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Risks Related to Our Business and Our Technologies
−Removed: • Macroeconomic factors could negatively impact demand for our products and increase our costs.
+Added: • Macroeconomic factors could continue to 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.
−Removed: • If we are unable to provide complete analytics, our ability to maintain and grow our business may be harmed.
+Added: • If we are unable to provide complete analytics, our ability to maintain and grow our business will be harmed.
• We depend on third parties for data and hosting/delivery services that are critical to our business.
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• We may not be able to adequately retain and hire qualified personnel.
−Removed: • 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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Risks Related to Legal and Regulatory Compliance, Litigation and Tax Matters
−Removed: • Concern over privacy violations and data breaches could materially harm our business.
+Added: • Concern over data privacy and security, AI and data governance could materially harm our business.
• 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.
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• There could be adverse developments in tax laws or disagreements with our tax positions in the jurisdictions where we operate.
−Removed: Table of Conte nt s
Risks Related to International Operations
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• Export controls and sanctions laws could impair our ability to compete in international markets and subject us to liability.
+Added: Table of Conte nt s
• Changes in foreign currencies could have a significant effect on our operating results.
Risks Related to Our Capital Structure and Financings
−Removed: • 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.
+Added: • The holders of our 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.
−Removed: • The market value of our Common Stock could decline if the holders of our Preferred Stock sell their shares when transfer restrictions expire.
−Removed: • Our financing and debt covenants could restrict our operating flexibility.
+Added: • Our financing and debt obligations and covenants could restrict our operating flexibility.
• Any failure to meet our debt obligations could adversely affect our business and financial condition.
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• Securities that we may become obligated to issue under existing or future agreements may cause immediate and substantial dilution to our current stockholders.
+Added: • Actions of activist stockholders may disrupt our business and cause fluctuations in our stock price
• Provisions in our governing documents and under Delaware law might discourage, delay or prevent a change of control or changes in our management.
Risks Related to Our Business and Our Technologies
−Removed: Macroeconomic factors could adversely affect our business and financial results.
+Added: Macroeconomic factors could continue to 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.
−Removed: 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.
+Added: Over the past two years, macroeconomic factors including 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.
−Removed: 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.
−Removed: 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.
+Added: Further reductions in advertising spending could result in customers terminating their subscriptions for our products, delaying renewals, or renewing on terms less favorable to us.
+Added: Furthermore, our newer products, for which we recognize revenue based on impressions used, are 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.
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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.
−Removed: The market for audience and advertising measurement products is highly competitive and is evolving rapidly.
+Added: The market for audience and advertising measurement products is highly competitive and continues to evolve rapidly.
We compete primarily with providers of media intelligence and related analytical products and services.
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.
−Removed: 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.
+Added: In recent years, competition has intensified as a result of the entrance of new competitors, the increasing variety and number of media channels and platforms requiring measurement, and the development of new technologies, products and services in our industry to address this media fragmentation.
+Added: We expect these trends 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.
+Added: 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 will be harmed.
+Added: As the media and advertising industries increasingly evaluate advertising campaigns across various forms of media, the ability to measure the combined size and composition of audiences across channels and platforms is increasingly important and in demand.
+Added: 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
Table of Conte nt s
−Removed: 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.
−Removed: As the media and advertising industries increasingly evaluate advertising campaigns across various forms of media, such as television, online, and mobile, the ability to measure the combined size and composition of audiences across platforms is increasingly important and in demand.
−Removed: 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.
−Removed: 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.
+Added: commercially reasonable terms, our ability to meet our customers' demands and our business and financial performance may be harmed.
+Added: Furthermore, even if we do have access to a particular form of 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.
−Removed: In particular, our acquisition of television data may be reliant on companies that have historically held a dominant market position measuring television to produce industry-accepted measurement across a combination of media platforms.
−Removed: Our competitors or other providers may have more leverage with data providers and may be unable or unwilling to provide us with access to quality data to support our products, on reasonable terms or at all.
−Removed: 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.
−Removed: 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.
−Removed: 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.
+Added: Our competitors may have more leverage with data providers than we do, which may result in those providers being unwilling to provide us with access to quality data to support our products, on reasonable terms or at all.
+Added: Likewise, our acquisition of data may be reliant on large digital publishers that may technologically or legally prevent access to their proprietary platforms for research or measurement purposes.
+Added: Moreover, as mobile devices, technology and CTV viewing continue to proliferate, gaining and maintaining cost-effective access to mobile and CTV data has become increasingly critical, and we could face difficulty in accessing these forms of data on reasonable terms or at all.
+Added: If we are unable to acquire and integrate data effectively and efficiently, or if the cost of data acquisition or integration continues to increase, our business, financial condition and results of operations will be harmed.
We depend on third parties for data and services that are critical to our business, and our business could suffer if we cannot continue to obtain reliable data from these suppliers or if third parties place additional restrictions on our use of such data.
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To comply with any additional restrictions, we may be required to implement certain additional technological and manual controls that could put pressure on our cost structure and could affect our pricing.
−Removed: Supplier consolidation and increased pricing for additional use cases, including in connection with the integration of acquired companies and technologies, could also put pressure on our cost structure and our ability to meet obligations to our customers.
+Added: Supplier consolidation and increased pricing for additional use cases could also put pressure on our cost structure and our ability to meet obligations to our customers.
We may be required to enter into vendor relationships, strategic alliances, or joint ventures with some third parties in order to obtain access to the data sources that we need.
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We operate in industries that require sophisticated data collection and processing technologies.
−Removed: Our future success will depend in part on our ability to develop new and modify or enhance our existing products and services, including without limitation, our data collection technologies and approaches, in order to meet customer needs, add functionality and address technological advancements and industry standards.
+Added: Our future success will depend in large part on our ability to develop new and modify or enhance our existing products and services, including without limitation, our data collection technologies and approaches, in order to meet customer needs, add functionality and address technological advancements and evolving industry standards.
For example, the development of opt-in permissions and enhanced focus on consent-based measurement provide the benefit of limiting the transfer of consumer personal information, but also mean changes to our data collection, storage and delivery processes.
−Removed: If we are unable to innovate and adapt our methodologies to meet evolving customer needs, our products may become obsolete or less competitive.
−Removed: As another example, if certain proprietary devices become the primary mode of receiving content and conducting transactions on the internet, and we are unable to adapt to collect information from such devices, then we would not be able to report on digital usage activity.
−Removed: To remain competitive, we will need to develop new products that address these evolving technologies and standards across the universe of media including television, online, and mobile usage.
+Added: In particular, limitations on the use of cookies, pixels and similar technologies (which we collectively refer to as "cookies") may create significant challenges for our products that use these technologies for data collection and measurement.
+Added: The most common Internet browsers allow users to delete and block cookies through changes to their settings, and some browsers and software providers block cookies by default.
+Added: Moreover, Google has publicly stated that it will stop allowing cross-domain third-party cookies in its Chrome browser in 2024, and Apple previously stopped supporting third-party cookies in its Safari browser.
+Added: We also maintain mechanisms for users to opt out of the collection of their information via cookies and other technologies.
+Added: Any substantial reduction in the availability, use or effectiveness of cookies - whether due to user opt-outs, browser changes, regulatory action or otherwise - could negatively affect our products that use these technologies.
+Added: As we innovate and adapt our methodologies to address the deprecation of cookies and other technological challenges, our products may be negatively impacted.
+Added: For example, we may be unable to report the same types of data or level of granularity as previously available;
+Added: we may see breaks in historical trends or comparability of data across periods;
+Added: and we may experience delays or disruptions in service delivery to our customers.
+Added: If we are unable to address these issues, our products may become less competitive or obsolete.
+Added: More generally, we will need to develop new products and methodologies to address evolving technologies and standards across the universe of media, including television, online and mobile usage.
However, we may be unsuccessful in identifying new product opportunities, developing or marketing new products in a timely or cost-effective manner, or obtaining the necessary access to data or technologies needed to support new products, or we may be limited in our ability to operate due to patents held by others.
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If we are unable to develop and integrate timely enhancements to, and new features for, our existing methodologies or products or if we are unable to develop new products and technology that keep pace with rapid technological developments, changing industry standards or consumer preferences, our products may become obsolete, less marketable and less competitive, and our business will be harmed.
−Removed: Furthermore, the market for our products is characterized by changes in protocols and evolving industry standards.
−Removed: For example, industry associations such as the Advertising Research Foundation, the Council of American Survey Research Organizations, the
Table of Conte nt s
−Removed: 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.
+Added: Furthermore, the market for our products is characterized by changes in protocols and evolving industry standards.
+Added: 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 seek or achieve accreditation, delays in accreditation, or adverse audit findings may negatively impact the market acceptance of our products.
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Such customers may elect to publicly air their dissatisfaction with the methodological changes made by us, which may damage our brand and harm our reputation.
−Removed: If we are not able to maintain panels of sufficient size and scope, or if the costs of establishing and maintaining our panels materially increase, our business could be harmed.
+Added: If we are not able to maintain panels of sufficient size and scope, or if the costs of establishing and maintaining our panels increase, our business could be harmed.
We believe that the quality, size and scope of our research panels are important to our business.
−Removed: In recent years, however, panel participation has declined, in part due to changes by software providers that have made it more difficult to obtain consent to participate in panels.
−Removed: At the same time, the cost of recruiting new panelists has increased.
+Added: In recent years, however, panel participation has declined, in part due to changes by software providers that have made it more difficult to obtain consent to participate in panels, steps taken by antivirus providers to remove third-party measurement software despite panelists' previous consent, and operating system updates (including iOS and Android) that limit the ability of third parties to measure device usage.
+Added: At the same time, the difficulty of recruiting new panelists has increased.
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.
−Removed: 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.
+Added: We anticipate that the cost of panel recruitment will increase with the proliferation of proprietary and secure media content delivery platforms, evolving industry practices and regulatory developments, 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.
To the extent that such additional expenses are not accompanied by increased revenues, our operating margins may be reduced and our financial results could be adversely affected.
−Removed: If we are unable to maintain panels of sufficient size and scope, we could face negative consequences, including degradation in the quality of our products, failure to receive accreditation from industry associations, loss of customers and damage to our brand.
+Added: If we are unable to maintain panels of sufficient size and scope, we could face negative consequences, including degradation in the quality and competitiveness of our products, failure to receive accreditation from industry associations, loss of customers and damage to our brand.
We derive a significant portion of our revenues from sales of our subscription-based products.
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If additional customers terminate their subscriptions for our products, do not renew their subscriptions, delay renewals of their subscriptions or renew on terms less favorable to us, our revenues could decline and our business could suffer.
−Removed: Our customers have no obligation to renew after the expiration of their initial subscription period, and we cannot be assured that current subscriptions will be renewed at the same or higher dollar amounts, if at all.
−Removed: Furthermore, our newer products, for which revenue is recognized based on impressions used, may be subject to higher fluctuations in revenue.
−Removed: 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
Table of Conte nt s
−Removed: 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.
+Added: Our customers have no obligation to renew after the expiration of their initial subscription period, and we cannot be assured that current subscriptions will be renewed at the same or higher dollar amounts, if at all.
+Added: Furthermore, our newer products, for which revenue is recognized based on impressions used, are subject to higher fluctuations in revenue.
+Added: 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, 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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To compete effectively, we have in the past been, and may in the future be, forced to offer significant discounts to maintain existing customers or acquire other large customers.
−Removed: 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.
−Removed: 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.
+Added: As a result, new large customers or increased usage of our products by large customers may cause our profit margins to decline.
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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• incur debt, which may be on terms unfavorable to us or that we are unable to repay.
−Removed: 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.
−Removed: These or other future relationships or transactions may involve preferred or exclusive licenses,
Table of Conte nt s
−Removed: discount pricing, provision of our products and services without charge, or investments in other businesses to expand our sales capabilities.
+Added: 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.
+Added: 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 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 ability to collect and report accurate data may be interrupted by a number of factors, including the failure of our network or software systems, computer viruses, security breaches, or variability in the information we ingest.
−Removed: Our product, information technology and security teams regularly review our systems and security posture and evaluate ways to enhance our processes and controls.
−Removed: In addition, our board of directors and audit committee receive quarterly updates on developments in information technology, security and data governance.
−Removed: We regularly train our employees on information security and related risks, and we conduct third-party audits on our security program (ISO 27001).
−Removed: Nevertheless, we cannot guarantee that a security incident will not occur or that any such incident will be timely detected or remediated.
−Removed: Cyber breaches continue to evolve in sophistication and may be difficult to detect.
+Added: We have experienced, and may in the future experience, system failures and cybersecurity incidents.
+Added: While prior incidents have not materially affected our business strategy, results of operations or financial condition to date, and although our processes are designed to help prevent, detect and mitigate the impact of such incidents, we cannot guarantee that a future incident will not materially affect our strategy, results of operations or financial condition.
+Added: Cybersecurity breaches continue to evolve in sophistication and may be difficult to detect and remediate.
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, give rise to government inquiries or enforcement actions, or damage our brand and reputation.
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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.
−Removed: 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.
−Removed: Such a power outage could result in the disruption
Table of Conte nt s
−Removed: of our business.
+Added: 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.
+Added: Such a power outage could result in the disruption 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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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.
−Removed: 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").
−Removed: In addition to employee terminations, the Restructuring Plan includes the reallocation of commercial and product development resources;
+Added: 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 communicated a workforce reduction in 2022 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").
+Added: We expect the Restructuring Plan to be substantially complete in 2024.
+Added: In addition to employee terminations, the Restructuring Plan has included 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;
−Removed: and reduction of other operating expenses, including software and facility costs.
−Removed: We may also determine to exit certain activities in certain geographic regions in order to more effectively align resources with business priorities.
−Removed: 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.
−Removed: 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.
−Removed: 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.
+Added: and reduction of other operating expenses.
+Added: If the Restructuring Plan does not generate the expected cost savings, our business and financial results could be adversely affected.
+Added: Moreover, some of the organizational and operational changes we have made and are making in connection with the Restructuring Plan require careful management to avoid disrupting customer, partner and employee relationships.
+Added: If we do not successfully manage our restructuring activities, including the Restructuring Plan, the expected benefits may not be 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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Our future success also depends on our ability to retain, attract and motivate highly skilled technical, managerial, sales and marketing personnel.
−Removed: 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.
−Removed: Our restructuring activities have put additional pressure on our ability to retain, attract and motivate key personnel.
+Added: The market for these personnel is extremely competitive, particularly for software engineers, data scientists and other technical staff, and 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.
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Failure to ensure effective transitions and knowledge transfers may adversely affect our operations and our ability to execute on our strategic plans and growth initiatives.
−Removed: The effectiveness of our equity awards as a means to recruit and retain key personnel has diminished, and we may need to grant equity awards outside of our existing plan.
+Added: The effectiveness of our equity awards as a means to recruit and retain key personnel has diminished, and we may need to request additional shares for our equity plan or grant equity awards outside of our existing plan.
Historically, we have relied on equity awards as one means of recruiting and retaining key personnel, including our senior management.
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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.
−Removed: 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.
−Removed: We also may need to consider granting equity awards outside of our 2018 Plan, as we did with a 2021 executive hire.
+Added: In order to address our compensation needs, we may seek an amendment to our 2018 Plan to increase the number of shares available for future equity awards.
+Added: We also may 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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 resume normal operations.
−Removed: 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.
−Removed: We face risks related to the Russian invasion of Ukraine, including from the resulting geopolitical effects.
−Removed: The Russian invasion of Ukraine has resulted in worldwide geopolitical and macroeconomic uncertainty.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
+Added: Alternatively, we may need to shift a larger portion of employee compensation to cash, which could adversely affect our liquidity and financial condition.
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;
−Removed: • 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;
−Removed: • the impact of our contract renewal rates caused by our customers' budgetary constraints, competition, customer dissatisfaction or customer corporate restructuring;
+Added: • the impact of our contract renewal rates caused by our customers' budgetary constraints, competition, customer dissatisfaction or customer corporate restructuring or consolidation;
• the timing of contract renewals, delivery of products and duration of contracts and the corresponding timing of revenue recognition;
• the effect of revenues generated from significant one-time projects or the loss of such projects;
−Removed: • the timing and success of new product introductions or changes in methodology by us or our competitors;
+Added: • the timing and success of new product introductions or changes in methodology by us or our competitors, particularly in light of cookie deprecation and other technological changes in our industry;
• the impact of our Preferred Stock transactions, including our long-term data license with Charter;
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• 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;
−Removed: Table of Conte nt s
• 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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Investors are cautioned not to rely on the results of prior periods as an indication of future performance.
+Added: Table of Conte nt s
We may not be able to generate or obtain sufficient cash to service our debt, dividend obligations, lease facilities and trade payables.
We currently have indebtedness and lease facilities, as well as trade payables, including expenses incurred in prior periods.
−Removed: In addition, we are required to pay annual cash dividends on our Preferred Stock, and we may incur additional debt for operations or to fund a special dividend to the holders of our Preferred Stock.
−Removed: These obligations could require us to use a large portion of our cash flow from operations to service our debt, dividend obligations and lease facilities and pay accrued expenses.
+Added: In addition, we are required to pay annual dividends on our Preferred Stock, which we deferred in 2023 and continue to accrue, and we may incur additional debt for operations or to fund a special dividend to the holders of our Preferred Stock.
+Added: Moreover, our existing credit facility matures in May 2024, and we do not currently have an agreement in place to extend or refinance the facility upon its maturity.
+Added: These obligations could require us to use a large portion of our cash flow from operations to service our debt, current and deferred dividend obligations, and lease facilities and pay accrued expenses.
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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
+Added: 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 and transactions.
+Added: Accordingly, our ability to meet our obligations depends on our future performance and corporate activities, which will be affected by financial, business, contractual, economic and other factors, some of which are beyond our control.
+Added: Failure to meet our payment obligations could disrupt our supply of goods and services and impact our reputation, creditworthiness and relations with customers, partners, creditors and holders of our Preferred Stock.
It could also lead to costly litigation.
−Removed: Failure to meet our dividend payment obligations could result in an increase in the annual dividend rate, among other things.
If our cash flow and capital resources prove inadequate to allow us to pay the interest and principal on our debt when due and meet our other financial obligations, we could face substantial liquidity challenges and might be required to dispose of material assets or operations, restructure or refinance our debt (which we may be unable to do on acceptable terms) or forego attractive business opportunities.
In addition, the terms of our existing or future financing agreements and Preferred Stock may restrict us from pursuing these alternatives.
−Removed: Failure to meet our financial obligations could have important consequences including, potentially, forcing us into bankruptcy or liquidation.
+Added: Failure to meet our financial obligations could have significant 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 another impairment of goodwill or other intangible assets.
3 unchanged sentences
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.
−Removed: 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.
−Removed: We recorded a $4.7 million impairment charge related to our right-of-use ("ROU") assets, and related leasehold improvements, during 2020.
−Removed: We recorded a $46.3 million impairment charge related to goodwill in the third quarter of 2022.
+Added: We recorded impairment charges totaling $79.7 million and $46.5 million in 2023 and 2022, respectively.
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.
−Removed: Additionally, changes in our strategy or significant technical
−Removed: Table of Conte nt s
−Removed: developments could significantly impact the recoverability of our intangible assets.
−Removed: 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.
+Added: Additionally, changes in our strategy or significant technical developments could significantly impact the recoverability of our intangible assets.
+Added: If the assumptions used in our analysis are not realized, it is possible that additional impairment charges 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.
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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.
−Removed: 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.
+Added: Such actions may expose us to disruption by dissatisfied employees or employee-related claims, including claims by terminated employees
+Added: Table of Conte nt s
+Added: 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.
If we are not able to efficiently and effectively manage our cost structure and resolve employee-related claims, or if we are unable to manage our space to support our needs, our business may be impaired.
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net operating loss carryforwards that can be utilized annually to offset future taxable income and taxes payable.
−Removed: A significant portion of our net operating loss carryforwards are subject to an annual limitation under Section 382 of the Internal Revenue Code.
−Removed: 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.
+Added: We completed a Section 382 study in 2023 and concluded that an ownership change occurred in May 2021 as a result of the Preferred Stock transactions;
+Added: therefore all of our U.S.
+Added: net operating loss carryforwards are subject to annual limitations under Section 382.
As of December 31, 2023, we estimate our U.S.
−Removed: 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.
−Removed: 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.
+Added: federal and state net operating loss carryforwards for tax purposes to be $559.5 million and $1.5 billion, respectively, subject to limitation as described above.
+Added: We estimate that $456.7 million of our U.S.
+Added: federal net operating loss carryforwards are utilizable given the annual limitations under Section 382.
+Added: We have not yet completed the Section 382 analysis for our state net operating loss carryforwards, but we believe a portion of these will also not be utilizable due to the annual limitations under Section 382.
+Added: Our net operating loss carryforwards begin to expire in 2024 for federal and state income tax reporting purposes.
The federal and certain state net operating losses generated after December 31, 2017 have an indefinite carryforward period as a result of the enactment of the Tax Cuts and Jobs Act ("TCJA").
−Removed: As of December 31, 2022, we estimate our aggregate net operating loss carryforwards for tax purposes related to our foreign subsidiaries were $9.8 million, which will begin to expire in 2024.
+Added: As of December 31, 2023, we estimate our aggregate net operating loss carryforwards for tax purposes related to our foreign subsidiaries to be $10.8 million, which begin to expire in 2024.
We apply a valuation allowance to our deferred tax assets when management does not believe that it is more likely than not that they will be realized.
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.
−Removed: We also consider other evidence such as historical pre-tax book income in making
−Removed: Table of Conte nt s
−Removed: the determination.
+Added: We also consider other evidence such as historical pre-tax book income in making the determination.
As of December 31, 2023, we continue to have a valuation allowance recorded against the net deferred tax assets of our U.S.
1 unchanged sentence
Risks Related to Legal and Regulatory Compliance, Litigation and Tax Matters
−Removed: Concern over privacy violations and data breaches could lead to public relations problems, regulatory scrutiny and lawsuits, which could harm our business.
−Removed: We are subject to data privacy and protection laws and regulations that apply to the collection, transmission, storage and use of personal information.
+Added: Concern over data privacy and security, AI and data governance could lead to regulatory scrutiny, public relations problems, contractual disputes and lawsuits, which could harm our business.
+Added: We are subject to numerous U.S.
+Added: and foreign laws and regulations and contractual obligations covering a wide variety of data privacy, security and governance topics, and our introduction and maintenance of products, methodologies and technologies will continue to be impacted by regulatory developments and concern in these areas.
+Added: In recent years, governments around the world and in numerous U.S.
+Added: states have adopted new laws and regulations focused on data privacy and protection.
+Added: These laws and regulations apply to the collection, transmission, storage and use of personal information, among other things.
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.
−Removed: 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.
+Added: They also may require us to change our business practices and modify the products that we offer, which may increase our costs and decrease the quality and functionality of our products.
+Added: 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, activist 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.
−Removed: 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.
+Added: Table of Conte nt s
+Added: In addition to our own data privacy, security and governance policies, 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 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.
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In the EU, cross-border data transfers are increasingly scrutinized to ensure compliance, and there have been expanded enforcement efforts in this area.
−Removed: states now have comprehensive privacy laws governing the collection and use of personal information.
−Removed: 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.
−Removed: 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.
−Removed: Table of Conte nt s
+Added: states have also adopted comprehensive privacy laws governing the collection and use of personal information.
+Added: 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 2023.
+Added: 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 in 2023 as well.
+Added: Additional comprehensive state laws will come into effect over the next few years.
+Added: These laws have expanded consumer rights to include individual rights of access, deletion, portability, correction and appeal and the right to "opt in" to collection and use of certain types of personal information deemed sensitive under the laws.
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.
−Removed: 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.
+Added: Artificial intelligence, or AI, is also the subject of evolving review by various governments and regulatory agencies around the world.
+Added: For example, provisional agreement on a proposed EU AI Act was reached in 2023, including that specific transparency and other requirements would be introduced for general purpose AI systems and the models on which those systems are based.
+Added: In addition, a U.S.
+Added: Executive Order on the Safe, Secure and Trustworthy Development and Use of Artificial Intelligence devises a framework for the U.S.
+Added: government to regulate private-sector use and development of certain foundational models, among other things.
+Added: These new and changing laws and regulations covering the development, use and provision of AI technologies and other digital products and services could impact our ability to use certain methodologies or limit our ability to pursue alternative strategies to build our products.
+Added: We may also be required to expend resources to adjust and analyze certain product offerings and methodologies as the regulatory environment evolves.
+Added: We have implemented policies and procedures to comply with the GDPR, state privacy laws, the Children's Online Privacy Protection Act and other existing laws and regulations, and we continue to evaluate and implement processes and technical 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.
+Added: Table of Conte nt 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.
−Removed: 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.
+Added: In addition, failure to comply with these and other laws and regulations may result in, among other things, government 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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or other courts.
−Removed: Our use of open
−Removed: Table of Conte nt s
−Removed: source licenses could limit our ability to sell our products or subject our proprietary code to public disclosure if not properly managed.
+Added: 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.
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.
+Added: Table of Conte nt s
We are subject to taxation in multiple jurisdictions.
6 unchanged sentences
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.
−Removed: In August 2022, the Inflation Reduction Act ("IRA") was enacted in the U.S.
−Removed: Although we do not currently expect the IRA to have a material impact on our business, we are continuing to analyze its provisions.
−Removed: Moreover, the current U.S.
−Removed: 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.
−Removed: federal income taxes on corporations and the tax rate on foreign earnings.
−Removed: In addition to changes in U.S.
−Removed: law, longstanding international tax norms that determine each country's jurisdiction to tax cross-border international trade are subject to potential evolution.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: There can be no assurance that future changes to federal and state tax laws in the U.S.
−Removed: and foreign tax laws will not be proposed or enacted that could materially impact our business or financial results.
−Removed: If and when any of these changes are put into effect, they could result in tax increases where we do business both in and outside of the U.S.
−Removed: and could have a material and adverse effect on our results of operations.
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.
10 unchanged sentences
• 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.
−Removed: Foreign Corrupt Practices Act;
+Added: Foreign Corrupt Practices Act and U.S.
+Added: sanctions regime;
• difficulties in staffing and managing international operations, including complex and costly hiring, disciplinary, and termination requirements as well as third-party contracting arrangements;
• the complexities of foreign value-added taxes and the repatriation of earnings, particularly following the enactment of the TCJA;
−Removed: Table of Conte nt s
• reduced or varied protection for intellectual property rights in some countries;
• political, social and economic instability abroad, terrorist attacks and security concerns;
−Removed: • fluctuations in currency exchange rates;
+Added: • fluctuations in currency exchange rates that have affected and could continue to affect our results of operations;
• increased accounting and reporting burdens and complexities.
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If we fail to comply with these laws and regulations, we could be subject to civil or criminal penalties and reputational harm.
−Removed: Although we take precautions to prevent the collection of data from panelists in embargoed countries that may be subject to export controls and economic and trade sanctions under these laws and regulations, we have collected such data in the past, and there is a risk that we could collect such data in the future despite our precautions.
−Removed: We have implemented a number of additional screening and other measures designed to prevent such transactions with embargoed countries and other U.S.
+Added: Table of Conte nt s
+Added: Although we take precautions to prevent the collection of data from panelists in embargoed countries and regions that may be subject to export controls and economic and trade sanctions under these laws and regulations, we have collected such data in the past, and there is a risk that we could collect such data in the future despite our precautions.
+Added: We have implemented a number of screening and other measures designed to prevent such transactions with embargoed countries and other U.S.
sanctions targets.
Changes in the list of embargoed countries and regions or prohibited persons may require us to modify these procedures in order to comply with governmental regulations.
−Removed: Our failure to screen potential panelists properly could result in negative consequences to us, including government investigations, penalties and reputational harm, any of which could materially and adversely affect our business, financial condition or results of operations.
+Added: Our failure to screen potential panelists or other third parties properly could result in negative consequences to us, including government investigations, penalties and reputational harm, any of which could materially and adversely affect our business, financial condition or results of operations.
Changes in foreign currencies could have a significant effect on our operating results.
6 unchanged sentences
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.
−Removed: 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.
−Removed: ("Qurate") and Pine Investor, LLC ("Pine") (collectively, the "Investors").
−Removed: 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.
+Added: In 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.
+Added: ("Qurate") and Pine Investor, LLC ("Pine").
+Added: In 2023, Qurate sold its shares of Preferred Stock to Liberty Broadband Corporation ("Liberty") in a private transaction.
+Added: We collectively refer to Charter, Pine and Qurate/Liberty (as applicable) as the "Investors" in this 10-K.
+Added: The issuance of securities pursuant to the Securities Purchase Agreements (the "Transactions") and related matters were approved by our stockholders and completed in 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.
−Removed: At the closing of the Transactions, the Preferred Stock was initially convertible into an aggregate of 82,527,609 shares of our Common Stock (subject to adjustment).
−Removed: 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.
+Added: At the closing of the Transactions, the Preferred Stock was initially convertible into an aggregate of 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, 2023, with each Investor's Preferred Stock representing approximately 16.4% 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.
1 unchanged sentence
As of December 31, 2023, each Investor's Preferred Stock represented approximately 15.3% of the outstanding voting power of the Company on an as-converted basis.
−Removed: In addition, under the Stockholders Agreement that we entered into in connection with the
−Removed: Table of Conte nt s
−Removed: 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).
−Removed: 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.
+Added: 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).
+Added: Additionally, under certain circumstances, an Investor may gain additional designation rights and in some instances, we may even be obligated to increase the size of our Board of Directors 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.
−Removed: Pursuant to the Stockholders Agreement, each Investor has consent rights over certain significant matters of our business.
−Removed: These include, but are not limited to, decisions:
−Removed: (a) to amend our organizational documents;
−Removed: (b) to create, increase, reclassify, issue or sell any additional Preferred Stock;
−Removed: (c) to consummate a change of control transaction;
−Removed: (d) to create or issue indebtedness that would cause us to exceed a specified leverage ratio;
−Removed: (e) to increase or decrease the number of directors on our board of directors or certain committees thereof;
−Removed: (f) to change the nature of our business in any material respect;
−Removed: (g) to make certain changes to our management;
−Removed: (h) to declare cash dividends or distributions;
−Removed: (i) to enter into certain related-party transactions;
−Removed: and (j) to adopt certain shareholder rights plans.
−Removed: As a result, each Investor is able to influence fundamental corporate matters and transactions.
−Removed: 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.
+Added: Pursuant to the Stockholders Agreement, each Investor has consent rights over certain matters.
+Added: As a result, each Investor is able to influence corporate matters and transactions in a different way than other stockholders.
+Added: 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 (including in connection with the 2023 dividend waivers described under "Recent Key Developments - Dividend Waivers" in Part I, Item 1, "Business" of this 10-K).
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.
+Added: Table of Conte nt s
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.
4 unchanged sentences
If we are not able to achieve these objectives and realize the anticipated benefits from the Transactions, our business, financial condition and operating results may be adversely affected.
−Removed: The market value of our Common Stock could decline if the Investors sell their Preferred Stock or Common Stock after certain transfer restrictions expire.
−Removed: 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.
−Removed: 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.
−Removed: Any sale of such shares, or the anticipation of the possibility of such sales, could create downward pressure on the market price of our Common Stock.
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.
3 unchanged sentences
In addition, the Revolving Credit Agreement provides for an unused commitment fee equal to 0.25% of the unused commitments.
−Removed: The Revolving Credit Agreement matures on May 5, 2024.
−Removed: Servicing our indebtedness under the Revolving Credit Agreement could divert resources from other priorities, including investment in our products and operations and satisfaction of our outstanding trade payables.
+Added: The Revolving Credit Agreement matures in May 2024, and we do not currently have an agreement in place to extend or refinance the Revolving Credit Agreement upon its maturity.
+Added: Servicing and, upon maturity, repaying our indebtedness under the Revolving Credit Agreement could divert resources from other priorities, including investment in our products and operations and satisfaction of our outstanding trade payables and dividend obligations.
If our cash flow from operations is inadequate to allow us to pay the interest and principal on our debt when due and meet our other financial obligations, we could face substantial liquidity challenges.
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.
−Removed: These covenants could limit our operating flexibility and cause us to forego attractive business opportunities, which could hurt our customer relationships and
−Removed: Table of Conte nt s
−Removed: put us at a competitive disadvantage.
+Added: 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.
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.
−Removed: 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).
+Added: 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 and a minimum Consolidated Fixed Charge Coverage Ratio for periods after March 31, 2024 (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.
−Removed: 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.
+Added: If we fail to meet our 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.
This could have important consequences for our company, including requiring us to restructure or refinance our debt (which we may be unable to do on acceptable terms or at all), dispose of assets or, potentially, enter into liquidation or bankruptcy.
We may require additional capital to support our business, and this capital may not be available on acceptable terms or at all.
−Removed: 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.
+Added: 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 meet our outstanding financial obligations, 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, as described above, the holders of our Preferred Stock have certain dividend rights, including the right to request a special dividend.
2 unchanged sentences
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.
−Removed: 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.
+Added: Repaying our existing debt obligations and 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.
This could make it more difficult for us to raise necessary financing in the future.
+Added: Table of Conte nt s
Capital and credit market conditions, adverse events affecting our business or industry, the tightening of lending standards, rising interest rates, negative actions by regulatory authorities or rating agencies, or other factors also could negatively impact our ability to obtain future financing on terms acceptable to us or at all.
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General Risks Related to Ownership of Our Common Stock
−Removed: The Company's outstanding securities, the stock or securities that we may become obligated to issue under existing or future agreements, and certain provisions of those securities, may cause immediate and substantial dilution to our existing stockholders.
+Added: Our outstanding securities, the stock or securities that we may issue under existing or future agreements, and certain provisions of those securities, may cause immediate and substantial dilution to our existing stockholders.
Our existing stockholders have and may continue to experience substantial dilution as a result of our obligations to issue shares of Common Stock.
As of December 31, 2023, our Preferred Stock was convertible into an aggregate of 4,614,513 shares of Common Stock at the election of the holders.
−Removed: Furthermore, we have reserved 5,457,026 shares of Common Stock for issuance pursuant to our Series A Warrants.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: Table of Conte nt s
+Added: Furthermore, we have reserved 272,851 shares of Common Stock for issuance pursuant to our Series A Warrants, which are subject to adjustment upon certain issuances of capital stock.
+Added: We have also issued 403,342 shares of Common Stock 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 2024 in shares of Common Stock.
+Added: In addition, in June 2023 our stockholders adopted an amendment to the Certificate of Designations of our Preferred Stock to permit payment of annual dividends on the Preferred Stock in the form of cash, shares of Common Stock, additional shares of Preferred Stock (which would be convertible into shares of Common Stock) or a combination thereof.
+Added: As of December 31, 2023, 108,663 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), 313,724 shares of Common Stock were reserved for issuance pursuant to outstanding restricted stock unit and deferred stock unit awards under our equity incentive plans and arrangements (including Shareablee plan awards and an employment inducement award we granted in 2021), and 340,728 shares of Common Stock were available for future equity awards under our 2018 Equity and Incentive Compensation Plan.
+Added: The issuance of shares of Common Stock (i) upon the conversion of or payment of dividends on 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.
+Added: Actions of activist stockholders may disrupt our business and cause fluctuations in our stock price.
+Added: We have been and may in the future be subject to legal and business challenges in the operation of our Company due to actions instituted by activist stockholders, such as stockholder proposals, media campaigns and proxy contests.
+Added: Responding to proxy contests and other actions by activist stockholders, including related litigation, can be costly and time-consuming, disrupt our operations and divert the attention of our Board of Directors and senior management from the pursuit of business strategies, which could adversely affect our results of operations and financial condition.
+Added: Additionally, perceived uncertainties as to our future direction or potential changes to the composition of our Board of Directors as a result of stockholder activism may lead to the perception of an adverse change in the direction of our business, loss of potential business opportunities, instability or lack of management or oversight continuity.
+Added: These uncertainties may be more acute or heightened if an activist stockholder seeks to change a majority of the Board of Directors or ultimately desires to acquire the Company.
+Added: Actions by activist stockholders may be exploited by our competitors, cause concern to our current or potential customers and vendors, be interpreted as an increase in risk associated with current or future financing, make it more difficult to attract and retain qualified personnel and create adverse uncertainty for our employees.
+Added: In addition, actions of activist stockholders may cause significant fluctuations in our stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.
+Added: In January 2024, we received notice from a stockholder, 180 Degree Capital Corp.
+Added: ("180 Degree"), of its intent to nominate a director candidate for election to the Board of Directors and submit a business proposal for consideration at our 2024 annual meeting of stockholders.
+Added: Our Board of Directors and management team strive to maintain constructive, ongoing communications with our stockholders, including 180 Degree, and we welcome all views and ideas that have the potential to enhance value for all stockholders.
+Added: Although our Board of Directors has not yet made its recommendations with respect to the 2024 annual meeting, it is possible that, if the Company and 180 Degree cannot reach a resolution in connection with its nomination and proposal, a proxy contest involving 180 Degree may ensue with respect to the 2024 annual meeting.
+Added: We could also become engaged in a proxy contest with another activist stockholder in 2024 or future years.
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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These provisions:
+Added: Table of Conte nt s
• provide for a classified Board of Directors so that not all members of our Board are elected at one time;
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In addition, we are subject to Section 203 of the Delaware General Corporation Law, which prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any "interested" stockholder for a period of three years following the date on which the stockholder became an "interested" stockholder and which may discourage, delay or prevent a change of control of our company.
−Removed: UNRESOLVED STAFF COMMENTS
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.