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Item 1A. Risk Factors

2023-03-02 compared with 2022-03-02 · 178 added, 166 removed, 423 unchanged (45% of the section changed)

An investment in our Common Stock involves a substantial risk of loss.

You should carefully consider the following risk factors, together with all of the other information included in this 10-K, before you decide whether to invest in shares of our Common Stock.

You should carefully consider the following risk factors, together with all of the other information included in this 10-K, before you decide whether to invest in our stock.

The risks identified below could materially and adversely affect our business, financial condition and operating results.

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Risks Related to Our Business and Our Technologies

• The COVID-19 pandemic could continue to have adverse effects on our business.

• Macroeconomic factors could negatively impact demand for our products and increase our costs.

• The market for our products is highly competitive, and our revenues could decline if we cannot compete effectively.

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• Our acquisitions or partnerships with other companies may not be successful and may divert our management's attention.

• System failures, security breaches, delays in system operations, or failure to pass customer/partner security reviews may harm our business.

• System failures, security breaches, delays in system operations, or failure to pass customer or partner security reviews may harm our business.

• Our restructuring activities may not deliver the expected results and could disrupt our business operations.

• We may not be able to adequately retain and hire qualified personnel.

• The COVID-19 pandemic and other global events could continue to adversely affect our business.

Risks Related to Our Results of Operations

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• We may incur another impairment of goodwill or other intangible assets.

• Changes in the fair value of our financing derivatives, warrants or contingent consideration could adversely affect our financial condition and results.

• Changes in the fair value of our financing derivatives or warrants could adversely affect our financial condition and results.

• We may encounter difficulties managing our costs, may continue to incur net losses, and may not achieve profitability.

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• Concern over privacy violations and data breaches could materially harm our business.

• Domestic or foreign laws may limit our ability to collect and incorporate media usage information in our products.

• Domestic or foreign laws may limit our ability to collect and incorporate media usage information in our products and impose costly requirements on our business.

• Third parties could assert that we are infringing their intellectual property rights, or we could be unable to protect and enforce our own intellectual property rights.

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• There could be adverse developments in tax laws or disagreements with our tax positions in the jurisdictions where we operate.

Risks Related to International Operations

• Our business could become increasingly susceptible to risks associated with international operations, including those detailed below.

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Risks Related to International Operations

• Our business could become increasingly susceptible to risks associated with international operations.

• Export controls and sanctions laws could impair our ability to compete in international markets and subject us to liability.

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Risks Related to Our Capital Structure and Financings

• The holders of our Preferred Stock have significant influence, and their interests may conflict with our other stockholders.

• The holders of our Series B Convertible Preferred Stock ("Preferred Stock") have significant influence and rights that may conflict with the interests of our other stockholders.

• We may not realize the anticipated benefits of our Preferred Stock transactions, including commercial benefits from our data license with Charter.

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• Any failure to meet our debt obligations could adversely affect our business and financial condition.

• We may need additional capital, which may not be available on acceptable terms or at all.

• We may need additional capital to support our business or meet our debt or dividend obligations, which may not be available on acceptable terms or at all.

General Risks Related to Ownership of Our Common Stock

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Risks Related to Our Business and Our Technologies

The COVID-19 pandemic and related economic repercussions could continue to have adverse effects on our business, financial position, results of operations and cash flows.

The COVID-19 pandemic and related government mandates and restrictions have had a significant impact on the media, advertising and entertainment industries in which we operate.

The extent to which the COVID-19 pandemic may ultimately impact our business is uncertain and will depend in large part on our customers, many of whom continue to be affected by measures taken to mitigate the spread of the virus.

To date, the COVID-19 pandemic and related measures have had some impact on our business, including with respect to the execution of new and renewal contracts, the impact of closed movie theaters on our customers, customer payment delays and requests to modify contractual payment terms, particularly in our Movies Reporting and Analytics business.

These conditions have negatively impacted our revenue, cash flows, net loss and financial position, and could continue to have an impact in future periods.

It is possible that long-term changes in consumer behavior will impact our customers' operations, and thus their demand for our services and ability to pay, even after the spread of COVID-19 has been contained and businesses are permitted to resume normal operations.

While we have taken actions to mitigate the impact of the COVID-19 pandemic, these steps may not be successful or adequate if customer demand or cash collection efforts are further impacted by the COVID-19 pandemic or other factors.

Given the nature and significance of these events, we are unable to enumerate all risks to our business from the COVID-19 pandemic.

However, we believe that in addition to the impacts described above, other current and potential impacts include, but are not limited to:

• notices from customers and vendors arguing that any non-performance under our contracts with them is permitted as a result of force majeure or other reasons;

• delays in meeting our payment obligations to vendors or others, which could result in the loss of goods and services necessary to operate our business;

• inefficiencies, increased security risks and privacy concerns surrounding remote working arrangements, under which most of our employees are continuing to operate;

• disruptions from operational changes we have undertaken or may undertake, including lease and contract terminations, workforce reductions, furloughs and other cost-reduction initiatives;

• challenges in complying with our debt obligations or dividend requirements;

• unfavorable capital and credit market conditions, which could impact our ability to obtain future financing;

• heightened sensitivity from government regulators, particularly with respect to privacy compliance and cybersecurity in the current environment;

• further impairment of lease-related assets, goodwill or other intangible assets;

• litigation risk and possible loss contingencies related to COVID-19 and its impact, including with respect to our debt facilities, leases, commercial contracts, employee matters and insurance arrangements.

We cannot predict the duration of the COVID-19 pandemic or its effects on our business or financial performance in the future;

nor can we guarantee that any measures we have taken or will take to mitigate the impact will be successful.

To the extent COVID-19

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continues to adversely affect our business, financial condition, results of operation or cash flows, it may also have the effect of heightening many of the other risks described below.

Macroeconomic factors could adversely affect our business and financial results.

Our business depends on the health of the media and advertising industries in which we operate.

The strength of the advertising market can fluctuate in response to the economic prospects of specific advertisers or industries, advertisers' spending priorities, and the economy in general.

In recent months, macroeconomic factors such as inflation, rising interest rates and supply chain disruptions have caused some advertisers to reduce or delay advertising expenditures.

These declines, which may continue in future periods, have a direct impact on demand for our products, which measure advertising campaigns and audiences across platforms.

Sustained reductions in advertising spending could result in customers terminating their subscriptions for our products, delaying renewals, or renewing on terms less favorable to us.

Furthermore, our newer products, for which we recognize revenue based on impressions used, may be subject to higher fluctuations in revenue from changes in our customers' advertising budgets and spending.

Macroeconomic factors could also increase our costs, reducing margins and preventing us from meeting our profitability goals.

Finally, these factors make it more difficult for us to predict our future revenue and costs, which could result in misallocation of resources or operating inefficiencies that could harm our business.

The extent of the impact of macroeconomic factors on our business is uncertain and may continue to adversely affect our operations and financial results.

The market for media measurement and analytics products is highly competitive, and if we cannot compete effectively, our revenues could decline and our business could be harmed.

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We also compete with providers of marketing services and solutions, with full-service survey providers, and with internal solutions developed by customers and potential customers.

We expect competition to intensify as a result of the entrance of new competitors and the development of new technologies, products and services in our industry.

In recent years, competition has intensified as a result of the entrance of new competitors and the development of new technologies, products and services in our industry, and we expect this trend to continue.

Some of our competitors have substantially greater resources than we do.

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If we are unable to compete successfully against our current and future competitors, we may not be able to retain and acquire customers, and we may consequently experience a decline in revenues, reduced operating margins, loss of market share and diminished value from our products.

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If we are unable to provide television, digital or cross-platform analytics, or if our analytics are incomplete, our ability to maintain and grow our business may be harmed.

