Turning Point Brands (TPB) risk factors, FY2024 10-K

General Risks

1. 01third-party claims that we infringe on their intellectual property; and
2. 38Our business may be damaged by events outside of our or our suppliers’ control, such as the impact of epidemics, political upheavals, or natural disasters
3. 39Climate change and legal and regulatory requirements related to climate change and environmental sustainability may have an adverse impact on our business and results of operations
4. 40Reliance on information technology means a significant disruption could affect our communications and operations
5. 41Security and privacy breaches may expose us to liability and cause us to lose customers
6. 42We may fail to manage our growth
7. 43We may fail to successfully identify, negotiate, and complete suitable investment or acquisition opportunities, integrate our acquisitions or otherwise be unable to benefit from pursuing acquisitions
8. 44We are subject to fluctuations in our results that make it difficult to track trends and develop strategies in the short-term
9. 45We are subject to the risks of exchange rate fluctuations
10. 46Adverse U.S. and global economic conditions could negatively impact our business, prospects, results of operations, financial condition or cash flows
11. 47The departure of key management personnel and the failure to attract and retain talent could adversely affect our operations
12. 48Our intellectual property rights may be infringed or misappropriated
13. 49Third parties may claim that we infringe or misappropriate their intellectual property rights
14. 50We may be required to write down intangible assets, including trademarks and goodwill, due to impairment, which could have a material adverse effect on our results of operations or financial position

Risks Related to Our Business and Industry

1. 02Sales of tobacco products are generally expected to continue to decline
2. 03We depend on a small number of key third-party suppliers and producers for our products
3. 04We may be unable to identify or contract with new suppliers or producers in the event of a disruption to our supply of products
4. 05Our licenses to use certain brands and trademarks may be terminated or not renewed
5. 06We may not be successful in maintaining the consumer brand recognition and consumer loyalty to our products or in anticipating and responding to changes in consumer preferences and purchase behavior
6. 07Our distribution efforts rely in part on our ability to leverage relationships with large retailers and national chains
7. 08We are subject to significant competition across our segments and compete against companies in all segments that have access to significant resources in terms of technology, relationships with suppliers and distributors and access to cash flow and financial markets
8. 09There can be no assurance that our products will be able to compete successfully against “big tobacco” or any of our other competitors, some of which have far greater resources, capital, experience, market penetration, sales and distribution channels than us
9. 10Competition from illicit sources may have an adverse effect on our overall sales volume, restricting the ability to increase selling prices and damaging brand equity
10. 11Contamination of, or damage to, our products could adversely impact sales volume, market share and profitability
11. 12The market for certain of our products is subject to a great deal of uncertainty and is still evolving
12. 13Complications with the design or implementation of our new enterprise resource planning system could adversely impact our business and operations
13. 14We could decide, or be required to, recall products, which could have a material adverse effect on our business, reputation, financial position, results of operations, or cash flows
14. 15We may encounter difficulties or liabilities arising from investments in joint ventures, acquisitions or divestitures

Risks Related to Legal, Tax and Regulatory Matters

1. 16We are subject to substantial and increasing regulation
2. 17Our products are regulated by the FDA, which has broad regulatory powers
3. 18Many of our products contain nicotine, which is considered to be a highly addictive substance
4. 19We are required to maintain cash amounts within an escrow account in order to be compliant with a settlement agreement between us and certain U.S. states and territories
5. 20Increases in tobacco-related taxes have been proposed or enacted and are likely to continue to be proposed or enacted in numerous jurisdictions
6. 21Our distribution to our wholesalers and retailers is dependent on the demands of their customers who are sensitive to increased taxes and economic conditions affecting their disposable income
7. 22We may be subject to increasing international control and regulation
8. 23encouraging litigation against tobacco companies
9. 24Our failure to comply with certain environmental, health and safety regulations could adversely affect our business
10. 25Imposition of significant tariffs on imports into the U.S. could have a material adverse effect on our business
11. 26The scientific community has not yet studied extensively the long-term health effects of certain substances contained in some of the products we previously sold and some products sold by joint ventures in which we have invested
12. 27We are subject to significant product liability litigation

Risks Related to Financial Results, Finances and Capital Structure

1. 28We have a substantial amount of indebtedness that could affect our financial condition
2. 29Our credit rating and ability to access well-functioning capital markets are important to our ability to secure future debt financing on acceptable terms
3. 30The terms of the agreement governing our indebtedness may restrict our current and future operations, which would adversely affect our ability to respond to changes in our business and to manage our operations
4. 31transfer all or substantially all of our assets or enter into merger or consolidation transactions
5. 32If we fail to establish and maintain proper and effective internal control over financial reporting, our operating results and our ability to operate our business could be harmed
6. 33A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis

Risks Related to our Common Stock

1. 34Our certificate of incorporation and bylaws, as well as Delaware law and certain regulations, could discourage or prohibit acquisition bids or merger proposals, which may adversely affect the market price of our common stock
2. 35limitations on the ability of our stockholders to fill vacant directorships or amend the number of directors constituting our board of directors
3. 36Future sales of our common stock in the public market could reduce our stock price, and any additional capital raised by us through the sale of equity or convertible securities may dilute our stockholders
4. 37We may issue preferred stock whose terms could adversely affect the voting power or value of our common stock