As filed with the Securities and Exchange Commission on January 8, 2021.

Registration No. 333-          

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

INTERIOR LOGIC GROUP HOLDINGS, LLC

to be converted as described herein to a corporation named

Interior Logic Group Holdings, Inc.

(Exact name of registrant as specified in its charter)

10 Bunsen

Irvine, California 92618

(800) 959-8333

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Alan K. Davenport

Chief Executive Officer and Chairman

Interior Logic Group Holdings, LLC

10 Bunsen

Irvine, California 92618

(800) 959-8333

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box.  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

CALCULATION OF REGISTRATION FEE

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

EXPLANATORY NOTE

Interior Logic Group Holdings, LLC, the registrant whose name appears on the cover of this Registration Statement, is a Delaware limited liability company. Prior to the effectiveness of this Registration Statement, Interior Logic Group Holdings, LLC will convert into a Delaware corporation and be renamed Interior Logic Group Holdings, Inc. (the “Corporate Conversion”). Shares of common stock of Interior Logic Group Holdings, Inc. are being offered by the prospectus. Except as otherwise disclosed in the prospectus, the consolidated financial statements and selected historical financial data and other financial information included in this Registration Statement are those of Interior Logic Group Holdings, LLC and its respective subsidiaries, as the case may be, and do not give effect to the Corporate Conversion.

The information contained in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted.

Shares

Interior Logic Group Holdings, Inc.

Common Stock

This is the initial public offering of our common stock. We are offering shares of our common stock.

No public market currently exists for our common stock. We have applied to list our common stock on the Nasdaq Global Select Market under the symbol “ILG.”

We currently expect the initial public offering price to be between $             and $             per share.

Investing in our common stock involves a high degree of risk. See “Risk Factors” beginning on page 23 of this prospectus.

The underwriters may also purchase up to an additional                shares of our common stock from us at the public offering price, less underwriting discounts and commissions, within 30 days from the date of this prospectus. If the underwriters exercise this option in full, the total underwriting discounts will be $                , and the total proceeds, after underwriting discounts but before expenses, to us will be $                .

Neither the Securities and Exchange Commission nor any state securities commission or other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares to purchasers on or about                , 2021.

You should rely only on the information contained in this prospectus and any free writing prospectus we may authorize to be delivered to you. We have not, and the underwriters have not, authorized anyone to provide you with information different from, or in addition to, that contained in this prospectus and any related free writing prospectus. We and the underwriters take no responsibility for, and can provide no assurances as to the reliability of, any information that others may give you. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is only accurate as of the date of this prospectus, regardless of the time of delivery of this prospectus and any sale of shares of our common stock.

TABLE OF CONTENTS

Presentation of Market and Industry Data and Certain Definitions

We use market data and industry forecasts and projections throughout this prospectus, particularly in the sections entitled “Prospectus Summary,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Our Business.” The industry and market data are based on the good faith estimates of our management, research studies and surveys, independent industry publications and other publicly available information. Industry publications and research studies and surveys generally state that they have been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. These data involve a number of assumptions and limitations, and investors are cautioned not to give undue weight to such estimates. Although we have not independently verified the accuracy or completeness of any third-party information, we believe that the information from these publications and studies included in this prospectus is generally reliable, and the conclusions contained in the third-party information are reasonable. In addition, projections, assumptions and estimates of our future performance and the future performance of the industry in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of

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factors, including those described in the section entitled “Risk Factors” and elsewhere in this prospectus. In particular, some of the market and industry estimates in this prospectus were prepared prior to the COVID-19 pandemic. These and other factors could cause results to differ materially from those expressed in the estimates made by independent parties and by us. We expect that the COVID-19 pandemic may continue to materially reduce the growth of various of the markets discussed in this prospectus, and we cannot predict the extent to which these estimates will be affected. These and other factors could cause results to differ materially from those expressed in, or implied by, the estimates made by independent parties and by us. Furthermore, we cannot assure you that a third party using different methods to assemble, analyze or compute industry and market data would obtain the same results. See “Information Regarding Forward-Looking Statements.”

In this prospectus, we present a variety of housing market indicators, including housing starts and home closings.

Housing starts are considered a leading indicator of the state of the housing market. Rankings of MSAs (as defined below) by 2019 single-family housing starts are based on estimated 2019 single-family housing starts per MSA published in Metrostudy’s September 2020 Builder Home Building Outlook.

References to a housing market mean a Metropolitan Statistical Area (“MSA”), which is an area that generally consists of at least one urbanized area of 50,000 or more inhabitants, plus adjacent territory that has a high degree of social and economic integration with the core area as measured by commuting ties. MSA boundaries are based on U.S. Census Bureau determinations as of March 2020. References to our “geographic markets” mean the MSAs we serve. References to our “turnkey” supply chain management and installation services mean the provision of both materials and workforce sold together.

References to the largest homebuilders are based on Builder Magazine’s 2020 Builder 100 list, which ranks U.S. homebuilders based on total number of home closings.

We calculate the size of the approximately $23 billion U.S. new home interior finish solutions industry by multiplying the average installed cost of flooring, cabinets and countertops in a new single-family home in 2019, which was approximately $25,500 according to the National Association of Homebuilders (the “NAHB”), by the number of 2019 single-family housing starts (approximately 887,700 based on U.S. Census Bureau data).

In this prospectus, we define a “direct” competitor as a company whose primary business is the provision of residential design services and the supply and installation of multiple categories of interior finishes.

In this prospectus, we refer to our “design studio solutions” and “builder direct solutions.” We define our design studio solutions as our full suite of design, supply chain management and installation services, including our dedicated builder-branded and shared ILG-branded design studios where we interface directly with homebuyers in the design process. We define our builder direct solutions as our supply chain management and installation services for homebuilders. Some of our customers start as builder direct customers and then convert to our design studio solutions.

Service Marks, Trademarks and Trade Names

This prospectus includes trademarks and service marks owned by us and our subsidiaries, as well as trademarks, trade names and service marks of other companies, which are the property of their respective owners. Solely for convenience, trademarks, trade names and service marks referred to in this prospectus may appear without the ^®, TM or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these

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trademarks, trade names and service marks. We do not intend our use or display of other parties’ trademarks, trade names or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.

The Business Combination

On May 31, 2018, we consummated a business combination transaction (the “Business Combination”) where Interior Specialists, Inc. (“ISI”) acquired Interior Logic Group, Inc. (“ILG”) and combined under a new holding company, Interior Logic Group Holdings, LLC (“ILG Holdings”), pursuant to a Contribution Agreement (the “Contribution Agreement”) dated April 30, 2018, by and among Faraday Holdings, LLC (“Faraday”), Installation Services Holdings, LLC (“ISH”), ISI, Installation Services Holdings, Inc., (the parent company of ILG), and ILG Holdings.

We refer to the business of ISI prior to the Business Combination as “legacy ISI” and the business of ILG prior to the Business Combination as “legacy ILG.” Unless otherwise indicated, or the context otherwise requires, references to “we,” “us,” “our,” or the “Company” refer to (i) with respect to periods prior to the Business Combination, legacy ISI, (ii) with respect to periods beginning with the completion of the Business Combination and ending immediately before the completion of our Corporate Conversion (as defined below), Interior Logic Group Holdings, LLC and its subsidiaries, and (iii) with respect to periods beginning with the completion of our Corporate Conversion and thereafter, Interior Logic Group Holdings, Inc. and its consolidated subsidiaries. In accordance with Rule 3-05 of Regulation S-X, separate financial statements are not required for any of our acquisitions individually or in the aggregate.

Prior to the Business Combination, for the fiscal year ended December 31, 2017, legacy ILG had revenues of $566 million and nearly 1,600 employees, while legacy ISI had revenues of $852 million and nearly 2,600 employees. At the time of the Business Combination, legacy ILG was legacy ISI’s largest direct competitor.

Basis of Presentation

Our consolidated financial statements accompanying this prospectus have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, and include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions have been eliminated in consolidation. Our consolidated financial statements are based on a fiscal year ending December 31.

Additional information regarding our financial performance and non-GAAP measures, including reconciliations of non-GAAP measures to their most directly comparable GAAP measure, is included in “Non- GAAP Financial Measures” and in “Summary Historical Financial Data.” In addition, such financial information should be read in conjunction with the disclosures set forth under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes appearing elsewhere in this prospectus.

Non-GAAP Measures

In addition to the results reported in accordance with GAAP, we have provided information in this prospectus relating to Adjusted EBITDA and Adjusted EBITDA margin.

We define EBITDA as earnings before interest, income taxes, depreciation and amortization. We define “Adjusted EBITDA” as EBITDA, adjusted for acquisition and integration costs, share-based compensation, management fees, pre-opening costs, refinancing costs and expenses associated with the submission of our prior draft registration statement to the SEC, which was discontinued. To calculate Adjusted EBITDA for the nine-month period ended September 30, 2020, we further adjusted EBITDA for direct COVID-19-related costs, which represent charges for severance costs, remote connectivity and health and safety modifications within our facilities, all of which are clearly and directly related to COVID-19 and are incremental and separable from

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normal operations. To calculate Adjusted EBITDA for 2018, we further adjusted EBITDA for an impairment charge resulting from our rebranding in connection with our Business Combination. Adjusted EBITDA measures performance by adjusting EBITDA for certain income or expense items that are not considered part of our core operations.

Adjusted EBITDA margin takes Adjusted EBITDA and divides it by revenues. We believe that the presentation of these measures provides useful information to investors regarding our results of operations because it assists both investors and us in analyzing and benchmarking the performance and value of our business. We also believe these measures are useful to investors and us as measures of comparative operating performance from period to period, as they measure our changes in pricing decisions, cost controls and other factors that impact operating performance, and they remove the effect of our capital structure (primarily interest expense), asset base (primarily depreciation and amortization), items outside our control (primarily income taxes) and the volatility related to the timing and extent of other activities, such as asset impairments, and non-core income and expenses, such as acquisition and integration expenses. Accordingly, we believe that these measures are useful for comparing general operating performance from period to period. In addition, we use various Adjusted EBITDA- based measures in determining certain of our incentive compensation programs. Other companies may define Adjusted EBITDA and Adjusted EBITDA margin differently and, as a result, our measures may not be directly comparable to measures of other companies. In addition, Adjusted EBITDA may be defined differently for purposes of covenants contained in our Revolving Credit Facility or any future indebtedness.

