Item 1A. Risk Factors
Item
1A. Risk Factors
In
addition to the following risk factors and the other information set forth in this Quarterly Report on Form 10-Q, you should carefully
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”.
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 nine months ended September 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 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
10-Q.
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds
None
that have not been previously disclosed in a Current Report on Form 8-K.
Item
3. Defaults Upon Senior Securities
None.
Item
4. Mine Safety Disclosures
Not
applicable.
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