What changed in this filing

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Item 1A. Risk Factors

2022-03-31 compared with 2021-03-30 · 67 added, 54 removed, 279 unchanged (30% of the section changed)

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COVID-19 Pandemic

The Company’s financial condition, results of operations and cash flows have been and will continue to be adversely impacted by the COVID-19 pandemic and future periods may continue to be adversely affected by the COVID-19 pandemic or other outbreaks of infectious disease or similar public health threats and the resulting economic impact.

The Company’s financial condition, results of operations and cash flows have been and will continue to be adversely impacted by the COVID-19 pandemic and future periods may continue to be adversely affected by the COVID-19 pandemic or other outbreaks of infectious diseases or similar public health threats and the resulting economic impact.

Any outbreaks of contagious diseases and other adverse public health developments could have a material and adverse effect on the Company’s business, results of operations and financial condition.

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Depending on the severity and longevity of the COVID-19 pandemic, the Company’s business, employees, customers, suppliers and stockholders may continue to experience significant negative impacts for future periods.

In addition, due to the speed with which the COVID-19 situation continues to develop and evolve, there is significant uncertainty around its ultimate impact on public health, business operations and the overall economy;

In addition, due to the nature with which the COVID-19 situation continues to evolve, there is significant uncertainty around its ultimate impact on public health, business operations and the overall economy;

therefore, the negative impact on the Company’s business, results of operations and financial condition cannot be reasonably estimated at this time, but the impact may continue to be material in the future.

In April 2020, the Company implemented contingency actions as a result of the expected significant negative impacts of these factors.

The Company’s temporary cost reduction measures included:

• reduced hours of operations of the Company’s production facilities;

• reduced work week for all office employees;

The Company’s temporary cost reduction measures included, among others, reduced hours of operations of the

Company’s production facilities;

reduced pay for salaried employees between 10% and 30%, depending on the employee’s position;

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deferred spending on certain R&D programs;

• implemented a hiring freeze;

• restricted all non-essential travel;

• minimized discretionary expenses and consulting services.

and minimized discretionary expenses and consulting services.

The measures with regard to pay for salaried employees and the suspension of the Company’s 401 (k) plan match were in effect through December 31, 2020.

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The degree to which the COVID-19 pandemic continues to impact the Company’s financial condition, cash flows, and results of operations depends upon future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration, location, and spread of the outbreak, its severity, government and business measures to contain the virus and address its impact, and how quickly and to what extent normal economic and operating conditions can resume.

We cannot, at this time, predict the many potential impacts of the COVID-19 pandemic, but it could have a material adverse effect on the Company’s business, prospects, financial condition, cash flows, and results of operations.

The Company cannot, at this time, predict the many potential impacts of the COVID-19 pandemic, but it could have a material adverse effect on the Company’s business, prospects, financial condition, cash flows, and results of operations.

Liquidity and Indebtedness

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The consolidated financial statements included herein have been prepared assuming the Company will continue as a going concern.

As of December 31, 2020, the Company had debt outstanding under its credit agreement between the Company and Standard Chartered Bank (“Standard Chartered”) (the “ Credit Agreement”) of $130.0 million.

In March 2021, the Company amended and restated the Credit Agreement (the “Amended and Restated Uncommitted Revolving Credit Agreement”).

The Amended and Restated Uncommitted Revolving Credit Agreement matures on March 25, 2022, is uncommitted, and is secured by substantially all of the Company’s assets.

The Amended and Restated Uncommitted Revolving Credit Agreement includes certain financial covenants as well as a change of control provision.

In addition, Standard Chartered has the right to demand payment of any and all outstanding borrowings and other amounts outstanding under the Amended and Restated Uncommitted Revolving Credit Agreement at any point in time at its discretion.

In connection with the execution of the Amended and Restated Uncommitted Revolving Credit Agreement, the Company entered into an amendment and restatement of the shareholder’s loan agreement originally executed with Weichai in December 2020 (the “First Amended and Restated Shareholder’s Loan Agreement”).

The First Amended and Restated Shareholder’s Loan Agreement provides the Company with access to $130.0 million of credit solely for purposes of repaying outstanding borrowings under the Amended and Restated Uncommitted Revolving Credit Agreement.

The First Amended and Restated Shareholder’s Loan Agreement expires on April 25, 2022.

Due to the Amended and Restated Uncommitted Revolving Credit Agreement’s current maturity date, the Company will need to extend and amend or refinance the Amended and Restated Uncommitted Revolving Credit Agreement on or before March 25, 2022.

