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Item 1A. Risk Factors

2026-03-03 compared with 2025-03-04 · 143 added, 109 removed, 69 unchanged (79% of the section changed)

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Industry and Segment Risks

The demand for our products may be cyclical, creating uncertainty regarding future profitability.

Various changes in general economic conditions affect (or disproportionately affect) the industries in which our customers operate.

These changes include decreases in the rate of consumption or use of our customers’ products due to economic downturns.

Other factors causing fluctuation in our customers’ positions are changes in market demand, capital spending, tariff induced price changes, lower overall pricing due to domestic and international overcapacity, lower priced imports, currency fluctuations, and increases in use or decreases in prices of substitute materials.

As a result of these factors, our profitability has been and may in the future be subject to significant fluctuation.

Domestic competition and excess manufacturing capacity could force lower product pricing and may have an adverse effect on our revenues and profitability.

From time-to-time, intense competition and excess manufacturing capacity in the commodity stainless steel industry have resulted in reduced selling prices, excluding raw material surcharges, for many of our stainless steel products sold by the Tubular Products segment.

In such situations, in order to maintain market share, we would have to lower our prices to match the competition.

These factors have had and may in the future have a material adverse impact on our revenues, operating results and financial condition.

Overcapacity and overproduction by foreign producers in our industry could result in lower domestic prices, which would adversely affect our sales, margins and profitability.

Our business is susceptible to the import of products from other countries, particularly in our Tubular Products segment.

Import levels of various products are affected by, among other things, overall world-wide demand, lower cost of production in other countries, the trade practices of foreign governments, government subsidies to foreign producers, the strengthening of the U.S.

dollar, and government-imposed trade restrictions in the United States, such as imposed in 2018 under Section 232 of the Trade Expansion Act of 1962 (section 232 tariffs).

Although imports from certain countries have been curtailed by anti-dumping duties, imported products from other countries could significantly reduce prices.

Increased imports of certain products, whether illegal dumping or legal imports, could reduce demand for our products or cause us to lower our prices to maintain demand for our products, which could adversely affect our business, financial position, or results of operations.

A substantial portion of our sales in the Specialty Chemicals segment is dependent upon a limited number of customers.

The top 15 customers in the Specialty Chemicals segment accounted for approximately 53% of revenues for the year ended December 31, 2024 and 72% for the year ended December 31, 2023 with the top customer accounting for approximately 12% of revenues for 2024 and 24% of revenues for 2023.

Our industry is highly competitive, and demand for our products and our financial results may be negatively impacted by changes in industry capacity utilization, shifts in production geography, raw material dynamics, and competition from other specialty chemical providers.

We operate in a highly competitive specialty chemicals marketplace.

Our financial performance is sensitive to fluctuations in industry capacity utilization;

pricing often declines when overall capacity exceeds demand, leading to underutilization and pressure on margins.

Overcapacity in regions such as Asia, particularly when production is exported to other markets, can disrupt supply-demand balances globally and reduce demand for our products in key regions.

Our ability to compete effectively depends on maintaining advanced technical capabilities and continuously developing and commercializing innovative, high-value specialty chemical solutions for current and prospective customers.

Growing competition from alternative products, especially those with enhanced environmental profiles or lower costs, or from substitutes that deliver similar performance could reduce demand for our offerings and adversely affect our market position, pricing power, and growth opportunities.

Variations in our product, customer, and geographic sales mix make it difficult to predict future performance.

Our net sales and gross margins fluctuate based on the specific mix of products, customers, and regions in any period, which can differ significantly from prior or expected periods.

Gross margins are heavily influenced by this mix, as well as by competitive dynamics, product commoditization, rising input or logistics costs, inflation, regulatory changes, and other market factors.

These variations have historically caused material period-to-period differences in results (particularly during economic downturns) and can complicate assessments of how external conditions or internal changes may impact our business.

As a result, forecasting operating results remains challenging.

A substantial portion of our sales is dependent upon a limited number of customers with the top five customers accounting for approximately 51% of revenues for 2025 and 35% of revenues for 2024.

