−Removed: Investing in our common stock involves a high degree of risk.
−Removed: There are numerous and varied risks, known and unknown, that may prevent us from achieving our goals.
−Removed: The risks described below are not the only ones we will face.
−Removed: If any of the following risks or other risks actually occurs, our business, financial condition, results of operations or future prospects could be materially and adversely affected.
−Removed: In such event, the trading price of our common stock could decline and investors in our common stock could lose all or part of their investment.
−Removed: Risks Related to Our Agribusiness Division
+Added: Risks Related to Our Agribusiness Operations
Adverse weather conditions, natural disasters, including earthquakes and wildfires, and other natural conditions, including the effects of climate change, could impose significant costs and losses on our business.
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Additionally, a significant portion of our agricultural plantings and our corporate headquarters are located in a region of California that is prone to natural disasters such as earthquakes and wildfires.
−Removed: For example, in December 2017, high winds and the related Southern California wildfires caused a brief power outage at our Santa Paula, California packinghouse and destroyed 14 of our approximately 260 farm worker housing units.
+Added: For example, in December 2017, high winds and the related Southern California wildfires caused a brief power outage at our Santa Paula, California packinghouse and destroyed 14 of our 256 farm worker housing units.
While our orchards did not suffer significant damage in the wildfire, the potential for significant damage to a substantial amount of our plantings from a natural disaster in the future continues to exist.
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By itself, ACP causes only minor cosmetic damage to citrus trees.
−Removed: HLB, however, is considered to be one of the most devastating diseases of citrus in the world.
+Added: HLB, however, is considered one of the most devastating diseases of citrus in the world.
Trees infected with HLB decline in health, produce inedible fruit and eventually die, usually in 3 to 5 years after becoming infected.
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These infestations can increase costs, decrease revenues and lead to additional charges to earnings, which may have a material adverse effect on our business, results of operations and financial condition.
−Removed: Our business is highly competitive and we cannot assure you that we will maintain our current market share.
−Removed: Many companies compete in our different businesses.
−Removed: However, only a few well-established companies operate on an international, national and regional basis with one or several product lines.
−Removed: We face strong competition from these and other companies in all our product lines.
−Removed: Important factors with respect to our competitors include the following:
−Removed: Some of our competitors may have greater operating flexibility and, in certain cases, this may permit them to respond better or more quickly to changes in the industry or to introduce new products and packaging more quickly and with greater marketing support.
−Removed: We cannot predict the pricing or promotional actions of our competitors or whether those actions will have a negative effect on us.
−Removed: There can be no assurance that we will continue to compete effectively with our present and future competitors, and our ability to compete could be materially adversely affected by our debt levels and debt service requirements.
Our strategy of marketing and selling our lemons directly to our food service, wholesale and retail customers may not continue to be successful.
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Any disruption in this relationship could harm our sales.
−Removed: We sell 100% of the avocados we grow to Calavo and depend on their willingness and ability to market and sell our avocados to consumers.
+Added: We sell a majority of the avocados we grow to Calavo and depend on their willingness and ability to market and sell our avocados to consumers.
Calavo sources its avocados from many growers and we cannot control who they will purchase from and how large their orders may be.
−Removed: Should there be any change in our current relationship structure, whereby they buy our entire avocado crop, we would need to find replacement buyers to purchase our remaining crop, which could take time and expense and may result in less favorable terms of sale.
+Added: Should there be any change in our current relationship structure, whereby they buy a majority of our avocado crop, we would need to find replacement buyers to purchase our remaining crop, which could take time and expense and may result in less favorable terms of sale.
Any loss of Calavo as a customer on a whole may cause a material loss in our profits, as it may take time to fill any such void.
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Growing conditions in various parts of the world, particularly weather conditions such as windstorms, floods, droughts and freezes, as well as diseases and pests, are primary factors affecting market prices because of their influence on the supply and quality of product.
+Added: The ongoing COVID-19 pandemic has also reduced the demand for our products resulting in excess supplies.
Fresh produce is highly perishable and generally must be brought to market and sold soon after harvest.
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Our specialty citrus is sold generally from November through June and our pistachios and wine grapes are sold generally in September and October.
−Removed: Currency exchange fluctuation may impact the results of our operations.
−Removed: We distribute our products both nationally and internationally.
