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Risks Related to Our Business
−Removed: We may not be able to successfully build out operations or commercialize customers within the anticipated time frame following the recent opening of our new facility in Conway, Arkansas and may incur additional expenses in the process, which could hamper our ability to satisfy customer demand, meet revenue targets and generate positive operating cash flows.
+Added: We may not be able to successfully scale up operations or commercialize customers within the anticipated time frame following the recent opening of our new facility in Conway, Arkansas and may incur additional expenses in the process, which could hamper our ability to satisfy customer demand, meet revenue targets and generate positive operating cash flows.
In 2021, we purchased a 524,000 square foot manufacturing facility in Conway, Arkansas with the intent to build out the capacity and capabilities needed to meet our customer demand.
−Removed: Construction on the facility began in late 2022.
−Removed: Portions of the facility began commercial production in 2024, and the facility is expected to be fully operational in fiscal year 2025.
−Removed: If the facility does not become fully operational within our anticipated timeframe, or if we incur additional expenses in the process of opening this facility, it might hamper our ability to satisfy customer demand, meet revenue targets and generate positive operating cash flows.
+Added: Construction on the facility began in late 2022 and the facility became fully operational in 2025.
+Added: If we do not scale up our operations and commercialize customers at the facility within our anticipated timeframe, or if we incur additional expenses in the process of scaling up operations, it might hamper our ability to satisfy customer demand, meet revenue targets and generate positive operating cash flows.
Disruption in operations at any of our production and distribution facilities could affect our ability to manufacture or distribute products and could adversely affect our business and sales.
Our sales and distribution network requires a large investment to maintain and operate, and we rely on a limited number of production and distribution facilities.
−Removed: Our production capacity is currently concentrated in our Concord, North Carolina, North Little Rock, Arkansas and Johor Bahru, Malaysia facilities and, once it is fully operational, a significant portion of our extract and ready-to-drink production capabilities will reside at, and a significant portion of our expected future revenues and operating cash flows will be generated by, our facility in Conway, Arkansas.
+Added: Our production capacity is currently concentrated in our Conway, Arkansas, Concord, North Carolina, North Little Rock, Arkansas and Johor Bahru, Malaysia facilities and a significant portion of our extract and ready-to-drink production capabilities reside at, and a significant portion of our expected future revenues and operating cash flows will be generated by, our facility in Conway, Arkansas.
If we were to experience a prolonged disruption in the operation of these facilities due to damage from fire, natural disaster, power loss, utilities interruptions, labor shortages, regulatory or food safety issues, water scarcity or a failure of production equipment or information technology systems supporting our production processes, we may not have sufficient capacity at our other facilities to meet our customers’ demands.
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There can be no assurance that our customers will continue to purchase our products in the same mix or quantities or on the same terms as they have in the past.
−Removed: Our customers may also take actions that we cannot control or anticipate, such as changing their business strategy or introducing products that may compete with ours.
−Removed: Additionally, industry consolidation has generally led to our customers becoming larger and more sophisticated buyers of our products, leveraging their buying power and negotiating strength to improve their profitability through more favorable contractual terms.
+Added: Our customers may also take actions that we cannot control or anticipate, such as changing their business strategy, merging with our competitors or introducing products that may compete with ours.
+Added: Additionally, industry consolidation has generally led to our customers becoming larger and more sophisticated buyers of our products, leveraging their buying power and negotiating strength to improve their profitability through more
+Added: favorable contractual terms.
To the extent we provide contractual concessions such as lower prices or more favorable trade terms, our margins would be reduced.
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Our customers generally have no obligation to continue or otherwise extend their purchasing, and there can be no assurance that our customers will continue or otherwise extend their purchasing for similar periods or for the same amount of our products.
−Removed: The rate at which we retain our customers may decline or fluctuate as a result of a number of factors, including our end-use customers’ changing preferences, the shift among millennial coffee drinkers from hot brew towards cold brew and
−Removed: extracts (or any reversion thereof), satisfaction with our products and their prices, the prices of competing products, mergers and acquisitions affecting our direct customers, the effects of global economic conditions, and reductions in customers’ spending levels.
