BBBY

We are exposed to market risk from interest rate changes, foreign currency fluctuations, and changes in the market values of our securities. Information relating to quantitative and qualitative disclosures about these market risks is set forth below. Interest Rate Sensitivity The fair value of our cash and cash equivalents (highly liquid instruments with a remaining maturity of 90 days or less at the date of purchase) would not be significantly affected by either an increase or decrease in interest rates due mainly to the short-term nature of these instruments. Interest on the revolving line of credit pursuant to the Loan Agreement described herein would accrue based on market rates plus 1.00%, for a one-month interest period; however, we do not expect that any changes in prevailing interest rates will have a material impact on our results of operations. The Delayed Draw Term Loan Commitments require the Company to originate a loan at a floating interest rate plus an agreed margin upon request from the borrower, so long as the conditions specified in the Amended Credit Agreement with respect to the origination of such loan are satisfied. The outstanding Delayed Draw Term Loan Commitments expose the Company to the risk that the price of the loans arising from the exercise of the instrument might change from the inception to funding of the loan due to changes in loan interest rate margins; however, we do not expect that any changes in prevailing interest rates will have a material impact on our results of operations. Foreign Currency Risk Most of our sales and operating expenses are denominated in U.S. dollars, and therefore, our net revenue and operating expenses are not currently subject to significant foreign currency risk. As we grow our operations, our exposure to foreign currency risk could become more significant. Inflation Increases in commodity and shipping prices and energy and labor costs have resulted in inflationary pressures across various parts of our business and operations, including our partners and supply chain. We continue to monitor the impact of inflation to minimize its effects on our customers. We work with our partners to limit the amount of cost increases that are passed on through higher pricing. If costs borne by the Company or our partners were to be subject to incremental inflationary pressures, we may not be able to fully offset such higher costs through pricing actions or other cost efficiency measures. Our inability or failure to do so could harm our business, financial condition, and results of operations. While it is difficult to accurately measure the impact of inflation due to the imprecise nature of the estimates required, we believe the effects of inflation, if any, on our historical results of operations and financial condition have been immaterial. We cannot assure you, however, that our results of operations and financial condition will not be materially impacted by inflation in the future. Investment Risk The fair values of the equity and debt securities may be subject to fluctuations due to volatility of the stock market in general, investment-specific circumstances, and changes in general economic conditions. At June 30, 2026, the recorded value in equity securities of private companies was $55.9 million. At June 30, 2026, $17.1 million of the equity securities and $26.0 million of the debt securities were measured at fair value using Level 3 inputs. The fair value assessment of private companies includes a review of recent operating results and trends, recent sales/acquisitions of the securities, and other publicly available data. Valuations of private companies are inherently more complex due to the lack of readily available market data. As such, we believe that providing a sensitivity analysis is not practicable. These investments valued using Level 3 inputs represent 65.1% of assets measured at fair value. See Note 4—Fair Value Measurement included in Item 1, Part I, Financial Statements (Unaudited) of this Quarterly Report on Form 10-Q for further information. For the equity interest in Medici Ventures, L.P., we record our proportionate share of the entity's reported net income or loss, which reflects the fair value changes of the underlying investments of the entity and any other income or losses of the entity. 46 Table of Contents

From time to time, we are involved in, or become subject to litigation or other legal proceedings concerning consumer protection, employment, privacy, intellectual property, claims under the securities laws, and other commercial matters related to the conduct and operation of our business and the sale of products on our websites. We also prosecute lawsuits to enforce our legal rights. In connection with such litigation or other legal proceedings, we have been in the past and we may be in the future subject to equitable remedies relating to the operation of our business or judgments requiring us to pay significant damages or associated costs. Such litigation could be costly and time consuming and could divert or distract our management and key personnel from our business operations. Due to the uncertainty of litigation and depending on the amount and the timing, an unfavorable resolution of some or all of such matters could materially affect our business, results of operations, financial position, or cash flows. For additional details, see the information set forth under Item I of Part I, Financial Statements (Unaudited)—Note 10—Commitments and Contingencies, subheading Legal Proceedings and Contingencies, contained in the Notes to Unaudited Consolidated Financial Statements of this Quarterly Report on Form 10-Q, which is incorporated by reference in answer to this Item.