Although we use these measures to assess the performance of our business, the uses of the measures are limited because they do not include certain material expenses, such as interest and taxes, necessary to operate our business. Adjusted EBITDA and Adjusted EBITDA margin should be considered in addition to, and not as substitutes for, net income (loss) in accordance with GAAP as a measure of performance. Our presentation of these measures should not be construed as an indication that our future results will be unaffected by unusual or non-recurring items.

These measures have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Because of these limitations, these measures are not intended as alternatives to net income (loss) as indicators of our operating performance, as alternatives to any other measure of performance in conformity with GAAP or as alternatives to cash flow provided by operating activities as measures of liquidity. You should therefore not place undue reliance on these measures or ratios calculated using those measures.

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RISK FACTORS

Investing in our common stock involves a high degree of risk. You should consider carefully the risks and uncertainties described below, together with all of the other information in this prospectus, including our consolidated financial statements and related notes included elsewhere in this prospectus, before making an investment decision. In addition to the risks relating to the COVID-19 pandemic that are specifically described in these Risk Factors, the effects of the COVID-19 pandemic may also have the effect of significantly heightening many of the other risks associated with our business and an investment in our common stock, including the other risks described in this prospectus. There may be additional risks and uncertainties of which we are not currently aware or which we currently believe to be immaterial. If any of the following risks are realized, our business, financial condition, results of operations and prospects could be materially and adversely affected. In that event, the trading price of our common stock could decline and you could lose part or all of your investment.

Risks Related to COVID-19 Pandemic

Our business, financial condition and results of operations have been, and are expected to continue to be, adversely affected by the current COVID-19 public health pandemic.

In December 2019, coronavirus was reported in China, and, in March 2020, the World Health Organization declared COVID-19 a pandemic. On March 12, 2020, the President of the United States declared the COVID-19 outbreak in the United States a national emergency. The COVID-19 pandemic has caused significant economic dislocation in the United States as many state and local governments have ordered non-essential businesses to close and residents to shelter in place at home for a period of time. This has resulted in an unprecedented slow-down in economic activity and a related increase in unemployment. Since the COVID-19 outbreak, more than 50 million people have filed claims for unemployment, and financial markets have experienced extreme volatility. Any outbreaks of contagious diseases, public health epidemics or pandemics and other adverse public health developments could have a material adverse effect on our business, financial condition and results of operations. The COVID-19 pandemic, and the reactions of governmental and other authorities to contain, mitigate or combat the pandemic, which have severely restricted the level of economic activity around the world, have impacted, and are expected to continue to impact, our operations, and the nature, extent and duration of the impact of COVID-19 or any future disease or adverse health condition is highly uncertain and beyond our control. In response to the COVID-19 pandemic, the governments of many countries, states, cities and other geographic regions have taken preventative or protective actions, such as imposing restrictions on travel and business operations. These restrictions have had negative impacts on our business, and may potentially continue to negatively impact our business operations in the future. While our operations have resumed in all of our markets as of the date of filing of this Registration Statement, future mandatory shutdowns, reductions in operations or other restrictions could have a material adverse effect on our business.

Although we have implemented measures to mitigate the impact of the COVID-19 pandemic on our business, financial condition and results of operations, including reducing our expenses, furloughing employees and expanding the use of our fully virtual design appointments in place of in-person design studios, these measures may not fully mitigate the impact of the COVID-19 pandemic on our business, financial condition and results of operations. We have also experienced increased costs as a result of the COVID-19 pandemic, including severance costs and costs related to ensuring the safety of our workforce. We cannot predict the degree to, or the period over, which we will be affected by the COVID-19 pandemic and resulting governmental and other measures.

We expect that the economic effects of the COVID-19 pandemic will likely continue to adversely affect demand for our services and products as well as the length of the construction cycle and the timing of our revenue over the balance of fiscal 2020 and through the first half of 2021. Some of our customers have elected to delay remodeling activity due to the COVID-19 pandemic and the government has imposed certain restrictions in some geographic regions to contain the spread of the pandemic. We anticipate that homebuilders and our other

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customers may choose to continue to delay new construction or repair and remodeling activity, in response to the COVID-19 pandemic and the measures to contain its spread.

In addition, the construction industry in our sector has been experiencing labor and supply constraints as a result of the COVID-19 pandemic. We have and may continue in the future to experience disruptions or delays in our supply chain in connection with the pandemic in the future, which may result in the need to seek alternate suppliers. Alternate suppliers may be more expensive, may not be available or may encounter delays in shipments to us, which would affect our business, financial condition and results of operations. We cannot estimate the extent and duration of the disruption to our supply chain, or the significance of the related financial impact. Should any such disruption continue for an extended period of time, the impact could have a material adverse effect on our business, financial condition and results of operations.

In the long term, our liquidity will depend on many factors, including our results of operations, our future growth and the timing and extent of our expenditures, the expansion of our sales and marketing activities and the extent to which we make acquisitions. Changes in our operating plans, material changes in anticipated sales, increased expenses, acquisitions or other events may cause us to seek additional equity and/or debt financing in future periods. We cannot assure you that we will have access to capital to satisfy our needs under the impacts of the COVID-19 pandemic.

We expect that the COVID-19 pandemic will continue to adversely affect many aspects of our business, including, but not limited to, the following:

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Our management of the impact of COVID-19 has required, and will continue to require, significant investment of time by our management and employees as well as other resources. The focus on managing and mitigating the impacts of COVID-19 on our business will likely cause us to divert or delay the application of our resources toward new initiatives and growth opportunities, which may adversely impact our financial condition and results of operations in future periods.

The continuing impact of the COVID-19 pandemic on our business and operations depends on numerous factors beyond our control, including, among other things: (1) the duration of, and any revisions in, governmental quarantine, shelter-in-place or similar social distancing orders or guidelines; (2) the occurrence and magnitude of future outbreaks; (3) the availability of vaccines or other medical remedies and preventive measures; and (4) broader economic conditions, including unemployment levels and the reaction of consumers to potentially longer-term economic uncertainty, which may adversely impact our financial condition and results of operations in future periods.

Additionally, we continue to review available benefits under the federal and state relief and stimulus legislation and programs, including, among other things, those under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. We anticipate benefiting from certain payroll-related items, net operating loss carryback provisions, increased depreciation provisions, and relaxed interest expense limitation provisions of the CARES Act, but we do not know whether we will be able to access additional benefits in a manner that is advantageous to us.

Risks Related to Our Business and Industry

Our business and the industry in which we operate are highly dependent on the level of new single-family residential construction activity, the U.S. and regional economies, credit markets and other important factors, all of which are beyond our control.

Our business is highly dependent on the level of new single-family residential construction activity, which is cyclical and sensitive to general and local economic conditions over which we have no control, including:

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Unfavorable changes in demographics, credit markets, political conditions, consumer confidence, household formation, housing affordability or housing inventory levels, or a weakening of the national economy or of any regional or local economy in which we operate, could adversely affect consumers’ spending on new single-family residential projects and, as a result, our business, financial condition, results of operations and prospects. Adverse changes in these conditions may affect our business generally or may be more prevalent or concentrated in particular markets in which we operate.

Decrease in demand for interior option upgrades could decrease our profit margins.

Our profitability is impacted by the mix of products for which we provide interior finish solutions. For example, in the new single-family residential market, sales of option upgrades are more profitable for us than sales of standard options, which are built into the base price of a home and vary based on the size of homes consumers are looking for. A shift in consumer preference towards smaller starter homes could lead to a decrease in demand for interior option upgrades. Although our overall product mix has shifted toward option upgrade sales through our design studios and virtual design appointments, there can be no assurance that this trend will continue. Unfavorable changes in demographics, credit markets, consumer confidence, health care costs, housing affordability, housing inventory levels, mortgage interest rates, a weakening of the national economy or of any regional or local economy in which we operate and other factors beyond our control could adversely affect consumer spending, resulting in decreased demand for interior option upgrades. Any shift to options that generate lower revenues and/or profit margins could adversely impact our business, financial condition, results of operations and cash flows.

The growth in the housing market may not continue at the same rate, and any decline in the growth rate in our geographic markets or of the homebuilding industry may materially and adversely affect our business, financial condition, results of operations and cash flows.

The U.S. Census Bureau reported approximately 887,700 total single-family housing starts in 2019. This is an increase from approximately 875,800 starts in 2018, but still below the historical average over the past 60

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years. There is significant uncertainty regarding the timing and extent of any further recovery in new home construction and resulting product demand levels, and any decline may materially adversely affect our business, financial condition, results of operations and cash flows. In particular, increases in mortgage interest rates and rising home prices, along with other economic factors, may slow the recovery of the home construction market or lead to a decline. In addition, concerns over the affordability of housing as a consequence of increasing mortgage interest rates and rising home prices may reduce the demand in the markets we serve.

In addition, some analysts project that the demand for residential construction may be negatively impacted by lower home ownership rates resulting from increases in the number of renting households. Further, even if homebuilding activity fully recovers, the impact of such recovery on our business may be dampened if, for example, the average selling price or average size of new single-family homes decreases, which could cause our homebuilder customers to decrease spending on our interior finish solutions. Other factors that might impact growth in the homebuilding industry include: uncertainty in domestic and international financial, credit and consumer lending markets amid slow growth or recessionary conditions in various regions around the world; levels of mortgage repayment; tight lending standards and practices for mortgage loans that limit consumers’ ability to qualify for mortgage financing to purchase a home, including increased minimum credit score requirements, credit risk/mortgage loan insurance premiums and/or other fees and required down payment amounts, more conservative appraisals, higher loan-to- value ratios and extensive buyer income and asset documentation requirements; federal and state personal income tax rates and recent changes to the deductibility of certain state and local taxes; Federal Reserve policy changes; and severe weather and adverse climate conditions. Given these factors, we can provide no assurance that present growth trends will continue, whether overall or in our markets, or whether the new single-family residential market will ever return to historical levels.

If there is limited or no economic growth or if there are declines in employment and consumer income and/ or continued tight mortgage lending standards and practices in the geographic areas in which we operate, or if interest rates for mortgage loans continue to rise, there would likely be a corresponding adverse effect on the new single-family residential market, which could adversely affect our business, financial condition, results of operations and prospects. Economic conditions could also have a negative effect on homebuyers’ ability or desire to spend on interior option upgrades, even if there is not an overall impact on housing market volumes. These factors could also have a disproportionate impact on homeowners who otherwise would consider relocating to a house with a higher average selling price. For example, improvements in the overall new single-family residential market would not have as positive an impact on our operations if accompanied by an increase in entry-level housing starts as a proportion of the overall market mix for new homes.

