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New words:
AA, advice, advisory, amy, antigen, anytime, artificial, Ascend, automate, blend, bound, buyer, Cal, calm, cancer, CECL, cell, Cellular, center, Central, CFO, Chair, chimeric, Clawback, CODM, cord, CRS, cure, cytokine, datacasting, District, education, ego, electrical, empowered, entry, esthetician, evade, FAC, Faith, fatal, FDIC, foster, fx, Gaza, healthy, honoring, hypothetical, immune, immunotherapy, inadvertently, intelligence, intelligent, Israel, jointly, lab, Los, Maker, member, Meruelo, mezzanine, Misrepresentation, NC, neurotoxicity, nonmedical, notation, overseen, passing, PBCIC, pertinent, picked, piggyback, Plaintiff, proactive, ratify, receptor, referenced, regime, relmapirazin, repleading, RPP, SAC, safeguard, shelf, Shenzhen, Simplification, slight, SOFR, sound, stakeholder, Stan, stimulate, Strip, sublease, succeeding, Supr, syndrome, tenure, text, threatening, TIC, Title, titled, unutilized, variation, wilkinson, youthful
Removed:
AcquisitionCo, acting, AJ, allegedly, appointment, approving, block, CGI, commencing, considerable, consolidating, contracted, Corrib, crane, discounted, disproportionate, dispute, disrupted, divided, downturn, driver, escrow, exempt, extraordinary, Fargo, FVI, GMSL, govern, grew, heightening, Hispanic, HMRC, Hong, ICS, inaccurate, install, kenneth, Kong, Leffler, Lehman, LLP, Luxor, Majesty, managed, mandated, Mercuria, multichannel, noncontrolling, optical, plastic, postpone, produced, putative, recently, regulator, residual, Roach, Robert, run, scatter, Scott, season, seller, Sherman, Spanish, spot, staffing, Stahl, stemming, stop, subcontract, surviving, TCW, travel, trial, twenty, unchanged, unconverted, VAT, Verified, viewed, Voluntary
Financial report summary
?Risks
- INNOVATE is a holding company and its only material assets are its cash on hand, equity interests in its operating subsidiaries and its other investments. As a result, INNOVATE’s principal source of cash and cash flow is distributions from its subsidiaries and its subsidiaries may be limited by law and by contract in making distributions to INNOVATE.
- To service our indebtedness and other obligations, we will require a significant amount of cash.
- The agreements governing our indebtedness and Certificates of Designation for our outstanding shares of preferred stock contain various covenants that limit our discretion in the operation of our business and/or require us to meet financial maintenance tests and other covenants. The failure to comply with such tests and covenants could have a material adverse effect on us.
- We have significant indebtedness and other financing arrangements and could incur additional indebtedness and other obligations, which could adversely affect our business and financial condition.
- We have experienced significant historical, and may experience significant future, operating losses and net losses, which may hinder our ability to meet working capital requirements or service our indebtedness, and we cannot assure you that we will generate sufficient cash flow from operations to meet such requirements or service our indebtedness.
- We and our subsidiaries may not be able to attract and/or retain additional skilled personnel.
- We may identify material weaknesses in our internal control over financial reporting which could adversely affect our ability to report our financial condition and results of operations in a timely and accurate manner.
- Prolonged inflation could result in higher costs and decreased margins and earnings.
- Overall tightening of the labor market increases in labor costs or any possible labor unrest may adversely affect our business and results of operations.
- Fluctuations in the exchange rate of the U.S. dollar and in foreign currencies may adversely impact our results of operations and financial condition.
- Our failure to meet the continued listing requirements of NYSE could result in a delisting of our securities, which in turn could adversely affect our financial condition and the market for our common stock.
- Because we face significant competition for acquisition and business opportunities, including from numerous companies with a business plan similar to ours, it may be difficult for us to fully execute our business strategy. Additionally, our subsidiaries also operate in highly competitive industries, limiting their ability to gain or maintain their positions in their respective industries.
- Future acquisitions or business opportunities could involve unknown risks that could harm our business and adversely affect our financial condition and results of operations.
- We may not be able to successfully integrate acquisitions into our business, or realize the anticipated benefits of these acquisitions.
- We rely on information systems to conduct our businesses, and failure to protect these systems against security breaches and otherwise to implement, integrate, upgrade and maintain such systems in working order could have a material adverse effect on our results of operations, cash flows or financial condition.