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If we are unable to gain or maintain access to information measuring a media component or type, or if we are unable to do so on commercially reasonable terms, our ability to meet our customers' demands and our business and financial performance may be harmed.

Furthermore, even if we do have access to television and digital (including mobile and OTT) data, if we have insufficient technology, or encounter challenges in our methodological approaches, our products may be inferior to other offerings, and we may be unable to meet our customers' demands.

Furthermore, even if we do have access to television and digital (including mobile and CTV) data, if we have insufficient technology, or encounter challenges in our methodological approaches, our products may be inferior to other offerings, and we may be unable to meet our customers' demands.

In such event, our business and financial performance may be harmed.

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Likewise, our acquisition of digital data may be reliant on large digital publishers that may technologically or legally prevent access to their proprietary platforms for research or measurement purposes.

Moreover, as mobile devices, technology and OTT viewing continue to proliferate, gaining and maintaining cost-effective access to mobile and OTT data will become increasingly critical, and we could face difficulty in accessing these forms of data.

Moreover, as mobile devices, technology and CTV viewing continue to proliferate, gaining and maintaining cost-effective access to mobile and CTV data will become increasingly critical, and we could face difficulty in accessing these forms of data.

If we are unable to acquire and integrate data effectively and efficiently, or if the cost of data acquisition or integration increases, our business, financial condition and results of operations may be harmed.

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If third-party information is not available to us on commercially reasonable terms, or is found to be inaccurate, it could harm our products, our reputation, and our business and financial performance.

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If we fail to respond to technological developments or evolving industry standards, our products may become obsolete or less competitive.

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Furthermore, the market for our products is characterized by changes in protocols and evolving industry standards.

For example, industry associations such as the Advertising Research Foundation, the Council of American Survey Research Organizations, the Internet Advertising Bureau, and the Media Rating Council as well as foreign and international industry associations have initiated efforts to either review market research methodologies across the media that we measure or develop minimum standards for such research.

Failure to achieve accreditation, delays in accreditation, or adverse audit findings may negatively impact the market acceptance of our products.

For example, industry associations such as the Advertising Research Foundation, the Council of American Survey Research Organizations, the

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Internet Advertising Bureau, and the Media Rating Council as well as foreign and international industry associations have initiated efforts to either review market research methodologies across the media that we measure or develop minimum standards for such research.

Failure to seek or achieve accreditation, delays in accreditation, or adverse audit findings may negatively impact the market acceptance of our products.

Meanwhile, successful accreditation or audits may lead to costly changes to our procedures and methodologies and may not result in the anticipated commercial benefits.

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We have in the past and may in the future change our methodologies, the methodologies of companies we acquire, or the scope of information we collect.

Such changes may result from identified deficiencies in current methodologies, development of more advanced methodologies, changes in our business plans or in industry standards or regulatory requirements, changes in technology used by websites, browsers, mobile applications, servers, or media we measure, integration of acquired companies or expressed or perceived needs of our customers, potential customers or partners.

Such changes may result from identified deficiencies in current methodologies, development of more advanced methodologies, changes in our business plans or in industry standards, changes in law or regulatory requirements, changes in technology used by websites, browsers, mobile applications, servers, or media we measure, integration of acquired companies or expressed or perceived needs of our customers, potential customers or partners.

Any such changes or perceived changes, or our inability to accurately or adequately communicate to our customers and the media such changes and the potential implications of such changes on the data we have published or will publish in the future, may result in customer dissatisfaction, particularly if certain information is no longer collected or information collected in future periods is not comparable with information collected in prior periods.

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At the same time, the cost of recruiting new panelists has increased.

Although we have taken steps to mitigate the impact of

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these changes on our business, there can be no assurance that we will be able to maintain panels of sufficient size and scope to provide the quality of marketing intelligence that our customers demand from our products.

Although we have taken steps to mitigate the impact of these changes on our business, there can be no assurance that we will be able to maintain panels of sufficient size and scope to provide the quality of marketing intelligence that our customers demand from our products.

We anticipate that the cost of panel recruitment will continue to increase with the proliferation of proprietary and secure media content delivery platforms and evolving regulatory requirements, and that the difficulty in collecting these forms of data will continue to grow, which may require significant hardware and software investments, as well as increases to our panel incentive and panel management costs.

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Furthermore, our newer products, for which revenue is recognized based on impressions used, may be subject to higher fluctuations in revenue.

Our customer renewal rates may decline or fluctuate due to a number of factors, including customer satisfaction or dissatisfaction with our products, the costs or functionality of our products, the prices or functionality of products offered by our competitors, the health of the advertising marketplace and the industries in which we operate (particularly in light of COVID-19), mergers and acquisitions affecting our customer base, general economic conditions or reductions in our customers' spending levels.

Our customer renewal rates may decline or fluctuate due to a number of factors, including customer satisfaction or dissatisfaction with our products, the costs or

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functionality of our products, the prices or functionality of products offered by our competitors, the health of the advertising marketplace and the industries in which we operate, mergers and acquisitions affecting our customer base, general economic conditions or reductions in our customers' spending levels.

Our growth depends upon our ability to retain existing large customers and add new large customers.

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In addition, we may be forced to reduce or withdraw from our relationships with certain existing customers or refrain from acquiring certain new customers in order to acquire or maintain relationships with important large customers.

As a result, new large customers or increased usage of our products by large customers may cause our profits to decline, and our ability to sell our products to other customers could be adversely affected.

As a result, new large customers or increased usage of our products by large customers may cause our profit margins to decline, and our ability to sell our products to other customers could be adversely affected.

If we are unable to effectively persuade customers to buy our products in substitution for those of an incumbent services provider, our revenue growth may suffer.

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Acquisitions may also disrupt our ongoing business, divert our resources and require significant management attention that would otherwise be available for ongoing development of our business.

Moreover, we cannot guarantee that the anticipated benefits of

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any acquisition, investment or business relationship would be realized timely, if at all, or that we would not be exposed to unknown liabilities.

Moreover, we cannot guarantee that the anticipated benefits of any acquisition, investment or business relationship would be realized timely, if at all, or that we would not be exposed to unknown liabilities.

In connection with any such transaction, we may:

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We also have entered into relationships with certain third-party providers to expand our product offerings, and we may enter into similar arrangements in the future.

These or other future relationships or transactions may involve preferred or exclusive licenses, discount pricing, provision of our products and services without charge, or investments in other businesses to expand our sales capabilities.

These or other future relationships or transactions may involve preferred or exclusive licenses,

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discount pricing, provision of our products and services without charge, or investments in other businesses to expand our sales capabilities.

These transactions could be material to our financial condition and results of operations, and though these transactions may provide additional benefits, they may not be profitable immediately or in the long term.

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Our product, information technology and security teams regularly review our systems and security posture and evaluate ways to enhance our processes and controls.

In addition, our board of directors and audit committee receive quarterly updates on developments in information technology, security and data governance, we regularly train our employees on information security and related risks, and we conduct third-party audits on our security program (ISO 27001).

In addition, our board of directors and audit committee receive quarterly updates on developments in information technology, security and data governance.

We regularly train our employees on information security and related risks, and we conduct third-party audits on our security program (ISO 27001).

Nevertheless, we cannot guarantee that a security incident will not occur or that any such incident will be timely detected or remediated.

A security incident or failure of our network or data gathering procedures, or those of our third-party data suppliers, could result in liability to the Company, impede the processing of data, cause the corruption or loss of data, prevent the timely delivery of our products, or damage our brand and reputation.

Cyber breaches continue to evolve in sophistication and may be difficult to detect.

In the future, we may need to expand our network and systems at a more rapid pace than we have in the past.