+Added: The rate at which we retain our customers may decline or fluctuate as a result of a number of factors, including our end-use customers’ changing preferences, the shift among millennial coffee drinkers from hot brew towards cold brew and extracts (or any reversion thereof), satisfaction with our products and their prices, the prices of competing products, mergers and acquisitions affecting our direct customers, the effects of global economic conditions, and reductions in customers’ spending levels.
If our customers do not continue purchasing our products, our revenues would decline, and we may not realize improved operating results from our customer base.
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In addition, we may not successfully integrate and manage businesses that we acquire or fully achieve anticipated cost savings and synergies from acquisitions in the timeframe we anticipate or at all and projections of the anticipated benefits of any acquisition can be negatively affected by intervening events beyond our control.
−Removed: There can be no assurance that we will successfully or efficiently integrate any businesses that we may acquire in the future, and the failure to do so could have a material adverse effect on our business, financial condition and operating results.
+Added: no assurance that we will successfully or efficiently integrate any businesses that we may acquire in the future, and the failure to do so could have a material adverse effect on our business, financial condition and operating results.
If we continue to grow rapidly, we may not be able to effectively manage the growth and increased complexity of our business and, as a result, our business, financial condition and operating results could suffer.
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Any enhancements, expansions and additions to our property, plant and equipment or workforce necessary to manage our growth could strain our resources, expose us to new legal risks in new jurisdictions, and cause operating difficulties.
−Removed: If we are unable to manage our growth and increased complexity
−Removed: effectively, we may be unable to execute our business plan, which could lead to a material adverse effect on our business, financial condition and operating results.
+Added: If we are unable to manage our growth and increased complexity effectively, we may be unable to execute our business plan, which could lead to a material adverse effect on our business, financial condition and operating results.
We are subject to U.S.
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Further, because of the potential risks, expenses, and uncertainties of litigation, we may, from time to time, settle disputes, even where we believe that we have meritorious claims or defenses.
−Removed: Any material legal proceedings (including class actions), disputes, claims, investigations, regulatory proceedings, or similar actions could have a material adverse effect on our business,
−Removed: results of operations, and financial condition.
+Added: Any material legal proceedings (including class actions), disputes, claims, investigations, regulatory proceedings, or similar actions could have a material adverse effect on our business, results of operations, and financial condition.
Our business reputation and our relationship with our customers, suppliers, and employees may also be adversely impacted by our involvement in legal proceedings.
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We cannot be certain that we will be able to address any such vulnerabilities, in whole or part, and there may be delays in developing and deploying patches and other remedial measures to adequately address vulnerabilities and taking such remedial steps could adversely impact or disrupt our operations.
−Removed: We expect similar issues to arise in the future as our products are more widely adopted, we continue to expand the features of existing products and introduce new products and we process, store, and transmit increasingly large amounts of personal and/or sensitive data.
+Added: We expect similar issues to arise in the future as our
+Added: products are more widely adopted, we continue to expand the features of existing products and introduce new products and we process, store, and transmit increasingly large amounts of personal and/or sensitive data.
An actual or perceived breach of our security systems or those of our third-party service providers may require notification under applicable data privacy regulations or for customer relations or publicity purposes, which could result in reputational harm, costly litigation (including class action litigation), material contract breaches, liability, settlement costs, loss of sales, regulatory scrutiny, actions or investigations, loss of confidence in our business, diversion of management’s time and attention, and significant fines, penalties, assessments, fees and expenses.
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The successful assertion of one or more large security incident or breach-related claims against us that exceeds our available insurance coverage, or results in changes to our insurance policies (including premium increases or the imposition of large deductible or co-insurance requirements), could harm our business.
−Removed: In addition, we cannot be sure that our existing
−Removed: insurance coverage will continue to be available on acceptable terms or that our insurers will not deny coverage as to all or part of any future claim or loss.
+Added: In addition, we cannot be sure that our existing insurance coverage will continue to be available on acceptable terms or that our insurers will not deny coverage as to all or part of any future claim or loss.
The unauthorized access, theft, use or destruction of personal, financial or other confidential information relating to our customers, suppliers, employees or business could expose us to reputational damage and operational risk, negatively affect our business and expose us to potential liability.