Any investment in our securities involves a high degree of risk. Please consider the following risk factors and the risk factors previously disclosed in Part 1, Item 1A, "Risk Factors," of our Annual Report on Form 10-K for the year ended December 31, 2025 carefully. If any one or more of such risks were to occur, it could have a material adverse effect on our business, prospects, financial condition and results of operations, and the market price of our securities could decrease significantly. Statements to the effect that an event could or would harm our business (or have an adverse effect on our business or similar statements) mean that the event could or would have a material adverse effect on our business, prospects, financial condition and results of operations, which in turn could or would have a material adverse effect on the market price of our securities. Many of the risks we face involve more than one type of risk. Consequently, you should carefully read all of the risk factors below, the risk factors described in our Form 10-K for the year ended December 31, 2025, and in any reports we file with the SEC after we file this Form 10-Q, before making any decision to acquire or hold our securities. Other than the risk factors set forth below, there are no material changes from the risk factors previously disclosed in Part I, Item 1A, "Risk Factors," of our Annual Report on Form 10-K for the year ended December 31, 2025. Future sales or other distributions of our stock may depress our stock price or subject us to limitations on our ability to use our net operating loss and tax credit carryforwards. Sales or other distributions of a substantial number of shares of our common stock, in the public market or otherwise, by us or by a significant stockholder, have in the past and could in the future, depress the trading price of our common stock and impair our ability to raise capital through the sale of additional equity securities. In addition, we have in the past and may in the future issue additional shares of our common or preferred stock from time to time in amounts that may be significant. We have sold common stock including under our "at the market" sales agreement and in follow-on underwritten offerings in the past and may do so in the future. We also previously issued a class of preferred stock that was publicly traded and may in the future issue preferred stock that is publicly traded. The sale of substantial amounts of our common or any preferred stock, by us or a significant stockholder, or the perception that these sales may occur, could adversely affect the trading prices of our securities. Under Section 382 and Section 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” the corporation may be limited in its ability to use its pre-ownership change net operating loss carryforwards and certain other tax attributes to offset its post-ownership change taxable income or otherwise reduce its income tax liabilities. In general, an “ownership change” will occur if the ownership of our stock by certain stockholders or groups of stockholders changes by more than 50% over a rolling three-year period. Similar rules may apply under state tax laws. Changes in the ownership of our stock, including as a result of issuances of stock in connection with the proposed TCS Merger, our merger with TBHC and other transactions (some of which may be beyond our control), may result in an ownership change, which could result in increased future income tax liability to us. 48 Table of Contents Risks Related to the Combined Company with TCS The TCS Merger will involve substantial costs. We and TCS have incurred and expect to incur non-recurring costs associated with combining the operations of the two companies, as well as transaction fees and other costs related to the TCS Merger. These costs and expenses include fees paid to financial, legal, accounting and other advisors, and other related charges. The combined company will also incur restructuring and integration costs in connection with the TCS Merger. The costs related to restructuring will be expensed as a cost of the ongoing results of operations of the combined company. There are processes, policies, procedures, operations, technologies and systems that must be integrated in connection with the TCS Merger and the integration of TCS’s business with our business. We expect that the elimination of duplicative costs, strategic benefits, and additional income, as well as the realization of other efficiencies related to the integration of the businesses, may offset incremental transaction, TCS Merger-related and restructuring costs over time. However, any net benefit may not be achieved in the near term or at all. While we have assumed that certain expenses would be incurred in connection with the TCS Merger and the other transactions pursuant to the TCS Merger Agreement, there are many factors beyond our control that could affect the total amount or the timing of the integration and implementation expenses. Lawsuits may in the future be filed against us or TCS, or against our directors or TCS’s principals, challenging the TCS Merger. Transactions such as the TCS Merger are frequently subject to litigation or other legal proceedings, including actions alleging that our board of directors or the TCS principals breached their respective fiduciary duties to their stockholders or equity holders by entering into the TCS Merger Agreement, by failing to obtain a greater value in the transaction or otherwise. Neither we nor TCS can provide assurance that such litigation or other legal proceedings will not be brought. If litigation or other legal proceedings are in fact brought against us or TCS, or against our board of directors or the TCS principals, we and they will defend against them, but might not be successful in doing so. An adverse outcome in such matters, as well as the costs and efforts of a defense even if successful, could have a material adverse effect on our business, results of operations or financial position or that of the combined company, including through the possible diversion of either company’s resources or distraction of key personnel. We and TCS have each incurred significant losses in recent years, and we cannot be certain when or if our