What changed in this filing

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Item 1A. Risk Factors

2026-02-12 compared with 2025-02-13 · 83 added, 68 removed, 227 unchanged (40% of the section changed)

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Accordingly, we believe that our future success will depend on our ability to accelerate time-to-market for new products with improved functionality, ease-of-use, performance, and price.

This includes continuing to introduce products embedded with artificial intelligence ("AI") technology that augments rule-based machine vision with image-based analysis.

This includes continuing to introduce products embedded with AI technology that augments rule-based machine vision with image-based analysis.

There can be no assurance that we will be able to introduce new products in accordance with scheduled release dates or that new products will achieve market acceptance.

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We also compete with internal engineering departments of current or prospective customers, as well as open-source tools available for free from various companies, including tools using AI.

In recent years, advancements in AI, particularly the availability of sophisticated AI algorithms and open-source machine vision platforms, have lowered the barriers to entry in our market.

These tools enable new entrants and low-cost providers, particularly in China, to produce vision systems that may perform comparably to our offerings.

This commoditization trend intensifies pricing pressures and challenges our ability to differentiate our products solely on performance or features.

Additionally, large technology companies and other competitors with substantial financial and technological resources may continue to develop and distribute free or low-cost solutions, further eroding market prices.

If we fail to effectively respond to these trends through innovation, cost management, or other strategies, our competitive position could weaken.

This could result in decreased market share, reduced pricing power, and a material adverse effect on our revenue, gross margins, and operating results.

Further, in recent years, we have seen some examples of industry consolidation in our markets.

This trend may continue as companies attempt to strengthen or hold their market positions in an evolving industry and as

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companies are acquired or are unable to continue operations.

We believe that industry consolidation may result in stronger competition and may be accompanied by pressure from customers for lower prices.

Advancements in the availability of sophisticated AI algorithms and open-source machine vision platforms may lower barriers to enter our market in the future.

A further fragmentation of the market could intensify pricing pressures and challenge our ability to differentiate our products on performance or features.

Additionally, large technology companies and other competitors with substantial financial and technological resources may continue to develop and distribute free or low-cost solutions.

If we fail to effectively respond to these trends through innovation, customer experience improvements, cost management, or other strategies, our competitive position could weaken.

This could result in decreased market share and have a material adverse effect on our revenue, gross margins, and operating results.

Further, companies in our industry could attempt to strengthen their market positions through consolidation.

Such industry consolidation may result in stronger competition and may be accompanied by pressure from customers for lower prices.

This could have a material adverse effect on our revenue, gross margins, and operating results.

If we fail to attract and retain key talent, effectively plan for succession, and maintain our unique corporate culture, our business and operating results could suffer.

If we fail to attract and retain key talent, effectively plan for and execute management succession, and maintain our unique corporate culture, our business and operating results could suffer.

To support our growth and execute our operating plans and strategic initiatives, we must effectively attract, train, develop, motivate, and retain skilled employees, while maintaining our unique corporate culture.

Technical personnel with experience in machine vision, and more recently AI and transformer-based models, are in high demand and competition for their talents is intense.

Technical personnel with experience in machine vision, and AI technology, are in high demand.

We rely on attracting and retaining talent with these skills to execute our product development plans.

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Accordingly, we may find it difficult to attract and retain employees, and any such difficulty could materially adversely affect our business.

Our success significantly depends on the continued contributions of our executive officers and other key management personnel.

The loss of any of these individuals could materially adversely affect our business, operating results, and financial condition.

With the appointment of our new Chief Executive Officer in June 2025, we are transitioning to a different management style and strategic focus.

Navigating this transition is important to the near- and long-term success of the business.

More generally, our success significantly depends on the continued contributions of our executive officers and other key management personnel.

The loss of any of these individuals or the failure to successfully navigate succession could materially adversely affect our business, operating results, and financial condition.

Effective succession planning is crucial to ensure smooth transitions and maintain business continuity.

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Our failure to properly manage the distribution of our products and services could result in the loss of revenues and profits.

We utilize a direct sales force, as well as a network of distribution and integration partners, to sell our products and services.

We utilize a direct sales force, as well as a network of distribution, original equipment manufacturer, and integration partners, to sell our products and services.

We are continually reviewing our go-to-market strategy to help ensure that we are reaching the most customers that we can and with the highest level of service.

At times, this may require strategic changes to our sales organization or enlisting or dropping various partners in certain regions, which could result in additional costs or operational challenges.