- We may increase our operational size in the future, and may experience difficulties in managing growth.
- We may not be able to fully utilize our net operating loss and other tax carryforwards.
- We may be required to restate certain of our financial statements in the future, which may lead to additional risks and uncertainties, including stockholder litigation and loss of investor confidence.
- Our officers, directors, stockholders and their respective affiliates may have a pecuniary interest in certain transactions in which we are involved, and may also compete with us.
- In the course of their other business activities, certain of our current and future directors and officers may become aware of business and acquisition opportunities that may be appropriate for presentation to us as well as the other entities with which they are affiliated. Such directors and officers are not required to and may therefore not present otherwise attractive business or acquisition opportunities to us.
- We may suffer adverse consequences if we are deemed an investment company and we may incur significant costs to avoid investment company status.
- We are subject to litigation in respect of which we are unable to accurately assess our level of exposure and which, if adversely determined, may have a material adverse effect on our financial condition and results of operations.
- Deterioration of global economic conditions could adversely affect our business.
- Climate change may have an impact on our business.
- We are subject to risks associated with our international operations.
- We face certain risks associated with the acquisition or disposition of businesses and lack of control over certain of our investments.
- Our development stage companies may never produce revenues or income.
- We could consume resources in researching acquisitions, business opportunities or financings and capital market transactions that are not consummated, which could materially adversely affect subsequent attempts to locate and acquire or invest in another business.
- There may be tax consequences associated with our acquisition, investment, holding and disposition of target companies and assets.
- Our participation in any future joint investment could be adversely affected by our lack of sole decision-making authority, our reliance on a partner’s financial condition and disputes between us and the relevant partners.
- We may issue additional shares of common stock or preferred stock, which could dilute the interests of our stockholders and present other risks.
- Conversion of the 2026 Convertible Notes will dilute the ownership interest of existing stockholders, including holders who had previously converted their Convertible Notes, or may otherwise depress the market price of our common stock.
- Future sales of substantial amounts of our common stock by holders of our preferred stock or other significant stockholders may adversely affect the market price of our common stock.
- Price fluctuations in our common stock could result from general market and economic conditions and a variety of other factors.
- Delaware law and our charter documents contain provisions that could discourage or prevent a potential takeover, even if such a transaction would be beneficial to our stockholders.
- Actions of activist stockholders, including a proxy contest, could be disruptive and potentially costly and the possibility that activist stockholders may contest, or seek changes that conflict with, our strategic direction could cause uncertainty about the strategic direction of our business. Such actions may also trigger a change in control under certain agreements to which the Company is party, which could materially and adversely affect our business.
- Bank failures or other similar events could adversely affect our and our customers' and vendors' liquidity and financial performance.
- DBMG’s business is dependent upon major construction contracts, the unpredictable timing of which may result in significant fluctuations in its cash flow due to the timing of receipt of payment under such contracts.
- The nature of DBMG’s primary contracting terms for its contracts, including fixed-price and cost-plus pricing, could have a material adverse effect on DBMG’s results of operations, cash flows or financial condition.
- DBMG’s billed and unbilled revenue may be exposed to potential risk if a project is terminated or canceled or if DBMG’s customers encounter financial difficulties.
- DBMG may be exposed to additional risks as it obtains new significant awards and executes its backlog, including greater backlog concentration in fewer projects, potential cost overruns and increasing requirements for letters of credit, and inability to fully realize the revenue value reported in its backlog, a substantial portion of which is attributable to a relatively small number of large contracts or other commitments, each of which could have a material adverse effect on DBMG’s results of operations, cash flows or financial condition.
- DBMG’s failure to meet contractual schedule or performance requirements could have a material adverse effect on DBMG’s results of operations, cash flows or financial condition.
- DBMG’s government contracts may be subject to modification or termination, which could have a material adverse effect on DBMG’s results of operations, cash flows or financial condition.
- DBMG is exposed to potential risks and uncertainties associated with its reliance on subcontractors and third-party vendors to execute certain projects.
- Persistent inflation and economic uncertainty may negatively impact DBMG's business.
- Any increase in the price of, or change in supply and demand for, the steel and steel components that DBMG utilizes to complete projects could have a material adverse effect on DBMG’s results of operations, cash flows or financial condition.
- DBMG’s dependence on suppliers of steel and steel components makes it vulnerable to a disruption in the supply of its products.
