecting China.

These changes have, in certain cases, increased our costs of doing business.

In response to the tariffs, the Company may seek to increase prices to its customers, which may diminish demand for its products.

Additionally, if the Company is unable to increase prices, this may result in the lowering of the gross margin that the Company realizes from the sale of its products.

The results of either eventuality could adversely affect the Company’s results of operations and financial condition.

Moreover, the imposition of further policies restrictive on trade by the U.S.

government, or the imposition of retaliatory policies or tariffs by other governments, may adversely affect the Company’s results of operations and financial condition.

The imposition of additional tariffs or other trade barriers could increase our costs in certain markets and may cause our customers to find alternative sourcing or could make it more difficult for us to sell our products in some markets.

Other countries where we operate or sell our products have changed, and may continue to change, their own policies on trade as well as business and foreign investment in their respective countries.

Additionally, it is possible that U.S.

policy changes and uncertainty about such changes could increase market volatility and currency exchange rate fluctuations.

As a result of these dynamics, we cannot predict the impact to our business of any future changes to the U.S.’s or other countries’ trading relationships or the impact of new laws or regulations adopted by the U.S.

or other countries.

Legislative or regulatory initiatives related to climate change could have a material adverse effect on our business.

6 unchanged sentences

The Company is generally not fully insured against all significant losses.

For example, the Company is not fully insured against hurricane and earthquake related losses.

For example, the Company is not fully insured against hurricane, earthquake, acts of war, and terrorism related losses.

A loss for which the Company is not fully insured could have a material adverse effect on the business, financial condition, results of operations and prospects.

2 unchanged sentences

If insurance coverage is not available or obtainable on acceptable terms, the Company may be required to pay costs associated with adverse future events.

The Company must successfully manage the demand, supply, and operational challenges associated with the actual or perceived effects of the COVID-19 pandemic.

Any failure to do so could have a material adverse impact on the Company’s business, financial condition, results of operations, cash flows, and competitive position.

The COVID-19 pandemic has negatively impacted the global economy and disrupted global supply chains.

Continuing concerns over economic and business prospects in the U.S.

and other countries have contributed to increased volatility and diminished expectations for the global economy.

Liquidity and financial risks

1 unchanged sentence

The Company has a substantial amount of indebtedness and is dependent on the availability of its bank loan facilities to finance its liquidity needs.

As of December 31, 2021, the Company had $252.1 million of consolidated debt outstanding under a senior secured term loan credit facility (the “Term Loan” and, collectively with the ABL Agreement, the “Debt Agreements”).

The ABL Agreement provides for, among other things, a maximum aggregate principal amount of $150.0 million and will mature on March 2, 2023.

As of December 31, 2022, the Company had $256.3 million of consolidated debt outstanding under a senior secured term loan credit facility (as amended, the “Term Loan”).

The Company's credit agreement, dated as of March 2, 2018 (as amended, the “ABL Agreement” and together with the Term Loan the “Debt Agreements”) provides for, among other things, a maximum aggregate principal amount of $200.0 million and will mature on August 25, 2027 (subject to an earlier springing maturity date that is 90 days prior to the Term Loan maturity date of February 28, 2025 if the Company’s Term Loan has not been repaid or refinanced by such date).

The Term Loan will be repaid in quarterly payments of principal equal to 0.25% of the original aggregate principal amount of the Term Loan, which payments commenced June 30, 2018.

25 unchanged sentences

These requirements could limit the Company’s ability to obtain future financing and may prevent the Company from taking advantage of attractive business opportunities.

The Company’s ability to meet the covenants or requirements in its Debt Agreements may be affected by events beyond the Company’s control, and the Company

may not be able to satisfy such covenants and requirements.

The Company’s ability to meet the covenants or requirements in its Debt Agreements may be affected by events beyond the Company’s control, and the Company may not be able to satisfy such covenants and requirements.

A breach of these covenants or the Company’s inability to comply with the restrictions could result in an event of default under the Debt Agreements, which in turn could result in an event of default under the terms of the Company’s other indebtedness.

5 unchanged sentences

To the extent that the Company’s access to credit may be restricted because of its own performance, its bank lenders’ performances or conditions in the capital markets generally, the Company would not be able to operate normally.

The Company’s Receivables Purchase Agreement also depends upon LIBOR, as it is a component of the discount rate applicable to the agreement.

If LIBOR increases, the Company may not be able to rely on the Receivables Purchase Agreement, which could have a material and adverse effect upon the Company’s financial condition, results of operations and cash flows.