−Removed: Our international sales are primarily transacted in U.S.
−Removed: Our results of operations are affected by fluctuations in currency exchange rates in both sourcing and selling locations.
−Removed: In the past, periods of a strong U.S.
−Removed: dollar relative to other currencies have led international customers, particularly in Asia, to find alternative sources of fruit.
Increases in commodity or raw product costs, such as fuel and paper, could adversely affect our operating results.
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Shortages of labor could delay our harvesting or lemon processing activities or could result in increases in labor costs.
−Removed: We and our labor contractors are subject to government mandated wage and benefit laws and regulations.
−Removed: For example, the State of California, where a substantial number of our labor contractors are located, passed regulations which increased minimum wage rates from $12.00 per hour to $13.00 per hour, effective January 1, 2020, and will gradually increase to $15.00 per hour by 2022.
−Removed: The State of Arizona also increased minimum wage rates from $11.00 per hour to $12.00 per hour, effective January 1, 2020, and after that will rise each year based on the annual cost of living.
+Added: Our labor contractors and we are subject to government mandated wage and benefit laws and regulations.
+Added: For example, the State of California, where a substantial number of our labor contractors are located, passed regulations that increased minimum wage rates from $13.00 per hour to $14.00 per hour, effective January 1, 2021, and will increase to $15.00 per hour in 2022.
+Added: The State of Arizona also increased minimum wage rates from $11.00 per hour to $12.00 per hour, effective January 1, 2020, and effective January 1, 2021 the wage rates will rise each year based on the annual cost of living.
In addition, current or future federal or state healthcare legislation and regulation, including the Affordable Care Act, may increase our medical costs or the medical costs of our labor contractors that could be passed on to us.
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Following our acquisition of Associated, we began using federal project water in Arizona from the Colorado River through the YMIDD.
−Removed: In February 2017, we acquired water rights with our purchase of 90% of PDA and in July 2018, we acquired additional water rights in Chile with our acquisition of San Pablo.
+Added: We also have acquired water rights in Chile related to our acquisitions of PDA and San Pablo.
California has historically experienced periods of below average precipitation.
−Removed: Though recent precipitation has brought relief to California’s drought conditions, the last few years have been among the most severe droughts on record.
−Removed: Rainfall, snow levels and water content of snow pack had previously been significantly below historical averages.
+Added: The governor of California declared a drought State of Emergency in February 2014 and the next few years were among the most severe droughts on record.
+Added: Rainfall, snow levels and water content of snow pack were significantly below historical averages.
These conditions resulted in reduced water levels in streams, rivers, lakes, aquifers and reservoirs.
−Removed: The governor of California declared a drought State of Emergency in February 2014, which was lifted in April 2017.
+Added: Precipitation in 2017 brought relief to California’s drought conditions and the State of Emergency was lifted in April 2017.
+Added: California has experienced below average precipitation two of the last three years and according to the US Drought Monitor, the 2020 season ended with California experiencing abnormally dry drought conditions.
Federal officials oversee the Central Valley Project, California’s largest water delivery system and 100% of the contracted amount of water was provided to San Joaquin Valley farmers in 2017 through 2020 compared to 75% in 2016 and zero in 2015 and 2014.
For fiscal year 2020, irrigation costs for our agricultural operations were $0.1 million lower than fiscal year 2019.
−Removed: Costs may increase as we pump more water than our historical averages and federal, state and local water delivery infrastructure costs may
−Removed: increase to access these limited water supplies.
+Added: Costs may increase as we pump more water than our historical averages and federal, state and local water delivery infrastructure costs may increase to access these limited water supplies.
We have an ongoing plan for irrigation improvements in fiscal year 2021 that includes drilling new wells and upgrading existing wells and irrigation systems.
−Removed: We believe we have access to adequate supplies of water for our agricultural operations as well as our real estate development and rental operations segments of our business and currently do not anticipate that future drought conditions will have a material impact on our operating results.
+Added: We believe we have access to adequate supplies of water for our agricultural operations as well as our real estate development and rental operations and currently do not anticipate that future drought conditions will have a material impact on our operating results.
However, if future drought conditions are worse than prior drought conditions or if regulatory responses to such conditions limit our access to water, our business could be negatively impacted by these conditions and responses in terms of access to water and/or cost of water.