operations will generate sufficient cash to fully fund our ongoing operations or the growth of the combined company. We and TCS have each historically used significant amounts of cash in operating activities, and we expect the combined company to continue to use significant amounts of cash to fund ongoing operations, capital requirements, working capital needs, and debt service obligations for the foreseeable future. If the combined company do not achieve profitability as anticipated, we may be required to allocate additional financial resources, which could adversely affect liquidity, results of operations, or the ability to pursue other strategic initiatives. The incurrence of indebtedness for such purposes would result in increased payment obligations and could also result in certain restrictive covenants, such as limitations on our ability to incur additional debt or secure such debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our liquidity, financial condition, or ability to conduct our business. We cannot be certain when or if the combined company’s operations will generate sufficient cash to fully fund ongoing operations or the growth of the combined company. Combining our business with that of TCS may be more difficult, costly or time-consuming than expected and the combined company may fail to realize the anticipated benefits of the TCS Merger, which may adversely affect the combined company’s business results and negatively affect the value of the combined company’s common stock. The success of the TCS Merger will depend on, among other things, the ability of us and TCS to combine our businesses in a manner that facilitates growth opportunities. We and TCS have entered into the TCS Merger Agreement because we believe that the TCS Merger and the other transactions contemplated by the TCS Merger Agreement are in the best interests of our respective stockholders and that combining our businesses will produce benefits. However, we and TCS must successfully combine and integrate our businesses in a manner that permits these benefits to be realized. In addition, the combined company must achieve the anticipated growth without adversely affecting current revenues, liquidity, customer and vendor relationships, and investments in future growth. If the combined company is not able 49 Table of Contents to successfully achieve these objectives, the anticipated benefits of the TCS Merger may not be realized fully, or at all, or may take longer to realize than expected. An inability to realize the full extent of the anticipated benefits of the TCS Merger and the other transactions under the TCS Merger Agreement, as well as any delays encountered in the integration process, could have an adverse effect upon the revenues, level of expenses and operating results of the combined company, which may adversely affect the value of the common stock of the combined company. In addition, the actual integration may result in additional and unforeseen expenses, and the anticipated benefits of the integration plan may not be realized. Actual growth and any potential cost savings, if achieved, may be lower than what we and TCS expect and may take longer to achieve than anticipated. If we and TCS are not able to adequately address integration challenges, we may be unable to successfully integrate operations or realize the anticipated benefits of the integration of the two companies. The failure to successfully integrate TCS with our businesses and operations in the expected time frame may adversely affect the combined company’s future results. We and TCS have operated will continue to operate independently. There can be no assurance that our businesses can be integrated successfully. It is possible that the integration process could result in the loss of key employees of either company, the loss of customers, the disruption of either company’s or both companies’ ongoing businesses, inconsistencies in standards, controls, procedures and policies, unexpected integration issues, higher than expected integration costs and an overall post-completion integration process that takes longer than originally anticipated. Specifically, the following issues, among others, must be addressed in integrating our operations in order to realize the anticipated benefits of the TCS Merger so the combined company performs as expected: •combining the companies’ operations and corporate functions; •combining the businesses and meeting the capital requirements of the combined company, in a manner that permits the combined company to achieve any cost savings or other synergies anticipated to result from the TCS Merger, the failure of which would result in the anticipated benefits of the TCS Merger not being realized in the time frame currently anticipated or at all; •integrating the companies’ technologies and technologies licensed from third parties; •integrating and unifying the offerings and services available to customers; •identifying and eliminating redundant and underperforming functions and assets; •harmonizing the companies’ operating practices, employee development and compensation programs, internal controls and other policies, procedures and processes; •maintaining existing agreements with customers, suppliers, distributors, vendors, landlords, and other counterparties, avoiding delays in entering into new agreements with prospective counterparties, and leveraging relationships with such third parties for the benefit of the combined company; •addressing possible differences in business backgrounds, corporate cultures and management philosophies; •consolidating the companies’ administrative and information technology infrastructure; •coordinating distribution and marketing efforts; •managing the movement of certain positions to different locations; •coordinating geographically dispersed organizations; and •effecting actions that may be required in connection with obtaining regulatory or other governmental approvals and consents. In addition, at times