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Negative findings in an audit and/or the failure to adequately remediate in a timely fashion such negative findings could cause customers or partners to terminate their contracts or otherwise have an adverse effect on our reputation, results of operations and financial condition.

Further, customers or partners from time to time may require new or stricter physical or information security than they negotiated in their contracts and may condition continued volumes and business on the

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satisfaction of such additional requirements.

Some of these requirements may be expensive to implement or maintain and may not be factored into our contract pricing.

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Additionally, our data center facility agreements are of limited durations, and our data center facilities have no obligation to renew their agreements with us on commercially reasonable terms, if at all.

We believe that we have good relationships with our data center facility vendors and believe that we will be able to renew, or find alternative data center facilities, on commercially reasonable terms, although there can be no guarantee of this.

We select our third-party data center providers through a rigorous process based on redundant capability and compliance with industry standards and audits.

We believe that we will be able to renew, or find alternative data center facilities, on commercially reasonable terms, although there can be no guarantee of this.

If we are unable to renew our agreements with the owners of the facilities on commercially reasonable terms, or if we migrate to a new data center, we may experience delays in delivering our products until an agreement with another data center facility can be arranged or the migration to a new facility is completed.

If we or the third-party data centers that we use were to experience a major power outage, we would have to rely on back-up generators, which may not function properly, and their supply may be inadequate.

Such a power outage could result in the disruption of our business.

Such a power outage could result in the disruption

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of our business.

Additionally, if our current facilities fail to have sufficient cooling capacity or availability of electrical power, we would need to find alternative facilities and could experience delays in delivering our products.

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This initiative may divert resources from other priorities, which could have a negative impact on our revenue and growth opportunities.

In addition, our existing personnel may lack experience in cloud-based platform services, processes and controls and may require additional training, or we may need to hire additional personnel with the requisite skills and experience, which we may be unable to do on reasonable terms or at all.

If the migration of these processes is not successful, or if the initiative takes longer or requires more resources than we anticipate, our results of operations and financial condition could be adversely affected.

We currently leverage a large content delivery network ("CDN"), to provide services that allow us to offer a more accurate measurement methodology.

If that network faced an outage or breach or the service became unavailable, an alternate CDN provider or additional capacity in our data centers would need to be established to support the large volume of tag requests that we currently manage, which would either require additional investments in equipment and facilities or a transition plan.

This could unexpectedly raise our costs and could contribute to delays or losses in tag data that could affect the quality and reputation of our Media Metrix, vCE, cross-platform and other products that involve the measurement of a large amount of digitally transmitted activity across multiple providers.

We depend on access to the internet through third-party bandwidth providers to operate our business.

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Our business, financial condition and results of operations would be materially and adversely affected if there were errors or delays in delivering our products or services, including for reasons beyond our control, and our reputation would be harmed if our customers or potential customers believe our products and services are unreliable.

Our restructuring activities and cost reduction initiatives may not deliver the expected results and could disrupt our business operations.

Achieving our long-term revenue and profitability goals depends significantly on our ability to allocate resources in line with our strategic objectives and control our operating costs.

As described in Footnote 15 , Organizational Restructuring of the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this 10-K, we recently communicated a workforce reduction as part of our broader efforts to improve cost efficiency and better align our operating structure and resources with strategic priorities (collectively, the "Restructuring Plan").

In addition to employee terminations, the Restructuring Plan includes the reallocation of commercial and product development resources;

reinvestment in and modernization of key technology platforms;

consolidation of data storage and processing activities to reduce our data center footprint;

and reduction of other operating expenses, including software and facility costs.

We may also determine to exit certain activities in certain geographic regions in order to more effectively align resources with business priorities.

If we are not able to implement the Restructuring Plan as currently contemplated, if the Restructuring Plan does not generate the expected cost savings, or if we incur higher than expected costs to implement the Restructuring Plan, our business and financial results could be adversely affected.

Moreover, some of the organizational and operational changes we are making in connection with the Restructuring Plan will require careful management to avoid disrupting customer, partner and employee relationships.

If we do not successfully manage our restructuring activities, including the Restructuring Plan, the expected benefits may be delayed or not realized, and our operations and business could be disrupted.

We rely heavily on our management team and other personnel to operate and grow our business.

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The market for these personnel is extremely competitive, particularly for software engineers, data scientists and other technical staff, and like many companies in our industry, we have faced higher rates of attrition in recent years.

If we cannot retain highly skilled

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workers and key leaders, our ability to develop and deliver our products and increase our revenues may be materially and adversely affected.

Our restructuring activities have put additional pressure on our ability to retain, attract and motivate key personnel.

If we cannot retain highly skilled workers and key leaders, our ability to develop and deliver our products and increase our revenues may be materially and adversely affected.

If we must increase employee compensation and benefits in order to remain competitive for these personnel, our operating costs and financial condition may be adversely affected.

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Due to declines in our stock price in recent years, the effectiveness of our outstanding equity awards as a means to retain key personnel has diminished.

Moreover, the quantity of equity awards we are able to grant under our 2018 Equity and Incentive Compensation Plan ("2018 Plan") is limited.

Moreover, the quantity of equity awards we are able to grant under our 2018 Equity and Incentive

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Compensation Plan ("2018 Plan") is limited.

These limits have impacted our ability to offer new awards to current and prospective employees, which in turn has contributed to employee retention and hiring challenges.

In order to address our compensation needs, we may seek to amend our 2018 Plan to increase the number of shares available for future equity awards, or we may need to consider granting equity awards outside of our 2018 Plan, as we did with a recent executive hire.

In order to address our compensation needs, we plan to seek an amendment to our 2018 Plan to increase the number of shares available for future equity awards.

We also may need to consider granting equity awards outside of our 2018 Plan, as we did with a 2021 executive hire.

Either of these options would result in additional dilution to our existing stockholders.

Alternatively, we may need to shift a larger portion of employee compensation to cash, which could adversely affect our liquidity and financial condition.

If the amendment to our 2018 Plan is not approved by our stockholders or if our stock price continues to decline, we may need to shift a larger portion of employee compensation to cash, which could adversely affect our liquidity and financial condition.

The COVID-19 pandemic and related economic repercussions could continue to have adverse effects on our business, financial position, results of operations and cash flows.

The COVID-19 pandemic and related government mandates and restrictions have had a significant impact on the media, advertising and entertainment industries in which we operate.

To date, the COVID-19 pandemic has had some impact on our business, including with respect to the execution of new and renewal contracts, the impact of closed movie theaters on our customers, customer payment delays and requests to modify contractual payment terms.

These conditions have negatively impacted our revenue and cash flows, particularly in our movies business, and could continue to have an impact in future periods.

We face risks related to the Russian invasion of Ukraine, including from the resulting geopolitical effects.

The Russian invasion of Ukraine has resulted in worldwide geopolitical and macroeconomic uncertainty.

and others have imposed financial and economic sanctions on certain industry sectors and parties in and associated with Russia and Belarus, and additional sanctions could be adopted in the future.

Compliance with the sanctions and export controls regime is complex and may lead to increased regulatory scrutiny, particularly with respect to data collection and data transfer in affected regions.

The conflict may also heighten risks relating to employee safety, cybersecurity incidents or disruptions to our information systems, operational costs, reputational damage and potential retaliatory action by the Russian government or other actors.

As the situation develops and the regulatory environment continues to evolve, we may adjust our business practices as required or appropriate to respond to the changes.

While we do not currently expect the conflict to have a direct material impact on our business, it is not possible to predict the broader consequences, which could include additional sanctions, embargoes, regional instability, geopolitical shifts and adverse effects on the global economy or on our business and operations, as well as those of our customers, partners and third-party service providers.

