−Removed: Important risk factors that could affect our operations and financial performance, or that could cause results or events to differ from current expectations, are described in “Part I, Item 1A — Risk Factors” of our Annual Report on Form 10-K filed with the SEC on March 30, 2020 for the year ended December 31, 2019, as supplemented by the "Risk Factors" section in our prospectus filed with the SEC on January 10, 2020 (as amended and/or supplemented to date) and September 4, 2020 (as amended an/or supplemented to date) and the information set forth below.
−Removed: An investment in our securities involves a high degree of risk.
+Added: Important risk factors that could affect our operations and financial performance, or that could cause results or events to differ from current expectations, are described in Part I, Item 1A, " Risk Factors ” of our Annual Report on Form 10-K filed with the SEC on March 31, 2021 for the year ended December 31, 2020, as supplemented by the " Risk Factors " section in our prospectus filed with the SEC on February 12, 2021 (as amended and/or supplemented to date) and April 7, 2021 (as amended and/or supplemented to date) and the information set forth below or contained elsewhere in this Report.
The risks and uncertainties described below and within our Form 10-K for the year ended December 31, 2020 and the prospectuses are not the only ones we face.
Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business or results of operations.
−Removed: The COVID-19 pandemic could adversely affect our business, operating results, cash flow and financial condition.
−Removed: We are closely monitoring the impact of the 2019 novel coronavirus, or COVID-19, on all aspects of our business.
−Removed: In March 2020, the World Health Organization characterized COVID-19 as a pandemic and the President of the United States declared the COVID-19 outbreak a national emergency.
−Removed: Since then, the COVID-19 pandemic has rapidly spread across the globe and has already resulted in significant volatility, uncertainty and economic disruption.
−Removed: The future impacts of the pandemic and any resulting economic impact are largely unknown.
−Removed: It is possible that the COVID-19 pandemic, the measures taken by local, state and national governments and the resulting economic impact may materially and adversely affect our business, results of operations, cash flow and financial condition.
−Removed: The COVID-19 pandemic may prevent us from conducting business activities at full capacity for an extended period of time, including due to spread of the disease or due to shutdowns that are requested or mandated by governmental authorities.
−Removed: For example, we have taken precautionary measures intended to help minimize the risk of the virus to our employees which may disrupt our operations, including implementing a work-from-home policy for our employees until we determine to reopen our offices, canceling marketing events and suspending travel.
−Removed: An extended period of remote work arrangements could strain our business continuity plans, introduce operational risk, including, but not limited to, cybersecurity risks, prevent us from expanding or upselling our customer base, prevent the timely delivery of contracts in progress and impair our ability to effectively manage our business.
−Removed: In addition, any economic downturn or recession resulting from the COVID-19 pandemic will likely impact demand for our products and services and adversely affect our operations.
−Removed: We expect there to be volatility in customer demand and buying habits as the pandemic continues and the resulting economic impacts are felt, including the possibilities that our end customers delay, decrease or cancel their planned purchases, or are unable to pay amounts owed to us.
−Removed: The extent to which COVID-19 ultimately impacts our business, results of operations, cash flow and financial condition will depend on future developments, which are uncertain and cannot be predicted, including, but not limited to, the duration and spread of the outbreak, its severity, the actions taken by governments and authorities to contain the virus or treat its impact, and when and to what extent normal economic and operating conditions can resume.
−Removed: These uncertainties have resulted in volatility in securities and financial markets, which may prevent us from accessing the equity or debt capital markets on attractive terms or at all for a period of time, which could have an adverse effect on our liquidity position.
−Removed: Even after the COVID-19 pandemic has subsided, we may continue to experience materially adverse impacts to our business as a result of its global economic impact, including as a result of any recession that may occur.
−Removed: The impact of the COVID-19 pandemic may also exacerbate other risks discussed in this “Risk Factors” section and elsewhere in this Quarterly Report on Form 10-Q and those described in our Annual Report on Form 10-K filed with the SEC on March 30, 2020.
−Removed: For these reasons, the current level of uncertainty over the economic and operational impacts of COVID-19 means the impact on our business, results of operations, cash flows and financial position cannot be reasonably estimated at this time.
−Removed: Our loans under the Paycheck Protection Program ("PPP") may not be forgiven or may subject us to challenges and investigations regarding qualification for the loan.
−Removed: On April 10, 2020, we received a loan under the PPP, which was established under the CARES Act, in the aggregate principal amount of approximately $2.85 million.
−Removed: Pursuant to the CARES Act, we may apply for and be granted forgiveness for all or a portion of the PPP Loans.
−Removed: Such forgiveness will be determined, subject to limitations, based on the use of the loan proceeds for qualifying expenses, which include payroll costs, rent, and utility costs over the allowable measurement period following receipt of the loan proceeds.
−Removed: In addition to changes enacted by the Congress, the Small Business Administration (“SBA”) continues to develop and issue new and updated guidance regarding the PPP Loans application process, including guidance regarding required borrower certifications and requirements for forgiveness of loans made under the program.
−Removed: We continue to track the guidance as it is released and assess and re-assess various aspects of its application as necessary based on the guidance.