the attention of certain members of our management and resources may be focused on the integration of the businesses of the two companies and diverted from day-to-day business operations or other opportunities that may have been beneficial to such company, which may disrupt the business of the combined company. The combined company may not be able to retain customers or other business relationships, which could have an adverse effect on the combined company’s business and operations. Third parties may terminate or alter existing contracts or relationships with us or TCS. The combined company may experience impacts on relationships with customers, suppliers, vendors, landlords, and other counterparties that may harm the combined company’s business and results of operations. Certain counterparties may no longer desire to do business with the combined company following the TCS Merger, may seek to renegotiate commercial terms, 50 Table of Contents or may terminate, reduce, or fail to renew existing relationships. There can be no guarantee that customers and other third parties will remain with or continue to have a relationship with the combined company following the TCS Merger. If any customers or other counterparties stop doing business with the combined company, then the combined company’s business and results of operations may be harmed. We and TCS also have contracts with landlords, licensors and other business partners which may contain limitations applicable to such contracts following the TCS Merger. If these consents cannot be obtained, the combined company may suffer a loss of potential future revenue, incur costs and lose rights that may be material to the combined company’s business. In addition, third parties with whom we or TCS currently have relationships may terminate or otherwise reduce the scope of their relationship with either party following the TCS Merger. Any such disruptions could limit the combined company’s ability to achieve the anticipated benefits of the TCS Merger. The combined company may be exposed to increased litigation, which could have an adverse effect on the combined company’s business and operations. The combined company may be exposed to increased litigation from stockholders, customers, suppliers, distributors, consumers and other third parties due to the combination of our and TCS’s businesses following the TCS Merger. Such litigation may have an adverse impact on the combined company’s business and results of operations or may cause disruptions to the combined company’s operations. Due to the TCS Merger, we may be required to recognize impairment charges for goodwill and other intangible assets. We anticipate that we will have a significant amount of goodwill and other intangible assets on our consolidated balance sheet following the TCS Merger. Goodwill represents the excess of the purchase price paid over the fair value of the net assets acquired in business combinations, such as the TCS Merger. If the carrying amount exceeds fair value, an impairment loss is recognized. Goodwill is tested for impairment at least annually, or when we determine that a triggering event has occurred. Significant negative industry or economic trends, disruptions to our business, the impact of acquired businesses (including an inability to effectively integrate acquired businesses), unexpected significant changes, planned changes in use of the assets, divestitures and market capitalization declines may impair goodwill and other intangible assets. We may recognize impairment charges for goodwill and other intangible assets. Any charges relating to such impairments could materially and adversely affect our results of operations in the periods recognized, which could result in an adverse effect on the market price of our common stock. The market price for shares of our common stock following the TCS Merger may be affected by factors different from, or in addition to, those that historically have affected or currently affect the market prices of shares of our common stock. Our stockholders and the former equity holders and creditors of TCS were entitled to receive merger consideration under the TCS Merger Agreement now hold shares of common stock in the combined company. The business of TCS differs from our business, and, accordingly, the results of operations and prospects of the combined company will be affected by some factors that are different from those currently or historically affecting our results of operations and the market price of our common stock. Former TCS equity holders and creditors who received shares of our common stock or the Convertible Notes in the TCS Merger may decide not to hold such securities following the TCS Merger, and our existing stockholders before the TCS Merger may decide to reduce their investment in us as a result of changes to our investment profile following the TCS Merger. Sales of our common stock after the closing, or the perception that such sales may occur, as well as future conversion of the Convertible Notes into shares of our common stock, could have the effect of depressing the market price of the common stock of the combined company. Risks Related to the Fathom and F9 Mergers The Pending Mergers may not be completed and the Merger Agreements may be terminated in accordance with their terms. The Fathom Merger Agreement and the F9 Merger Agreement (together with the Fathom Merger Agreement, the “Merger Agreements”) are subject to a number of conditions that must be satisfied or waived (to the extent permitted) prior to the completion of our proposed merger with, as applicable, FTHM and F9 (together, the “Pending Mergers”). The conditions to the completion of the Pending Mergers, some of which are beyond the control of the Company, Fathom and F9, may not be 51 Table of Contents satisfied or waived in a timely manner or at all, and, accordingly, the Pending Mergers may be delayed or not completed. Additionally, either the Company or Fathom and F9 may terminate the