We also rely on repair & remodel activity. High unemployment levels, high mortgage delinquency and foreclosure rates, lower home prices, limited availability of mortgage and home improvement financing, higher mortgage rates and significantly lower housing turnover may restrict consumer spending, particularly on discretionary items such as home improvement projects, and affect consumer confidence levels leading to reduced spending in the repair & remodel market. In addition, as the residential rental market continues to grow and demand for rental properties increases, property owners may not need to engage in substantial levels of repair & remodel activity in order to secure tenants. Furthermore, with even a slight decline in the economy, nationally or in any of the markets in which we operate, consumer preferences and purchasing practices and the strategies of our customers may adjust in a manner that could result in changes to the nature and prices of products demanded by the end consumer and our customers, and could adversely affect our business, financial condition and results of operations.

Any loss or decrease in the construction activity of or purchases by any of our significant customers could affect our business, financial condition, results of operations and cash flows.

The top 10 U.S. homebuilders accounted for approximately 43.7% and 42.7% of our revenues for the nine months ended September 30, 2020 and the year ended December 31, 2019, respectively. We cannot guarantee that we will maintain or improve our relationships with these customers or that we will continue to provide

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services to these customers at historical levels. The revenues from these customers generally are correlated to the level of building activity in their respective markets. In the future, homebuilder customers may exit or decrease their building activity in one or more of our markets depending on market conditions in the homebuilding industry.

In addition, our homebuilder and other customers may: (i) purchase some of the products for which we currently provide supply chain management and installation services directly from manufacturers; (ii) elect to establish their own building products design, manufacturing, fabrication, distribution and/or installation facilities, or online and technology platforms in lieu of our design solutions; (iii) give advantages to design, manufacturing, fabrication, distribution and/or installation intermediaries in which they have an economic stake; or (iv) elect to utilize the technology platforms and/or services of our competitors. Continued consolidation among homebuilders could also result in a loss of some of our customers. The loss of, or a decrease in, the business of one or more of our significant customers, or deterioration in our relations with any of them, could significantly adversely affect our business, financial condition, results of operations and cash flows. There can also be no assurance that the continued impact of COVID-19 will not impact homebuilders’ financial health or result in changes from the past practice.

Furthermore, our customers are not required to purchase any minimum amount of product from us. Should our customers purchase the products for which we provide supply chain management and installation services in significantly lower quantities than they have in the past, or should the customers of any business that we acquire purchase products from us in significantly lower quantities than they had prior to our acquisition of such business, such decreased purchases could have a material adverse effect on our financial condition, results of operations and cash flows.

Our customers may terminate their agreements with us.

Although we have agreements with our customers, there are not minimum commitments under all of these agreements, and such agreements are typically terminable by either party upon 30 to 90 days’ notice and may contain cross-default provisions. In addition, certain of our design studio services agreements obligate us to provide reasonable transition services to our homebuilder customers or their new service providers for a limited period of time following termination, and grant our homebuilder customers the ability to engage the services of or hire any or all of the design studio staff in place prior to termination.

We make investments to open and subsequently update and improve our design studios. However, the use of design studios in our business has been and may continue to be impacted by the COVID-19 pandemic. We experienced reductions in demand for our in-person design studio services during the initial peak of the COVID-19 pandemic. As a result of the ongoing COVID-19 pandemic and related quarantines, shelter-in-place orders, and similar restrictions, our customers have increasingly chosen to use our online and technology-based design and photo-realistic virtual tour platform. Also, demand for our in-person design studio services has resumed at or above pre-COVID-19 levels. Nevertheless, our customers may decide to use the technology of our competitors, or elect to establish their own building products design technologies, instead of visiting our physical design studios. While we have managed the increased volume of demand for our visual tour technology platform, there are no assurances that we will continue to do so. Disruptions, failures or other performance issues with our customer-facing technology systems, either due to the increased volume or other factors, could impair the benefits they provide, adversely impact our sales, and negatively affect our relationship with our customers. In addition, as more business activities have shifted online due to COVID-19 restrictions, and as many of our team members are working remotely, we face an increased risk due to the potential failure of internal or external information technology infrastructure as well as increased cybersecurity threats and attempts to breach our security networks.

As a result of the COVID-19 pandemic, we have experienced a customer terminating its design studio services agreement and choosing to establish its own design studio capabilities. If homebuilder customers

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terminate their design studio services agreements, depending on the terms of such agreements, we could experience a loss of our capital investment in the design studios operating under such agreement. The consequences of a termination of one or more design studio services agreements could impact our business, financial condition, results of operations, cash flows and prospects.

We are subject to significant pricing pressures from our customers.

Large homebuilders and other large customers historically have been able to exert significant pressure on their outside product and service providers to keep prices low in the highly fragmented building products supply and services industry. In addition, continued consolidation in the homebuilding industry and changes in customers’ purchasing policies and payment practices could result in even further pricing pressure. For example, there has been a trend of large publicly-traded homebuilders acquiring other large homebuilders, which increases their market share and buying power and, as a result, could adversely impact our margins. In addition, local providers may provide labor and materials services at extremely low prices. A decline in the prices of the products we source and the services we provide could adversely impact our results of operations. Alternatively, due to the rising market price environment, our suppliers may increase prices or reduce discounts on the products we source, and we may be unable to pass on any cost increase to our customers, thereby resulting in reduced margins and profits. Similarly, if our workforce costs increase, we may be unable to pass on any cost increase to our customers. Overall, these pricing pressures may adversely affect our financial condition, results of operations and cash flows.

Changes in the cost of products we install could decrease our profit margins.

The products that we install have been subject to price changes in the past, some of which have been significant. In particular, for certain products that require longer lead times, we may be subject to price increases between the time we place an order from our suppliers and the time we take delivery of the materials. We may not be able to pass any such price increases along to our customers. Accordingly, our operating results for individual quarterly periods can be adversely affected by a delay between when building product cost increases are implemented and when we are able to increase prices for our products and services. Further, our supplier purchase prices often depend on volume requirements. If we do not meet these volume requirements, our costs could increase and our margins may be adversely affected. While we have been able to achieve cost savings through volume purchasing and our relationships with suppliers, we may not be able to continue to receive advantageous pricing for the products that we install, which could have a material adverse effect on our financial condition, results of operations and cash flows. In addition, some of our customers may work directly with suppliers to specify products for their projects. To the extent that our customers enter into agreements directly with suppliers, we may lose some of the benefits of our purchasing advantages, which could adversely impact our profit margins.

Tariffs and other changes in foreign trade policy could adversely affect our business and results of operations in the future.

Dynamic changes in legislation and government policy may have a material adverse effect on our business. The imposition of tariffs on certain materials has increased our product costs. The current U.S. administration has taken action with respect to certain trade policies, such as the imposition of tariffs on imported products and the withdrawal from or renegotiation of certain trade agreements, including the North American Free Trade Agreement. For example, the United States has increased tariffs on certain imports from China, as well as on steel and aluminum products imported from various countries. With an upcoming change of administration in January 2021, proposed legislation and regulatory changes could have a material impact on us including, but not limited to, modifications to international trade policy and increased regulation. Furthermore, existing tariffs imposed on goods imported from abroad that are used in our businesses may be extended or expanded.

We procure certain of the raw materials we use in the manufacturing of our products directly or indirectly from outside of the United States. The imposition of tariffs and other potential changes in U.S. trade policy could

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increase the cost or limit the availability of raw materials, which could hurt our competitive position and adversely impact our business, financial condition and results of operations.

These changes in trade policy and any recently enacted, proposed and future trade agreements or tariffs on imported products could negatively impact our business and results of operations if they seriously disrupt the movement of products through our supply chain or increase their cost. In addition, while we may be able to shift some of our sourcing options, executing such a shift would be time consuming and would be difficult or impracticable for many products and may result in an increase in our manufacturing costs. In the event that we are required to pay higher prices for the products that we install, we may not be able to pass on price increases to our customers in a timely manner or at all due to the competitive nature of our industry.

Our success depends on the continued services of our senior management team and other key personnel.

Our success depends to a significant degree upon the contributions of our senior management team and other key personnel, each of whom would be difficult to replace. To encourage the retention of our senior management team and key personnel, we have entered into various equity-based compensation agreements designed to encourage their retention. We do face the risk, however, that members of our senior management and other key personnel may not continue in their current positions, and the loss of their services could cause us to lose customers and reduce our sales and/or margins, negatively affect relationships with our customers or our suppliers, lead to employee morale problems and/or the loss of other key employees, or cause disruptions to our business. Also, we may be unable to find qualified individuals to replace members of our senior management team or other key personnel who leave our company on a timely basis or at all.

Our success depends on our ability to attract and retain qualified employees while controlling workforce costs.

Our success depends on our ability to attract, hire, train and retain qualified managerial, operational, sales, design and other personnel, while at the same time controlling our workforce costs. Further, in order to accelerate development of our technology solution, we have added and expect to continue to add, in the future, new members for our technology team. The labor market for the construction industry and the technology space is tight, resulting in significant competition for these types of employees and increased employee-related costs. Our ability to control workforce costs is subject to numerous external factors, including competitive wage rates and health and other insurance and benefit costs. A significant increase in competition, minimum wage or overtime rates in localities where we have employees could have a significant impact on our operating costs and may require that we take steps to mitigate such increases, all of which may cause us to incur additional costs, expend resources responding to such increases and lower our margins. We may be unsuccessful in attracting and retaining the personnel we require to conduct and expand our operations successfully. If we are unable to attract or retain qualified employees in the future, it could adversely impact our business, financial condition and results of operations.

We and our customers may be affected by shortages in workforce supply, increased workforce costs or workforce disruptions, which could affect our business, financial condition, results of operations and cash flows.

Our customers require a qualified labor force to build, repair and remodel homes and communities, and we require a qualified workforce to install our products in those homes and communities. Access to qualified workers and subcontractors by our customers and us may be affected by circumstances beyond their or our control, including:

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Workforce shortages can be further exacerbated if demand for housing or repair and remodel activity increases. Any of these circumstances could give rise to delays in the start or completion of, or could increase the cost of, building, repairing and remodeling homes and communities. Such delays and cost increases would also have an effect on our ability to generate interior option sales from end customers and could have a material adverse effect on our business, financial condition, results of operations and cash flows.

We face risks in completing the implementation of our ERP system.