Risks Related to Our Results of Operations

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• our ability to increase sales to existing customers and attract new customers in the current economic environment;

• our ability to respond to changes in our customers' businesses and consumer behavior resulting from the COVID-19 pandemic;

• the potential loss or reduction in spending by significant customers;

• changes in our customers' subscription renewal behaviors and spending on projects, particularly custom projects;

• the impact of our contract renewal rates caused by our customers' budgetary constraints, pandemic-related factors, competition, customer dissatisfaction, customer corporate restructuring, or our customers' actual or perceived lack of need for our products;

• our ability to respond to changes in our customers' businesses and consumer behavior resulting from the COVID-19 pandemic and other factors;

• changes in our customers' subscription renewal behaviors and spending on projects, particularly custom projects and usage-based products;

• the impact of our contract renewal rates caused by our customers' budgetary constraints, competition, customer dissatisfaction or customer corporate restructuring;

• the timing of contract renewals, delivery of products and duration of contracts and the corresponding timing of revenue recognition;

• the challenges of persuading existing and prospective customers to switch from incumbent service providers;

• the timing of revenue recognition for usage-based or impression-based products;

• the effect of revenues generated from significant one-time projects or the loss of such projects;

• the timing and success of new product introductions or changes in methodology by us or our competitors;

• the impact of our Preferred Stock transactions, including our long-term data license with Charter, on our revenues and cost of revenues;

• the impact of our Preferred Stock transactions, including our long-term data license with Charter;

• changes in our pricing and discounting policies or those of our competitors;

• the impact of our decision to discontinue certain products;

• our failure to accurately estimate or control costs, including those incurred as a result of business or product development initiatives, legal proceedings, strategic or financing transactions, and the integration of acquired businesses;

• the impact of our decision to discontinue certain products or exit certain geographic regions;

• our failure to accurately estimate or control costs, including those incurred as a result of business or product development initiatives, restructuring activities, legal proceedings, strategic or financing transactions, and the integration of acquired businesses;

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• the cost and availability of data from third-party sources and the cost to integrate such data into our systems and products and implement new use cases;

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• service of our existing debt and incurrence of additional debt;

• the amount and timing of capital expenditures and operating costs related to the maintenance and expansion of our operations and infrastructure;

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• the amount and timing of capital expenditures and operating costs related to the maintenance, migration and expansion of our operations and infrastructure;

• service outages, other technical difficulties or security breaches;

• limitations relating to the capacity of our networks, systems and processes;

• maintaining appropriate staffing levels and capabilities relative to projected growth;

• maintaining appropriate staffing levels and capabilities, particularly during organizational restructuring;

• limitations on our ability to use equity awards to compensate current and prospective employees;

• the cost and timing of organizational restructuring;

• the risks associated with operating in countries in which we may have little or no previous experience and with maintaining or reorganizing corporate entity structures in international jurisdictions;

• the extent to which certain expenses are deductible for tax purposes, such as share-based compensation that fluctuates based on the timing of vesting and our stock price;

• the timing of any changes to our deferred tax valuation allowance;

• adoption of new accounting pronouncements;

• changes in the fair value of our financing derivatives and warrants, contingent consideration, market volatility or management assumptions;

• general economic, political, regulatory, industry and market conditions and those conditions specific to internet usage and online businesses.

• changes in the fair value of our financing derivatives or warrants;

• general economic, political, regulatory, industry and market conditions and those conditions specific to media and advertising internet usage and online businesses.

We believe that our revenues and results of operations on a year-over-year and sequential quarter-over-quarter basis may vary significantly in the future and that period-to-period comparisons of our operating results may not be meaningful.

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They could also limit our flexibility to invest in our business and adjust to market conditions, which could impact our customer relationships and place us at a competitive disadvantage.

We expect to obtain the funds to pay our expenses and meet our financial obligations from cash flow from our operations and, potentially, from other debt and/or equity offerings.

We expect to obtain the funds to pay our expenses and meet our financial obligations from cash flow from our operations and, potentially, from other debt or equity offerings.

Accordingly, our ability to meet our obligations depends on our future performance and capital-raising activities, which will be affected by financial, business, contractual, economic and other factors, some of which are beyond our control.

Failure to meet our payment obligations to vendors could disrupt our supply of goods and services and impact our reputation, creditworthiness and relations with customers.

Failure to meet our payment obligations to vendors could disrupt our supply of goods and services and impact our reputation, creditworthiness and relations with customers and partners.

It could also lead to costly litigation.

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Failure to meet our financial obligations could have important consequences including, potentially, forcing us into bankruptcy or liquidation.

Our financial condition and results of operations could suffer and be adversely affected if we incur an impairment of goodwill or other intangible assets.

We are required to test goodwill and intangible assets, annually and on an interim basis if an event occurs or there is a change in circumstance that would more likely than not reduce the fair value of our reporting unit below its carrying values or indicate that the carrying value of such intangibles is not recoverable.

Our financial condition and results of operations could suffer and be adversely affected if we incur another impairment of goodwill or other intangible assets.

We are required to test goodwill and intangible assets, annually and on an interim basis if an event occurs or there is a change in circumstance that would more likely than not reduce the fair value of our reporting unit below its carrying value or indicate that the carrying value of such intangibles is not recoverable.

When the carrying value of a reporting unit exceeds its fair value, a charge to operations, up to the total amount of goodwill, is recorded.

If the carrying amount of an intangible asset is not recoverable, a charge to operations is recognized.

Either event would result in incremental expenses for that period, which would reduce any earnings or increase any loss for the period in which the impairment was determined to have occurred.

Either event would result in incremental expense for that period, which would reduce any earnings or increase any loss for the period in which the impairment was determined to have occurred.

We recorded a $224.3 million impairment charge related to goodwill and a $17.3 million impairment charge for our strategic alliance intangible asset in 2019.

We recorded a $4.7 million impairment charge related to our right-of-use ("ROU") assets, and related leasehold improvements, during 2020.

We recorded a $46.3 million impairment charge related to goodwill in the third quarter of 2022.

Our impairment analysis is sensitive to changes in key assumptions used in our analysis, such as expected future cash flows, the degree of volatility in equity and debt markets and our stock price.

Additionally, changes in our strategy or significant technical developments could significantly impact the recoverability of our intangible assets.

If the assumptions used in our analysis are not realized, it is possible that an additional impairment charge may need to be recorded in the future.

Additionally, changes in our strategy or significant technical

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Changes in the fair value of our derivative financial instruments, warrants or contingent consideration could adversely affect our financial condition and results of operations.

Our financing derivatives, warrants, and contingent consideration related to our acquisition of Shareablee are classified as liabilities in our consolidated financial statements.

developments could significantly impact the recoverability of our intangible assets.

If the assumptions used in our analysis are not realized, it is possible that an additional impairment charge may need to be recorded in the future.

Changes in the fair value of our derivative financial instruments or warrants could adversely affect our financial condition and results of operations.

Our financing derivatives and warrants are classified as liabilities in our consolidated financial statements.

We use various models and assumptions to determine the fair value of these liabilities, including assumptions with respect to market rates, the price and volatility of our Common Stock, the probability of occurrence of certain events, and term.

Any change in our assumptions could result in a change in the fair value of our derivative liabilities, warrants and contingent consideration, which would be recorded to earnings and could significantly affect our financial condition and results of operations.

Any change in our assumptions could result in a change in the fair value of our derivative liabilities or warrants, which would be recorded to earnings and could significantly affect our financial condition and results of operations.

Any adjustment to the terms of our warrants (whether due to the application of antidilution provisions, payment of a special dividend or otherwise) also could result in a change in the fair value of the warrants and affect our financial condition and results of operations.

We may encounter difficulties managing our costs, which could adversely affect our results of operations.

