What changed in this filing

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Item 1A. Risk Factors

2025-03-31 compared with 2024-03-06 · 171 added, 108 removed, 827 unchanged (25% of the section changed)

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• The ability of our subsidiaries to make distributions, our principal source of cash

• Substantial doubt about our ability to continue as a going concern

• Our levels of indebtedness, financing arrangements and other obligations

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• Any identified material weaknesses in our internal controls

• Impact of inflationary pressures

• Constraints in the labor market and increases in labor costs

• Foreign exchange rate volatility

• Foreign exchange rate volatility and inflation

• Impact of competition on our business

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• Impact of construction contract pricing terms, including fixed-price and cost-plus pricing

• New or increased import tariffs on steel or other materials and the impact of fluctuations in other costs and inflation

• Termination or cancellation of construction projects

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• Reliability of subcontractors and third-party vendors

• Impact of inflationary pressures

• Volatility in the supply and demand for steel and steel components

• Dependability of steel component suppliers

• Dependability of steel component suppliers and the impact of changes in costs and tariffs

• Intense competition in construction markets

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• Significant fluctuations in Pansend's operating results

• High levels of competition in the life sciences space

• Reliance on third parties for sales, marketing, manufacturing and/or distribution

• Limited current and historical operating revenue

• High levels of competition in the life sciences space, competition in general and competitive developments in the market

• Reliance on third parties for sales, marketing, manufacturing and/or distribution, including delivery service providers

• Risks associated with potential disruptions in our operations

• Lack of significant current and historical operating revenue and risks associated with the implementation of our growth strategy

• Customer demand, patient satisfaction with procedures, and the impact of general economic conditions

• Impact of a failure to obtain or maintain necessary FDA (or foreign equivalent) clearances and approvals

• Risks associated with the misuse by customers, physicians and technicians of Pansend's products

• Pansend's limited manufacturing experience

• Inventory management, Pansend's limited manufacturing experience, and our ability to scale, suspend or reduce production based on variations in product demand.

• Competition for skilled technical professional personnel

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• Ability of Pansend to effectively protect its intellectual property and the impact of a failure to do so

• Patient satisfaction with R2's procedures

• Impact of third party intellectual property infringement claims

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INNOVATE’s principal source of cash and cash flow is distributions from its subsidiaries.

Thus, its ability to service its debt, including the $330.0 million in aggregate principal amount of 8.5% Senior Secured Notes due 2026 (the "Secured Notes"), $51.8 million aggregate principal of 7.50% convertible senior notes due 2026 (the "2026 Convertible Notes"), $35.1 million aggregate principal amount of 9.0% unsecured notes issued to the Continental General Insurance Company ("CGIC") due 2026 (the "CGIC Unsecured Note") and $20.0 million secured revolving credit agreement (the “Revolving Credit Agreement”), of which $20.0 million was drawn as of December 31, 2023, and to finance future acquisitions, is dependent on the ability of its subsidiaries to generate sufficient net income and cash flows to make upstream cash distributions to INNOVATE.

Thus, its ability to service its debt, including the $330.0 million in aggregate principal amount of 8.5% Senior Secured Notes due 2026 (the "2026 Senior Secured Notes"), $48.9 million aggregate principal of 7.50% convertible senior notes due 2026 (the "2026 Convertible Notes"), $31.0 million aggregate principal amount of 16.0% unsecured notes issued to the Continental General Insurance Company ("CGIC") due 2026 (the "CGIC Unsecured Note") and the $20.0 million secured revolving credit agreement (the “Revolving Credit Agreement”), of which $20.0 million was drawn as of December 31, 2024, and to finance future acquisitions, is dependent on the ability of its subsidiaries to generate sufficient net income and cash flows to make upstream cash distributions to INNOVATE.

INNOVATE’s subsidiaries are separate legal entities, and although they may be wholly-owned or controlled by INNOVATE, they have no obligation to make any funds available to INNOVATE, whether in the form of loans, dividends, distributions or otherwise.

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For a description of our and our subsidiaries' indebtedness, refer to Note 11.

Debt Obligations to the Consolidated Financial Statements included in this Annual Report on Form 10-K, which is incorporated herein by reference.

Debt Obligations included in the Consolidated Financial Statements of this Annual Report on Form 10-K, which is incorporated herein by reference.

If our business does not generate sufficient cash flow from operations or if future borrowings are not available to us in an amount sufficient to enable us and our subsidiaries to pay our indebtedness or make mandatory redemption payments with respect to our outstanding shares of preferred stock, or to fund our other liquidity needs, we may need to refinance all or a portion of our indebtedness or redeem the preferred stock, on or before the maturity thereof, sell assets, reduce or delay capital investments or seek to raise additional capital, any of which could have a material adverse effect on us.

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Our inability to generate sufficient cash flow to satisfy our debt service and other obligations, or to refinance or restructure our obligations on commercially reasonable terms or at all, would have an adverse effect, which could be material, on our business, financial condition and results of operations.

Substantial doubt about our ability to continue as a going concern

As of the date of these financial statements, there is substantial doubt about the Company's ability to continue as a going concern within one year after the date that the financial statements are issued.

The principal conditions leading to this conclusion are the upcoming maturities of our Corporate Senior Secured Notes, other current debt at Corporate and certain of our subsidiaries as well as from certain cross-default provisions in the Company's Senior Secured Notes.

Based on these conditions, the Company may not be able to meet its obligations at maturity and comply with certain cross-default provisions under the Senior Secured Notes over the next twelve months.

The Company plans to alleviate these conditions through various initiatives it is currently exploring, including refinancing the debt at Corporate and our subsidiaries, pursuing asset sales, and raising additional capital.

However, there can be no assurance that the Company will have the ability to raise additional capital when needed, be successful in any asset sales, or refinance its existing debt, on attractive terms, or at all, nor any assurances that lenders will provide additional extensions, waivers or amendments in the event of future non-compliance with the Company’s debt covenants or other possible events of default.

Further, there can be no assurance that the Company will be able to execute a reduction, extension, or refinancing of the debt, or that the terms of any replacement financing would be as favorable as the terms of the debt prior to the maturity date.

There can be no assurance that these plans will be successfully implemented or that they will mitigate the conditions that raise substantial doubt about the Company's ability to continue as a going concern.

The potential inability to refinance or extend the maturity of the aforementioned current debt, or to obtain additional financing or raise sufficient cash to pay the debt at maturity would have a material adverse effect on our financial condition and likely cause the price of the Company’s common stock to decline.