We are in the process of completing the implementation of a company-wide ERP system. Presently, more

than 50% of our revenues are processed through our ERP system. The implementation of this system is complex and time-consuming, and we have incurred and expect to incur additional expenses in connection with the implementation. Furthermore, the COVID-19 pandemic caused some delay in its implementation. Many companies have experienced delays and difficulties with the implementation of ERP systems that have had a negative effect on their business. Despite any delays we have experienced, our implementation of the ERP system has not to date had a material negative impact on our operations; nonetheless, we are still in the process of completing the implementation and successful implementation remains subject to significant risks.

If the ERP system rollout is not effectively implemented as planned, or the system does not operate as intended, the effectiveness of our internal controls over financial reporting could be adversely affected or our ability to assess those controls adequately could be delayed. If there are significant delays in documenting, reviewing and testing our internal controls over financial reporting, we may fail to prevent or detect material misstatements in our financial statements, in which case investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our securities may decline.

If we are unable to successfully complete the implementation of the ERP system, it could have a material adverse effect on our business, financial condition, results of operations and cash flows.

The implementation of new initiatives related to our operating software systems and related technology could disrupt our operations, and these initiatives might not provide the anticipated benefits or might fail.

We have made, and we plan to continue to make, significant investments in our visualization and option selection technology platform and enhancing our streamlined integration with homebuilders’ back office systems and ability to aggregate extensive data analytics to offer insights into evolving design trends and homeowner preferences. This includes the integration and expansion of technology obtained through acquisitions and the hiring of new members for our technology team. The cost and potential issues and interruptions associated with this technology development and integration, as well as those associated with managing third-party service providers, employing new cloud-based tools and services and aggregating large amounts of data, could disrupt or reduce the efficiency of our operations. In addition, our new and upgraded technology might cost more than anticipated or might not provide the anticipated benefits, or it might take longer than expected to realize the anticipated benefits or the initiatives might fail altogether. Furthermore, as more business activities have shifted online due to COVID-19 restrictions, we face an increased risk due to the potential failure or disruption of internal or external information technology infrastructure, as well as increased cybersecurity threats such as a breach to our company networks or systems. Because the success of our growth strategy depends in part on our IT infrastructure, issues that arise with ant related initiatives or our IT systems may adversely affect our business.

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Our business and results of operations are dependent on the availability and skill of subcontractors.

We primarily engage subcontractors to perform the installation of the products that we source for our customers. Accordingly, the timing and quality of our installations depends on the availability and skill of our subcontractors. Competition for skilled subcontractors can be significant in our markets. While we believe that our relationships with subcontractors are good, we generally do not have long-term contractual commitments with any subcontractors, and we can provide no assurance that skilled subcontractors will continue to be available at reasonable rates in our markets. The inability to contract with skilled subcontractors at reasonable rates on a timely basis could have a material adverse effect on our business, financial condition and results of operations.

Despite our quality control efforts, we may discover that our subcontractors have engaged in improper construction practices or have installed defective materials. The adverse costs of satisfying our warranty and other legal obligations in these instances may be significant and we may be unable to recover the costs of warranty-related repairs from subcontractors, suppliers and insurers, which could have a material impact on our business, financial condition and results of operations.

Our use of subcontractors for certain functions may expose us to additional risks.

We primarily rely on subcontractors to perform installation services. We structure our relationships with subcontractors in a manner that we believe results in an independent contractor relationship, not an employee relationship. An independent contractor is generally distinguished from an employee by, among other things, his or her degree of autonomy and independence in providing services. A high degree of autonomy and independence is generally indicative of a contractor relationship, while a high degree of control by the hiring entity is generally indicative of an employment relationship. However, laws regarding independent contractor status vary from state to state and are subject to change and interpretation based on court decisions and regulation. For example, the California Supreme Court recently adopted a new standard for determining in certain circumstances whether a company “employs” individuals for purposes of the California Wage Orders in its decision in the Dynamex Operations West, Inc. v. Superior Court case. The Dynamex decision, codified in AB 5, generally alters the analysis of whether an individual, who is classified by a hiring entity as an independent contractor in California, has been properly classified as an independent contractor by requiring satisfaction of a three-part test. Adverse determinations regarding the independent contractor status of any of our subcontractors could entitle such individuals to, among other things, the reimbursement of certain expenses and to the benefit of wage-and-hour laws, and could result in us being liable for employment and withholding tax and benefits for such individuals. Any such adverse determination could result in a material reduction of the number of subcontractors we can use for our business or significantly increase our costs to serve our customers, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. Additionally, we cannot assure you that there will not be further changes in laws relating to characterization and treatment of independent contractors.

The subcontractors we rely on to perform our installation services are also subject to a significant and evolving number of local, state and federal laws and regulations, including laws involving matters that are not within our control. If these subcontractors fail to comply with applicable laws, or if they take other improper actions, we may suffer reputational damage and may be exposed to liability.

We may be unable to effectively execute our growth strategy, which could have an adverse effect on our business, results of operations and prospects.

Some of the challenges we may encounter in executing our growth strategy include:

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If we fail to overcome the risks associated with the effective execution of our growth strategy, our financial position, results of operations and prospects could be adversely affected.

We face competition from a variety of competitors and increased competitive pressure may adversely affect our business, financial condition, results of operations and cash flows.

Our industry is highly fragmented and competitive. We face significant competition from other national, regional and local companies that (i) provide design studio solutions (both in-person and virtually) and supply chain management and installation services, (ii) provide repair and remodel services, or (iii) sell and install building products directly to and for consumers. We expect to face increased competition from current and future companies in the property technology industry as the demand for virtual and digital technology grows. In addition, homebuilders may perform interior design services or develop new technologies in-house. Any of these competitors may:

As a result, we may not be able to compete successfully with our competitors. If we are unable to compete effectively, our business, financial condition, results of operations and cash flows may be adversely affected.

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Acquisitions involve a number of risks which could have an adverse effect on our business, financial condition, results of operations and cash flow.

Acquisitions have contributed to our growth, and as part of our growth strategy, we intend to continue to pursue acquisitions. At any given time, we may be evaluating or in discussions with one or more acquisition candidates. However, we may not be able to identify suitable acquisition candidates and may face increased competition for acquisition candidates that meet our criteria. In addition, acquired businesses may not perform in accordance with expectations, and our business judgments concerning the value, strengths and weaknesses of acquired businesses may not prove to be correct. We may also be unable to achieve expected improvements or anticipated cost savings in businesses that we acquire.

Acquisitions involve a number of other special risks, including:

Our failure to integrate any acquired businesses effectively or to manage other consequences of our acquisitions, including as a result of the foregoing factors, could prevent us from implementing our growth strategy, remaining competitive and, ultimately, could adversely affect our business, financial condition, results of operations and cash flows.

Future acquisitions may result in the incurrence of debt and contingent liabilities, legal liabilities, goodwill impairments, increased interest and/or amortization expense and significant integration costs. In particular, we may be subject to claims or liabilities arising from the ownership or operation of acquired businesses for the periods prior to our acquisition of them, including tax liabilities, product liabilities, asbestos liabilities, environmental liabilities, pension liabilities, liabilities for employment and immigration practices and other liabilities and claims not covered by insurance. These claims or liabilities could be significant, and our ability to seek indemnification from the former owners of our acquired businesses for these claims or liabilities may be limited by various factors, including the specific time, monetary or other limitations contained in the respective acquisition agreements and the financial ability of the former owners to satisfy our indemnification claims. In addition, insurance companies may be unwilling to cover claims that have arisen from acquired businesses or locations, or claims may exceed the coverage limits that our acquired businesses had in effect prior to the date of acquisition.

In addition, we may require additional debt or equity financing for future acquisitions, and such financing may not be available on favorable terms, if at all. If we finance acquisitions by issuing our equity securities or securities convertible into our equity securities, the ownership of our existing stockholders would be diluted, which, in turn, could adversely affect the market price of our common stock. We could also finance an acquisition with debt, resulting in higher leverage and interest costs relating to an acquisition.

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Possible future acquisitions or dispositions may also trigger a review by the U.S. Department of Justice, the U.S. Federal Trade Commission, and/or the state attorneys general under their respective regulatory authority, focusing on the effects on competition, including the size or structure of the relevant markets and the pro- competitive benefits of the transaction. Any delay, prohibition or modification required by regulatory authorities could adversely affect the terms of a proposed acquisition or could require us to modify or abandon an otherwise attractive acquisition opportunity.

We intend to expand into new geographic markets, and our expansion may be costly and unsuccessful.

Our growth depends, in part, on our ability to expand into new geographic markets. Our expansion into new geographic markets will require us to make incremental expenditures for the workforce and facilities. In addition, we may face challenges operating in new business environments with which we are unfamiliar, including facing difficulties securing adequate workers, subcontractors and managing our new operations, expanding our sales channels and sourcing capabilities and stemming from our exposure to new legal and regulatory environments. Expansion into new geographic markets may also expose us to direct competition with companies with whom we have limited or no past experience as competitors. If we fail to manage the risks inherent in our geographic expansion, we could incur substantial capital and operating costs without any related increase in revenues, which would harm our results of operations. Further, even if our geographic expansion is successful in generating additional revenues, failure to effectively manage our growth in a cost-effective manner could result in declines in customer satisfaction, increased costs or disruptions of our operations.

Increases in the construction of modular and manufactured homes could adversely affect our business, financial condition, results of operations and cash flows.

If concerns over the affordability of housing increase due to rising mortgage interest rates or home prices, homebuyers may choose to purchase modular or manufactured homes, which are built, in whole or in part, in offsite factories. To the extent these types of homes become more popular among homebuyers, it may reduce the construction activity of our homebuilder customers. In addition, an increase in the construction of homes at offsite locations would reduce our opportunity to perform on-site installation services for such homes, which could have an adverse effect on our business, financial condition, results of operations and cash flows.

Product shortages, the loss of key suppliers or failure to develop relationships with qualified suppliers or substantial changes to supply terms could affect our business, financial condition, results of operations and cash flows.

We primarily rely on third-party suppliers for the products for which we provide interior finish solutions, and as such, our business depends on our ability to obtain adequate product supply from manufacturers and other suppliers. Our two largest suppliers collectively accounted for approximately 39% and 37% of our product purchases for the nine months ended September 30, 2020 and the year ended December 31, 2019, respectively. We typically do not enter into long-term agreements with our suppliers, as the products that we offer are generally available from various sources and in sufficient quantities. However, suppliers have been subject to increased consolidation and, during construction downturns, some of our suppliers experienced bankruptcy. The loss of, or a substantial decrease in the availability of, products from our suppliers, or the loss of key supplier arrangements, could adversely impact our business, financial condition, results of operations and cash flows. In prior downturns in the housing industry, building products manufacturers have reduced capacity by closing plants and production lines within plants. Even if such capacity reductions are not permanent, there may be a delay in manufacturers’ ability to increase capacity in times of rising demand. If the demand for products from manufacturers and other suppliers exceeds the available supply, we may be unable to source additional products in sufficient quantity or quality in a timely manner and the prices for the products that we install could rise. These developments could affect our ability to take advantage of market opportunities and limit our growth prospects.

