Corsair Gaming, Inc.
−Removed: (also referred to in this document as “Corsair,” “we,” the “company,” or the “registrant”) is a leading global provider and innovator of high-performance gear for gamers and content creators.
−Removed: Our industry-leading gaming gear helps digital athletes, from casual gamers to committed professionals, perform at their peak across PC or console platforms, and our streaming gear enables creators to produce studio-quality content to share with friends or to broadcast to millions of fans.
+Added: (also referred to in this document as “Corsair,” “we,” the “company,” or the “registrant”) is a leading global provider and innovator of high-performance gear for gamers, streamers and content creators, many of which build their own PCs using our components.
+Added: Our industry-leading gaming gear helps digital athletes, from casual gamers to committed professionals, perform at their peak across PC or console platforms, and our streaming gear enables streamers and content creators to produce studio-quality content to share with friends or to broadcast to millions of fans.
+Added: Our PC components products offer our customers multiple options to build their customized gaming and workstation desktop PCs.
We design and sell high-performance gaming and streaming peripherals, components and systems to enthusiasts globally.
−Removed: We have served the market for over two decades and many of our products maintain a number one U.S.
−Removed: market share position, according to data from NPD Group and internal estimates.
−Removed: We have built a passionate base of loyal customers due to our brand authenticity and reputation as a provider of innovative and finely engineered products that deliver an uncompromising level of performance.
+Added: We have served the market for over two decades and many of our products maintain leading market share positions, according to external market data and internal estimates.
+Added: We have built a passionate base of loyal customers due to our brand authenticity and reputation as a provider of innovative and finely engineered products that deliver a high level of performance.
Our solution is the most complete suite of gear among our major competitors and addresses the most critical components for both game performance and streaming.
Our product offering is enhanced by our two proprietary software platforms:
−Removed: iCUE for gamers and Elgato’s streaming suite for content creators.
+Added: iCUE for gamers and Elgato’s streaming suite for streamers and content creators, including our Stream Deck control software.
These software platforms provide unified, intuitive performance, and aesthetic control and customization across their respective product families.
1 unchanged sentence
Gamer and creator peripherals.
−Removed: Includes our high-performance gaming keyboards, mice, headsets, controllers, and our streaming gear including capture cards, Stream Decks, USB microphones, studio accessories and EpocCam software, as well as coaching and training services, among others.
+Added: Includes our high-performance gaming keyboards, mice, headsets, controllers, and our streaming gear including capture cards, Stream Decks, USB microphones, our Facecam streaming camera, studio accessories and EpocCam software, as well as coaching and training services, among others.
Gaming components and systems.
Includes our high-performance power supply units, or PSUs, cooling solutions, computer cases, DRAM modules, as well as high-end prebuilt and custom-built gaming PCs, among others.
−Removed: We believe our brand, scale and global reach provide significant competitive advantages and will allow us to continue to capture a growing share of the rapidly expanding gaming and streaming market, estimated at over $36 billion in 2019 by Jon Peddie Research.
−Removed: We intend to continue to grow by offering market-leading gear to gamers and content creators, expanding the breadth of our product suite to meet the needs of our customers, growing our worldwide market share, continuing to invest in marketing, product innovation and sales, and selectively pursuing accretive acquisitions.
−Removed: We leverage our scale and operational expertise to acquire and integrate complementary brands and businesses into our portfolio, completing six acquisitions since 2018.
−Removed: The 2018 acquisition of Elgato allowed us to enter the streaming gear market, the 2019 acquisition of Origin PC allowed us to offer custom-built gaming PCs, and the 2019 acquisition of SCUF Gaming allowed us to enter the console gear market with a leading brand of controllers.
−Removed: In 2020, we acquired EpocCam to enhance the Elgato streaming camera software offering, and Gamer Sensei to offer gaming coaching services to the wide audience of gamers looking to improve their skills.
−Removed: In February 2021, we acquired Visuals by Impulse to provide creative services to streamers looking to professionalize the look of their broadcast.
+Added: Our gear is sold to end users worldwide through our retail channel or our direct-to-consumer channel.
+Added: In our retail channel, we distribute our gear either directly to the retailer, such as Amazon and Best Buy, or through distributors.
+Added: We believe our brand, scale and global reach provide significant competitive advantages and will allow us to continue to capture a growing share of the expanding gaming and streaming market.
+Added: We believe we can continue to grow by offering market-leading gear
+Added: to gamers , streamers and content creators, expanding the breadth of our product suite to meet the needs of our customers, growing our worldwide market share, continuing to invest in marketing, product innovation and sales, and selectively pursuing accretive acquisitions , such as the eight acquisitions we have completed since 2018 .
