What changed in this filing

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Item 1A. Risk Factors

2026-02-13 compared with 2025-02-18 · 105 added, 97 removed, 308 unchanged (40% of the section changed)

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The industries in which we compete are subject to unpredictable fluctuation or cycles, which may be volatile.

As a supplier to the global semiconductor equipment, industrial, medical, data center computing, telecommunication, and networking industries, we are subject to business fluctuations, the timing, length, and volatility of which can be difficult to predict.

As a supplier to the global semiconductor equipment, data center computing, industrial, medical, telecommunication, and networking industries, we are subject to business fluctuations, the timing, length, and volatility of which can be difficult to predict.

We are impacted by sudden changes in customers’ manufacturing capacity requirements and spending, which depend in part on technology transitions, capacity utilization, demand for customers’ products, inventory levels relative to demand, access to affordable capital, and changes in geopolitical factors, including tariffs.

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If we are not able to timely and appropriately adapt to changes in our business environment or to accurately assess where we are positioned within a business cycle, our business, financial condition, or results of operations may be materially and adversely affected.

For example, the semiconductor industry appears to be recovering from a cyclical downturn, and the Industrial and Medical market and Telecom and Networking market are rebalancing elevated inventory levels, which have adversely impacted demand for our products.

If the semiconductor industry’s recovery does not continue as anticipated, if the length, severity, and/or volatility of the lower demand environments in the Industrial and Medical market and Telecom and Networking market exceeds our expectations, if we fail to achieve further growth in our other markets, our results of operations could be adversely impacted.

For example, infrastructure investments in artificial intelligence (“AI”) have increased substantially, which is driving significant demand increases in the Data Center Computing market.

We accelerated investments to increase capacity and make upgrades to support higher demand and new product requirements in the market, but if we are unable to timely or efficiently scale to meet growing demand or if we have not accurately assessed the magnitude or sustainability of such demand, our results of operations could be adversely impacted.

We must achieve design wins to retain our existing customers and to obtain new customers, although design wins achieved may not necessarily result in substantial revenue or gross profit.

Driven by continuing technology migration and changing customer demand, the markets we serve are constantly changing in terms of advancement in applications, core technology, and competitive pressures.

The markets we serve are constantly changing in terms of advancement in applications, core technology, and competitive pressures driven by continuing technology migration and changing customer demand.

New products designed for capital equipment manufacturers typically have a lifespan of many years.

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Given such up-front investments we make to develop, evaluate, and qualify products in the design win process, our success and future growth depend on our products being designed into our customers’ new generations of equipment as they develop new technologies and applications.

We must work with these manufacturers early in their design cycles to modify, enhance, and upgrade our products or

design new products that meet the requirements of their new systems.

The design win process is highly competitive, the design windows may be narrow, and there is no assurance we will succeed with new design wins for our existing customers or new customers’ next generations of equipment.

For example, in the last few years, we have made significant investments to launch new technology platforms and products into the semiconductor and industrial and medical markets.

If existing or new customers do not choose our designs or we cannot agree to pricing, volumes, and other key commercial terms with these customers, our market share may decline, potential revenues related to the lifespan of our products may not be realized, and our business, financial condition, and results of operations could be materially and adversely impacted.

We must work with these manufacturers early in their design cycles to modify, enhance, and upgrade our products or design new products that meet the requirements of their new systems.

The design win process is highly competitive, the

design windows may be narrow, and there is no assurance we will succeed with new design wins for our existing customers or new customers’ next generations of equipment.

Our competitors may also be more successful in implementing an AI strategy and develop more successful products with the aid of AI technology.

In the last few years, we have made significant investments to launch new technology platforms and products into the Semiconductor and Industrial and Medical markets and upgrade our capabilities in the Data Center Computing market.

If existing or new customers do not choose our designs, we are unable to maintain single source status, or we cannot agree to pricing, volumes, and other key commercial terms with these customers, our market share may decline, potential revenues related to the lifespan of our products may not be realized, and our business, financial condition, and results of operations could be materially and adversely impacted.

Further, our ability to generate revenue or gross profit from design wins is in part or wholly dependent upon the success of our customers’ solutions.

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Furthermore, some of our products have lengthy lifecycles and are subject to supplier parts obsolescence, and sole-sourced parts can create challenges in terms of purchasing parts on reasonable terms and lead-times.

These situations may lead to customers cancelling orders prior to shipment causing a decrease in revenue, which may have a material adverse effect on our business and results of operations.

