arcee-ai/sec-data-full · Datasets at Hugging Face

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suppliers. As such, we are exposed to risks relating to the quality of such products. In the event that any of our products prove to be
defective, we may be required to recall or redesign such products, which would result in significant unexpected costs. 55 We are also exposed to potential claims arising
from the conduct of our employees and contractors, for which we may be contractually liable. We have in the past been, and may in
the future be, subject to penalties and other liabilities in connection with injury or damage incurred in conjunction with the installation of
our products. In addition, our contracts, particularly those
with large single-family and multi-family homebuilders, contain certain performance and installation schedule requirements. Many factors,
some of which our outside of our control, may affect our ability to meet these requirements, including shortages of material or skilled
labor, unforeseen engineering problems, work stoppages, weather interference, floods, unanticipated cost increases, and legal or political
challenges. If we do not meet these requirements, we may be subject to liquidated damages or other penalties, as well as claims for breach
of contract. Product liability, workmanship warranty, casualty,
negligence, construction defect, breach of contract and other claims and legal proceedings can be expensive to defend and can divert the
attention of management and other personnel for significant periods of time, regardless of the ultimate outcome. In addition, lawsuits
relating to construction defects typically have statutes of limitations that can run as long as ten years. Claims of this nature could
also have a negative impact on customer confidence in us and our services. Although we currently maintain what we believe to be suitable
and adequate insurance, we may be unable to maintain such insurance on acceptable terms or such insurance may not provide adequate protection
against potential liabilities. In addition, some liabilities may not be covered by our insurance. Current or future claims could have
a material adverse effect on our reputation, business, financial condition and results of operations. If we are unable to compete successfully
with our competitors, our financial condition and results of operations may be harmed. We operate in a highly
fragmented and very competitive industry. Our competitors include national and local carpentry manufacturers. These can be large, consolidated
operations which house their manufacturing facilities in large and efficient plants, as well as relatively small, local cabinetmakers.
Although we believe that we have superior name and reputation of direct marketing of custom designed carpentry, we compete with numerous
competitors in our primary markets in which we operate, with reputation, price, workmanship and services being the principal competitive
factors. Some of our competitors have achieved substantially more market penetration in certain of the markets in which we operate. Some
of our competitors have greater resources available and are less highly leveraged, which may provide them with greater financial flexibility.
We also compete against retail chains, including Sears, Costco, Builders Square, Sam’s Warehouse Club and other stores, which offer
similar products and services through licensees. We compete, to a lesser extent, with small home improvement contractors and with large
“home center” retailers such as Home Depot and Lowes. As a result of the implementation of our business strategy to conduct
more remodel, condo/multi-family, and commercial projects in the new construction markets, we anticipate that we will compete to a greater
degree with large “home center” retailers. To remain competitive, we will need to invest continuously in manufacturing, customer
service and support, marketing and our dealer network. We may have to adjust the prices of some of our products to stay competitive, which
would reduce our revenues or harm our financial condition and result of operations. We may not have sufficient resources to continue to
make such investments or maintain our competitive position within each of the markets we serve. We have historically depended on a limited
number of third parties to supply key finished goods and raw materials to us. Failure to obtain a sufficient supply of these finished
goods and raw materials in a timely fashion and at reasonable costs could significantly delay our delivery of products, which would cause
us to breach our sales contracts with our customers. We have historically
purchased certain key finished goods and raw materials, such as pre-manufactured doors, cabinets, countertops, lumber and hardware, from
a limited number of suppliers. We purchased finished goods and raw materials on the basis of purchase orders. In the absence of firm and
long-term contracts, we may not be able to obtain a sufficient supply of these finished goods and raw materials from our existing suppliers
or alternates in a timely fashion or at a reasonable cost. If we fail to secure a sufficient supply of key finished goods and raw materials
in a timely fashion, it would result in a significant delay in our delivery of products, which may cause us to breach our sales contracts
with our customers. Furthermore, failure to obtain sufficient supply of these finished goods and raw materials at a reasonable cost could
also harm our revenue and gross profit margins. Increased prices
for finished goods or raw materials could increase our cost of sales and decrease demand for our products, which could adversely affect
our revenue or profitability. Our profitability is
affected by the prices of the finished goods and raw materials used in the manufacturing and sale of our products. These prices may fluctuate
based on a number of factors beyond our control, including, among others, changes in supply and demand, general economic conditions, labor
costs, competition, import duties, tariffs, currency exchange rates and, in some cases, government regulation. Increased prices could
adversely affect our profitability or revenues. We do not have long-term supply contracts for the finished goods and raw materials; however,
we enter into pricing agreements with certain customers which fix their pricing for specified periods ranging from one to twelve months.
