What changed in this filing

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Item 1A. Risk Factors

2025-05-06 compared with 2024-11-04 · 224 added, 195 removed, 2 unchanged (100% of the section changed)

as described below, there have been no material changes from the risk factors previously disclosed in our 2024 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.

The cost of the

Restructuring Plan may exceed our estimates and we may not otherwise realize the intended benefits of the Restructuring Plan, which could

adversely affect our results of operations and our financial condition.

costs of the Restructuring Plan may exceed our estimates, and we may not achieve the targeted financial benefits or generate additional

savings to invest in growth.

We may have trouble relocating equipment to Georgia and expanding our Georgia manufacturing workforce.

we replace experienced Utah manufacturing employees with inexperienced employees in Georgia, we may lose continuity and accumulated knowledge,

as well as experience a decline in productivity, which may negatively impact our production efficiency and quality.

We may experience

an increase in the cost of distribution due to manufacturing in only one region of the United States.

During the process of consolidation,

we could encounter disruptions with respect to inventory levels or raw material supply due to shifting plant volumes.

We may not be able

to timely sublease our Utah manufacturing facilities, which could adversely affect our financial condition.

The reduction in our workforce

and related restructuring, including the loss of jobs in Utah, could damage employee morale, our business reputation, and our ability

to attract and retain highly skilled employees, which could adversely affect our business.

Disruption of our manufacturing

operations has and could increase our costs of doing business or lead to delays in shipping our products and could materially adversely

affect our business, our results of operations, and our financial condition.

disruption of our manufacturing operations for a significant period of time, or even permanently, such as due to the Restructuring Plan

or a closure related to restructuring, a pandemic, natural disasters, the termination or expiration of a lease or mechanical failures

in our manufacturing equipment, would likely increase our costs of doing business and lead to delays in manufacturing and shipping our

products to customers and could adversely affect our business, results of operations and our financial condition including our cash flows.

In addition, the occurrence of workplace injuries or other industrial accidents at one or more of our manufacturing plants has required,

and may require in the future, that we suspend production or modify our operations, which could lead to delays in manufacturing and shipping

our products to customers.

Likewise, acts of workplace violence may require us to temporarily suspend production or modify our operations.

Such delays could adversely affect our customer satisfaction, results of operations, financial condition including our cash flows.

a result of the Restructuring Plan, we may be at increased risk of disruption to our manufacturing operations by any event affecting that

plant including but not limited to a regional economic downturn, hurricanes and other natural disasters, closure due to a pandemic, the

unavailability of utilities, or any other events that impacts our manufacturing and operating activities in Georgia, which could adversely

affect our business.

may delist our securities from its exchange, which could harm our business and limit our stockholders ’ liquidity.

Our Common Stock is currently

listed on NASDAQ, which has qualitative and quantitative listing criteria.

However, we cannot assure that our Common Stock will continue

to be listed on NASDAQ in the future.

In order to continue listing our Common Stock on NASDAQ, we must maintain certain governance, financial,

distribution and stock price levels.

Generally, we must maintain a minimum amount in stockholders’ equity, a minimum number of

holders of our Common Stock, and a $1.00 minimum per share bid price for our Common Stock.

If we fail to maintain a $1.00 minimum per

share bid price for a period of 30 consecutive business days, we have 180 calendar days to maintain our Common Stock at a $1.00 minimum

per share bid price for 10 consecutive trading days.

If we do not regain compliance within 180 calendar days, NASDAQ may grant a second

compliance period of 180 calendar days or it may make a determination to delist our Common Stock, at which point we would have an opportunity

to appeal the delisting determination to a hearings panel.

Our Common Stock has been trading below the $1.00 minimum per share bid price

since September 30, 2024.

If our common stock continues to close below the $1.00 minimum per share requirement, we would then be required

to file a Form 8-K reporting the receipt of a notice of delisting and failure to satisfy a continued listing rule or standard.

disclosure may lead to a limited amount of analyst coverage and have a negative effect on the price of our common stock.