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Moreover, our need to effectively manage our operations and cost structure requires that we continue to assess and improve our operational, financial and management controls, reporting systems and procedures.

From time to time, as a result of acquisition integration initiatives, or through efforts to improve or streamline our operations, we have reduced our workforce or reassigned personnel, and we may do so in the future.

From time to time, as a result of acquisition integration initiatives, or through efforts to improve or streamline our operations (including the Restructuring Plan), we have reduced our workforce or reassigned personnel, and we may do so in the future.

Such actions may expose us to disruption by dissatisfied employees or employee-related claims, including claims by terminated employees who believe they are owed more compensation than we believe these employees are due under our compensation and benefit plans, or claims maintained internationally in jurisdictions whose laws and procedures differ from those in the U.S.

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We cannot make assurances that we will be able to achieve profitability in the future.

As of December 31, 2021, we had an accumulated deficit of $1,218.7 million.

As of December 31, 2022, we had an accumulated deficit of $1.3 billion.

Because a large portion of our costs are fixed, we may not be able to adequately reduce our expenses in response to any decrease in our revenues, which would materially and adversely affect our operating results.

In addition, our operating expenses may increase as we implement certain growth initiatives, which include, among other things, the development of new products and enhancements of our data assets and infrastructure.

In addition, our operating expenses may increase as we implement certain growth initiatives and restructuring activities, which include, among other things, the development of new products, enhancement of our data assets and infrastructure, and payment of severance and other costs in connection with organizational restructuring.

If our revenues do not increase to offset these increases in costs and operating expenses, our operating results would be materially and adversely affected.

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A significant portion of our net operating loss carryforwards are subject to an annual limitation under Section 382 of the Internal Revenue Code.

We anticipate the Transactions may have triggered further limitations, but we have not yet reached a final conclusion as to whether an ownership change occurred and to what extent our carryforwards are further limited.

We anticipate that our 2021 Preferred Stock transactions may have triggered further limitations, but we have not yet reached a final conclusion as to whether an ownership change occurred and to what extent our carryforwards are further limited.

As of December 31, 2022, we estimate our U.S.

federal and state net operating loss carryforwards for tax purposes were $620.0 million and $1,403.0 million, respectively, subject to limitation as described above.

federal and state net operating loss carryforwards for tax purposes were $584.8 million and $1.4 billion, respectively, subject to limitation as described above.

These net operating loss carryforwards will begin to expire in 2031 for federal income tax reporting purposes and in 2023 for state income tax reporting purposes.

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In assessing the need for a valuation allowance, we consider all sources of taxable income, including potential opportunities for loss carrybacks, the reversal of existing temporary differences associated with our deferred tax assets and liabilities, tax planning strategies and future taxable income.

We also consider other evidence such as historical pre-tax book income in making the determination.

We also consider other evidence such as historical pre-tax book income in making

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the determination.

As of December 31, 2022, we continue to have a valuation allowance recorded against the net deferred tax assets of our U.S.

entities and certain foreign subsidiaries, including net operating loss carryforwards.

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We have limited experience with respect to our pricing model for certain offerings, and if the fees we charge for our products are unacceptable to customers, our revenues and operating results will be harmed.

Many of our customers purchase specifically tailored contracts that are priced in the aggregate.

Due to the level of customization of such contracts, the pricing of contracts or individual product components of such packages may not be readily comparable across customers or periods.

Existing and potential customers may have difficulty assessing the value of our products and services when comparing them to competing products and services.

As the market for our products matures, or as competitors introduce new products or services that compete with ours, we may be unable to renew our agreements with existing customers or attract new customers with the fees we have historically charged.

As a result, it is possible that future competitive dynamics in our market may require us to reduce our fees, which could have an adverse effect on our revenues, profitability and operating results.

Risks Related to Legal and Regulatory Compliance, Litigation and Tax Matters

Concern over privacy violations and data breaches could lead to public relations problems, regulatory scrutiny and class action lawsuits, which could harm our business.

We are subject to data privacy and protection laws and regulations that apply to the collection, transmission, storage and use of proprietary information and personal information.

Concern over privacy violations and data breaches could lead to public relations problems, regulatory scrutiny and lawsuits, which could harm our business.

We are subject to data privacy and protection laws and regulations that apply to the collection, transmission, storage and use of personal information.

The regulatory environment surrounding information security and data privacy varies from jurisdiction to jurisdiction and is constantly evolving and increasingly demanding.

The restrictions imposed by such laws continue to develop and may require us to incur substantial costs and fines or adopt additional compliance measures, such as notification requirements and corrective actions.

Any perception of our practices, products or services as a violation of individual privacy rights may subject us to public criticism, loss of customers, partners or vendors, class action lawsuits, reputational harm, or investigations or claims by regulators, industry groups or other third parties, all of which could significantly disrupt our business and expose us to increased liability.

Any perception of our practices, products or services as a violation of individual privacy rights may subject us to public criticism, loss of customers, partners or vendors, litigation (including class action lawsuits), reputational harm, or investigations or claims by regulators, industry groups or other third parties, all of which could significantly disrupt our business and expose us to increased liability.

Additionally, laws regulating privacy and third-party products purporting to address privacy concerns could negatively affect the functionality of, and demand for, our products and services, thereby resulting in loss of customers, partners and vendors and harm to our business.

We also rely on security questionnaires and contractual representations made to us by customers, partners, vendors and other third-party data providers that their own use of our services and the information they provide to us do not violate any applicable privacy laws, rules and regulations or their own privacy or security policies.

As a component of our client contracts, we obligate customers to provide their consumers the opportunity to obtain the appropriate level of consent (including opt outs) for the information collection associated with our services, as applicable, or provide another appropriate legal basis for collection.

As a component of our client contracts, we generally obligate customers to provide their consumers the opportunity to obtain the appropriate level of consent (including opt outs) for the information collection associated with our services, as applicable, or provide another appropriate legal basis for collection.

If these questionnaires or representations are false, inaccurate or incomplete, or if our customers, partners, vendors and other third-party data providers do not otherwise comply with applicable privacy laws or security practices, we could face adverse publicity and possible legal or regulatory action.

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Our business could be adversely impacted by existing or future laws, regulations or actions by domestic or foreign regulatory agencies, or by our customers' or partners' efforts to comply with these laws.

For example, privacy, data protection and personal information, intellectual property, advertising, data security, data retention and deletion, protection of minors, consumer protection, economic or other trade prohibitions or sanctions concerns could lead to legislative, judicial and regulatory limitations on our or our partners' ability to collect, maintain and use information about consumers' behavior or media consumption in the U.S.

This could impact the amount and quality of data in our products.

For example, privacy, data protection and personal information, intellectual property, advertising, data security, data retention and deletion, protection of minors, consumer protection, economic or other trade prohibitions or sanctions concerns have and could continue to lead to legislative, judicial and regulatory limitations on our and our partners' ability to collect, maintain and use information about consumers' behavior and media consumption in the U.S.

and abroad, impacting the amount and quality of data in our products and increasing our costs.

State and federal laws within the U.S.

and foreign laws and regulations are varied, and at times conflicting, resulting in higher risk related to compliance.

A number of laws coming into effect and/or proposals pending before federal, state and foreign legislative and regulatory bodies have affected and are likely to continue to affect our business.

For example, the European Union's ("EU") General Data Protection Regulation, or GDPR, became effective in May 2018, imposing more stringent EU data protection requirements and providing for greater penalties for noncompliance.

In addition, regulators in the EU and elsewhere are increasingly focused on consent and the collection of data using tracking technologies, and cross-border data transfers.

Adding further uncertainty is the UK's

and foreign laws and regulations are varied, overlapping and at times conflicting, resulting in higher risk related to compliance.