Pending Merger Agreements, as applicable, under certain circumstances. The termination of the Merger Agreements could negatively impact our business and the trading prices of our common stock. If the Merger Agreements are not completed, the ongoing business of the Company may be adversely affected and, without realizing any of the expected benefits of having completed the Pending Mergers, we would be subject to a number of risks, including the following: •failure to complete the proposed Pending Mergers may result in negative publicity and a negative impression of us in the investment community; •we may experience negative reactions from our customers, employees, and other counterparties; •we will be required to pay our costs relating to the Pending Mergers, such as financial advisory, legal, financing and accounting costs and associated fees and expenses, whether or not the Pending Mergers are completed; and •matters relating to the Pending Mergers (including integration planning) will require substantial commitments of time and resources by management, which could otherwise have been devoted to day-to-day operations or to other opportunities that may have been beneficial to us. Our current stockholders will have a reduced ownership and voting interest in us after the Pending Mergers compared to their current ownership and will exercise less influence over management. Based on the number of issued and outstanding shares of common stock as of June 30, 2026, it is expected that Fathom and F9 equity holders and creditors entitled to receive merger consideration will collectively own up to approximately 21%, of our outstanding shares of common stock after giving effect to the Pending Mergers. As a result of the Pending Mergers, assuming consummated, our current stockholders will own a smaller percentage of the combined company than they currently own, and as a result will have less influence on our management and policies of the combined company than they now have on our management and policies, as the case may be. Obtaining required approvals and satisfying closing conditions may prevent or delay completion of the Pending Mergers. The Pending Mergers are subject to a number of conditions to closing as specified in the respective Merger Agreements. No assurance can be given that these approvals, financings, consents and other required conditions to closing will be obtained or satisfied, and, if they are obtained or satisfied, no assurance can be given as to their timing or the terms on which they are obtained. Any delay in completing the Pending Mergers could cause the combined company not to realize, or to be delayed in realizing, some or all of the benefits that we expect to achieve if the Pending Mergers are successfully completed within the expected time frame. Failure to attract, motivate and retain executives and other key employees could diminish the anticipated benefits of the Pending Mergers. The success of the Pending Mergers will depend in part on the combined company’s ability to retain the talents and dedication of the professionals currently employed by us and Fathom and F9. It is possible that these employees may decide not to remain with us or Fathom or F9, as applicable, while the Pending Mergers are pending, or with the combined company if the mergers are consummated. If key employees terminate their employment, or if an insufficient number of employees are retained to maintain effective operations, the combined company’s business activities may be adversely affected and management’s attention may be diverted from successfully integrating us and Fathom or F9 to hiring suitable replacements, all of which may cause the combined company’s business to suffer. In addition, we and Fathom or F9 may not be able to locate suitable replacements for any key employees who leave either company or offer employment to potential replacements on reasonable terms. In addition, there could be disruptions to or distractions for the workforce and management, including disruptions associated with integrating employees into the combined company. No assurance can be given that the combined company will be able to attract or retain key employees of ours and Fathom or F9 to the same extent that those companies have been able to attract or retain their own employees in the past. The Pending Mergers, and uncertainty regarding the Pending Mergers, may cause customers, strategic partners and others to delay or defer decisions concerning us or Fathom or F9 and adversely affect each company’s ability to effectively manage its respective business. 52 Table of Contents The Pending Mergers will occur only if the stated conditions are met, including the receipt of required approvals, and consents among other conditions. Many of these conditions are beyond our control and Fathom and F9’s control, and all parties also have certain rights to terminate the Pending Merger Agreements under certain circumstances. Accordingly, there may be uncertainty regarding the completion of the Pending Mergers. This uncertainty may cause customers, strategic partners or others that deal with us or Fathom or F9 to delay or defer entering into contracts with us or making other decisions concerning us or seek to change or cancel existing business relationships with us, which could negatively affect the business of either company. Any delay or deferral of those decisions or changes in existing agreements could have an adverse impact on our business, regardless of whether the Pending Mergers are ultimately completed. Whether or not the Pending Mergers are completed, the announcement and pendency of the Pending Mergers could cause disruptions in our business, which could have an adverse effect on our business and financial results. Whether or not the Pending Mergers are completed, the announcement and pendency of the Pending Mergers could cause disruptions in our business, including by diverting the attention of our management away from day-to-day business operations and