In 2023, we began investing more aggressively to expand our direct sales force to include entry-level sales personnel to sell our easier-to-deploy and easier-to-use products.

To support the expansion of our business internationally, we may decide to make changes to our operating structure in other countries when we believe these changes will make us more competitive by reaching additional customers, offering faster delivery, importation services, and/or local currency sales.

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Furthermore, as we assume more responsibility for the importation of our products into other countries, we face higher compliance risk to adhere to local regulatory and trade requirements.

Finally, the local stocking of finished products in countries outside of our primary distribution centers may result in higher costs and increased risk of excess or obsolete inventory associated with maintaining the appropriate level and mix of products in multiple inventory locations, resulting in lower gross margins.

Finally, the local stocking of finished products in countries outside of our

primary distribution centers may result in higher costs and increased risk of excess or obsolete inventory associated with maintaining the appropriate level and mix of products in multiple inventory locations, resulting in lower gross margins.

Our go-to-market strategy has distinct risks and costs, and therefore, our failure to implement the most advantageous balance in the sales and operating model for our products and services could have a material adverse effect on our revenue and profitability.

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As a result, our business is subject to the risks inherent in international sales and operations, including, among other things:

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• various regulatory and statutory requirements,

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Any of these factors could have a material adverse effect on our business, operating results, or financial condition.

We face several risks related to conducting business in China.

In recent years, trade tariffs imposed by the United States on certain components imported from Chinese suppliers resulted in higher costs for our products, which, to date, have not been material to our total cost of revenue.

In addition to the above, we face several risks related to conducting business in China.

An escalation of the China-Taiwan conflict could lead to challenges procuring integrated circuit chips from Taiwan-based vendors that are fundamental to the design of our products.

Furthermore, in recent years, trade tariffs imposed by the United States on certain components imported from Chinese suppliers resulted in higher costs for our products, which, to date, have not been material to our total cost of revenue.

In addition to trade tariffs, U.S.

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The recent expansion of U.S.

sanctions on Chinese companies, including expanded restrictions with respect to Chinese semi-conductor companies, has heightened the risks and complexities for U.S.

sanctions on Chinese companies, including expanded restrictions with respect to Chinese semiconductor companies, has heightened the risks and complexities for U.S.

companies conducting business in China.

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however, if disputes and conflicts continue or further escalate, actions by governments in response could be significantly more severe and restrictive and could materially adversely affect our operating results.

An escalation of the China-Taiwan conflict could lead to challenges procuring integrated circuit chips from Taiwan-based vendors that are fundamental to the design of our products.

Although we are taking steps to mitigate this risk, including purchasing chips in advance of demand, there can be no assurance that these steps will be successful in securing an adequate supply of chips at our current cost structure.

Furthermore, purchasing inventory in advance of demand may expose us to increased risk of excess and obsolete inventory and resulting charges.

Implementation of our acquisition strategy may not be successful, which could affect our ability to increase our revenue or profitability and may otherwise adversely affect our business.

We have acquired, and may continue to acquire, new businesses and technologies.

During the fourth quarter of 2023, we completed our largest acquisition to date by acquiring Moritex Corporation, a global provider of premium optical components based in Japan, for an enterprise value of approximately $270 million.

In 2023, we completed our largest acquisition to date by acquiring Moritex Corporation, a global provider of premium optical components based in Japan, for an enterprise value of approximately $270 million.

The Moritex acquisition, and acquisitions in general, may involve significant risks and uncertainties, which could include, among others:

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• the failure to retain key talent and difficulties integrating corporate cultures,

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• entry into markets in which we may have limited prior experience and where competitors have stronger market positions,

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Challenges in obtaining favorable funding may delay, reduce, or eliminate certain business activities or growth initiatives, which could adversely affect our financial condition and operating results.

If we are unable to effectively scale our operations and salesforce to support a significantly expanded customer base, our growth strategy and customer experience may be adversely affected.

As part of our strategic priorities, we are focused on expanding our customer base and transforming our salesforce to better serve a broader range of customers.

Successfully executing this strategy requires significant investments in sales, support, systems, processes, and personnel, as well as effective organizational change management.

Scaling our operations to support a larger and more diverse customer base presents operational and execution risks.

