Item 1A. Risk Factors
ITEM 1A. RISK FACTORS
Except as described below, there have been no material changes from
the risk factors previously disclosed in our 2023 Annual Report on Form 10-K filed with the SEC on March 12, 2024.The disclosure of risks
identified below does not imply that the risk has not already materialized.
Future sales of our Common Stock in the
public market may depress our share price.
Sales of a substantial number
of shares of our Common Stock in the public market, or the perception that these sales might occur, could depress the market price of
our Common Stock and could impair our ability to raise capital through the sale of additional equity securities or other securities convertible
into or exchangeable for equity securities, regardless of whether there is any relationship between such sales and the performance of
our business.
In
connection with the issuance of Warrants pursuant to the Amended and Restated Credit Agreement, on January 23, 2024, the Company entered
into an Amended and Restated Registration Rights Agreement (the “Registration Rights Agreement”) with CCP, Blackwell, Coliseum
Capital Co-Invest III, L.P. (“C-3”), Harvest Master, Harvest Partners, and HSCP (the “Holders”), providing for
the registration under the Securities Act of the Warrants, the shares of Common Stock issuable upon the exercise of the Warrants and the
Class A Common Stock held by the Holders as of such date (the “Registrable Securities”), subject to customary terms and conditions.
The Registration Rights Agreement provides that on or prior to February 22, 2024, the Company was required to prepare and file with the
SEC pursuant to Rule 415 of the Securities Act a registration statement to register the resale of the Registrable Securities. The Company
received an extension from the Holders to file the registration statement on or prior to March 22, 2024. On March 21, 2024, the Company
filed the registration statement pursuant to the Registration Rights Agreement.
The market price of our Common
Stock could decline as a result of sales in the market by a few large stockholders, such as Coliseum or the Holders, or the perception
that these sales could occur, including as a result of the registration statement filed March 21, 2024. These sales might also make it
more difficult for us to sell equity securities at a time and price that we deem appropriate.
Our stockholders may experience substantial
dilution in the value of their investment or may otherwise have their interests impaired if we issue additional shares of our capital
stock, including as a result of the exercise of the Warrants.
Our Second Amended and Restated Certificate of Incorporation allows
us to issue up to 300 million shares of our common stock, including 210 million shares of Common Stock and 90 million shares
of Class B Stock, and up to five million shares of undesignated preferred stock. For example, in February 2023 we issued 13,400,000 shares
of Common Stock pursuant to an underwritten public offering. To raise additional capital, we may in the future sell additional shares
of our Common Stock or other securities convertible into or exchangeable for our Common Stock at prices that are lower than the prices
paid by existing stockholders, and investors purchasing shares or other securities in the future could have rights superior to existing
stockholders, which could result in substantial dilution to the interests of existing stockholders. For example, on January 23, 2024,
we issued to the Lenders under the Amended and Restated Credit Agreement Warrants to purchase 20,000,000 shares of our Common Stock (approximately
19% of our currently outstanding Class A Common Stock) at a price of $1.50 per share, subject to certain adjustments. The Warrants will
expire on the 10-year anniversary of issuance or earlier upon redemption. The exercise of the Warrants will dilute the value of the Common
Stock and stockholder voting power.
Pursuant to our Certificate
of Incorporation, our board of directors may authorize the issuance of up to five million shares of preferred stock at any time and from
time to time, with such terms and preferences as the board of directors determines and without any stockholder approval other than as
may be required by Nasdaq rules. The issuance of such shares of preferred stock could dilute the interest of, or impair the voting power
of, our common stockholders. The issuance of such preferred stock could also be used as a method of discouraging, delaying, or preventing
a change of control.
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