Changes in the method for determining LIBOR and the potential replacement of the LIBOR benchmark interest rate could increase the Company's borrowing costs.

Some of the Company’s borrowings bear interest at a variable rate based on LIBOR.

In March 2021, the United Kingdom’s Financial Conduct Authority (“FCA”), a regulator of financial services firms and financial markets in the United Kingdom, stated that it will plan for a phase out of regulatory oversight of LIBOR interest rates indices beginning as of December 31, 2021.

The United States Federal Reserve has also advised banks to cease entering into new contracts that use USD LIBOR as a reference rate.

The Alternative Reference Rates Committee has proposed the Secured Overnight Financing Rate (“SOFR”) as its recommended alternative to LIBOR, and the Federal Reserve Bank of New York began publishing SOFR rates in April 2018.

SOFR is intended to be a broad measure of the cost of borrowing cash overnight collateralized by U.S.

Treasury securities.

The Company is evaluating the potential impact of the eventual replacement of the LIBOR benchmark interest rate, including the possibility of SOFR as the dominant replacement.

Introduction of an alternative rate also may introduce additional basis risk for market participants as an alternative index is utilized along with LIBOR.

The Company’s Receivables Purchase Agreement also depends upon the Secured Overnight Financing rate ("SOFR"), as it is a component of the discount rate applicable to the agreement.

If SOFR increases, the Company may not be able to rely on the Receivables Purchase Agreement, which could have a material and adverse effect upon the Company’s financial condition, results of operations and cash flows.

The replacement of the LIBOR benchmark interest rate with SOFR could increase the Company's borrowing costs.

In March 2021, the U.K.’s Financial Conduct Authority (“FCA”), a regulator of financial services firms and financial markets in the U.K., stated that it will plan for a phase out of regulatory oversight of London Inter-Bank Offered Rate (“LIBOR”) interest rates indices beginning as of December 31, 2021.

In the United States, the Alternative Reference Rates Committee, a committee convened by the Federal Reserve Board and the Federal Reserve Bank of New York, recommended SOFR plus a recommended spread adjustment as LIBOR's replacement.

LIBOR and SOFR have significant differences, such as LIBOR being an unsecured lending rate while SOFR is a secured lending rate, and SOFR being an overnight rate while LIBOR reflects term rates at different maturities.

The Company is evaluating the impact of the eventual replacement of the LIBOR benchmark interest rate with SOFR as the dominant replacement.

Introduction of SOFR may also introduce additional basis risk for market participants as an alternative index is utilized along with LIBOR.

There can be no guarantee that SOFR will become widely used and that alternatives may or may not be developed with additional complications.

The Company is not able to predict whether the USD LIBOR will cease to be available after June 2023, whether SOFR will become a widely accepted benchmark in place of LIBOR, or what the impact of such a possible transition to SOFR may be on the Company's financial condition and results of operations.

On December 28, 2021 the Company entered into Amendment No.1 amend the ABL Credit Agreement to make certain changes with respect to the interest rate benchmarks (the "Benchmarks") used to calculate the rate on at which interest accrues on the loans, commitments, and/or other extensions of credit under the ABL Credit Agreement.

The Company is not able to predict whether the USD LIBOR will cease to be available after June 2023, whether SOFR will become a widely accepted benchmark in place of LIBOR, or what the impact the transition to SOFR may be on the Company's financial condition and results of operations.

On December 28, 2021 the Company entered into Amendment No.1 to amend the ABL Credit Agreement to make certain changes with respect to the interest rate benchmarks (the "Benchmarks") used to calculate the rate on at which interest accrues on the loans, commitments, and/or other extensions of credit under the ABL Credit Agreement.

Specifically, the Amendment provides a mechanism for determining an alternative rate of interest upon the occurrence of certain events relating to the availability of LIBOR and/or other applicable Benchmarks provided for in the ABL Credit Agreement.

At this time, the Company is not able to predict the impact that the changes or other reforms relating to LIBOR and the Benchmarks rates may have on its financial condition, results of operations and cash flows.

In addition, on December 29, 2022, the Company entered into Amendment No.

1 to amend the Loan Agreement to replace the LIBOR-based interest rates with SOFR-based interest rates and to modify the provisions for determining an alternative rate of interest upon the occurrence of certain events relating to the availability of Benchmark.

At this time, the Company is not able to predict the impact that the changes or other reforms relating to SOFR and the Benchmarks rates may have on its financial condition, results of operations and cash flows.

The Company’s inability to complete future acquisitions or strategic alliances and/or integrate acquired businesses could have a material adverse effect on the Company’s business and results of operations.

