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

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property rights. The outcome of such litigation can be uncertain, and the cost of prosecuting such litigation may have an adverse impact
on our earnings. We have patent and trademark registrations for several patents and marks. However, any registrations may not adequately
cover our intellectual property or protect us against infringement by others. Effective patent, trademark, service mark, copyright and
trade secret protection may not be available in every country in which our products and services may be made available online. We also
currently own or control a number of Internet domain names and have invested time and money in the purchase of domain names and other
intellectual property, which may be impaired if we cannot protect such intellectual property. We may be unable to protect these domain
names or acquire or maintain relevant domain names in the United States and in other countries. If we are not able to protect our patents,
trademarks, domain names or other intellectual property, we may experience difficulties in achieving and maintaining brand recognition
and customer loyalty. Because we are involved in litigation from
time to time and are subject to numerous laws and governmental regulations, we could incur substantial judgments, fines, legal fees and
other costs as well as reputational harm. We are sometimes the
subject of complaints or litigation from customers, employees or other third parties for various reasons. The damages sought against us
in some of these litigation proceedings could be substantial. Although we maintain liability insurance for some litigation claims, if
one or more of the claims were to greatly exceed our insurance coverage limits or if our insurance policies do not cover a claim, this
could have a material adverse effect on our business, financial condition, results of operations and cash flows. 63 Existing or future
government regulation could expose us to liabilities and costly changes in our business operations and could reduce customer demand for
our products and services. We are subject to federal
and state consumer protection laws and regulations, including laws protecting the privacy of customer non-public information and regulations
prohibiting unfair and deceptive trade practices, as well as laws and regulations governing businesses in general and the Internet and
e-commerce and certain environmental laws. Additional laws and regulations may be adopted with respect to the Internet. These laws may
cover issues such as user privacy, spyware and the tracking of consumer activities, marketing e-mails and communications, other advertising
and promotional practices, money transfers, pricing, content and quality of products and services, taxation, electronic contracts and
other communications, intellectual property rights, and information security. Furthermore, it is not clear how existing laws such as those
governing issues such as property ownership, sales and other taxes, trespass, data mining and collection, and personal privacy apply to
the Internet and e-commerce. To the extent we expand into international markets, we will be faced with complying with local laws and regulations,
some of which may be materially different than U.S. laws and regulations. Any such foreign law or regulation, any new U.S. law or regulation,
or the interpretation or application of existing laws and regulations to our business may have a material adverse effect on our business,
prospects, financial condition and results of operations by, among other things, subjecting us to fines, penalties, damages or other liabilities,
requiring costly changes in our business operations and practices, and reducing customer demand for our products and services. We may
not maintain sufficient, or any, insurance coverage to cover the types of claims or liabilities that could arise as a result of such regulation. We may be affected
by global climate change or by legal, regulatory, or market responses to such change. The growing political
and scientific sentiment is that global weather patterns are being influenced by increased levels of greenhouse gases in the earth’s
atmosphere. This growing sentiment and the concern over climate change have led to legislative and regulatory initiatives aimed at reducing
greenhouse gas emissions which warm the earth’s atmosphere. These warmer weather conditions could result in a decrease in demand
for auto parts in general. Moreover, proposals that would impose mandatory requirements on greenhouse gas emissions continue to be considered
by policy makers in the United States. Laws enacted that directly or indirectly affect our suppliers (through an increase in the cost
of production or their ability to produce satisfactory products) or our business (through an impact on our inventory availability, cost
of sales, operations or demand for the products we sell) could adversely affect our business, financial condition, results of operations
and cash flows. Significant increases in fuel economy requirements or new federal or state restrictions on emissions of carbon dioxide
that may be imposed on vehicles and automobile fuels could adversely affect demand for vehicles, annual miles driven or the products we
sell or lead to changes in automotive technology. Compliance with any new or more stringent laws or regulations, or stricter interpretations
of existing laws, could require additional expenditures by us or our suppliers. Our inability to respond to such changes could adversely
impact the demand for our products and our business, financial condition, results of operations or cash flows. Possible new tariffs
that might be imposed by the United States government could have a material adverse effect on our results of operations. Changes in U.S. and foreign
governments’ trade policies have resulted in, and may continue to result in, tariffs on imports into and exports from the U.S.,
among other restrictions. Throughout 2018 and 2019, the U.S. imposed tariffs on imports from several countries, including China. If further
tariffs are imposed on imports of our products, or retaliatory trade measures are taken by China or other countries in response to existing
or future tariffs, we could be forced to raise prices on all of our imported products or make changes to our operations, any of which
could materially harm our revenue or operating results. Any additional future tariffs or quotas imposed on our products or related materials