If we are unable to recruit, train, and retain sufficient sales and support personnel, or if changes to our sales processes, tools, and operating model do not perform as intended, we may experience operational inefficiencies, inconsistent customer engagement, delays in responding to customer needs, or reduced effectiveness of our sales efforts.

In addition, expanding into new customer segments and geographies may increase complexity in managing customer relationships, product requirements, and support expectations.

Failure to maintain a consistently high-quality customer experience during this period of growth could result in customer dissatisfaction, reputational harm, and reduced demand for our products.

Any inability to effectively scale our operations and salesforce, or to manage the associated organizational and operational challenges, could increase costs, limit our ability to achieve anticipated growth, and materially adversely affect our business, financial condition, and results of operations.

The failure to effectively transform our operating model, manage our expenses, and achieve expected cost reductions could adversely affect our business and financial results.

We are implementing initiatives intended to improve our operating model and productivity across key functions, with the goal of enhancing efficiency, strengthening our cost structure, and supporting long‑term growth.

These efforts include changes to processes, systems, and organizational design, and depend on effective execution and sustained discipline in managing our expenses.

Transforming our operating model presents operational and execution risks.

If the changes we implement do not perform as intended, take longer than expected, or create disruptions to ongoing activities, we may not achieve the anticipated cost reductions or productivity benefits.

Expected savings are based on various assumptions, including stable business conditions and successful adoption of new processes and tools.

Unexpected challenges, such as higher‑than‑anticipated operating costs or delays in executing planned changes, could reduce or offset the expected benefits.

If we do not effectively transform our operating model, manage our expenses, or realize the expected cost efficiencies, our cost structure may remain higher than planned, which could materially adversely affect our business, financial condition, and results of operations.

Risks Related to Information Technology and Intellectual Property

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We rely on our information technology systems, including third-party services, to effectively run our business.

We may be subject to information security failures or breaches caused by hacking, malicious software, acts of vandalism or terrorism, or other events.

We may be subject to information security failures or breaches caused by social engineering, hacking, malicious software, acts of vandalism or terrorism, or other events.

The risk of a cyberattack continues to increase given rapid advancements in technologies, as well as the proliferation of diplomatic and armed conflict throughout the world.

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Cybersecurity threats are becoming increasingly sophisticated and frequent, with attackers employing new and varied methods such as ransomware, phishing, and advanced persistent threats.

These threats pose significant risks to our operations, including:

These threats pose significant risks to our operations and potentially to our customer's operations, including:

• disruption of operations, system outages, data corruption, and other disruptions, impacting our ability to deliver products and services to our customers,

• disruption of customer operations, system outages, data corruption, and other disruptions, impacting customer's ability to conduct their business,

• the distraction of management and diversion of information technology resources,

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• litigation, regulatory penalties, and increased compliance costs as a result of data breaches and cybersecurity incidents.

We have experienced cybersecurity incidents in the past, however, to date, these incidents have not had a material impact on our operations or financial results.

We have experienced cybersecurity incidents in the past;

however, to date, these incidents have not had a material impact on our operations or financial results.

Future cybersecurity incidents could have a material adverse effect on our business, reputation, financial condition, or operating results.

We continuously invest in and enhance our

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cybersecurity measures, including employee training, incident response planning, and collaboration with third-party experts, to mitigate these risks.

Changes in laws or regulations relating to data privacy or data protection, or any actual or perceived failure by us to comply with such laws and regulations, could harm our business.

We continuously invest in and enhance our cybersecurity measures, including employee training, incident response planning, and collaboration with third-party experts, to attempt to mitigate these risks.

Changes in laws or regulations relating to data privacy, data protection, or product security, or any actual or perceived failure by us to comply with such laws and regulations, could harm our business.

We are subject to a variety of United States and international laws, rules, policies, and other obligations regarding data protection and security breaches.

Privacy and data security have become significant issues in the United States, Europe, and in many other jurisdictions where we conduct or may in the future conduct our operations.

The regulatory framework for the collection, use, safeguarding, sharing, and transfer of information worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future.

regulatory framework for the collection, use, safeguarding, sharing, and transfer of information worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future.

New regulations may require us to further modify certain of our information practices and could subject us to additional compliance costs.

These laws continue to develop and may be inconsistent from jurisdiction to jurisdiction.

The adoption of AI technologies is subject to increasing regulatory scrutiny, with emerging laws such as the European Union's AI Act and U.S.

initiatives potentially imposing requirements for transparency, bias mitigation, and ethical deployment.