If we are unable to comply

with the continued listing requirements, our Common Stock may be subject to delisting.

If NASDAQ delists our Common Stock from trading

on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be

quoted on an over-the-counter market.

If this were to occur, we could face significant material adverse consequences, including:

a limited availability of market quotations for our securities;

reduced liquidity for our securities;

a determination that our Common Stock is a “penny stock” which will require brokers trading in our Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

a limited amount of news and analyst coverage;

a decreased ability to issue additional securities or obtain additional financing in the future.

Future use and amount of our Current NOLs

and other tax benefits is uncertain.

On June 27, 2024, our Board

approved the adoption of the NOL Rights Plan to protect stockholder value by attempting to safeguard our ability to use Current NOLs of

approximately $238 million to reduce potential future federal income tax obligations from becoming substantially limited by future ownership

filed with the SEC on March 14, 2025.

The disclosure of risks identified below does not imply that the risk has not already materialized.

trade policy including the impact of tariffs are having and may continue to have a material adverse effect on our business and

results of operations.

business and results of operations are being and may continue to be adversely affected by uncertainty and changes in U.S.

trade policies,

including tariffs, trade agreements or other trade restrictions which may be imposed by the U.S.

or other governments with little or no

advance notice.

For example, the U.S.

government recently imposed tariffs on product imports from almost all countries.

Some tariff announcements

have been followed by the granting of limited exemptions and temporary pauses causing substantial uncertainty and volatility in financial

trade policy has and may continue to result in retaliatory measures on U.S.

If we are unable to navigate

further these unpredictable changes in U.S.

or international trade policy, it could have a material adverse impact on our business and

results of operations.

of our products require materials that may be subject to these recent

tariffs, especially our products requiring textiles.

Any imposition of or increase in tariffs on imports of these products or components,

as well as corresponding price increases for such materials available domestically, could increase our costs.

To the extent that we are

unsuccessful in finding alternative suppliers that are subject to smaller or no tariffs, negotiating sharing these costs with our suppliers,

or failing to pass cost increases on to our customers, such cost increases could adversely affect our business and results of operations.

Higher costs could also inhibit our ability to develop new products and innovations.

or other trade restrictions may lead to continuing uncertainty and volatility in U.S.

and global financial and economic conditions and

commodity markets, declining consumer confidence, significant inflation, and diminished expectations for the economy, and ultimately may

reduce demand for our products.

Such conditions could have a material adverse impact on our business, results of operations and cash flows.

Also, disruptions and volatility in the financial markets may lead to adverse changes in the availability, terms and cost of capital.

Such adverse changes could increase our costs of capital and limit our access to financing sources, which could in turn reduce our cash

flow and limit our ability to pursue growth opportunities.

indebtedness, related covenants, and certain prepayment obligations, including make-whole payments, could limit operational and financial

flexibility and adversely affect our business if we breach such covenants or default on such indebtedness.

January 23, 2024, to refinance existing obligations, we entered into the Amended and Restated Credit Agreement.

Upon entry into the Amended

and Restated Credit Agreement, we received a term loan in the amount of $61.0 million.

The Amended and Restated Credit Agreement imposes

various affirmative and negative covenants, including covenants regarding dispositions of property, investments, forming or acquiring

subsidiaries, business combinations or acquisitions, incurrence of additional indebtedness, paying dividends or making distributions and

transactions with affiliates, among other customary covenants.

restrictions may prevent us from taking actions that we believe would be in the best interests of the business and complicate our ability

to execute our business strategy or compete with less restricted companies.

If we fail to comply with the covenants under the Amended

and Restated Credit Agreement, we may need to seek future amendments or waivers and/or alternative liquidity sources, such as subordinated

debt, which may not be favorable or available.

Before taking any action requiring a waiver under the Amended and Restated Credit Agreement,

we must first obtain approval from the Lenders, which may cause us to incur additional costs and may not be granted.