may impact our sales, gross margin and profitability if we are unable to pass increased prices onto our customers. 64 Risks Related to Our Relationship with Our
Manager Termination of the management services agreement
will not affect our manager’s rights to receive profit allocations and removal of our manager may cause us to incur significant
fees. Our manager owns all of our allocation shares,
which generally will entitle our manager to receive a profit allocation as a form of preferred distribution. In general, this profit allocation
is designed to pay our manager 20% of the excess of the gains upon dispositions of our subsidiaries, plus an amount equal to the net income
of such subsidiaries since their acquisition by us, over an annualized hurdle rate. If our manager resigns or is removed, for any reason,
it will remain the owner of our allocation shares. It will therefore remain entitled to all profit allocations while it holds our allocation
shares regardless of whether it is terminated as our manager. If we terminate our manager, it may therefore be difficult or impossible
for us to find a replacement to serve the function of our manager, because we would not be able to force our manager to transfer its allocation
shares to a replacement manager so that the replacement manager could be entitled to a profit allocation. Therefore, as a practical matter,
it may be difficult for us to replace our manager without its cooperation. If it becomes necessary to replace our manager and we are unable
to replace our manager without its cooperation, we may be unable to continue to manage our operations effectively and our business may
fail. If we terminate the management services agreement
with our manager, any fees, costs and expenses already earned or otherwise payable to our manager upon termination would become immediately
due. Moreover, if our manager were to be removed and our management services agreement terminated by a vote of our board of directors
and a majority of our common shares other than common shares beneficially owned by our manager, we would also owe a termination fee to
our manager on top of the other fees, costs and expenses. In addition, the management services agreement is silent as to whether termination
of our manager “for cause” would result in a termination fee; there is therefore a risk that the agreement may be interpreted
to entitle our manager to a termination fee even if terminated “for cause”. The termination fee would equal twice the sum
of the amount of the quarterly management fees calculated with respect to the four fiscal quarters immediately preceding the termination
date of the management services agreement. As a result, we could incur significant management fees as a result of the termination of our
manager, which may increase the risk that our business may be unable to meet its financial obligations or otherwise fail. Mr. Ellery W. Roberts, our Chairman and Chief
Executive Officer, controls our manager. If some event were to occur to cause Mr. Roberts (or his designated successor, heirs, beneficiaries
or permitted assigns) not to control our manager without the prior written consent of our board of directors, our manager would be considered
terminated under our agreement. Our manager and the members of our management
team may engage in activities that compete with us or our businesses. Although our Chief Executive Officer intends to
devote substantially all of his time to the affairs of our company and our manager must present all opportunities that meet our acquisition
and disposition criteria to our board of directors, neither our manager nor our Chief Executive Officer is expressly prohibited from investing
in or managing other entities. In this regard, the management services agreement and the obligation to provide management services will
not create a mutually exclusive relationship between our manager and its affiliates, on the one hand, and our company, on the other. See
Item 1 “ Business—Our Manager ” for more information about our relationship with our manager and our management
team. Our manager need not present an acquisition
opportunity to us if our manager determines on its own that such acquisition opportunity does not meet our acquisition criteria. Our manager will review any acquisition opportunity
to determine if it satisfies our acquisition criteria, as established by our board of directors from time to time. If our manager determines,
in its sole discretion, that an opportunity fits our criteria, our manager will refer the opportunity to our board of directors for its
authorization and approval prior to signing a letter of intent, indication of interest or similar document or agreement. Opportunities
that our manager determines do not fit our criteria do not need to be presented to our board of directors for consideration. In addition,
upon a determination by our board of directors not to promptly pursue an opportunity presented to it by our manager, in whole or in part,
our manager will be unrestricted in its ability to pursue such opportunity, or any part that we do not promptly pursue, on its own or
refer such opportunity to other entities, including its affiliates. If such an opportunity is ultimately profitable, we will have not
participated in such opportunity. See Item 1 “ Business—Our Manager—Acquisition and Disposition Opportunities ”
for more information about our current acquisition criteria. Our Chief Executive Officer, Mr. Ellery
W. Roberts, controls our manager and, as a result we may have difficulty severing ties with Mr. Roberts. Under the terms of the management services agreement,
our board of directors may, after due consultation with our manager, at any time request that our manager replace any individual seconded
to us, and our manager will, as promptly as practicable, replace any such individual. However, because Mr. Roberts controls our manager,
we may have difficulty completely severing ties with Mr. Roberts absent terminating the management services agreement and our relationship
with our manager. Further, termination of the management services agreement could give rise to a significant financial obligation, which
may have a material adverse effect on our business and financial condition. See Item 1 “ Business—Our Manager ”
for more information about our relationship with our manager. 65 If the management services agreement is
terminated, our manager, as holder of the allocation shares, has the right to cause us to purchase its allocation shares, which may have

