Risk Factors Update Summary

• Added risks include heightened volatility in financial markets and uncertain political environments. This could impact consumer spending.
• Increased competition from regional and local distributors, online wholesalers, and retailers. Low switching costs.
• Concerns about potential losses due to reputation, inability to collect accounts receivable, and bankruptcy of customers.
• Compliance with data privacy regulations, including CCPA and CPRA, may lead to fines and legal liabilities.
• Decrease in loans outstanding from $333 million to $327 million may impact liquidity.
• Expansion into new markets and acquisitions may face challenges in integration and market presence.
• Increased focus on cybersecurity risks, potential breaches, and the need for robust IT systems.
• Climate change regulations and initiatives may increase costs, impact operations, and require compliance efforts.
• Convertible debt reduced from $100 million to $0.2 million, affecting financial obligations.
• Ownership concentration among executives decreased, with John Pappas now owning 8% of shares.