▸ Acquisitions have been an important element of our overall corporate strategy, and these transactions entailed investments by us that are material to our financial condition and results of operations. We may evaluate and enter into· · · · ● 1 ▸ As a Delaware corporation, we are subject to the U.S. Foreign Corrupt Practices Act, which generally prohibits U.S. companies from engaging in bribery or other prohibited payments to foreign officials for the purpose of obtaining or retaining· · · · ● 1 ▸ If our shares of common stock become subject to the penny stock rules, it would become more difficult to trade our shares.· · · · ● 1 ▸ We are currently not in compliance with the continued listing standards of Nasdaq, and if we are unable to regain compliance, our common stock will be delisted from the exchange.· · · · ● 1 ▸ We are not able to meet our current working capital needs and contractual obligations.· · · · ● 1 ▸ We are exposed to manufacturing risks that could adversely affect our business and results of operations.· · · ● ● 2 ▸ Our restructuring activities may increase our expenses and cash expenditures, and may not have the intended effects.· · ● ● ● 3 ▸ The price of our common stock has been, and may continue to be, volatile and may fluctuate substantially, which could result in substantial losses for purchasers of our common stock.· · ● ● ● 3 ▸ If we fail to manage our inventory effectively, our results of operations, financial condition and liquidity may be materially and adversely affected.· ● ● ● ● 4 ▸ Long-lived assets and inventories represent a significant portion of our total assets and we may be required to record additional impairments or write-downs in future periods.· ● ● ● ● 4 rw ▸ Our inventory is vulnerable to damage or loss caused by accidents or natural disasters, and we face the risk of theft of our products from inventory or during shipment.· ● ● ● ● 4 ▸ Our peat bogs are susceptible to sudden changes in weather and the impacts of climate change.· ● ● ● ● 4 ▸ group Risks Relating to Our Intellectual Property· ● ● ● ● 4 ▸ We are a "smaller reporting company" and, because we have opted to use the reduced reporting requirements available to us, certain investors may find investing in our securities less attractive.· ● ● ● ● 4 rw ▸ The doctrine of corporate opportunity generally provides that a corporate fiduciary may not develop an opportunity using corporate resources, acquire an interest adverse to that of the corporation or acquire property that is reasonably incident to· · · ● · 1 ▸ The steps we take to obtain, maintain, protect and enforce our intellectual property rights may be deemed inadequate and despite our efforts to protect these rights, unauthorized third parties, including our competitors, may duplicate, reverse· · · ● · 1 ▸ We may not meet continued listing requirements, our common stock may be delisted from the Nasdaq Capital Market, which could affect the market price and liquidity for our common stock and reduce our ability to raise additional capital.· · · ● · 1 ▸ Although we continue to implement risk-mitigation strategies for single-source suppliers, we rely on a limited number of suppliers for certain of the light ballasts used in manufacturing our lighting systems. A portion of our key suppliers· · ● · · 1 ▸ If we fail to maintain effective internal controls over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reporting and the price of our common stock may be adversely affected.· · ● · · 1 ▸ The impact of the COVID-19 pandemic, the shift to a COVID-19 endemic approach and related risks could materially affect our results of operations, financial position and/or liquidity.· · ● · · 1 ▸ Given that the conversion to SOFR under the Term Loan has not yet occurred, we are unable to determine whether our interest obligations under the SOFR based rates will be higher than corresponding interest rates benchmarked to LIBOR.· ● · · · 1 ▸ If we fail to meet the continued listing standards of Nasdaq, our common stock may be delisted, which may adversely affect the market price and liquidity of our common stock.· ● ● · · 2 ▸ Our success depends upon our ability to develop, manufacture, market and sell our products, and to use our proprietary technologies without infringing, misappropriating or otherwise violating the intellectual property or proprietary rights of third· ● · · · 1 ▸ The transition to SOFR may present challenges, including, but not limited to, the illiquidity of SOFR derivatives markets, which could make it difficult for financial institutions to offer SOFR-based debt products, the determination of the· ● · · · 1 ▸ We may be adversely impacted by the transition from LIBOR to SOFR as a reference rate.· ● · · · 1 ▸ During 2021, we remediated the identified material weaknesses. In particular, we (i) hired and continue to hire, additional qualified accounting and financial reporting personnel with technical and/or public company experience, (ii)● · · · · 1 ▸ If our existing stockholders, our directors, their affiliates, or our executive officers, sell a substantial number of shares of our common stock in the public market, the market price of our common stock could decrease significantly. The perception● · · ● · 2 ▸ If securities or industry analysts do not publish research or reports about our business, or they publish negative reports about our business, our share price and trading volume could decline.