property rights. The outcome of such litigation can be uncertain, and the cost of prosecuting such litigation may have an adverse impact

on our earnings. We have patent and trademark registrations for several patents and marks. However, any registrations may not adequately

cover our intellectual property or protect us against infringement by others. Effective patent, trademark, service mark, copyright and

trade secret protection may not be available in every country in which our products and services may be made available online. We also

currently own or control a number of Internet domain names and have invested time and money in the purchase of domain names and other

intellectual property, which may be impaired if we cannot protect such intellectual property. We may be unable to protect these domain

names or acquire or maintain relevant domain names in the United States and in other countries. If we are not able to protect our patents,

trademarks, domain names or other intellectual property, we may experience difficulties in achieving and maintaining brand recognition

and customer loyalty. Because we are involved in litigation from

time to time and are subject to numerous laws and governmental regulations, we could incur substantial judgments, fines, legal fees and

other costs as well as reputational harm. We are sometimes the

subject of complaints or litigation from customers, employees or other third parties for various reasons. The damages sought against us

in some of these litigation proceedings could be substantial. Although we maintain liability insurance for some litigation claims, if

one or more of the claims were to greatly exceed our insurance coverage limits or if our insurance policies do not cover a claim, this

could have a material adverse effect on our business, financial condition, results of operations and cash flows. 63 Existing or future

government regulation could expose us to liabilities and costly changes in our business operations and could reduce customer demand for

our products and services. We are subject to federal

and state consumer protection laws and regulations, including laws protecting the privacy of customer non-public information and regulations

prohibiting unfair and deceptive trade practices, as well as laws and regulations governing businesses in general and the Internet and

e-commerce and certain environmental laws. Additional laws and regulations may be adopted with respect to the Internet. These laws may

cover issues such as user privacy, spyware and the tracking of consumer activities, marketing e-mails and communications, other advertising

and promotional practices, money transfers, pricing, content and quality of products and services, taxation, electronic contracts and

other communications, intellectual property rights, and information security. Furthermore, it is not clear how existing laws such as those

governing issues such as property ownership, sales and other taxes, trespass, data mining and collection, and personal privacy apply to

the Internet and e-commerce. To the extent we expand into international markets, we will be faced with complying with local laws and regulations,

some of which may be materially different than U.S. laws and regulations. Any such foreign law or regulation, any new U.S. law or regulation,

or the interpretation or application of existing laws and regulations to our business may have a material adverse effect on our business,

prospects, financial condition and results of operations by, among other things, subjecting us to fines, penalties, damages or other liabilities,

requiring costly changes in our business operations and practices, and reducing customer demand for our products and services. We may

not maintain sufficient, or any, insurance coverage to cover the types of claims or liabilities that could arise as a result of such regulation. We may be affected

by global climate change or by legal, regulatory, or market responses to such change. The growing political

and scientific sentiment is that global weather patterns are being influenced by increased levels of greenhouse gases in the earth’s

atmosphere. This growing sentiment and the concern over climate change have led to legislative and regulatory initiatives aimed at reducing

greenhouse gas emissions which warm the earth’s atmosphere. These warmer weather conditions could result in a decrease in demand

for auto parts in general. Moreover, proposals that would impose mandatory requirements on greenhouse gas emissions continue to be considered

by policy makers in the United States. Laws enacted that directly or indirectly affect our suppliers (through an increase in the cost

of production or their ability to produce satisfactory products) or our business (through an impact on our inventory availability, cost

of sales, operations or demand for the products we sell) could adversely affect our business, financial condition, results of operations

and cash flows. Significant increases in fuel economy requirements or new federal or state restrictions on emissions of carbon dioxide

that may be imposed on vehicles and automobile fuels could adversely affect demand for vehicles, annual miles driven or the products we

sell or lead to changes in automotive technology. Compliance with any new or more stringent laws or regulations, or stricter interpretations

of existing laws, could require additional expenditures by us or our suppliers. Our inability to respond to such changes could adversely

impact the demand for our products and our business, financial condition, results of operations or cash flows. Possible new tariffs

that might be imposed by the United States government could have a material adverse effect on our results of operations. Changes in U.S. and foreign

governments’ trade policies have resulted in, and may continue to result in, tariffs on imports into and exports from the U.S.,

among other restrictions. Throughout 2018 and 2019, the U.S. imposed tariffs on imports from several countries, including China. If further

tariffs are imposed on imports of our products, or retaliatory trade measures are taken by China or other countries in response to existing

or future tariffs, we could be forced to raise prices on all of our imported products or make changes to our operations, any of which

could materially harm our revenue or operating results. Any additional future tariffs or quotas imposed on our products or related materials

may impact our sales, gross margin and profitability if we are unable to pass increased prices onto our customers. 64 Risks Related to Our Relationship with Our