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Although in many instances we have agreements with our suppliers, these agreements are generally terminable by either party on limited notice. Many of our suppliers also offer us favorable purchasing terms based on our large scale and the volume of our purchases. If market conditions change, suppliers may stop offering us favorable terms. Failure by our suppliers to continue to supply us with products on favorable terms, commercially reasonable terms, or at all, could put pressure on our operating margins or have a material adverse effect on our business, financial condition, results of operations and cash flows.

Our business also depends on our ability to identify and develop relationships with qualified suppliers in order to provide our services with high-quality products in a timely manner. Disruptions at distribution centers, shipping ports, transportation carriers or elsewhere along our supply chain due to labor disputes, work stoppages, natural disasters or otherwise may affect our ability to deliver products to our customers on a timely basis, which may in turn adversely affect our relationships and reputation with customers and our results of operations.

A material disruption at one of our suppliers’ facilities or loss of a supplier relationship could prevent us from meeting customer demand, reduce our sales, increase our costs and negatively affect our overall results of operations.

Any of the following events could cease or limit the operations of our suppliers unexpectedly: fires, floods, earthquakes, hurricanes, on-site or off-site environmental incidents or other catastrophes; utility and transportation infrastructure disruptions; labor difficulties; other operational problems; pandemics; or war, acts of terrorism or other unexpected events. Any downtime or facility damage at our suppliers could prevent us from meeting customer demand for our products or require us to make more expensive purchases from a competing supplier. If our suppliers were to incur significant downtime, our ability to satisfy customer requirements could be impaired, resulting in customers seeking products and services from other sources, as well as decreased customer satisfaction and lower revenues. In addition, a loss of a supplier relationship could harm our operations. Because we purchase from a limited number of suppliers, the effects of any particular shutdown or facility damage or loss of a supplier relationship could be significant to our operating margins and our overall operations. In addition, our suppliers’ inability to produce or procure the necessary raw materials to supply finished goods to us may adversely impact our business, financial condition, results of operations and cash flows.

We rely on third-party license agreements. Any changes to these agreements could adversely affect our business.

We rely on third-party license agreements for certain trademarks and technologies we employ in our business, including software that we utilize in connection with our design and installation services that could be difficult to replace. There is a risk that third parties may modify or terminate such licenses, which may harm our operating results. Certain of the software we use is not licensed to us on an exclusive basis or is used jointly with our customers. Accordingly, if our licenses are terminated, or if our commercial relationships with the licensors and/or our customers become adverse, such software may be used by our customers or competitors to compete against us, which may, in turn, have a material adverse effect on our business, financial condition, results of operations and cash flows. In addition, while these license agreements generally provide that the licensors will indemnify us, subject to certain limitations, for certain infringement liabilities, our ability to seek indemnification from the respective licensors is limited by various factors, including the financial condition of the licensor as well as by the terms and limits of such indemnities or obligations. As a result, there can be no assurance that we could receive any indemnification from licensors, and any related infringement liabilities, costs or penalties could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Our industry is both seasonal and cyclical and may be affected by severe weather conditions and a changing climate.

Our industry is both seasonal and cyclical. Seasonal changes and other weather-related conditions can adversely affect our businesses and operations through a decline in the demand for our services. Our products are

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installed near the end of the construction process and therefore typically lag housing starts by several months. Housing starts have historically been highest in the second and third quarters due to weather as well as seasonal selling peaks in most areas of the country. Accordingly, our sales are generally highest in the third and fourth quarters. We expect this seasonal pattern to continue, but it may be affected by volatility in the weather as well as in the new construction industry, including the impacts from the COVID-19 pandemic and changing climate conditions in the geographic markets we serve, and we can make no assurance as to the degree to which these historical patterns will continue, if at all.

Construction-based businesses are also generally cyclical. Our financial performance will be impacted by economic changes nationally and locally in the geographic markets we serve and is subject to cyclical market pressures. Our operations are subject to fluctuations arising from changes in supply and demand, national and international economic conditions, workforce costs, competition, government regulation, trade policies, and other factors that affect the construction industry such as demographic trends, interest rates, housing starts, average home selling prices, interior options and upgrades, commercial construction activity, employment levels, consumer confidence, and the availability of credit to homebuilders, contractors and homeowners.

Although our interior finish solutions relate primarily to the interior of buildings, severe weather and natural disasters can cause delays or halts and increased costs in the construction process. Severe weather is often unpredictable, which contributes to earnings volatility and makes forecasting our results of operation more difficult. Severe weather and volatility in seasonality, which is projected to be exacerbated by climate change, may have an adverse impact on our business, financial position, results of operations and cash flows, and our results of operations in any given period may not be necessarily representative of other periods. We may also expand into geographic markets that are disproportionately impacted by severe weather and adverse climate effects.

Our systems and IT infrastructure may be subject to security breaches and other cybersecurity incidents.

We rely heavily on our systems and IT infrastructure to interact with our customers and suppliers, including our design platform. The use of our systems and IT infrastructure involve the transmission and/or storage of valuable data, including in certain instances, customers’ confidential business information. Thus, maintaining the security of computers, computer networks and data storage resources is a critical issue for us and our customers, as security breaches could result in vulnerabilities and loss of and/or unauthorized access to confidential information. We may face attempts by experienced hackers, cybercriminals or others with unauthorized access to our systems to misappropriate our proprietary information and technology, interrupt our business, and/or gain unauthorized access to confidential information. The reliability and security of our IT infrastructure and software, and our ability to expand and continually update technologies in response to our changing needs, is critical to our business. Furthermore, our technology is integrated with homebuilder back office systems to help improve construction quality, decrease cycle times and increase customer stickiness. To the extent that any security disruptions or breaches result in a loss or damage to our data, it could cause harm to our reputation and cause customers to fear that their systems may be compromised. This could lead to some existing customers discontinuing doing, and prospective customers choosing not to do, business with us. We may also be subject to state or federal enforcement actions, which could result in fines, penalties and/or other liabilities and which may cause us to incur legal fees and costs, and/or additional costs associated with responding to the cyberattack. Increased regulation regarding cybersecurity may increase our costs of compliance, including fines and penalties, as well as costs of cybersecurity audits. Any of these actions could materially adversely impact our business, financial condition, results of operations and cash flows.

To date, to our knowledge we have not experienced a material breach that affected our IT systems. As cyberattacks become more sophisticated generally, we expect to incur significant costs to strengthen our systems to protect against outside intrusions and/or maintain insurance coverage related to the threat of such attacks. While we have invested in industry appropriate protections and monitoring practices of our data and IT to reduce these risks and continue to monitor our systems on an ongoing basis for any current or potential threats, there can be no assurance that our efforts will prevent breakdowns or breaches of our or our third-party providers’ databases or systems that could adversely affect our business.

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There is also a risk that our software or IT systems could be subject to a virus or other malware or a cyberattack or other security breach. The measures that we implement to reduce and mitigate this risk may not be effective. If such an event occurred, it could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Any major disruption or failure of our information technology systems or our website, or our failure to implement technology effectively, could adversely affect our business and operations.

We rely on various information technology systems, owned by us and third parties, to manage our operations, maintain books and records, record transactions, provide information to management and prepare our financial statements. We own our core ERP system, which is a tier 1 ERP system from a global vendor, and we are in the process of completing our ERP implementation and the associated core technology tools across our company. Presently, more than 50% of our revenues are processed through our ERP system. When we complete the deployment in 2021, approximately 85% of our revenues will be transacted through this system. We also own our retail flooring specialty software systems that support the remaining 15% of our revenues.

Our human capital management system is a cloud-based SAAS offering by a nationally recognized vendor and our payroll and related tax filings are outsourced to an experienced nationally recognized vendor. To support our installation and field management processes, we utilize various proprietary and third-party software solutions with direct interfaces into our core ERP platform. Our web-based marketing and pre-sales systems have been developed in-house and are built on our proprietary technology. Our design studio solutions encompass our proprietary visualization platform and proprietary design software that is used to configure, price and quote at the end of the design process. Our interior option selection systems which are used during at-home or in-studio design sessions leverage both in-house and third-party technology. Our ERP system and all of our design systems, including any third-party components, are hosted on major cloud-computing platforms such as AWS and Azure. For our third-party technology, including software that we utilize in connection with our design and installation services, we rely on third-party license agreements with the software owners.

In addition, we have made a significant investment in our website which we believe is critical for lead generation and is the primary forum through which we interact with end consumers. As more business activities have shifted online, in part due to COVID-19 restrictions, a failure of internal or external information technology infrastructure or a cybersecurity attack could have a more significant impact on our business operations than in the past. A failure of our information technology systems or our website to operate as expected could disrupt our business and adversely affect our financial condition and results of operations. These systems and our website are vulnerable to damage from hardware failure; fire; power loss; Internet; data network and telecommunications failure; loss or corruption of data and impacts of terrorism; natural disasters or other disasters. We may not have sufficient redundant operations to cover a loss or failure in a timely manner. In addition, the operation of these systems and our website is dependent upon third party technologies, systems and services, and support by third party vendors, and we cannot be sure that these third party systems, services and support will continue to be available to us without interruption, particularly in light of the disruptions stemming from the COVID-19 pandemic. Any damage to our information technology systems or website could cause interruptions to our operations that materially adversely affect our ability to meet customers’ requirements, resulting in an adverse impact to our business, financial condition and results of operations. Periodically, these systems and our website need to be expanded, updated or upgraded as our business needs change. We may not be able to successfully implement changes in our information technology systems and to our website without experiencing difficulties, which could require significant financial and human resources.

Our fabrication operations involve significant risks.

A portion of our business involves the fabrication of certain products that we install, including countertops. We currently operate nine countertop fabrication facilities. These fabrication activities require significant resources to maintain. For instance, we must continuously review and improve our fabrication processes in order

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to maintain satisfactory yields and product performance, try to lower our costs and otherwise remain competitive. As we fabricate new and more complex products, the risk of encountering delays, difficulties or higher costs increases. In addition, the start-up costs associated with implementing new fabrication technologies, methods and processes, including the purchase of new equipment and any resulting delays and inefficiencies, could negatively impact our results of operations.