An adverse change in, or termination of, the relationship with one or more of our top customers could materially and adversely affect our results of operations.

Industry dynamics, technological changes, and customer trends may lead to volatility in our results.

The specialty chemicals sector experiences rapid innovation, product obsolescence, pricing pressures, raw material volatility, and shifting supply-demand patterns.

End markets such as oil & gas, coatings, personal care, and others are influenced by technological advances, regulatory shifts, consumer preferences for sustainable alternatives, and economic factors.

Changes in customer formulations, processes, or specifications could render certain products less relevant or obsolete, while alternatives may emerge that reduce or eliminate the need for our solutions.

These factors can cause significant fluctuations in sales, margins, and overall financial condition.

We must continue to enhance existing products, develop new ones, and accurately predict customer needs to remain competitive.

Failure to do so effectively could materially and adversely affect our business.

Operations and Supply Chain Risks

Any interruption in our ability to procure raw materials, or significant volatility in the price of raw materials, could adversely affect our business and results of operations.

While the Company believes that raw materials for both segments are (in general) readily available from numerous sources, some of our raw material needs are met by a sole supplier or only a few suppliers and many such relationships are terminable by either party.

If any key supplier that we rely on for raw materials ceases or limits production, we may incur significant additional costs, including capital costs, in order to find alternate, reliable raw material suppliers.

We may also experience significant production delays while locating new supply sources, which could result in our failure to timely deliver products to our customers.

In addition, purchase prices and availability of these critical raw materials are subject to volatility which may negatively impact financial performance due to decreased sales volume and /or decreased profitability.

At any given time, we may be unable to obtain an adequate supply of these critical raw materials on a timely basis, at acceptable prices and other terms, or at all.

If suppliers increase the price of critical raw materials, we may not have alternative sources of supply.

As well, though we attempt to pass changes in the prices of raw materials along to our customers, we cannot always do so due to market

competition, among other reasons, or price increases to customers may occur on a delayed basis.

In addition, although raw materials may remain available, volatility in raw material pricing may negatively impact customer ordering patterns.

The loss of or reduced supply from one or more key suppliers in either segment, or any other material change in our current supply channels, could materially affect the Company’s ability to meet the demand for its products and adversely affect the Company’s business and results of operations.

In addition, any limitations (or delay) on our ability to pass through any price increases in raw materials could have an adverse effect on our profitability.

Loss of a key supplier or lack of product availability from suppliers could adversely affect our sales and earnings .

Our Specialty Chemicals segment depends on maintaining an immediately available supply of various products to meet customer demand.

Many of our relationships with key product suppliers are longstanding but are terminable by either party.

The loss of key supplier authorizations, or a substantial decrease in the availability of their products, could put us at a competitive disadvantage and have a material adverse effect on our business or results of operations.

Supply interruptions could arise from raw material shortages, inadequate manufacturing capacity or utilization to meet demand, financial difficulties, tariffs and other regulations affecting trade between the U.S.

and other countries, labor disputes, weather conditions affecting suppliers' production, transportation disruptions or other reasons beyond our control.

Our business depends on the timely availability of raw materials, and any interruption in our ability to procure such materials, or significant volatility in their pricing, could adversely affect our business, financial condition and results of operations.

We actively manage our sourcing strategy to mitigate supply risk and cost volatility, including maintaining relationships with multiple approved suppliers where commercially practicable, monitoring supplier performance and financial condition, and managing inventory levels.

However, these efforts may not fully protect us from supply interruptions, capacity constraints,

transportation disruptions, geopolitical developments, force majeure events, or other unforeseen circumstances affecting our suppliers.

While most of our raw materials are available from multiple sources, certain key inputs are obtained from a sole supplier or a limited number of qualified suppliers.

The loss of, or significant reduction in supply from, any such supplier could require us to identify and qualify alternative sources, potentially resulting in increased costs, capital expenditures, or production delays.

Any such disruption could adversely affect our ability to meet customer demand.