−Removed: However, given the evolving nature of the guidance and based on our projected ability to use the loan proceeds for qualifying expenses, we cannot give any assurance that the anticipated PPP Loans will be forgiven in whole or in part.
−Removed: Additionally, the PPP Loans applications required us to certify that the current economic uncertainty made the PPP Loans request necessary to support our ongoing operations.
−Removed: While we made this certification in good faith after analyzing, among other things, our financial situation and access to alternative forms of capital, and believe that we satisfied all eligibility criteria for the PPP Loans and that our receipt of the PPP Loans is consistent with the broad objectives of the PPP of the CARES Act, the certification described above does not contain any objective criteria and is subject to interpretation.
−Removed: In addition, the SBA has stated that it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith.
−Removed: The lack of clarity regarding loan eligibility under the program has resulted in significant media coverage and controversy with respect to public companies applying for and receiving loans.
−Removed: If, despite our good faith belief that we satisfied all eligibility requirements for the PPP Loans, we are found to have been ineligible to receive the PPP Loans or in violation of any of the laws or regulations that apply to us in connection with the PPP Loans, including the False Claims Act, we may be subject to penalties, including significant civil, criminal and administrative penalties and could be required to repay the PPP Loans.
−Removed: In the event that we seek forgiveness of all or a portion of the PPP Loans, we will also be required to make certain certifications which will be subject to audit and review by governmental entities and could subject us to significant penalties and liabilities if found to be inaccurate.
−Removed: In addition, our receipt of the PPP Loans may result in adverse publicity and damage to our reputation, and a review or audit by the SBA or other government entity or claims under the False Claims Act could consume significant financial and management resources.
−Removed: Any of these events could harm our business, results of operations and financial condition.
−Removed: A substantial number of shares of our common stock may be issued pursuant to the conversion terms of the 2020 Convertible Notes and exercise of the warrant, which could cause the price of our common stock to decline.
−Removed: The 2020 Convertible Notes are immediately convertible into shares of our common stock at an initial conversion price of $3.00 per share.
−Removed: The noteholder may also exercise the warrant in connection therewith in full for 2,160,000 shares (without taking into account the limitations on the conversion of the 2020 Convertible Notes and exercise of the warrant).
−Removed: The issuance of these shares would dilute our other equity holders, which could cause the price of our common stock to decline.
−Removed: Sales of substantial amounts of our common stock by selling stockholders, or the perception that such sales could occur, could adversely affect the price of our common stock.
−Removed: The sale by selling stockholders of a significant number of shares of common stock could have a material adverse effect on the market price of our common stock.
−Removed: In addition, the perception in the public markets that selling stockholders may sell all or a portion of their shares as a result of the registration of such shares for resale could also in and of itself have a material adverse effect on the market price of our common stock.
−Removed: We cannot predict the effect, if any, that market sales of those shares of common stock or the availability of those shares of common stock for sale will have on the market price of our common stock.
−Removed: The requirement that we repay the 2020 Convertible Notes and interest thereon in cash could adversely affect our business plan, liquidity, financial condition, and results of operations.
−Removed: We are required to make monthly installment payments to the noteholder to repay principal amounts outstanding under the 2020 Convertible Notes and interest thereon in cash.
−Removed: These obligations could have important consequences on our business.
−Removed: In particular, they could:
−Removed: • limit our flexibility in planning for, or reacting to, changes in our businesses and the industries in which we operate;
−Removed: • increase our vulnerability to general adverse economic and industry conditions;
−Removed: • place us at a competitive disadvantage compared to our competitors.
−Removed: No assurances can be given that we will be successful in making the required payments under the 2020 Convertible Notes.
−Removed: If we are unable to make the required cash payments, there could be a default under the 2020 Convertible Notes.
−Removed: In such event, or if a default otherwise occurs under the 2020 Convertible Notes, including as a result of our failure to comply with the financial or other covenants contained therein, the holders of the 2020 Convertible Notes could require us to immediately repay 115% of the outstanding principal and interest on the 2020 Convertible Notes or an amount equal to the market value of the shares of our common stock underlying the 2020 Convertible Notes, as determined in accordance with the 2020 Convertible Notes, in cash, if greater.
−Removed: Restrictive covenants under the 2020 Convertible Notes could limit our growth and our ability to finance our operations, fund our capital needs, respond to changing conditions and engage in other business activities that may be in our best interests.
−Removed: The 2020 Convertible Notes contain a number of affirmative and negative covenants regarding the incurrence of certain indebtedness, the existence of liens, the repayment of indebtedness, the payment of cash in respect to dividends, distributions or redemptions, and the transfer of assets among other matters.
−Removed: We are also subject to a financial covenant that requires us to maintain available cash in the amount of $500,000 at the end of each figure quarter, subject to a right of cure.
−Removed: Our ability to comply with these covenants may be adversely affected by events beyond our control, and we cannot assure you that we can maintain compliance with these covenants.
−Removed: The financial covenants could limit our ability to make needed expenditures or otherwise conduct necessary or desirable business activities.
Unregistered Sales of Equity Securities and Use of Proceeds.
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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.