A number of laws have recently come into effect, and there are proposals pending before federal, state and foreign legislative and regulatory bodies that have affected and are likely to continue to affect our business.

For example, the European Union's ("EU") General Data Protection Regulation, or GDPR, became effective in 2018, imposing more stringent EU data protection requirements and providing for greater penalties for noncompliance.

In addition, regulators in the EU, the U.S.

and elsewhere are increasingly focused on transparency, consent, consumer choice and the collection of data using tracking technologies.

In the EU, cross-border data transfers are increasingly scrutinized to ensure compliance, and there have been expanded enforcement efforts in this area.

states now have comprehensive privacy laws governing the collection and use of personal information.

The California Consumer Privacy Act, which went into effect in 2020, was substantially expanded by the California Privacy Rights Act of 2020, which went into effect in January 2023.

The Virginia Consumer Data Protection Act, the Colorado Privacy Act, the Connecticut Data Privacy Act and the Utah Consumer Privacy Act all came into effect or will come into effect in 2023.

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departure from the EU, commonly referred to as Brexit.

As another example, Brazil enacted the General Data Protection Law, and the State of California enacted the California Consumer Privacy Act ("CCPA").

The CCPA, which went into effect in January 2020, expanded the scope of what is considered "personal information" and created new data access and opt-out rights for consumers, which are impacting Comscore and other companies that operate in California, including many of our customers and partners.

Beginning in January 2023, three new state privacy laws (and related regulations) are scheduled to come into effect.

The California Privacy Rights Act of 2020, or CPRA, is scheduled to become fully operative on January 1, 2023, substantially expanding the CCPA;

the Virginia Consumer Data Protection Act is scheduled to become effective on January 1, 2023;

and the Colorado Privacy Act is scheduled to become effective on July 1, 2023.

federal and state and foreign laws and regulations, which in some cases can be enforced by private parties in addition to government entities, are constantly evolving and can be subject to significant change.

We have implemented policies and procedures to comply with GDPR, CCPA, the Children's Online Privacy Protection Act ("COPPA") and other laws, and we continue to evaluate and implement processes and enhancements and monitor changes in laws and regulations.

federal and state and foreign laws and regulations, which in some cases can be enforced by private parties in addition to government entities, are constantly evolving and impose new and complex requirements on our business.

We have implemented policies and procedures to comply with the GDPR, state privacy laws, the Children's Online Privacy Protection Act and other laws and regulations, and we continue to evaluate and implement processes and enhancements and monitor changes in laws and regulations.

However, the application, interpretation, and enforcement of these laws and regulations are often uncertain, particularly in the rapidly evolving industries in which we operate, and may be interpreted and applied inconsistently from country to country, state to state, and customer to customer, and inconsistently with our current policies and practices.

Additionally, the costs of compliance with, and the other burdens imposed by, these and other laws, regulatory actions and customer or partner policies may prevent us from selling our products and have and may continue to increase the costs associated with selling our products, and may affect our ability to invest in or jointly develop products in the U.S.

Additionally, the costs of compliance with, and the other burdens imposed by, these and other laws, regulatory actions and customer or partner policies may prevent us from selling our products, may require us to alter our products in ways that make them less competitive or compelling to customers, may divert development resources from other priorities, may continue to increase the costs associated with selling our products, and may affect our ability to invest in or jointly develop products in the U.S.

and in foreign jurisdictions.

In addition, failure to comply with these and other laws and regulations may result in, among other things, administrative enforcement actions and substantial fines, class action lawsuits, contractual breaches, significant legal fees, and civil and criminal liability.

In addition, failure to comply with these and other laws and regulations may result in, among other things, administrative enforcement actions and substantial fines, individual and class action lawsuits, contractual breaches, significant legal fees, and civil and criminal liability.

Any regulatory or civil action that is brought against us, even if unsuccessful, may distract our management's attention, divert our resources, negatively affect our public image or reputation among our panelists, customers, partners and vendors, and harm our business.

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If we are unable to protect our intellectual property rights, or if we must engage in costly and time-consuming litigation to enforce our rights, our results of operations and financial condition could be adversely affected.

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Our use of open source software could limit our ability to sell our products, subject our code to public disclosure or require us to reengineer our products.

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or other courts.

Our use of open source licenses could limit our ability to sell our products or subject our proprietary code to public disclosure if not properly managed.

Our use of open

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source licenses could limit our ability to sell our products or subject our proprietary code to public disclosure if not properly managed.

Remediation of such issues may involve licensing software on costly or unfavorable terms or reengineering our products, either of which could have an adverse effect on our results of operations and financial condition.

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tax authorities, were to successfully challenge the tax treatment or characterization of any of our transactions, it could have a material and adverse effect on our business, financial condition or results of operations.

The current U.S.

presidential administration has made various proposals that, if enacted, would cause significant changes to existing tax law, in particular, an increase in U.S.

In August 2022, the Inflation Reduction Act ("IRA") was enacted in the U.S.

Although we do not currently expect the IRA to have a material impact on our business, we are continuing to analyze its provisions.

Moreover, the current U.S.

presidential administration has made various other proposals that, if enacted, would cause significant changes to existing tax law, in particular, an increase in U.S.

federal income taxes on corporations and the tax rate on foreign earnings.

Additionally, longstanding international tax norms that determine each country's jurisdiction to tax cross-border international trade are subject to potential evolution.

In connection with the Base Erosion and Profit Shifting Integrated Framework provided by the Organization for Economic Cooperation and Development ("OECD"), the OECD recently reached an agreement to align countries on a minimum corporate tax rate and expand taxing rights of market countries.

As a result of this agreement, the determination of multi-jurisdictional taxation rights and the rate of tax applicable to certain types of income may be subject to change.

In addition to changes in U.S.

law, longstanding international tax norms that determine each country's jurisdiction to tax cross-border international trade are subject to potential evolution.

In October 2021, the Organization for Economic Cooperation and Development ("OECD") announced the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (the "Framework"), which included a two-pillar solution to address tax challenges arising from digitalization of the economy.

In December 2021, the OECD released Pillar Two Model Rules, defining global minimum tax rules that contemplate a minimum tax rate of 15% for multinational enterprises with annual global turnover exceeding €750 million.

Although our current results are below the threshold for application of the global minimum tax, future growth in our business or changes in the Framework or related laws and regulations could result in the application of a minimum tax to our business, which could adversely affect our financial condition and results.

There can be no assurance that future changes to federal and state tax laws in the U.S.

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Taxing authorities may successfully assert that we should have collected or in the future should collect sales and use, value added or similar taxes, and we could be subject to liability with respect to past or future sales.

In certain cases, we have concluded that we do not need to collect sales and use, value added and similar taxes in jurisdictions in which we have sales.

In certain cases, we have concluded that we do not need to collect sales and use, value added and similar taxes in jurisdictions in which we have sales or operations.

Certain jurisdictions in which we do not collect such taxes may assert that such taxes are applicable, which could result in tax assessments, penalties and interest, and we may be required to collect such taxes in the future.

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• difficulties in expanding the adoption of our server- or census-based web beacon data collection in certain countries or obtaining access to other necessary data sources;

• the complexities and expense of complying with a wide variety of foreign laws and regulations, including the GDPR, LGPD, other privacy and data protection laws and regulations, and foreign anti-corruption laws, as well as the U.S.

• the complexities and expense of complying with a wide variety of foreign laws and regulations, including the GDPR, other privacy and data protection laws and regulations, and foreign anti-corruption laws, as well as the U.S.

Foreign Corrupt Practices Act;

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• the complexities of foreign value-added taxes and the repatriation of earnings, particularly following the enactment of the TCJA;

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• reduced or varied protection for intellectual property rights in some countries;

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• fluctuations in currency exchange rates;

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• increased accounting and reporting burdens and complexities.