In recent years, there was a shortage of critical components caused by a variety of factors, including increased demand for electronic components used in a wide variety of industries, the pandemic-driven rise in consumer demand for technology goods, logistics-related disruptions in shipping, capacity limitations at some suppliers, and labor shortages.

These supply constraints led to longer lead times in procuring materials and subcomponents and, in some cases, meaningfully higher costs for the subcomponents.

Finally, if shortages of critical components or supply constraints were to reoccur, we could again experience the longer lead times in procuring materials and subcomponents and, in some cases, meaningfully higher costs for the subcomponents that we faced in the wake of the pandemic.

Our revenues, earnings, and cash flow may be adversely impacted if these conditions reoccur.

We are exposed to risks associated with worldwide financial markets and the global economy.

Uncertain or adverse economic and business conditions, including uncertainties and volatility in the financial markets, rising inflation and interest rates, economic recession, national debt, and fiscal or monetary concerns, could

materially adversely impact our operating results and financial condition.

Disruptions in the global economy or financial markets, higher interest rates and market volatility could have an adverse impact on our access to and cost of capital.

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Further, these conditions and uncertainty about future economic conditions could also make it challenging for us to forecast our operating results and evaluate the risks that may affect our business, financial condition, and results of operations.

We must scale our manufacturing capacity and secure sufficient critical components to meet customer demand.

Our manufacturing facilities are located globally, and the majority of our products are manufactured in a select few key facilities.

Most facilities are under operating leases, and interruptions in operations could be caused by early termination of existing leases by landlords or failure by landlords to renew existing leases upon expiration, including the possibility that suitable operating locations may not be available in proximity to existing facilities, which could result in labor or supply chain risks, including risks related to our ability to secure critical components to meet customer demand.

Additionally, we are executing a restructuring plan to optimize and consolidate our manufacturing operations and improve operating efficiencies, which we expect to be substantially complete during 2027.

We continue to expand output in and evaluate our existing manufacturing facilities, and we may decide to conduct additional optimization and consolidation initiatives.

We also recently constructed a new factory in Thailand in connection with our consolidation plans.

These plans and any future initiatives, however, may or may not be ultimately successful in achieving our intended results.

If the actual costs and charges are greater than anticipated, the actual cost savings or operating efficiencies are lower than anticipated, market conditions deviate from our expectations, we encounter delays or other challenges, or we experience a loss of continuity or inefficiency during transitional periods, our business and results of operations may be adversely affected.

If we are unable to maintain our pricing strategy or adjust our business strategy successfully for some of our product lines to reflect our customers’ price sensitivity, our business and financial condition could be harmed.

Our customers continually exert pressure on us to reduce our prices and extend payment terms and we have been and may be required to enter into long term reduced pricing agreements, extended payment terms, exclusivity arrangements, and other unfavorable contract terms.

Our customers continually exert pressure on us to reduce our prices and extend payment terms and we have been and may be required to enter into long-term pricing agreements, extended payment terms, exclusivity arrangements, and other less favorable contract terms.

In addition, we compete in markets in which customers may dual or multi-source their power supply products.

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If competition against any of our product lines should come to focus solely on price rather than on product performance and technology innovation, we would need to adjust our business strategy, product offerings, and product costs accordingly, and if we are unable to do so, our business, financial condition, and results of operations could be materially and adversely affected.

Conversely, in 2022, we not only increased prices but also implemented surcharges across many of our products to reflect our higher supply chain costs.

Although these price changes were generally accepted by our customers, we did experience some loss of business.

We continue to execute our pricing strategies and practices;

however, any future price increases could make our products less competitive in the market over time and could have an adverse effect on our results of operations.

however, we have in the past had to implement price increases and surcharges to reflect higher supply chain costs and any future price increases outside of our normal pricing strategy could make our products less competitive in the market over time and could have an adverse effect on our results of operations.

A significant portion of our revenue and accounts receivable are concentrated among a few customers.

Consistent with prior years, a limited number of customers accounted for a significant portion of our business, revenue and accounts receivable.

Consistent with prior years, a limited number of customers accounted for a significant portion of our business, revenue and accounts receivable in 2025.

A significant decline in revenue from these or our other large customers, the loss of these or other large customers, or any inability to collect from large customers could materially and adversely impact our business, results of operations, and financial condition.

The mix of products sold to our customers, particularly our large customers, may also impact our financial performance.

For example, our Data Center Computing market generally has lower margins than our other markets.

As Data Center Computing grows to comprise a larger proportion of our revenue, gross margin has been and could continue to be negatively impacted.