Raw material prices are subject to volatility due to changes in supply and demand, energy costs, global trade conditions, regulatory developments and other macroeconomic factors.

Significant or sustained increases in raw material costs may adversely impact our margins if we are unable to timely pass such increases through to customers.

Competitive market conditions, contractual arrangements, or customer purchasing behavior may limit our ability to fully recover cost increases or delay the timing of such recovery.

In addition, volatility in raw material pricing may influence customer ordering patterns, which could affect our sales volumes and operating results.

Accordingly, any material disruption in our supply chain, inability to secure adequate raw material supply at acceptable prices and terms, or limitations in our ability to pass through cost increases could materially and adversely affect our business, financial condition and results of operations.

The financial health of our customers or suppliers could impair demand, pricing, collections, or our supply chain.

Our customers operate in competitive end markets and face pressures from their own competitors, shifting preferences, and economic conditions.

These factors have historically led some customers to experience financial distress, including bankruptcy or receivership.

Distressed customers may delay payments, seek concessions on pricing or terms, reduce volumes, or eliminate product lines, and prior payments may be subject to clawback in bankruptcy proceedings.

Such developments could negatively affect our sales, margins, and cash flow.

Similarly, if key suppliers face insolvency or fail to meet obligations, we may need to secure replacement supplies at higher costs or on less favorable terms, with limited recovery options.

Raw materials for our specialty chemicals are generally available from multiple sources, but some needs are met by sole or limited suppliers with terminable relationships.

Interruptions, significant price volatility, or inability to pass through cost increases due to competition could adversely affect our business and results of operations.

Our operating results are sensitive to the availability and cost of energy and freight, which are important in the manufacture and transport of our products.

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The occurrence of incidents in the future may result in production delays, failure to timely fulfill customer orders or otherwise have a material adverse effect on our business, financial condition or results of operations.

Our operations present significant risk of injury and other liabilities.

The industrial activities conducted at our facilities present significant risk of serious injury or even death to our employees or other visitors to our operations, notwithstanding our safety precautions, including our material compliance with federal, state and local employee health and safety regulations, and we may be unable to avoid material liabilities for any such incidents.

We maintain various forms of insurance, including insurance covering claims related to our properties and risks associated with our operations, but there can be no assurance that the insurance coverage will be applicable and adequate, or will continue to be available on terms acceptable to us, or at all, which could result in material liability to us for any injuries or deaths.

We may not be able to make the operational and product changes necessary to continue to be an effective competitor.

We must continue to enhance our existing products, develop and manufacture new products with improved capabilities, and accurately predict future customer needs and preferences in order to continue to be an effective competitor in our business markets.

In addition, we must anticipate and respond to changes in industry standards, including government regulations, that affect our products and the needs of our customers.

The success of any new or enhanced products will depend on a number of factors, such as technological innovations, increased manufacturing and material costs, customer acceptance, and the performance and quality of the new or enhanced products.

We cannot predict the level of market acceptance or the amount of market share these new or enhanced products may achieve, and we may experience delays or problems in the introduction of new or enhanced products.

Any failure in our ability to effectively and efficiently launch new or enhanced products could materially and adversely affect our business, financial condition or results of operation.

Capital projects are complex and subject to delays, cost overruns, or underperformance.

Our capital expenditures support maintenance, upgrades, and expansions of manufacturing facilities and equipment.

These projects involve complexities such as construction timelines, equipment commissioning, customer quality certifications, and

demand forecasting.

Delays, budget overruns, or failure to achieve expected returns are possible.

Some projects rely on government incentives or funding, which could change or be unavailable.

If we lack sufficient capital or face higher-than-anticipated needs due to technology shifts or competition, we may struggle to maintain or expand capabilities in key markets.

Ascent relies on information technology systems that are vulnerable to disruption and cybersecurity threats.

Our operations depend heavily on IT systems for efficient functioning and, in some cases, core business processes.

We outsource significant portions of IT management, including infrastructure, networks, data centers, end-user support, backups, and security to third-party providers.

Any prolonged failure or disruption of these systems, whether ours or a third party's, could cause substantial operational interruptions, damage our reputation, and harm our financial results.