The Company’s ability to continue as a going concern is dependent on generating profitable operating results, having sufficient liquidity, maintaining compliance with the covenants and other requirements under the Amended and Restated Uncommitted Revolving Credit Agreement and extending and amending, refinancing or repaying the indebtedness outstanding under the Amended and Restated Uncommitted Revolving Credit Agreement.

As of December 31, 2021 , the Company had $180.9 million of total borrowings outstanding under its debt arrangements with Standard Chartered Bank (“Standard Chartered”) and Weichai.

On March 25, 2022, the Company amended and restated its $130.0 million uncommitted senior secured revolving credit agreement with Standard Chartered (the “Second Amended and Restated Uncommitted Revolving Credit Agreement”), which extends the maturity date of loans outstanding under its previous credit facility to the earlier of March 24, 2023 or the demand of Standard Chartered.

The $130.0 million Second Amended and Restated Uncommitted Revolving Credit Agreement is subject to customary events of default and covenants and is secured by substantially all of the Company’s assets.

In addition, Standard Chartered has the right to demand payment of any and all outstanding borrowings and other amounts outstanding at any point in time at its discretion.

In connection with this Second Amended and Restated Uncommitted Revolving Credit Agreement, on March 25, 2022, the Company also amended two of the three shareholder’s loan agreements with Weichai, to among other things, extend the maturities thereof.

The amended first shareholder’s loan agreement continues to provide the Company with a $130.0 million subordinated loan under which Weichai is obligated to advance funds solely for purposes of repaying outstanding borrowings under the $130.0 million Second Amended and Restated Uncommitted Revolving Credit Agreement if the Company is unable to pay such borrowings.

The amended second shareholder’s loan agreement continues to provide the Company with a $25.0 million subordinated loan at the discretion of Weichai.

The maturity of the amended first shareholder’s loan agreement was extended to April 24, 2023 and the maturity of the amended second shareholder’s loan agreement was extended to May 20, 2023.

The Company is also party to a third shareholder’s loan agreement with Weichai, which was entered into on December 10, 2021, and matures on November 30, 2022.

The third shareholders loan agreement provides the Company with access to up to $50.0 million of credit at the discretion of Weichai.

All of the shareholder loan agreements with Weichai are subject to customary events of default and covenants.

The Company has covenanted to secure any amounts borrowed under either of the agreements upon payment in full of all amounts outstanding under the $130.0 million Second Amended and Restated Uncommitted Revolving Credit Agreement.

Due to the above maturity dates of existing debt, which range from November 30, 2022 to May 20, 2023, the Company will need to extend and amend or refinance these loans on or before the expiration dates.

The Company’s ability to continue as a going concern is dependent on generating profitable operating results, having sufficient liquidity, maintaining compliance with the covenants and other requirements under the various debt agreements, and extending and amending, refinancing or repaying the indebtedness outstanding under the Company’s debt agreements.

There can be no assurance that it will be able to complete a financing on acceptable terms or repay this outstanding indebtedness, when required or if at all.

Further, since certain of the Company’s loans are uncommitted or at the discretion of the lender, there can be no assurance that any available credit will be extended.

If the Company does not have sufficient liquidity to fund its business activities, it may be forced to limit its business activities or be unable to continue as a going concern, which would have a material adverse effect on its results of operations and financial condition.

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Its existing debt or any potential new debt could adversely affect its business and growth prospects.

As of December 31, 2020, the Company’s total debt obligations, including indebtedness under the Credit Agreement, was $131.1 million.

As of December 31, 2021, the Company’s total debt obligations, including indebtedness under agreements with Standard Chartered and Weichai, was $180.9 million.

The Company’s debt arrangements contain and may contain in the future certain requirements, including specific financial and other covenants or restrictions.

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• making the Company more vulnerable in the event of a downturn in its business.

The Company’s Amended and Restated Uncommited Revolving Credit Agreement places limitations on its ability to make acquisitions and restricts its ability to incur additional indebtedness.

Any future failure by the Company to comply with the financial covenants set forth under the Amended and Restated Uncommited Revolving Credit Agreement, if not cured or waived, could result in the acceleration of debt maturities or prevent the Company from accessing availability under the Amended and Restated Uncommited Revolving Credit Agreement.

The Company’s Second Amended and Restated Credit Agreement places limitations on its ability to make acquisitions and restricts its ability to incur additional indebtedness, while certain loan agreements with Weichai place limitations or restrictions on the Company’s usage of borrowed funds.