Non-compliance could

lead to defaults, which could materially adversely affect our financial condition and results of operations, including possible acceleration

of our debt, as well as other cross-defaulting debt obligations.

Additionally, defaults could significantly impair our ability to secure

alternative financing and limit our business strategies.

Our compliance with these covenants will depend on successfully implementing

our business strategies, as breaches could lead to defaults and acceleration of our debt, potentially forcing us into bankruptcy or liquidation.

addition, on March 12, 2025, we entered into the 2025 Amendment, pursuant to which the 2025 Lenders agreed to provide us with an incremental

term loan of $19.0 million pursuant to Section 2.18 of the Amended and Restated Credit Agreement.

On May 2, 2025, we entered into the

2025 Second Amendment, pursuant to which the 2025 Lenders agreed to provide us with an incremental term loan of $20.0 million pursuant

to Section 2.18 of the Amended A&R Credit Agreement.

The 2025 Amendment also amended the Amended A&R Credit Agreement to (i) provide

for an additional term loan from the 2025 Term Loan Lenders (as defined in the 2025 Amendment) in an aggregate amount not to exceed $20.0

million, subject to the approval of the Required Lenders in their discretion, (ii) provide for the payment of substantial make-whole payments

in the event we prepay the loans prior to their maturity, and (iii) provide that the incremental term loan will be senior in right of

repayment to the initial term loan.

the Amended and Restated Credit Agreement, we have mandatory prepayment obligations, including upon certain asset dispositions, equity

issuances, debt incurrences and extraordinary receipts of cash.

As amended by the 2025 Amendment, we may be required to make substantial

“make-whole” payments to the Lenders.

If required to prepay or pay such make-whole payments, we may lack the liquidity to

do so, resulting in default.

Prepayments, including make-whole payments, would also divert resources from operating expenses, potentially

harming relationships with suppliers, hindering growth strategies, and jeopardizing our business continuity.

In addition, such payments

could result in holders of our Class A Stock not receiving any consideration in a sale of our business, or if we were to liquidate, dissolve,

or wind-up, either voluntarily or involuntarily.

may need additional funds to execute our business plan, maintain our liquidity, repay our debt and fund our operations.

be able to obtain such funds on acceptable terms or at all.

have experienced recurring operating losses and negative cash flows and may continue to generate operating losses and consume significant

cash resources in the future.

For the years ended December 31, 2024, and 2023, we had negative cash flow from operating activities of

$18.0 million and $54.7 million, respectively.

As of December 31, 2024, we had unrestricted cash and cash equivalents of $29.0 million

and borrowings of $70.7 million under our Amended and Restated Credit Agreement, which will become due on December 31, 2026.

March 12, 2025, we borrowed an additional $19.0 million under the Amended and Restated Credit Agreement pursuant to the 2025 Amendment,

which will also become due on December 31, 2026.

On May 2, 2025, we borrowed an additional $20 million under the Amended and Restated

Credit Agreement, pursuant to the 2025 Second Amendment.

The 2025 Amendment also added certain make-whole payments with respect to our

borrowings under the Amended and Restated Credit Agreement, which would require substantial payments in connection with certain pre-payments

or refinancing of our outstanding borrowings.

In connection with the preparation

of our 2024 financial statements, we undertook a going concern assessment and concluded the Company will have sufficient liquidity for

its operations for at least one year from the date these consolidated financial statements are issued.

However, there can be no assurance

that we will be able to maintain the liquidity necessary to fund our long-term operations and growth strategies, or repay our debt obligations

As a result, we may need to secure additional sources of liquidity to fund our long-term operating activities and capital expenditures.

However, there can be no assurance that we will be able to obtain additional financing as needed on terms favorable to us, or at all.

If we fail to meet liquidity and capital requirements, we may need to scale back or halt our growth plans, risking slower growth, losing

suppliers, failing to meet customer demands, and losing employees.