Since traditional arcade games of the 1970s, gaming has evolved into the mainstream and taken a central place in the global entertainment landscape.
−Removed: There were an estimated 2.8 billion gamers worldwide across all devices spending more than $174 billion on games in 2020, an amount which has grown at a 12.2% compound annual growth rate over the last two years, according to Newzoo.
According to Activate Research, gaming today represents approximately 11% of all American consumer internet and media activity, surpassing activities such as social media and messaging.
+Added: Further, based on external market data, in the fourth quarter of 2021, it was estimated that the worldwide gaming community consisted of approximately 1.4 billion casual PC gamers, 125 million regular PC gamers and 24 million PC gaming enthusiasts.
+Added: We believe this indicates that the majority of the gaming hardware total addressable market is still consumed by a small percentage of gamers, and as a result, there is significant potential opportunity for gaming hardware sales.
There are a number of drivers we believe will continue to fuel the gaming market’s expansion.
1 unchanged sentence
There is increasing availability and variety of high quality, interactive game content as game publishers use cutting-edge game development engines to rapidly create graphically sophisticated and engaging virtual worlds, many of which can support massive multiplayer experiences.
−Removed: Audiences are progressively engaging more with gaming content across platforms, with 71% of millennial gamers in the United States watching gaming video content on platforms like YouTube and Twitch for an average of almost six hours per week, according to a 2019 survey by Nielsen.
−Removed: Finally, there are decreasing barriers to gaming, where according to Newzoo, in 2020, there were 2.6 billion gamers using mobile devices, and the console and PC platforms represent a natural upgrade path for those seeking a more immersive or competitive gaming environment.
+Added: Audiences are progressively engaging more with gaming content across platforms and finally, there are decreasing barriers to gaming, where more gamers using mobile devices, and the console and PC platforms represent a natural upgrade path for those seeking a more immersive or competitive gaming environment.
In parallel, digital content creation today has democratized, with content sharing, video-first communication and voice-chat being the norm among creators, viewers and gamers.
−Removed: Gaming content creation and streaming is now ubiquitous, with over 40 million active gaming channels on YouTube in 2020 and over 27 billion live streaming hours watched across Twitch, Mixer, YouTube Gaming and Facebook Gaming in 2020.
+Added: Gaming content creation and streaming is now ubiquitous, with many active gaming channels on YouTube and live streaming hours watched across Twitch, Mixer, YouTube Gaming and Facebook Gaming is growing.
The proliferation of gaming content is attracting new gamers and increasing the performance focus of existing gamers.
8 unchanged sentences
Similarly, the broadcast quality expected of streamers has increased significantly and a traditional webcam does not produce the professional quality audiences expect of content.
−Removed: Dedicated capture cards are required to record and broadcast video at high resolution, high fidelity microphones are required to ensure clear sound quality, studio lighting and green screens improve production quality, and dedicated software is required to integrate gear and optimize the streaming experience, preventing lag and fidelity loss.
+Added: Dedicated capture cards are required to record and broadcast video at high resolution, high fidelity microphones are required to ensure clear sound quality, studio lighting and green screens improve production quality, high resolution USB cameras are required to capture smooth and clear images, and dedicated software is required to allow a single-person operation to optimize the streaming experience, preventing lag and fidelity loss.
Further, gamers striving for peak performance have heightened requirements for ergonomics and durability, and gamers and streamers often wish to express their personal style or brand with their choice of gear, including a range of appealing design options and opportunities for customization.
−Removed: Finally, gear integration has become an important feature, where gamers and streamers need all of their gear to
−Removed: integrate harmoniously and need the ability to fine-tune that gear, which we believe is an experience best delivered with a software platform that seamlessly integrates and unifies control across devices.
−Removed: Our two proprietary software ecosystems cover the broadest range of gaming peripherals, components and streaming gear and are unmatched by anything else in the market.
−Removed: Our Market Opportunity
−Removed: The global gaming PC and streaming gear markets, including peripherals, components and prebuilt PCs and laptops specifically designed for PC gaming, totaled approximately $36 billion in 2019, according to Jon Peddie Research.
−Removed: In 2019, there were an estimated 524 million PC gamers worldwide, comprising committed, competitive and casual PC gamers.
−Removed: Approximately 94 million of these gamers spent over $1,000 on their gaming PC systems.
−Removed: These gamers, comprising committed and competitive PC gamers, represented approximately $30 billion of the global gaming PC gear market.
−Removed: Further, approximately 27 million of these gamers, comprising committed PC gamers, spent over $1,800 on their gaming PC systems, representing $18 billion of the global gaming PC gear market.
−Removed: Globally, committed, competitive and casual gamers are estimated to have each spent on average $651, $179 and $14, respectively, on gaming PC gear in 2019.