The agreements governing our indebtedness and Certificates of Designation for our outstanding shares of preferred stock contain various covenants that limit our discretion in the operation of our business and/or require us to meet financial maintenance tests and other covenants.

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We have a significant amount of indebtedness and outstanding shares of preferred stock.

As of December 31, 2023, our total outstanding indebtedness was $722.8 million and the accrued value of our outstanding preferred stock has a combined redemption value of $16.1 million with a current fair value as of December 31, 2023 of $16.4 million.

As of December 31, 2024, our total principal amount of outstanding debt was $668.3 million and the accrued value of our outstanding preferred stock had a combined redemption value of $16.1 million and a current fair value of $16.4 million as of December 31, 2024, which is inclusive of the $0.3 million accrued dividend payable on January 15, 2025.

We may not generate enough cash flow to satisfy our obligations under such indebtedness and other arrangements.

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• higher interest expense if interest rates increase on our floating rate borrowings are not effective to mitigate the effects of these increases;

• our Secured Notes are secured by substantially all of INNOVATE’s assets and those of certain of INNOVATE’s subsidiaries that have guaranteed the Secured Notes, including certain equity interests in our other subsidiaries and other investments, as well as certain intellectual property and trademarks, and those assets cannot be pledged to secure other financings;

• our 2026 Senior Secured Notes are secured by substantially all of INNOVATE’s assets and those of certain of INNOVATE’s subsidiaries that have guaranteed the 2026 Senior Secured Notes, including certain equity interests in our other subsidiaries and other investments, as well as certain intellectual property and trademarks, and those assets cannot be pledged to secure other financings;

• certain assets of our subsidiaries are pledged to secure their indebtedness, and those assets cannot be pledged to secure other financings;

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In addition, our inability to maintain certain leverage ratios could result in acceleration of a portion of our debt obligations and could cause us to be in default if we are unable to repay the accelerated obligations.

We have experienced significant historical, and may experience significant future, operating losses and net losses, which may hinder our ability to meet working capital requirements or service our indebtedness, and we cannot assure you that we will generate sufficient cash flow from operations to meet such requirements or service our indebtedness.

We cannot assure you that we will recognize net income in future periods.

We have experienced significant historical, and may experience significant future, operating losses and net losses, which may hinder our ability to meet working capital requirements or service our indebtedness, and we cannot assure you that we will generate sufficient cash flows from operations to meet such requirements or service our indebtedness.

We cannot assure you that we will recognize net income or positive cash flows from operations in future periods.

If we cannot generate net income or sufficient operating profitability, we may not be able to meet our working capital requirements or service our indebtedness.

Our ability to generate sufficient cash for our operations will depend upon, among other things, the future financial and operating performance of our operating businesses, which will be affected by prevailing economic and related industry conditions and financial, business, regulatory and other factors, many of which are beyond our control.

We recognized net loss attributable to INNOVATE of $35.2 million in 2023 and net loss attributable to INNOVATE of $35.9 million in 2022, and have incurred net losses in prior periods.

We recognized net loss attributable to INNOVATE of $34.6 million in 2024 and net loss attributable to INNOVATE of $35.2 million in 2023, and we have also incurred net losses in other prior periods.

We cannot assure you that our business will generate cash flow from operations in an amount sufficient to fund our liquidity needs.

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Furthermore, any proceeds that we could realize from any such disposition may not be adequate to meet our obligations.

For the years ended December 31, 2023 and 2022, we recognized cash flows provided by continuing operating activities of $26.5 million and cash used in continuing operating activities of $9.5 million, respectively.

Loss of our key management or other personnel, including the recent unexpected passing of our Chief Executive Officer, President and Director, could adversely impact our business.

For the years ended December 31, 2024 and 2023, we recognized cash flows provided by operating activities of $9.1 million and $26.5 million, respectively.

Loss of our key management or other personnel, including the 2023 unexpected passing of our Chief Executive Officer, President and Director, could adversely impact our business.

We believe that the future success of INNOVATE and its operating subsidiaries is largely dependent and will depend to a significant extent upon the performance, skills, experience and efforts of our senior management and certain other key personnel.

If, for any reason, one or more senior executives or key personnel were not to remain active in our Company, our results of operations could be adversely affected.

On July 23, 2023, we announced the unexpected passing of Wayne Barr, our President, Chief Executive Officer and Director.

On July 23, 2023, we announced the unexpected passing of Wayne Barr, our President, Chief Executive Officer ("CEO") and Director.

Barr had served as a director of INNOVATE since January 2014 and as CEO since November 2020.

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Barr’s death, on July 25, 2023, Paul K.

Voigt was named Interim Chief Executive Officer of the Company.

Voigt was named Interim CEO of the Company.

Voigt has served as Senior Managing Director of Investments at Lancer Capital, LLC ("Lancer Capital") since 2019.

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If we are unable to assert that our internal control over financial reporting is effective in any future period, we could lose investor confidence in the accuracy and completeness of our financial reports, which could have an adverse effect on the trading price of our common stock and potentially subject us to additional and potentially costly litigation and governmental inquiries/investigations.

Prolonged inflation could result in higher costs and decreased margins and earnings.

A majority of our products are manufactured and sold inside of the United States, which increases our exposure to, among other things, domestic inflation and fuel price increases.

Recent inflationary pressures have resulted in increased interest rates, fuel, wages, freight and container expenses and other costs which, if they continue for a prolonged period, may adversely affect our results of operations.

If our costs remain subject to continuing significant inflationary pressures, we may not be able to fully offset such higher costs through price increases.

Our inability or failure to do so could harm our business, financial condition, and results of operation.

Overall tightening of the labor market increases in labor costs or any possible labor unrest may adversely affect our business and results of operations.

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Fluctuations in the exchange rate of the U.S.

dollar and in foreign currencies may adversely impact our results of operations and financial condition.

We conduct various operations outside the United States.

dollar, foreign currencies and inflation may adversely impact our results of operations and financial condition.

Although the majority of our products are manufactured and sold inside of the United States, we conduct various operations outside the United States.

As a result, we face exposure to movements in currency exchange rates.

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dollars, our functional currency, upon consolidation;

• planning risk related to changes in exchange rates between the time we prepare our annual and quarterly forecasts and when actual

results occur.

• planning risk related to changes in exchange rates between the time we prepare our annual and quarterly forecasts and when actual results occur.

Our businesses are also exposed to, among other things, inflation and fuel price increases.

Inflationary pressures can result in increased interest rates, fuel, wages, freight and container expenses and other costs which, if they continue for a prolonged period, may adversely affect our results of operations if we are not able to fully offset such higher costs through price increases.