We expect that revenue from a few large customers will continue to account for a significant percentage of our total revenue in future periods;

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As part of our day-to-day business, we process, transmit and store our own confidential data and certain data about our customers and employees in our global information technology system.

We are subject to ongoing data security threats, including phishing attempts, denial of service attacks, ransomware, viruses, and other malware, employee error or malfeasance, theft, natural disasters, and hardware or software malfunctions, any one of which could compromise our data security, cause the loss of critical data, or disrupt operations, which could materially adversely

affect our business and results of operations.

Additionally, third parties may attempt to fraudulently induce employees or customers into disclosing sensitive information such as usernames, passwords, or other information to gain access to our customers’ data or our data or our information technology systems.

We and our third party providers have experienced, and expect to continue to experience, cybersecurity events or confidential information theft incidents, some of which could be devastating.

We and our third party providers have experienced, and expect to continue to experience, cybersecurity events from external actors and confidential information theft from internal actors, some of which could be devastating.

We continue to devote significant resources to cybersecurity, IP protection, data encryption, and other measures to protect our systems and data from unauthorized external access or internal misuse, and we may be required to expend greater resources in the future for cybersecurity protection, compliance, and remediation, especially in the face of continuously evolving and increasingly sophisticated cybersecurity threats and privacy and data protection laws.

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These implementations are expected to occur in phases over the next several years.

Any delays, challenges, or failure to achieve our implementation goals may adversely impact our operations.

In 2025, we shifted our deployment strategy for the new ERP system to a more staggered approach and delayed widespread implementation to better align with our business needs and risk tolerance.

Delays, unexpected challenges, or a failure to achieve our implementation goals may lead to cost overrun, diversion of management attention and resources, or otherwise adversely impact our operations.

In addition, the failure to anticipate the necessary readiness and training needs, manage the transition to systems , or appropriately convert historical and concurrent data could lead to business disruption and potential loss of business.

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Our success depends to a significant degree upon the continuing contributions of our management, technical, marketing, and sales employees.

We may not be successful in retaining our employees or attracting and retaining additional skilled personnel as required.

If we are unable to attract, retain, and motivate qualified employees and leaders, we may be unable to fully capitalize on current and new market opportunities, which could adversely impact our business and results of operations.

Our success in hiring and retaining employees depends on a variety of factors, including the attractiveness of our compensation and benefit programs, global economic or political and industry conditions, our organizational structure, our reputation, culture and working environment, competition for talent and the availability of qualified employees, the readiness for and availability of career development opportunities, and our ability to offer a challenging and rewarding work environment.

We have experienced, and may continue to experience, increasing costs to attract and retain needed talent, driven by macroeconomic conditions and a highly competitive labor market.

In addition, the loss or retirement of key employees presents particular challenges to the extent the departing employee had particularly valuable knowledge or experiences.

This requires us to identify and train existing or new employees to perform necessary functions, which we may be unable to do, or which could result in unexpected costs, reduced productivity, or difficulties with respect to internal processes and controls.

If we fail to have succession plans in place or our succession plans do not operate effectively, we may not be able to maintain continuity and our business could be adversely affected.

We are consolidating our manufacturing footprint, which brings risks.

Our manufacturing facilities are located globally, and the majority of our products are manufactured in a select few key facilities.

Additionally, we are currently restructuring to optimize and consolidate our manufacturing operations and improve operating efficiencies, and we continue to evaluate our manufacturing facilities and may decide to conduct additional optimization and consolidation initiatives.

These plans and any future initiatives may or may not be successful in achieving our intended results.

If the expected costs and charges are greater than anticipated, the estimated cost savings are lower than anticipated, or we experience a loss of continuity or inefficiency during transitional periods, our business and results of operations may be adversely affected.

If we are unable to attract, retain, and motivate qualified employees and leaders as required, we may be unable to fully capitalize on current and new market opportunities, which could adversely impact our business and results of operations.

Our success in hiring and retaining employees depends on a variety of factors, including market competitive compensation and benefits programs, global economic or political and industry conditions, our organizational structure, our reputation, culture and working environment, competition for talent and the availability of qualified employees, the readiness for and availability of career development opportunities, and our ability to offer a challenging, safe, and rewarding work environment.

We have experienced, and may continue to experience, increasing costs to attract and retain qualified talent, driven by macroeconomic conditions and a highly competitive labor market.

In addition, the loss or retirement of key employees presents challenges to the extent the departing employee had valuable institutional knowledge or experience.

This requires us to identify and train existing or new employees to perform necessary functions, therefore causing unforeseen delays, which could result in unexpected costs, reduced productivity, or an impact to internal processes and controls.