We may also need to restructure our obligations or pursue other measures

to address any liquidity deficiency.

Under the Amended and Restated

Credit Agreement, we can request additional loans, but the Lenders may deny requests, limiting our access to future funds and adversely

affecting our liquidity, financial condition and results of operations.

As a condition to providing future funds, the Lenders may require

other revisions to the Amended and Restated Credit Agreement, such as increasing prepayment or make-whole payments or including additional

restrictive covenants, which could adversely affect our business and financial condition.

Future equity or debt financings

may involve issuing securities likely to be dilutive to our existing stockholders, such as warrants, as we did on January 23, 2024 when

we issued to the Lenders, as partial consideration for their entering into the Amended and Restated Credit Agreement, warrants (the “2024

Warrants”) to purchase 20.0 million shares of our Common Stock (approximately 19% of our currently outstanding Common Stock) at

a price of $1.50 per share, subject to certain adjustments.

In addition, on March 12, 2025, we issued to the 2025 Lenders, as partial

consideration for their entering into the 2025 Amendment, warrants to purchase 6.2 million shares of our Common Stock, on May 2, 2025

we issued to the 2025 Lenders, as partial consideration for their entering into the Second 2025 Amendment, warrants to purchase 6.6 million

shares of our Common Stock and on May 2, 2025 we issued to SGI as partial consideration for their entering into the SGI Agreement, warrants

to purchase 8.0 million shares of our Common Stock at a price of $1.50 per share, subject to certain adjustments.

The exercise of such

warrants and/or any additional similar securities in the future would dilute the value and amount of our Common Stock.

Similarly, any

new securities we may issue may carry preferences, superior voting rights, or additional terms that could adversely affect shareholders

of our Common Stock.

At the Special Meeting, the Company’s stockholders ratified the NOL Rights Plan.

Pursuant to the NOL Rights

Plan, the Board authorized and declared a dividend of one Right for each outstanding share of Common Stock to stockholders of record at

the close of business on July 26, 2024.

Upon a stockholder acquiring greater than a 4.9% ownership percentage threshold (or, if a stockholder

has beneficial ownership of in excess of 4.9%, then the ownership percentage that is one-half of one percentage point greater than their

current beneficial ownership percentage), the Rights will become exercisable to significantly dilute any stockholder who violates the

ownership limitations of the NOL Rights Plan.

In connection with the NOL Rights Plan, the Board adopted, and recommended that our stockholders

approve, the NOL Protective Charter Amendment that adds an additional layer of protection to our Current NOLs until June 30, 2025 by voiding

any transfer of Common Stock that results in a stockholder acquiring beyond a 4.9% ownership percentage threshold (or, if a stockholder

has current beneficial ownership of in excess of 4.9%, then the ownership percentage that is one-half of one percentage point greater

than their current beneficial ownership percentage).

At the Special Meeting, the Company’s stockholders approved the NOL Protective

Charter Amendment.

Our use of our Current NOLs

and other tax benefits depends on our ability to generate taxable income in the future.

We cannot ensure whether we will have future taxable

income in any applicable period or, if we do, whether such income or our Current NOLs or other tax benefits at such time will exceed any

potential limitation under Code Section 382.

The IRS may challenge our Current NOLs and

other tax benefits .

As of September 30, 2024,

the amount of our Current NOLs has not been audited or otherwise validated by the Internal Revenue Service (the “IRS”).

IRS could challenge the amount of our Current NOLs, which could result in an increase in our future liability for income taxes.

determining whether an ownership change under Code Section 382 has occurred is subject to uncertainty, both because of the complexity

and ambiguity of the provisions of Code Section 382 and because of limitations on the knowledge that any publicly traded company can have

about the ownership of, and transactions in, its securities on a timely basis.

Therefore, we cannot ensure that the IRS or another taxing

authority will not claim that we experienced an ownership change under Code Section 382 and attempt to reduce the benefit of our Current

NOLs and other tax benefits available to us at such time, even if the NOL Protective Charter Amendment is in place.