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If we are found to infringe on the intellectual property rights of others, we could incur significant liability for damages, be enjoined from continuing to manufacture, market or use the affected product, or be required to enter into royalty or licensing agreements in order to obtain the right to use a third party’s intellectual property.
−Removed: Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all.
+Added: Any royalty or licensing
+Added: agreements, if required, may not be available to us on acceptable terms or at all.
Similarly, changing products or processes to avoid infringing the rights of others may be costly or impracticable.
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Assuming that the liquidation preference of the Series A Preferred Shares remains $11.50 per share and all 23,510,527 Series A Preferred Shares remain outstanding after February 26, 2028, we estimate an aggregate redemption payment of at least approximately $270.4 million.
−Removed: If Westrock was required by the holders to redeem a significant number of Series A Preferred Shares, Westrock may not have enough cash available (including through draws on its credit facility) for other purposes such as servicing its debt, paying dividends on the Common Shares, repurchases of Common Shares, financing acquisitions or other expansions, paying employee incentives and executing its business strategy.
+Added: If Westrock was required by the holders to redeem a significant number of Series A Preferred Shares, Westrock may not have enough cash available (including through draws on its credit facility) for
+Added: other purposes such as servicing its debt, paying dividends on the Common Shares, repurchases of Common Shares, financing acquisitions or other expansions, paying employee incentives and executing its business strategy.
An outflow of a significant amount of cash from Westrock as a result of redemptions of the Series A Preferred Shares may cause a deterioration in the financial condition of Westrock and our ability to pay our other obligations and/or execute our business strategy.
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Section 203 of the DGCL provides that, subject to limited exceptions, a person that acquires, or is affiliated with a person that acquires, more than 15% of the outstanding voting stock of a Delaware corporation (an “interested stockholder”) must not engage in any business combination with that corporation, including by merger, consolidation or acquisitions of additional shares, for a three-year period following the date on which the person became an interested stockholder, unless (i) prior to such time, the board of directors of such corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;
−Removed: (ii) upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of such corporation at the time the transaction commenced (excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) the voting stock owned by directors who are also officers or held in employee benefit plans in which the employees do not have a confidential right to tender or vote stock held by the plan);
+Added: (ii) upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of such corporation at the time the transaction commenced (excluding for purposes of determining the voting stock outstanding (but not the outstanding
+Added: voting stock owned by the interested stockholder) the voting stock owned by directors who are also officers or held in employee benefit plans in which the employees do not have a confidential right to tender or vote stock held by the plan);
or (iii) on or subsequent to such time the business combination is approved by the board of directors of such corporation and authorized at a meeting of stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock of such corporation not owned by the interested stockholder.
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As a result, Westrock’s financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates, and Westrock will incur additional costs in connection with complying with the accounting standards applicable to public companies at such time or times as they become applicable to Westrock.
+Added: The Company anticipates that it will no longer be an emerging growth company as of December 31, 2026 and, as a result, we will no longer be able to take advantage of the reduced disclosure and other obligations that are available to emerging growth companies after that date.
Risks Related to Our Industry
−Removed: Increases in the cost of green coffee may not be able to be passed through to customers, which could adversely impact our gross margins and profitability.
+Added: Increases in the cost of green coffee may not be able to be passed through to customers, which could adversely impact our liquidity, gross margins and profitability.
Our primary raw material green coffee is an exchange-traded agricultural commodity that is subject to price fluctuations, depending on a variety of factors, including outside speculative influences such as indexed and algorithmic commodity funds, climate patterns in coffee-producing countries, economic and political conditions affecting coffee-producing countries such as unrest and armed conflict, foreign currency fluctuations, real or perceived supply shortages, crop disease (such as coffee rust) and pests, general increase in farm inputs and costs of production, an increase in green coffee purchased and sold on a negotiated basis rather than directly on commodity markets in response to higher production costs relative to “C” market prices, acts of terrorism, pandemics or other disease outbreaks, government actions and trade barriers or tariffs, and the actions of producer organizations that have historically attempted to influence green coffee prices through agreements establishing export quotas or by otherwise limiting coffee supplies.