If we fail to have succession plans in place for key roles, we may not be able to maintain continuity and our business could be adversely affected.

Disruptions to our manufacturing or other operations or the operations of our customers or suppliers, due to natural or other disasters, uncontrollable events or other issues could affect our results of operations.

Certain of our manufacturing and other operations are in locations subject to natural disasters, such as severe weather and geological events, including earthquakes or tsunamis, which could disrupt operations.

Certain of our manufacturing and other operations are in locations subject to natural disasters that could disrupt operations, such as severe weather and geological events, including earthquakes or tsunamis.

Natural disasters, uncontrollable occurrences (including the emergence of pandemics, epidemics, or widespread outbreaks of infectious disease), or other operational issues at any of our manufacturing or other facilities could significantly reduce or disrupt our productivity and could prevent us from meeting our customers’ requirements in a timely manner, or at all.

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A natural disaster, fire, explosion, pandemic, or other event that results in a prolonged disruption to our operations or the operations of our customers or suppliers, may materially adversely affect our business, workforce, supply chain, results of operations, financial condition, or cash flows.

Our long-term success and results of operations depend on our ability to successfully identify, close, integrate, and realize the anticipated benefits from our acquisitions and strategic investments.

As part of our business strategy, we have and will likely continue to acquire companies or businesses and make investments to further our business.

Our long-term success and results of operations depend on our ability to successfully identify, close, integrate, and realize the anticipated benefits from our acquisitions, strategic investments or divestitures.

As part of our business strategy, we have and will likely continue to acquire companies or businesses and make investments or divestitures to further our business.

Risks associated with these transactions are many, including the following which could adversely affect our financial results:

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● the inability to successfully integrate product and/or service offerings to realize anticipated benefits from business combinations;

● the inability to integrate acquired business into our existing enterprise resource planning and other global information technology systems to realize productivity improvement and cost efficiencies;

goodwill or intangible assets acquired in connection with a business combination becomes impaired, we may incur additional material charges related to impairment of those assets;

● the inability to integrate acquired business into our existing ERP and other global information technology systems to realize productivity improvement and cost efficiencies;

● we have incurred and will incur additional depreciation and amortization expense over the useful lives of certain assets acquired in connection with business combination and, to the extent that the value of goodwill or intangible assets acquired in connection with a business combination becomes impaired, we may incur additional material charges related to impairment of those assets;

● deterioration in our effective tax rate;

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● unknown, underestimated, undisclosed or undetected commitments or liabilities or non-compliance by acquired business with laws, regulations, or policies.

Our products may suffer from defects or errors leading to increased costs, damages, or warranty claims.

Our products may suffer from defects or errors leading to increased costs, damages, warranty claims, claims outside of warranty or product liability claims.

Our products use complex system designs and components that may contain errors or defects in designs, manufacturing, firmware, software, component parts, or other materials.

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As a result of the technical complexity of these products, design defects, skilled labor turnover, changes in our or our suppliers’ manufacturing processes or the inadvertent use of defective or nonconforming materials or components by us or our suppliers could adversely affect our manufacturing quality and product reliability.

To the extent our products are defective or fail, we might be required to repair, redesign, replace, or recall those products, pay damages (including liquidated damages), or fulfill warranty claims, and we could suffer significant expenses as well as harm to our reputation.

Furthermore, some of our products are used in medical device applications where malfunction of the device could result in serious injury.

Our products could also be, and have in the past been, counterfeited, misbranded or sold without authorization on the “gray market.” To the extent our products are defective or fail, we might be required to repair, redesign, replace, or recall those products, pay damages (including liquidated damages) in connection with claims outside of warranty and/or product liability claims, or fulfill warranty claims, and we could suffer significant expenses as well as harm to our reputation.

Furthermore, some of our products are used in medical device applications where malfunction of the device could result in serious injury or in critical infrastructure where malfunction could result in significant damages.

We accrue a warranty reserve for estimated costs to provide warranty services, including the cost of technical support, product repairs, and product replacement for units that cannot be repaired.

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We are a global organization.

We have employees in 16 countries, our manufacturing facilities are located across the globe (mainly in the Asia-Pacific region), and revenue from customers outside the United States represented 66% of our total revenue during the year ended December 31, 2024.

We have employees in the Asia-Pacific region, Europe, and North America.

Our manufacturing facilities are located across the globe (mainly in the Asia-Pacific region), and revenue from customers outside the United States represented 70% of our total revenue during the year ended December 31, 2025.

Given the global nature of our business, we have both domestic and international concentrations of cash and investments.