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We cannot be certain that the investments and additional resources required to establish and maintain operations in other countries will hold their value or produce desired levels of revenues or profitability.

We cannot be certain that we will be able to comply with laws, rules, regulations or local guidelines to maintain and increase the size of the user panels that we currently have in various countries, that we will be able to recruit a representative sample for our audience measurement products or that we will be able to enter into arrangements with a sufficient number of website and mobile app content providers and/or television operators to allow us to collect information for inclusion in our products.

We cannot be certain that we will be able to comply with laws, rules, regulations or local guidelines to maintain or increase the size of the user panels that we currently have in various countries, that we will be able to recruit a representative sample for our audience measurement products or that we will be able to enter into arrangements with a sufficient number of website and mobile app content providers and/or television operators to allow us to collect information for inclusion in our products.

In addition, governmental authorities in various countries have different views regarding regulatory oversight of the internet, data protection and consumer privacy.

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Changes in foreign currencies could have a significant effect on our operating results.

We operate in several countries in Latin America, Europe and Asia.

We operate in numerous countries in Latin America, Europe and Asia.

A portion of our revenues and expenses from business operations in foreign countries are derived from transactions denominated in currencies other than the functional currency of our operations in those countries.

As such, we have exposure to adverse changes in exchange rates associated with revenues and operating expenses of our foreign operations, but we do not currently enter into any hedging instruments that hedge foreign currency exchange rate risk.

If we grow our international operations, or acquire companies with established business in international regions, our exposure to foreign currency risk could become more significant.

As such, we have exposure to changes in exchange rates associated with revenues and operating expenses of our foreign operations, and these changes have impacted our results in prior periods.

We do not currently enter into any hedging instruments that hedge foreign currency exchange rate risk.

If we grow our international operations, if we acquire companies with established business in international regions, or if exchange rates become more variable, our exposure to foreign currency risk could become more significant.

Risks Related to Our Capital Structure and Financings

The holders of our Preferred Stock have significance influence over the Company, may prevent other stockholders from influencing significant corporate decisions, and may have interests that conflict with those of our other stockholders.

As described in Item 1, Business , on January 7, 2021, we entered into separate Series B Convertible Preferred Stock Purchase Agreements (collectively, the "Securities Purchase Agreements") with each of Charter, Qurate and Pine (collectively, the "Investors").

The issuance of securities pursuant to the Securities Purchase Agreements and related matters were approved by our stockholders on March 9, 2021 and completed on March 10, 2021.

On January 7, 2021, we entered into separate Series B Convertible Preferred Stock Purchase Agreements (collectively, the "Securities Purchase Agreements") with each of Charter Communications Holding Company, LLC ("Charter"), Qurate Retail, Inc.

("Qurate") and Pine Investor, LLC ("Pine") (collectively, the "Investors").

The issuance of securities pursuant to the Securities Purchase Agreements (the "Transactions") and related matters were approved by our stockholders on March 9, 2021 and completed on March 10, 2021.

In connection with the Transactions, we also entered into a long-term data license with Charter, which was intended to enhance our ability to execute on our strategic plans and growth initiatives.

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On an as-converted basis, this collectively represented approximately 50.6% of our issued and outstanding Common Stock immediately following the closing (equating to approximately 16.9% per Investor), and the Investors became the largest stockholders of the Company.

The Investors remained the largest stockholders of the Company as of December 31, 2021, with each Investor holding 16.3% of our issued and outstanding Common Stock on an as-converted basis.

This concentration of ownership, together with the voting rights, director designation rights and consent rights described below, may be perceived negatively by other investors and, as a result, may adversely affect the market price of our Common Stock.

As of December 31, 2021, each Investor held 15.8% of the outstanding voting power of the Company on an as-converted basis.

In addition, under the Stockholders Agreement that we entered into in connection with the Transactions, each Investor has the right to designate two directors to serve on our board of directors until the earlier of such time as the Investor (a) beneficially owns less than 50% of the shares of Preferred Stock held by such Investor as of the date of the closing (the "Initial Preferred Stock Ownership") as a result of the Investor's transfer of such shares to any of the other Investors or (b) beneficially owns voting stock representing less than 10% of the outstanding shares of Common Stock (on an as-converted basis), after which the Investor's designation rights will be reduced to one designee until such time as the Investor beneficially owns Voting Stock representing less than 5% of the outstanding shares of Common Stock (on an as-converted basis).

Additionally, under certain circumstances, an Investor may gain additional board

The Investors remained the largest stockholders of the Company as of December 31, 2022, with each Investor's Preferred Stock representing approximately 16.1% of our issued and outstanding Common Stock on an as-converted basis and certain Investors holding (or reporting beneficial ownership of) additional shares of Common Stock beyond their Preferred Stock holdings.

This concentration of ownership, together with the voting rights, director designation rights, consent rights and dividend rights described below, has been criticized by certain stockholders, may be perceived negatively by other investors and, as a result, may adversely affect the market price of our Common Stock.

As of December 31, 2022, each Investor's Preferred Stock represented approximately 15.6% of the outstanding voting power of the Company on an as-converted basis.

In addition, under the Stockholders Agreement that we entered into in connection with the

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designation rights and in some instances, we may even be obligated to increase the size of our board to enable an Investor to designate one additional director nominee.

Transactions, each Investor has the right to designate two directors to serve on our board of directors until the earlier of such time as the Investor (a) beneficially owns less than 50% of the shares of Preferred Stock held by such Investor as of the date of the closing (the "Initial Preferred Stock Ownership") as a result of the Investor's transfer of such shares to any of the other Investors or (b) beneficially owns voting stock representing less than 10% of the outstanding shares of Common Stock (on an as-converted basis), after which the Investor's designation rights will be reduced to one designee until such time as the Investor beneficially owns Voting Stock representing less than 5% of the outstanding shares of Common Stock (on an as-converted basis).

Additionally, under certain circumstances, an Investor may gain additional board designation rights and in some instances, we may even be obligated to increase the size of our board to enable an Investor to designate one additional director nominee.

As of the date of this 10-K, each Investor has designated two directors on our board of directors.

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As a result, each Investor is able to influence fundamental corporate matters and transactions.

The interests of the Investors may not always coincide with our interests or the interests of our other stockholders, and these consent rights may delay, deter or prevent acts that would be favored by our other stockholders.

As holders of our Preferred Stock, the Investors are entitled to a cumulative dividend at the rate of 7.5% per annum, payable annually in arrears and subject to increase under certain circumstances.

In addition, each Investor is entitled to request, and we are obligated to take all actions reasonably necessary to pay, a one-time special dividend equal to the highest amount that our board of directors determines can be paid at the applicable time, subject to additional conditions and limitations set forth in the Stockholders Agreement.

As described in the Stockholders Agreement, we may be obligated to obtain debt financing in order to effectuate the special dividend.

The interests of the Investors may not always coincide with our interests or the interests of our other stockholders, and the rights described above may delay, deter or prevent acts that would be favored by our other stockholders.

Also, the Investors may seek to cause us to take courses of action that, in their judgment, could enhance their investment in us, but which might involve risks to our other stockholders or adversely affect us or our other stockholders.

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The market value of our Common Stock could decline if the Investors sell their Preferred Stock or Common Stock after certain transfer restrictions expire.

Pursuant to the Stockholders Agreement, for one year following the closing (until March 10, 2022), subject to certain exceptions, each Investor is prohibited from selling any shares of Preferred Stock held by such Investor, including any shares of Common Stock issued or issuable upon conversion of the Preferred Stock.

