Risk Factors Update Summary

• Business model shift to low cost production and distribution may impact profitability significantly.
• Regulatory developments on AI and machine learning pose risks. The EU AI Act could result in significant fines for noncompliance.
• Sanctions on Russian diamonds could lead to a substantial increase in diamond prices.
• Potential increase in advertising costs due to changes in search engine and social media algorithms.
• Changes in climate regulations may result in increased compliance costs and impact operations.
• Legislation in the US and Europe may require transparency and human oversight in AI decision-making.
• Expansion from 25 to 37 showrooms may impact profitability and operational complexity.
• Risks related to cybersecurity and data breaches could lead to significant financial losses.
• The company faces increased compliance costs and potential liability due to evolving AI regulations.
• Increased emphasis on ESG matters may affect business reputation and operations.
• The EU AI Act, once in force, will impact the company's use of AI and require additional compliance measures.
• The company identified a material weakness in internal controls related to IT general controls.
• Costs related to implementing an internal audit and compliance function are expected to continue.
• Failure to comply with public company demands could lead to errors in financial reporting.