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

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of us or our manager and otherwise will subject us to additional regulation that will be costly and time-consuming. 43 We have identified material weaknesses in
our internal control over financial reporting. If we fail to develop or maintain an effective system of internal controls, we may not
be able to accurately report our financial results and prevent fraud. As a result, current and potential shareholders could lose confidence
in our financial statements, which would harm the trading price of our common shares. Companies that file reports with the SEC, including
us, are subject to the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or SOX 404. SOX 404 requires management to establish
and maintain a system of internal control over financial reporting and annual reports on Form 10-K filed under the Securities Exchange
Act of 1934, as amended, or the Exchange Act, to contain a report from management assessing the effectiveness of a company’s internal
control over financial reporting. Separately, under SOX 404, as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act
of 2010, public companies that are large accelerated filers or accelerated filers must include in their annual reports on Form 10-K an
attestation report of their regular auditors attesting to and reporting on management’s assessment of internal control over financial
reporting. Non-accelerated filers and smaller reporting companies, like us, are not required to include an attestation report of their
auditors in annual reports. A report of our management is included under Item
9A. “ Controls and Procedures ”. We are a smaller reporting company and, consequently, are not required to include
an attestation report of our auditor in our annual report. However, if and when we become subject to the auditor attestation requirements
under SOX 404, we can provide no assurance that we will receive a positive attestation from our independent auditors. During its evaluation of the effectiveness of
internal control over financial reporting as of December 31, 2021, management identified material weaknesses. These material weaknesses
were associated with our lack of (i) appropriate policies and procedures to evaluate the proper accounting and disclosures of key documents
and agreements, (ii) adequate segregation of duties with our limited accounting personnel and reliance upon outsourced accounting services
and (iii) sufficient and skilled accounting personnel with an appropriate level of technical accounting knowledge and experience in the
application of GAAP commensurate with our financial reporting requirements. We are undertaking remedial measures, which measures
will take time to implement and test, to address these material weaknesses. There can be no assurance that such measures will be sufficient
to remedy the material weaknesses identified or that additional material weaknesses or other control or significant deficiencies will
not be identified in the future. If we continue to experience material weaknesses in our internal controls or fail to maintain or implement
required new or improved controls, such circumstances could cause us to fail to meet our periodic reporting obligations or result in material
misstatements in our financial statements, or adversely affect the results of periodic management evaluations and, if required, annual
auditor attestation reports. Each of the foregoing results could cause investors to lose confidence in our reported financial information
and lead to a decline in our share price. Risks Related to Our Retail and Appliances
Business If we fail to acquire new customers or retain
existing customers, or fail to do so in a cost-effective manner, we may not be able to achieve profitability. Our success depends on our ability to acquire
and retain customers in a cost-effective manner. We have made significant investments related to customer acquisition and expect to continue
to spend significant amounts to acquire additional customers. We cannot assure you that the net profit from new customers we acquire will
ultimately exceed the cost of acquiring those customers. If we fail to deliver a quality shopping experience, or if consumers do not perceive
the products we offer to be of high value and quality, we may not be able to acquire new customers. If we are unable to acquire new customers
who purchase products in numbers sufficient to grow our business, we may not be able to generate the scale necessary to drive beneficial
network effects with our suppliers or efficiencies in our logistics network, our net revenue may decrease, and our business, financial
condition and operating results may be materially adversely affected. We believe that many of our new customers originate
from word-of-mouth and other non-paid referrals from existing customers. Therefore, we must ensure that our existing customers remain
loyal to us in order to continue receiving those referrals. If our efforts to satisfy our existing customers are not successful, we may
not be able to acquire new customers in sufficient numbers to continue to grow our business, or we may be required to incur significantly
higher marketing expenses in order to acquire new customers. 44 Our success depends in part on our ability
to increase our net revenue per active customer. If our efforts to increase customer loyalty and repeat purchasing as well as maintain
high levels of customer engagement are not successful, our growth prospects and revenue will be materially adversely affected. Our ability to grow our business depends on our
ability to retain our existing customer base and generate increased revenue and repeat purchases from this customer base, and maintain
high levels of customer engagement. To do this, we must continue to provide our customers and potential customers with a unified, convenient,
efficient and differentiated shopping experience ● providing
imagery, tools and technology that attract customers who historically would have bought elsewhere; ● maintaining
a high-quality and diverse portfolio of products; ● delivering
products on time and without damage; and ● maintaining
and further developing our in-store and online platforms. If we fail to increase net revenue per active
customer, generate repeat purchases or maintain high levels of customer engagement, our growth prospects, operating results and financial
condition could be materially adversely affected. Our business depends on our ability to build
and maintain strong brands. We may not be able to maintain and enhance our brands if we receive unfavorable customer complaints, negative
publicity or otherwise fail to live up to consumers’ expectations, which could materially adversely affect our business, results
of operations and growth prospects. Maintaining and enhancing our brands is critical