There is continued risk of ownership change

under Code Section 382 .

Although the NOL Protective

Charter Amendment and NOL Rights Plan are intended to reduce the likelihood of an ownership change under Code Section 382, we cannot ensure

that the NOL Protective Charter Amendment and the NOL Rights Plan will be effective.

The amount by which an ownership interest under Code

Section 382 may change in the future could, for example, be affected by purchases of our Common Stock by stockholders who are 5%-stockholders

(as defined under Code Section 382) or by purchases of stock or other interests in corporations, partnerships or other legal entities

that own 4.9% or more of our Common Stock, over which we have no control.

Further, while the NOL Protective Charter Amendment and the

NOL Rights Plan allow for the exercise of currently outstanding conversion rights, exchange rights, warrants or options or otherwise,

such exercises may result in an ownership change under Code Section 382.

It may also be in our best interests, taking into account all

relevant facts and circumstances at the time, to permit the acquisition of our Common Stock in excess of the specified limitations or

to issue new or redeem existing equity in the future, all of which may increase the likelihood of an ownership change under Code Section

The NOL Protective Charter Amendment and

the NOL Rights Plan may potentially adversely affect the market for, and negatively impact the value of, our Common Stock .

The NOL Protective Charter

Amendment and the NOL Rights Plan are intended to prohibit or deter a stockholder’s ability to acquire, directly, indirectly or

constructively, additional shares of our Common Stock in excess of the specified limitations.

As such, a stockholder’s ability to

dispose of our Common Stock may be limited by reducing the class of potential acquirers for such shares.

In addition, a stockholder’s

ownership of our Common Stock may become subject to the restrictions of the NOL Protective Charter Amendment, or may trigger applicable

thresholds under the NOL Rights Plan, upon actions taken by Persons (as such term is defined in the NOL Protective Charter Amendment or

the NOL Rights Plan, as applicable) related to, or affiliated with, such stockholder.

Because the NOL Protective

Charter Amendment and the NOL Rights Plan were approved by our stockholders at the Special Meeting, we have included a legend reflecting

the transfer restrictions included in the NOL Protective Charter Amendment and the Rights issued pursuant to the NOL Rights Plan on certificates

representing newly issued or transferred shares of our Common Stock and disclosed such Rights and restrictions to Persons holding our

Common Stock in uncertificated form, and to the public generally.

Because certain buyers, including Persons who wish to acquire more than

4.9% of our Common Stock and certain institutional holders who may not be comfortable holding our Common Stock with restrictive legends,

may choose not to purchase our Common Stock, the NOL Protective Charter Amendment and the NOL Rights Plan could have an adverse effect

on the marketability and trading value of our Common Stock in an amount that could more than offset any value preserved from protecting

our Current NOLs.

The NOL Protective Charter Amendment and NOL Rights Plan could also have a negative impact on the trading value of our

Common Stock by deterring Persons or groups of Persons from acquiring our Common Stock, including in acquisitions that might result in

some or all of our stockholders receiving a premium above market value.

The NOL Protective Charter Amendment and

the NOL Rights Plan may have an anti-takeover effect .

While the NOL Protective Charter

Amendment is not intended to prevent, or even discourage, a proposal to acquire the Company, the NOL Protective Charter Amendment may

have a potential anti-takeover effect because, among other things, it will restrict the ability of a Person, entity or group to accumulate

more than 4.9% of our Common Stock and the ability of Persons, entities or groups now owning more than 4.9% of our Common Stock to acquire

any significant amount of additional shares of our Common Stock, in each case, without the approval of our Board.

Similarly, while the

NOL Rights Plan is not intended to prevent, or even discourage, a proposal to acquire the Company the NOL Rights Plan may have a potential

anti-takeover effect because, among other things, an Acquiring Person (as such term is defined in the NOL Rights Plan) may have its ownership

interest diluted upon the occurrence of a triggering event.