Thereafter, until the second anniversary of the closing (March 10, 2023), and subject to certain exceptions, each Investor has agreed not to sell more than 50% of such Investor's Initial Preferred Stock Ownership, including any shares of Common Stock issued or issuable upon conversion of such Preferred Stock.

Pursuant to the Stockholders Agreement, until the second anniversary of the Transactions closing (March 10, 2023), and subject to certain exceptions, each Investor has agreed not to sell more than 50% of such Investor's Initial Preferred Stock Ownership, including any shares of Common Stock issued or issuable upon conversion of such Preferred Stock.

Pursuant to the Registration Rights Agreement that we entered into in connection with the Transactions, we registered the resale of the shares of Preferred Stock and the shares of Common Stock underlying the Preferred Stock with the SEC, which means that such shares may be eligible for resale in the public markets following the expiration of applicable transfer restrictions.

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Our credit facility may impact our ability to operate our business and secure additional financing in the future, and any failure to meet our debt obligations could adversely affect our business and financial condition.

On May 5, 2021, we entered into a senior secured revolving credit agreement (the "Revolving Credit Agreement") with a borrowing capacity of $25.0 million.

On February 25, 2022, we amended the Revolving Credit Agreement to increase the borrowing capacity to $40.0 million.

We have a senior secured revolving credit agreement (the "Revolving Credit Agreement") with a borrowing capacity of $40.0 million.

As of the date of this 10-K, we had borrowings and letters of credit outstanding under the Revolving Credit Agreement totaling $19.4 million.

Amounts outstanding under the Revolving Credit Agreement bear interest at a rate per annum equal to the Daily SOFR (as defined in the Revolving Credit Agreement) plus 2.50%.

Amounts outstanding under the Revolving Credit Agreement currently bear interest at a rate per annum equal to the Daily SOFR (as defined in the Revolving Credit Agreement) plus 3.50%.

In addition, the Revolving Credit Agreement provides for an unused commitment fee equal to 0.25% of the unused commitments.

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Under the Revolving Credit Agreement, we are subject to restrictive covenants limiting our ability to, among other things, incur additional indebtedness, permit additional liens, make investments and loans, enter into mergers and acquisitions, make or declare dividends and other payments, enter into certain contracts, sell assets, and engage in transactions with affiliates.

These covenants could limit our operating flexibility and cause us to forego attractive business opportunities, which could hurt our customer relationships and put us at a competitive disadvantage.

These covenants could limit our operating flexibility and cause us to forego attractive business opportunities, which could hurt our customer relationships and

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put us at a competitive disadvantage.

The covenants also could prevent us from securing additional financing in the future, including to fund our operations, satisfy liabilities, or pay dividends to the holders of our Preferred Stock.

In addition, we are subject to financial covenants under the Revolving Credit Agreement, including a requirement to maintain minimum Consolidated EBITDA and a minimum Consolidated Asset Coverage Ratio for periods through December 31, 2022, and a minimum Consolidated Fixed Charge Coverage Ratio for periods after December 31, 2022 (each term as defined in the Revolving Credit Agreement).

In addition, we are subject to financial covenants under the Revolving Credit Agreement, including a requirement to maintain a minimum Consolidated Asset Coverage Ratio and minimum Liquidity through maturity, minimum Consolidated EBITDA for periods through December 31, 2023, and a minimum Consolidated Fixed Charge Coverage Ratio for periods after December 31, 2023 (each term as defined in the Revolving Credit Agreement).

While we are currently in compliance with these covenants, there is no guarantee that we will be able to achieve our plans and remain in compliance in future periods.

Moreover, our ability to comply with the covenants could be affected by economic, financial, competitive, regulatory and other factors beyond our control, including changes in consumer behavior or government mandates stemming from the COVID-19 pandemic.

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Moreover, our ability to comply with the covenants could be affected by economic, financial, competitive, regulatory and other factors beyond our control.

If we fail to meet our financial covenants or other obligations under the Revolving Credit Agreement, the lender(s) may accelerate any amounts outstanding under the Revolving Credit Agreement and may terminate their commitments to extend further credit.

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We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new products or enhance our existing products, enhance our operating infrastructure, retain and hire key personnel, and acquire complementary businesses and technologies.

In addition, holders of our Preferred Stock have certain dividend rights, including the right to request a special dividend.

In addition, as described above, the holders of our Preferred Stock have certain dividend rights, including the right to request a special dividend.

Accordingly, we may need to engage in equity or debt financings to secure additional funds.

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Any financing secured by us in the future could include restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.

Servicing future debt obligations could also limit our flexibility to invest in the business and adjust to market conditions, which could impact our customer relationships and place us at a competitive disadvantage.

As a result of our settlement with the SEC relating to financial accounting and disclosure practices between February 2014 and February 2016, we are currently subject to a "bad actor" disqualification and are unable to rely on certain exemptions from registration under the federal securities laws, including Regulation D.

In addition, we are an "ineligible issuer" as the term is defined under Rule 405 promulgated under the Securities Act.

This could make it more difficult for us to raise necessary financing in the future.

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Furthermore, we have reserved 5,457,026 shares of Common Stock for issuance pursuant to our Series A Warrants.

We have also issued 7,945,519 shares of Common Stock for distribution to the selling stockholders of Shareablee (which we acquired in December 2021), and we have reserved 121,360 shares of Common Stock in connection with a working capital adjustment holdback.

In addition, we may elect to pay any deferred consideration due to the Shareablee sellers in 2022 and future years in shares of Common Stock.

As of December 31, 2021, 1,783,055 shares of Common Stock were reserved for issuance pursuant to outstanding stock options under our equity incentive plans (including stock option awards we assumed in the Shareablee acquisition), 4,030,243 shares of Common Stock were reserved for issuance pursuant to outstanding restricted stock unit awards under our equity incentive plans (including assumed Shareablee awards), and an aggregate of 3,230,941 shares of Common Stock were available for future equity awards under our 2018 Equity and Incentive Compensation Plan and acquired Shareablee plan.

An additional 451,977 shares were reserved for issuance pursuant to a restricted stock unit inducement award we granted in 2021.

We have also issued 8,066,876 shares of Common Stock for distribution to the selling stockholders of Shareablee (which we acquired in December 2021), and we may elect to pay any deferred consideration due to the Shareablee sellers in 2023 and 2024 in shares of Common Stock.

As of December 31, 2022, 2,283,987 shares of Common Stock were reserved for issuance pursuant to outstanding stock options under our equity incentive plans (including stock option awards we assumed in the Shareablee acquisition), 4,644,619 shares of Common Stock were reserved for issuance pursuant to outstanding restricted stock unit awards under our equity incentive plans and arrangements (including assumed Shareablee awards and an employment inducement award we granted in 2021), 5,693,104 shares of Common Stock were available for future equity awards under our 2018 Equity and Incentive Compensation Plan, and 176,435 shares of Common Stock were available for future equity awards under our acquired Shareablee plan.

The issuance of shares of Common Stock (i) upon the conversion of our Preferred Stock, (ii) upon the exercise of warrants, (iii) as deferred consideration to the Shareablee sellers, (iv) pursuant to outstanding and future equity awards, or (v) upon the conversion of other existing or future convertible securities, may result in substantial dilution to each of our stockholders by reducing that stockholder's percentage ownership of our outstanding Common Stock.

Table of Conte nt s

Provisions in our certificate of incorporation, bylaws and under Delaware law might discourage, delay or prevent a change of control of our company or changes in our management and, therefore, depress the trading price of our Common Stock.

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• authorize "blank check" preferred stock that our board could issue to increase the number of outstanding shares to discourage a takeover attempt;

Table of Conte nt s

• prohibit stockholder action by written consent, which means that all stockholder actions must be taken at a meeting of our stockholders;

5 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-K

Item 1A. Risk Factors