Any future failure by the Company to comply with the financial covenants set forth under the Company’s debt agreements, if not cured or waived, could result in the acceleration of debt maturities or prevent the Company from accessing availability.

If the maturity of the indebtedness is accelerated, the Company may not have sufficient cash resources, or have the ability to obtain financing through alternative resources, to satisfy its debt and other obligations, and the Company may not be able to continue as a going concern.

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As part of the settlement, among other undertakings, the Company committed to remediate the deficiencies in its internal control over financial reporting that constituted material weaknesses as identified in Part II, Item 9A.

Controls and Procedures by April 30, 2021 unless an extension is provided by the SEC.

To the extent that the Company’s actions are not successful and completed in accordance with the provisions of the settlement with the SEC and USAO, the Company may be forced to incur additional time and expense towards further remediation efforts and incremental substantive procedures, which could have a material adverse effect on its results of operations.

Controls and Procedures by April 30, 2021.

On April 12, 2021 the SEC granted the Company’s request for an extension of time until March 31, 2022 in which to comply with the requirements of the administrative order to remediate the remaining material weaknesses.

Due to the progress achieved in remediating the material weaknesses as noted in Changes in Internal Control over Financial Reporting below, the Company formally requested an additional extension from the SEC to remediate the three remaining material weaknesses below.

To the extent that the Company’s request for an extension from the SEC, or other actions are not successful and completed in accordance with the provisions of the settlemen t with the SEC and USAO, the Company may be required to incur additional time and expense towards further remediation efforts and incremental substantive procedures, which could have a material adverse effect on its results of operations.

In addition, failure to comply with the provisions of the settlement agreements with the SEC and USAO could result in further actions by one or both governmental agencies which could have a material adverse effect on the Company’s results of operations.

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Based on cumulative legal fees and settlements incurred, the Company fully exhausted its primary directors and officers insurance coverage of $30.0 million during the first quarter of 2021.

Further, during 2021 the Company also exhausted most of its primary $10 million side A insurance coverage.

Additional expenses currently expected to be incurred and that may occur in the future and/or liabilities that may be imposed in connection with actions against certain of the Company’s past and present directors and officers and certain current and former employees who are entitled to indemnification will be funded by the Company with its existing cash resources.

exhausting its primary directors’ and officers’ liability insurance coverage in early 2020, the Company has incurred over $7 million related to its indemnification obligation.

Since exhausting its primary directors’ and officers’ liability insurance coverage in early 2021, the Company has incurred $22.8 million related to its indemnification obligation in 2021 and 2020 combined.

Such e xpenses could continue to have a material impact on the Company’s financial condition, results of operations and cash flows.

In June 2020, the Company entered into a new directors’ and officers’ liability insurance policy, which was renewed in June 2021.

The insurance policy includes standard exclusions including for any ongoing or pending litigation such as the disclosed investigations by the SEC and USAO.

Financial Condition, Results of Operations, and Cash Flows

The Company has experienced substantial net losses in recent fiscal years and may continue to experience net losses.

The Company generated a net loss in fiscal year 2020 compared to net income in fiscal year 2019 and has an accumulated deficit as of December 31, 2020.

The net loss experienced in 2020 was principally attributable to low sales volume largely due to the COVID-19 pandemic, and the related historic decline in oil demand, significant warranty expense primarily related to certain engines sold into the transportation end market, legal and professional expenses associated with efforts to file the Company’s prior financial statements, remediate material weaknesses in its internal control over financial reporting, respond to the government investigations and defend the lawsuits related to the restatements as well as indemnifications of certain current and former directors and officers of the Company, high outstanding debt, and borrowing costs.

The Company expects that many of these costs will remain significant in future periods.

The Company generated a net loss in fiscal years 2021 and 2020 and has an accumulated deficit as of December 31, 2021.

The net loss experienced in 2021 was principally attributable to reduced gross profit as a result of higher material, tariff and freight costs (which were not fully recovered through pricing), significant warranty expenses (mostly related to certain engines sold into the transportation end market), and unfavorable product mix.

In addition, the Company incurred significant legal and professional expenses associated with indemnifications of certain former employees of the Company.

Some of these costs could remain in future periods.

Continued losses could reduce cash available from operations to service or refinance the Company’s indebtedness as necessary, as well as limit the Company’s ability to finance future growth in its business and implement its strategies.

The Company could incur restructuring and impairment charges as it evaluates its portfolio of assets and identifies opportunities to restructure its business to optimize its cost structure.