● · · · · 1 ▸ In order to manage our future expected growth, we may need to continue to grow the size of our organization, and we may experience difficulties in managing this growth.● · · · · 1 ▸ Intellectual property and proprietary rights do not necessarily address all potential threats to our competitive advantage.● ● · · · 2 ▸ Many factors influence our reputation including the perception of us held by our customers, suppliers, partners, shareholders, other key stakeholders, and the communities in which we operate. We face increasing scrutiny related to● · · · · 1 ▸ Negative economic and/or industry conditions, specifically in the United States and Canada, could adversely affect our business.● ● ● · · 3 ▸ Our common stock has only recently become publicly-traded, and the market price of our common stock has been volatile.● ● · · · 2 rw ▸ Our distribution and sales and marketing capabilities provide significant value to our suppliers. Distributed brand suppliers sell through us in order to access thousands of retail and commercial customers across the United States and Canada● · · · · 1 ▸ Our international operations make us susceptible to the costs and risks associated with operating internationally.● ● ● · · 3 ▸ Our largest stockholders will exercise significant influence over our company for the foreseeable future, including the outcome of matters requiring stockholder approval.● ● · · · 2 ▸ Our reliance on a limited base of suppliers for certain products, such as light fixtures, may result in disruptions to our business and adversely affect our financial results.● ● ● · · 3 rw ▸ Recent laws make it difficult to predict how patents will be issued or enforced in our industry.● ● · · · 2 ▸ Should any of these events occur, they could significantly harm our business, results of operations and prospects.● ● · · · 2 ▸ The JPMorgan credit facilities contain, and future debt facilities may contain, restrictions that limit our flexibility in operating our business.● · · · · 1 ▸ Uncertainty relating to the London interbank offered rate (“LIBOR”) and the potential discontinuation of LIBOR in the future may adversely affect our interest expense.● · · · · 1 ▸ We are subject to risks related to corporate and social responsibility and reputation.● ● · · · 2 ▸ We have incurred and will continue to incur increased costs as a result of being a public company.● ● ● · · 3 ▸ We may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their former employers.● ● · · · 2 ▸ We sell products, including hydroponic gardening products, through third-party retailers and resellers. End users may purchase these products for use in new and emerging industries, including the growing of cannabis that may not achieve market● · · ● · 2 ▸ group Risks Relating to Other Regulations● · ● ● ● 4 ▸ A disruption in the operations of our freight carriers, higher shipping costs or shipping delays could disrupt our supply chain and could negatively impact our margin performance and our financial results.● ● ● ● ● 5 ▸ A significant interruption in the operation of our or our suppliers’ facilities could impact our capacity to produce products and service our customers, which could adversely affect revenues and earnings.● ● ● ● ● 5 ▸ A significant product defect or product recall could materially and adversely affect our brand image, causing a decline in our sales and profitability, and could reduce or deplete our financial resources.● ● ● ● ● 5 ▸ Acquisitions, other strategic alliances and investments could result in operating difficulties, dilution, and other harmful consequences that may adversely impact our business and results of operations.● ● ● ● ● 5 ▸ Businesses involved in the cannabis industry, and investments in such businesses, are subject to a variety of laws and regulations related to money laundering, financial recordkeeping and proceeds of crimes.● ● ● ● ● 5 ▸ Certain state and other regulations pertaining to the use of certain ingredients in grow media and plant nutrients could adversely impact us by restricting our ability to sell such products.● ● ● ● ● 5 rw ▸ Climate change may impact the availability of our facilities, we may incur substantial costs to comply with climate change legislation and related regulatory initiatives, and weather conditions could adversely impact financial results.● ● ● ● ● 5 rw ▸ Damage to our reputation could have an adverse effect on our business.● ● ● ● ● 5 ▸ Delaware law contains anti-takeover provisions that could deter takeover attempts that could be beneficial to our stockholders.● ● ● ● ● 5 ▸ Disruption in our global supply chain or vendor relationships may negatively impact our businesses.● ● ● ● ● 5 rw ▸ Disruptions in the availability or increases in the prices of raw materials sourced by suppliers could adversely affect our results of operations.● ● ● ● ● 5 rw ▸ Failure to comply with the U.S. Foreign Corrupt Practices Act could subject us to penalties and other adverse consequences.