Our inability or failure to do so could harm our business, financial condition, and results of operations.

Our failure to meet the continued listing requirements of NYSE could result in a delisting of our securities, which in turn could adversely affect our financial condition and the market for our common stock.

On October 27, 2022, the Company was notified by NYSE that the average closing price of the Company’s common stock had fallen below $1.00 per share over a period of 30 consecutive trading days, which is the minimum average share price required by Section 802.01C of the NYSE Listed Company Manual (“Section 802.01C”).

On January 3, 2023, the Company was notified by the NYSE that it had regained compliance with this listing standard.

On February 26, 2024, the Company was notified by the NYSE that the average closing price of the Company's common stock had fallen below $1.00 per share over a period of 30 consecutive trading days, which is the minimum average share price required by Section 802.01C.

Pursuant to Section 802.01C, the Company has a period of six months following the receipt of the notice to regain compliance with the minimum share price requirement.

The Company may regain compliance at any time during the six-month cure period if on the last trading day of any calendar month during the six-month cure period the Common Stock has a closing share price of at least $1.00 and an average closing share price of at least $1.00 over the 30 trading-day period ending on the last trading day of that month.

If the Company is unable to regain compliance with the $1.00 share price rule within this period, the NYSE will initiate procedures to suspend and delist the Common Stock.

On February 26, 2024, the Company was notified by the New York Stock Exchange ("NYSE") that the average closing price of the Company's common stock had fallen below $1.00 per share over a period of 30 consecutive trading days, which is the minimum average share price required by Section 802.01C of the NYSE Listed Company Manual (“Section 802.01C”).

Pursuant to Section 802.01C, the Company had a period of six months following the receipt of the notice to regain compliance with the minimum share price requirement.

On August 27, 2024, subsequent to the Reverse Stock Split, the Company was notified by the NYSE that it had again regained compliance with this listing standard.

If the Company's average closing price of the Company's common stock falls below $1.00 per share again and the Company is unable to regain compliance with the $1.00 share price rule within the mandated cure period, the NYSE will initiate procedures to suspend and delist the Common Stock.

If the common stock ultimately were to be delisted from the NYSE, it could negatively impact the Company by, among other things, (i) reducing the liquidity and market price of the Company’s common stock;

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If the Company’s common stock is delisted from NYSE, the price paid by investors may not be recovered.

As of the filing date of this Annual Report on Form 10-K, the Company has not regained compliance with Section 802.01C.

Because we face significant competition for acquisition and business opportunities, including from numerous companies with a business plan similar to ours, it may be difficult for us to fully execute our business strategy.

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This inherent competitive limitation gives others an advantage in pursuing acquisition and investment opportunities.

Furthermore, our subsidiaries also face competition from both traditional and new market entrants that may adversely affect them as well, as discussed below in the risk factors related to the Infrastructure, Life Sciences and Spectrum segments.

Furthermore, our subsidiaries also face competition from both traditional and new market entrants that may adversely affect them as well, as discussed below in the risk factors related to our Infrastructure, Life Sciences and Spectrum segments.

Future acquisitions or business opportunities could involve unknown risks that could harm our business and adversely affect our financial condition and results of operations.

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Cybersecurity attacks could also include attacks targeting sensitive data or the security, integrity and/or reliability of the hardware and software installed in products we use.

Additionally, the rapid advancement of AI may give rise to additional cyber vulnerabilities.

Additionally, the rapid advancement of AI may give rise to additional cybersecurity vulnerabilities.

Through generative AI, potential threats may have new tools to automate and refine attacks or evade detection.

We treat such cybersecurity risks seriously given these threats pose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data.

We devote resources to maintain and regularly update our systems and processes that are designed to protect the security of our computer systems, software, networks and other technology assets against attempts by unauthorized parties to obtain access to confidential information, destroy data, disrupt or degrade service, sabotage systems or cause other damage, and we have implemented certain review and approval procedures internally and with our banks;

and have implemented system-wide changes.

Despite our implementation of industry-accepted security measures and technology, our information systems are vulnerable to and have been in the past subject to computer viruses, malicious codes, unauthorized access, phishing efforts, denial-of-service attacks and other cyber-attacks and we expect to be subject to similar attacks in the future as such attacks become more sophisticated and frequent.

Although to date, such attacks have not had a material impact on our financial condition, results of operations or liquidity, there can be no assurance that our cyber-security measures and technology will adequately protect us from these and other risks, including internal and external risks such as natural disasters and power outages and internal risks such as insecure coding and human error.

Despite our implementation of industry-accepted security measures and technology, our information systems are vulnerable to and have been subject to cyber-attacks, computer viruses, malicious codes, unauthorized access, phishing efforts, denial-of-service attacks and other cyber-attacks and we expect to be subject to similar attacks in the future as such attacks become more sophisticated and frequent.

Although to date, such attacks have not had a material impact on our financial condition, results of operations or liquidity, there can be no assurance that our cybersecurity measures and technology will adequately protect us from these and other risks, including internal and external risks such as natural disasters and power outages and internal risks such as insecure coding and human error.

Attacks perpetrated against our information systems could result in loss of assets and critical information, theft of intellectual property or inappropriate disclosure of confidential information and could expose us to remediation costs and reputational damage.

The inappropriate disclosure of confidential information or risk of theft of our intellectual property could result from the inappropriate use of AI systems by our employees, personnel, or business partners with access to such information, which could have an adverse effect on our business.

In addition, the unexpected or sustained unavailability of the information systems or the failure of these systems to perform as anticipated for any reason, including cyber-security attacks and other intentional hacking, could subject us to legal claims if there is loss, disclosure or misappropriation of or access to our customers’ information and could result in service interruptions, safety failures, security violations, regulatory compliance failures, an inability to protect information and assets against intruders, sensitive data being lost or manipulated and could otherwise disrupt our businesses and result in decreased performance, operational difficulties and increased costs, any of which could adversely affect our business, results of operations, financial condition or liquidity.

In addition, the unexpected or sustained unavailability of the information systems or the failure of these systems to perform as anticipated for any reason, including cybersecurity attacks and other intentional hacking, could subject us to legal claims if there is loss, disclosure or misappropriation of or access to our customers’ information and could result in service interruptions, safety failures, security violations, regulatory compliance failures, an inability to protect information and assets against intruders, sensitive data being lost or manipulated and could otherwise disrupt our businesses and result in decreased performance, operational difficulties and increased costs, any of which could adversely affect our business, results of operations, financial condition or liquidity.

We may increase our operational size in the future, and may experience difficulties in managing growth.