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Similarly, in the EU, regulation (EC) No.
−Removed: 1107/2009 which became effective on June 14, 2011, fundamentally changed the pesticide approval process from the current risk base to hazard criteria based on the intrinsic properties of the substance.
+Added: 1107/2009 fundamentally changed the pesticide approval process to hazard criteria based on the intrinsic properties of the substance.
These actions and future actions regarding the availability and use of pesticides could have an adverse effect on us.
In addition, if a regulatory agency were to determine that we are not in compliance with a regulation in that agency’s jurisdiction, this could result in substantial penalties and a ban on the sale of part or all of our products in that jurisdiction.
−Removed: There has been a broad range of proposed and promulgated state, national and international regulation aimed at reducing the effects of climate change.
−Removed: Such regulations apply or could apply in countries where we have interests or could have interests in the future.
−Removed: In the United States, there is a significant possibility that some form of regulation will be enacted at the federal level to address the effects of climate change.
−Removed: Such regulation could take several forms that could result in additional costs in the form of taxes, the restriction of output, investments of capital to maintain compliance with laws and regulations, or required acquisition or trading of emission allowances.
−Removed: Climate change regulation continues to evolve, and while it is not possible to accurately estimate either a timetable for implementation or our future compliance costs relating to implementation, we do not believe that such regulation is reasonably likely to have a material effect in the foreseeable future on our business, results of operations, capital expenditures or financial position.
−Removed: Global capital and credit market issues affect our liquidity, increase our borrowing costs and may affect the operations of our suppliers and customers.
−Removed: The global capital and credit markets have experienced increased volatility and disruption over the past several years, making it more difficult for companies to access those markets.
−Removed: We depend in part on stable, liquid and well-functioning capital and credit markets to fund our operations.
−Removed: Although we believe that our operating cash flows and existing credit facilities will permit us to meet our financing needs for the foreseeable future, there can be no assurance that continued or increased volatility and disruption in the capital and credit markets will not impair our liquidity or increase our costs of borrowing.
−Removed: Our business could also be negatively impacted if our suppliers or customers experience disruptions resulting from tighter capital and credit markets or a slowdown in the general economy.
A global economic downturn may have an adverse impact on participants in our industry, which cannot be fully predicted.
−Removed: The full impact of a global economic downturn on customers, vendors and other business partners cannot be anticipated.
+Added: The full impact of a global economic downturn on customers, vendors and other business partners such as seen with the COVID-19 pandemic cannot be anticipated.
For example, major customers or vendors may have financial challenges unrelated to us that could result in a decrease in their business with us or, in extreme cases, cause them to file for bankruptcy protection.
Similarly, parties to contracts may be forced to breach their obligations under those contracts.
−Removed: Although we exercise prudent oversight of the credit ratings and financial strength of our
−Removed: major business partners and seek to diversify our risk to any single business partner, there can be no assurance that there will not be a bank, insurance company, supplier, customer or other financial partner that is unable to meet its contractual commitments to us.
+Added: Although we exercise prudent oversight of the credit ratings and financial strength of our major business partners and seek to diversify our risk to any single business partner, there can be no assurance that there will not be a bank, insurance company, supplier, customer or other financial partner that is unable to meet
+Added: its contractual commitments to us.
Similarly, stresses and pressures in the industry may result in impacts on our business partners and competitors, which could have wide-ranging impacts on the future of the industry.
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The occurrence of any events or rumors that cause consumers and/or institutions to no longer associate these brands with high quality and safe food products may materially adversely affect the value of our brand names and demand for our products.
−Removed: We are dependent on key personnel and the loss of one or more of those key personnel may materially and adversely affect our prospects .
−Removed: We currently depend heavily on the services of our key management personnel.
−Removed: The loss of any key personnel could materially and adversely affect our results of operations, financial condition, or our ability to pursue land development.
−Removed: Our success will also depend in part on our ability to attract and retain additional qualified management personnel.
−Removed: Inflation can have a significant adverse effect on our operations.
−Removed: Inflation can have a major impact on our farming operations.
−Removed: The farming operations are most affected by escalating costs and unpredictable revenues (due to an oversupply of certain crops) and very high irrigation water costs.
−Removed: High fixed water costs related to our farm lands will continue to adversely affect earnings.