Additionally, we could experience a prolonged disruption, material malfunction, interruption or other loss of operations at our fabrication facilities, or we may need to add capacity to satisfy any increased demand for our products. Under these circumstances, we may be forced to rely on third parties for our fabrication needs, which could increase our costs, decrease our gross margin, decrease our control over fabrication processes, limit our ability to satisfy customer requirements and demand and delay new product development until we could secure a relationship with a third-party manufacturer, which we may not be able to do in a timely manner, on acceptable terms or at all. If any of these risks occur, our operations, performance and customer relationships could be severely harmed.

We also may need to expand our existing fabrication facilities or establish new facilities in the future. Any need to expand or replace our existing facilities would be expensive and time-consuming. Further, we may not be able to replace or increase our fabrication capacity at all. The occurrence of any of these events could have a material adverse effect on our business, financial condition and results of operations.

We operate our design studios and other facilities under leases with typical durations of three to five years. We may be unable to renew leases at the end of their terms or to terminate a lease if a homebuilder customer terminates a design studio services agreement.

Most of our design studios and other facilities are located in leased premises with typical lease durations of three to five years. At the end of the lease term and any renewal period, we may be unable to renew the lease without substantial additional cost, if at all. If we are unable to renew our design studio or other leases, we may be required to close or relocate such design studio or facility, which could subject us to construction, relocation and other costs, disruption of our operations and other risks, which in turn could have a material adverse effect on our business and results of operations.

Additionally, our leases are terminable only in certain circumstances. As a result of the COVID-19 pandemic, we have experienced a customer terminating its design studio services agreement and choosing to establish its own design studio capabilities. Although demand for our in-person design studio services has resumed at or above pre-COVID-19 levels, future mandatory shutdowns, or other government restrictions as a result of the spread of the virus could reduce demand for our in-person design studio services. We also may experience a reduction in demand from customers for our physical design studios in the future in order to transition to use of our technology-based design platforms or our competitors. If additional homebuilder customers terminate design studio services agreements, and we are unable to terminate a lease and/or be reimbursed for termination-related costs, we will be subject to costs associated with a vacant lease, which could have a material adverse effect on our business and results of operations.

The estimates and forecasts of market opportunity and market growth included in this prospectus may prove to be inaccurate, and we cannot assure you our business will grow at similar rates, or at all.

The interior finish solutions industry is a large, growing and highly fragmented market. We estimate the market to be approximately $23 billion in size, based on the average installed cost of flooring, cabinets and countertops in a new single-family home. However, estimates and forecasts of market size and opportunity and of market growth are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. The estimates and forecasts in this prospectus of the size of the markets that we may be able to address and the growth in these markets are subject to many assumptions and may prove to be inaccurate. In addition, we expect that the COVID-19 pandemic may materially affect the growth of various of the markets

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discussed in this prospectus, and we cannot predict the extent to which those estimates will be affected. Further, we may not be able to address fully the markets that we believe we can address, and we cannot be sure that these markets will grow at historical rates or the rates we expect for the future. We believe that the long-term shift to digital solutions is fundamentally changing our market, with more homebuyers and homeowners preferring to review options and make design selections online. We may not be able to address this shift with a shift in our products and services as swiftly as the market’s demand. Even if we are able to address the markets that we believe represent our market opportunity and even if these markets experience the growth we expect, we may not grow our business at similar rates, or at all. Our growth is subject to many factors, including our success in implementing our business strategy, which is subject to many risks and uncertainties. Accordingly, the estimates and forecasts of market size and opportunity and of market growth included in this prospectus may not be indicative of our future growth.

Risks Related to Legal and Regulatory Matters

Changes in employment laws or failure to properly verify the employment eligibility of our employees may adversely affect our business.

Various federal and state labor laws govern the relationship with our employees and impact operating costs.

These laws include:

Significant additional government-imposed increases in the preceding areas could have a material adverse effect on our business, financial condition and results of operations.

In addition, various states in which we operate are considering or have already adopted new immigration laws or enforcement programs, and, from time to time, the U.S. Congress, Department of Homeland Security and the Executive Branch of the U.S. government consider and implement changes to federal immigration laws, regulations or enforcement programs. These changes may increase our compliance and oversight obligations, which could subject us to additional costs and make our hiring process more cumbersome, or reduce the availability of potential employees. Although we take steps to verify the employment eligibility status of all our employees, some of our employees may, without our knowledge, be unauthorized workers, and we cannot guarantee that we will properly identify all applicants who are ineligible for employment. Unauthorized workers are subject to deportation and may subject us to fines or penalties and adverse publicity that negatively impacts our brand and may make it more difficult to hire and retain qualified employees. Termination of a significant number of employees who were unauthorized employees may disrupt our operations, cause temporary increases in our labor costs as we train new employees and result in additional adverse publicity. We could also become subject to fines, penalties and other costs related to claims that we did not fully comply with all recordkeeping obligations of federal and state immigration laws. These factors could have a material adverse effect on our business, financial condition and results of operations.

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Furthermore, we are subject to regulations of U.S. Immigration and Customs Enforcement, or ICE, and Department of Labor, and we are audited from time to time by these parties for compliance with work authentication requirements. While we believe we are in compliance with applicable laws and regulations, if we are found not to be in compliance as a result of any audits, we may be subject to fines or other remedial actions, which could be material.

We are exposed to warranty, casualty, construction defect, contract, tort and other claims, and legal proceedings related to our business, the services we provide, and services provided for us by third parties.

In the ordinary course of business, we are subject to various claims and litigation. Any such claims, whether with or without merit, could be time consuming and expensive to defend and could divert management’s attention and resources. We may not always be able to successfully defend or be excused from the lawsuits related to these claims and could be subject to substantial losses.

Our customers may be subject to construction defect and warranty claims in the ordinary course of their business. Our contractual arrangements with these customers may include our agreement to defend and indemnify them against various liabilities. These claims, often asserted several years after completion of construction, can result in complex lawsuits or claims against our customers and many of their subcontractors, including us, and may require us to incur defense and indemnity costs even when our services or installed products are not the principal basis for the claims. In addition, we are exposed to potential claims arising from the conduct of our employees and subcontractors. In the process of negotiating contracts with our customers and our subcontractors, we may be unable to secure favorable indemnity, limitation of liability and/or insurance provisions.

We rely on manufacturers and other suppliers, including overseas suppliers, to provide us with the products for which we provide interior finish solutions. As we do not have direct control over the quality of the products manufactured or supplied by such third-party suppliers, we are exposed to risks relating to the quality of those products. It is possible that products from a manufacturer or supplier could be sold to our customers and later be alleged to have quality problems or to have caused personal injury, subjecting us to potential claims from customers or third parties. We have in the past been, and may in the future be, subject to such claims.

Although we currently maintain what we believe to be suitable and adequate insurance in excess of our self-insured amounts, there can be no assurance that we will be able to obtain and maintain insurance on acceptable terms, including premiums and deductibles, or that such insurance will provide adequate protection against potential liabilities. Construction defect, product liability and other claims and legal proceedings can be expensive to defend and can divert the attention of management and other personnel for significant periods, regardless of the ultimate outcome. Claims of this nature could also have a negative impact on customer confidence in our products and our company. In addition, we are involved on an ongoing basis in other types of legal proceedings. We cannot assure you that any current or future claims will not adversely affect our financial condition, results of operations or cash flows.

We may fail to adequately protect our intellectual property rights or may be accused of infringing the intellectual property rights of third parties.

We rely on trademark and service mark protection in the conduct of our business. We also rely on trade secret and copyright protection for certain of our IT systems and software, as well as contractual obligations with many customers, service providers and other business partners. These protections may not adequately safeguard our intellectual property and we may incur significant costs to defend our intellectual property rights, which may harm our operating results. There is a risk that third parties, including our current competitors, will infringe on our intellectual property rights, in which case we may have to defend these rights. There is also a risk that third parties will claim that our products and services infringe their intellectual property rights or that we are overusing or misusing licenses. These third parties may assert infringement claims against us, our customers, our employees or businesses we have acquired. Despite carrying insurance coverage to manage risk exposure for certain claims, the outcome of litigation or other legal proceedings intrinsically uncertain. These claims, if resolved in a manner adverse to us, could result in significant liabilities and could restrict or prohibit our ability to use the technology on which we rely, which could have a material

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adverse effect on our business, financial condition, results of operations and cash flows. Even if these claims are resolved in our favor, such claims result in significant expenses and could distract our management until resolved.

As we continue to expand our technology solutions, acquire companies and grow our team and business, we may be increasingly subject to claims and lawsuits, including intellectual property infringement claims, and threats to our intellectual property rights. We rely on a combination of laws and contractual restrictions on access to and use of confidential information and our proprietary technology with employees, contractors, business partners and other third parties to establish and protect our and their various intellectual property rights. No guarantees can be given that these efforts will result in adequate protections. Despite these measures, challenges to our intellectual property rights could still arise, third parties could copy or otherwise obtain and use our intellectual property without authorization, and/or laws regarding the enforceability of existing intellectual property rights could change or be applied in an adverse manner. In addition, to the extent that our employees, contractors, business partners or other third parties with which we do business use intellectual property owned by others in their work for us, we may be subject to third party infringement, breach of contract or misappropriation allegations given our relationships, with claims that could be expensive and timing-consuming to defend against, and with uncertain outcomes.

The occurrence of any of these events could impede our expansion and place limitations on our ability to operate our business, as well as impede our ability to effectively compete, any of which could adversely affect our business, financial condition and results of operations.

Compliance with occupational safety and health requirements and best practices can be costly, and noncompliance with such requirements may result in potentially significant penalties, operational delays and adverse publicity.

The fabrication and installation of building products may pose certain health and safety risks to our employees and subcontractors. For example, our countertop fabrication facilities are subject to regulations concerning air quality, including maximum permissible quantities of silica dust. Our operations are subject to regulation under the U.S. Occupational Safety and Health Act (“OSHA”) and equivalent state laws. Changes to OSHA requirements, or stricter interpretation or enforcement of existing laws or regulations, could result in increased costs. If we fail to comply with applicable OSHA regulations, even if no work-related serious injury or death occurs, we may be subject to civil or criminal enforcement and be required to pay substantial penalties, incur significant capital expenditures, or suspend or limit operations. Any accidents, citations, violations, injuries or failure to comply with industry best practices may subject us to adverse publicity, damage our reputation and competitive position and adversely affect our business. We have not in the past been subject to material fines or penalties, although we cannot assure that we will not be in the future. See also “Our Business—Regulatory Matters.”