Compliance with these evolving standards may increase costs, delay product launches, or require significant changes to our technologies.

AI-related concerns, including data privacy, intellectual property, and cybersecurity, add further complexity, while inconsistent global regulations heighten operational challenges.

Regions and countries are introducing new laws and regulations regarding the cybersecurity of the products being sold in their markets, such as the European Union's Cyber Resilience Act and Network and Information Systems Directive 2, a European Union regulation aimed at strengthening cybersecurity across member states.

Both of these regulations establish cybersecurity requirements for products, including secure software development practices, vulnerability management and reporting, incident response and lifecycle support obligations.

These new laws introduce new requirements in product security and software development and our ability to comply with these requirements to prescribed timescales could result in additional cost, inhibit market access and sales, and adversely affect our business, financial condition, and operating results.

Complying with emerging and changing requirements may be costly and require us to change certain business practices.

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Any inability to adequately address privacy and data security concerns or comply with applicable privacy or data security laws, regulations, and policies could result in additional cost, damage our reputation, inhibit sales, and adversely affect our business, financial condition, and operating results.

Changes in laws or regulations relating to artificial intelligence, data usage, or automated technologies, or any actual or perceived failure to develop, deploy, or govern such technologies responsibly, could harm our business.

Our development and use of AI, machine learning, and related technologies may subject us to evolving legal, regulatory, operational, and cybersecurity risks.

AI technologies are increasingly subject to regulatory scrutiny in the United States and internationally, including under emerging frameworks such as the European Union’s AI Act, which may impose requirements related to transparency, bias mitigation, data governance, and ethical deployment.

Compliance with these requirements, by us or our customers, may increase costs, delay product development or commercialization, or require significant changes to our technologies or business practices.

The use of data to train, validate, and improve AI models presents additional risks related to data privacy, security, intellectual property rights, and contractual limitations on data usage.

In addition, the integration of AI into our products and systems may increase exposure to cybersecurity threats, system vulnerabilities, and reputational harm if our technologies fail to perform as intended or are perceived to be used inappropriately.

Because AI regulations and standards are rapidly evolving and may be inconsistent across jurisdictions, we may face challenges in anticipating and complying with future requirements, which could materially adversely affect our business, financial condition, results of operations, or reputation.

If we fail to successfully protect our intellectual property, our competitive position and operating results could suffer.

We rely on our proprietary software technology and hardware designs, as well as the technical expertise, creativity, and knowledge of our personnel, to maintain our position as a leading provider of machine vision products.

We rely on our proprietary software technology and hardware designs, as well as the technical expertise, creativity, and knowledge of our personnel and third parties, to maintain our position as a leading provider of machine vision products.

Software piracy and reverse engineering may result in counterfeit products that are misrepresented in the market as Cognex products or pirated products that contain stolen technology, such as software.

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Moreover, changes in patent laws or their interpretation in the United States and other countries could also diminish the value of our intellectual property or narrow the scope of our patent protection.

In addition, the legal systems of certain countries do not favor the aggressive enforcement of patents and the laws of foreign countries may not protect our rights to the same extent as the laws of the United States.

In addition, the legal systems of certain countries do not favor the aggressive enforcement of patents and the laws of foreign countries

may not protect our rights to the same extent as the laws of the United States.

As a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar to ours.

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A significant portion of our products is manufactured by a third-party contractor located in Indonesia.

Since 2022, we have been scaling up an additional contract manufacturer located in Malaysia, which has further mitigated risk, diversified our supply chain, and expanded our production capacity.

With the acquisition of Moritex Corporation in the fourth quarter of 2023, we began in-house manufacturing of optical components, such as lenses and lighting, in production plants located in China and Vietnam.

In-house manufacturing exposes us to various risks that could

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adversely impact our business operations and financial condition, including, but not limited to, (i) the health and safety of our employees engaged in manufacturing;

In recent years we have taken steps to broaden our manufacturing base to attempt to further mitigate risk, diversify our supply chain, and expand our production capacity.

With the acquisition of Moritex, we began in-house manufacturing of optical components, such as lenses and lighting, in production plants located in China and Vietnam.

In-house manufacturing exposes us to various risks that could adversely impact our business operations and financial condition, including, but not limited to, (i) the health and safety of our employees engaged in manufacturing;

(ii) the storage, use, and transportation of hazardous materials utilized in the manufacturing process;

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We have experienced, and may continue to experience, delays in the delivery of our products from our suppliers due to the impact of global supply chain challenges or other factors.