Significant increases in the prices of finished goods and raw materials could adversely affect our profit margins, especially if we are
not able to recover these costs by increasing the prices we charge our customers for our products. 56 Interruptions in
deliveries of finished goods and raw materials could adversely affect our revenue or profitability. Our dependency upon regular
deliveries from particular suppliers means that interruptions or stoppages in such deliveries could adversely affect our operations until
arrangements with alternate suppliers could be made. If any of our suppliers were unable to deliver finished goods and raw materials to
us for an extended period of time, as the result of financial difficulties, catastrophic events affecting their facilities or other factors
beyond our control, or if we were unable to negotiate acceptable terms for the supply of finished goods and raw materials with these or
alternative suppliers, our business could suffer. We may not be able to find acceptable alternatives, and any such alternatives could
result in increased costs for us. Even if acceptable alternatives are found, the process of locating and securing such alternatives might
be disruptive to our business. Extended unavailability of a necessary finished good or raw material could cause us to cease manufacturing
or selling one or more of our products for a period of time. Environmental requirements
applicable to our facilities may impose significant environmental compliance costs and liabilities, which would adversely affect our results
of operations. Our facilities are subject
to numerous federal, state and local laws and regulations relating to pollution and the protection of the environment, including those
governing emissions to air, discharges to water, storage, treatment and disposal of waste, remediation of contaminated sites and protection
of worker health and safety. We believe we are in substantial compliance with all applicable requirements. However, our efforts to comply
with environmental requirements do not remove the risk that we may be held liable, or incur fines or penalties, and that the amount of
liability, fines or penalties may be material, for, among other things, releases of hazardous substances occurring on or emanating from
current or formerly owned or operated properties or any associated offsite disposal location, or for contamination discovered at any of
our properties from activities conducted by previous occupants. Changes in environmental
laws and regulations or the discovery of previously unknown contamination or other liabilities relating to our properties and operations
could result in significant environmental liabilities. In addition, we might incur significant capital and other costs to comply with
increasingly stringent air emission control laws and enforcement policies which would decrease our cash flow. We may fail to
fully realize the anticipated benefits of our growth strategy within the multi-family and commercial properties channels. Part of our growth strategy
depends on expanding our business in the multi-family and commercial properties channels. We may fail to compete successfully against
other companies that are already established providers within those channels. Demand for our products within the multi-family and commercial
properties channels may not grow, or might even decline. In addition, trends within the industry change often, we may not accurately gauge
consumer preferences and successfully develop, manufacture and market our products. Our failure to anticipate, identify or react to changes
in these trends could lead to, among other things, rejection of a new product line, reduced demand and price reductions for our products,
and could adversely affect our sales. Further, the implementation of our growth strategy may place additional demands on our administrative,
operational and financial resources and may divert management’s attention away from our existing business and increase the demands
on our financial systems and controls. If our management is unable to effectively manage growth, our business, financial condition or
results of operations could be adversely affected. If our growth strategy is not successful then our revenue and earnings may not grow
as anticipated or may decline, we may not be profitable, or our reputation and brand may be damaged. In addition, we may change our financial
strategy or other components of our overall business strategy if we believe our current strategy is not effective, if our business or
markets change, or for other reasons, which may cause fluctuations in our financial results. 57 Risks Related to Our Automotive Supply Business If we fail to offer
a broad selection of products at competitive prices or fail to maintain sufficient inventory to meet customer demands, our revenue could
decline. In order to expand our
business, we must successfully offer, on a continuous basis, a broad selection of products that meet the needs of our customers, including
by being the first to market with new products. In addition, to be successful, our product offerings must be broad and deep in scope,
competitively priced, well-made, innovative and attractive to a wide range of consumers. We cannot predict with certainty that we will
be successful in offering products that meet all of these requirements. Moreover, even if we offer a broad selection of products at competitive
prices, we must maintain sufficient in-stock inventory to meet consumer demand. If our product offerings fail to satisfy our customers’
requirements or respond to changes in customer preferences or we otherwise fail to maintain sufficient in-stock inventory, our revenue
could decline. We are highly dependent
upon key suppliers and an interruption in such relationships or our ability to obtain products from such suppliers could adversely affect
our business and results of operations. In 2021 and 2020, Wolo
purchased a substantial portion of finished goods from four third-party vendors which comprised of 61.4% and 56% of its purchases, respectively.
Our ability to acquire products from our suppliers in amounts and on terms acceptable to us is dependent upon a number of factors that
could affect our suppliers and which are beyond our control. For example, financial or operational difficulties that some of our suppliers
may face could result in an increase in the cost of the products we purchase from them. If we do not maintain our relationships with our