Given the nature of our business and customer base, we are a potential target for evolving cybersecurity threats, including those from hackers, insiders, or advanced tools such as artificial intelligence.

While we maintain controls, policies, and procedures to mitigate these threats, they may not always prevent breaches or detect issues promptly.

A significant breach could result in loss or theft of proprietary information, intellectual property, customer/supplier data, or employee information, triggering legal notifications, litigation, regulatory penalties, remediation costs, and harm to customer relationships, brand reputation, and financial performance.

If we fail to maintain an efficient cost structure, our profitability may suffer.

Our competitiveness and profitability depend on controlling costs across manufacturing, operations, sales, and support functions.

We pursue ongoing efficiency and cost-reduction initiatives, which may involve facility optimizations, workforce adjustments, or process changes.

These efforts require significant management focus and carry risks, including employee relations issues or failure to achieve targeted savings.

If we cannot sustain efficiencies amid market price pressures, our margins and financial performance could decline.

Natural disasters, pandemics, or other catastrophic events could disrupt operations and materially affect our results.

Events such as severe weather (hurricanes, floods, storms), earthquakes, pandemics, or other catastrophes at our facilities, those of suppliers, customers, or in key regions could interrupt production, supply chains, or demand.

Past events, including hurricanes and global health crises such as COVID-19, have impacted volumes, costs, and operations.

Future occurrences could similarly harm results, financial position, and cash flows, depending on severity, duration, and broader economic effects.

Government Regulation Risks

Evolving ESG expectations and requirements could increase costs and create new risks.

Heightened emphasis on environmental, social, and governance (ESG) factors require ongoing investment in tracking, reporting, and progress toward sustainability goals amid changing standards.

Third-party ESG ratings influence investor decisions, and failure to meet expectations could harm our reputation.

Disclosure rules, which are rapidly growing in complexity and number, demand resources and may necessitate revisions to methodologies, goals, or reported data.

Compliance with emerging climate or environmental regulations could drive additional capital spending, operating expenses, or product changes, with potentially material costs.

Our operations expose us to the risk of environmental, health and safety liabilities and obligations, which could have a material adverse effect on our financial condition or results of operations.

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In addition, any unanticipated liabilities or obligations arising, for example, out of discovery of previously unknown conditions or changes in laws or regulations, could have an adverse effect on our business, financial condition or results of operations.

Federal, state and local legislative and regulatory initiatives relating to hydraulic fracturing, as well as governmental reviews of such activities could result in delays or eliminate new wells from being started, thus reducing the demand for our pressure vessels and heavy walled pipe and tube.

Hydraulic fracturing (“fracking”) is currently an essential and common practice to extract oil from dense subsurface rock formations, and this lower cost extraction method is a significant driving force behind the surge of oil exploration and drilling in several locations in the United States.

However, the Environmental Protection Agency, U.S.

Congress and state legislatures have considered adopting legislation to provide additional regulations and disclosures surrounding this process.

In the event that new legal restrictions surrounding the fracking process are adopted in the areas in which our customers operate, we may experience a decrease in revenue, which could have an adverse impact on our results of operations, including profitability.

Regulations related to “conflict minerals” may force us to incur additional expenses, may make our supply chain more complex and may result in damage to our reputation with customers.

On August 22, 2012, under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), the SEC adopted new requirements for companies that use certain minerals and metals, known as conflict minerals, in their products, whether or not these products are manufactured by third parties.

These regulations require companies to conduct annual due diligence and disclose whether or not such minerals originate from the Democratic Republic of Congo and adjoining countries.

Tungsten and tantalum are designated as conflict minerals under the Dodd-Frank Act.

These metals are used to varying degrees in our welding materials and are also present in specialty alloy products.

These new requirements could adversely affect the sourcing, availability and pricing of minerals used in our products.

In addition, we could incur additional costs to comply with the disclosure requirements, including costs related to determining the source of any of the relevant minerals and metals used in our products.

Since our supply chain is complex, we may not be able to sufficiently verify the origins for these minerals and metals used in our products through the due diligence procedures that we implement, which may harm our reputation.

In such event, we may also face difficulties in satisfying customers who could require that all of the components of our products are conflict mineral-free.

We may be adversely affected by changes in tax laws or tax rates.

Our business, which involves manufacturing operations, custom chemical production, and sales to industries such as coatings, adhesives, pulp & paper, textiles, automotive, water treatment, construction, heavy industrial, petrochemical, food processing, pharmaceutical, oil & gas, and others, may be impacted by factors outside our control.

These include changes in tax laws or tax rates, as well as conditions in financial services and capital markets, including counterparty risk from suppliers or customers, rising interest rates that could increase borrowing costs for capital-intensive manufacturing, inflation affecting raw material and energy costs (e.g., petroleum-derived inputs), deflation impacting pricing, and fluctuations in currencies relevant to our international sales or sourcing.

Macroeconomic challenges, such as volatility in financial and capital markets, unemployment levels, and the U.S.

and other governments' ability to manage rising debt, may persist and exert pressure on the broader economy.

This could lead to shifts in tax policies or rates, reduced demand for our specialty chemicals, supply chain disruptions, higher input costs, or competitive pressures.

There can be no assurance that changes in tax laws or tax rates will not materially affect our future cash taxes, effective tax rate, deferred tax assets and liabilities, or overall profitability.

Tariff and Trade Environment may significantly affect our industry and business, and economic decline can materially impact our financial results.

The recently imposed U.S.

tariffs did not materially impact our fiscal 2025 results, but their effects and the potential imposition of modified or additional tariffs may, among other things, create new trade barriers that disrupt supply chains, raise costs, weaken consumer confidence and impact consumer demand for our products, and impact our ability to export our

products, all of which could have an adverse effect on our business and financial results.

The extent of the impact of tariffs on the Company’s business is highly uncertain and difficult to predict.

We are closely monitoring the rapidly evolving tariff landscape and are working diligently with key suppliers to mitigate risks.

Deterioration in general economic conditions that in turn diminishes consumer confidence or discretionary income may reduce our sales, or we may decide to lower pricing for our products, which could adversely affect our financial results, including increasing the potential for future impairment charges.

In addition, economic uncertainty may also increase certain costs of operation, such as financing costs, energy costs and insurance premiums, which in turn may impact our results of operations.

We cannot predict the strength of global economies or the timing of economic recovery, either globally or in the specific markets in which we compete.

Human Capital Risks

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As of December 31, 2025, we had 54 employees represented by unions which is approximately 27% of the aggregate number of Company employees.

These employees are represented by local unions affiliated with the USW and the UFCW.

Collective bargaining contracts for the USW and UFCW locals expire at various dates in 2027.

These employees are represented by local unions affiliated with the UFCW.

Collective bargaining contracts for the UFCW locals are in effect through 2027.

Although we believe that our present labor relations are strong, our failure to renew these agreements on reasonable terms as the current agreements expire could result in labor disruptions and increased labor costs, which could adversely affect our financial performance.

Failure to attract and retain key personnel may adversely impact our strategy and execution and financial results.

Our ability to successfully operate, grow our business and implement our business strategies is largely dependent on the efforts, abilities and services of our employees.

The loss of employees or our inability to attract, train and retain additional personnel could reduce the competitiveness of our business or otherwise impair our operations.

Our future success will also depend, in part, on our ability to attract and retain qualified personnel who have experience in the application of our products and are knowledgeable about our business, markets and products.

We also face risks associated with the actions taken in response to COVID-19, including those associated with workforce reductions, and may experience difficulties with hiring additional employees or replacing employees following the pandemic, which may be exacerbated by the tight labor market.

In addition, COVID-19 has, and may again result in quarantines of our personnel or an inability to access facilities, which could adversely affect our operations.

Our ability to operate effectively, execute our business strategy and achieve future growth depends significantly on our ability to identify, attract, recruit, develop and retain qualified employees.