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We may not be able to fully utilize our net operating loss and other tax carryforwards.

Our ability to utilize our net operating loss ("NOL") and other tax carryforward amounts, such as Section 163(j) disallowed interest carryforwards, to reduce taxable income in future years may be limited for various reasons.

Our ability to utilize our net operating loss ("NOL") and other tax carryforward amounts, such as Code Section 163(j) disallowed interest carryforwards, to reduce taxable income in future years may be limited for various reasons.

As a result of the enactment of the Tax Cuts and Jobs Act ("TCJA"), the deduction for NOLs arising in tax years after December 31, 2017, will be limited to 80% of taxable income, although they can be carried forward indefinitely.

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On August 30, 2021, the Company entered into a Tax Benefits Preservation Plan (the "2021 Preservation Plan").

The 2021 Preservation Plan was intended to help protect the Company's ability to use its tax net operating losses and other certain tax assets ("Tax Benefits") by deterring an "ownership change," as defined under the Code, by a person or group of affiliated or associated persons from acquiring beneficial ownership of 4.9% or more of the outstanding common shares.

The 2021 Preservation Plan was intended to help protect the Company's ability to use its tax NOLs and other certain tax assets ("Tax Benefits") by deterring an "ownership change," as defined under the Code, by a person or group of affiliated or associated persons from acquiring beneficial ownership of 4.9% or more of the outstanding common shares.

The 2021 Preservation Plan terminated on March 31, 2023, and, on April 1, 2023, the Company entered into a new Tax Benefits Preservation Plan (the “2023 Preservation Plan”).

On May 6, 2024, the Company terminated its Tax Benefits Preservation Plan entered into on April 1, 2023 (the “2023 Preservation Plan”) because the Company’s Board of Directors determined that the 2023 Preservation Plan was no longer necessary or desirable for the preservation of the Company’s ability to use its tax net operating losses and other certain tax assets.

Refer to Note 16.

Temporary Equity and Equity for additional information on both the expired 2021 Preservation Plan and 2023 Preservation Plan.

The 2023 Preservation Plan may adversely affect the marketability of our common stock by discouraging any individual, firm, corporation, partnership or other person or group of affiliated or associated persons from acquiring beneficial ownership of 4.9% or more shares of our common stock then outstanding.

In addition, although the 2023 Preservation Plan is intended to reduce the likelihood of an ownership change that could adversely affect utilization of our NOLs, there is no assurance that the 2023 Preservation Plan will prevent all transfers that could result in such an ownership change.

Equity and Temporary Equity included in the Consolidated Financial Statements of this Annual Report on Form 10-K for additional information on the expired 2023 Preservation Plan, which is incorporated herein by reference.

We may experience ownership changes in the future as a result of subsequent shifts in our common stock ownership, some of which may be outside of our control.

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For instance, in 2014, after substantial acquisitions of our common stock were reported by new beneficial owners, and we issued shares of our preferred stock, convertible into our common stock.

We conducted a Section 382 review.

We conducted a Code Section 382 review.

The conclusions of this review indicated that an ownership change had occurred as of May 29, 2014.

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Additionally, we do not have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us.

We have in the past engaged in transactions in which such persons have an interest (for example, the 2021 sale of CIG to Continental General Holdings LLC, an entity controlled by Michael Gorzynski, a former director of the Company).

Subject to the terms of any applicable covenants in financing arrangements or other agreements, we may from time to time or may in the future enter into additional transactions in which such persons have an interest.

We have in the past engaged in transactions in which such persons have an interest (for example, the 2021 sale of Continental Insurance Group ("CIG") to Continental General Holdings LLC, an entity controlled by Michael Gorzynski, a former director of the Company).

Subject to the terms of any applicable covenants in financing arrangements or other agreements, we may from time to time enter into additional transactions in which such persons have an interest.

In addition, such parties may have an interest in certain transactions such as strategic partnerships or joint ventures in which we are involved, and may also compete with us.

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While we seek to mitigate our business risks associated with climate change by establishing robust environmental programs and partnering with organizations who are also focused on mitigating their own climate-related risks, we recognize that there are inherent climate change-related risks wherever business is conducted.

Any of our primary locations may be vulnerable to the adverse effects of climate change.

For example, our offices globally have historically experienced, and are projected to continue to experience, climate-related events at an increasing frequency, including drought, water scarcity, heat waves, wildfires and resultant air quality impacts and power shutoffs associated with wildfire prevention.

While there have been no direct impacts to the financial statements, any of our primary locations could be vulnerable to the adverse effects of climate change, including drought, water scarcity, heat waves, wildfires and resultant air quality impacts and power shutoffs associated with wildfire prevention.

Changing market dynamics, global policy developments and the increasing frequency and impact of extreme weather events on critical infrastructure in the U.S.

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and foreign governments;

• the imposition of withholding or other taxes on foreign income, tariffs or restrictions on foreign trade and investment;

• the imposition of withholding or other taxes on foreign income, new or increased tariffs or restrictions on foreign trade and investment;

• adverse tax consequences;

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We also own minority interests in a number of entities, such as MediBeacon, Triple Ring Technologies, Inc.

and Scaled Cell Solutions, Inc., over which we do not exercise, or have only limited, management control, and we are, therefore, unable to direct or manage the business to realize the anticipated benefits that we can achieve through full integration.

and Scaled Cell, over which we do not exercise, or have only limited, management control, and we are, therefore, unable to direct or manage the business to realize the anticipated benefits that we can achieve through full integration.

Our development stage companies may never produce revenues or income.

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We also have reserved shares of common stock for issuance pursuant to our broad-based equity incentive plans, upon exercise of stock options and other equity-based awards granted thereunder, and pursuant to other equity compensation arrangements.

We may issue shares of common stock or additional shares of preferred stock to raise additional capital, to complete a business combination or other acquisition, to capitalize new businesses or new or existing businesses of our operating subsidiaries or pursuant to other employee incentive plans, any of which could dilute the interests of our stockholders and present other risks.

We may issue shares of common stock or additional shares of preferred stock to raise additional capital, such as during the Rights Offering which closed during 2024, to complete a business combination or other acquisition, to capitalize new businesses or new or existing businesses of our operating subsidiaries or pursuant to other employee incentive plans, any of which could dilute the interests of our stockholders and present other risks.

The issuance of additional shares of common stock or preferred stock may, among other things:

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Future sales of substantial amounts of our common stock by holders of our preferred stock or other significant stockholders may adversely affect the market price of our common stock.

As of December 31, 2023, the holders of our outstanding preferred stock had certain rights to convert their Preferred Stock into 3,616,233 shares of our common stock.