Accordingly, the overall effects of the NOL Protective Charter Amendment and

NOL Rights Plan may be to render more difficult or discourage a merger, tender offer, proxy contest or assumption of control by a substantial

holder of our Common Stock, and have an adverse effect on the marketability and the trading value of our Common Stock.

However, the NOL

Protective Charter Amendment and NOL Rights Plan should not interfere with any merger or other business combination approved by the Board.

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.

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 required the Company 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.

On March 21, 2024, the Company filed the registration statement pursuant

to the Registration Rights Agreement which became effective on June 4, 2024.

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 Class A common stock and 90 million shares of Class B common stock, and up to five million shares of undesignated preferred stock.

For example, in February 2023 we issued 13.4 million shares of Class A common stock pursuant to an underwritten public offering.

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 20.0 million 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 Class A common

stock and stockholder voting power.

Future capital raising efforts may incur substantial costs, such as investment banking, legal, and accounting fees,

and could lead to non-cash expenses that negatively impact our financial condition.

business could suffer if we are unsuccessful in making, integrating and maintaining commercial agreements, strategic alliances and other

business relationships.

rely on commercial agreements and strategic relationships with suppliers, service providers, and wholesale partners.

Disruptions in these

relationships or strategic decisions by partners could negatively affect our business.

For example, (i) one of our competitors has acquired

one of our wholesale partners, which could disrupt our relationship or prevent us from continuing to sell our products in favorable placements

alongside the competitor’s products or at all in the wholesale partner’s stores, and (ii) one of our competitors owns a manufacturing

company with which we have a manufacturing relationship, and that competitor could disrupt that relationship to harm our manufacturing

We may also struggle to maintain or develop these relationships and may not be able to secure new ones on favorable terms.

sell products through wholesale partnerships and may seek to expand these relationships.

However, these wholesale partnerships may not

be profitable and could incur additional costs compared to our DTC operations.

In addition, an expansion of these relationships may concentrate

our business with one customer resulting in greater reliance on that customer, which could adversely affect our ability to grow our business

and compete in our industry Wholesale relationships may be terminated or modified, or wholesale partners may reduce orders or fail to

meet their obligations, resulting in lost sales and adversely affecting our financial performance, results of operations and financial

Disputes with partners or the termination or amendment of agreements could lead to expenses, delayed payments, liabilities,

and distractions from our strategic objectives.

If we cannot renew or replace agreements on favorable terms, it could harm our business.

partners may also compete against us in key channels, harming our business.

Maintaining these relationships may require significant resources

and could limit our sales channels, adversely affecting other areas of our business.

are expanding Purple showrooms across the U.S., which may compete with our wholesale partners for customers.

This omni-channel strategy

carries the risk of diminishing sales in other channels, increasing costs, and the potential loss of wholesale partners.

Managing this

omni-channel strategy may require significant resources, potentially impacting other areas of our business.

If our financial performance

falls short of expectations, we may struggle to secure favorable payment terms or obtain credit from commercial partners that have extended

credit to us.

may delist our securities from its exchange, which could harm our business and limit our stockholders ’ liquidity.

Common Stock is currently listed on NASDAQ, which has listing criteria.

We cannot assure that our Common Stock will continue to be listed

on NASDAQ in the future.

To continue listing our Common Stock on NASDAQ, we must maintain certain governance, financial, distribution

and stock price levels.

Generally, we must maintain a minimum amount in stockholders’ equity, a minimum number of holders of our

Common Stock, and a $1.00 minimum per share bid price for our Common Stock.

If we fail to maintain a $1.00 minimum per share bid price

for a period of 30 consecutive business days, we have 180 calendar days to maintain our Common Stock at a $1.00 minimum per share bid

price for 10 consecutive trading days.

If we do not regain compliance within 180 calendar days, NASDAQ may grant a second compliance period

of 180 calendar days or it may determine to delist our Common Stock, at which point we would have an opportunity to appeal the delisting

determination to a hearings panel.

