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Item 1. Legal Proceedings

2026-08-04 compared with 2026-05-05 · 126 added, 4 removed, 6 unchanged (96% of the section changed)

LEGAL PROCEEDINGS

The information presented under the caption “DPLTA Appraisal Proceedings” in Note 17 “Commitments and Contingencies” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report is incorporated herein by reference.

The information presented under the captions "Legal Matters" and “DPLTA Appraisal Proceedings” in Note 17 “Commitments and Contingencies” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report is incorporated herein by reference.

RI SK FACTORS

A list of factors that could materially affect our business, financial condition or operating results is described in Part I, Item 1A, “Risk Factors” in the 2025 Form 10-K.

There have been no material changes to our risk factors from those disclosed in Part I, Item 1A, “Risk Factors” in the 2025 Form 10-K.

There have been no material changes to our risk factors from those disclosed in Part I, Item 1A, “Risk Factors” in the 2025 Form 10-K, other than as described in the risk factors below.

Risks related to our financial results and Company success

We are obligated to comply with covenants related to our JPMorgan Chase Bank Credit Agreement that restrict our operating activities, and the failure to comply with such covenants could result in defaults that accelerate our debt obligations.

On July 21, 2026, we terminated the Former Credit Agreement with Wells Fargo.

All outstanding principal amounts thereunder were repaid, and we entered into a new five-year, $350.0 million credit agreement with JPMorgan Chase Bank, N.A.

(the “New Credit Agreement”) on such date.

As with our Former Credit Agreement, the New Credit Agreement governs a portion of our indebtedness and contains restrictive covenants that limit our ability to engage in activities that may be in our long-term best interest.

Our failure to comply with the restrictive covenants in our Former Credit Agreement has resulted in prior events of default, and a failure to comply with the restrictive covenants in the New Credit Agreement may in the future result in an event of default that, if not cured or waived, results in the acceleration of all of our debt.

Specifically, our New Credit Agreement contains various restrictive covenants which include, among others, provisions limiting our ability to:

• pay dividends or make other distributions or repurchase capital stock;

• incur or guarantee additional debt;

• make certain distributions, investments and other restricted payments;

• engage in transactions with affiliates;

• engage in mergers or consolidations or other change in control transactions;

• grant or incur liens on assets;

• dispose of assets;

• make loans and investments;

• modify our organization documents in a manner that is materially adverse to the lenders, taken as a whole;

• enter into certain restrictive agreements.

In addition, the New Credit Agreement contains customary events of default, such as misrepresentation and a default in the performance or observance of any covenant (subject to customary cure periods and materiality thresholds for certain covenants).

In addition, certain covenants in the New Credit Agreement, require us, among other things, to:

• maintain certain leverage ratios;

• maintain certain fixed charge coverage ratios;

As a result of these restrictions, we have been and may be:

• limited in how we conduct our business;

• limited in how much additional funding we can draw on our line of credit;

• unable to raise additional debt or equity financing to operate during general economic or business downturns;

• unable to compete effectively or to take advantage of new business opportunities.

Our failure to comply with the restrictive covenants in our Former Credit Agreement has resulted in prior events of default, and a failure to comply with the restrictive covenants in the New Credit Agreement may in the future result in an event of default that accelerates the payment of such debt, which would likely have a material adverse impact on our financial condition and results of operations.

In addition, an event of default under the New Credit Agreement would, if not cured or waived, permit the lenders to terminate all commitments to extend further credit under the applicable facility.

Furthermore, if we were unable to repay the amounts due and payable under the New

Credit Agreement, the lenders could proceed against the collateral granted to them to secure that indebtedness.

In the event our lenders accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness.

In addition, these defaults could impair our ability to access debt and equity capital markets.

For additional information on our debt covenants, see "Liquidity and Capital Resources" in Part I, Item 2 of this report.

Our significant indebtedness exposes us to various risks.

As of June 30, 2026, the Company’s borrowings under the Former Credit Agreement were $25.0 million.

As of June 30, 2026, the U.S.

Borrower had a total of $6.8 million in letters of credit under the Former Credit Agreement, leaving a net amount (after giving effect to the $25.0 million of outstanding borrowings described above) of $318.2 million available for future borrowings based on debt covenant compliance metrics.

The credit facilities provided under the Former Credit Agreement were to mature in July 2027.

On July 21, 2026, the Company terminated the Former Credit Agreement and entered into the New Credit Agreement.

As of the date of this filing, the Company had total outstanding borrowings under the New Credit Agreement of $48.0 million, leaving $302.0 million available for future borrowings.

In addition, on September 19, 2025, the Company issued $201.3 million principal amount of its 3.75% convertible senior notes due September 15, 2030 (the “2030 Notes” or the “Notes”).

See "Cash Requirements" in Part I, Item 2 of this report for additional information.

Our indebtedness has and may continue to adversely affect our operations and liquidity.

Our level of indebtedness:

• could make it more difficult for us to pay or refinance our debts as they become due during adverse economic and industry conditions because we may not have sufficient cash flows to make its scheduled debt payments;

• has caused us and may continue to cause us to use a larger portion of our cash flow to fund interest and principal payments, reducing the availability of cash to fund working capital, capital expenditures, research and development and other business activities;

• limits our ability to assume debt in a future acquisition.

Specifically, our New Credit Agreement limits the amount of debt we can assume in an acquisition.

This could limit our ability to take advantage of significant business opportunities, such as acquisition opportunities, and to react to changes in market or industry conditions;

• could cause us to be more vulnerable to general adverse economic and industry conditions;

• could cause us to be disadvantaged compared to competitors with less leverage;

• limits our ability to borrow additional money.

Specifically, our New Credit Agreement limits our ability to borrow additional money, which could limit our ability to fund working capital, capital expenditures, research and development and other general corporate needs in the future.

Our ability to satisfy our debt obligations and to refinance our indebtedness in the future is dependent upon our future performance and other risk factors discussed in this section.

We cannot assure you that we will maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness.

If we fail to pay interest on, or repay, our borrowings under the New Credit Agreement when required, we will be in default under the applicable loans, and may also suffer an event of default under the terms of other borrowing arrangements that we may enter into from time to time.

In addition, our failure to repurchase the 2030 Notes or to pay the cash amounts due upon conversion when required will constitute a default under the indenture.

We may be forced to further reduce or delay capital expenditures, sell assets or operations, seek additional capital or restructure or refinance our indebtedness.

We cannot assure you that we would be able to take any of these actions, that these actions would be successful and permit us to meet our scheduled obligations or that these actions would be permitted under the terms of our current or future debt agreements.

If we are unable to achieve sufficient operating results and resources, we could face substantial liquidity challenges and might be required to dispose of material assets or operations to meet our debt service and other obligations.

We may not be able to consummate those dispositions or obtain sufficient proceeds from those dispositions to meet our debt service and other obligations when due.

Any of these events could have a material adverse effect on our business, results of operations and financial condition.

We may also incur additional long-term debt and working capital lines of credit to meet future financing needs, which would increase our total indebtedness.

Although the terms of its existing and future credit agreements and of the indentures governing its debt contain restrictions on the incurrence of additional debt, including secured debt, these restrictions are subject to a number of important exceptions and debt incurred in compliance with these restrictions could be substantial.

If we or our restricted subsidiaries incur significant additional debt, the relative risks may intensify.

Changes in trade policy in the U.S.

and other countries, including the imposition of additional tariffs and the resulting consequences, may adversely impact our gross profits, gross margins, results of operations and financial condition.

In recent years, international market conditions and the international regulatory environment have been increasingly affected by competition among countries and geopolitical frictions.

Since early 2025, the U.S.

has introduced trade policy actions that increased

import tariffs across a wide range of countries at various rates, with certain exemptions.

On February 20, 2026, the United States Supreme Court issued a ruling striking down certain tariffs previously imposed under the IEEPA.

The ultimate availability, timing, and amount of any potential refunds of such tariffs remain highly uncertain and are subject to further legal, regulatory, and administrative developments.

Following the Supreme Court’s decision, the U.S.

presidential administration invoked Section 122 of the Trade Act of 1974 to impose new tariffs of 10% on imports from all countries, in addition to any existing non-IEEPA tariffs (including tariffs on semiconductors, which are expected to increase in June 2027), and also amended tariffs on imports of copper, steel and aluminum previously imposed under Section 232 of the Trade Expansion Act of 1962, effective April 6, 2026, to apply differentiated tariff rates based on metal content and the use of U.S.-origin metal inputs.

By its terms, the Section 122 tariff expired on July 24, 2026.

On July 23, 2026, the Office of the U.S.

Trade Representative ("USTR") announced a final action under Section 301 of the Trade Act of 1974 imposing additional ad valorem tariffs of 10% or 12.5% on most goods imported from approximately 60 foreign trading partners, which together account for nearly all U.S.

import trade.

Under the final action, trading partners that have adopted, or have committed to adopt and effectively enforce, a qualifying forced labor import prohibition are subject to the lower 10% tariff rate, while trading partners that have not adopted such a prohibition are subject to the 12.5% rate.

Certain categories of goods are excluded from the new tariffs, including articles already subject to duties under Section 232 of the Trade Expansion Act of 1962, and certain other products identified by USTR as warranting exemption.

Furthermore, recent U.S.

trade actions have triggered retaliatory actions by certain affected countries, and other foreign governments may impose further trade measures, including reciprocal tariffs, on certain U.S.

goods in the future.

Because not all products can be sourced in all countries, we have experienced, and expect to continue to experience, increased costs in our supply chain as a result of such tariffs, which may lead to reduced margins or increased prices.

We have taken, and may continue to take, steps intended to mitigate these impacts, but there is no assurance that these measures will be sufficient to offset the impact of tariffs on our business.

At this time, it remains unclear what additional actions, if any, will be taken by the U.S.

or other governments with respect to international trade agreements, the imposition of or changes to tariffs on goods imported into the U.S.

or exported to other countries, tax policy related to international commerce, increased export control, sanctions and investment restrictions, import or use of foreign communications equipment, or other trade matters.

Related costs and the uncertainty during transition periods could lead to changes in buying behavior, such as decreased demand.

These impacts could have a negative effect on our financial results, including our revenue and profitability.

In addition, the extent and duration of increased tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as negotiations between the U.S.

and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, availability and cost of alternative sources of supply, and reduced demand for our and our customers’ products and services.

Such conditions could have a material adverse impact on our business, results of operations and cash flows.

Also, disruptions and volatility in the financial markets may lead to adverse changes in the availability, terms and cost of capital.

Such adverse changes could increase our costs of capital and limit our access to external financing sources to fund acquisitions, capital projects, or refinancing of debt maturities on similar terms, which could in turn reduce our cash flows and limit our ability to pursue growth opportunities.

Changes in tariffs and trade restrictions can be announced with little or no advance notice.

The adoption and expansion of tariffs or other trade restrictions, increasing trade tensions, or other changes in governmental policies related to taxes, tariffs, trade agreements or policies, are difficult to predict, which makes attendant risks difficult to anticipate and mitigate.

If we are unable to navigate further changes in U.S.

or international trade policy, it could have a material adverse impact on our business and results of operations.

The complexity of announced or future tariffs may also increase the risk that we or our customers or suppliers may be subject to enforcement actions in the U.S.

or foreign jurisdictions related to compliance with trade regulations.

In May 2025, the U.S.

Department of Justice announced that trade and customs fraud, including tariff evasion, is a high-impact area and designated it as an enforcement priority area.

Additionally, the imposition of tariffs is dependent upon the classification of items under the Harmonized Tariff System (“HTS”) and the country of origin of the item.

Determination of the HTS and the origin of the item is a technical matter that can be subjective in nature.

Accordingly, although we believe our classifications of both HTS and origin are appropriate, there is no certainty that the U.S.

government will agree with us.

government does not agree with our determinations, we could be required to pay additional amounts, including potential penalties, and our profitability would be adversely impacted.

Finally, tariffs on our customers’ products may adversely affect our gross profit margins in the future due to the potential for increased pressure on our selling prices by customers seeking to offset the impact of tariffs on their own products.

In addition, tariffs could make our products less attractive relative to products offered by competitors, which may not be subject to similar tariffs.

In reaction to the increased tariffs, customers may elect to reduce spending, renegotiate contracts, defer orders or delivery of existing orders, or shift purchases to other vendors, each of which would adversely impact our financial results and competitive position with customers.

Increases in tariffs on imported goods or the failure to resolve current international trade disputes could further decrease demand and have a material adverse effect on our business and operating results.

Recently, the Company has experienced increased costs on imports of certain critical raw minerals and derivative products relevant to our business and products due to tariffs imposed by the U.S.

government and other nations, and the availability, timing, and amount of any potential refunds of related U.S.

tariffs remains uncertain.

We have taken steps, and may take additional steps, to attempt to mitigate the impact of tariffs on our business, including by availing ourselves of certain exemptions to tariffs;

by making changes to our supply

chain practices, sources of supply, or manufacturing locations;

and by passing the cost of tariffs to customers.

These changes could take considerable time to implement, result in significant costs, and cause supply chain delays or disruption.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

1 unchanged sentence

Issuer Purchases of Equity Securities

During the three months ended March 31, 2026, we did not repurchase any shares of our common stock.

As of March 31, 2026, there is no current authorization to repurchase common stock.

During the three months ended June 30, 2026, we did not repurchase any shares of our common stock.

As of June 30, 2026, there is no current authorization to repurchase common stock.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Legal Proceedings