−Removed: 51% of the PC gaming market comprises of machines in the $1,800+ category.
−Removed: The United States is a major market for PC Gaming, with an estimated 145 million PC gamers in 2020, according to Newzoo.
−Removed: Our gaming components products are targeted at consumers who build their own PCs.
−Removed: According to DFC Intelligence, these “DIY” PC gamers spent $953 on average in 2019, representing 46% of global spending on gaming PCs, and this market has grown at a 14% compounded annual growth rate from 2012 to 2019.
−Removed: There were an estimated 825 million console gamers globally in 2020, according to Newzoo, driving demand for gaming console gear including controllers and console headsets.
−Removed: In addition, there were over 40 million active gaming channels on YouTube alone in 2020 and millions more active streamers across Twitch, Facebook Gaming, Huya and DouYu, driving purchases of dedicated content creation and streaming gear.
−Removed: As gaming and streaming continue to expand in the mainstream, casual gamers increasingly aspire to emulate committed gamers and amateur streamers increasingly seek to improve their production quality.
−Removed: We expect this will bring new customers into the gaming and streaming gear market and push existing customers to improve their performance and content quality, in part through related gear spending.
−Removed: Our Market Leadership
−Removed: Our focus on gamers and content creators, and our dedication to providing them with integrated high-performance gear have earned us a number one U.S.
−Removed: market share position in many of our key product lines according to internal estimates and data from the NPD Group representing market share based on the trailing twelve months ending December 2020.
−Removed: We maintain our market leadership by staying true to the following principles:
−Removed: We practice a gamer- and creator-centric design philosophy.
−Removed: Gamers look for gaming gear to play the most sophisticated games at the highest performance levels, while being able to customize such gear for differentiated control and style.
−Removed: Similarly, content creators seek gear that delivers exceptional production quality while remaining low in complexity, so they can focus on maximizing creativity.
−Removed: We continue to update and improve our gear on a regular basis to address the changing needs of gamers and content creators.
−Removed: We prioritize high performance and professional quality.
−Removed: Our gaming and streaming gear meets our customers’ demanding requirements and features highly differentiated characteristics, including gaming precision and speed, live streaming quality and user experience, gaming PC performance, durability and ergonomics.
+Added: Finally, gear integration has become an important feature, where gamers and streamers need all of their gear to integrate harmoniously and need the ability to fine-tune that gear, which we believe is an experience best delivered with a software platform that seamlessly integrates and unifies control across devices.
+Added: Our two proprietary software ecosystems cover the broadest range of gaming peripherals, components and streaming gear, which we believe are unmatched by anything else in the market.
Our Competitive Strengths
We are a leading global provider and innovator of high-performance gaming gear.
−Removed: We believe that we have a strong position in our target market, which consists of gamer and creator peripherals, and gaming components and systems markets, as a result of the following competitive strengths:
+Added: We believe that we have a strong position in our target markets, which consist of gamer and creator peripherals, and gaming components and systems markets, as a result of the following competitive strengths:
Leading brand recognition for performance drives strong customer loyalty.
1 unchanged sentence
As a result, we believe we have established ourselves as a leading brand among gaming enthusiasts and streamers, many of whom are active and prominent in esports and act as ambassadors for our branded gear.
−Removed: Differentiated, gamer and streamer-centric R&D engine focused on delivering a broad portfolio of high-performing gear.
+Added: Differentiated, gamer and streamer-centric R&D engine focused on delivering a broad portfolio of high-performing gear, including components for self-built gaming PCs.
We are an innovation-driven company with a rigorous development process designed to consistently deliver high-performance and quality gaming and streaming gear to the market.
2 unchanged sentences
Since our inception, we have concentrated our efforts on helping gamers succeed, which has led us to develop what we believe to be the most complete ecosystem of high-performance gaming gear in the market, which is connected through our iCUE software.
−Removed: We have applied the same ethos to our product development for streaming gear, developing a suite of streaming software under our Elgato brand that help streamers optimize their gear and maximize content quality.
+Added: We have applied the same ethos to our product development for streaming gear, including the development of streaming software, which helps streamers to optimize their products and maximize their content quality.
+Added: This includes our Stream Deck software that allows fingertip control of hardware and software.
Global sales and distribution network.
−Removed: As a global company, we have developed a comprehensive worldwide marketing and distribution network.
−Removed: In this network, we have established a multichannel sales model and have long-standing relationships with key distributors and retailers globally, as well as direct-to-consumer sales channels.
+Added: We have developed a comprehensive worldwide marketing and distribution network.
+Added: In this global network, we have established a multichannel sales model and have long-standing relationships with distributors and retailers globally, as well as direct-to-consumer sales channels.