to expanding our base of customers and suppliers. Our ability to maintain and enhance our brand depends largely on our ability to maintain
customer confidence in our product and service offerings, including by delivering products on time and without damage. If customers do
not have a satisfactory shopping experience, they may seek out alternative offerings from our competitors and may not return to our stores
and sites as often in the future, or at all. In addition, unfavorable publicity regarding, for example, our practices relating to privacy
and data protection, product quality, delivery problems, competitive pressures, litigation or regulatory activity, could seriously harm
our reputation. Such negative publicity also could have an adverse effect on the size, engagement, and loyalty of our customer base and
result in decreased revenue, which could adversely affect our business and financial results. In addition, maintaining and enhancing these brands
may require us to make substantial investments, and these investments may not be successful. If we fail to promote and maintain our brands,
or if we incur excessive expenses in this effort, our business, operating results and financial condition may be materially adversely
affected. We anticipate that, as our market becomes increasingly competitive, maintaining and enhancing our brands may become increasingly
difficult and expensive. Maintaining and enhancing our brands will depend largely on our ability to provide high quality products to our
customers and a reliable, trustworthy and profitable sales channel to our suppliers, which we may not be able to do successfully. Customer complaints or negative publicity about
our sites, products, delivery times, customer data handling and security practices or customer support, especially on blogs, social media
websites and our sites, could rapidly and severely diminish consumer use of our sites and consumer and supplier confidence in us and result
in harm to our brands. Our efforts to expand our business into
new brands, products, services, technologies, and geographic regions will subject us to additional business, legal, financial, and competitive
risks and may not be successful. Our business success depends to some extent on
our ability to expand our customer offerings by launching new brands and services and by expanding our existing offerings into new geographies.
Launching new brands and services or expanding geographically requires significant upfront investments, including investments in marketing,
information technology, and additional personnel. We may not be able to generate satisfactory revenue from these efforts to offset these
costs. Any lack of market acceptance of our efforts to launch new brands and services or to expand our existing offerings could have a
material adverse effect on our business, prospects, financial condition and results of operations. Further, as we continue to expand our
fulfillment capability or add new businesses with different requirements, our logistics networks become increasingly complex and operating
them becomes more challenging. There can be no assurance that we will be able to operate our networks effectively. 45 We have also entered and may continue to enter
into new markets in which we have limited or no experience, which may not be successful or appealing to our customers. These activities
may present new and difficult technological and logistical challenges, and resulting service disruptions, failures or other quality issues
may cause customer dissatisfaction and harm our reputation and brand. Further, our current and potential competitors in new market segments
may have greater brand recognition, financial resources, longer operating histories and larger customer bases than we do in these areas.
As a result, we may not be successful enough in these newer areas to recoup our investments in them. If this occurs, our business, financial
condition and operating results may be materially adversely affected. If we fail to manage our growth effectively,
our business, financial condition and operating results could be harmed. To manage our growth effectively, we must continue
to implement our operational plans and strategies, improve and expand our infrastructure of people and information systems and expand,
train and manage our employee base. We have rapidly increased employee headcount since our inception to support the growth in our business.
To support continued growth, we must effectively integrate, develop and motivate a large number of new employees. We face significant
competition for personnel. Failure to manage our hiring needs effectively or successfully integrate our new hires may have a material
adverse effect on our business, financial condition and operating results. Additionally, the growth of our business places
significant demands on our operations, as well as our management and other employees. For example, we typically launch hundreds of promotional
events across thousands of products each month on our sites via emails and personalized displays. These events require us to produce updates
of our sites and emails to our customers on a daily basis with different products, photos and text. Any surge in online traffic and orders
associated with such promotional activities places increased strain on our operations, including our logistics network, and may cause
or exacerbate slowdowns or interruptions. The growth of our business may require significant additional resources to meet these daily
requirements, which may not scale in a cost-effective manner or may negatively affect the quality of our sites and customer experience.
We are also required to manage relationships with a growing number of suppliers, customers and other third parties. Our information technology
systems and our internal controls and procedures may not be adequate to support future growth of our supplier and employee base. If we
are unable to manage the growth of our organization effectively, our business, financial condition and operating results may be materially
adversely affected. Our ability to obtain continued financing

of us or our manager and otherwise will subject us to additional regulation that will be costly and time-consuming. 43 We have identified material weaknesses in

our internal control over financial reporting. If we fail to develop or maintain an effective system of internal controls, we may not

be able to accurately report our financial results and prevent fraud. As a result, current and potential shareholders could lose confidence

in our financial statements, which would harm the trading price of our common shares. Companies that file reports with the SEC, including

us, are subject to the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or SOX 404. SOX 404 requires management to establish

and maintain a system of internal control over financial reporting and annual reports on Form 10-K filed under the Securities Exchange

