Item 1A. Risk Factors
ITEM
1A. RISK FACTORS to be updated
Except
as described below, there have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K
filed with the SEC on March 1, 2022.The disclosure of risks identified below does not imply that the risk has not already materialized.
We are required to make certain prepayments
to any revolving loans and thereafter may not be able to draw upon our revolving line of credit.
Under the 2020 Credit Agreement,
as amended, if the aggregate amount of cash and cash equivalents we hold exceeds $25.0 million, we are required to prepay an amount
equal to the lesser of (i) the outstanding revolving loans and (ii) the amount of cash and cash equivalents in excess of $25.0 million.
In addition, we are prohibited from making additional borrowings under the revolver if after giving effect to any borrowing, and any transactions
to be consummated therewith, the aggregate amount of cash and cash equivalents exceeds $25.0 million. As a result of these two restrictions,
our ability to accumulate cash in excess of $25.0 million is limited. If for any reason we are unable to borrow on our revolving
credit facility, we would be limited in available cash to pay expenses and meet our obligations, which lack of liquidity could impair
our relationships with suppliers and vendors, delay our growth plans or prevent us from taking actions in our best interest or even continue
in business.
We may issue debt and equity securities
or securities convertible into equity securities, any of which may be senior to our Class A Stock as to distributions and in liquidation,
which could negatively affect the value of our Class A Stock.
In the future, we may attempt
to increase our capital resources by entering into additional debt or debt-like financing that is unsecured or secured by up to all of
our assets, or by issuing additional debt or equity securities, which could include issuances of secured or unsecured notes, preferred
stock, hybrid securities or securities convertible into or exchangeable for equity securities. For example, in March 2022 we completed
a public offering of shares of Class A Stock. In the event of our liquidation, our lenders and holders of our debt would receive distributions
of our available assets before distributions to holders of our Class A Stock, and holders of securities senior to the Class A Stock would
receive distributions of our available assets before distributions to the holders of our Class A Stock. Because our decision to incur
debt and issue securities in future offerings may be influenced by market conditions and other factors beyond our control, we cannot predict
or estimate the amount, timing or nature of our future offerings or debt financings. Further, market conditions could require us to accept
less favorable terms for the issuance of our securities in the future.
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