47 unchanged sentences

The implementation of restructuring plans could be disruptive to the Company’s operations, result in higher than anticipated charges and otherwise adversely affect the Company’s results of operations and financial condition.

In addition, the Company’s ability

to complete restructuring plans and achieve the anticipated benefits from a plan is subject to estimates and assumptions and may vary materially from the Company’s expectations, including as a result of factors that are beyond the Company’s control.

In addition, the Company’s ability to complete restructuring plans and achieve the anticipated benefits from a plan is subject to estimates and assumptions and may vary materially from the Company’s expectations, including as a result of factors that are beyond the Company’s control.

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

3 unchanged sentences

and long-lived assets.

At December 31, 2021, goodwill, net of impairment totaled $30.3 million;

indefinite-lived intangibles assets, net of impairment totaled $49.6 million;

finite-lived intangible assets, net of impairment and accumulated amortization totaled $132.8 million.

At December 31, 2022, goodwill, net of accumulated impairment charges totaled $33.2 million;

indefinite-lived intangibles assets, net of accumulated impairment charges totaled $49.6 million;

finite-lived intangible assets, net of accumulated impairment charges and accumulated amortization totaled $131.1 million.

The Company does not amortize goodwill but rather reviews it for impairment on an annual basis or more frequently when events or changes in circumstances indicate that its carrying value may not be recoverable.

26 unchanged sentences

Over time, controls are revised, as necessary, due to changes in conditions or deterioration in the degree of compliance with policies or procedures.

If in the future the Company’s controls become inadequate, it could fail to meet its financial reporting

obligations, its reputation may be adversely affected, its business and operating results could be harmed, and the market price of its stock could decline.

If in the future the Company’s controls become inadequate, it could fail to meet its financial reporting obligations, its reputation may be adversely affected, its business and operating results could be harmed, and the market price of its stock could decline.

Customer risks

17 unchanged sentences

Decisions by large customers to increase their purchases directly from overseas vendors could have a material adverse effect on the Company’s business, results of operations and financial condition.

Significant changes or financial difficulties, including consolidations of ownership, restructurings, bankruptcies, liquidations or other events that affect retailers, could result in fewer retailers selling the Company’s products, reliance on a smaller group of customers, an increase in the risk of extending credit to these customers or limitations on the Company’s ability to collect amounts due from these customers.

Significant changes or financial difficulties, including consolidations of ownership, restructurings, bankruptcies,

liquidations or other events that affect retailers, could result in fewer retailers selling the Company’s products, reliance on a smaller group of customers, an increase in the risk of extending credit to these customers or limitations on the Company’s ability to collect amounts due from these customers.

Although the Company has long-established relationships with many of its customers, the Company does not have any long-term supply or binding contracts or guarantees of minimum purchases.

32 unchanged sentences

This overall trend has negatively affected many brick-and-mortar retailers, which has been exacerbated by the ongoing COVID-19 pandemic.

If the Company’s brick-and-mortar retail customers fail to maintain or grow their overall market position through the integration of physical retail presence and digital retail, these customers may experience financial difficulties including store closures, bankruptcies or liquidations.

If the Company’s brick-and-mortar retail customers fail to maintain or grow their overall market position through the integration of physical retail presence and digital retail, these customers

may experience financial difficulties including store closures, bankruptcies or liquidations.

This could, in turn, substantially reduce the Company’s revenues, increase credit risk and have a material adverse effect on the Company’s results of operations, financial condition and cash flows.

4 unchanged sentences

changes in required technology interfaces, website downtime and other technical failures, costs and technical issues as the Company upgrades its website software, computer viruses, changes in applicable federal and state regulations, security breaches, data breaches, and consumer privacy concerns.

In addition, the Company must keep up to date with competitive technology trends, including the use of improved technology, creative user interfaces and other Internet marketing tools such as paid search, which may increase its costs and which

may not succeed in increasing sales or attracting customers.

The Company’s failure to successfully respond to these risks and uncertainties might adversely affect the sales in its Internet business, as well as damage the Company’s reputation and brands.

5 unchanged sentences

Supply chain risks

International suppliers subject the Company to regional regulatory, man-made or natural disasters, health epidemics, political or military conflicts, economic and foreign currency exchange risk that could materially and adversely affect the Company’s operating results.

The Company sources its products from suppliers located principally in Asia, Europe and the United States, which international scope of operations subjects the Company to various risks, including man-made or natural disasters, health epidemics, political or military conflicts, economic and foreign currency changes.

Additionally, the Company’s vendors in Asia, from whom a substantial majority of the Company’s products are sourced, are located primarily in China, which subjects the Company to regional risks including regulatory, social and other risks in addition to the risks resulting from the rising tensions between the United States and China involving trade policies and certain regulatory actions.

The Company's reliance on international suppliers subject the Company to regional regulatory, man-made or natural disasters, health epidemics, political or military conflicts, economic and foreign currency exchange risk that could materially and adversely affect the Company’s operating results.

The Company sources its products from suppliers located principally in Asia, Europe and the United States, which subjects the Company to various risks, including man-made or natural disasters, adverse macroeconomic conditions (including inflation, slower growth, and recession), and foreign currency changes, all of which could create disruptions in our supply chain.

Similarly, geopolitical risks, including instability resulting from civil unrest, political demonstrations, strikes and armed conflict or other crises, such as Russia’s invasion of Ukraine, and the resulting sanctions could change the global supply chain dynamics and demand.

Additionally, the Company’s vendors in Asia, from whom a substantial majority of the Company’s products are sourced, are located primarily in China, which subjects the Company to regional risks including regulatory, social and other risks in addition to the risks resulting from tensions between the United States and China involving trade policies and certain regulatory actions.

The Company’s ability to select and retain reliable vendors and suppliers who provide timely deliveries of quality parts and products efficiently will impact its success in meeting customer demand for timely delivery of quality products.

6 unchanged sentences

Interruption of supplies from any of the Company’s vendors, or the loss of one or more key vendors, could have a negative effect on the Company’s business and operating results.

The Company’s international trade subjects it to transportation risks.

A disruption in deliveries to or from suppliers or decreased availability of materials could have an adverse effect on our ability to meet our commitments to customers or increase our operating costs.

A disruption from such third‑party suppliers, manufacturers or service providers, capacity constraints, production disruptions, price increases, quality control issues, recalls or other decreased availability of parts and products could adversely affect our ability to meet our commitments to customers and have a material adverse effect on our business, financial condition and results of operations.

The Company’s international trade activity subjects it to transportation risks.

The Company imports its products for delivery to its distribution centers, as well as arranges for its customers to import goods to which title has passed overseas or at a port of entry.

5 unchanged sentences

With the exception of the Company’s sterling silver products, the Company sources almost all of its products from suppliers located outside the United States, primarily in China, which restricts the Company’s ability to monitor and control their manufacture of the Company’s goods.

Although the Company has agreements with its third party manufacturers regarding quality standards and regularly audits the facilities of its manufacturers through its quality control program, the third party manufacturers may not continue to meet the Company’s quality standards, social standards regarding its workforce that are expected in the United States or legislation and regulations that apply to the products the Company contracts to manufacture.

The third party manufacturers may not continue to meet the Company’s quality standards, social standards regarding its workforce that are expected in the United States or legislation and regulations that apply to the products the Company contracts to manufacture.

There is also no assurance that the Company’s quality control program will adequately audit, analyze and evaluate the quality standards of third party manufacturers.

Failure by the Company’s

manufacturers to meet these standards could, in turn, increase order cancellations, returns and price concessions and decrease customer demand for the Company’s products.

Failure by the Company’s manufacturers to meet these standards could, in turn, increase order cancellations, returns and price concessions and decrease customer demand for the Company’s products.

Non-compliance with the Company’s product standards, regulatory requirements or product recall (or other regulatory actions) could have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

4 unchanged sentences

The cost of producing and distributing the Company’s products is also sensitive to energy costs, duties and tariffs.

For example, freight costs increased in 2021 and are expected to increase in 2022.

The selling prices of the Company’s products have not always increased in response to raw material, labor or other cost increases, and the Company is unable to determine to what extent, if any, it will be able to pass future cost increases through to its customers.

For example, freight costs increased in 2021 and continued to fluctuate in 2022.

The Company is unable to determine to what extent, if any, it will be able to pass future cost increases through to its customers.

The Company’s inability to come to favorable agreements with its suppliers or to pass increased costs through to the Company’s customers could materially and adversely affect its financial condition or results of operations.

105 unchanged sentences

These existing and future laws and regulations may impede the growth of the Internet, e-commerce or other online services.

These regulations and laws may cover taxation, user privacy, data protection, pricing, content, copyrights, distribution, electronic contracts and other communications, consumer protection, the provision of online payment services, broadband residential Internet access and the characteristics and quality of products and services.

These regulations and laws may cover

taxation, user privacy, data protection, pricing, content, copyrights, distribution, electronic contracts and other communications, consumer protection, the provision of online payment services, broadband residential Internet access and the characteristics and quality of products and services.

It is not clear how existing laws governing issues such as property ownership, sales and other taxes, and personal privacy apply to the Internet and e-commerce.

6 unchanged sentences

This potential negative impact on the Company’s e-commerce business could have a material adverse effect on the Company’s overall business, results of operations and financial condition.

Climate change, environmental, social and governance and sustainability initiatives may result in regulatory or structural industry changes that could require significant operational changes and expenditures, reduce demand for the Company’s products and adversely affect our business, financial condition, and results of operations.

Greenhouse gases may have an adverse effect on global temperatures, weather patterns, and the frequency and severity of extreme weather and natural disasters.

Such events could have a negative effect on our business.

Concern over climate change may result in new or additional legislative and regulatory requirements to reduce or mitigate the effects of climate change on the environment, which could result in future tax, transportation cost, and utility increases.

Moreover, natural disasters and extreme weather conditions may impact the productivity of our facilities, the operation of our supply chain, or consumer buying patterns.

Any of these risks could have a material adverse effect on our business.

Climate change, environmental, social and governance (“ESG”) and sustainability are a growing global movement.

Continuing political and social attention to these issues has resulted in both existing and pending international agreements and national, regional and local legislation, regulatory measures, reporting obligations and policy changes.

Also, there is increasing societal pressure in some of the areas where we operate, to limit greenhouse gas emissions as well as other global initiatives.

These agreements and measures, including the Paris Climate Accord, may require, or could result in future legislation, regulatory measures or policy changes that would require operational changes, taxes, or purchases of emission credits to reduce emission of greenhouse gases from our operations, which may result in substantial capital expenditures.

Furthermore, increasing attention to climate change, ESG and sustainability has resulted in governmental investigations, and public and private litigation, which could increase our costs or otherwise adversely affect our business or results of operations.

In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters.

Such ratings are used by some investors to inform their investment and voting decisions.

Unfavorable ESG ratings may lead to increased negative investor sentiment toward us, which could have a negative impact on the price of our securities and our access to and costs of capital.

Any or all of these ESG and sustainability initiatives may result in significant operational changes and expenditures, reduced demand for our products, cause us reputational harm, and could materially adversely affect our business, financial condition, and results of operations.

A failure in or compromise of the Company’s operating systems or infrastructure or those of third parties could disrupt the Company’s business and cause losses.

The Company relies on many information technology systems for the operation of its principal business functions, including, but not limited to, the Company’s enterprise resource planning, warehouse management, inventory forecast and ordering and call center systems.

In the case of the Company’s inventory forecast and ordering system, most of the Company’s orders are received directly

through electronic connections with the Company’s largest customers.

In the case of the Company’s inventory forecast and ordering system, most of the Company’s orders are received directly through electronic connections with the Company’s largest customers.

Additionally, the success of certain product categories in a competitive marketplace is dependent upon the creation and launch of new, innovative products.

12 unchanged sentences

As the Company transitions to cloud-based technologies, the Company may be exposed to additional cyber threats as the Company migrates from legacy systems to cloud-based solutions.

The Company's increased dependence on third parties for cloud-based systems may also subject the Company to further cyber threats, such as the recently identified Log4J vulnerability.

While such vulnerability did not result in a material adverse effect on the Company, there can be no assurance that the Company will not suffer a material adverse effect resulting from vulnerabilities in widely deployed software used by third parties.

The Company's increased dependence on third parties for cloud-based systems may also subject the Company to further cyber threats, such as the identified Log4J vulnerability.

There can be no assurance that the Company will not suffer a material adverse effect resulting from vulnerabilities in widely deployed software used by third parties.

The Company sells consumer products which involve an inherent risk of product liability claims.

14 unchanged sentences

In the event that the U.S.

government or foreign governments enact new climate change laws or regulations or make changes to existing laws or regulations, compliance with applicable laws or regulations may result in increased manufacturing costs for the Company’s products, such as by requiring investment in new pollution control equipment or changing the ways in which certain of the Company’s products are made.

government or foreign governments enact new climate change laws or regulations or make changes to existing laws or

regulations, compliance with applicable laws or regulations may result in increased manufacturing costs for the Company’s products, such as by requiring investment in new pollution control equipment or changing the ways in which certain of the Company’s products are made.

The Company may incur some of these costs directly and others may be passed on to the Company from its third-party suppliers.

28 unchanged sentences

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