The Company continuously evaluates its portfolio of assets and its operational structure in an effort to identify opportunities to optimize its cost structure including as a result of the COVID-19 pandemic.

These actions could result in restructuring and related charges, including but not limited to asset impairments and employee termination costs, any of which could be significant and could adversely affect the Company’s results of operations.

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The prices of some of the key components of the Company’s power systems are subject to fluctuation due to market forces, including changes in the costs of raw materials incorporated into these components.

Such price increases occur from time to time due to spot shortages of commodities, increases in labor costs or longer-term shortages due to market forces.

Such price increases, which were substantial in 2021, occur from time to time due to spot shortages of commodities, increases in labor costs or longer-term shortages due to market forces.

In particular, the prices of certain precious metals, such as palladium and rhodium, used in emissions-control systems fluctuate frequently and often significantly.

Substantial increases in the prices of raw materials used in components that the Company sources from suppliers may result in increased prices charged by suppliers.

If the Company incurs price increases from suppliers for key components in its power systems, production costs will increase, and given competitive market conditions, the Company may not be able to pass all or any of those cost increases on to OEM customers in the form of higher sales prices.

If the Company incurs price increases from suppliers for key components in its power systems, production costs will increase, and given competitive market conditions, or contractual limitations, the Company may not be able to pass all or any of those cost increases on to OEM customers in the form of higher sales prices.

To the extent that its competitors do not suffer comparable component cost increases, the Company may have even greater difficulty passing along price increases, and the Company’s competitive position may be harmed.

As a result, increases in costs of key components may adversely affect the Company’s margins and otherwise adversely affect its results of operations.

As a result, increases in costs of key components may adversely affect the Company’s margins and otherwise adversely affect its results of operations, as was experienced during 2021.

Many of the Company’s power systems involve long and variable design and sales cycles.

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The Company’s power systems are sophisticated and complex, and the success of the power systems is dependent, in part, upon the quality and performance of key components, such as engines, fuel systems, generators, breakers, and complex electrical components and associated software.

The Company may incur liabilities for warranty claims as a result of defective products or

components, including claims arising from defective products or components provided by its suppliers that are integrated into its power systems.

The Company may incur liabilities for warranty claims as a result of defective products or components, including claims arising from defective products or components provided by its suppliers that are integrated into its power systems.

The provisions the Company makes for warranty accrual may not be sufficient, or it may be unable to rely on a warranty provided by a third-party manufacturer or recover costs incurred associated with defective components or products provided by its suppliers.

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Furthermore, the COVID-19 pandemic has resulted in work stoppages at certain suppliers that are part of the Company’s supply chain.

In early 2021, the Company experienced delays in its supply chain due to temporary shortages of raw materials and container delays of overseas materials as bottlenecks occurred at ports in Asia and North America.

During 2021, the Company experienced delays in its supply chain due to temporary shortages of raw materials and container delays of overseas materials as bottlenecks occurred at ports in Asia and North America.

This, in turn, has caused delivery delays to some of the Company’s customers.

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The Company may not be able to extend the agreements or may not achieve acceptable pricing.

For example, the Company was an exclusive supplier of the GM 6.0L engine to OEMs and GM is discontinuing the engine.

For example, the Company was an exclusive supplier of the GM 6.0L engine to OEMs and GM has discontinued the engine.

The Company does not have an agreement with GM to supply on-highway OEMs with GM’s successor product to the 6.0L engine.

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In addition, the exclusive agreements often include minimum purchase requirements.

The failure to reach the minimum purchase requirements could result in financial penalties or the loss of exclusivity that could be material to the Company.

to reach the minimum purchase requirements could result in financial penalties or the loss of exclusivity that could be material to the Company.

The Company utilizes a global supply chain to source products, including engines, components and materials, which may subject it to tariffs, including U.S.

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The market for alternative-fueled, spark-ignited power systems may not continue to develop as expected.

The continued growth of the market for efficient alternative-fueled, spark-ignited power systems, including natural gas, propane and gasoline, is a key tenet of the Company’s growth strategy.

The continued market acceptance and growth of the market for efficient alternative-fueled, spark-ignited power systems, including natural gas, propane and gasoline, is a key tenet of the Company’s growth strategy.

The impact of diesel emission regulations is expected to increase the cost and complexity of diesel power systems, but this may not materialize to the expected extent or at all.

Also, customers, or potential customers, may not substitute natural gas-, propane- and gasoline-powered power systems for diesel power systems in response to these regulations.

