Aterian (ATER) risk factors, FY2024 10-K

Risks Relating to Our Business

1. 01We have historically operated at a loss and we may never achieve or sustain continuous profitability or positive cash flows. Further we and our independent registered public accounting firm have expressed substantial doubt about our ability to continue as a going concern
2. 02We face intense competition and if we are unable to compete effectively, our market share and revenue could be diminished which may delay or otherwise hinder our efforts to achieve or maintain profitability
3. 03Our financial projections are highly subjective in nature and our future financial results could vary significantly from our projections and also from quarter-to-quarter
4. 04Our business is sensitive to the strength of the United States consumer market to a meaningful extent, and changes in consumer spending and economic conditions could adversely affect our business
5. 05Demand for our products is highly seasonal and dependent on weather conditions, which could result in significant variations in our inventory levels, financial condition and operating results
6. 06If we are unable to manage our inventory effectively, our operating results, financial condition, and cash flows could be adversely affected
7. 07Increased costs of raw materials, energy, labor, transportation and platform fees charged by marketplaces may adversely affect our business, operating results, financial condition, and cash flows
8. 08We depend on third-party suppliers for all of our products, most of which are located in Asia, and any inability or delay in obtaining products from such suppliers could have a material adverse effect on our business, operating results, financial condition, and cash flow
9. 09A significant majority of our revenue results from sales of products on Amazon’s U.S. marketplace, and any change, limitation, or restriction on our ability to operate on Amazon’s platform could have a material adverse impact on our business, operating results, financial condition, and cash flows
10. 10On February 23, 2024, the Company amended the Credit Facility to extend the term to December 2026 and provide us with access to $17 million in current commitments which can be increased, subject to certain conditions, to $30.0 million
11. 11Our efforts to grow our business through new products, marketplace and geographic expansion may not be successful and may place a significant strain on our management and operational, financial and other resources
12. 12We may be unable to attract, retain or motivate key personnel, which could harm our business
13. 13Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations

Risks Relating to Information and Cyber Security

1. 14We rely on data provided by third parties and any loss, reduction in access or increased costs related thereto of which could have a material adverse effect on our business
2. 15Our business, operating results, financial condition, and cash flows could be adversely impacted if our information technology systems or those of third-parties become subject to a data security breach, are disrupted or cease to operate effectively

Risks Relating to the Litigation and Government Regulation

1. 16Claims, litigation, government investigations, product liability and recalls, and other proceedings may adversely affect our business, operating results, financial condition, and cash flows
2. 17In the summer of 2021, the Company received informal notice from a third-party alleging patent infringement with respect to certain transfer paper products sold by the Company
3. 18We must successfully manage compliance with current and expanding laws and regulations, as well as manage new and pending legal and regulatory matters in the U.S. and abroad
4. 19U.S. government trade actions could have a material adverse effect on our business, financial position, and results of operation

Risks Relating to the Ownership of our Common Stock

1. 20We no longer qualify as an “emerging growth company” as of December 31, 2024 and, as a result, we are no longer able to avail ourselves of certain reduced disclosure requirements applicable to emerging growth companies
2. 21We are a "smaller reporting company" and the reduced disclosure requirements applicable to smaller reporting companies may make it more difficult to compare our performance with other public companies and make our common stock less attractive to investors
3. 22The market price and trading volume of our common stock may fluctuate significantly
4. 23We may be limited by our ability to raise the funding we need to support our growth or to maintain our existing business. Also, such funding may be available only by diluting existing stockholders
5. 24Future sales of our common stock by our insiders, or the perception that these sales may occur, may cause the market price of our common stock to decline
6. 25Future sales and issuances of our capital stock, or the perception that such sales may occur, could cause our stock price to decline
7. 26There is no guarantee that we will continue to meet all requirements for continued listing on the Nasdaq Capital Market. We must continue to satisfy Nasdaq’s continued listing requirements, including, among other things, a minimum closing bid price requirement of $1.00 per share