Act of 1934, as amended, or the Exchange Act, to contain a report from management assessing the effectiveness of a company’s internal

control over financial reporting. Separately, under SOX 404, as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act

of 2010, public companies that are large accelerated filers or accelerated filers must include in their annual reports on Form 10-K an

attestation report of their regular auditors attesting to and reporting on management’s assessment of internal control over financial

reporting. Non-accelerated filers and smaller reporting companies, like us, are not required to include an attestation report of their

auditors in annual reports. A report of our management is included under Item

9A. “ Controls and Procedures ”. We are a smaller reporting company and, consequently, are not required to include

an attestation report of our auditor in our annual report. However, if and when we become subject to the auditor attestation requirements

under SOX 404, we can provide no assurance that we will receive a positive attestation from our independent auditors. During its evaluation of the effectiveness of

internal control over financial reporting as of December 31, 2021, management identified material weaknesses. These material weaknesses

were associated with our lack of (i) appropriate policies and procedures to evaluate the proper accounting and disclosures of key documents

and agreements, (ii) adequate segregation of duties with our limited accounting personnel and reliance upon outsourced accounting services

and (iii) sufficient and skilled accounting personnel with an appropriate level of technical accounting knowledge and experience in the

application of GAAP commensurate with our financial reporting requirements. We are undertaking remedial measures, which measures

will take time to implement and test, to address these material weaknesses. There can be no assurance that such measures will be sufficient

to remedy the material weaknesses identified or that additional material weaknesses or other control or significant deficiencies will

not be identified in the future. If we continue to experience material weaknesses in our internal controls or fail to maintain or implement

required new or improved controls, such circumstances could cause us to fail to meet our periodic reporting obligations or result in material

misstatements in our financial statements, or adversely affect the results of periodic management evaluations and, if required, annual

auditor attestation reports. Each of the foregoing results could cause investors to lose confidence in our reported financial information

and lead to a decline in our share price. Risks Related to Our Retail and Appliances

Business If we fail to acquire new customers or retain

existing customers, or fail to do so in a cost-effective manner, we may not be able to achieve profitability. Our success depends on our ability to acquire

and retain customers in a cost-effective manner. We have made significant investments related to customer acquisition and expect to continue

to spend significant amounts to acquire additional customers. We cannot assure you that the net profit from new customers we acquire will

ultimately exceed the cost of acquiring those customers. If we fail to deliver a quality shopping experience, or if consumers do not perceive

the products we offer to be of high value and quality, we may not be able to acquire new customers. If we are unable to acquire new customers

who purchase products in numbers sufficient to grow our business, we may not be able to generate the scale necessary to drive beneficial

network effects with our suppliers or efficiencies in our logistics network, our net revenue may decrease, and our business, financial

condition and operating results may be materially adversely affected. We believe that many of our new customers originate

from word-of-mouth and other non-paid referrals from existing customers. Therefore, we must ensure that our existing customers remain

loyal to us in order to continue receiving those referrals. If our efforts to satisfy our existing customers are not successful, we may

not be able to acquire new customers in sufficient numbers to continue to grow our business, or we may be required to incur significantly

higher marketing expenses in order to acquire new customers. 44 Our success depends in part on our ability

to increase our net revenue per active customer. If our efforts to increase customer loyalty and repeat purchasing as well as maintain

high levels of customer engagement are not successful, our growth prospects and revenue will be materially adversely affected. Our ability to grow our business depends on our

ability to retain our existing customer base and generate increased revenue and repeat purchases from this customer base, and maintain

high levels of customer engagement. To do this, we must continue to provide our customers and potential customers with a unified, convenient,

efficient and differentiated shopping experience ● providing

imagery, tools and technology that attract customers who historically would have bought elsewhere; ● maintaining

a high-quality and diverse portfolio of products; ● delivering

products on time and without damage; and ● maintaining

and further developing our in-store and online platforms. If we fail to increase net revenue per active

customer, generate repeat purchases or maintain high levels of customer engagement, our growth prospects, operating results and financial