−Removed: Prices received for many of our products are dependent upon prevailing market conditions and commodity prices.
−Removed: Therefore, it is difficult for us to accurately predict revenue and we cannot pass on cost increases caused by general inflation, except to the extent reflected in market conditions and commodity prices.
−Removed: System security risks, data protection breaches, cyber-attacks and systems integration issues could disrupt our internal operations or services provided to customers, and any such disruption could reduce our expected revenue, increase our expenses, damage our reputation and adversely affect our stock price.
−Removed: Computer programmers and hackers may be able to penetrate our network security and misappropriate or compromise our confidential information or that of third parties, create system disruptions or cause shutdowns.
−Removed: Computer programmers and hackers also may be able to develop and deploy viruses, worms, and other malicious software programs that attack our products or otherwise exploit any security vulnerabilities of our products.
−Removed: In addition, sophisticated hardware and operating system software and applications that we produce or procure from third parties may contain defects in design or manufacture, including “bugs” and
−Removed: other problems that could unexpectedly interfere with the operation of the system.
−Removed: The costs to us to eliminate or alleviate cyber or other security problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant, and our efforts to address these problems may not be successful and could result in interruptions, delays, cessation of service and loss of existing or potential customers that may impede our sales, packing, distribution or other critical functions.
−Removed: Portions of our IT infrastructure also may experience interruptions, delays or cessations of service or produce errors in connection with systems integration or migration work that takes place from time to time.
−Removed: We may not be successful in implementing new systems and transitioning data, which could cause business disruptions and be more expensive, time consuming, disruptive and resource-intensive.
−Removed: Such disruptions could adversely impact our ability to fulfill orders and interrupt other processes.
−Removed: Delayed sales, lower margins or lost customers resulting from these disruptions could adversely affect our financial results, stock price and reputation.
Government regulation could increase our costs of production and increase legal and regulatory expenses.
Growing, packaging, storing and distributing food products are activities subject to extensive federal, state and local regulation, as well as foreign regulation.
−Removed: These aspects of our operations are regulated by the U.S.
−Removed: Food and Drug Administration (the “FDA”), the USDA and various state and local public health and agricultural agencies.
−Removed: On January 4, 2011, the FDA Food Safety Modernization Act was enacted and intended to ensure food safety.
+Added: Food and Drug Administration (the “FDA”), the USDA and various state and local public health and agricultural agencies regulate these aspects of our operations.
+Added: Our business is subject to the FDA Food Safety Modernization Act to ensure food safety.
This Act provides direct recall authority to the FDA and includes a number of other provisions designed to enhance food safety, including increased inspections by the FDA of food facilities.
The Federal Perishable Agricultural Commodities Act, which specifies standards for the sale, shipment, inspection and rejection of agricultural products, governs our relationships with our fresh food suppliers with respect to the grading and commercial acceptance of product shipments.
−Removed: Our business is also affected by import and export controls and similar laws and regulations, both in the United States and elsewhere.
+Added: Import and export controls and similar laws and regulations, in both the United States and elsewhere affect our business.
Issues such as health and safety, which may slow or otherwise restrict imports and exports, could adversely affect our business.
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Failure to comply with these laws could subject us to civil and criminal penalties that could materially and adversely affect our financial condition and results of operations.
−Removed: The acquisition of other businesses could pose risks to our operating income.
−Removed: We intend to continue to consider acquisition prospects that we think complement our business.
−Removed: While we are not currently a party to any agreement with respect to any acquisitions, we may acquire other businesses in the future.
−Removed: Future acquisitions by us could result in accounting charges, potentially dilutive issuances of equity securities, and increased debt and contingent liabilities, any of which could have a material adverse effect on our business and the market price of our common stock.
−Removed: Acquisitions entail numerous risks, including the integration of the acquired operations, diversion of management’s attention to other business concerns, risks of entering markets in which we have limited prior experience, and potential loss of key employees of acquired organizations.
−Removed: We may be unable to successfully integrate businesses or the personnel of any business that might be acquired in the future, and our failure to do so could have a material adverse effect on our business and on the market price of our common stock.
We depend on our infrastructure to have sufficient capacity to handle our annual lemon production needs.
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Our revolving and non-revolving credit facility with the Farm Credit West Credit Facility and our Wells Fargo Term Loan contain a financial covenant that requires us to maintain compliance with a specified debt service coverage ratio on an annual basis.
