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New words:
abetting, abuse, Agency, aiding, alleged, appointed, assert, Black, breach, budget, Central, Chairman, claim, commitment, complaint, consumption, conventional, Court, Creditor, deadline, description, detailed, Dieckmann, disclaim, dispute, District, duty, eating, enrichment, evidenced, exert, fiduciary, guarantee, healthier, implicit, influence, lawsuit, longer, main, misleading, mismanagement, motion, noncontrolling, nonrecurring, opportunistically, past, paused, plaintiff, pressure, promulgated, purported, range, recovery, Rule, Senior, slightly, space, stay, Stephanie, subordinated, Subordination, thereunder, unjust, unsecured, unspecified, verified, waste
Removed:
accompanied, accurately, achieved, Acquiree, active, affecting, altered, ambient, assumption, audited, Bernalillo, bifurcation, bond, broader, categorized, cold, combined, commenced, concurrent, concurrently, confidence, consumer, contemplation, contemporaneously, core, counterparty, County, cumulative, data, deductible, deliver, depend, distributor, economy, efficiency, embedded, energy, ERP, escalation, event, executed, expensive, experience, filing, finalize, fluidity, forma, fourth, fuel, geopolitical, Health, host, impair, implementation, imported, imposing, industrial, informational, insufficient, integrated, invasion, involvement, involving, IRB, issuing, land, largely, leaseback, legally, literature, machinery, manufacturer, membership, military, minimal, monitoring, necessarily, negatively, offer, operate, Organization, output, ownership, partial, payoff, payroll, phased, preceding, prediction, preliminary, pro, provisional, reassessed, recapitalization, refrigerated, regional, remote, replace, replaced, requiring, rest, retroactively, retrospectively, reverse, robotic, Russian, shareholder, situation, standard, stated, statement, Subtopic, transformation, transportation, treat, treated, twelve, uncertain, uncertainty, unpredictable, vary, viewed, world
Financial report summary
?Risks
- Our recurring losses and significant accumulated deficit have raised substantial doubt regarding our ability to continue as a going concern.
- We may be unable to sustain our revenue growth rate and, as our costs increase, generate sufficient revenue to return to profitability over the long term.
- We may require additional financing to achieve our goals and a failure to obtain this necessary capital when needed on acceptable terms, or at all, may negatively impact our product manufacturing and development, and other operations.
- We may continue to be in a position of non-compliance with financial covenants.
- Our operations may be exposed to inflation risk, which could adversely affect our results of operations.
- We have recently recognized impairment charges for goodwill and we may need to recognize further impairments for other assets in the future, which could materially adversely impact our financial condition and results of operations.
- We are subject to substantial customer concentration. If we fail to retain existing customers, derive revenue from existing customers consistent with historical performance or acquire new customers cost-effectively, our business could be adversely affected.
- We may not be able to obtain raw materials on a timely basis or in quantities sufficient to meet the demand for our products.
- Our products are primarily manufactured in our facilities in Paramount, California, Albuquerque, New Mexico, Youngstown, Ohio and Prossedi, Italy and any damage or disruption at these facilities may harm our business.
- Failure to introduce new products or successfully improve existing products may adversely affect our ability to continue to grow.
- Consumer preferences for our products are difficult to predict and may change, and, if we are unable to respond quickly to new trends, our business may be adversely affected.
- If we fail to expand manufacturing and production capacity effectively, forecast demand for products accurately, or respond to forecast changes quickly, our business and operating results and our brand reputation could be harmed.
- Failure to retain our senior management may adversely affect operations.
- We may not be able to protect our intellectual property adequately, which may harm the value of our brand.
- We do not have contracts with customers that require the purchase of a minimum amount of our products.
- We may not be able to implement our growth strategy successfully.
- The “Tattooed Chef” brand has limited awareness among the general public.
- Ingredient, packaging, freight and storage costs are volatile and have risen and may continue to rise significantly, which may negatively impact the profitability of our business.
- Our operations in Italy may expose us to the risk of fluctuation in currency exchange rates and rates of foreign inflation, which could adversely affect our results of operations.
- Increasing tensions between the United States and Russia, and other effects of the ongoing conflict in Ukraine, could negatively impact our business, results of operations, and financial condition.
- Our revenues and earnings may fluctuate as a result of promotional activities.
- Litigation or legal proceedings could expose us to significant liabilities and negatively impact our reputation or business.
- Failure by our transportation providers to deliver products on time, or at all, could result in lost sales.
- We rely on independent certification for a number of our products.
- Our geographic focus makes us particularly vulnerable to economic and other events and trends in the United States.
- If we experience the loss of one or more of our food brokers that cannot be replaced in a timely manner, results of operations may be adversely affected.
- Our disclosure controls and procedures were not effective as of and for the years ended December 31, 2022 and 2021. Failure to achieve and maintain effective internal controls over financial reporting could lead to misstatements in our financial reporting and adversely affect our business.
- If we are unable to attract, train and retain employees, we may not be able to grow or successfully operate our business.
- We need to complete the implementation of our Enterprise Resource Planning (“ERP”) system. Significant additional costs, cost overruns and delays in connection with the implementation of an ERP system may adversely affect results of operations.
- Our operations are subject to FDA, FTC and other foreign, federal, state and local regulation, and there is no assurance that we will be in compliance with all regulations.
- We are subject to international regulations that could adversely affect our business and results of operations.
- Legal claims, government investigations or other regulatory enforcement actions could subject us to civil and criminal penalties.
- Changes in existing laws or regulations, or the adoption of new laws or regulations may increase costs and otherwise adversely affect our business, results of operations and financial condition.
- Failure by suppliers to comply with food safety, environmental or other laws and regulations, or with the specifications and requirements of our products, may disrupt our supply of products and adversely affect our business.
- Good manufacturing practice standards and food safety compliance metrics are complex, highly subjective and selectively enforced.
- Our failure to prepare and timely file our periodic reports with the SEC limits our access to the public markets to raise debt or equity capital and restricts our ability to issue equity securities.
- Our failure to meet the continued listing requirements of the Nasdaq Capital Market could result in a delisting of our common stock.
- Mr. Galletti has significant influence or control over us, and his interests may conflict with those of other stockholders.
- Anti-takeover provisions contained in our charter and proposed bylaws, as well as provisions of Delaware law, could impair a takeover attempt.
- Sales of shares by existing stockholders could cause our stock price to decline.
- The COVID-19 pandemic could continue to adversely impact our business, results of operations and financial condition.
- We may not be able to compete successfully in our highly competitive market.
- Our growth may be limited if we are unable to expand our distribution channels and secure additional retail space for our products.
- A cybersecurity incident, other technology disruptions or failure to comply with laws and regulations relating to privacy and the protection of data relating to individuals could negatively impact our business, reputation and relationships with customers.
- Disruptions in the worldwide economy may adversely affect our business, results of operations and financial condition.
- Future acquisitions or investments could disrupt our business and harm our financial condition.
- Climate change may negatively affect our business and operations.
- Our stock price may be volatile and may decline regardless of our operating performance.
Management Discussion
- ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek”, “expand” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of our Annual Report on Form 10-K for the period ending December 31, 2022 filed with the Securities and Exchange Commission (“SEC”) and Part II, Item 1A. Risk Factors herein. Our securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the following:
- •the impact of future regulatory, judicial, and legislative changes on our industry.