In addition, to the extent that diesel power system manufacturers develop the ability to design and produce emission-compliant diesel power systems that are more competitive than the Company’s alternative-fueled power systems, customers and potential customers may be less likely to substitute alternative-fueled power systems for diesel power

Furthermore, if alternative-fueled power systems are substituted for diesel power systems, there can be no assurance that the Company’s power systems would capture any portion of the potential market increase.

If the industrial OEM market generally, or more specifically any of the OEM categories that represent a significant portion of the Company’s business or in which it anticipates significant growth opportunities for its power systems, fails to develop or develops more slowly than the Company anticipates, its business could be materially adversely affected.

Lastly, the Company also faces competition from other forms of power systems, including electric and fuel cells, for example, which could limit its ability to grow in the future.

The Company may be impacted by volatility of oil and gas prices and/or fuel price differentials.

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This volatility, as with any commodity, will occur from time to time and may adversely affect the Company’s business.

Also, a significant portion of the Company’s sales and profitability is derived from sales of products that are used in the oil and gas industry, primarily in support of operating wells.

At times of severely depressed oil prices, as was experienced in the market during 2020, oil and gas producers have curtailed capital expenditures, sometimes sharply.

Also, a significant portion of the Company’s sales and profitability has historically been derived from sales of products that are used in the oil and gas industry, primarily in support of operating wells.

Various factors, such as capital allocation strategies, oil pricing, rig counts, and governments policies, among others, could lead oil and gas producers curtail or limit capital expenditures as was experienced in both 2020 and 2021.

In addition, oil and gas producers may cease or suspend production at well sites that have or are likely to become unprofitable.

As a result, sales of the Company’s products could be severely impacted during periods of a prolonged depression in energy prices, which could have a material adverse effect on the Company’s results of operations.

As a result, sales of the Company’s products could be severely impacted during periods of a prolonged depression in energy prices, rig counts and capital expenditures which could have a material adverse effect on the Company’s results of operations.

The Company estimates that as much as approximately $25 million and $45 million of its 2021 and 2020 net sales, respectively, were attributable to the sale of products used within the oil and gas industry.

The potential impact of future disruptions, continued economic uncerta inty, and continued depressed crude oil prices and low rig count levels may have a significant adverse impact that may result in the recognition of material impairments or other related charges.

The introduction of new products, including new engines that the Company develops, and the continued expansion of products in the energy and transportation markets may not succeed or achieve widespread acceptance.

The introduction of new products, including new engines that the Company develops, and the continued expansion of products in the power systems and transportation markets may not succeed or achieve widespread acceptance.

The Company’s growth depends on its ability to develop and/or acquire new products and/or refine existing products and power system technology, to complement and enhance the breadth of its power system offerings with respect to engine class and the OEM market categories into which the Company supplies its products.

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The purchasers of the Company’s power systems are OEMs that manufacture a wide range of applications and equipment that include standby and prime power generation, demand response, microgrid, combined heat and power, utility power, arbor equipment, material handling (including forklifts), agricultural and turf, construction, pumps and irrigation, compressors, utility vehicles, light- and medium-duty vocational trucks, and school and transit buses.

As a result of the significant resources and expertise required to develop and manufacture emission-certified power systems, certain of these customers have historically

chosen to outsource production of power systems to the Company.

As a result of the significant resources and expertise required to develop and manufacture emission-certified power systems, certain of these customers have historically chosen to outsource production of power systems to the Company.

To a significant extent, the Company depends on OEMs continuing to outsource design and production of power systems, power system components and subsystems.

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The Company faces competition from companies that employ current power system technologies, and it may face competition in the future from additional companies as new power system technologies are adopted.

Additionally, the Company may face competition from companies developing technologies such as cleaner diesel engines, biodiesel, fuel cells, advanced batteries and hybrid battery/internal combustion power systems.

Additionally, the Company may face competition from companies developing technologies such as cleaner diesel engines, biodiesel, fuel cells, electrification, advanced batteries and hybrid battery/internal combustion power systems.

The Company may not be able to incorporate such technologies into its product offerings, or it may be required to devote substantial resources to do so.

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The Company is engaged in an industry that will be affected by future technological developments.

The Company’s success will depend upon its ability to develop and introduce, on a timely and cost-effective basis, new products, applications and processes that keep pace with technological developments and address increasingly sophisticated customer requirements.

The Company’s success will depend upon its ability to develop and introduce, on a timely and cost-effective basis, new products, applications and

processes that keep pace with technological developments and address increasingly sophisticated customer requirements.

The Company may not be successful in identifying, developing and marketing new products, applications and processes, and product or process enhancements.