toward the completion of the Pending Mergers. In addition, we have diverted significant management resources in an effort to complete the Pending Mergers. If the Pending Mergers are not completed, we will have incurred significant costs, including the diversion of management resources, for which we will have received little or no benefit. These disruptions could adversely affect our business and financial results. The Pending Mergers will involve substantial costs. We, Fathom and F9 have incurred and expect to incur non-recurring costs associated with combining the operations of the companies, as well as transaction fees and other costs related to the Pending Mergers. These costs and expenses include fees paid to financial, legal, accounting and other advisors, and other related charges. Some of these costs are payable by us regardless of whether the Pending Mergers are completed. The combined company will also incur restructuring and integration costs in connection with the Pending Mergers. The costs related to restructuring will be expensed as a cost of the ongoing results of operations of the combined company. There are processes, policies, procedures, operations, technologies and systems that must be integrated in connection with the Pending Mergers and the integration of Fathom and F9’s businesses with our business. We expect that the elimination of duplicative costs, strategic benefits, and additional income, as well as the realization of other efficiencies related to the integration of the businesses, may offset incremental transaction, merger related and restructuring costs over time. However, any net benefit may not be achieved in the near term or at all. Many of these costs will be borne by us even if the Pending Mergers are not completed. While we have assumed that certain expenses would be incurred in connection with the Pending Mergers and the other transactions contemplated by the Merger Agreements, there are many factors beyond our control that could affect the total amount or the timing of the integration and implementation expenses. Lawsuits may in the future be filed against us or Fathom or F9, or against our directors or Fathom or F9’s principals, challenging the Pending Mergers, and an adverse ruling in any such lawsuit may prevent the Pending Mergers from becoming effective or from becoming effective within the expected time frame. Transactions such as the proposed Pending Mergers are frequently subject to litigation or other legal proceedings, including actions alleging that the respective board of directors breached their respective fiduciary duties to their stockholders or equity holders by entering into the Merger Agreements, by failing to obtain a greater value in the transaction or otherwise. Neither we nor Fathom or F9 can provide assurance that such litigation or other legal proceedings will not be brought. If litigation or other legal proceedings are in fact brought against us, Fathom or F9, or against the respective board of directors, we and they will defend against them, but might not be successful in doing so. An adverse outcome in such matters, as well as the costs and efforts of a defense even if successful, could have a material adverse effect on our business, results of operations or financial position or that of the combined company, including through the possible diversion of either company’s resources or distraction of key personnel. Furthermore, one of the conditions to the completion of each of the Pending Mergers is that no law or order restraining, enjoining, making illegal, or otherwise prohibiting the consummation of the Pending Mergers be in effect. As such, if any plaintiff or governmental authority is successful in obtaining such relief, that relief may prevent the Pending Mergers from becoming effective or from becoming effective within the expected time frame. Future sales or other distributions of our stock may depress our stock price or subject us to limitations on our ability to use our net operating loss and tax credit carryforwards. 53 Table of Contents Sales or other distributions of a substantial number of shares of our common stock, in the public market or otherwise, by us or by a significant stockholder, have in the past and could in the future, depress the trading price of our common stock and impair our ability to raise capital through the sale of additional equity securities. In addition, we have in the past and may in the future issue additional shares of our common or preferred stock from time to time in amounts that may be significant. We have sold common stock including under our "at the market" sales agreement and in follow-on underwritten offerings in the past and may do so in the future. We also previously issued a class of preferred stock that was publicly traded and may in the future issue preferred stock that is publicly traded. The sale of substantial amounts of our common or any preferred stock, by us or a significant stockholder, or the perception that these sales may occur, could adversely affect the trading prices of our securities. Under Section 382 and Section 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” the corporation may be limited in its ability to use its pre-ownership change net operating loss carryforwards and certain other tax attributes to offset its post-ownership change taxable income or otherwise reduce its income tax liabilities. In general, an “ownership change” will occur if the ownership of our stock by certain stockholders or groups of stockholders changes by more than 50% over a rolling three-year period. Similar rules may apply under state tax laws. Changes in the ownership of our stock, including as a result of issuances of stock in connection with the Pending Mergers, our merger with TCS, our merger with TBHC and other transactions (some of which may be beyond our control), may result in an ownership change, which could result in increased future income tax liability to us. Risks Related to the Combined Company with Fathom and F9 We have incurred significant losses in recent years, and we cannot be certain when or if our operations will generate sufficient cash to fully fund our ongoing operations or the growth of the combined company. We have historically used significant amounts of cash in operating activities, and we expect the combined company to continue to use significant amounts of cash to fund ongoing operations, capital requirements, working capital needs, and debt service obligations for the foreseeable future. If we, Fathom, F9, or the combined company do not achieve profitability as anticipated, we may be required to allocate additional financial resources, which could adversely affect liquidity, results of operations, or the ability to pursue other strategic initiatives. The incurrence of indebtedness for such purposes would result in increased payment obligations and could also result in certain restrictive covenants, such as limitations on our ability to incur additional debt or secure such debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our liquidity, financial condition, or ability to conduct our business. We cannot be certain when or if our, Fathom’s, F9’s, or the combined company’s operations will generate sufficient cash to fully fund ongoing operations or the growth of the combined company. Combining our business with that of Fathom or F9 may be more difficult, costly or time-consuming than expected and the combined company may fail to realize the anticipated benefits of the Pending Mergers, which may adversely affect the combined company’s business results and negatively affect the value of the combined company’s common stock. The success of the Pending Mergers, if consummated, will depend on, among other things, the ability of us, Fathom and F9 to combine our businesses in a manner that facilitates growth opportunities. We, Fathom and F9 have entered into the respective Merger Agreements because we believe that the Pending Mergers and the other transactions contemplated by the Merger Agreements are in the best interests of our respective stockholders and that combining our businesses will produce benefits. However, we, Fathom and F9 must successfully combine and integrate our businesses in a manner that permits these benefits to be realized. In addition, the combined company must achieve the anticipated growth without adversely affecting current revenues, liquidity, customer and vendor relationships, and investments in future growth. If the combined company is not able to successfully achieve these objectives, the anticipated benefits of the Pending Mergers may not be realized fully, or at all, or may take longer to realize than expected. An inability to realize the full extent of the anticipated benefits of the Pending Mergers and the other transactions contemplated by the Merger Agreements, as well as any delays encountered in the integration process, could have an adverse effect upon the revenues, level of expenses and operating results of the combined company, which may adversely affect the value of the common stock of the combined company. In addition, the actual integration may result in additional and unforeseen expenses, and the anticipated benefits of the integration plan may not be realized. Actual growth and any potential cost savings, if achieved, may be lower than what we, Fathom and F9 expect and may take longer to achieve than anticipated. If we, Fathom and F9 are not able to adequately address 54 Table of Contents integration challenges, we may be unable to successfully integrate operations or realize the anticipated benefits of the integration of the companies. The failure to successfully integrate Fathom or F9 with our businesses and operations in the expected time frame may adversely affect the combined company’s future results. We, Fathom and F9 have operated and, until the completion of the Pending Mergers, will continue to operate independently. There can be no assurance that our businesses can be integrated successfully. It is possible that the integration process could result in the loss of key employees of either company, the loss of customers, the disruption of either company’s or both companies’ ongoing businesses, inconsistencies in standards, controls, procedures and policies, unexpected integration issues, higher than expected integration costs and an overall post-completion integration process that takes longer than originally anticipated. Specifically, the following issues, among others, must be addressed in integrating our operations in order to realize the anticipated benefits of the Pending Mergers so the combined company performs as expected: •combining the companies’ operations and corporate functions; •combining the businesses and meeting the capital requirements of the combined company, in a manner that permits the combined company to achieve any cost savings or other synergies anticipated to result from the Pending Mergers, the failure of which would result in the anticipated benefits of the Pending Mergers not being realized in the time frame currently anticipated or at all; •integrating the companies’ technologies and technologies licensed from third parties; •integrating and unifying the offerings and services available to customers; •identifying and eliminating redundant and underperforming functions and assets; •harmonizing the companies’ operating practices, employee development and compensation programs, internal controls and other policies, procedures and processes; •maintaining existing agreements with customers, suppliers, distributors, vendors, landlords, and other counterparties, avoiding delays in entering into new agreements with prospective counterparties, and leveraging relationships with such third parties for the benefit of the combined company; •addressing possible differences in business backgrounds, corporate cultures and management philosophies; •consolidating the companies’ administrative and information technology infrastructure; •coordinating distribution and marketing efforts; •managing the movement of certain positions to different locations; •coordinating geographically dispersed organizations; and •effecting actions that may be required in connection with obtaining regulatory or other governmental approvals and consents. In addition, at times the attention of certain members of our Fathom’s and F9’s management and each company’s respective resources may be focused on completion of the Pending Mergers and the integration of the businesses of the companies and diverted from day-to-day business operations or other opportunities that may have been beneficial to such company, which may disrupt each company’s ongoing business and the business of the combined company. The combined company may not be able to retain customers or other business relationships, which could have an adverse effect on the combined company’s business and operations. Third parties may terminate or alter existing contracts or relationships with us, Fathom or F9. If the Pending Mergers are consummated, the combined company may experience impacts on relationships with customers, suppliers, vendors, landlords, and other counterparties that may harm the combined company’s business and results of operations. Certain counterparties may no longer desire to do business with the combined company following the Pending Mergers, may seek to renegotiate commercial terms, or may terminate, reduce, or fail to renew existing relationships. There can be no guarantee that customers and other third parties will remain with or continue to have a relationship with the combined company following the Pending Mergers. If any customers or other counterparties stop doing business with the combined company, then the combined company’s business and results of operations may be harmed. Contracts with landlords, licensors and other business partners may require us, Fathom or F9, as applicable, to obtain consent from these other parties in connection with the Pending Mergers, or which may otherwise contain limitations applicable to such contracts following the Pending Mergers. If these consents cannot be obtained, the combined company may suffer a loss of potential future revenue, incur costs and lose rights that may be material to the combined company’s business. In addition, third parties with whom we, Fathom or F9 currently have relationships may terminate or otherwise reduce the scope of their relationship with either party in anticipation of the Pending Mergers. Any such disruptions could limit the combined company’s ability to achieve the anticipated benefits of the Pending Mergers. The adverse effect of any such disruptions could also be exacerbated by a delay in the completion of the Pending Mergers or by a termination of the Merger Agreements. 55 Table of Contents The combined company may be exposed to increased litigation, which could have an adverse effect on the combined company’s business and operations. The combined company may be exposed to increased litigation from stockholders, customers, suppliers, distributors, consumers and other third parties due to the combination of our, Fathom’s and F9’s businesses following the Pending Mergers. Such litigation may have an adverse impact on the combined company’s business and results of operations or may cause disruptions to the combined company’s operations. Due to the Pending Mergers, we may be required to recognize impairment charges for goodwill and other intangible assets. Upon and subject to closing the Pending Mergers, we anticipate that we will have a significant amount of goodwill and other intangible assets on our consolidated balance sheet. Goodwill represents the excess of the purchase price paid over the fair value of the net assets acquired in business combinations, such as the Pending Mergers. If the carrying amount exceeds fair value, an impairment loss is recognized. Goodwill is tested for impairment at least annually, or when we determine that a triggering event has occurred. Significant negative industry or economic trends, disruptions to our business, the impact of acquired businesses (including an inability to effectively integrate acquired businesses), unexpected significant changes, planned changes in use of the assets, divestitures and market capitalization declines may impair goodwill and other intangible assets. If the Pending Mergers are consummated, we may recognize impairment charges for goodwill and other intangible assets. Any charges relating to such impairments could materially and adversely affect our results of operations in the periods recognized, which could result in an adverse effect on the market price of our common stock. The market price for shares of our common stock following the Pending Mergers may be affected by factors different from, or in addition to, those that historically have affected or currently affect the market prices of shares of our common stock. If the Pending Mergers are consummated, our stockholders and the current equity holders and creditors of Fathom and F9 entitled to receive merger consideration under the respective Merger Agreements will hold shares of common stock in the combined company. The business of Fathom and F9 differs from our business, and, accordingly, the results of operations and prospects of the combined company will be affected by some factors that are different from those currently or historically affecting our results of operations and the market price of our common stock. Former Fathom and F9 equity holders and creditors who receive shares of our common stock in the Pending Mergers may decide not to hold such securities following the Pending Mergers, and our existing stockholders may decide to reduce their investment in us as a result of changes to our investment profile following the Pending Mergers. Sales of our common stock after the closing, or the perception that such sales may occur could have the effect of depressing the market price of the common stock of the combined company.