As of December 31, 2024, the holders of our outstanding Series A-3 Preferred Stock and Series A-4 Preferred Stock had certain rights to convert their preferred stock into 549,884 shares of our common stock.

Pursuant to a second amended and restated registration rights agreement, dated January 5, 2015, entered into in connection with the issuance of the preferred stock, we have granted registration rights to the purchasers of our preferred stock and certain of their transferees with respect to INNOVATE common stock held by them and common stock underlying the preferred stock.

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• establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted on by stockholders at stockholder meetings.

We are subject to the provisions of Section 203 of the Delaware General Corporation Law which limit the right of a corporation to engage in a

business combination with a holder of 15 percent or more of the corporation’s outstanding voting securities, or certain affiliated persons.

We are subject to the provisions of Section 203 of the Delaware General Corporation Law which limit the right of a corporation to engage in a business combination with a holder of 15 percent or more of the corporation’s outstanding voting securities, or certain affiliated persons.

Although we believe that these charter and bylaw provisions, and provisions of Delaware law, provide an opportunity for the board to assure that our stockholders realize full value for their investment, they could have the effect of delaying or preventing a change of control, even under circumstances that some stockholders may consider beneficial.

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Any increase in the price of, or change in supply and demand for, the steel and steel components that DBMG utilizes to complete projects could have a material adverse effect on DBMG’s results of operations, cash flows or financial condition.

The prices of the steel and steel components that DBMG utilizes in the course of completing projects are susceptible to price fluctuations due to supply and demand trends, energy costs, transportation costs, government regulations, duties and tariffs, changes in currency exchange rates, price controls, general economic conditions and other unforeseen circumstances.

The prices of the steel and steel components that DBMG utilizes in the course of completing projects are susceptible to price fluctuations due to supply and demand trends, duties and tariffs, energy costs, transportation costs, government regulations, changes in currency exchange rates, price controls, general economic conditions and other unforeseen circumstances.

For example, the recent armed conflicts in Ukraine and Israel have resulted in significant uncertainty in the commodities markets.

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As a result, DBMG’s margins may be adversely impacted by such cost increases.

In addition, the recently approved increases in steel import tariffs proposed by the U.S.

president could lead to significant increases in the cost of steel.

Tariffs on components that we or our suppliers import from certain nations that have, or may in the future have, tariffs may adversely affect our profitability unless we are able to exclude such components from the tariffs or we raise prices for our products, which may result in our services and products becoming less attractive relative to services and products offered by our competitors.

To the extent that our sales or profitability are negatively affected by any such tariffs or other trade actions, our business and results of operations may be materially adversely affected.

DBMG’s dependence on suppliers of steel and steel components makes it vulnerable to a disruption in the supply of its products.

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• its ability to import products;

• its suppliers’ noncompliance with applicable laws, trade restrictions and tariffs;

• its suppliers’ noncompliance with applicable laws, trade restrictions and tariffs, including the imposition of or increase in tariffs,

export controls and other trade restrictions;

• its inability to find replacement suppliers in the event of a deterioration of the relationship with current suppliers;

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or internationally;

• the timing and status of enrollment for Pansend’s clinical trials;

• coverage and reimbursement policies with respect to Pansend’s product and product candidates, including the degree to which treatments using its products are covered and receive adequate reimbursement from third-party payors, and potential future drugs or devices that compete with its products;

• the cost of manufacturing Pansend’s product, as well as building out its supply chain, which may vary depending on the quantity of

• production and the terms of Pansend’s agreements with manufacturers;

• the timing and status of enrollment for Pansend’s clinical trials; the timing and success or failure of nonclinical studies and clinical trials for Pansend’s product candidates or competing product candidates, or any other change in the competitive landscape of the life sciences industry, including consolidation among Pansend’s competitors or partners;

• the cost of manufacturing Pansend’s product, as well as building out its supply chain, which may vary depending on the quantity of production and the terms of Pansend’s agreements with manufacturers;

• expenditures that Pansend may incur to acquire, develop or commercialize additional product candidates and technologies;

• the level of demand for Pansend’s product and any product candidates, if approved or cleared, which may vary significantly over time;

• litigation, including patent, employment, securities class action, stockholder derivative, general commercial, and other lawsuits; and

• the timing and success or failure of nonclinical studies and clinical trials for Pansend’s product candidates or competing product candidates, or any other change in the competitive landscape of the life sciences industry, including consolidation among Pansend’s competitors or partners.

Pansend operates in a highly competitive market, and may face competition from large, well-established medical technology, device and

product manufacturers with significant resources, and may not be able to compete effectively.

• the level of demand for Pansend’s product and any product candidates, if approved or cleared, which may vary significantly over time and may experience seasonal fluctuations in demand;

• litigation, including patent, employment, securities class action, stockholder derivative, general commercial, product liability and other lawsuits or claims;

• changes in geographic, channel or product mix;

• weakness in consumer spending as a result of a slowdown in the global, U.S.

or other economies;

• changes in relationships with our customers and distributors, including timing of orders;

• our inability to scale, suspend or reduce production based on variations in product demand.

To respond to these and other factors, we may make business decisions that adversely affect our operating results such as modifications to our pricing policy, promotions, or operations.

Most of our expenses, such as employee compensation, are relatively fixed in the short term.

Moreover, expense levels are based, in part, on our expectations regarding future revenue levels.

As a result, if our net revenues for a particular period fall below expectations, we may be unable to adjust spending quickly enough to offset any shortfall in net revenues.

Due to these and other factors, we believe that quarter-to-quarter comparisons of our operating results may not be meaningful.

You should not rely on our results for any one quarter as an indication of future performance.

Pansend operates in a highly competitive market, and may face competition from large, well-established medical technology, device and product manufacturers with significant resources, and may not be able to compete effectively.

The medical technology, medical device, biotechnology, and pharmaceutical industries are characterized by intense and dynamic competition to develop new technologies and proprietary therapies.

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As a result, Pansend may not be able to compete effectively against current and potential future competitors or their devices and products.

Pansend may rely on third parties for its sales, marketing, manufacturing and/or distribution, and these third parties may not perform satisfactorily.

To be able to commercialize Pansend’s planned products, it may elect to internally develop aspects of sales, marketing, large-scale manufacturing, or distribution, or it may elect to utilize third parties with respect to one or more of these items.

Pansend’s reliance on these third parties may reduce its control over these activities however, reliance on third parties does not relieve Pansend of its responsibility to ensure compliance with all required legal, regulatory, and scientific standards.