−Removed: During the year ended December 31, 2024, market prices for green coffee increased approximately 70%, and from January 1, 2025 through the date of this Annual Report on Form 10-K, the “C” market price has continued to increase, surpassing $4.00 per pound of green coffee, reaching all-time highs.
+Added: During 2024 and 2025, market prices for green coffee were elevated relative to historical prices, at times exceeding $4.00 per pound of green coffee for sustained periods of time.
+Added: Elevated market prices impact the entire supply chain, as exporters, traders, suppliers and roasters require increased working capital to fund rising green coffee costs, and without having access to sufficient working capital, supply chain disruptions may emerge.
Additionally, specialty green coffees tend to trade on a negotiated basis at a premium above the “C” market price.
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Additionally, if we are unable to purchase sufficient quantities of green coffee due to any of the factors described herein or a worldwide or regional shortage, we may not be able to fulfill the demand for our products, which could have an adverse impact on our business and financial results.
−Removed: We have historically utilized, and expect to continue to utilize, various types of derivative instruments, including forward contracts, futures contracts, and option contracts to hedge our exposure to the commodities price variability of green coffee.
+Added: We have historically utilized, and expect to continue to utilize, various types of derivative instruments, including forward contracts, commodity swaps, futures contracts, and option contracts to hedge our exposure to the commodities price variability of green coffee.
Our hedging strategy is an important part of our business model as it allows us to fix raw materials costs for inventory needed to grow our business, while minimizing the margin volatility associated with fluctuations in the prices of green coffee.
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While our derivatives strategy may mitigate the impacts of volatile green coffee prices, no strategy can eliminate all pricing risks, and we generally remain exposed to supply risk in the event of nonperformance by the counterparties in any one of our physical contracts.
−Removed: Failure to properly execute an
−Removed: effective hedging strategy with respect to the price of green coffee may materially adversely affect our business and operating results.
−Removed: Fluctuations in other commodity prices and in the availability of certain of our ingredients and packaging materials could negatively affect our margins and profitability.
+Added: Failure to properly execute an effective hedging strategy with respect to the price of green coffee may materially adversely affect our business and operating results.
+Added: Fluctuations in other commodity prices and in the availability of certain of our ingredients and packaging materials could negatively affect our liquidity, gross margins and profitability.
In addition to green coffee, our other commodity inputs are also exposed to the risk of cost fluctuations.
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Changes in the prices we pay may take place on a monthly, quarterly or annual basis depending on the product and supplier.
−Removed: We do not purchase any derivative instruments to hedge cost fluctuations in these other commodities like we do with respect to green coffee, but we may do so in the future.
+Added: We currently do not purchase any derivative instruments to hedge cost fluctuations in these other commodities like we do with respect to green coffee, but we may do so in the future.
As a result, to the extent we are unable to pass along such costs through price increases, our margins and profitability will decrease.
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Additionally, if as a result of these factors, we are unable to obtain these commodities, we may not be able to fulfill the demand for our products, which could have an adverse impact on our business and financial results.
−Removed: We are subject to risks associated with operating a coffee trading business and a coffee exporting business, including those associated with the availability and prices of green coffee.
−Removed: Falcon, our coffee trading business headquartered in the United Kingdom, operates as a separate subsidiary, and we maintain a coffee exporting business in Peru.
−Removed: RTC, our coffee exporting business headquartered in Rwanda, is also operated as a separate subsidiary.
+Added: We are subject to risks associated with operating a coffee trading, including those associated with the availability and prices of green coffee.
+Added: Falcon, our coffee trading business headquartered in the United Kingdom, operates as a separate subsidiary.
As a purchaser and reseller of coffee, Falcon engages in commodity hedging and is reliant on third-party logistics suppliers to fulfill its commitments.
Disruptions in Falcon’s supply chain could result in the failure to deliver on commitments, which could adversely impact Falcon’s business, cash flows and financial performance.
−Removed: Both RTC and Falcon rely on third party financing sources to purchase coffee for resale, and in each case, the failure to maintain an adequate source of working capital would have a material adverse impact on their respective businesses, cash flows and financial performance.
+Added: Falcon relies on third party financing sources to purchase coffee for resale, and the failure to maintain an adequate source of working capital would have a material adverse impact on its business, cash flows and financial performance.
The availability and prices of green coffee are subject to wide fluctuations, including impacts from factors outside of our control such as changes in weather conditions, climate change, rising sea levels, crop disease, plantings, government programs and policies, competition, and changes in global demand.
−Removed: These price fluctuations can adversely affect the business of each of Falcon and RTC.
+Added: These price fluctuations can adversely affect Falcon’s business.
We are exposed to risks associated with the interruption of supply and increased costs as a result of our reliance on suppliers and third-party transportation carriers for shipment of our products.
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Nonperformance by suppliers and the lack of alternative suppliers could expose us to supply risk under purchase commitments for coffee, tea, and other ingredients for delivery in the future.
−Removed: Further, there may be a limited numbers of suppliers for certain ingredients, and, as a result of this concentration, our business and operations may in the future be negatively affected if our key suppliers experience significant disruptions affecting the price, quality, availability or timely delivery of their products, we suffer a partial or complete loss of, or a significant adverse change in the relationship with, any one of our key suppliers or any key suppliers refuse or are unable to provide us with necessary ingredients and raw materials.
+Added: Further, there may be a limited numbers of suppliers for certain ingredients, and, as a result of this concentration, our business and operations may in the future be negatively affected if our key suppliers experience significant disruptions affecting the price, quality, availability or timely delivery of their products, we suffer a
+Added: partial or complete loss of, or a significant adverse change in the relationship with, any one of our key suppliers or any key suppliers refuse or are unable to provide us with necessary ingredients and raw materials.
Additionally, supply is affected by many factors in the coffee-growing countries including weather, pest damage, economic conditions, acts of terrorism, as well as efforts by coffee growers to expand or form cartels or associations.
Our operations are also exposed to the political and social environment of the emerging and less developed markets from which we source coffee beans, including Africa, Indonesia, and Central and South America.
−Removed: These regions have the potential for civil and political unrest, and such instability could affect our ability to purchase coffee from those regions.
−Removed: If green coffee beans from a
−Removed: region become unavailable or prohibitively expensive, we could be forced to use alternative coffee beans or discontinue certain blends, which could adversely impact our sales.
+Added: These regions currently have and have the potential for future civil and political unrest, and such instability could affect our ability to purchase coffee from those regions.
+Added: If green coffee beans from a region become unavailable or prohibitively expensive, we could be forced to use alternative coffee beans or discontinue certain blends, which could adversely impact our sales.
Any material interruption in our supply chain, such as material interruption of roasted coffee supply due to the casualty loss at any of our roasting plants or suppliers, interruptions in service by our third-party logistic service providers or common carriers that ship goods within our distribution channels, trade restrictions, such as increased tariffs or quotas, embargoes or customs restrictions, pandemics, social or labor unrest, natural disasters or political disputes and military conflicts that cause a material disruption in our supply chain could have a negative impact on our business and our profitability.
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Sales of hot coffee products are typically higher during the winter months compared to the summer months.
−Removed: Most of our customers define “coffee season” as mid-September through April.
+Added: Most of our customers define “coffee season” as mid-September through February.
+Added: However, sales of cold brew, iced tea and extract products from March through August helps mitigate the impact of seasonality.
Our quarterly operating results may fluctuate as a result of these seasonal trends.
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Our mitigation strategies, including working with our warehouse and over the road haulage vendors, have provided us the necessary flexibility to respond to the risks, and have ensured that we have adequate access to raw materials to reliably provide our customers with the high-quality products they expect.
−Removed: In addition, where possible, we seek to recover inflation impacted
−Removed: costs by passing these costs onto our customers through periodic pricing increases.
+Added: In addition, where possible, we seek to recover inflation impacted costs by passing these costs onto our customers through periodic pricing increases.
However, our pricing increases often lag our cost increases, including increases in commodity costs.
−Removed: At this time, it is too early to determine what impact these inflationary pressures and supply chain disruptions will have on our long-term growth strategies, as there is uncertainty in how long these risks may persist, and to what extent we will be successful in passing these increased costs to our customers.
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.