suppliers. As such, we are exposed to risks relating to the quality of such products. In the event that any of our products prove to be

defective, we may be required to recall or redesign such products, which would result in significant unexpected costs. 55 We are also exposed to potential claims arising

from the conduct of our employees and contractors, for which we may be contractually liable. We have in the past been, and may in

the future be, subject to penalties and other liabilities in connection with injury or damage incurred in conjunction with the installation of

our products. In addition, our contracts, particularly those

with large single-family and multi-family homebuilders, contain certain performance and installation schedule requirements. Many factors,

some of which our outside of our control, may affect our ability to meet these requirements, including shortages of material or skilled

labor, unforeseen engineering problems, work stoppages, weather interference, floods, unanticipated cost increases, and legal or political

challenges. If we do not meet these requirements, we may be subject to liquidated damages or other penalties, as well as claims for breach

of contract. Product liability, workmanship warranty, casualty,

negligence, construction defect, breach of contract and other claims and legal proceedings can be expensive to defend and can divert the

attention of management and other personnel for significant periods of time, regardless of the ultimate outcome. In addition, lawsuits

relating to construction defects typically have statutes of limitations that can run as long as ten years. Claims of this nature could

also have a negative impact on customer confidence in us and our services. Although we currently maintain what we believe to be suitable

and adequate insurance, we may be unable to maintain such insurance on acceptable terms or such insurance may not provide adequate protection

against potential liabilities. In addition, some liabilities may not be covered by our insurance. Current or future claims could have

a material adverse effect on our reputation, business, financial condition and results of operations. If we are unable to compete successfully

with our competitors, our financial condition and results of operations may be harmed. We operate in a highly

fragmented and very competitive industry. Our competitors include national and local carpentry manufacturers. These can be large, consolidated

operations which house their manufacturing facilities in large and efficient plants, as well as relatively small, local cabinetmakers.

Although we believe that we have superior name and reputation of direct marketing of custom designed carpentry, we compete with numerous

competitors in our primary markets in which we operate, with reputation, price, workmanship and services being the principal competitive

factors. Some of our competitors have achieved substantially more market penetration in certain of the markets in which we operate. Some

of our competitors have greater resources available and are less highly leveraged, which may provide them with greater financial flexibility.

We also compete against retail chains, including Sears, Costco, Builders Square, Sam’s Warehouse Club and other stores, which offer

similar products and services through licensees. We compete, to a lesser extent, with small home improvement contractors and with large

“home center” retailers such as Home Depot and Lowes. As a result of the implementation of our business strategy to conduct

more remodel, condo/multi-family, and commercial projects in the new construction markets, we anticipate that we will compete to a greater

degree with large “home center” retailers. To remain competitive, we will need to invest continuously in manufacturing, customer

service and support, marketing and our dealer network. We may have to adjust the prices of some of our products to stay competitive, which

would reduce our revenues or harm our financial condition and result of operations. We may not have sufficient resources to continue to

make such investments or maintain our competitive position within each of the markets we serve. We have historically depended on a limited

number of third parties to supply key finished goods and raw materials to us. Failure to obtain a sufficient supply of these finished

goods and raw materials in a timely fashion and at reasonable costs could significantly delay our delivery of products, which would cause

us to breach our sales contracts with our customers. We have historically

purchased certain key finished goods and raw materials, such as pre-manufactured doors, cabinets, countertops, lumber and hardware, from

a limited number of suppliers. We purchased finished goods and raw materials on the basis of purchase orders. In the absence of firm and

long-term contracts, we may not be able to obtain a sufficient supply of these finished goods and raw materials from our existing suppliers

or alternates in a timely fashion or at a reasonable cost. If we fail to secure a sufficient supply of key finished goods and raw materials

in a timely fashion, it would result in a significant delay in our delivery of products, which may cause us to breach our sales contracts

with our customers. Furthermore, failure to obtain sufficient supply of these finished goods and raw materials at a reasonable cost could

also harm our revenue and gross profit margins. Increased prices

for finished goods or raw materials could increase our cost of sales and decrease demand for our products, which could adversely affect

our revenue or profitability. Our profitability is

affected by the prices of the finished goods and raw materials used in the manufacturing and sale of our products. These prices may fluctuate

based on a number of factors beyond our control, including, among others, changes in supply and demand, general economic conditions, labor

costs, competition, import duties, tariffs, currency exchange rates and, in some cases, government regulation. Increased prices could

adversely affect our profitability or revenues. We do not have long-term supply contracts for the finished goods and raw materials; however,

we enter into pricing agreements with certain customers which fix their pricing for specified periods ranging from one to twelve months.