For example, on June 7, 2022, our primary contract manufacturer experienced a fire at its plant in Indonesia which destroyed a significant amount of Cognex inventories.

For example, in 2022, our primary contract manufacturer experienced a fire at its plant in Indonesia which destroyed a significant amount of Cognex inventories.

The fire resulted in delayed shipments, loss of sales, and higher-than-normal purchase costs to replenish component inventories, which adversely impacted our business, financial condition, and results of operations through the first half of 2023.

Challenges in obtaining components and maintaining production have resulted in delays, and may continue to result in delays, in meeting our delivery schedules that, as a result, delay deliveries to our customers past their requested delivery date.

Challenges in obtaining components and maintaining production resulted in delays in meeting our delivery schedules that, as a result, delayed deliveries to our customers past their requested delivery date.

Delays in customer orders also can result in delayed revenue recognition or loss of business which can impact our operating results in a particular reporting period.

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Due to the impact of global supply chain challenges and other factors, we have experienced, and may continue to experience, disruptions to the supply of components for our products that have resulted, and may continue to result, in higher purchase costs, higher delivery costs, and manufacturing delays.

An escalation of the China-Taiwan conflict could also lead to challenges procuring integrated circuit chips from Taiwan-based vendors that are fundamental to the design of our products.

If components purchased by our contract manufacturers have not been consumed in our production of finished goods within a certain period of time, we have been required, and may continue to be required, to purchase these components from our contract manufacturers and later sell them back when they are needed to meet our demand.

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Although we are taking certain actions to mitigate supply risk and have entered into agreements for the supply of many components, there can be no assurance that Cognex will be able to extend or renew these agreements on similar terms, such as purchase prices, or at all.

Component suppliers may suffer from poor financial conditions, which can lead to business failure for the supplier, further limiting our ability to obtain sufficient quantities of components on reasonable terms, or at all.

Component suppliers may suffer from poor financial conditions, which can lead to business failure for the supplier, further limiting our ability to obtain sufficient quantities of

components on reasonable terms, or at all.

Therefore, Cognex remains subject to risks of supply shortages and price increases that can adversely affect our business, gross margins, and operating results.

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• significant repair or replacement costs,

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• product liability claims or lawsuits, particularly in connection with life sciences customers, electric vehicle battery manufacturers, or other high-risk end-user industries,

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The loss of, or significant curtailment of purchases by, large customers could have an adverse effect on our business.

Over the past few years, we had two customers that represented 10% or more of our total revenue.

At different times over the past few years, we have had one customer that represented a material portion of our total revenue.

Large customers may divert management’s attention from other operational matters and pull resources from other areas of the business, resulting in potential loss of sales from other customers.

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These debt securities are reported at fair value, with unrealized gains and losses, net of tax, included in shareholders’ equity as other comprehensive income (loss).

As of December 31, 2024, our portfolio of debt securities had a net unrealized loss of $4,904,000.

Included in this net loss, were gross unrealized losses totaling $5,317,000, of which $2,118,000 related to debt securities in a loss position for greater than twelve months.

As of December 31, 2025, our portfolio of debt securities had a net unrealized gain of $2,787,000.

Included in this net gain, were gross unrealized losses totaling $ 529,000 , of which $ 456,000 related to debt securities in a loss position for greater than twelve months.

Management monitors its debt securities that are in an unrealized loss position to determine whether a loss exists related to the credit quality of the issuer that would be reported in current operations.

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As of December 31, 2025, we had approximately $81 million in acquired intangible assets, consisting primarily of customer relationships and completed technologies.

The majority of these intangible assets were recorded in the fourth quarter of 2023 when Cognex acquired Moritex Corporation.

The majority of these intangible assets were recorded in 2023 when Cognex acquired Moritex.

These assets are susceptible to changes in fair value due to a decrease in the historical or projected cash flows from the use of these assets, which may be negatively impacted by economic trends.

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Significant judgment is required in determining our worldwide provision for income and other taxes.

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application of tax laws and regulations is subject to legal and factual interpretation, judgment, and uncertainty, and tax laws themselves are subject to change.

The application of tax laws and regulations is subject to legal and factual interpretation, judgment, and uncertainty, and tax laws themselves are subject to change.

