Freshpet (FRPT) risk factors, FY2024 10-K

Risks Related to our Growth Strategy and Need for Capital

1. 01We may not be able to successfully implement our growth strategy on a timely basis or at all
2. 02We expect to need capital in the future for business development, and we may not be able to generate sufficient cash flow or raise capital on acceptable terms to meet our needs
3. 03Loss of our key executive officers or personnel, or an inability to attract and retain such management and other personnel, could negatively affect our business

Risks Related to Competition in Our Industry

1. 04The pet food product category in which we participate is highly competitive. If we are unable to compete effectively, our results of operations could be adversely affected
2. 05Our operating results depend, in part, on the sufficiency and effectiveness of our marketing and trade spending programs

Risks Related to our Products and Customers

1. 06Our business depends on our ability to introduce new products and improve existing products in anticipation of changes in consumer preferences and demographics
2. 07If we fail to develop and maintain our brand, or the quality of our products that customers have come to expect, our business could suffer
3. 08The loss of a significant customer or distributor, certain actions by a significant customer or distributor, or financial difficulties of a significant customer or distributor could adversely affect our results of operations
4. 09If we are unable to maintain or increase prices for our products, our results of operations may be adversely affected
5. 10If our products are alleged to cause injury or illness, be mislabeled or misbranded, or fail to comply with governmental regulations, we may suffer adverse public relations, need to recall our products and experience product liability claims

Risks Related to our Manufacturing and Supply Chain

1. 11We may not be able to successfully implement initiatives to improve productivity and streamline operations to control or reduce costs. Failure to implement such initiatives could adversely affect our results of operations
2. 12Our manufacturing capacity and expansion plans could have a material adverse effect on our business, financial condition and results of operations
3. 13If we do not manage our supply chain effectively, including inventory levels, our business, financial condition and results of operation may be adversely affected
4. 14Adverse weather conditions, natural disasters, livestock disease, pestilences, global or local pandemics and other natural conditions can disrupt our operations, which can adversely affect our business, financial condition and results of operations
5. 15If the operating capacity or reputation of our Freshpet Fridges is harmed, our business, financial condition and results of operations may suffer
6. 16If the ingredients we use in our products are contaminated, alleged to be contaminated or are otherwise rumored to have adverse effects, our results of operations could be adversely affected
7. 17Outbreaks of animal diseases could have a material adverse effect on our business, financial condition and results of operations
8. 18We rely on co-packers to provide our supply of certain products and distributors to sell some of our products in certain channels. Any failure by co-packers or distributors to fulfill their obligations or any termination or renegotiation of their agreements could adversely affect our results of operations
9. 19Failure by our transportation providers to deliver our products on time or at all could result in lost sales
10. 20Disruptions in the U.S. and international economy may adversely affect our business, results of operations, and financial condition
11. 21Our ability to meet our workforce needs, particularly for staffing our Freshpet Kitchens, is crucial

Risks Related to Government Regulation and Legal Proceedings

1. 22Government regulation, scrutiny, warnings and public perception could increase our costs of production and increase legal and regulatory expenses
2. 23From time to time, we may be subject to litigation, government investigations or governmental proceedings, which may adversely impact our results of operations and financial condition

Risks Related to Intellectual Property

1. 24If we are not successful in protecting our intellectual property rights, our business, financial conditions and results of operations may be harmed

Risks Related to our International Operations

1. 25We may face difficulties as we expand into countries in which we have no prior operating experience

Risks Related to Environmental Regulation and Environmental Risks

1. 26We are subject to environmental regulation and environmental risks, which may adversely affect our business. Climate change or concerns regarding climate change may increase environmental regulation and environmental risks

Risks Related to Information Technology and Cyber Security

1. 27Our business operations could be disrupted if our information technology systems fail to perform adequately
2. 28We are subject to cyber security risks and may incur increasing costs in an effort to minimize those risks

Risks Related to our NOLs

1. 29We may be unable to use some or all of our net operating loss carryforwards, which could adversely affect our financial results

Risks Related to Ownership of Our Common Stock

1. 30Our quarterly operating results may fluctuate significantly and could fall below the expectations of securities analysts and investors due to various factors that are beyond our control, resulting in a decline in our stock price
2. 31The trading price of our common stock has been, and may continue to be, volatile, and you may not be able to resell your shares at or above the purchase price. Such volatility could be based on various factors relating to our Company and industry, including those described in this “Risks Factors" section
3. 32As of December 31, 2024, we had 48,701,787 shares of common stock outstanding, and our Certificate of Incorporation authorizes us to issue up to 200 million shares of common stock
4. 33Actions of activist stockholders have in the past and could in the future cause us to incur substantial costs, divert management's attention and resources, and have an adverse effect on our business
5. 34Future offerings of debt securities, which would rank senior to our common stock upon our bankruptcy or liquidation, and future offerings of equity securities, which may be senior to our common stock for the purposes of dividend and liquidating distributions, may adversely affect the market price of our common stock