On April 5, 2025, we received written notice from NASDAQ that we were not in compliance with Nasdaq

minimum share price rule, since the closing price of our Common Stock had been below $1.00 per share for 30 consecutive business days.

We have 180 calendar days, or until October 1, 2025, to regain compliance with the Nasdaq minimum share price rule.

To regain compliance,

the bid price of our Common Stock must close at $1.00 or more for a minimum of ten consecutive business days.

While we intend to actively

monitor the bid price of our Common Stock and will consider available options to regain compliance, there can be no guarantee that we

will be able to regain compliance or otherwise comply with NASDAQ’s other continued listing requirements.

we are unable to comply with NASDAQ’S continued listing requirements, our Common Stock may be subject to delisting.

If NASDAQ delists

our Common Stock from trading on its exchange or if we decide to voluntarily delist from NASDAQ and/or deregister our Common Stock under

the federal securities laws, we could face significant material adverse consequences, including but not limited to (i) a limited availability

of market quotations for our Common Stock;

(ii) reduced liquidity for our Common Stock;

(iii) a determination that our Common Stock is

a “penny stock” which will require brokers trading in our Common Stock to adhere to more stringent rules and possibly

result in a reduced level of trading activity in the secondary trading market for our securities;

(iv) a limited amount of news and analyst

coverage, and in the event of deregistration of our Common Stock, less public disclosure about us;

and (v) a decreased ability to issue

additional securities or obtain additional financing in the future.

stockholders may experience substantial dilution in the value of their investment or may otherwise have their interests impaired if we

issue additional debt or equity securities or securities convertible into equity securities, as well as due to the exercise of the currently

outstanding Warrants.

may attempt to increase our capital by entering additional secured or unsecured debt or debt-like financing, or by issuing additional

debt or equity securities, including issuances of secured or unsecured notes, preferred stock, hybrid securities or convertible securities.

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 Class A common stock and 90 million shares of Class B common stock, and up to five million shares of undesignated

preferred stock.

have previously sold and may in the future sell additional shares of our Common Stock or convertible securities at prices that are lower

than the prices paid by existing stockholders, and investors purchasing shares or other securities could have rights superior to existing

stockholders, which could result in substantial dilution of existing stockholders.

For example, in February 2023 we issued 13.4 million

shares of Common Stock pursuant to a public offering, on January 23, 2024, we issued to the Lenders under the Amended and Restated Credit

Agreement the 2024 Warrants to purchase 20.0 million shares of our Common Stock at a price of $1.50 per share, subject to adjustments,

and on March 12, 2025, we issued to the 2025 Lenders under the 2025 Amendment the 2025 Warrants to purchase 6.2 million shares of our

Common Stock at a price of $1.50 per share, subject to adjustments.

In addition, on May 2, 2025, we issued to the 2025 Lenders under the

Second 2025 Amendment the 2025 Additional Warrants to purchase 6.6 million shares of our Common Stock at a price of $1.50 per share, subject

to adjustments and on May 2, 2025, we issued to SGI as partial consideration for their entering into the SGI Agreement, warrants to purchase

8.0 million shares of our Common Stock at a price of $1.50 per share, subject to adjustments.

The exercise of the Warrants will dilute

the value of Class A common stock and stockholder voting power.

In addition, the Warrants include full-ratchet anti-dilution protections,

subject to certain conditions, which could result in the Warrants becoming exercisable for a significantly greater number of shares if

we engage in a dilutive financing.

the event of our liquidation, holders of our debt would receive distributions of our assets before distributions to holders of our Common

Stock, including substantial make-whole payments, and holders of securities senior to the Common Stock would receive distributions of

our assets before distributions to the holders of our Common Stock.

Because future debt and equity 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.

Market conditions could impose less favorable terms for the issuance of our securities in the future.

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-Q

Item 1A. Risk Factors