For example, many countries have adopted, or are considering the adoption of, revisions to their respective tax laws based on the Organization for Economic Co-operation and Development’s (“OECD”) Inclusive Framework, which could impact our tax liability due to our organizational structure and significant operations outside of the United States.

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Unfavorable economic conditions, such as inflation, slower growth or recession, higher interest rates, tighter credit, and labor shortages, may cause companies to delay or reduce spending for automation projects, including those with machine vision, amid weaker general manufacturing confidence and heightened uncertainty around global trade.

Furthermore, customer confidence and capital investment can be materially adversely impacted as a result of financial market volatility, negative financial news, declines in income or asset values, energy shortages and cost increases, labor and healthcare costs, and other global economic conditions.

Furthermore, customer confidence and capital investment can be materially adversely impacted as a result of financial market volatility, negative financial news, declines in income or asset values, tariffs and trade wars, energy shortages and cost increases, labor and healthcare costs, and other global economic conditions.

When global economic conditions are unfavorable, our revenue and our ability to generate operating profits could be materially adversely affected.

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In addition, we have no long-term debt.

We believe that our strong cash position puts us in a relatively good position to weather economic downturns.

We believe that our strong cash position enhances our ability to weather any future economic downturns.

Nevertheless, our operating results have been materially adversely affected in the past, and could be materially adversely affected in the future, as a result of unfavorable economic conditions and reduced capital spending by manufacturers and logistics companies worldwide.

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Natural disasters, widespread public health crises, and man-made disasters could result in business disruptions that may adversely affect our business and operating results.

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Expectations relating to environmental, social, and governance considerations expose the Company to potential liabilities, increased costs, reputational harm, and other adverse effects on our business.

Governments, regulators, investors, employees, customers, suppliers, and other stakeholders are increasingly focused on environmental, social, and governance disclosures relating to businesses activities.

Regulators, investors, customers, and other stakeholders may focus on environmental, social, and governance disclosures relating to business activities.

Performance in this area is driven by transparency, goal setting, and third-party opinion.

Any failure, or perceived failure, to further our initiatives, adhere to our public statements, comply with federal, state, or international environmental, social, and governance laws and regulations, or meet evolving and varied stakeholder expectations and standards could result in legal and regulatory proceedings against the Company and adversely affect our business, reputation, financial condition, operating results, stock price, and ability to operate in certain geographic regions.

Responding to environmental, social, and governance disclosure requests and the implementation of associated initiatives involves risks and uncertainties, requires investments, and depends in part on third-party performance or data that is outside of our control.

Initiatives related to climate performance may be dependent upon the availability of alternative energy sources and evolving procurement practices.

Stakeholder expectations and priorities continue to change.

We cannot guarantee that we will achieve our environmental, social, and governance goals or commitments.

Any failure, or perceived failure, to further our initiatives, adhere to our public statements, comply with federal, state, or international environmental, social, and governance laws and regulations, or meet evolving and varied stakeholder expectations and standards could adversely affect our business, reputation, financial condition, operating results, stock price, and ability to operate in certain geographic regions.

Responding to changing environmental, social, and governance expectations and the implementation or modification of associated initiatives involves risks and uncertainties, may require investments, and may depend in part on third-party performance or data that is outside of our control.

As stakeholder expectations and priorities continue to change, we cannot guarantee that we will achieve our environmental, social, and governance goals or commitments.

The price of the Company’s stock is subject to volatility.

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Our Company may be subject to time-consuming and costly litigation or activist shareholder activities.

From time to time, we may be subject to various claims, demands, and lawsuits by competitors, shareholders, customers, distributors, patent trolls, former employees, or other parties arising in the ordinary course of business, including lawsuits charging patent infringement, or claims and lawsuits instituted by us to protect our intellectual property and confidential information, or for other reasons.

including lawsuits charging patent infringement, or claims and lawsuits instituted by us to protect our intellectual property and confidential information, or for other reasons.

These matters can be time-consuming, divert management’s attention and resources, and cause us to incur significant expenses.

Furthermore, the results of any of these actions may have a material adverse effect on our operating results.

In addition, activist investors may seek to influence our business strategy, capital allocation, governance, or leadership.

While we evaluate all shareholder input, such activities can create increased costs, disruption, or uncertainty, including potential public campaigns, proxy contests, or proposals that may not align with our long-term objectives.

These situations could divert management’s focus, lead to volatility in our stock price, and have a material adverse effect on our operating results and ability to execute our strategic plan.

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