Federal, state, local and other laws and regulations could impose substantial costs, liabilities and/or restrictions on our operations that would adversely affect our financial condition, results of operations and cash flows.

Our industry is subject to various federal, state and local statutes, ordinances, rules and regulations concerning zoning, building design and safety, construction, contractors’ licensing, energy conservation and similar matters. Difficulties or failures in obtaining required permits, licenses or other regulatory approvals could delay or prevent our interior product installation activity in a particular locale, and the suspension of, or inability to renew, a license or permit could interrupt previously contracted installation services. Regulatory restrictions and industry standards may require us to alter our supply chain management and installation processes, which could increase our operating expenses and negatively affect the level of construction activity of our customers, any of which could negatively affect our business, financial condition and results of operations.

We are also subject to employment regulations promulgated by the U.S. Equal Employment Opportunity Commission. More burdensome regulatory requirements in this or other areas, including workers’ compensation, may increase our expenses and adversely affect our business, financial condition, results of operations and cash flows. Moreover, failure to comply with the regulatory requirements applicable to our business could expose us to substantial fines and penalties that could adversely affect our business and reputation.

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We are also subject to various federal, state and local environmental laws, ordinances, rules and regulations including those promulgated by the United States Environmental Protection Agency and analogous state agencies. As current and former owners, lessees and operators of real property, we can be held liable for the investigation or remediation of contamination at or from such properties, in some circumstances irrespective of whether we knew of or caused such contamination. No assurance can be provided that investigation and remediation will not be required in the future as a result of spills or releases of petroleum products or hazardous substances, the discovery of currently unknown environmental conditions, more stringent standards regarding existing contamination, or changes in legislation, laws, ordinances, rules or regulations or their interpretation or enforcement. More burdensome environmental regulatory requirements may increase our costs and adversely affect our financial condition, results of operations and cash flows. See also “Our Business—Regulatory Matters.”

Changes in legislation and government policy may have a material adverse effect on our business, financial condition and results of operations.

Our markets are affected by legislative and regulatory policies that promote or do not promote home ownership, such as U.S. tax rules allowing for deductions of mortgage interest or interest on home equity loans. For example, the Tax Cuts and Jobs Act, which was enacted into law on December 22, 2017 (the “Tax Act”), imposes limitations on the deductibility of interest on mortgages qualifying of the home mortgage interest deduction. The Tax Act provides that taxpayers may only deduct interest on $750,000 of qualified residence loans, including home equity loans that are used to substantially improve the taxpayer’s home that secures the loan, a reduction from the prior limit of $1.0 million. As many consumers finance renovation projects that use our products with home equity loans, limitations on the deductibility of interest on those loans could reduce demand for our products. In addition, recent U.S. federal and state legislative and regulatory policies enacted in response to the COVID-19 pandemic provide various measures of relief for homeowners, primarily in the form of mortgage payment forbearance for homeowners with federally-backed mortgages and temporary moratoria on foreclosures and evictions. It remains uncertain whether or to what extent such relief measures could protect homeowners and what impact they will have on the U.S. real estate market and the U.S. and global economies generally, and our business, financial condition and results of operations may be materially and adversely affected as a result. Future changes to laws or policies relating to these or similar matters could reduce demand for our products and have a material adverse effect on our business, financial condition and results of operations.

Changes in international trade policy, increased regulation and any trade agreements or tariffs on imported products could negatively impact our business and results of operations if they seriously disrupt the movement of products through our supply chain or increase their cost. With the upcoming change in administration in January 2021, we are currently unable to predict whether any meaningful changes to existing legislative and regulatory environments relevant to our business will materialize, or if any such changes would favorably or unfavorably impact our business. To the extent that such changes have a negative impact on us or the industries we serve, these changes may materially and adversely impact our business, financial condition, result of operations and cash flows. We are also impacted by changes in local laws and policies in markets in which we operate, which could subject us to rules and regulations that are not uniform across our footprint.

We may be limited in our ability to use our net operating loss carryforwards, which could adversely affect our profitability.

We have state net operating loss carryforwards due to prior period losses, which could expire unused and be unavailable to offset future income tax liabilities, which could adversely affect our profitability. In addition, under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), our ability to utilize net operating loss (“NOL”) carryforwards or other tax attributes in any taxable year may be limited if we experience an “ownership change.” A Section 382 “ownership change” generally occurs if one or more stockholders or groups of stockholders who own at least 5% of our stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. Similar rules may apply under state tax laws in the United States. It is possible that any future ownership changes or issuances of our capital stock, could have a material effect on the use of our NOL carryforwards or other tax attributes, which could adversely affect our future profitability.

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Contracting on government programs is subject to significant regulation, and any non-compliance could subject us to fines and penalties.

We are party to several contracts with federal, state and local governments and are subject to risks associated with this contracting, including substantial civil and criminal fines and penalties. These fines and penalties could be imposed for failing to follow procurement integrity and bidding rules, employing improper billing practices or otherwise failing to follow cost accounting standards, not complying with workforce obligations, receiving or paying kickbacks or filing false claims. We expect to be subjected to audits and investigations by federal, state and local governmental agencies and authorities. The failure to comply with the terms of our government contracts could harm our business reputation. It could also result in our progress payments being withheld or our suspension or debarment from future government contracts, which could have a material adverse effect on our results of operations.

Union organizing activity and work stoppages could delay or reduce demand for or availability of products that we install and negatively affect our results of operations.

None of our employees are currently covered by collective bargaining or other similar labor agreements. However, if our employees were to unionize, including as a result of any future legislation that makes it easier for employees to unionize, our business could be negatively affected.

In general, our customers do not have employees that are covered by collective bargaining or similar labor agreements. However, our customers conduct virtually all construction work through unaffiliated third-party subcontractors that in some instances have unionized employees. Any inability by our customers to negotiate collective bargaining arrangements could cause strikes or other work stoppages, and new contracts could result in increased operating costs. If any such strikes or other work stoppages occur, or if employees or other subcontractors become represented by a union, our customers could experience a disruption in their operations and higher labor costs, which could have an adverse effect on our results of operations.

In addition, certain of our suppliers have unionized employees, and certain of our products are transported by unionized truckers. Strikes, work stoppages or other labor disputes of our suppliers’ work forces or truckers could result in slowdowns or closures of facilities where the products for which we provide supply chain management and installation services are manufactured or could affect the ability of our suppliers to deliver such products to us. Any interruption in the production or delivery of these products could delay or reduce availability of these products and increase our costs or cause us to fail to meet a customer’s construction schedule.

Political and economic uncertainty and unrest in foreign countries where some of our direct and indirect suppliers are located could adversely affect our results of operations.

Our products and building materials are sourced directly and indirectly from a wide variety of suppliers, including certain overseas providers. Such products or materials may be imported because they are not available for domestic purchase in the United States, because of significantly reduced cost or because there is a shortfall of inventory available locally. Despite our efforts to ensure the merchantability of these products, such products may not adhere to U.S. standards or laws. We are subject to risks and uncertainties associated with changing economic and political conditions in the foreign countries from which we source, or in the future may source, any of our products, such as:

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In addition, pricing of these products and materials may be impacted by changes to the relative value of the U.S. dollar over the applicable foreign currency in the long-term, which could negatively impact our margins. Importation of such products or materials could subject us to greater risk, including currency risk, and lawsuits by customers or governmental entities.

We cannot predict if, when, or the extent to which the countries in which we source our products and building materials will experience any of the above events. Any event causing a disruption, delay or cessation of imports from foreign locations would likely increase the cost or reduce the supply of products available to us, and cause us to seek alternative sources for our products, which may only be available on less advantageous terms, and would adversely affect our results of operations.

Risks Related to Our Indebtedness

Restrictions in our existing credit arrangements, or any other indebtedness we may incur in the future, could adversely affect our business, financial condition, results of operations, our ability to make distributions to stockholders and the value of our common stock.

Our Revolving Credit Facility and Term Loan Facility (each as defined herein), or any future credit facility or other indebtedness we enter into, may limit our ability to, among other things:

Our Revolving Credit Facility contains, and any future credit facility or other debt instruments we may enter into will also likely contain, covenants requiring us to maintain certain financial ratios and meet certain tests, such as a fixed charge coverage ratio, under certain circumstances. Our ability to comply with those financial ratios and tests can be affected by events beyond our control, and we may not be able to comply with those ratios and tests when required to do so under the applicable debt instruments. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

The provisions of our Revolving Credit Facility, Term Loan Facility or other debt instruments may affect our ability to obtain future financing and pursue attractive business opportunities and our flexibility in planning for, and reacting to, changes in business conditions. In addition, a failure to comply with the provisions of our Revolving Credit Facility, Term Loan Facility, any future credit facility or other debt instruments could result in a default or an event of default that could enable our lenders or other debt holders to declare the outstanding principal of that debt, together with accrued and unpaid interest, to be immediately due and payable. If the payment of our debt is accelerated, our assets may be insufficient to repay such debt in full, and our stockholders could experience a partial or total loss of their investment.

We have, and may in the future incur, substantial indebtedness and could be subject to risks associated with incurring such indebtedness, which may adversely affect our business.

As of September 30, 2020, our total debt outstanding was approximately $383.5 million (net of original issue discount of $1.3 million and debt issuance costs of $7.6 million). Following this offering, we will have, and

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may in the future incur, substantial indebtedness and could be subject to risks associated with incurring such indebtedness, including:

We and our subsidiaries may incur substantial additional indebtedness in the future, subject to the terms and restrictions contained in the agreements governing our indebtedness. If we or our subsidiaries incur additional indebtedness, the related risks that we and they now face could intensify.

Our ability to make scheduled payments on our existing indebtedness as well as any future indebtedness that we may incur and to fund planned capital expenditures and other liquidity needs will depend on our ability to generate cash from operations or asset sales as well as our ability to refinance our indebtedness on favorable terms, all of which are subject to economic, financial, competitive and other factors that are beyond our control. We may not generate sufficient funds to service our debt and meet our business needs, such as funding working capital or the expansion of our operations. We cannot assure you that our businesses will generate sufficient cash flow from operations or that future borrowings will be available to us through capital markets financings or under our credit facilities or otherwise in an amount sufficient to enable us to pay our indebtedness, or to fund our other liquidity needs. We cannot assure you that we will be able to refinance any of the indebtedness that we will incur on commercially reasonable terms, or at all. In addition, we may incur additional indebtedness in order to finance our operations or to repay our indebtedness. If we are not able to repay or refinance our debt as it becomes due, the lenders who hold our debt could accelerate amounts due which could potentially trigger a default or acceleration of the maturity of our other debt. Further, if we cannot service our indebtedness, we may have to take actions such as selling assets, seeking additional debt or equity or reducing or delaying capital expenditures, strategic acquisitions, investments and alliances. We cannot assure you that any such actions, if necessary, could be effected on commercially reasonable terms, or at all, or on terms that would be advantageous to our stockholders or on terms that would not require us to breach the terms and conditions of our existing or future financing arrangements.