Significant increases in the prices of finished goods and raw materials could adversely affect our profit margins, especially if we are

not able to recover these costs by increasing the prices we charge our customers for our products. 56 Interruptions in

deliveries of finished goods and raw materials could adversely affect our revenue or profitability. Our dependency upon regular

deliveries from particular suppliers means that interruptions or stoppages in such deliveries could adversely affect our operations until

arrangements with alternate suppliers could be made. If any of our suppliers were unable to deliver finished goods and raw materials to

us for an extended period of time, as the result of financial difficulties, catastrophic events affecting their facilities or other factors

beyond our control, or if we were unable to negotiate acceptable terms for the supply of finished goods and raw materials with these or

alternative suppliers, our business could suffer. We may not be able to find acceptable alternatives, and any such alternatives could

result in increased costs for us. Even if acceptable alternatives are found, the process of locating and securing such alternatives might

be disruptive to our business. Extended unavailability of a necessary finished good or raw material could cause us to cease manufacturing

or selling one or more of our products for a period of time. Environmental requirements

applicable to our facilities may impose significant environmental compliance costs and liabilities, which would adversely affect our results

of operations. Our facilities are subject

to numerous federal, state and local laws and regulations relating to pollution and the protection of the environment, including those

governing emissions to air, discharges to water, storage, treatment and disposal of waste, remediation of contaminated sites and protection

of worker health and safety. We believe we are in substantial compliance with all applicable requirements. However, our efforts to comply

with environmental requirements do not remove the risk that we may be held liable, or incur fines or penalties, and that the amount of

liability, fines or penalties may be material, for, among other things, releases of hazardous substances occurring on or emanating from

current or formerly owned or operated properties or any associated offsite disposal location, or for contamination discovered at any of

our properties from activities conducted by previous occupants. Changes in environmental

laws and regulations or the discovery of previously unknown contamination or other liabilities relating to our properties and operations

could result in significant environmental liabilities. In addition, we might incur significant capital and other costs to comply with

increasingly stringent air emission control laws and enforcement policies which would decrease our cash flow. We may fail to

fully realize the anticipated benefits of our growth strategy within the multi-family and commercial properties channels. Part of our growth strategy

depends on expanding our business in the multi-family and commercial properties channels. We may fail to compete successfully against

other companies that are already established providers within those channels. Demand for our products within the multi-family and commercial

properties channels may not grow, or might even decline. In addition, trends within the industry change often, we may not accurately gauge

consumer preferences and successfully develop, manufacture and market our products. Our failure to anticipate, identify or react to changes

in these trends could lead to, among other things, rejection of a new product line, reduced demand and price reductions for our products,

and could adversely affect our sales. Further, the implementation of our growth strategy may place additional demands on our administrative,

operational and financial resources and may divert management’s attention away from our existing business and increase the demands

on our financial systems and controls. If our management is unable to effectively manage growth, our business, financial condition or

results of operations could be adversely affected. If our growth strategy is not successful then our revenue and earnings may not grow

as anticipated or may decline, we may not be profitable, or our reputation and brand may be damaged. In addition, we may change our financial

strategy or other components of our overall business strategy if we believe our current strategy is not effective, if our business or

markets change, or for other reasons, which may cause fluctuations in our financial results. 57 Risks Related to Our Automotive Supply Business If we fail to offer

a broad selection of products at competitive prices or fail to maintain sufficient inventory to meet customer demands, our revenue could

decline. In order to expand our

business, we must successfully offer, on a continuous basis, a broad selection of products that meet the needs of our customers, including

by being the first to market with new products. In addition, to be successful, our product offerings must be broad and deep in scope,

competitively priced, well-made, innovative and attractive to a wide range of consumers. We cannot predict with certainty that we will

be successful in offering products that meet all of these requirements. Moreover, even if we offer a broad selection of products at competitive

prices, we must maintain sufficient in-stock inventory to meet consumer demand. If our product offerings fail to satisfy our customers’

requirements or respond to changes in customer preferences or we otherwise fail to maintain sufficient in-stock inventory, our revenue

could decline. We are highly dependent

upon key suppliers and an interruption in such relationships or our ability to obtain products from such suppliers could adversely affect

our business and results of operations. In 2021 and 2020, Wolo

purchased a substantial portion of finished goods from four third-party vendors which comprised of 61.4% and 56% of its purchases, respectively.

Our ability to acquire products from our suppliers in amounts and on terms acceptable to us is dependent upon a number of factors that

could affect our suppliers and which are beyond our control. For example, financial or operational difficulties that some of our suppliers

may face could result in an increase in the cost of the products we purchase from them. If we do not maintain our relationships with our