● ● ● ● ● 5 rw ▸ Failure to optimize our supply chain or disruption of our supply chain could have an adverse effect on our business, financial condition and results of operations.● ● ● ● ● 5 ▸ From time to time, we may need to rely on licenses to proprietary technologies, which may be difficult or expensive to obtain or we may lose certain licenses which may be difficult to replace, harming our competitive position.● ● ● ● ● 5 ▸ Government laws and regulations, including environmental laws and regulations, could result in material costs or otherwise adversely affect our financial condition and results of operations.● ● ● ● ● 5 ▸ If our owned or in-licensed trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.● ● ● ● ● 5 ▸ If our suppliers are unable to source raw materials in sufficient quantities, on a timely basis, and at acceptable costs, our ability to sell our products may be harmed.● ● ● ● ● 5 ▸ If product liability lawsuits are brought against us, we may incur substantial liabilities.● ● ● ● ● 5 ▸ If we are unable to retain key personnel, we may not be able to implement our business plan and our business may fail; our headcount reductions may cause undesirable consequences.● ● ● ● ● 5 rw ▸ Increased prices and inflation could negatively impact our margin performance and our financial results.● ● ● ● ● 5 ▸ Intellectual property disputes could cause us to spend substantial resources and distract our personnel from their normal responsibilities.● ● ● ● ● 5 ▸ Litigation may adversely affect our business, financial condition and results of operations.● ● ● ● ● 5 ▸ Our Certificate of Incorporation provides that the doctrine of "corporate opportunity" will not apply with respect to any director or stockholder who is not employed by us or our affiliates.● ● ● ● ● 5 rw ▸ Our competitors and potential competitors may develop products and technologies that are more effective or commercially attractive than our products.● ● ● ● ● 5 ▸ Our indirect involvement in the cannabis industry could affect the public’s perception of us and be detrimental to our reputation.● ● ● ● ● 5 ▸ Our marketing activities may not be successful.● ● ● ● ● 5 ▸ Our operations may be impaired if our information technology systems, or those of our third-party vendors, fail to perform adequately or if we or our third-party vendors are the subject of a data breach or cyber-attack.● ● ● ● ● 5 ▸ Our proprietary brand offerings expose us to various risks.● ● ● ● ● 5 ▸ Our security holders may be diluted by future issuances of securities by us.● ● ● ● ● 5 ▸ Potential tariffs or a global trade war could increase the cost of our products, which could adversely impact the competitiveness of our products and our financial results.● ● ● ● ● 5 ▸ group Risks Relating to Our Business● ● ● ● ● 5 ▸ group Risks Relating to Our Capital Stock● ● ● ● ● 5 ▸ group Risks Relating to Our Indebtedness● ● ● ● ● 5 ▸ group Risks Relating to Third Parties● ● ● ● ● 5 ▸ group Risks Relating to the Cannabis Industry● ● ● ● ● 5 ▸ Scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.● ● ● ● ● 5 rw ▸ Substantially all of our and our Subsidiary Obligors’ assets are pledged to secure obligations under the Term Loan.● ● ● ● ● 5 rw ▸ The Term Loan has restrictions on our ability to sell our products directly to the cannabis industry.● ● ● ● ● 5 rw ▸ The estimates and judgments we make, or the assumptions on which we rely, in preparing our consolidated financial statements could prove inaccurate.● ● ● ● ● 5 ▸ The market price of our common stock could be negatively affected by future sales of our common stock.● ● ● ● ● 5 ▸ Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.● ● ● ● ● 5 ▸ Unanticipated changes in our tax provisions, the adoption of new tax legislation or exposure to additional tax liabilities could affect our profitability and cash flows.● ● ● ● ● 5 ▸ Various provisions of our lending agreements with JPMorgan, in addition to our Certificate of Incorporation, Bylaws and other corporate documents, could delay or prevent a change of control.● ● ● ● ● 5 ▸ We are subject to a number of risks, directly and indirectly through Cannabis Industry Participants, because cannabis is illegal under federal law.● ● ● ● ● 5 ▸ We may be limited in our ability to utilize, or may not be able to utilize, net operating loss carryforwards to reduce our future tax liability.● ● ● ● ● 5 ▸ We may incur indebtedness or issue capital stock that ranks senior or equally to our common stock as to liquidation preference and other rights and which may dilute our stockholders’ ownership interest.● ● ● ● ● 5 ▸ We may not be able to adequately obtain, maintain, protect or enforce our intellectual property and other proprietary rights that are material to our business.● ● ● ● ● 5 ▸ We may not be able to obtain sufficient capital and may be forced to limit the scope of our operations.● ● ● ● ● 5 rw ▸ We may not successfully develop new products, improve existing products, or maintain our effectiveness in reaching consumers through rapidly evolving communication vehicles.● ● ● ● ● 5 rw ▸ We occupy many of our facilities under long-term non-cancellable leases, and we may be unable to renew, sublease or terminate and exit our leases.● ● ● ● ● 5 rw 