Interest expense on debt we will incur may limit our cash available to fund our growth strategies.

Our current financing arrangements have, and any additional debt we subsequently incur may have, a variable rate of interest. Higher interest rates could increase debt service requirements on our current variable rate indebtedness and on any debt we subsequently incur, and could reduce funds available for operations, future business opportunities or other purposes. If we need to repay debt during periods of rising interest rates, we could be required to refinance our then-existing debt on unfavorable terms or liquidate one or more of our assets to repay such debt at times which may not permit realization of the maximum return on such assets and could result in a loss. The occurrence of either or both of such events could materially and adversely affect our cash flows and results of operations.

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The interest rates under our Revolving Credit Facility and Term Loan Facility are calculated using LIBOR. On July 27, 2017, the Financial Conduct Authority (the authority that regulates LIBOR) announced that it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. It is unclear whether new methods of calculating LIBOR will be established such that it continues to exist after 2021. If LIBOR ceases to exist, the administrative agents under our Revolving Credit Facility and Term Loan Facility may replace LIBOR with one or more Secured Overnight Financing Rate (SOFR) values or another alternate benchmark rate, giving due consideration to any evolving or then-existing convention for similar U.S. dollar denominated syndicated credit facilities for such alternative benchmarks. The U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, is considering replacing U.S. Dollar LIBOR with a newly created index, calculated based on repurchase agreements backed by treasury securities. It is not possible to predict the effect of these changes, other reforms or the establishment of alternative reference rates in the United Kingdom, the United States or elsewhere. However, if LIBOR ceases to exist after 2021, the interest rates under the alternative rate could be higher than LIBOR. To the extent these interest rates increase, our interest expense will increase, in which event we may have difficulties making interest payments and funding our other fixed costs, and our available cash flow for general corporate requirements may be adversely affected.

Our Term Loan Facility bears interest at a variable rate, however interest rate hedges in place mitigate the risk of interest rate fluctuations associated with a portion of the outstanding debt balance. For some instruments, the method of transitioning to an alternative reference rate may be challenging, especially if we cannot agree with the respective counterparty about how to make the transition. If a contract is not transitioned to an alternative reference rate and LIBOR is discontinued, the impact on our contracts is likely to vary by contract. If LIBOR is discontinued or if the methods of calculating LIBOR change from their current form, interest rates on our current or future indebtedness may be adversely affected. While we expect LIBOR to be available in substantially its current form until the end of 2021, it is possible that LIBOR will become unavailable prior to that point. This could result, for example, if sufficient banks decline to make submissions to the LIBOR administrator. In that case, the risks associated with the transition to an alternative reference rate will be accelerated and magnified.

We may require additional capital in the future and may not be able to secure adequate funds on terms acceptable to us.

The expansion and development of our businesses may require significant capital, which we may be unable to obtain, to fund our capital expenditures, operating expenses, working capital needs, and potential strategic acquisitions. In accordance with our growth strategy, we may opportunistically raise additional equity or debt capital to help fund the growth of our businesses, subject to market and other conditions, but such capital may not be available to us on a timely basis, or at all, to meet our cash requirements. Further, our capital requirements may vary materially from those currently planned if, for example, our revenues do not reach expected levels or we have to incur unforeseen capital expenditures and make investments to maintain our competitive position. If this is the case, we may require additional financing sooner than anticipated or we may have to delay or abandon some or all of our development and expansion plans or otherwise forego market opportunities.

To a large extent, our cash flow generation ability is subject to general economic, financial, competitive, legislative and regulatory factors and other factors that are beyond our control. We cannot assure you that our businesses will generate cash flow from operations in an amount sufficient to enable us to fund our liquidity needs. As a result, we may need to refinance all or a portion of our debt on or before its maturity or obtain additional equity or debt financing. We cannot assure you that we will be able to do so on favorable terms, if at all. Any inability to generate sufficient cash flow, refinance our debt or incur additional debt on favorable terms could adversely affect our financial condition and could cause us to be unable to service our debt and may delay or prevent the expansion of our businesses.

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Risks Related to Our Company’s Organization and Structure

We are a holding company and conduct all of our operations through our subsidiaries.

We are a holding company and all of our operating assets are held by certain of our direct and indirect subsidiaries. We derive all of our operating income from our operating subsidiaries. We and our other holding company subsidiaries rely on the earnings and cash flows of our subsidiaries, which are paid to us by our operating subsidiaries in the form of dividends and other payments or distributions, to meet our debt service and other obligations. The ability of our subsidiaries to pay dividends or make other payments or distributions to us will depend on their respective operating results and may be restricted by, among other things, the laws of their jurisdiction of organization (which may limit the amount of funds available for the payment of dividends and other distributions to us), the terms of existing and future indebtedness, including the Term Loan Facility and the Revolving Credit Facility, and other agreements of our subsidiaries and the covenants of any future outstanding indebtedness that our subsidiaries incur.

Provisions of our charter documents and Delaware law could delay, discourage or prevent an acquisition of us, even if the acquisition would be beneficial to our stockholders, and could make it more difficult for our stockholders to change our management.

Our certificate of incorporation and bylaws that will be in effect immediately prior to the effectiveness of this registration statement may discourage, delay or prevent a merger, acquisition or other change in control that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares of our common stock. In addition, these provisions may frustrate or prevent any attempt by our stockholders to replace or remove our current management by making it more difficult to replace or remove our board of directors. These provisions may include the following:

In addition, we will be subject to Section 203 of the Delaware General Corporation Law (the “DGCL”), which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with a stockholder owning 15% or more of such corporation’s outstanding voting stock for a period

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of three years following the date on which such stockholder became an “interested” stockholder. This provision could have the effect of delaying or preventing a change of control, whether or not it is desired by or beneficial to our stockholders. Any delay or prevention of a change of control transaction or changes in our board of directors and management could deter potential acquirers or prevent the completion of a transaction in which our stockholders could receive a substantial premium over the then-current market price for their shares of our common stock. See “Description of Capital Stock—Anti-Takeover Effects of Provisions of our Charter, our Bylaws and Delaware Law.”

Our certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for a wide range of disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our certificate of incorporation provides that the Court of Chancery of the State of Delaware (or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware) is the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: (i) any derivative action or proceeding brought on our behalf; (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders; (iii) any action asserting a claim arising pursuant to any provision of the DGCL or of our certificate of incorporation or our bylaws; (iv) any action or proceeding to interpret, apply, enforce or determine the validity of our certificate of incorporation or our bylaws (including any right, obligation or remedy under our certificate of incorporation or our bylaws); (v) any action asserting a claim against us or any of our directors, officers or other employees governed by the internal-affairs doctrine; or (vi) any action or proceeding as to which the DGCL confers jurisdiction to the Court of Chancery of the State of Delaware.

This provision does not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the U.S. federal courts have exclusive jurisdiction.

The exclusive-forum provisions also provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Section 22 of the Securities Act created concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Accordingly, there is uncertainty as to whether a court would enforce this exclusive forum provision, and the enforceability of similar choice of forum provisions in other companies’ charter documents have been challenged in legal proceedings. While the Delaware courts have determined that such exclusive forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provision, and there can be no assurance that such provision will be enforced by a court in those other jurisdictions. Any person or entity purchasing or otherwise acquiring any interest in our securities shall be deemed to have notice of and consented to this provision; however, we note that investors cannot waive our compliance with the federal securities laws and the rules and regulations thereunder.

These exclusive-forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or employees, which may discourage lawsuits against us and our directors, officers and employees.

Risks Related to this Offering, Being a Public Company and our Common Stock

Before this offering, there has been no public market for our common stock, and an active trading market for our common stock may not develop or be sustained, which could impede your ability to sell shares and depress the market price of your shares.

Prior to this offering, there has been no public market for our common stock. An active trading market for our common stock may not develop upon completion of this offering or, if it does develop, it may not be

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sustained. Furthermore, we cannot be certain that we will continue to satisfy the continued listing standards of Nasdaq.

Accordingly, no assurance can be given as to the following:

If an active trading market does not develop or is not maintained, you may have difficulty selling any shares of our common stock that you purchase, and the value of such shares might be materially impaired. Even if an active trading market develops for our common stock, the market price may be highly volatile and subject to wide fluctuations. Our financial performance, government regulatory action, tax laws, interest rates and market conditions in general could have a significant impact on the future market price of our common stock. The initial public offering price of our common stock will be determined by negotiations between us and representatives of the underwriters and may not reflect the prevailing price in the open market. See “Underwriting” for a discussion of the factors considered in determining the initial public offering price.

The market price of our common stock may fluctuate substantially, and your investment may decline in value.

The initial public offering price for our common stock will be determined through negotiations among the underwriters and us, and may vary from the market price of our common stock following this offering. If you purchase shares of common stock in this offering, you may not be able to resell those shares at or above the initial public offering price. The market price of our common stock may fluctuate or decline significantly in response to numerous factors, many of which are beyond our control, including:

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These and other factors may lower the market price of our common stock, regardless of our actual operating performance. As a result, our common stock may trade at prices significantly below the public offering price.

Furthermore, in recent years, the stock market has experienced significant price and volume fluctuations.

This volatility has had a significant impact on the market price of securities issued by many companies, including companies in our and related industries. The changes frequently appear to occur without regard to the operating performance of the affected companies. Hence, the price of our common stock could fluctuate based upon factors that have little or nothing to do with us, and these fluctuations could materially reduce the price of our common stock and materially affect the value of your investment.

The obligations associated with being a public company will require significant resources and management attention.

As a public company, we will face increased legal, accounting, administrative and other costs and expenses that we have not incurred as a private company. We expect to incur substantial incremental costs related to operating as a public company. After the completion of this offering, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which requires that we file annual, quarterly and current reports with respect to our business and financial condition, and proxy and other information statements. In addition, we will be subject to the rules and regulations implemented by the SEC, the Sarbanes-Oxley Act, the Dodd-Frank Act, the Public Company Accounting Oversight Board and    , each of which imposes additional reporting and other obligations on public companies. As a public company, we will be required to: