What changed in this filing

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Item 1A. Risk Factors

2021-08-12 compared with 2021-05-17 · 21 added, 61 removed, 7 unchanged (92% of the section changed)

1 unchanged sentence

consider the risk factors discussed in Part I, Item 1A of our Annual Report on Form 10-K (our Form 10-K) for the year ended December

31, 2020 and any subsequent filings with the Securities and Exchange Commission (SEC) made prior to the date hereof, which could

materially affect our business, financial condition, results of operations or future results.

The risks and uncertainties discussed

below, in our Form 10-K and in any subsequent filings with the SEC made prior to the date hereof are not the only ones facing

our business.

Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may materially

adversely affect our business, cash flows, financial condition and/or results of operations.

The risk factor below updates, and

should be read together with, the risk factors disclosed in Part I, Item 1A of our Form 10-K.

Please also read the Cautionary

Notice Regarding Forward-Looking Statements and Information in Part I, Item 2 of this Quarterly Report on Form 10-Q under

the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

may not be entitled to forgiveness of our recently received Paycheck Protection Program Loan, and our application for the Paycheck

Protection Program Loan could in the future be determined to have been impermissible.

April 20, 2020, we were granted a Paycheck Protection Program loan (the “PPP loan”) under the Coronavirus Aid, Relief,

and Economic Security Act (the “CARES Act”) administered by the U.S.

Small Business Administration (the “SBA”)

in the aggregate amount of $770,000 pursuant to the Paycheck Protection Program (the “PPP”) under the CARES Act.

PPP loan agreement is dated April 20, 2020, matures on April 20, 2022, bears interest at a rate of 1% per annum, with the first

six months of interest deferred, is payable monthly commencing on November 2020, and is unsecured and guaranteed by the U.S.

Business Administration.

The loan term may be extended to April 20, 2025, if mutually agreed to by the Company and lender.

PPP loan may be prepaid at any time prior to maturity with no prepayment penalties.

Under the CARES Act, as amended in June 2020,

loan forgiveness is generally available for the sum of documented payroll costs, covered rent payments, covered mortgage interest

and covered utilities during the “Covered Period”, which is 8 weeks or 24 weeks (at the election of the Company) beginning

on the date of the first disbursement of the PPP Loan.

We will be required to repay any portion of the outstanding principal that

is not forgiven, along with accrued interest, and we cannot provide any assurance that we will be eligible for loan forgiveness,

that we will apply for forgiveness, or that any amount of the PPP Loan will ultimately be forgiven by the SBA.

In order to apply

for the PPP Loan, we were required to certify, among other things, that the current economic uncertainty made the PPP Loan request

necessary to support our ongoing operations.

We made this certification in good faith after analyzing, among other things, the

maintenance of our workforce, our need for additional funding to continue operations, and our ability to access alternative forms

of capital in the current market environment to offset the effects of the COVID-19 pandemic.

Following this analysis, we believe

that we satisfied all eligibility criteria for the PPP Loan, and that our receipt of the PPP Loan is consistent with the broad

objectives of the CARES Act.

The certification described above is subject to interpretation.

On April 23, 2020, the SBA issued

guidance stating 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.

The lack of clarity regarding loan eligibility under the Paycheck Protection

Program has resulted in significant media coverage and controversy with respect to public companies applying for and receiving

If, despite our good-faith belief that given our circumstances we satisfied all eligible requirements for the PPP Loan,

we are later determined to have not been in compliance with these requirements or it is otherwise determined that we were ineligible

to receive the PPP Loan, we may be required to repay the PPP Loan in its entirety and/or be subject to additional penalties.

we be audited or reviewed by federal or state regulatory authorities as a result of filing an application for forgiveness of the

PPP Loan or otherwise, such audit or review could result in the diversion of management’s time and attention and the incurrence

of additional costs.

Any of these events could have a material adverse effect on our business, results of operations and financial

Increases in costs of freight may

have an adverse impact on our gross and operating margins.

The capacity in the freight market has

not kept up with demand and increased freight rates.

During the quarter ended March 31, 2021, we experienced higher transportation

31, 2020 and any subsequent filings with the Securities and Exchange Commission (SEC) made prior to the date hereof, which could materially

affect our business, financial condition, results of operations or future results.

The risks and uncertainties discussed below, in our

Form 10-K and in any subsequent filings with the SEC made prior to the date hereof are not the only ones facing our business.

risks and uncertainties not currently known to us or that we currently deem to be immaterial may materially adversely affect our business,

cash flows, financial condition and/or results of operations.

The risk factor below updates, and should be read together with, the risk

factors disclosed in Part I, Item 1A of our Form 10-K.

Please also read the Cautionary Notice Regarding Forward-Looking Statements and

Information in Part I, Item 2 of this Quarterly Report on Form 10-Q under the heading “Management’s Discussion and Analysis

of Financial Condition and Results of Operations”.

in costs of freight may have an adverse impact on our gross and operating margins.

capacity in the freight market has not kept up with demand and increased freight rates.

During the six months ended June 30, 2021, we

experienced higher transportation expenses.

We believe that costs will continue to increase throughout fiscal 2021.

We are implementing mitigation plans to manage

however, due to the price sensitivity of our products, we may not be able to pass such increases on to our customers.

For a discussion of increased delivery and handling expenses, see “Operating Expenses” under the heading “Management’s

Discussion and Analysis of Financial Condition and Results of Operations” in Part I, Item 2 of this Form 10-Q.

We are implementing

mitigation plans to manage this risk;

however, due to the price sensitivity of our products, we may not be able to pass such increases

on to our customers.

For a discussion of increased delivery and handling expenses, see “Operating Expenses” under the heading

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part I, Item 2 of this Form

Unregistered Sales of Equity Securities and Use of Proceeds

3 unchanged sentences

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