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Additionally, our success producing goods internationally and competing in international markets is subject to our ability to manage various operational risks and difficulties, including, but not limited to:

● our ability to effectively manage our employees at remote locations who are operating in different business environments from the United States;

● our ability to effectively hire, manage, and retain our employees at locations operating in different business environments from the United States;

● our ability to develop and maintain relationships with suppliers and other local businesses;

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● laws and regulations regarding privacy, data use and processing, data privacy and protection, cybersecurity, and network security .

Our operations in the Asia Pacific region, including China, are subject to significant political and economic uncertainties over which we have little or no control and we may be unable to alter our business practice in time to avoid reductions in revenues.

A significant portion of our operations and supply chain outside the United States are located in the Asia Pacific region, including China, which exposes us to risks, such as exchange controls and currency restrictions, changes in local economic conditions, changes in customs regulations and tariffs, changes in tax policies, changes in local laws and regulations, possible retaliatory government actions, potential inability to enforce intellectual property protection or contracts terms, and changes in U.S.

Our operations in the Asia Pacific region are subject to significant political and economic uncertainties over which we have little or no control and we may be unable to alter our business practice in time to avoid reductions in revenues.

A significant portion of our operations and supply chain outside the United States are located in the Asia Pacific region, which exposes us to risks, such as exchange controls and currency restrictions, changes in local economic conditions, customs regulations and tariffs, tax policies, and local laws and regulations, possible retaliatory government actions, potential inability to enforce intellectual property protection or contracts terms, and changes in U.S.

policy regarding overseas manufacturing and export controls.

and China regularly have significant disagreements over geopolitical, trade, and economic issues.

In particular, the U.S.

and China regularly have significant disagreements over geopolitical, trade, and economic issues, and there are currently considerable trade tensions between the two countries.

Any escalating political controversies between the U.S.

and China, whether or not directly related to our business, could have a material adverse effect on our operations, business, results of operations, and financial condition.

Additionally, the Chinese government exercises substantial control over the Chinese economy, and our operations and supply chain in China may be subject to various government and regulatory interference.

Policy changes, preferential treatment of local companies, or the imposition of new, stricter regulations or interpretations of existing regulations could require changes to our operating activities, increase our costs, or limit our ability to sell products in China.

We continuously evaluate the risk of operations in China, including manufacturing and supply chain, and the potential financial impact to our operations.

and China or other countries in the Asia Pacific region in which we operate, whether or not directly related to our business, could have a material adverse effect on our operations, business, results of operations, and financial condition.

Additionally, the Chinese government exercises substantial control over the Chinese economy, and may exercise preferential treatment of local companies.

Our supply chain in China may be subject to various U.S.

or China government and regulatory actions.

Policy changes or the imposition of new, stricter regulations or interpretations of existing regulations could increase our costs or limit our ability to sell products in the Asia Pacific region.

Unfavorable currency exchange rate fluctuations may lead to lower operating margins, or may cause us to raise prices, which could result in reduced revenue.

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We do not attempt to hedge these exposures given the long-term nature of the underlying liabilities and the non-cash nature of the foreign exchange gain or loss.

Regulatory, Legal, Tax, and Compliance Related Risks

Legal, Tax, and Compliance Related Risks

Continued restrictive global trade regulatory environment coupled with increasingly complex rules have adversely impacted our business, could further impact our business, and could erode the competitiveness of our products compared to local and global competitors .

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and other government authorities.

We expect continued exposure to risk arising from ongoing activity in both the promulgation of newly imposed global trade regulations and increased enforcement of existing regulations.

The implementation and interpretation of these complex rules and other regulatory actions is uncertain and evolving, trending towards continued increasing restrictions, which is deleterious to our business and challenging for us to manage our operations and forecast our operating results.

We expect continued exposure to risk arising from both the further promulgation of global trade regulations and enforcement of existing regulations.

The implementation and interpretation of some of these complex rules and other regulatory actions is uncertain and evolving, which can make it challenging for us to manage our operations and forecast our operating results.

Since October 2022, we have been particularly affected by U.S.

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semiconductor and supercomputing technology and related parts and services sold in China.

Over the past few years, the U.S.

government has introduced several additional regulatory changes that impose extensive restrictions and compliance obligations, and Chinese customers may replace us with competitors who are not subject to U.S.

As a result, Chinese customers replaced us at least in part with competitors operate outside the scope of U.S.

export rules.

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Obtaining export licenses may be difficult, costly, and time-consuming, and there is no assurance we will be issued licenses in time to meet customer requirements or at all.

Recently, we were also subject to new anti-dumping and countervailing duty rates and increased Section 301 tariffs that took effect in 2024 and 2025 for certain products we import from China.

The Trump Administration has threatened further tariffs on imports.

If we are unable to mitigate the impact of these import restrictions, our costs and results of operations could be adversely affected.

We cannot predict the extent to which unfavorable international trade policies may be implemented in the future and to what extent our business may be impacted.

In 2025, the U.S.

government imposed significant tariffs on imports from a wide range of countries, with further tariffs threatened.

The tariffs were imposed under various rules including Section 301 (punitive duties imposed

by on imported goods, primarily from China, to counter unfair trade practices like intellectual property theft and forced technology transfer), Section 232 (tariffs that aim to protect U.S.

national security), and the International Emergency Economic Powers Act.

We are also subject to anti-dumping and countervailing duty rates.

In 2025, higher costs from tariffs partially offset benefits from cost optimization across our operations, and we expect this negative dynamic to continue.

If we are unable to mitigate the impact of these and any additional tariffs or other import restrictions in future periods, we can expect our results of operations to be adversely affected.

The current political landscape has introduced greater uncertainty with respect to trade regulation, and we cannot predict the extent to which unfavorable international trade policies may be implemented in the future or to what extent our business may be impacted.

Future regulatory changes that could materially and adversely affect our business include but are not limited to additional or increased tariffs, additions or updates to various restricted party lists, further restrictions on selling products to entities in certain countries whose actions or functions are intended to support policies contrary to U.S.

national security, new customs rules or requirements, and retaliatory trade actions or trade wars.

Additionally, with increasing geopolitical risks, we might experience customers or governments of our customers promoting their own domestic businesses and competitors.

Additionally, governments of our customers may promote their own domestic businesses and competitors.

Any or all of the foregoing could decrease demand for our products, increase costs and decrease margins, reduce the competitiveness of our products, or restrict our ability to sell products, provide services or purchase necessary equipment and supplies, which in turn could have a material and adverse effect on our business, results of operations, or financial condition .

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We attempt to protect our intellectual property rights through a variety of methods including trade secrets, patents, and non-disclosure agreements;

however, we might not be able to protect our technology, and customers or competitors might be able to develop similar technology independently.

Infringement, misappropriation, and unlawful use of our intellectual property rights, and resulting unauthorized manufacture or sale of equipment using our IP rights, could result in lost revenue.

however, we might not be able to protect our technology, and customers or competitors might be able to develop similar technology.

Infringement, misappropriation, and unlawful use of our intellectual property rights, and resulting unauthorized manufacture or sale of equipment using our IP rights, or loss of IP from employee turnover, could result in lost revenue.

Monitoring and detecting any unauthorized use of intellectual property is difficult and costly and we cannot be certain that the protective measures we have implemented will completely prevent theft or misuse.

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Our intellectual property is not protected by patents in several countries in which we do business, and we have limited or no patent protection in other countries, including China.

Consequently, manufacturing our products in China may subject us to an increased risk that unauthorized parties may attempt to copy our products or otherwise obtain or use our intellectual property.

Generally, our efforts to obtain international patents have been concentrated in the European Union and Korea, Japan, and Taiwan.

Third parties may also assert claims against us and our products.

Claims that our products infringe the rights of others, whether or not meritorious, can be expensive and time-consuming to defend and resolve, and may divert the efforts and attention of management and personnel.

Consequently, manufacturing our products in these countries may subject us to an increased risk that unauthorized parties may attempt to copy our products or otherwise obtain or use our intellectual property.

Third parties may also assert claims against us and our products or business practices.

Claims that our products or business practices infringe the rights of others, whether or not meritorious, can be expensive and time-consuming to defend and resolve, and may divert the efforts and attention of management and personnel.

The inability to obtain rights to use third party intellectual property on commercially reasonable terms could also have an adverse impact on our business.

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Goods suspected of being manufactured with forced labor could be blocked from importation into the U.S., which could impact revenue.

Another possible risk is foreign governments that restrict our access to supply;

for example, if China were to further restrict export of rare earth minerals, our suppliers’ ability to obtain such supply may be constrained and we may be unable to obtain sufficient quantities, or obtain supply in a timely manner, or at a commercially reasonable cost.

Another possible risk is U.S.

or foreign governments that restrict our access to supply;

for example, China has restricted exports of rare earth minerals, and the U.S.

government’s export controls have resulted in restricted supply chains.

Given such restrictions, we may be unable to obtain supply in a timely manner, in sufficient quantities, or at a commercially reasonable cost.

We are, and expect to continue to be, involved in litigation.

Legal proceedings are costly and could have a material adverse effect on our commercial relationships, business, financial condition, and operating results.

We may be involved in legal proceedings, litigation, enforcement actions, or claims arising from our business, including, but not limited to, those regarding product performance, product warranty, product certification, product liability, patent infringement, misappropriation of trade secrets, other intellectual property rights, antitrust, environmental regulations, securities, contracts, unfair competition, employment, workplace safety, and other matters.

We may be involved in legal proceedings, litigation, enforcement actions, or claims arising from our business, including, but not limited to, those regarding product performance, product warranty, product certification, product liability, patent infringement, misappropriation of trade secrets, other intellectual property rights, antitrust, various regulations such as environmental or privacy, securities, contracts, unfair competition, employment, workplace safety, business practices, and other matters.

Legal proceedings, enforcement actions and claims, whether with or without merit, and associated internal investigations, may be time-consuming and expensive to prosecute, defend or conduct;

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For example, various jurisdictions around the world have enacted or are considering revenue-based taxes such as digital services taxes and other targeted taxes, which could lead to inconsistent and potentially overlapping international tax regimes.

The Organization for Economic Cooperation and Development is coordinating negotiations with the goal of achieving consensus around substantial changes to international tax policies, including the implementation of a minimum global effective tax rate of 15%.

The Organization for Economic Cooperation and Development (“OECD”) is coordinating negotiations with the goal of achieving consensus around substantial changes to international tax policies, including the implementation of a minimum global effective tax rate of 15%.

These changes could increase our effective tax rate and cash tax payments could increase in future years, create additional compliance burdens, and/or require changes to our tax compliance processes.

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by changes in accounting principles;

or by changes in tax laws and regulations, treaties, or interpretations thereof, including changes to the taxation of earnings of our foreign subsidiaries, the deductibility of expenses attributable to foreign income, and the foreign tax credit rules.

Significant judgment is required to determine the recognition and measurement attribute prescribed in the accounting guidance for uncertainty in income taxes.

The Organization for Economic Co-operation and Development (“OECD”), an international association, including the U.S., has made changes to numerous long-standing tax principles.

There can be no assurance that these changes, once adopted by countries in which we operate, will not have an adverse impact on our provision for income taxes.

The OECD has made changes to numerous long-standing tax principles.

There can be no assurance that these changes, as adopted by countries in which we operate, will not have an adverse impact on our provision for income taxes.

Further, because of certain of our ongoing employment and capital investment actions and commitments, our income in certain countries is subject to reduced tax rates.

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In addition, through previous acquisitions, we expanded our presence in the medical market to include more highly regulated applications and added a medical-certified manufacturing center to our operating footprint.

We may encounter

increased costs to maintain compliance with the quality systems and other regulations and requirements that apply to the acquired business.

We may encounter increased costs to maintain compliance with the quality systems and other regulations and requirements that apply to the

acquired business.

Compliance with future regulations, directives, and standards could require us to modify or redesign some products, make capital expenditures, or incur substantial costs.

Also, we may incur significant costs in complying with the numerous imports, exports, and customs regulations as we seek to sell our products internationally.

If we do not comply with current or future regulations, directives, and standards:

● we could be subject to fines and penalties;

● our production or shipments could be suspended;

● we could be prohibited from offering particular products in specified markets.

If we do not comply with current or future regulations, directives, and standards, we could be subject to fines and penalties, our production or shipments could be suspended, and we could be prohibited from offering particular products in specified markets.

If we were unable to comply with current or future regulations, directives and standards, our business, financial condition, and results of operations could be materially and adversely affected.

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handling, discharge, recycling and disposal of hazardous materials used in our products or in producing our products;

restrictions on the presence of certain substances in our products;

the operation of our facilities;

and the use of our real property.

The failure or inability to comply with existing or future environmental, health and safety regulations, including with respect to energy consumption and climate change, could result in significant remediation or other legal liabilities;

The failure or inability to comply with existing or future environmental, health and safety regulations could result in significant remediation or other legal liabilities;

the imposition of penalties and fines;

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Maintaining possibly unlawful ESG programs could expose us to litigation threat.

In addition, standards and processes for measuring and reporting carbon emissions and other sustainability metrics may change over time, resulting in inconsistent data, or could result in significant revisions to our sustainability commitments or our ability to achieve them.

In addition, standards and processes for measuring and reporting carbon emissions and other sustainability metrics change over time, which may result in inconsistent data, or significant revisions to our sustainability commitments or our ability to achieve them.

Any scrutiny of our carbon emissions or other sustainability disclosures or our failure to achieve related goals could adversely impact our reputation or performance.

As governments impose greenhouse gas emission reporting and climate risk assessment requirements, along with other ESG-related laws, we are subject to at least some of these rules and concomitant regulatory risk exposure.

Also, certain customers request ESG related performance data in relation to our products.

ESG compliance and reporting costly, and we could be at a disadvantage compared to companies that do not have similar reporting requirements or that have more resources to devote to ESG efforts.

As governments impose greenhouse gas emission reporting requirements and other ESG-related laws, or customers make ESG-related demands, we are subject to at least some of these rules and concomitant regulatory risk exposure, and the potential for regulatory scrutiny, enforcement actions, and reputational harm.

ESG compliance and reporting is costly, and we could be at a disadvantage compared to companies that do not have similar regulatory requirements, customer pressures, or that have more resources to devote to ESG efforts.

Commercial and Financial Related Risks

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Our Credit Agreement, including the associated revolving line of credit, imposes financial covenants on us and our subsidiaries that require us to maintain a certain leverage ratio.

The financial covenants place certain restrictions on our business that may affect our ability to execute our business strategy successfully or take other actions that we believe would be in the best interests of our Company.

The financial covenants place certain restrictions on

our business that may affect our ability to execute our business strategy successfully or take other actions that we believe would be in the best interests of our Company.

These include limitations or restrictions, among other things, on our ability and the ability of our subsidiaries to:

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Any impairment or revised useful life could have a material and adverse effect on our financial position and results of operations and could harm the trading price of our common stock.

The conditional conversion features of the Convertible Notes, if triggered, may adversely affect our financial condition and operating results.

In the event any of the conditional conversion features of the Convertible Notes are triggered, holders will be entitled to convert at any time during specified periods at their option.

If one or more holders elect to convert, we would be required to settle any converted principal amount of such Convertible Notes through payment of cash, which could adversely affect our liquidity.

The conditional conversion features of the Convertible Notes may adversely affect our financial condition and operating results.

One of the conditional conversion features of the Convertible Notes was triggered as of December 31, 2025 due to the trading price of our common stock exceeding 130% of the Convertible Notes conversion price on at least 20 out of the 30 consecutive trading days prior to such date.

As a result, the Convertible Notes are currently convertible at the option of the holders, in whole or in part, until March 31, 2026, and may in the future continue to be convertible at the option of the holders during specified periods in the event the current conversion features or any additional conditional conversion features of the Convertible Notes are triggered.

If one or more holders elect to convert, we would be required

to settle any converted principal amount of such Convertible Notes through payment of cash, which could adversely affect our liquidity.

In addition, even if holders do not elect to convert, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the Convertible Notes as current rather than long-term liability, which would result in a material reduction of our net working capital.

For example, during 2025 our stock price exceeded the conversion price of our Convertible Notes, resulting in the reclassification of the outstanding principal of our Convertible Notes to current.

Conversion of the Convertible Notes may dilute the ownership interest of our stockholders and the existence of the Convertible Notes may depress the price of our common stock.

The Convertible Notes currently are convertible through March 31, 2026, and may in the future continue to be, convertible at the option of their holders.

The conversion of some or all of the Convertible Notes may dilute the ownership interests of our stockholders.

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These contracts are expected to reduce the potential dilution to our common stock upon any conversion of the Convertible Notes and/or offset any cash payments we are required to make in excess of the principal amount.

The warrants could separately have a dilutive effect on our common stock to the extent that the market price per share of our common stock exceeds the exercise price.

Because the market value per share of our common stock currently exceeds the exercise price of the warrants, we expect the warrants to separately have a dilutive effect on our common stock as we will owe the warrant counterparties additional shares of common stock based on the excess of such market price per share of the common stock over the exercise price.

In addition, the counterparties or their affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and sell our common stock prior to the maturity of the Convertible Notes (and are likely to do so in connection with any conversion or redemption).

This activity could cause fluctuations in the market price of our common stock.

We are subject to counterparty default risk with respect to the Note Hedges.

The counterparties are financial institutions, and we are subject to the risk that any or all of them might default.

This activity could cause a decrease in the market price of our common stock.

We are subject to counterparty default risk with respect to the Convertible Note Hedges.

The counterparties for our hedge transactions are financial institutions, and we are subject to the risk that any or all of them might default.

Our exposure is not secured by any collateral.

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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-K

Item 1A. Risk Factors