Manager Termination of the management services agreement

will not affect our manager’s rights to receive profit allocations and removal of our manager may cause us to incur significant

fees. Our manager owns all of our allocation shares,

which generally will entitle our manager to receive a profit allocation as a form of preferred distribution. In general, this profit allocation

is designed to pay our manager 20% of the excess of the gains upon dispositions of our subsidiaries, plus an amount equal to the net income

of such subsidiaries since their acquisition by us, over an annualized hurdle rate. If our manager resigns or is removed, for any reason,

it will remain the owner of our allocation shares. It will therefore remain entitled to all profit allocations while it holds our allocation

shares regardless of whether it is terminated as our manager. If we terminate our manager, it may therefore be difficult or impossible

for us to find a replacement to serve the function of our manager, because we would not be able to force our manager to transfer its allocation

shares to a replacement manager so that the replacement manager could be entitled to a profit allocation. Therefore, as a practical matter,

it may be difficult for us to replace our manager without its cooperation. If it becomes necessary to replace our manager and we are unable

to replace our manager without its cooperation, we may be unable to continue to manage our operations effectively and our business may

fail. If we terminate the management services agreement

with our manager, any fees, costs and expenses already earned or otherwise payable to our manager upon termination would become immediately

due. Moreover, if our manager were to be removed and our management services agreement terminated by a vote of our board of directors

and a majority of our common shares other than common shares beneficially owned by our manager, we would also owe a termination fee to

our manager on top of the other fees, costs and expenses. In addition, the management services agreement is silent as to whether termination

of our manager “for cause” would result in a termination fee; there is therefore a risk that the agreement may be interpreted

to entitle our manager to a termination fee even if terminated “for cause”. The termination fee would equal twice the sum

of the amount of the quarterly management fees calculated with respect to the four fiscal quarters immediately preceding the termination

date of the management services agreement. As a result, we could incur significant management fees as a result of the termination of our

manager, which may increase the risk that our business may be unable to meet its financial obligations or otherwise fail. Mr. Ellery W. Roberts, our Chairman and Chief

Executive Officer, controls our manager. If some event were to occur to cause Mr. Roberts (or his designated successor, heirs, beneficiaries

or permitted assigns) not to control our manager without the prior written consent of our board of directors, our manager would be considered

terminated under our agreement. Our manager and the members of our management

team may engage in activities that compete with us or our businesses. Although our Chief Executive Officer intends to

devote substantially all of his time to the affairs of our company and our manager must present all opportunities that meet our acquisition

and disposition criteria to our board of directors, neither our manager nor our Chief Executive Officer is expressly prohibited from investing

in or managing other entities. In this regard, the management services agreement and the obligation to provide management services will

not create a mutually exclusive relationship between our manager and its affiliates, on the one hand, and our company, on the other. See

Item 1 “ Business—Our Manager ” for more information about our relationship with our manager and our management

team. Our manager need not present an acquisition

opportunity to us if our manager determines on its own that such acquisition opportunity does not meet our acquisition criteria. Our manager will review any acquisition opportunity

to determine if it satisfies our acquisition criteria, as established by our board of directors from time to time. If our manager determines,

in its sole discretion, that an opportunity fits our criteria, our manager will refer the opportunity to our board of directors for its

authorization and approval prior to signing a letter of intent, indication of interest or similar document or agreement. Opportunities

that our manager determines do not fit our criteria do not need to be presented to our board of directors for consideration. In addition,

upon a determination by our board of directors not to promptly pursue an opportunity presented to it by our manager, in whole or in part,

our manager will be unrestricted in its ability to pursue such opportunity, or any part that we do not promptly pursue, on its own or

refer such opportunity to other entities, including its affiliates. If such an opportunity is ultimately profitable, we will have not

participated in such opportunity. See Item 1 “ Business—Our Manager—Acquisition and Disposition Opportunities ”

for more information about our current acquisition criteria. Our Chief Executive Officer, Mr. Ellery

W. Roberts, controls our manager and, as a result we may have difficulty severing ties with Mr. Roberts. Under the terms of the management services agreement,

our board of directors may, after due consultation with our manager, at any time request that our manager replace any individual seconded

to us, and our manager will, as promptly as practicable, replace any such individual. However, because Mr. Roberts controls our manager,

we may have difficulty completely severing ties with Mr. Roberts absent terminating the management services agreement and our relationship

with our manager. Further, termination of the management services agreement could give rise to a significant financial obligation, which

may have a material adverse effect on our business and financial condition. See Item 1 “ Business—Our Manager ”

for more information about our relationship with our manager. 65 If the management services agreement is

terminated, our manager, as holder of the allocation shares, has the right to cause us to purchase its allocation shares, which may have