−Removed: At October 31, 2019 , we were not in compliance with such debt service coverage ratio and the non-compliance was waived by Farm Credit West and Wells Fargo.
+Added: In August 2020, Farm Credit West modified the covenant to defer measurement at October 31, 2020 with measurement resuming as of October 31, 2021.
+Added: At October 31, 2020, we were not in compliance with the debt service coverage ratio for Wells Fargo and the non-compliance was waived.
Our failure to comply with this covenant in the future may result in the declaration of an event of default under our Farm Credit West Credit Facility and Wells Fargo Term Loan.
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Upon the occurrence of an event of default under any of our credit facilities, the applicable lender(s) could elect to declare all amounts outstanding to be immediately due and payable and, with respect to our revolving credit facility, terminate all commitments to extend further credit.
−Removed: If we were unable to repay those amounts, our lenders could proceed against the collateral granted to them to secure the indebtedness.
+Added: If we were unable to repay those amounts, our lenders could proceed against the collateral granted to them to
+Added: secure the indebtedness.
If the lenders under our current or future indebtedness were to accelerate the payment of the indebtedness, we cannot assure you that our assets or cash flow would be sufficient to repay in full our outstanding indebtedness.
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to fund early development activities.
−Removed: The Loan matures in January 2020, with an option to extend the maturity date until 2021, subject to certain conditions.
−Removed: The interest rate on the Loan is LIBOR plus 2.85%, payable monthly.
+Added: The Loan originally matured in January 2020 and was extended to February 22, 2021 per the terms thereof.
+Added: The interest rate on the Loan is LIBOR plus 2.85% and is payable monthly.
The Loan contains certain customary default provisions and the Joint Venture may prepay any amounts outstanding under the Loan without penalty.
−Removed: In February 2018, the obligations under the Loan were guaranteed by certain principals from Lewis and by the Company.
+Added: In February 2018, certain principals from Lewis and by the Company guaranteed the obligations under the Loan.
Defaults by the Joint Venture could increase our indebtedness.
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The expected discontinuation of LIBOR after 2021 could have a significant impact on the Company if we cannot replace LIBOR with alternative reference rates at or below the current LIBOR rate.
−Removed: Risks Related to Our Real Estate Development Division
+Added: Global capital and credit market issues affect our liquidity, increase our borrowing costs and may affect the operations of our suppliers and customers.
+Added: The global capital and credit markets have experienced increased volatility and disruption over the past several years, making it more difficult for companies to access those markets.
+Added: We depend in part on stable, liquid and well-functioning capital and credit markets to fund our operations.
+Added: Although we believe that our operating cash flows and existing credit facilities will permit us to meet our financing needs for the foreseeable future, there can be no assurance that continued or increased volatility and disruption in the capital and credit markets will not impair our liquidity or increase our costs of borrowing.
+Added: Our business could also be negatively impacted if our suppliers or customers experience disruptions resulting from tighter capital and credit markets or a slowdown in the general economy.
+Added: Risks Related to Our Real Estate Development Operations
We are involved in a cyclical industry and are affected by changes in general and local economic conditions.
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Since the most recent recession, the U.S.
−Removed: Federal Reserve has taken actions which have resulted in low interest rates prevailing in the marketplace for a historically long period of time.
−Removed: In August, September and October 2019, the U.S.
−Removed: Federal Reserve lowered its benchmark interest rates by a quarter of a percentage point, respectively, which partially offset four consecutive raises by a quarter of a percentage point in 2018.
+Added: Federal Reserve has taken actions that have resulted in low interest rates prevailing in the marketplace for a historically long period of time.
Market interest rates may increase in the future and the increase may materially and negatively affect us.
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In addition, the zoning that ultimately is approved could include density provisions that would limit the number of homes and other structures that could be built within the boundaries of a particular area, which could adversely impact the financial returns from a given project.
−Removed: In addition, many states, cities and counties (including Ventura County) have in the past approved various “slow growth” or “urban limit line” measures.
+Added: In addition, in the past, many states, cities and counties (including Ventura County) have approved various “slow growth” or “urban limit line” measures.
If unforeseen regulatory challenges with East Areas I and II occur, we may not be able to develop these projects as planned and the approximately $78.8 million investment we have in the projects could be impaired in the future.
