What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2022-03-08 compared with 2021-03-08 · 85 added, 63 removed, 718 unchanged (17% of the section changed)

9 unchanged sentences

As a result, our business, financial condition and results of operations could be significantly harmed.

The World Health Organization has declared the COVID-19 outbreak a pandemic, and the virus continues to spread in areas where we operate and sell our products and services.

The COVID-19 pandemic and similar issues in the future could have a material adverse effect on our ability to operate, results of operations, financial condition, liquidity, and capital investments.

Several public health organizations have recommended, and many local governments have implemented, certain measures to slow and limit the transmission of the virus, including shelter in place and social distancing ordinances.

The World Health Organization has declared the COVID-19 outbreak a pandemic, and the virus continues to exist in areas where we operate and sell our products and services.

The COVID-19 pandemic, actions taken in response to it and similar or related issues in the future could have a material adverse effect on our ability to operate, results of operations, financial condition, liquidity, and capital investments.

Several public health organizations have periodically recommended, and many local governments have implemented, measures to slow and limit the transmission of the virus, including shelter in place and social distancing ordinances.

Such preventive measures, or others we may voluntarily put in place, may have a material adverse effect on our business for an indefinite period of time, such as the potential shut down of certain locations, decreased employee availability, potential border closures, disruptions to the businesses of our channel partners, and others.

3 unchanged sentences

Business interruptions that are sustained for an extended time period due to the outbreak could have a material negative impact on our business and operations.

For example, the postponement of the Japan 2020 Olympics negatively impacted demand in Japan for our products in 2020 and may have continued impact on demand in 2021.

For example, the postponement of the Japan 2020 Olympics negatively impacted demand in Japan for our products in 2020.

Conversely, it is possible that certain of our service provider customers could experience increased demand for their solutions due to shelter in place practices globally, which could, in turn, increase demand for our solutions, but there can be no assurance as to when, if, or to what extent this may occur, if at all, given the present degree of uncertainty.

1 unchanged sentence

and international markets.

The ongoing global semiconductor shortage is causing disruptions in many diverse businesses and is expected to continue in the near term.

If these shortages and supply chain disruptions continue or worsen, our business could suffer, which would harm our financial results.

Any decrease, limitations or delays on our ability to import, export, or sell our products would harm our business.

1 unchanged sentence

There are many uncertainties around COVID-19, including scientific and health issues, the unknown duration and extent of economic disruption on the global economy.

Due to the increased spread of COVID-19, the potential impact and risk to our business and operations have increased.

Due to COVID-19, we face heightened risk to our business and operations.

We cannot predict what impacts may arise in the future due to the evolving nature of the COVID-19 pandemic.

Due to this uncertainty, the Company has temporarily suspended our practice of providing quarterly quantitative guidance regarding revenue and earnings.

If we do not successfully anticipate market needs and opportunities or if the market does not continue to adopt our application delivery solutions, our business, financial condition and results of operations could be significantly harmed.

3 unchanged sentences

We continuously seek to enhance and improve our solutions we make available to our customers.

However, even if we are able to anticipate, develop and commercially introduce new products and enhancements that address the market’s needs and

opportunities, there can be no assurance that new products or enhancements will achieve widespread market acceptance.

For example, organizations that use other conventional or first-generation application delivery solutions for their needs may believe that these solutions are sufficient.

However, even if we are able to anticipate, develop and commercially introduce new products and enhancements that address the market’s needs and opportunities, there can be no assurance that new products or enhancements will achieve widespread market acceptance.

example, organizations that use other conventional or first-generation application delivery solutions for their needs may believe that these solutions are sufficient.

In addition, as we launch new product offerings, organizations may not believe that such new product offerings offer any additional benefits as compared to the existing application delivery solutions that they currently use.

15 unchanged sentences

However, if we are unable to develop new products and features to address technological changes and new customer requirements in the application networking or security markets or if our investments in research and development do not yield the expected benefits in a timely manner, our business and operating results could be adversely affected.

For example, when the 5G standards are published, we may not be able to produce a satisfactory return on investment if our strategic vision and the resources that we are spending on developing our presence in the 5G technology industry turn out to be misaligned with such standards.

For example, the 5G standards were recently published and we may not be able to produce a satisfactory return on investment if our strategic vision and the resources that we are spending on developing our presence in the 5G technology industry turn out to be misaligned with such standards.

We have experienced net losses in recent periods and may not achieve or maintain profitability in the future.

86 unchanged sentences

Concurrently with this transition, pricing and delivery models are also evolving.

Many companies in our industry,

including some of our competitors, are developing and deploying cloud-based solutions for their customers.

In addition, the emergence of new cloud infrastructures may enable new companies to compete with our business.

Many companies in our industry, including some of our competitors, are developing and deploying cloud-based solutions for their customers.

In addition, the

emergence of new cloud infrastructures may enable new companies to compete with our business.

These new competitors may include large cloud providers who can provide their own ADC functionality as well as smaller companies targeting applications that are developed exclusively for delivery in the cloud.

22 unchanged sentences

The timing of these purchases and of the requested delivery of the purchased product is difficult to predict.

As a consequence, any acceleration or delay in anticipated product purchases by or requested deliveries to our largest end-customers could materially affect our revenue and operating results in any quarter and cause our quarterly revenue and operating results to fluctuate from quarter to quarter.

As a consequence, any acceleration or delay in anticipated product purchases by or requested deliveries to our largest end-customers could materially affect our revenue and operating results in any quarter and cause our revenue and operating results to fluctuate from quarter to quarter.

We cannot provide any assurance that we will be able to sustain or increase our revenue from our largest end-customers nor that we will be able to offset any absence of significant purchases by our largest end-customers in any particular period with purchases by new or existing end-customers in that or a subsequent period.

43 unchanged sentences

• general economic and political conditions in these foreign markets;

• economic uncertainty around the world, including continued economic uncertainty as a result of the COVID-19 pandemic, sovereign debt issues in Europe and the United Kingdom’s exit from the European Union (commonly referred to as “Brexit”);

• economic uncertainty around the world, including continued economic uncertainty as a result of the COVID-19 pandemic, sovereign debt issues in Europe, the United Kingdom’s exit from the European Union (commonly referred to as “Brexit”), and tensions between Russia and Ukraine, and China and Taiwan;

• management communication and integration problems resulting from cultural and geographic dispersion;

41 unchanged sentences

If economic conditions in the United States, Europe and other key markets for our products continue to be volatile in response to COVID-19 or otherwise do not improve or those markets experience a prolonged downturn, many end-customers may delay or reduce their IT spending.

caused severe economic disruptions around the globe and such disruptions may have a negative impact on the demand for information technology by large enterprises and service providers.

This could result in reductions in sales of our products and services, longer sales cycles, slower adoption of new technologies and increased price competition.

This could result in reductions in sales of our products and services, longer sales cycles, slower adoption of new technologies and increased price

Any of these events would likely harm our business, operating results and financial condition.

3 unchanged sentences

Our primary manufacturers are Lanner and AEWIN, each of which is located in Taiwan.

Deterioration of relations between Taiwan and China, the resulting actions taken by either country, and other factors affecting the political or economic conditions of Taiwan in the future, could cause disruption to the manufacturing of our hardware components, which could materially adversely affect our business, financial condition and results of operations and the market price and the liquidity of our shares.

Our reliance on these third-party manufacturers reduces our control over the manufacturing process and exposes us to risks, including reduced control over quality assurance, product costs, and product supply and timing.

Any manufacturing disruption at these manufacturers, including but not limited to disruptions due to COVID-19, could severely impair our ability to fulfill orders.

Any manufacturing disruption at these manufacturers, including but not limited to disruptions due to COVID-19 or tensions with China, could severely impair our ability to fulfill orders.

In addition, the ongoing global supply chain issues are expected to continue and may adversely impact our suppliers to a degree that could materially impacts us.

Our reliance on outsourced manufacturers also may create the potential for infringement or misappropriation of our intellectual property rights or confidential information.

12 unchanged sentences

If we are unable to obtain a sufficient quantity of these components in a timely manner for any reason, sales and/or shipments of our products could be delayed or halted, which would seriously affect present and future sales and cause damage to end-customer relationships, which would, in turn, adversely affect our business, financial condition and results of operations.

In response to COVID-19, some of the countries in which these components are manufactured have implemented mandatory shut downs that may ultimately limit our ability to obtain a sufficient quantity of these components in a timely manner.

In response to COVID-19, some of the countries in which these components are manufactured have implemented mandatory shutdowns that may ultimately limit our ability to obtain a sufficient quantity of these components in a timely manner.

In addition, our component suppliers change their selling prices frequently in response to market trends, including industry-wide increases in demand, and because we do not necessarily have contracts with these suppliers, we are susceptible to price fluctuations related to raw materials and components.

If we are unable to pass component price increases along to our end-customers or maintain stable pricing, our gross margin and operating results could be negatively impacted.

Furthermore, poor quality in sole-sourced components or certain other components in our products could also result in lost sales or lost sales opportunities.

If the quality of such components does not meet our standards or our end-customers’ requirements, if we are

unable to obtain components from our existing suppliers on commercially reasonable terms, or if any of our sole source providers cease to continue to manufacture such components or to remain in business, we could be forced to redesign our products and qualify new components from alternate suppliers.

Furthermore, poor quality in sole-sourced components or certain other components in our products could also result in lost sales or lost sales

opportunities.

If the quality of such components does not meet our standards or our end-customers’ requirements, if we are unable to obtain components from our existing suppliers on commercially reasonable terms, or if any of our sole source providers cease to continue to manufacture such components or to remain in business, we could be forced to redesign our products and qualify new components from alternate suppliers.

The development of alternate sources for those components can

26 unchanged sentences

• litigation, regulatory inquiries, or investigations that may be costly and further harm our reputation.

Although we maintain cyber liability coverage that may cover certain liabilities in connection with a security breach, we cannot be certain that our insurance coverage will be adequate for liabilities actually incurred, that insurance will continue to be available to use on commercially reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim.

Although we maintain cybersecurity liability coverage that may cover certain liabilities in connection with a security breach, we cannot be certain that our insurance coverage will be adequate for liabilities actually incurred, that insurance will continue to be available to use on commercially reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim.

The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, including our financial condition, results of operation and reputation.

81 unchanged sentences

We believe that our ability to provide consistent, high quality customer service and technical support is a key factor in attracting and retaining end-customers of all sizes and is critical to the deployment of our products.

When support is purchased our end-customers depend on our support organization to provide a broad range of support services, including on-site technical support, 24-hour support and shipment of replacement parts on an expedited basis.

If our support organization or our

distribution channel partners do not assist our end-customers in deploying our products effectively, succeed in helping our end-customers resolve post-deployment issues quickly, or provide ongoing support, it could adversely affect our ability to sell our products to existing end-customers and could harm our reputation with potential end-customers.

When support is purchased

our end-customers depend on our support organization to provide a broad range of support services, including on-site technical support, 24-hour support and shipment of replacement parts on an expedited basis.

If our support organization or our distribution channel partners do not assist our end-customers in deploying our products effectively, succeed in helping our end-customers resolve post-deployment issues quickly, or provide ongoing support, it could adversely affect our ability to sell our products to existing end-customers and could harm our reputation with potential end-customers.

We currently have technical support centers in the United States, Japan, China, India and the Netherlands.

28 unchanged sentences

In addition, our systems and processes may not prevent or detect all errors, omissions or fraud.

For example, as described in our Annual Report on Form 10-K for our fiscal year ended December 31, 2018, we identified material weaknesses in our internal control over financial reporting and concluded that our internal control over financial reporting was not effective as of December 31, 2018 and December 31, 2017, and that our disclosure controls and procedures were not effective as of December 31, 2018 and December

For example, as described in our Annual Report on Form 10-K for our fiscal year ended December 31, 2018, we identified material weaknesses in our internal control over financial

reporting and concluded that our internal control over financial reporting was not effective as of December 31, 2018 and December 31, 2017, and that our disclosure controls and procedures were not effective as of December 31, 2018 and December 31, 2017.

We may experience difficulties in managing improvements to our systems, processes, and controls or in connection with third-party software, which could impair our ability to provide products or services to our customers in a timely manner, causing us to lose customers, limit us to smaller deployments of our products, increase our technical support costs, or damage our reputation and brand.

28 unchanged sentences

We may also have difficulty in integrating acquired technologies or products with our existing product lines.

Any integration process may require significant time and resources, and we may not be able to manage the process successfully.

Any integration process may require significant time and resources, and we may not be able to

manage the process successfully.

Our ongoing business and management’s attention may be disrupted or diverted by transition or integration issues and the complexity of managing geographically and culturally diverse locations.

We may have difficulty

maintaining uniform standards, controls, procedures and policies across locations.

We may have difficulty maintaining uniform standards, controls, procedures and policies across locations.

We may experience significant problems or liabilities associated with product quality, technology and other matters.

17 unchanged sentences

In the event our or our service providers’ information technology systems or manufacturing or logistics abilities are hindered by any of the events discussed above, shipments could be delayed, resulting in missed financial targets, such as revenue and shipment targets, and our operations could be disrupted, for the affected quarter or quarters.

In addition, cyber security attacks, acts of war or terrorism, or other geo-political unrest could cause disruptions in our business or the business of our supply chain, manufacturers, logistics providers, partners, or end-customers or the economy as a whole.

In addition, cybersecurity attacks, acts of war or terrorism, or other geo-political unrest could cause disruptions in our business or the business of our supply chain, manufacturers, logistics providers, partners, or end-customers or the economy as a whole.

Any disruption in the business of our supply chain, manufacturers, logistics providers, partners or end-customers that impacts sales at the end of a quarter could have a significant adverse impact on our quarterly results.

4 unchanged sentences

Our industry is characterized by the existence of a large number of patents and by increasingly frequent claims and related litigation based on allegations of infringement or other violations of patent and other intellectual property rights.

In the ordinary course of our business, we have been and may presently be in disputes and licensing discussions with others regarding their patents and other claimed intellectual property and proprietary rights.

Intellectual property infringement and

misappropriation lawsuits and other claims are subject to inherent uncertainties due to the complexity of the technical and legal issues involved, and we cannot be certain that we will be successful in defending ourselves against such claims or in concluding licenses on reasonable terms or at all.

ordinary course of our business, we have been and may presently be in disputes and licensing discussions with others regarding their patents and other claimed intellectual property and proprietary rights.

Intellectual property infringement and misappropriation lawsuits and other claims are subject to inherent uncertainties due to the complexity of the technical and legal issues involved, and we cannot be certain that we will be successful in defending ourselves against such claims or in concluding licenses on reasonable terms or at all.

We may have fewer issued patents than some of our major competitors, and therefore may not be able to utilize our patent portfolio effectively to assert defenses or counterclaims in response to patent infringement claims or litigation brought against us by third parties.

16 unchanged sentences

There may be instances where we are not able to protect intellectual property or other proprietary rights in a manner that maximizes competitive advantage.

If we are unable to protect our

intellectual property and other proprietary rights from unauthorized use, the value of those assets may be reduced, which could negatively impact our business.

If we are unable to protect our intellectual property and other proprietary rights from unauthorized use, the value of those assets may be reduced, which could negatively impact our business.

We also rely in part on confidentiality and/or assignment agreements with our technology partners, employees, consultants, advisors and others.

6 unchanged sentences

If we fail to protect our intellectual property adequately, our competitors might gain access to our technology, and our business might be harmed.

In addition, even if we protect our intellectual property, we may need to license it to competitors,

which could also be harmful.

In addition, even if we protect our intellectual property, we may need to license it to competitors, which could also be harmful.

For example, as a result of the settlement of an intellectual property matter, we have already licensed all of our issued patents, pending applications, and future patents and patent applications that we may acquire, obtain, apply for or have a right to license to Brocade Communications Systems, Inc.

5 unchanged sentences

Exposure to UK political developments, including the effects of Brexit, could have a material adverse effect on us.

On January 31, 2020, the United Kingdom (“UK”) left the European Union (“EU”), which began a transition period until the end of 2020 during which the UK and the EU will negotiate additional arrangements.

The effects of Brexit will depend on agreements the UK makes to retain access to EU markets following the transition period.

Brexit creates an uncertain political and economic environment in the UK and potentially across other EU member states for the foreseeable future, including during the transition period and such uncertainties could impair or limit our ability to transact business in the member EU states.

On January 31, 2020, the United Kingdom (“UK”) withdrew from the European Union (“EU”), which began a transition period until the end of 2020 during which the UK and the EU negotiated additional arrangements.

For instance, the EU-UK Trade and Cooperation Agreement went into effect on January 1, 2021, which retains the tariff-free and quota-free status on trade between the EU and UK.

Brexit creates an uncertain political and economic environment in the UK and potentially across other EU member states for the foreseeable future and such uncertainties could impair or limit our ability to transact business in the member EU states.

The political and economic uncertainty created by Brexit has caused and may continue to cause significant volatility in global financial markets and in the value of the Pound Sterling currency or other currencies, including the Euro.

Depending on the final terms reached between the UK and the EU, it is possible that there may be adverse practical and/or operational implications on our business.

Depending on the extent of the effects of Brexit, it is possible that there may be adverse practical and/or operational implications on our business.

Consequently, no assurance can be given as to the overall impact of Brexit and, in particular, no assurance can be given that our operating results, financial condition and prospects would not be adversely impacted by the result.

7 unchanged sentences

from China, including communications equipment products and components manufactured and imported from China.

In October 2021 the USTR confirmed these enacted U.S.

tariffs will stay in place for the time being.

An increase in tariffs will cause our costs to increase, which could narrow the profits we earn from sales of products requiring such materials.

8 unchanged sentences

Additionally, the current uncertainty about the future relationship between the United States and other countries with respect to the trade policies, treaties, taxes, government regulations and tariffs makes it difficult to plan for the future.

New developments in these areas, or the perception that any of them could occur, may have a material adverse effect on global

economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between these nations and the United States.

New developments in these areas, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between these nations and the United States.

Any of these factors could depress economic activity and restrict our access

34 unchanged sentences

Although we maintain privacy, data breach and network security liability insurance, we cannot be certain that our coverage will be adequate for liabilities actually incurred or that insurance will continue to be available to us on economically reasonable terms, or at all.

partners’ or end-customers information, or other information, could violate applicable laws and regulations, contractual obligations or other legal obligations and cause significant legal and financial exposure, adverse publicity and a loss of confidence in our security measures, any of which could have an material adverse effect on our business, financial condition and operating results.

Any actual or perceived compromise or breach of our security measures, or those of our third-party service providers, or any unauthorized access to, misuse or misappropriation of personally identifiable information, channel partners’ or end-customers information, or other information, could violate applicable laws and regulations, contractual obligations or other legal obligations and cause significant legal and financial exposure, adverse publicity and a loss of confidence in our security measures, any of which could have an material adverse effect on our business, financial condition and operating results.

Our failure to adequately protect personal data could have a material adverse effect on our business.

26 unchanged sentences

Noncompliance with applicable regulations or requirements could subject us to investigations, sanctions, mandatory product recalls, enforcement actions, disgorgement of profits, fines, damages, civil and criminal penalties or injunctions.

If any governmental sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, operating results, and

financial condition could be materially adversely affected.

If any governmental sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, operating results, and financial condition could be materially adversely affected.

In addition, responding to any action will likely result in a significant diversion of management’s attention and resources and an increase in professional fees.

28 unchanged sentences

• changes in the valuation of our deferred tax assets and liabilities;

• expected timing and amount of the release of tax valuation allowances;

• expiration of, or detrimental changes in, research and development tax credit laws;

22 unchanged sentences

This or other changes in accounting principles could adversely affect our financial results, including the comparability of our results.

See Note 1 Description of Business and Summary of Significant Accounting Policies, and Note 2 Revenue, of the notes to consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for the effect of new accounting pronouncements on our financial statements.

See Note 1 Description of Business and Summary of Significant Accounting Policies of the notes to consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for the effect of new accounting pronouncements on our financial statements.

Any difficulties in implementing these pronouncements could cause us to fail to meet our financial reporting obligations, which could result in regulatory discipline and harm investors’ confidence in us.

1 unchanged sentence

We concluded that our internal control over financial reporting was not effective as of December 31, 2018 due to material weaknesses that were remediated as of December 31, 2019.

Previous significant deficiencies and material weaknesses

also resulted in a restatement of certain of our financial reports, as disclosed in our Annual Report on Form 10-K for our fiscal year ended December 31, 2018.

Previous significant deficiencies and material weaknesses also resulted in a restatement of certain of our financial reports, as disclosed in our Annual Report on Form 10-K for our fiscal year ended December 31, 2018.

If any new internal control procedures which may be adopted or our existing internal control procedures are deemed inadequate, or if we identify additional material weaknesses in our disclosure controls or internal controls over financial reporting in the future, we will be unable to assert that our internal controls are effective.

13 unchanged sentences

Our bylaws designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.

Our bylaws provide that, unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, any action arising pursuant to any provision of the Delaware General Corporate Law (“DGCL”), our certificate of incorporation or our bylaws, or any action asserting a claim that is governed by the internal affairs doctrine, in each case subject to the Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein and the claim

not being one which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery or for which the Court of Chancery does not have subject matter jurisdiction.

incorporation or our bylaws, or any action asserting a claim that is governed by the internal affairs doctrine, in each case subject to the Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein and the claim not being one which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery or for which the Court of Chancery does not have subject matter jurisdiction.

This exclusive forum provision does not apply to suits brought to enforce a duty or liability created by the Securities Exchange Act of 1934.

5 unchanged sentences

Alternatively, if a court were to find this provision of our bylaws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could have a material adverse effect on our business, financial condition or results of operations.

Increasing attention on environmental, social and governance (“ESG”) matters may have a negative impact on our business, impose additional costs on us, and expose us to additional risks.

Companies are facing increasing attention from investors, customers, partners, consumers and other stakeholders relating to ESG matters, including environmental stewardship, social responsibility, diversity and inclusion, racial justice and workplace conduct.

In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters.

Such ratings are used by some investors to inform their investment and voting decisions.

Unfavorable ESG ratings may lead to negative investor sentiment toward the Company, which could have a negative impact on our stock price and our access to and costs of capital.

We have established corporate social responsibility programs aligned with sound environmental, social and governance principles.

These programs reflect our current initiatives and are not guarantees that we will be able to achieve them.

Our ability to successfully execute these initiatives and accurately report our progress presents numerous operational, financial, legal, reputational and other risks, many of which are outside our control, and all of which could have a material negative impact on our business.

Additionally, the implementation of these initiatives imposes additional costs on us.

If our ESG initiatives fail to satisfy investors, customers, partners and our other stakeholders, our reputation, our ability to sell products and services to customers, our ability to attract or retain employees, and our attractiveness as an investment, business partner or acquirer could be negatively impacted.

Similarly, our failure or perceived failure to pursue or fulfill our goals, targets and objectives or to satisfy various reporting standards within the timelines we announce, or at all, could also have similar negative impacts and expose us to government enforcement actions and private litigation.

Risks Related to Capitalization and Financial Markets

5 unchanged sentences

Revenue resulting from selling in local currencies and costs incurred in local currencies are exposed to foreign currency exchange rate fluctuations that can affect our operating income.

The currency exchange impact of the foreign exchange rates on our net income was $1.9 million unfavorable during the year ended December 31, 2021.

The currency exchange impact of the foreign exchange rates on our net income was $13 thousand favorable during the year ended December 31, 2020.

The currency exchange impact of the foreign exchange rates on our net loss was $1.4 million and $0.7 million unfavorable during the years ended December 31, 2019 and 2018, respectively.

The currency exchange impact of the foreign exchange rates on our net loss was $1.4 million unfavorable during the year ended December 31, 2019.

As exchange rates vary, our operating income may differ from expectations.

We deploy normal and customary hedging practices that are designed to proactively mitigate such exposure.

We deploy normal and customary

hedging practices that are designed to proactively mitigate such exposure.

The use of such hedging activities may not offset any, or more than a portion, of the adverse financial effects of unfavorable movements in currency exchange rates over the limited time the hedges are in place and would not protect us from long term shifts in currency exchange rates.

9 unchanged sentences

If we raise additional funds through further issuances of equity or convertible debt securities, you could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of our then-existing capital stock.

Any debt financing secured by us in the future could involve

restrictive covenants relating to our capital raising activities and other financial and operational matters, that may make it more difficult for us to obtain additional capital and to pursue business opportunities.

Any debt financing secured by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, that may make it more difficult for us to obtain additional capital and to pursue business opportunities.

If we cannot raise additional funds when we need them, our business and prospects could fail or be materially and adversely affected.

14 unchanged sentences

• general economic conditions and trends;

• major catastrophic events, including COVID-19, and the responses thereto;

• major catastrophic events, including COVID-19, acts of war or other events affecting the global economy, and the responses thereto;

• sales of large blocks of our common stock;

20 unchanged sentences

If analysts should cease coverage of our company or fail to regularly publish reports on us based on current publicly available information, we could lose visibility in the financial markets, which would cause our share price or trading volume to decline.

We do not presently have a plan to pay dividends and there can be no assurance that we will adopt such a plan in the near future, which may negatively affect your return on investment.

We do not presently have a plan to pay cash dividends and there can be no assurance that we will adopt such a plan in the near future.

In addition, any future financing arrangements we may enter into may restrict our ability to pay cash dividends while such financing arrangement remains outstanding.

As a result, you may only receive a return on your investment in our common stock if the value of our common stock increases.

A reduction in or suspension or elimination of our dividend payments could have a negative effect on our stock price.

On October 28, 2021, we announced that our Board of Directors approved a capital allocation strategy to return capital to our stockholders.

As part of this, the Board declared a quarterly dividend.

The declaration, amount and timing of any dividends are subject to capital availability and determinations by our Board of Directors that cash dividends are in the best interest of our stockholders and are in compliance with all respective laws and our agreements applicable to the declaration and

payment of cash dividends.

Our ability to pay dividends will depend upon, among other factors, our cash flows from operations, our available capital and potential future capital requirements as well as our results of operations, financial condition and other factors beyond our control that our Board of Directors may deem relevant.

A reduction in or suspension or elimination of our dividend payments could have a negative effect on our stock price.

There is no assurance that the existence of a share repurchase program will result in repurchases of our common stock or enhance long term stockholder value, and repurchases, if any, could affect our stock price and increase its volatility and will diminish our cash reserves.

On October 28, 2021, we announced that our Board of Directors approved a capital allocation strategy to return capital to our stockholders.

As part of this, the Board authorized a $100 million share repurchase program under which we may repurchase up to $100 million of our outstanding common stock over the following 12 months.

Under the share repurchase program, we may repurchase shares in the open market, privately negotiated transactions, in block trades or a combination of the foregoing.

We are not obligated under the share repurchase program to repurchase any specific number or dollar amount of shares of common stock, and we may modify, suspend or discontinue the share repurchase program at any time.

Our management and Board will determine the timing and amount of any repurchase in its discretion based on a variety of factors, such as the market price of our common stock, corporate requirements, general market economic conditions and legal requirements.

Repurchases pursuant to the share repurchase program or any other share repurchase program we adopt in the future could affect our stock price and increase its volatility and will reduce the market liquidity for our stock.

The existence of a share repurchase program could also cause our stock price to be higher than it would be in the absence of such a program.

Additionally, these repurchases will diminish our cash reserves, which could impact our ability to pursue possible future strategic opportunities and acquisitions and would result in lower overall returns on our cash balances.

There can be no assurance that any share repurchases will, in fact, occur, or, if they occur, that they will enhance stockholder value.

Although the share repurchase programs is intended to enhance long term stockholder value, short-term stock price fluctuations could reduce the effectiveness.

Unresolved Staff Comments

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