The loss of key personnel, or our failure to successfully identify, attract, recruit, develop and retain talent in a competitive labor market, could adversely affect our operations, customer relationships and financial performance.

Our future success also depends on maintaining a workforce with the technical expertise, operational experience and commercial knowledge necessary to support our manufacturing processes, product development efforts and customer engagement activities.

Competition for skilled personnel, including experienced production employees, engineers, technical service professionals and commercial leadership, may increase labor costs and limit our ability to staff our facilities and support growth initiatives.

If we are unable to maintain a stable and capable workforce, our competitiveness and ability to execute our strategic objectives could be materially adversely affected.

We also face risks associated with the actions taken in response to pandemics, including those associated with workforce reductions, and may experience difficulties with hiring additional employees or replacing employees following a pandemic, which may be exacerbated by the tight labor market.

In addition, pandemics have, and may again result in quarantines of our personnel or an inability to access facilities, which could adversely affect our operations.

Our operations present significant risk of injury and other liabilities.

Financial and Strategic Risks

There are risks associated with our outstanding and future indebtedness.

As of December 31, 2024, we had no outstanding indebtedness, however, we may incur additional indebtedness in the future.

We have customary restrictive covenants in our current debt agreements, which may limit our flexibility to operate our business.

Failure to comply with this covenant could result in an event of default that, if not cured or waived, could have a material adverse effect on our business, results of operations and financial condition.

Additionally, our ability to pay interest and repay the principal for our indebtedness is dependent upon our ability to manage our business operations, generate sufficient cash flows to service such debt and the other factors discussed in this section.

There can be no assurance that we will be able to manage any of these risks successfully.

We may need new or additional financing in the future to expand our business, and our inability to obtain capital on satisfactory terms or at all may have an adverse impact on our operations and our financial results.

If we are unable to access capital on satisfactory terms and conditions, we may not be able to expand our business or meet our payment requirements under the Credit Agreement.

Our ability to obtain new or additional financing will depend on a variety of factors, many of which are beyond our control.

We may not be able to obtain new or additional financing because we may have substantial debt, our current receivable and inventory balances do not support additional debt availability or because we may not have sufficient cash flows to service or repay our existing or future debt.

In addition, depending on market conditions and our financial performance, equity financing may not be available on satisfactory terms or at all.

If we are unable to access capital on satisfactory terms and conditions, this could have an adverse impact on our operations and our financial results.

Our recent exit from the Tubular Products Segment may result in unexpected costs, liabilities, or disruptions that could adversely affect our financial condition and results of operations.

In the past year, we have completely exited our Tubular Products Segment, which previously included our Welded Pipe & Tube operations.

This exit involved the cessation of operations, divestiture of assets, and winding down of related activities across facilities in Tennessee and North Carolina.

As a result of this strategic shift, we are now solely focused on our Specialty Chemicals Segment.

While this exit was intended to streamline our operations and allocate resources to higher-growth areas, it exposes us to several risks.

We may incur unanticipated costs related to the wind-down process.

Additionally, we could face potential liabilities from discontinued operations, such as product liability claims, contractual disputes, or regulatory investigations arising from historical activities in industries like oil and gas, chemical, petrochemical, and water treatment, where our tubular products were used.

Any such claims or obligations could require significant financial resources to resolve and may not be fully covered by insurance.

Furthermore, the loss of revenue and diversification from the Tubular

Products Segment, which served diverse markets including automotive, power generation, and mining, increases our dependence on the Specialty Chemicals Segment.

This concentration could amplify the impact of adverse events in the chemicals industry, such as raw material price volatility, supply chain disruptions, or shifts in demand from end markets like pulp and paper, coatings, and oil and gas.

If we are unable to successfully mitigate these risks or if the benefits of the exit do not materialize as anticipated, our business, financial condition, results of operations, and cash flows could be materially adversely affected.

The inability to successfully complete or integrate future acquisitions or strategic investments may harm our results.

As part of our strategy to expand and strengthen our specialty chemicals platform, we may pursue acquisitions, joint ventures, or other investments.