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Ultimately, our ability to sell or lease lots may decline as a result of weak economic conditions or restrictive regulations.
−Removed: If the real estate industry weakens or instability of the mortgage industry and commercial real estate financing exists, it could have an adverse effect on our real estate business.
−Removed: Our residential housing projects are currently in various stages of planning and entitlement, and therefore they have not been impacted by the downturn in the housing market or the mortgage lending crisis.
−Removed: Recent trends in the housing market have been improving;
−Removed: however, if the residential real estate market weakens or instability of the mortgage industry and commercial real estate financing exists, our residential real estate business could be adversely affected.
+Added: If the real estate industry weakens or instability of the mortgage industry and commercial real estate financing exists, it could have an adverse effect on our real estate activities.
+Added: If the residential real estate market weakens or instability of the mortgage industry and commercial real estate financing exists, our residential real estate business could be adversely affected.
An excess supply of homes available due to foreclosures or the expectation of deflation in house prices could also have a negative impact on our ability to sell our inventory when it becomes available.
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If we are unable to obtain required land use entitlements at reasonable costs, or at all, our operating results would be adversely affected.
−Removed: The financial performance of our real estate development segment is closely related to our success in obtaining land use entitlements for proposed development projects.
+Added: The financial performance of our real estate development activities is closely related to our success in obtaining land use entitlements for proposed development projects.
Obtaining all of the necessary entitlements to develop a parcel of land is often difficult, costly and may take several years, or more, to complete.
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The failure to obtain sufficient capital to fund our planned expenditures could have a material adverse effect on our business and operations and our results of operations in future periods.
−Removed: We may encounter risks associated with the real estate joint venture we entered into on November 10, 2015 with the Lewis Group of Companies including:
+Added: We may encounter risks associated with the real estate joint venture we entered into in November 2015 with the Lewis Group of Companies including:
• the joint venture may not perform financially or operationally as expected;
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• environmental remediation costs.
−Removed: Risks Related to Our Common Stock
+Added: General Risks and Risks Related to Our Common Stock
+Added: Our business is highly competitive and we cannot assure you that we will maintain our current market share.
+Added: Many companies compete in our different businesses.
+Added: However, only a few well-established companies operate on an international, national and regional basis with one or several product lines.
+Added: We face strong competition from these and other companies in all our product lines.
+Added: Important factors with respect to our competitors include the following:
+Added: • Some of our competitors may have greater operating flexibility and, in certain cases, this may permit them to respond better or more quickly to changes in the industry or to introduce new products and packaging more quickly and with greater marketing support.
+Added: • We cannot predict the pricing or promotional actions of our competitors or whether those actions will have a negative effect on us.
+Added: There can be no assurance that we will continue to compete effectively with our present and future competitors, and our ability to compete could be materially adversely affected by our debt levels and debt service requirements.
+Added: Currency exchange fluctuation may impact the results of our operations.
+Added: We distribute our products both nationally and internationally.
+Added: Our international sales are primarily transacted in U.S.
+Added: Our results of operations are affected by fluctuations in currency exchange rates in both sourcing and selling locations.
+Added: In the past, periods of a strong U.S.
+Added: dollar relative to other currencies have led international customers, particularly in Asia, to find alternative sources of fruit.
+Added: We are dependent on key personnel and the loss of one or more of those key personnel may materially and adversely affect our prospects .
+Added: We currently depend heavily on the services of our key management personnel.
+Added: The loss of any key personnel could materially and adversely affect our results of operations, financial condition, or our ability to pursue land development.
+Added: Our success will also depend in part on our ability to attract and retain additional qualified management personnel.
+Added: Inflation can have a significant adverse effect on our operations.
+Added: Inflation can have a major impact on our farming operations.
+Added: The farming operations are most affected by escalating costs and unpredictable revenues (due to an oversupply of certain crops) and very high irrigation water costs.
+Added: High fixed water costs related to our farm lands will continue to adversely affect earnings.
+Added: Prices received for many of our products are dependent upon prevailing market conditions and commodity prices.
+Added: Therefore, it is difficult for us to accurately predict revenue and we cannot pass on cost increases caused by general inflation, except to the extent reflected in market conditions and commodity prices.
+Added: System security risks, data protection breaches, cyber-attacks and systems integration issues could disrupt our internal operations or services provided to customers, and any such disruption could reduce our expected revenue, increase our expenses, damage our reputation and adversely affect our stock price.
+Added: Computer programmers and hackers may be able to penetrate our network security and misappropriate or compromise our confidential information or that of third parties, create system disruptions or cause shutdowns.
+Added: Computer programmers and hackers also may be able to develop and deploy viruses, worms, and other malicious software programs that attack our products or otherwise exploit any security vulnerabilities of our products.
+Added: In addition, sophisticated hardware and operating system software and applications that we produce or procure from third parties may contain defects in design or manufacture, including “bugs” and other problems that could unexpectedly interfere with the operation of the system.
+Added: The costs to us to eliminate or alleviate cyber or other security problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant, and our efforts to address these problems may not be successful and could result in interruptions, delays, cessation of service and loss of existing or potential customers that may impede our sales, packing, distribution or other critical functions.
+Added: Portions of our IT infrastructure also may experience interruptions, delays or cessations of service or produce errors in connection with systems integration or migration work that takes place from time to time.
+Added: We may not be successful in implementing new systems and transitioning data, which could cause business disruptions and be more expensive, time consuming, disruptive and resource-intensive.
+Added: Such disruptions could adversely impact our ability to fulfill orders and interrupt other processes.
+Added: Delayed sales, lower margins or lost customers resulting from these disruptions could adversely affect our financial results, stock price and reputation.
+Added: The acquisition of other businesses could pose risks to our operating income.
+Added: We intend to continue to consider acquisition prospects that we think complement our business.
+Added: While we are not currently a party to any agreement with respect to any acquisitions, we may acquire other businesses in the future.
+Added: Future acquisitions by us could result in accounting charges, potentially dilutive issuances of equity securities, and increased debt and contingent liabilities, any of which could have a material adverse effect on our business and the market price of our common stock.
+Added: Acquisitions entail numerous risks, including the integration of the acquired operations, diversion of management’s attention to other business concerns, risks of entering markets in which we have limited prior experience, and potential loss of key employees of acquired organizations.
+Added: We may be unable to successfully integrate businesses or the personnel of any business that might be acquired in the future, and our failure to do so could have a material adverse effect on our business and on the market price of our common stock.
The value of our common stock could be volatile.
+Added: Investing in our common stock involves a high degree of risk.
+Added: There are numerous and varied risks, known and unknown, that may prevent us from achieving our goals.
+Added: The risks described here are not the only ones we will face.
+Added: If any of these risks or other risks actually occurs, our business, financial condition, results of operations or future prospects could be materially and adversely
+Added: In such event, the trading price of our common stock could decline and investors in our common stock could lose all or part of their investment.
The overall market and the price of our common stock may fluctuate greatly and we cannot assure you that you will be able to resell shares at or above market price.
23 unchanged sentences
These rules and regulations may increase our legal and financial compliance costs, which could adversely affect the trading price of our common stock.
+Added: We have identified a material weakness in our internal control over financial reporting which existed as of October 31, 2020.
+Added: If we fail to properly remediate this or any future weaknesses or fail to maintain effective internal controls, there could be an adverse impact on our operations or the market price of our common stock.
+Added: Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we are required to include in our annual reports on Form 10-K our assessment of the effectiveness of our internal control over financial reporting.
+Added: As of October 31, 2020, a material weakness was detected related to an acquired foreign subsidiary in the first year the subsidiary was included in management's evaluation of the effectiveness of the Company's internal control over financial reporting.
+Added: We are actively engaged in remediation activities designed to address the material weakness, but our remediation efforts are not complete and are ongoing.
+Added: There can be no assurance that we will be able to implement fully our plan and controls to address this material weakness or that the plan and controls, if implemented, will be successful in remediating this material weakness.
+Added: In addition, we may in the future identify further material weaknesses in our internal control over financial reporting that we have not discovered to date.
+Added: If we cannot adequately maintain the effectiveness of our internal control over financial reporting, we might be subject to sanctions or investigation by regulatory authorities, such as the SEC.
+Added: Any such action could adversely affect our financial results, cause investors to lose confidence in the reliability of our financial statements and result in a decrease in the value of our common stock.
Unresolved Staff Comments
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.