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The Company’s success depends on its ability to attract, retain and motivate a highly-skilled and diverse management team and workforce.

In the last six months, the Company has experienced significant leadership changes, including appointing a new Chief Executive Officer and a new Chief Financial Officer.

During 2021, the Company has experienced significant leadership changes, including appointing a new Chief Executive Officer, a new Chief Financial Officer, and a new Chief Technical Officer.

Also, its Executive Vice President and Co-Founder retired from the Company.

Executive leadership transitions can be difficult to manage and could cause disruption to the Company’s business.

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Common Stock Ownership and Stockholder Influence

Ownership of the Company’s stock is concentrated among certain current and former employees and Weichai, therefore limiting other stockholders’ ability to influence corporate matters.

Ownership of the Company’s stock is concentrated among certain former employees and Weichai, therefore limiting other stockholders’ ability to influence corporate matters.

As of March 28, 2022, Weichai beneficially owned 51.2% of the Company’s outstanding shares of Common Stock.

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Winemaster, the Company’s founder, former Chairman of the Board, Chief Executive Officer, and President and nonexecutive Chief Strategy Officer, beneficially owned approximately 14.5% of the Company’s outstanding shares of Common Stock, and Kenneth J.

Winemaster, the Company’s co-founder and Executive Vice President, beneficially owned approximately 9.7% of the Company’s outstanding shares of Common Stock.

Winemaster, the Company’s co-founder and former Executive Vice President, beneficially owned approximately 9.6% of the Company’s outstanding shares of Common Stock.

E ach of these stockholders, by virtue of their significant equity ownership in the Company, may be able to significantly influence, and, in the case of Weichai, control the outcome of all matters requiring stockholder approval, including the election and removal of directors and any merger or other significant corporate transactions.

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The concentration of ownership might also have the effect of delaying or preventing a change of control of the Company that other stockholders may view as beneficial.

With the exercise of the Weichai Warrant, Weichai alone owns a majority of the outstanding shares of Common Stock and, therefore, it possesses voting control over the Company sufficient to prevent any change of control from occurring.

With the exercise of the Weichai Warrant, Weichai alone owns a

majority of the outstanding shares of Common Stock and, therefore, it possesses voting control over the Company sufficient to prevent any change of control from occurring.

Weichai also maintains certain rights through its Investor Rights Agreement with the Company.

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Because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until they are launched against a target, the Company may be unable to anticipate these techniques or to implement adequate preventive measures.

Information technology security threats, including security breaches, computer malware and other cyber-attacks, are increasing in both frequency and sophistication and could create financial liability, subject the Company to legal or regulatory sanctions, or damage its reputation with customers, dealers, suppliers and other stakeholders.

Information technology security threats, including security breaches, computer

malware and other cyber-attacks, are increasing in both frequency and sophistication and could create financial liability, subject the Company to legal or regulatory sanctions, or damage its reputation with customers, dealers, suppliers and other stakeholders.

The Company continuously seeks to maintain a robust program of information security and controls, but the impact of a material information technology event could have a material adverse effect on its reputation and results of operations.

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• terrorist activities;

• acts of war, including the events currently underway in Ukraine, which could lead to volatility in commodity availability and pricing, access to current or new markets, and general overall market volatility and weakness, among other factors;

• labor unrest;

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Any of these factors could have a material adverse effect on the Company’s business and results of operations.

The COVID-19 pandemic negatively impacted the Company’s business in 2020 and will likely have future impacts in 2021 and beyond.

The COVID-19 pandemic negatively impacted the Company’s business in 2020 and 2021 and will likely have future impacts in 2022 and beyond.

Furthermore, the extent and duration of such impacts over the longer term remain uncertain and dependent on future developments that cannot be accurately predicted at this time, such as the severity and transmission rate of the coronavirus, the extent and effectiveness of containment actions taken, including mobility restrictions and work restrictions, and the impact of these and other factors on the Company’s customer base, suppliers, and general commercial activity.

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Lastly, the Company’s overseas sales are subject to numerous stringent U.S.

and foreign laws, including the Foreign Corrupt Practices Act (“FCPA”) and comparable foreign laws and regulations, which prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S.

and foreign laws, including the Foreign Corrupt Practices Act (“FCPA”) and comparable foreign laws and regulations, which prohibit improper payments or offers of payments

to foreign governments and their officials and political parties by U.S.

and other business entities for the purpose of obtaining or retaining business.

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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.

What changed 10-K

Item 1A. Risk Factors