Pansend may rely on third parties for its sales, marketing, manufacturing and/or distribution, including delivery service providers, and these third parties may not perform satisfactorily.

A disruption in the operations of our primary freight carrier or higher shipping costs could cause a decline in our net revenues or a reduction in our earnings.

To be able to commercialize Pansend’s planned products, Pansend may elect to internally develop aspects of sales, marketing, large-scale manufacturing, or distribution, or Pansend may elect to utilize third parties with respect to one or more of these items.

Pansend’s reliance on these third parties may reduce its control over these activities;

however, reliance on third parties does not relieve Pansend of its responsibility to ensure compliance with all required legal, regulatory, and scientific standards.

Any failure of these third parties to perform satisfactorily and in compliance with relevant laws and regulations could lead to delays in the development of Pansend’s planned products, including delays in its clinical trials, or failure to obtain regulatory approval for its planned products, or failure to successfully commercialize its planned products or other future products.

Some of these events could be the basis for FDA or other regulatory action, including injunction, recall, seizure, or total or partial suspension of production.

Pansend currently has limited product revenue and may never become profitable.

To date, Pansend has generated limited revenue and has historically relied on financing from the sale of equity securities to fund its operations.

We expect that Pansend’s future financial results will depend primarily on its success in launching, selling, and supporting its therapies and treatments, including R2’s Glacial systems or other products based on Pansend’s technology.

R2 Technologies depends heavily on contracted third-party delivery service providers to deliver our products to our providers and customers.

Interruptions to or failures in these delivery services could prevent the timely or successful delivery of our products.

These interruptions or failures may be due to unforeseen events that are beyond our control or the control of our third-party delivery service providers, such as inclement weather, natural disasters or labor unrest, among others.

If our products are not delivered on time or are delivered in a damaged state, providers and customers may refuse to accept our products and have less confidence in our services, which could negatively impact our relationships with our customers and distributors, business, financial condition and results of operations.

We are dependent on commercial freight carriers to deliver our products within the United States.

If the operations of these carriers are disrupted for any reason, we may be unable to timely deliver our products to our customers.

If we cannot deliver our products on time and cost effectively, our customers may choose competitive offerings causing our net revenues and gross margins to decline.

In a rising fuel cost environment, our freight costs will increase.

If freight costs materially increase and we are unable to pass that increase along to our customers for any reason or otherwise offset such increases in costs, our gross margin and financial results could be adversely affected.

A disruption in our operations could materially and adversely affect our business.

As a company engaged in distribution, our operations, including those of our third-party suppliers and delivery service providers, are subject to the risks inherent in such activities, including industrial accidents, supply chain disruptions, macroeconomic issues, environmental events, strikes and other labor disputes, disruptions in information systems, product quality control, safety, licensing requirements and other regulatory issues, changes in laws and regulatory requirements, as well as natural disasters, pandemics (such as the COVID-19 pandemic), border disputes, political crises, and other external factors over which we and our third-party suppliers, brokers and delivery service providers may have no control.

Our ability to meet the needs of our consumers depends on the proper operation of our distribution facilities, where most of our inventory that is not in transit is housed.

The loss of, or damage to, the manufacturing facilities or distribution centers of our third-party suppliers and delivery service providers could materially and adversely affect our business, financial condition and results of operations.

Our insurance coverage may not be sufficient to cover the full extent of any loss or damage to our manufacturing facilities or distribution centers, and any loss, damage of or disruption to those facilities, or loss or damage of the inventory stored there, could materially and adversely affect our business, financial condition and results of operations.

Pansend currently has not generated significant product revenue and may never become profitable.

To date, Pansend has not generated significant revenue and has historically relied on financing from the sale of equity securities and issuances of additional debt to fund its operations.

We expect that Pansend’s future financial results will depend primarily on its success in launching, selling, and supporting its therapies and treatments, including R2 Technologies' Glacial systems or other products based on Pansend’s technology.

Pansend expects to expend significant resources on hiring of personnel, continued scientific and product research and development, potential product testing and pre-clinical and clinical investigation, intellectual property development and prosecution, marketing and promotion, capital expenditures, working capital, general and administrative expenses, and fees and expenses associated with Pansend’s capital raising efforts.

Pansend is expected to incur costs and expenses related to consulting costs, laboratory development costs, hiring of scientists, engineers, sales representatives, and other operational personnel, and the continued development of relationships with potential partners.

Pansend is incurring significant operating losses, it is expected to continue to incur additional losses for the foreseeable future, and we cannot assure you that it will generate revenue or be profitable in the future.

Pansend is incurring significant operating losses, and is expected to continue to incur additional losses for the foreseeable future, and we cannot assure you that it will generate significant revenue or be profitable in the future.

There are no assurances that Pansend’s future products will be cleared or approved or become commercially viable or accepted for use.

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Investment in medical technology is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product will fail to demonstrate adequate efficacy or clinical utility.

Investors should evaluate an investment in Pansend in light of the uncertainties encountered by developing medical technology companies in a competitive environment.

Investors should evaluate an investment in Pansend in light of the uncertainties encountered by developing medical technology companies and life sciences companies in a competitive environment.

There can be no assurance that Pansend’s efforts will be successful or that it will ultimately be able to achieve profitability.

Even if Pansend achieves profitability, it may not be able to sustain or increase profitability on a quarterly or annual basis.

We may not be able to successfully implement our growth strategy and we may be unable to grow our business effectively or efficiently, which would harm our business, financial condition and results of operations.

Our future growth, profitability and cash flows depend upon our ability to successfully implement our business strategy, which, in turn, is dependent upon a number of key initiatives, including our ability to:

drive demand in the brand;

invest in our providers;

and improve productivity in our retailers, U.S.

medical spa facilities and U.S.

spa facilities.

There can be no assurance that we can successfully achieve any or all of the above initiatives in the manner or time period that we expect.

Further, achieving these objectives will require investments that may result in short-term cost increases with net sales materializing on a longer-term horizon and therefore may be dilutive to earnings.

We cannot provide any assurance that we will realize, in full or in part, the anticipated benefits we expect our strategy will achieve.

The failure to realize those benefits could have a material adverse effect on our business, financial condition and results of operations.

Growing our business will place a strain on our management team, financial and information systems, supply chain and distribution capacity and other resources.

To manage growth effectively, we must continue to:

enhance our operational, financial and management systems, including warehouse management and inventory control;

maintain and improve internal controls and disclosure controls and procedures;

maintain and improve information technology systems and procedures;

and expand, train and manage our employee base.