Success in these efforts requires identifying suitable opportunities, negotiating favorable terms, securing financing, completing transactions, and integrating operations effectively.

There is no guarantee that we will achieve these objectives or realize the anticipated benefits, such as revenue growth, cost synergies, or enhanced capabilities.

Acquisitions and investments can expose us to unforeseen liabilities from the acquired entity or partner, including disputes over intellectual property, environmental or tax obligations, or other unknown issues that emerge post-transaction.

Depending on deal structure, we may assume or become liable for such matters, which could materially harm our business, financial condition, or results of operations.

We may repurchase or redeem our equity or debt securities, which could affect market dynamics for those securities and reduce our liquidity.

From time to time, we may repurchase shares of our common stock or redeem debt instruments through open-market transactions, accelerated programs, private negotiations, tender offers, or other methods.

The decision to pursue such actions, along with their timing and scale, depends on market conditions, our liquidity needs, contractual limitations, and other considerations.

These activities could influence the trading market for our securities and potentially constrain our available liquidity.

Growth and transformation initiatives may demand substantial resources and, if unsuccessful, could materially harm our business.

We regularly assess opportunities to grow, optimize, or transform our operations, which may include acquisitions, partnerships, divestitures, restructurings, new facilities, or other changes.

These efforts often require significant capital, potentially increasing debt levels, and introduce new risks.

If initiatives do not deliver expected outcomes, we could face heightened financial strain, reduced liquidity, limited market access, or dilution of shareholder value.

Implementation challenges may include management distraction, strained relationships, higher costs, regulatory hurdles, or inexperience in new areas.

We may also fall short of projected cost savings, revenue growth, or other benefits despite significant investment.

Impairment in the carrying value of our fixed assets or intangible assets could adversely affect our financial condition and consolidated results of operations.

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Should the value of goodwill, fixed assets or intangible assets become impaired, there could be an adverse effect on our financial condition and consolidated results of operations.

From time to time, we engage in acquisitions and divestitures and may encounter difficulties in integrating and separating these businesses and therefore we may not realize the anticipated benefits.

We may seek growth opportunities through strategic acquisitions as well as evaluate our portfolio for potential divestitures to optimize our business footprint and portfolio.

The success of these transactions will depend on our ability to integrate or separate, as applicable, assets and personnel in these transactions and to cooperate with our strategic partners.

We may encounter difficulties in integrating acquisitions with our operations as well as separating divested businesses, and in managing strategic investments.

Additionally, we may seek opportunities to monetize non-core and excess assets.

These opportunities may not materialize or generate the financial benefits expected.

Furthermore, we may not realize the degree, or timing, of benefits we anticipate when we first enter into a transaction.

Intellectual Property Risks

Our inability to sufficiently or completely protect our intellectual property rights could adversely affect our business, prospects, financial condition and results of operations.

Our ability to compete effectively in both of our business segments will depend on our ability to maintain the proprietary nature of the intellectual property used in our businesses.

These intellectual property rights consist largely of trade-secrets and know-how.

We rely on a combination of trade secrets and non-disclosure and other contractual agreements and technical measures to protect our rights in our intellectual property.

We also depend upon confidentiality agreements with our officers, employees, consultants and subcontractors, as well as collaborative partners, to maintain the proprietary nature of our intellectual property.

These measures may not afford us sufficient or complete protection, and others may independently develop intellectual property similar to ours, otherwise avoid our confidentiality agreements or produce technology that would adversely affect our business, financial condition or results of operations.

General Risk Factors

We encounter significant competition in all areas of our businesses and may be unable to compete effectively, which could result in reduced profitability and loss of market share.

We actively compete with companies producing the same or similar products and, in some instances, with companies producing different products designed for the same uses.

We encounter competition from both domestic and foreign sources in price, delivery, service, performance, product innovation, and product recognition and quality, depending on the product involved.

For some of our products, our competitors are larger and have greater financial resources than we do.

As a result, these competitors may be better able to withstand a change in conditions within the industries in which we operate, a change in the prices of raw materials or a change in the economy as a whole.

Our competitors can be expected to continue to develop and introduce new and enhanced products and more efficient production capabilities, which could cause a decline in market acceptance of our products.

Current and future consolidation among our competitors and customers also may cause a loss of market share as well as put downward pressure on pricing.

Our competitors could cause a reduction in the prices for some of

our products as a result of intensified price competition.

Competitive pressures can also result in the loss of major customers.

If we cannot compete successfully, our business, financial condition and results of operation could be adversely affected.

We have identified and may continue to discover material weaknesses in our internal controls over financial reporting, which may adversely affect investor confidence in the accuracy and completeness of our financial reports and consequently the market price of our securities.

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As a public company, we are required to design and maintain proper and effective internal controls over financial reporting and to report any material weaknesses in such internal controls.

Section 404 of the Sarbanes-Oxley Act of 2002 requires that we evaluate and determine the effectiveness of our internal controls over financial reporting and provide a management report on the internal controls over financial reporting, which must be attested to by our independent registered public accounting firm.

independent registered public accounting firm.

We have identified material weaknesses in our internal controls over financial reporting, and may not detect errors on a timely basis and our financial statements may be materially misstated.

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If we continue to identify material weaknesses in our internal controls over financial reporting, if we are unable to comply with the requirements of Section 404 in a timely manner, if we continue to be unable to assert that our internal controls over financial reporting are effective, or if our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal controls over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our securities could be negatively affected, and we could become subject to investigations by the Financial Industry Regulatory Authority, the SEC, or other regulatory authorities, which could require additional financial and management resources.

Cybersecurity risks and cyber incidents could adversely affect our business and disrupt operations.

Cyber incidents can result from deliberate attacks or unintentional events.

These incidents can include, but are not limited to, gaining unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption.

The result of these incidents could include, but are not limited to, disrupted operations, misstated financial data, liability for stolen assets or information, increased cyber security protection costs, litigation and reputational damage adversely affecting customer or investor confidence.

We have taken steps to address these concerns and have implemented internal control and security measures to protect our systems and networks from security breaches;

however, there can be no assurance that a system or network failure, or security breach, will not impact our business, results of operations and financial condition.

Intellectual Property Risks

Protecting our intellectual property is critical to our success.

We safeguard our intellectual property through patents, trade secrets, confidentiality agreements, and robust physical and cybersecurity measures.

Enforcing or defending these rights can involve substantial costs.

Intellectual property protections vary by jurisdiction, and in some countries where we operate, they may be weaker than in the United States.

Failure to secure, maintain, or defend our rights, particularly amid evolving technologies such as artificial intelligence, or successful third-party infringement claims against us could materially affect our business, financial condition, and results.

General Risk Factors

Our business is exposed to risks associated with the use of Artificial Intelligence (AI) tools.

We leverage artificial intelligence (“AI”) tools across our business operations to accelerate foundational business case development for new products and new markets, evaluate strategic and operational scenarios, and enhance innovation and process improvement initiatives.

While AI presents opportunities to improve efficiency, decision-making and competitive positioning, its adoption also introduces a range of risks that could adversely impact our business, financial condition and results of operations.

These risks include, but are not limited to, potential competitive disadvantages if peers more effectively leverage AI to accelerate innovation, product development or operational performance.

The use of AI may also expose us to legal, regulatory and reputational risks, particularly in jurisdictions with evolving or inconsistent regulatory frameworks governing AI, data privacy and cybersecurity.

Additionally, the deployment of AI tools, whether by us or by customers using AI-enabled solutions, may result in unintended consequences such as biased, inaccurate or incomplete outputs;

loss, misuse or compromise of confidential information or intellectual property;

and challenges in asserting, defending or protecting intellectual property rights.

These risks may be amplified by increasing regulatory scrutiny and potential compliance obligations, which could result in increased costs, operational constraints or limitations on our ability to deploy AI technologies effectively.

There can be no assurance that our use of AI will yield the anticipated benefits or that we will be able to successfully manage or mitigate the associated risks.

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What changed 10-K

Item 1A. Risk Factors