- Intense competition in the markets DBMG serves could reduce DBMG’s market share and earnings.
- DBMG’s customers’ ability to receive the applicable regulatory and environmental approvals for projects and the timeliness of those approvals could adversely affect DBMG’s business.
- DBMG’s failure to obtain or maintain required licenses may adversely affect its business.
- Volatility in equity and credit markets could adversely impact DBMG due to its impact on the availability of funding for DBMG’s customers, suppliers and subcontractors.
- DBMG’s business may be adversely affected by bonding and letter of credit capacity.
- DBMG is vulnerable to significant fluctuations in its liquidity that may vary substantially over time.
- DBMG’s projects expose it to potential professional liability, product liability, warranty and other claims.
- DBMG may experience increased costs and decreased cash flow due to compliance with environmental laws and regulations, liability for contamination of the environment or related personal injuries.
- DBMG is and will likely continue to be involved in litigation that could have a material adverse effect on DBMG’s results of operations, cash flows or financial condition.
- Work stoppages, union negotiations and other labor problems could adversely affect DBMG’s business.
- DBMG’s employees work on projects that are inherently dangerous, and a failure to maintain a safe work site could result in significant losses.
- Pansend’s operating results may fluctuate significantly, which makes its future operating results difficult to predict and could cause its operating results to fall below expectations.
- Pansend operates in a highly competitive market, and may face competition from large, well-established medical technology, device and
- product manufacturers with significant resources, and may not be able to compete effectively.
- Pansend currently has limited product revenue and may never become profitable.
- There is a limited talent pool of experienced professionals in the life sciences industry. If Pansend is not able to retain and recruit personnel with the requisite technical skills, it may be unable to successfully execute Pansend’s business strategy.
- Rapidly changing technology in life sciences could make the products Pansend is developing obsolete.
- If Pansend is unable to effectively protect its intellectual property, it may not be able to operate its business and third parties may be able to use and profit from its technology, both of which would impair Pansend’s ability to be competitive.
- R2's success depends upon patient satisfaction with its procedures.
- If third parties make claims of intellectual property infringement against Pansend, or otherwise seek to establish their intellectual property rights equal or superior to Pansend’s, it may have to spend time and money in response and potentially discontinue certain of Pansend’s operations.
- Therapies targeted by Scaled Cell represent a novel approach toward treatment of certain diseases. Increased regulatory scrutiny or negative perception of certain therapies or treatments could adversely affect our business.
- Patients receiving CAR-T therapies may experiences severe adverse events, which may affect clinical development, regulatory approval, and public perception.
- Our broadcasting business operates in highly competitive markets and our ability to maintain market share and generate operating revenues depends on how effectively we compete with existing and new competition.
- The FCC could implement regulations or the U.S. Congress could adopt legislation that might have a significant impact on the operations of the stations we own and the stations we provide services to or the television broadcasting industry as a whole.
- Broadcasting Licenses are issued by, and subject to the jurisdiction of the FCC, pursuant to the Communications Act of 1934, as amended (the "Communications Act"). The Communications Act empowers the FCC, among other actions, to issue, renew, revoke and modify broadcasting licenses; determine stations’ frequencies, locations and operating power; regulate some of the equipment used by stations; adopt other regulations to carry out the provisions of the Communications Act and other laws, including requirements affecting the content of broadcasts; and to impose penalties for violation of its regulations, including monetary forfeitures, short-term renewal of licenses and license revocation or denial of license renewals. Any of these actions imposed by the FCC could result in the loss of station licenses or assets.
- Continued uncertain financial and economic conditions may have an adverse impact on our business, results of operations or financial condition.
- Certain stations are also benefiting from our retransmission consent agreements with MVPDs, and we cannot predict the outcome of potential regulatory changes to the retransmission consent regime.
Management Discussion
- ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated annual financial statements and the notes thereto, each of which are contained in Item 8. entitled "Financial Statements and Supplementary Data," and other financial information included herein. Some of the information contained in this discussion and analysis includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section as well as the section below entitled "Special Note Regarding Forward-Looking Statements" for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
- Unless the context otherwise requires, in this Annual Report on Form 10-K, "INNOVATE" means INNOVATE Corp. (formerly known as HC2 Holdings, Inc.) and the "Company," "we" and "our" mean INNOVATE together with its consolidated subsidiaries. "U.S. GAAP" means accounting principles accepted in the United States of America.