We may not be able to effectively manage our expansion in any one or more of these areas, and any failure to do so could significantly harm our business, financial condition and results of operations.

Growing our business may make it difficult for us to adequately predict the expenditures we will need to make in the future.

If we do not make the necessary overhead expenditures to accommodate our future growth, we may be unsuccessful in executing our growth strategy and our results of operations could suffer.

R2 Technologies' success depends upon customer demand and patient satisfaction with its procedures.

R2 Technologies’ procedures are elective aesthetic procedures, the cost of which must be borne by the patient and is generally not covered by or reimbursable through government or private health insurance.

In order to generate repeat and referral business, patients must be satisfied with the effectiveness of the procedures conducted using R2’s systems.

The decision to undergo one of R2’s procedures is, thus, driven by patient demand, which may be influenced by a number of factors, such as:

• the success of R2’s sales and marketing programs;

• the extent to which R2’s physician customers recommend its procedures to their patients;

• the extent to which R2 Technologies’ procedures satisfy patient expectations;

• R2 Technologies’ ability to properly train its physician customers in the use of its systems so that their patients do not experience excessive discomfort during treatment or adverse side effects;

• the cost, safety, and effectiveness of R2 Technologies’ systems versus other aesthetic treatments;

• consumer sentiment about the benefits and risks of aesthetic procedures generally and R2 Technologies’ systems in particular;

• the success of any direct-to-consumer marketing efforts R2 Technologies may initiate; and

• general consumer confidence, which may be impacted by economic and political conditions outside of R2 Technologies’s control.

R2 Technologies’ financial performance will be negatively impacted in the event it cannot generate significant patient demand for procedures performed with its systems.

Demand for our products may not increase as rapidly as we anticipate due to a variety of factors, including a weakness in general economic conditions and resistance to non-traditional treatment methods.

Consumer spending habits are affected by, among other things, prevailing economic conditions, levels of employment, salaries and wage rates, consumer confidence and consumer perception of economic conditions.

A general slowdown in the U.S.

economy and certain international economies or an uncertain economic outlook could adversely affect consumer spending habits which may, among other things, result in reduced patient traffic in dermatology or internal medicine offices and in medical spa facilities and spa facilities, a reduction in consumer spending on elective, non-urgent or higher value treatments, such as those offered by our providers, or a reduction in the demand for aesthetic services generally, each of which could have a material adverse effect on our sales and operating results.

Weakness in the global economy results in a challenging environment for selling aesthetic technologies and doctors or estheticians may postpone investments in capital equipment, such as our Glacial systems.

Increased market acceptance of our products and treatments will depend in part upon the recommendations of medical and aesthetics professionals, as well as other factors including effectiveness, safety, ease of use, reliability, aesthetics and price compared to competing products and treatment methods.

Pansend’s failure to obtain or maintain necessary FDA clearances and approvals, or to maintain continued clearances, or equivalents thereof in the U.S.

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Each medical device that Pansend wishes to market in the U.S.

must first receive either 510(k) clearance or PMA from the FDA unless an exemption applies.

must first receive either 510(k) clearance or premarket approval ("PMA") from the FDA unless an exemption applies.

Either process can be lengthy and expensive.

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Delays in obtaining regulatory clearance or approval could adversely affect Pansend’s revenues and profitability.

R2 has obtained 510(k) clearances for its Glacial Rx system for various uses, including, but not limited to:

R2 Technologies has obtained 510(k) clearances for its Glacial Rx system for various uses, including, but not limited to:

the removal of benign lesions of the skin;

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Further, more stringent regulatory requirements or safety and quality standards may be issued in the future with an adverse effect on Pansend’s business.

Pansend’s customers, or physicians and technicians, as the case may be, may misuse certain of its products, and product liability lawsuits and other damages imposed on Pansend may have a material adverse impact on its business.

Pansend’s customers, or physicians, aestheticians and technicians, as the case may be, may misuse certain of its products, and product liability lawsuits and other damages imposed on Pansend may have a material adverse impact on its business.

Pansend faces an inherent risk of product liability as a result of the marketing and sale of its products.

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A product liability claim or product recall may result in losses that could result in the FDA taking legal or regulatory enforcement action against Pansend and/or Pansend’s products including recall, and could have a material adverse effect upon Pansend’s business, financial condition and results of operations.

Pansend has limited experience in manufacturing its products in large-scale commercial quantities and may face manufacturing risks that may adversely affect its ability to manufacture products and could reduce its gross margins and negatively affect its business and operating results.

If we fail to manage our inventory effectively, our results of operations, financial condition and liquidity may be materially and adversely affected.

Our business requires us to manage inventory effectively.

We depend on our forecasts of demand for, and popularity of, various products to make purchase decisions and to manage our inventory of stock-keeping units.

Demand for products, however, can change significantly between the time inventory or components are ordered and the date of sale.

Demand may be affected by seasonality, rapid changes in product pricing, product defects, promotions, changes in consumer spending patterns, changes in consumer tastes with respect to our products, competitors’ product launches, and other factors, and our consumers may not purchase products in the quantities that we expect.

It may be difficult to accurately forecast demand and determine appropriate levels of product or componentry.

If we fail to manage our inventory effectively we may be subject to a heightened risk of inventory obsolescence, a decline in inventory values, and significant inventory write-downs or write-offs.

In addition, if we are required to lower sale prices to reduce inventory level or to pay higher prices to our suppliers, our profit margins might be negatively affected.

Any of the above may materially and adversely affect our business, financial condition and results of operations.

Pansend has limited experience in manufacturing its products in large-scale commercial quantities and may face manufacturing risks , including an inability to scale, suspend or reduce production based on variations in product demand, that may adversely affect its ability to manufacture products and could reduce its gross margins and negatively affect its business and operating results.

Pansend’s success depends, in part, on its ability to manufacture its current and future products in sufficient quantities and on a timely basis to meet demand, while adhering to product quality standards, complying with regulatory quality system requirements and managing manufacturing costs.

For example, R2's third-party contract manufacturer has a manufacturing facility located in Sunnyvale, California where they produce, package and warehouse the Glacial Rx system.

R2 also relies on a global third-party manufacturer for production of some of the components used in the Glacial Rx System.

If R2’s facility, or the facilities of its third-party contract manufacturers, suffer damage, or a force majeure event, this could materially impact R2’s ability to operate.

For example, R2 Technologies' third-party contract manufacturer has a manufacturing facility located in Sunnyvale, California where they produce, package and warehouse the Glacial Rx, Glacial fx and Glacial Spa systems.

R2 Technologies also relies on a global third-party manufacturer for production of some of the components used in the Glacial Rx and Glacial fx/Spa systems.

If R2 Technologies' facility, or the facilities of its third-party contract manufacturers, suffer damage, or a force majeure event, this could materially impact R2 Technologies' ability to operate.

Pansend is also subject to other risks relating to its manufacturing capabilities, including:

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• failure to maintain compliance with quality system requirements or pass regulatory quality inspections;

• inability to increase production capacity or volumes to meet demand; and

• inability to increase, suspend or reduce production capacity or volumes to meet demand; and

• inability to design or modify production processes to enable Pansend to produce future products efficiently or implement changes in current products in response to design or regulatory requirements.

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Pansend’s future success depends upon Pansend’s ability to attract and retain highly skilled personnel, including scientific, technical, commercial, business, regulatory and administrative personnel, necessary to support Pansend’s anticipated growth, develop Pansend’s business and perform certain contractual obligations.

Given the scarcity of professionals with the scientific knowledge that Pansend requires and the competition for qualified personnel among life science businesses, Pansend may not succeed in attracting or retaining the personnel Pansend requires to continue and grow its operations.

Given the scarcity of professionals with the scientific knowledge that Pansend requires and the competition for qualified personnel among life sciences businesses, Pansend may not succeed in attracting or retaining the personnel Pansend requires to continue and grow its operations.

Rapidly changing technology in life sciences could make the products Pansend is developing obsolete.

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However, Pansend’s pending or future patent applications may be denied, and any patent previously issued to Pansend or Pansend’s subsidiaries may be challenged, invalidated, held unenforceable or circumvented.

In particular, R2 filed a patent application with the U.S.

In particular, R2 Technologies filed a patent application with the U.S.

Patent and Trademark Office for a commercial patent that covers the Glacial Rx System, U.S.

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Pansend’s existing patents and any future patents it obtains may not be sufficiently broad to prevent others from making use of technologies or developing competing products and technologies.

In addition, because patent law is evolving in the life science industry, the patent positions of companies like ours are uncertain.

In addition, because patent law is evolving in the life sciences industry, the patent positions of companies like ours are uncertain.

As a result, the validity and enforceability of Pansend’s patents cannot be predicted with certainty.

R2's success depends upon patient satisfaction with its procedures.

R2’s procedures are elective aesthetic procedures, the cost of which must be borne by the patient and is not covered by or reimbursable through government or private health insurance.

In order to generate repeat and referral business, patients must be satisfied with the effectiveness of the procedures conducted using R2’s systems.

The decision to undergo one of R2’s procedures is thus driven by patient demand, which may be influenced by a number of factors, such as:

• the success of R2’s sales and marketing programs;

• the extent to which R2’s physician customers recommend its procedures to their patients;

• the extent to which R2’s procedures satisfy patient expectations;

• R2’s ability to properly train its physician customers in the use of its systems so that their patients do not experience excessive discomfort during treatment or adverse side effects;

• the cost, safety, and effectiveness of R2’s systems versus other aesthetic treatments;

• consumer sentiment about the benefits and risks of aesthetic procedures generally and R2’s systems in particular;

• the success of any direct-to-consumer marketing efforts R2 may initiate; and

• general consumer confidence, which may be impacted by economic and political conditions outside of R2’s control.

R2’s financial performance will be negatively impacted in the event it cannot generate significant patient demand for procedures performed with its systems.

If third parties make claims of intellectual property infringement against Pansend, or otherwise seek to establish their intellectual property rights equal or superior to Pansend’s, it may have to spend time and money in response and potentially discontinue certain of Pansend’s operations.

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Increased regulatory scrutiny or negative perception of certain therapies or treatments could adversely affect our business.

Patients receiving CAR-T therapies or other treatment may experience severe adverse events, which may affect clinical development, regulatory approval, and public perception.

Scaled Cell is currently targeting chimeric antigen receptor CAR-T cell therapy which uses immune cells called T cells that are genetically altered in a lab to enable them in locating and destroying cancer cells more effectively.

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Additionally, responses by the FDA or other federal and state agencies to negative public perception or ethical concerns could result in increased regulation or legislation of CAR-T therapies.

Patients receiving CAR-T therapies may experiences severe adverse events, which may affect clinical development, regulatory approval, and public perception.

Certain product candidates of Scaled Cell may have serious and potentially fatal consequences.

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Spectrum's broadcast stations compete for audiences and advertising revenue with other broadcast stations as well as with other media such as the Internet and radio.

Broadcasting also faces competition from (i) local free over-the-air broadcast television and radio stations;

Broadcasting also faces competition from (i) local free OTA broadcast television and radio stations;

(ii) telecommunication companies;

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These shifts in consumer behavior create challenges with respect to maintaining predictable broadcasting revenue, and substantial adoption of alternative technologies could negatively affect our overall broadcasting business.

Also, a slowing adoption of the ATSC 3.0 standards, as well as potential barriers related to an industry shift to next-generation telecommunications technologies, such as a fifth-generation mobile network ("5G") and datacasting may lead to an unpredictable landscape for the broadcasting industry.

Also, a slowing adoption of the ATSC 3.0 standards, as well as potential barriers related to an industry shift to next-generation telecommunications technologies, such as 5G and datacasting may lead to an unpredictable landscape for the broadcasting industry.

Cable companies and others have developed national advertising networks in recent years that increase the competition for national advertising.

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The FCC’s rules require operational full-power and Class A stations to file quarterly reports demonstrating compliance with these regulations.

Low Power Television and TV Translator Authorizations.

LPTV and TV Translator Authorizations.

LPTV stations and TV Translators have "secondary spectrum priority" to full-service television stations.

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In addition to any negative direct consequences to our business or results of operations arising from these financial and economic developments, some of these actions may adversely affect financial institutions, capital providers, advertisers or other consumers on whom we rely, including for access to future capital or financing arrangements necessary to support our business.

Our inability to obtain financing in amounts and at times necessary could make it more difficult or impossible to meet our obligations or otherwise take actions in our best interests.

Certain stations are also benefiting from our retransmission consent agreements with MVPDs, and we cannot predict the outcome of potential regulatory changes to the retransmission consent regime.

Our inability to extend or obtain financing in amounts and at times necessary could make it more difficult or impossible to meet our obligations or otherwise take actions in our best interests.

Certain stations are also benefiting from our retransmission consent agreements with multichannel video programming distributors ("MVPDs"), and we cannot predict the outcome of potential regulatory changes to the retransmission consent regime.

Certain stations are also benefiting, although in very few instances on a small number of stations, on retransmission consent agreements.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors