What changed in this filing

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Item 1A. Risk Factors

2025-02-21 compared with 2024-02-14 · 103 added, 157 removed, 474 unchanged (35% of the section changed)

24 unchanged sentences

• Inability or failure to adequately protect and enforce Atmus’ intellectual property rights and the cost of protecting or enforcing Atmus' intellectual property rights.

• Ineffective internal control over financial reporting.

• Unexpected events, including natural disasters.

• Difficulty operating as a standalone company.

Risks Related to Legal and Regulatory Issues

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Risks Related to Macroeconomic and Geopolitical Conditions

• Increased tariffs or the imposition of other barriers to international trade.

• Political, economic, and social uncertainty in geographies where Atmus has significant operations or large offerings of products.

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Risks Related to Atmus’ Relationship with Cummins

• The loss of Cummins’ reputation, economies of scale, capital base and other resources as a result of the Separation from Cummins.

• Potential failure of performance by Atmus or Cummins under transaction agreements executed as part of the Separation.

• Actual or potential conflicts of interests for certain of Atmus' executive officers and directors because of their equity interests in Cummins.

• Limited liability to Atmus from Cummins and its directors for breach of fiduciary duty.

• Potential indemnification liabilities to Cummins pursuant to the Separation Agreement.

• Potential indemnification from Cummins may be insufficient to insure Atmus against the full amount of such liabilities;

• Terms from unaffiliated third parties may have been better than what Atmus received in agreements with Cummins;

Risks Related to Atmus’ Capital Structure

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• Substantial indebtedness consisting of Atmus’ term loan and revolving credit facility, which may impact Atmus' ability to service all its indebtedness and react to changes in the industry.

• Substantially all Atmus' assets pledged as security for its term loan and revolving credit facility.

Risks Related to Ownership of Atmus Common Stock

• Substantially all Atmus' assets being pledged as security for its term loan and revolving credit facility.

• Fluctuations in the price of Atmus common stock.

• Atmus’ stock repurchase program may be suspended or terminated at any time.

• No guarantee of the payment, timing or amount of any dividend.

• Applicable laws and regulations, provisions of Atmus' amended and restated certificate of incorporation and Atmus' bylaws and certain contractual rights granted to Cummins that may discourage takeover attempts and business combinations that stockholders might consider in their best interests.

• The designation of the Court of Chancery in the State of Delaware and the federal district courts for the District of Delaware as exclusive forums provision in Atmus’ amended and restated certificate of incorporation.

• Atmus’ historical consolidated financial statements are not necessarily representative of the results that would have been achieved as a standalone company.

Risks Related to Our Business Operations

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For the year ended December 31, 2024, net sales to Cummins accounted for approximately 17.6% of our net sales.

Sales to Cummins joint ventures and to distributors with which Cummins has a relationship also account for a portion of our net sales.

Sales to Cummins joint ventures and to distributors that Cummins has a relationship also account for a portion of our net sales.

A portion of our net sales is dependent upon customer acceptance of, and demand for, Cummins’ engines or generators that use our filters.

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Our relationships with these OEMs also allow us to be closely attuned to our customers' requirements and preferences and react quickly to any changes.

The use of our filtration products as a standard first-fit component creates a steady demand for that product in the aftermarket, as end-users often return to the OEM for aftermarket service for multiple years and may continue to prefer our products as replacement or repair parts.

The use of our filtration products as

a standard first-fit component creates a steady demand for that product in the aftermarket, as end-users often return to the OEM for aftermarket service for multiple years and may continue to prefer our products as replacement or repair parts.

We may not be able to maintain our current top OEM relationships in the future or may not become the preferred supplier for additional OEMs.

In addition, our channel partners’ and end-users’ preferences for

replacement or repair filtration products may change in the future.

In addition, our channel partners’ and end-users’ preferences for replacement or repair filtration products may change in the future.

The loss of a top OEM relationship, or changes in the preferences of our aftermarket end-users, could adversely impact the recurring nature of our aftermarket sales.

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Substantially all of our net sales are related to internal combustion engine filtration products.

Concerns regarding the effects of emissions of GHG on the climate have driven (and will likely continue to drive) international, national, regional and local

legislative and regulatory responses, including those imposing more stringent emissions standards, requiring higher fuel efficiency and/or banning sales of gas-powered vehicles in the future.

Concerns regarding the effects of emissions of GHG on the climate have driven (and will likely continue to drive) international, national, regional and local legislative and regulatory responses, including those imposing more stringent emissions standards, requiring higher fuel efficiency and/or banning sales of gas-powered vehicles in the future.

Such responses may generate or accelerate changes in technology and in customer and end-user preference, including wider adoption of, and preference for, technologies providing alternatives to diesel engines, such as electrification of equipment, which could reduce or eliminate the demand for our products.

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We face risks from strategic transactions, such as acquisitions, divestitures, joint ventures and other similar arrangements that we may pursue or undertake.

We are actively evaluating potential strategic acquisitions or investment opportunities and consider divestitures of non-strategic business lines and the filtration business has historically pursued and undertaken certain of those opportunities.

We are actively evaluating potential strategic acquisitions or investment opportunities and consider divestitures of non-strategic business lines, and the filtration business has historically pursued and undertaken

certain of those opportunities.

For example, in 1987 and 1994, our filtration business established our joint ventures in India and China, respectively, for our entry into those two markets, and has continued to explore additional joint ventures since then.

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There are also a number of other risks inherent to acquisitions, including the potential loss of key customers and suppliers of the acquired businesses or adverse effects on relationships with existing customers and suppliers;

the inability to identify all issues or potential liabilities during diligence;

the inability to identify all issues or potential liabilities during due diligence;

difficulties or delays in integrating and assimilating the acquired operations and products or in realizing projected efficiencies, growth prospects, cost savings and synergies;

loss of key employees;

the loss of key employees;

the potential increase in exposure to more onerous or costly legal and regulatory requirements and the diversion of management’s time and attention away from other business matters, which may prevent us from realizing the anticipated return on our investment.

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Among these collective bargaining agreements, those for the employees in Mexico, Brazil and France are renewed annually after compensation negotiations, while the collective bargaining agreement for the Cookeville, Tennessee plant typically has a four- to five-year term.

The collective bargaining agreement for Brazil is in place and active and the compensation negotiations for a new annual term on the collective bargaining agreements for Mexico and France were recently concluded.

Collective bargaining for Brazil Annual Profit Sharing will take place on February 19, 2025.

Annual term collective bargaining for Mexico and France were recently successfully completed.

These collective bargaining agreements have terms that will expire between December 2025 and February 2026.

The collective bargaining agreement for the Cookeville, Tennessee plant is expiring at the end of its four year term on February 29, 2024 and negotiations for its renewal started in January 2024.

Contract negotiations at the Cookeville, Tennessee plant took place in February of 2024 resulting in a new four year contract that will expire at the end of its four year term on February 29, 2028.

While we have no reason to believe that we will be materially impacted by work stoppages or other labor matters, there can be no assurance that future issues with our labor unions will be resolved favorably or that we will not encounter future strikes, work stoppages, or other types of conflicts with labor unions or our employees.

For example, during periodic collective bargaining in 2020, the United Auto Workers union representing manufacturing employees at the Cookeville, Tennessee site conducted a strike for six weeks after failing to accept modified terms and conditions offered by the company.

Any of these consequences may have an adverse effect on us or may limit our flexibility in dealing with our workforce.

In addition, many of our customers and suppliers have unionized work forces.

Work stoppages or slowdowns experienced by us, our customers or suppliers could result in slowdowns or closures that would have a material adverse effect on our business, financial condition, results of operations or cash flows.

Work stoppages or slowdowns experienced by us, our

customers or suppliers could result in slowdowns or closures that would have a material adverse effect on our business, financial condition, results of operations or cash flows.

Our products are exposed to variability in material and commodity costs.

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however, the timing of material and commodity market price increases may prevent us from passing these additional costs on to our customers through timely pricing actions, which may lead to an adverse impact on our profit margins.

For example, our gross margin decreased by 1.3% from the year ended December 31, 2021 (24.3%)

to the year ended December 31, 2022 (23.0%) as a result of our material and freight costs increasing at a faster rate than the increase in net sales.

Additionally, higher material and commodity costs around the world may offset our efforts to reduce our cost structure.

Economies around the world have also generally seen significant inflationary pressures since 2021.

Although those inflationary pressures began to abate towards the end of 2023, we are still subject to the risk of material and commodity cost increases and there can be no assurances that such cost increases do not return in 2024 and beyond.

Although those inflationary pressures began to abate towards the end of 2023 and stabilize by the end of 2024, we are still subject to the risk of material and commodity cost increases and there can be no assurances that such cost increases do not return in 2025 and beyond.

As of the date of this Annual Report on Form 10-K, we have not entered into any hedging arrangements or agreements with respect to the purchase of the commodities used in our products.

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Unacceptable levels of service for key customers may result if we are not able to fulfill orders on a timely basis or if product quality or warranty or safety issues result from compromised production.

Due to the complexity of our manufacturing operations, we may be unable to timely respond to fluctuations in demand, which could adversely impact our business, financial condition, results of operations or cash flows.

complexity of our manufacturing operations, we may be unable to timely respond to fluctuations in demand, which could adversely impact our business, financial condition, results of operations or cash flows.

While we have not experienced significant global surges or declines in demand, for much of 2022, overall demand exceeded our ability to fully meet such demand, resulting in an elevated level of backlog.

For 2023, the level of backlog that accumulated during 2022 reduced and stabilized.

As we move into 2024, there has been a reduction in these backlogs from peak levels, and we expect further stabilization in the first half of 2024.

During 2023 and 2024, the level of backlog reduced and stabilized from peak level.

A number of our customers operate in similar cyclical industries and economic conditions in these industries could impact our sales.

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Cummins is one of our key customers and accounted for approximately 17.6% of our net sales in 2024.

While our relationship with Cummins has been secured through our first-fit supply agreement and aftermarket supply agreement, both of which have an initial term of five years (except with respect to certain new products under the first-fit supply agreement, for which a five-year term commences from the date of the start of production), Cummins operates in both global off-highway and on-highway industries and is subject to the cyclicality of those industries.

While our relationship with Cummins has been secured through our first-fit supply agreement and aftermarket supply agreement, both of which have an initial term of five years from the date of our IPO (except with respect to certain new products under the first-fit supply agreement, for which a five-year term commences from the date of the start of production), Cummins operates in both global off-highway and on-highway industries and is subject to the cyclicality of those industries.

A number of our other customers, including PACCAR and the Traton Group, are also concentrated in similar cyclical industries, including off-highway industries such as construction, agriculture, mining, oil and gas and power generation, as well as on-highway industries such as truck, bus, vocational and recreational vehicles.

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Our success is also dependent on retaining key customers, which requires us to successfully manage relationships and anticipate the needs of our customers in the channels in which we sell our products.

Changes in the economic conditions could materially and adversely impact our business, financial condition, results of operations or cash flows.

Changes in economic conditions could materially and adversely impact our business, financial condition, results of operations or cash flows.

Our business is exposed to potential claims related to warranties and claims for support outside of standard warranty obligations.

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Product recall costs are incurred when we decide, either voluntarily or involuntarily, to recall a product through a formal campaign to solicit the return of specific products due to known or suspected performance or safety issues.

For example, in 2017, quality issues were identified with a particular application of a fuel heater, which primarily impacted one customer, resulting in a recall campaign beginning in 2020.

See Note 11, Product Warranty Liability , to the consolidated financial statements for additional details.

Any significant product recalls could have material adverse effects on our business, financial condition, results of operations and cash flows.

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Our intellectual property may be challenged, opposed, invalidated, diluted, cancelled, declared generic, stolen, circumvented, infringed or otherwise violated upon by third parties or we may be unable to maintain, renew or enter into new license agreements with third-party owners of intellectual property on reasonable terms, or at all.

In addition, the global nature of our business increases the risk that our intellectual property may be subject to infringement, theft or other unauthorized use or disclosure by others.

In addition, the global nature of our business increases the risk that our

intellectual property may be subject to infringement, theft or other unauthorized use or disclosure by others.

Our ability to protect and enforce intellectual property rights, including through litigation or other legal proceedings, also varies across jurisdictions.

In some cases, our ability to protect or enforce our intellectual property rights by

legal recourse or otherwise may be limited, particularly in countries where laws or enforcement practices are less protective than those in the United States.

In some cases, our ability to protect or enforce our intellectual property rights by legal recourse or otherwise may be limited, particularly in countries where laws or enforcement practices are less protective than those in the United States.

Our inability to obtain sufficient protection for our intellectual property, or to effectively maintain or enforce our intellectual property rights, could lead to reputational harm and/or adversely impact our competitive position, business, financial condition, results of operations or cash flows.

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Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations or cash flows.

If we fail to design and maintain effective internal control over financial reporting, our ability to timely and accurately report our financial condition and results of operations or comply with applicable laws and regulations could be impaired, which may adversely affect investor confidence in us and, as a result, the value of our common stock.

We identified a material weakness in our internal control over financial reporting during the period June 30, 2023 as a result of errors discovered in our financial statements for the three months ended March 31, 2023.

These errors principally related to accounting for intercompany and related party transactions and required us to restate our financial statements as of and for the three months ended March 31, 2023 and revise our financial statements as of and for the three months ended March 31, 2022, and as of December 31, 2022 and 2021 and for each of the years ended December 31, 2022, 2021 and 2020.

As of December 31, 2023, such material weakness has been remediated.

As a public company, we are required to maintain internal control over financial reporting and to evaluate and determine the effectiveness of our internal control over financial reporting.

Beginning with our annual report on Form 10-K as of and for the year ending December 31, 2024, we will be required to provide a management report on internal control over financial reporting, as well as an attestation of our independent registered public accounting firm.

As part of this reporting, we will be required to disclose any material weaknesses in our internal control over financial reporting.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

If material weaknesses exist in our internal control over financial reporting, we may have a higher likelihood of becoming subject to shareholder litigation or other litigation.

We may lose investor confidence in the accuracy and completeness of our financial reports, the market price of our securities could decline, and we could be subject to sanctions or investigations by regulatory authorities.

Further, failure to maintain effective internal control over financial reporting and disclosure controls and procedures could also restrict our future access to the capital markets.

Unexpected events, including natural disasters, may increase our cost of doing business or disrupt our operations.

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Such an event could result in physical damage to and complete or partial closure of one or more of our headquarters, manufacturing facilities or distribution centers, temporary or long-term disruption in the supply of component products from some local and international suppliers, disruption in the transport of our products to customers and disruption of information systems.

Prior to the IPO, Cummins’ existing insurance coverage, and following the IPO, the insurance coverage we entered into, may not provide protection for all costs that may arise from any such event.

Any disruption in our operations could have an adverse impact on our ability to meet

our customer needs or may require us to incur additional expenses in order to produce sufficient inventory.

The insurance coverage we have entered into, may not provide protection for all costs that may arise from any such event.

Any disruption in our operations could have an adverse impact on our ability to meet our customer needs or may require us to incur additional expenses in order to produce sufficient inventory.

Certain unexpected events could adversely impact our business, financial condition, results of operations or cash flows.

As a result of the Separation, we may experience difficulty operating as a standalone company.

Because we have limited experience operating as a standalone company following the Separation, we may encounter difficulties doing so in the future.

For example, if we do not accurately estimate the level of resources required to operate as a standalone company, we may need to acquire additional assets and resources, which could be costly, and in connection with the Separation, may also face difficulty in separating certain aspects of our business from Cummins, including incurring accounting, tax, legal and other professional services costs, recruiting and relocation costs associated with hiring or reassigning our personnel, costs related to establishing a new brand identity in the marketplace and costs to separate information systems and creating standalone administrative units or distribution centers in our business post-separation.

For example, we established our own standalone warehouse in Belgium in November 2024, and we have not yet realized normal operating levels.

Our business, financial condition, results of operations or cash flows could be materially adversely affected if we have difficulty operating as a standalone company.

Risks Related to Legal and Regulatory Issues

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Such counterfeit products divert sales from genuine products, often are of lower cost and quality and may pose safety risks.

If illegal sales of counterfeit products result in adverse product liability or negative consumer experiences, we may be associated with negative publicity resulting from such incidents.

If illegal sales

of counterfeit products result in adverse product liability or negative consumer experiences, we may be associated with negative publicity resulting from such incidents.

Although we proactively monitor the existence of counterfeit products and initiate actions to seize, remove them from sale or destroy, we may not be able to prevent third parties from manufacturing, selling or purporting to sell counterfeit products competing with our products, which may negatively impact our sales, brand reputation, business, financial condition, results of operations or cash flows.

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Our products are subject to many laws and regulations in the jurisdictions in which we operate.

We routinely incur costs in order to comply with these laws and regulations.

We routinely incur costs to comply with these laws and regulations.

We may be adversely impacted by new or changing laws and regulations that affect both our operations and our ability to develop and sell products that meet our customers’ requirements.

The discovery of noncompliance issues could have a material adverse impact on our business, financial condition, results of operations or cash flows.

The discovery of noncompliance issues could have a material adverse impact on our reputation, brand, business, financial condition, results of operations or cash flows.

Developing products to meet more stringent and changing regulatory requirements, with different implementation timelines and requirements, makes developing products efficiently for multiple markets complicated and could result in substantial additional costs that may be difficult to recover in certain markets.

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Any delays in implementation or enforcement could result in a loss of our competitive advantage and could have a material adverse impact on our business, financial condition, results of operations or cash flows.

We operate our business on a global basis and changes in international, national and regional trade laws, regulations, and policies affecting and/or restricting international trade, including sanctions resulting from Russia’s military operation in Ukraine, could adversely impact the demand for our products and our competitive position.

We operate our business on a global basis and changes in international, national and regional trade laws, regulations, and policies affecting and/or restricting international trade could adversely impact the demand for our products and our competitive position.

We manufacture, sell and service products globally and rely upon a global supply chain to deliver the raw materials, components, systems and parts that we need to manufacture and service our products.

Changes in laws, regulations and government policies on foreign trade and investment can affect the demand for our products and services, causing customers and end-users to shift preferences toward domestically manufactured or branded products and impact the competitive position of our products or prevent us from being able to sell products in certain countries.

Changes in laws, regulations and government policies on foreign trade and investment, including as a result of the recent change in U.S.

presidential administration, can affect the demand for our products and services, causing customers and end-users to shift preferences toward domestically manufactured or branded products and impact the competitive position of our products or prevent us from being able to sell products in certain countries.

Our business benefits from free trade agreements, such as the United States-Mexico-Canada Agreement, the U.S.

trade relationships with China, Brazil and France and the Comprehensive Economic Partnership Agreement between India and South Korea.

Efforts to withdraw from, or substantially modify such agreements or arrangements, in addition to the implementation of more restrictive trade policies, such as more detailed inspections, higher tariffs (including, but not limited to, additional tariffs on the import of steel or aluminum and imposition of new or retaliatory tariffs against certain countries, including based on developments in U.S.-China, U.S.-Russia and EU-Russia relations), import or export licensing requirements, and exchange controls or new barriers to entry, could limit our ability to capitalize on current and future growth opportunities in international markets, impair our ability to ship media from our plant in South Korea directly to

our joint venture partners, impair our ability to expand the business by offering new technologies, products, and services, and could adversely impact our production costs, customer and end-user demand and our relationships with customers and suppliers.

Efforts to withdraw from, or substantially modify such agreements or arrangements, in addition to the implementation of more restrictive trade policies, such as more detailed inspections, higher tariffs (including, but not limited to, additional tariffs on the import of steel or aluminum and imposition of new or retaliatory tariffs against certain countries, including based on developments in U.S.-China, U.S.-Mexico, U.S.-Canada, U.S.-Russia and EU-Russia relations), import or export licensing requirements, and exchange controls or new barriers to entry, could limit our ability to capitalize on current and future growth opportunities in international markets, impair our ability to ship media from our plant in South Korea directly to our joint venture partners, impair our ability to expand the business by offering new technologies, products, and services, and could adversely impact our production costs, customer and end-user demand and our relationships with customers and suppliers.

Any of these consequences could have a material adverse effect on our business, financial condition, results of operations or cash flows.

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In particular, changing U.S.

and European export controls and sanctions on China, as well as other restrictions affecting transactions involving China and Chinese parties and Russia and Russian parties, could affect our ability to collect receivables, provide aftermarket and warranty support for our products, sell products, and otherwise impact our reputation and business, any of which could have a material adverse effect on our business, financial condition, results of operations or cash flows.

and European export controls and sanctions on China, as well as other restrictions affecting transactions involving China and Chinese parties and Russia and Russian parties, could affect our

ability to collect receivables, provide aftermarket and warranty support for our products, sell products, and otherwise impact our reputation and business, any of which could have a material adverse effect on our business, financial condition, results of operations or cash flows.

Moreover, the enforceability of contracts in China, especially with governmental entities, including state-owned enterprises, is relatively uncertain.

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Such uncertainties or inability to enforce our contracts could materially and adversely affect our business, financial condition, results of operations or cash flows.

Additionally, the ongoing crisis related to Russia’s military operation in Ukraine (the “Russia-Ukraine War”) has resulted in the application of enhanced sanctions against Russia by a number of jurisdictions, including the United States, United Kingdom, and European Union.

On March 17, 2022, the Cummins Board of Directors made the decision to suspend all commercial operations in Russia indefinitely, including our operations therein.

Additionally, although we seek to comply with all applicable regulations, these laws and regulations are complex, frequently changing, and increasing in number and there is a risk that we will not be compliant with all relevant regulations at all times.

Such potential violations could have material adverse effects on our reputation, brand, business, financial condition, results of operations or cash flows.

Unanticipated changes in our effective tax rate, the adoption of new tax legislation or exposure to additional income tax liabilities could adversely affect our profitability and cash flow.

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Our income tax provision and cash tax liability in the future could be adversely affected by the adoption of new tax legislation, changes in the amounts or composition of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities and the discovery of new information in the course of our tax return preparation process.

Additionally, we may be subject to tax audits.

Additionally, we have been subject to tax audits.

These audits can involve complex issues, which may require an extended period of time to resolve and can be highly judgmental.

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The OECD has released several components of its comprehensive plan to create an agreed set of international rules for addressing base erosion and profit shifting.

As a result, the tax laws in the United States and other countries in which we do business could change on a prospective or retroactive basis, and any such changes could adversely affect our business, financial condition, results of operations or cash flows.

As a result, the tax laws in the United States and other countries in which we do business could change on a prospective or retroactive basis, including as a result of the recent change in U.S.

presidential administration, and any such changes could adversely affect our business, financial condition, results of operations or cash flows.

Our global operations are subject to laws and regulations that impose significant compliance costs and create reputational and legal risk.

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Recent years have seen an increase in the development and enforcement of laws regarding trade compliance, as well as new regulatory requirements regarding privacy and data protection, such as the European Union General Data Protection Regulation.

For example, in January 2024, the Tax Administration Service in Mexico amended the customs requirements for transactions between a maquiladora in Mexico shipping its manufactured goods to a domestic Mexican company, and to-date maquiladoras in Mexico, including our manufacturing facility in San Luis Potosi, have responded by exporting manufactured goods outside of Mexico and then re-importing them back into Mexico for delivery to domestic purchasers, resulting in increased costs for our Mexican operations.

Our foreign subsidiaries and affiliates are governed by laws, rules and business practices that differ from those of the U.S.

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Bribery Act (the “Bribery Act”) and export controls and economic sanctions programs, including those administered by the U.S.

Treasury Department’s Office of Foreign Assets Control (“OFAC”), relating to our business and our employees.

Treasury Department’s Office of

Foreign Assets Control (“OFAC”), relating to our business and our employees.

As part of our business, we deal with state-owned business enterprises, the employees of which are considered foreign officials for purposes of the FCPA’s prohibition on providing anything of value to foreign officials for the purposes of obtaining or retaining business or securing any improper business advantage.

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Our continued expansion outside the United States, including in China, India and developing countries, and our development of new partnerships worldwide, could increase the risk of FCPA, OFAC or Bribery Act violations in the future.

Despite our policies, procedures and compliance programs, our internal control and compliance systems may not be able to protect it from prohibited acts willfully committed by our employees, agents or business partners that would violate such applicable laws and regulations.

Despite our policies, procedures and compliance programs, our internal control and compliance systems may not be able to protect from prohibited acts willfully committed by our employees, agents or business partners that would violate such applicable laws and regulations.

Additionally, there can be no assurance that our policies and procedures will effectively prevent us from violating these regulations in every transaction in which we may engage or provide a defense to any alleged violation.

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Any violation or alleged violation of these laws and regulations, even if prohibited by our policies, could result in criminal or civil sanctions, reputational damage or other substantial costs and penalties, any of which could adversely affect our business, financial condition, results of operations or cash flows.

In particular, we may be held liable for the actions that our joint venture partners take inside or outside of the United States, even though our partners may not be subject to these laws.

In particular, we may be held liable for actions that our joint venture partners take inside or outside of the United States, even though our partners may not be subject to these laws.

Any such improper acts could damage our reputation, subject us to civil or criminal judgments, fines or penalties, and could otherwise disrupt our business.

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From time to time, we are subject to litigation or other commercial disputes and other legal and regulatory proceedings relating to our business, including actual or perceived failure to comply with the laws and regulations mentioned above.

Due to the inherent uncertainties of any litigation, commercial disputes or other legal or regulatory proceedings, we cannot accurately predict their ultimate outcome, including the outcome of

any related appeals.

Due to the inherent uncertainties of any litigation, commercial disputes or other legal or regulatory proceedings, we cannot accurately predict their ultimate outcome, including the outcome of any related appeals.

An unfavorable outcome could materially adversely impact our business, financial condition, results of operations or cash flows.

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Concerns regarding climate change may lead to additional international, national, regional and local legislative and regulatory responses.

For example, proposed SEC rules to enhance disclosures regarding the effects of climate change could increase our reporting and compliance costs, and in October 2023, the California Governor signed the Climate-Related Financial Risk and the Climate Corporate Data Accountability Act into law, which impose significant and mandatory climate-related reporting requirements for large companies doing business in the state.

companies doing business in the state.

Similarly, enhanced mandatory climate reporting requirements came into force in 2019 and again in 2022 in the United Kingdom and broader sustainability reporting requirements (including climate) will apply to certain European Union entities on a staged basis from 2024 and to their non-European Union parent undertakings from 2028.

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For example, we have developed the filtration intelligence technology (FIT) system, which embeds sensors and software within the filtration equipment system designed to optimize filtration maintenance and monitor equipment health.

In addition, we provide opportunities for remote working to our employees, which may pose additional information technology risks.

In addition, we provide opportunities for remote working to our employees, which may pose additional information

technology risks.

The impact of a significant information technology event on either our information technology environment or our products could negatively affect the performance of our products, our reputation, and competitive position.

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These threats could result in unauthorized access, use, modification, disclosure, loss or theft of information, including intellectual property, costly investigations, remediation efforts, notification requirements, privacy or data protection-related compliance obligations, legal claims or proceedings, government enforcement actions, civil or criminal penalties, fines, diversion of management attention, operational changes or other response measures, loss of customer confidence in our security measures, loss of business partners, and negative publicity that could adversely affect our brand, reputation, business, financial condition, results of operations or cash flows.

While we expect to obtain cyber insurance coverage, our cyber insurance policies may not cover, or may cover only a portion of, any potential claims related to such events or may not be adequate to indemnify us for all or any portion of liabilities that may be imposed or defense costs incurred.

Our cyber insurance policies may not cover, or may cover only a portion of, any potential claims related to such events or may not be adequate to indemnify us for all or any portion of liabilities that may be imposed or defense costs incurred.

We also cannot be certain that we will be able to maintain insurance coverage, on acceptable terms or in amounts sufficient to cover the potentially significant losses that may result from a security incident or breach, or that the insurer will not deny coverage of any future claim.

In addition, data we collect, store and process are subject to a variety of U.S.

and international laws and regulations, such as the European Union's General Data Protection Regulation, which may carry significant potential penalties for noncompliance.

A number of our operations depend on information technology infrastructure and assets that are increasing in complexity, which are undergoing changes as a result of the Separation.

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dollar against foreign currencies has had and could continue to have a negative impact on our consolidated results of operations due to translation impacts.

Although we did see a slightly favorable impact on our results of operations in the second half of 2023, we expect that the overall negative impact may continue in 2024.

Cummins has a hedging program to mitigate foreign currency exchange rate risk across its businesses, which included foreign currency exchange rate risk faced by the filtration business.

Although we have implemented certain aspects of our own hedging program, we are still evaluating other aspects, such as cash flow hedges, and there can be no assurances that we will be able to establish the same program as Cummins or at similar costs.

We currently manage exchange rate and other related risks through the selective use of derivatives, but there can be no assurance that fluctuations in exchange rates and other related risks will not have a material adverse effect upon our business, financial condition, results of operations or cash flows.

We have recorded goodwill as a result of prior acquisitions, and an economic downturn could cause these balances to become impaired, requiring write-downs that would reduce our operating income.

Goodwill amounted to approximately $84.7 million as of December 31, 2024.

As required under current accounting rules, we assess goodwill for impairment at least annually and whenever changes in circumstances indicate that the carrying amount may not be recoverable from estimated future cash flows.

As required under current accounting rules, we assess goodwill for impairment at least annually and whenever changes in circumstances

indicate that the carrying amount may not be recoverable from estimated future cash flows.

As of December 31, 2024, management has deemed there is no impairment of our recorded goodwill.

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Risks Related to Macroeconomic and Geopolitical Conditions

Increased tariffs or the imposition of other barriers to international trade could impact demand for our products and our competitive position.

Changes to trade protection measures and import or export licensing requirements;

the imposition of new, additional, or retaliatory tariffs, quotas, exchange controls, sanctions, trade barriers or other restrictions (including recent U.S.

tariffs imposed or threatened to be imposed by the current U.S presidential administration on China, Canada and Mexico and other countries and any retaliatory actions taken by such countries);

and the withdrawal from or modification of trade agreements or the negotiation of new trade agreements, in countries where we operate, particularly in Mexico, Canada, China, and India, could impact the cost of our products, demand for our products and the competitive position of our products.

Our largest global manufacturing facility is in San Luis Potosi, Mexico, and it supplies products to our U.S.

There can be no assurance that the consequences of these actions, given our global operations, will not have a material adverse effect upon our business, financial condition, results of operations or cash flows.

Political, economic and social uncertainty in geographies where we have significant operations or large offerings of our products could significantly change the dynamics of our competition, customer and end-user base and product offerings and impact our growth opportunities globally.

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• the difficulty of enforcing agreements and collecting receivables through foreign legal systems;

• trade protection measures and import or export licensing requirements;

• the imposition of taxes on foreign income and tax rates in certain foreign countries that exceed those in the U.S.;

• the imposition of tariffs, exchange controls, sanctions or other restrictions;

• difficulty in staffing and managing widespread operations and the application of foreign labor regulations;

• required compliance with a variety of foreign laws and regulations;

• changes in general economic and political conditions, including changes in relationship with the U.S., in countries where we operate, particularly in China, India and other emerging markets.

• changes in general economic and political conditions, including changes in relationship with the U.S.

in countries where we operate, particularly in Mexico, Canada, China, India and other emerging markets.

As we continue to operate and grow our business globally, our success will depend, in part, on our ability to anticipate and effectively manage these and other related risks.

There can be no assurance that the consequences of these and other factors relating to our multinational operations will not have a material adverse effect upon our business, financial condition, results of operations or cash flows.

In addition, there continues to be significant uncertainty about the future relationships between the U.S.

and China, including with respect to trade policies, treaties, government regulations and tariffs.

We currently have significant operations in China, including a joint venture and our wholly-owned subsidiary Cummins Filtration China.

For the year ended December 31, 2023, total sales in China, including consolidated and non-consolidated sales from our joint venture, were approximately $265.1 million, an increase of $32.1 million compared to approximately $233.0 million for the year ended December 31, 2022.

In the first half of 2022, the resurgence of COVID-19 in China led to lockdowns in several cities that negatively impacted the economy and our end markets.

Among the cities impacted by these lockdowns was Shanghai, which resulted in the shutdowns of us and our China joint ventures’ Shanghai-based facilities, and the results from our China operations were adversely impacted in 2023 as a result of general market conditions in China.

Equity, royalty and interest income from our China joint venture for the year ended December 31, 2023 was $5.9 million, an increase of $0.6 million compared to $5.3 million for the year ended December 31, 2022.

In addition, any increased trade barriers or restrictions on global trade, especially trade with China, could adversely impact our competitive position, business, financial condition, results of operations or cash flows.

Risks arising from uncertainty in worldwide and regional market and economic conditions may harm our business and make it difficult to project long-term performance.

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Among the economic factors which may have such an effect are:

public health crises such as pandemics and epidemics, currency exchange rates, difficulties entering new markets, tariffs and governmental trade and monetary policies, and general economic conditions such as inflation, deflation, interest rates and credit availability.

For example, as a result of the global economic downturn triggered by the COVID-19 pandemic, we experienced a 3.8% decline in net sales during 2020 compared to the previous year.

Most economies across the world slowed and, although we saw a recovery in 2021 (16.7% growth in net sales in 2021 compared to 2020), 2022 (8.6% growth in net sales in 2022 compared to 2021) and 2023 (4.2% growth in net sales in 2023 compared to 2022), there is still uncertainty as to whether the recovery will be sustained.

If any or all of these major markets that we sell to were to endure a continued slowdown or recession, including as a result of a new outbreak of a global pandemic, other public health crises, economic disruption or otherwise decline, it could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Additionally, in response to rising rates of inflation, the Federal Reserve Board increased the benchmark federal funds interest rates multiple times during the year ended December 31, 2023 but has signaled that there may be benchmark federal funds interest rate reductions in 2024.

This rate environment and the speed with which it has been occurring, or could occur in the future, could have a material adverse effect on our business, financial condition, results of operations or cash flows.

public health crises such as pandemics and epidemics, currency exchange rates, difficulties entering new markets, tariffs and governmental trade and

monetary policies, and general economic conditions such as inflation, deflation, interest rates and credit availability.

In addition, we face several risks associated with international business and are subject to global events beyond our control, including war, trade disputes, economic sanctions, trade wars and their collateral impacts and other international events.

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Risks Related to our Relationship with Cummins

As a result of the Separation, we lost Cummins’ reputation, economies of scale, capital base and other resources and may experience difficulty operating as a standalone company.

Our association with Cummins has contributed to the relationships we have with certain significant customers and suppliers due to the relationship those customers and suppliers had with Cummins.

Cummins cooperated in selling our products to Cummins’ customers.

After the Separation, we may not be able to attract new customers of Cummins, or retain existing customers, without Cummins’ support.

If this occurs, it could result in reduced sales of our products.

The loss of Cummins’ scale, capital base and financial strength may also prompt suppliers to reprice, modify or terminate their relationships with us, in particular if such suppliers had placed a premium on the Cummins brand or our relationship with Cummins.

In addition, Cummins’ reduction of its ownership of us could potentially cause some of our existing agreements and licenses to be terminated.

We cannot predict with certainty the effect that the Separation will have on our business, our clients, vendors or other persons, or whether our Fleetguard brand will experience dilution in the marketplace.

Further, because we have limited experience operating as a standalone company following the Separation, we may encounter difficulties doing so in the future.

Our business, financial condition, results of operations or cash flows could be materially adversely affected if we have difficulty operating as a standalone company.

We, or Cummins, may fail to perform under various transaction agreements that were executed as part of the IPO or we may fail to have necessary systems and services in place when certain of the transaction agreements expire.

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The level of this informal support may be eliminated following the Separation.

We also have established or expanded our own tax, treasury, internal audit, investor relations, corporate governance and listed company compliance and other corporate functions.

We have been incurring and expect to continue incurring one-time costs to replicate, or outsource from other providers, these corporate functions to replace the corporate services that Cummins historically provided us prior to the IPO.

Any failure or significant downtime in our own financial, administrative or other support systems or in the Cummins financial, administrative or other support systems during the transitional period during which Cummins provides us with support could negatively impact our results of operations or prevent us from paying our suppliers and employees, executing business combinations and foreign currency transactions or performing administrative or other services on a timely basis, which could have an adverse effect on our business, financial condition, results of operations or cash flows.

In particular, our day-to-day business operations rely on our information technology systems.

A significant portion of the communications among our personnel, customers and suppliers take place on our information

technology platforms.

A significant portion of the communications among our personnel, customers and suppliers take place on our information technology platforms.

We expect the separation of information technology systems from Cummins to be complex, time-consuming and costly.

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The value of the assets and liabilities we assumed in connection with the Separation could ultimately be materially different than such attributions, which could have a material adverse effect on our business, financial condition, results of operations or cash flows.

Certain of our executive officers and directors may have actual or potential conflicts of interest because of their equity interest in Cummins.

A majority of our current directors are employees of Cummins.

Any director who is an employee of Cummins will own Cummins common stock or equity awards.

Additionally, certain of our executive officers own Cummins common stock or equity awards.

The position of such individuals and their ownership of any Cummins equity or equity awards create, or may create the appearance of, conflicts of interest when these individuals are faced with decisions that could have different implications for Cummins than for us.

Cummins and its directors and officers will have limited liability to us or you for breach of fiduciary duty.

Subject to any contractual provision to the contrary, Cummins has no obligation to refrain from engaging in certain actions that may not be in our best interests.

Under our amended and restated certificate of incorporation, neither Cummins nor any officer or director of Cummins, including our directors who are also Cummins employees, except as provided therein, will be liable to us or to our shareholders for breach of any fiduciary duty by reason of any of these activities.

Potential indemnification liabilities to Cummins pursuant to the separation agreement could materially and adversely affect our businesses, financial condition, results of operations and cash flows.

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In connection with the Separation, Cummins has indemnified us for certain liabilities.

However, there can be no assurance that the indemnity will be sufficient to insure us against the full amount of such liabilities, or that Cummins’ ability to satisfy its indemnification obligation will not be impaired in the future.

However, there can be no assurance that the indemnity will be sufficient to insure us against the full amount of such

liabilities, or that Cummins’ ability to satisfy its indemnification obligation will not be impaired in the future.

Pursuant to the separation agreement and certain other agreements with Cummins, Cummins agreed to indemnify us for certain liabilities as discussed further in “ Agreements Between Cummins and Atmus and Other Related Party Transactions — Relationship between Atmus and Cummins — Separation Agreement — Release of Claims and Indemnification .” However, third parties could also seek to hold us responsible for any of the liabilities that Cummins has agreed to retain, and there can be no assurance that the indemnity from Cummins will be sufficient to protect us against the full amount of such liabilities, or that Cummins will be able to fully satisfy its indemnification obligations.

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Disruption of the global financial and credit markets may have an effect on our long-term liquidity and financial condition.

For example, the closures of Silicon Valley Bank and Signature Bank in March 2023 and their placement into receivership with the Federal Deposit Insurance Corporation created financial institution liquidity risk and concerns.

Our operations, investment opportunities, access to capital and ability to enforce the obligations of counterparties may be adversely affected by disruptions to the banking system and other financial market volatility.

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Our term loan agreement and revolving credit facility each contain covenants to maintain certain financial ratios that, under certain circumstances, could restrict our ability to incur additional indebtedness, make investments and other restricted payments, create liens and sell assets.

We have substantial indebtedness, consisting of the term loan and the revolving credit facility, and may incur substantial additional debt from time to time, which may impact our ability to service all our indebtedness and react to changes in our industry and limit our ability to seek further financing on favorable terms.

We have approximately $600 million of outstanding indebtedness consisting of the term loan and amounts drawn under the revolving credit facility as of December 31, 2023.

We have substantial indebtedness and may incur substantial additional debt from time to time, which may impact our ability to service all our indebtedness and react to changes in our industry and limit our ability to seek further financing on favorable terms.

We have approximately $592.5 million of outstanding indebtedness consisting of proceeds of the term loan as of December 31, 2024.

See “ Description of Material Indebtedness of Atmus .”

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If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, alter our dividend policy, seek additional debt or equity capital or restructure or refinance our indebtedness.

We may not be able to effect any such alternative measures on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations.

We may not be able to affect any such alternative measures on

commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations.

The instruments that will govern our indebtedness may restrict our ability to dispose of assets and may restrict the use of proceeds from those dispositions and may also restrict our ability to raise debt or equity capital to be used to repay other indebtedness when it becomes due.

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Each of these entities is a distinct legal entity and, under certain circumstances, legal, tax and contractual restrictions may limit our ability to obtain cash from them.

In the event that we do not receive

distributions from these entities, we may be unable to make required principal and interest payments on our indebtedness.

In the event that we do not receive distributions from these entities, we may be unable to make required principal and interest payments on our indebtedness.

Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, may materially adversely affect our business, financial condition, results of operations and cash flows and our ability to satisfy our obligations under our indebtedness or pay dividends on our common stock.

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The price of our common stock may fluctuate substantially, and you could lose all or part of your investment in our common stock as a result.

Our common stock has a limited trading history and there may be wide fluctuations in the market value of our common stock as a result of many factors.

From our IPO through February 13, 2024, the sales price of our common stock as reported by the New York Stock Exchange (the “NYSE”) has ranged from a low sales price of $18.21 on November 1, 2023 to a high sales price of $25.39 on December 15, 2023.

There may be wide fluctuations in the market value of our common stock as a result of many factors.

Factors that may cause the market price of our common stock to fluctuate, some of which may be beyond our control, include:

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Such litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.

We have not yet determined whether or the extent to which we will pay any dividends on our common stock or the timing or amount of such dividends.

We have not yet determined whether or the extent to which we will pay any dividends on our common stock.

The declaration, amount and payment of any future dividends will be at the discretion of our board of directors in accordance with applicable law.

Our board of directors may take into account general economic and business conditions, our financial condition and operating results, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our shareholders or by our subsidiaries to us, and such other factors as our board of directors may deem relevant.

Our stock repurchase program could affect the price of our common stock and may be suspended or terminated at any time, which may result in a decrease in the trading price of our common stock.

Our repurchase program does not have an expiration date and we are not obligated to repurchase a specified number or dollar value of shares.

Further, our stock repurchase program may be suspended, delayed or discontinued at any time, which could cause the market price of our common stock to decline.

Repurchases pursuant to our stock repurchase program could affect our stock price and the existence of our stock repurchase program could also cause our stock price to be higher than it would be in the absence of such a program.

There can be no assurance that any stock repurchases will enhance stockholder value because the market price of our common stock may decline below the levels at which we repurchased shares of common stock.

We cannot guarantee the payment of dividends on our common stock, or the timing, or amount of any such dividends.

We have no obligation to continue paying a quarterly cash dividend to holders of our common stock, and our dividend policy may change at any time without notice to our stockholders.

The payment of any dividends in the future to our stockholders, and the timing and amount thereof, will fall within the discretion of our board of directors.

Our board of directors’ decisions regarding the payment of dividends will depend on many factors, such as our financial condition, earnings, capital requirements, debt service obligations, restrictive covenants in the agreements governing our indebtedness, general economic business conditions, industry practice, legal requirements and other factors that our board of directors may deem relevant.

Our ability to pay dividends will depend on our ongoing ability to generate cash from operations and on our access to the capital markets.

We cannot guarantee that it will pay a dividend in the future or continue to pay any dividends if it commences paying dividends.

We cannot assure you that we will pay our anticipated dividend in the same amount or frequency, or at all, in the future.

Applicable laws and regulations, provisions of our amended and restated certificate of incorporation and bylaws and certain contractual rights granted to Cummins may discourage takeover attempts and business combinations that shareholders might consider in their best interests.

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• a classified board of directors, with our board of directors divided into three classes and with each class serving a staggered three-year term;

• advance notice requirements regarding how our shareholders may present proposals or nominate directors for election at shareholder meetings (except for Cummins’ designation of persons for nomination by the board of directors);

• advance notice requirements regarding how our shareholders may present proposals or nominate directors for election at shareholder meetings;

• the right of our board of directors to issue one or more series of preferred stock with such powers, rights and preferences as the board of directors shall determine;

• after Cummins no longer owns a majority of the outstanding shares of our Common Stock, the inability of shareholders to call special meetings of shareholders and the requirement that all shareholder action be taken at a meeting rather than by written consent;

• after Cummins no longer owns a majority of the outstanding shares of our Common Stock, our directors may be removed only for cause and only by a 75% shareholder vote;

• the inability of shareholders to call special meetings of shareholders and the requirement that all shareholder action be taken at a meeting rather than by written consent;

• our directors may be removed only for cause and only by a 75% shareholder vote;

• a 75% shareholder vote requirement to amend the section of our amended and restated certificate of incorporation and bylaws related to (i) our board of directors, including related to our classified board of directors and the removal of directors only for cause;

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Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, to the extent permitted by law, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware) shall be the sole and exclusive forum for:

(i) any derivative action or proceeding brought on behalf of us, (ii) any action asserting a claim of breach of fiduciary duty owed by any director, officer or other employee of us to us or our shareholders, (iii) any action arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or our bylaws or (iv) any action asserting a claim governed by the internal affairs doctrine.

It further provides that, unless we consent in writing to the selection of an alternative forum, to the extent permitted by law, the federal district courts of the U.S.

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If so, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business, financial condition, results of operations or cash flows.

The price of our common stock may fluctuate substantially.

You should consider an investment in our common stock to be risky and you should invest in our Common Stock only if you can withstand a significant loss and wide fluctuations in the market value of your investment.

Some factors that may cause the market price of our common stock to fluctuate, in addition to the other risks mentioned in this section of the Annual Report on Form 10-K, are:

• Our announcements or our competitors’ announcements regarding new products, enhancements, significant contracts, acquisitions or strategic investments;

• changes in earnings estimates or recommendations by securities analysts, if any, who cover our common stock;

• failure to meet external expectations or management guidance;

• fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;

• changes in our capital structure or dividend policy, including as a result of the Separation, future issuances of securities, sales of large blocks of common stock by our shareholders, including Cummins, or our incurrence of additional debt;

• reputational issues;

• changes in general economic and market conditions in or any of the regions in which we conduct our business;

• changes in industry conditions or perceptions;

• changes in applicable laws, rules or regulations and other dynamics;

• announcements or actions taken by Cummins as our principal shareholder.

In addition, if the market for stocks in our industry or related industries, or the stock market in general, experiences a loss of investor confidence, the trading price of our Common Stock could significantly decline for reasons unrelated to our business, financial condition, results of operations or cash flows.

If any of the foregoing occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management and could also require us to make substantial payments to satisfy judgments or settle litigation.

Our historical consolidated financial statements are not necessarily representative of the results we would have achieved as a standalone company and may not be a reliable indicator of our future results.

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Our historical consolidated financial statements do not reflect our obligations under the various transitional agreements we entered into with Cummins in connection with the Separation.

At the end of the transitional periods specified in these agreements, we will need to perform these functions itself or hire third parties to perform these functions on its behalf, and these costs may exceed the comparable expenses we have incurred in the past;

At the end of the transitional periods specified in these agreements, we will need to perform these functions ourselves or hire third parties to perform these functions on our behalf, and these costs may exceed the comparable expenses we have incurred in the past;

• Our working capital requirements and capital expenditures have historically been satisfied as part of Cummins’ corporate-wide cash management and centralized funding programs, and Atmus’ cost of debt and other capital may differ from the historical amounts reflected in Atmus’ historical consolidated financial statements;

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As a result of the Separation, it may be difficult for investors to compare our future results to historical results or to evaluate our relative performance or trends in our business.

The obligations associated with being an independent, publicly traded company will require significant resources and management attention.

We are subject to reporting and other obligations under the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations of the SEC and the NYSE.

As an independent, publicly traded company, we are required to:

• prepare and distribute periodic reports, proxy statements and other shareholder communications in compliance with the federal securities laws and rules;

• have our own board of directors and committees thereof, which comply with federal securities laws and rules and applicable NYSE requirements;

• maintain an internal audit function;

• institute our own financial reporting and disclosure compliance functions;

• establish an investor relations function;

• establish internal policies, including those relating to trading in our securities and disclosure controls and procedures.

These reporting and other obligations place significant demands on our management, diverting their time and attention from sales-generating activities to compliance activities, and require increased administrative and operational costs and expenses that we did not incur prior to the IPO, which could adversely affect our business, financial condition, results of operations or cash flows.

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