condition could be materially adversely affected. Our business depends on our ability to build

and maintain strong brands. We may not be able to maintain and enhance our brands if we receive unfavorable customer complaints, negative

publicity or otherwise fail to live up to consumers’ expectations, which could materially adversely affect our business, results

of operations and growth prospects. Maintaining and enhancing our brands is critical

to expanding our base of customers and suppliers. Our ability to maintain and enhance our brand depends largely on our ability to maintain

customer confidence in our product and service offerings, including by delivering products on time and without damage. If customers do

not have a satisfactory shopping experience, they may seek out alternative offerings from our competitors and may not return to our stores

and sites as often in the future, or at all. In addition, unfavorable publicity regarding, for example, our practices relating to privacy

and data protection, product quality, delivery problems, competitive pressures, litigation or regulatory activity, could seriously harm

our reputation. Such negative publicity also could have an adverse effect on the size, engagement, and loyalty of our customer base and

result in decreased revenue, which could adversely affect our business and financial results. In addition, maintaining and enhancing these brands

may require us to make substantial investments, and these investments may not be successful. If we fail to promote and maintain our brands,

or if we incur excessive expenses in this effort, our business, operating results and financial condition may be materially adversely

affected. We anticipate that, as our market becomes increasingly competitive, maintaining and enhancing our brands may become increasingly

difficult and expensive. Maintaining and enhancing our brands will depend largely on our ability to provide high quality products to our

customers and a reliable, trustworthy and profitable sales channel to our suppliers, which we may not be able to do successfully. Customer complaints or negative publicity about

our sites, products, delivery times, customer data handling and security practices or customer support, especially on blogs, social media

websites and our sites, could rapidly and severely diminish consumer use of our sites and consumer and supplier confidence in us and result

in harm to our brands. Our efforts to expand our business into

new brands, products, services, technologies, and geographic regions will subject us to additional business, legal, financial, and competitive

risks and may not be successful. Our business success depends to some extent on

our ability to expand our customer offerings by launching new brands and services and by expanding our existing offerings into new geographies.

Launching new brands and services or expanding geographically requires significant upfront investments, including investments in marketing,

information technology, and additional personnel. We may not be able to generate satisfactory revenue from these efforts to offset these

costs. Any lack of market acceptance of our efforts to launch new brands and services or to expand our existing offerings could have a

material adverse effect on our business, prospects, financial condition and results of operations. Further, as we continue to expand our

fulfillment capability or add new businesses with different requirements, our logistics networks become increasingly complex and operating

them becomes more challenging. There can be no assurance that we will be able to operate our networks effectively. 45 We have also entered and may continue to enter

into new markets in which we have limited or no experience, which may not be successful or appealing to our customers. These activities

may present new and difficult technological and logistical challenges, and resulting service disruptions, failures or other quality issues

may cause customer dissatisfaction and harm our reputation and brand. Further, our current and potential competitors in new market segments

may have greater brand recognition, financial resources, longer operating histories and larger customer bases than we do in these areas.

As a result, we may not be successful enough in these newer areas to recoup our investments in them. If this occurs, our business, financial

condition and operating results may be materially adversely affected. If we fail to manage our growth effectively,

our business, financial condition and operating results could be harmed. To manage our growth effectively, we must continue

to implement our operational plans and strategies, improve and expand our infrastructure of people and information systems and expand,

train and manage our employee base. We have rapidly increased employee headcount since our inception to support the growth in our business.

To support continued growth, we must effectively integrate, develop and motivate a large number of new employees. We face significant

competition for personnel. Failure to manage our hiring needs effectively or successfully integrate our new hires may have a material

adverse effect on our business, financial condition and operating results. Additionally, the growth of our business places

significant demands on our operations, as well as our management and other employees. For example, we typically launch hundreds of promotional

events across thousands of products each month on our sites via emails and personalized displays. These events require us to produce updates

of our sites and emails to our customers on a daily basis with different products, photos and text. Any surge in online traffic and orders

associated with such promotional activities places increased strain on our operations, including our logistics network, and may cause

or exacerbate slowdowns or interruptions. The growth of our business may require significant additional resources to meet these daily

requirements, which may not scale in a cost-effective manner or may negatively affect the quality of our sites and customer experience.

We are also required to manage relationships with a growing number of suppliers, customers and other third parties. Our information technology

systems and our internal controls and procedures may not be adequate to support future growth of our supplier and employee base. If we

are unable to manage the growth of our organization effectively, our business, financial condition and operating results may be materially

adversely affected. Our ability to obtain continued financing