We currently ship to more than 85 countries across six continents, with our gear being sold at leading retailers including Amazon, Best Buy, JD.com, MediaMarkt and Walmart.
19 unchanged sentences
Through our acquisitions of Origin and SCUF in 2019, we acquired two companies whose sales are primarily generated through direct-to-consumer channels.
−Removed: Our acquisitions of Gamer Sensei in 2020 and Visuals by Impulse in January 2021, both of which have recurring service revenue streams, engage directly with our customer base across our brands.
+Added: Our acquisitions of Gamer Sensei in 2020 and Visuals by Impulse in 2021, both of which have recurring service revenue streams, engage directly with our customer base across our brands.
While sales from this channel are a relatively small contributor to our revenue today, we believe direct-to-consumer sales represent a significant avenue to drive growth by facilitating increased market penetration across our product categories.
+Added: The mix of direct-to-consumer sales represented 10.7%, 8.6% and 2.7% of our total revenue for the years ended December 31, 2021, 2020 and 2019.
Continue to grow market share globally.
1 unchanged sentence
We will continue to invest in enhancing our sales and distribution infrastructure to expand our leadership position in the Americas and Europe.
−Removed: In the gaming peripherals market, we have increased our U.S.
−Removed: market share from 5.0% in December 2013 to 15.5% in December 2020 on a trailing twelve month basis, according to NPD Group.
−Removed: We are a clear market leader in the gaming PC components market.
−Removed: According to NPD Group, we have increased our U.S.
−Removed: market share from 26.2% in December 2015 to 40.7% in December 2020 on a trailing twelve month basis.
−Removed: Additionally, for the twelve months ended December 2020, we had number two U.S.
−Removed: market share in gaming computer cases with an 18% market share, and number one U.S.
−Removed: market share in cooling solutions with a 48% market share, PSUs with a 37% market share and high-performance memory with a 55% market share.
We view the Asia Pacific region as a long-term growth opportunity and recently invested in our local sales force and regional management to build out distributor networks and retail partnerships.
1 unchanged sentence
In the gaming PC components category, our revenue and margins have benefited from higher pricing versus the rest of the market, which we expect to continue as we invest in our brand and product portfolio.
−Removed: Compared to the average non-Corsair product, our computer cases, cooling solutions, PSUs and high-performance memory commanded price premiums of 29%, 54%, 31% and 4%, respectively, in the United States for the twelve months ended December 31, 2020, according to NPD data.
+Added: Compared to the average non-Corsair product, our computer cases, cooling solutions, PSUs and high-performance memory commanded price premiums of 24.7%, 20.7%, 29.2% and 43.7%, respectively, in the United States for the twelve months ended December 31, 2021, according to recent NPD data.
Selectively pursue complementary acquisitions .
−Removed: We plan to evaluate, and may pursue acquisitions, such as our acquisitions of Elgato, Origin, SCUF, EpocCam, Gamer Sensei and Visuals by Impulse, which we believe strengthen our capabilities in existing segments as well as diversify our product offerings, broaden our end-user base or expand our geographic presence.
+Added: We plan to evaluate, and may pursue acquisitions, such as our acquisitions of Elgato, Origin and SCUF, which we believe strengthen our capabilities in existing segments as well as diversify our product offerings, broaden our end-user base or expand our geographic presence.
Our Solutions
−Removed: We design our high-performance gear to address the needs of gamers and content creators.
+Added: We design our high-performance gear to address the needs of gamers, streamers and content creators.
To help our customers perform at their peak, whether in game or on camera, we have developed the industry’s most complete integrated ecosystem of gamer and creator peripherals and gaming components and systems.
2 unchanged sentences
Our gamer and creator peripherals seek to provide the fastest, highest fidelity, and most seamless interface between digital athletes and their game, and content creators and their viewers.
−Removed: Our solutions include our high-performance gaming keyboards, mice, headsets, controllers, and our streaming gear including capture cards, Stream Decks, USB microphones, studio accessories, and EpocCam software, as well as coaching and training services, among others.
+Added: Our solutions include our high-performance gaming keyboards, mice, headsets, controllers, and streaming gear, which includes capture cards, Stream Decks, USB microphones, our Facecam streaming camera, studio accessories, and EpocCam software, as well as coaching and training services and content design services, among others.
Gaming components and systems .
−Removed: We develop and sell high-performance gaming components to help gamers build their own custom gaming PCs.
+Added: We develop and sell high-performance gaming components to help gamers, streamers and content creators build their own custom gaming PCs.
We also develop and sell complete high-performance gaming systems using our gaming components.
3 unchanged sentences
Our product offering is enhanced by our two proprietary software platforms:
−Removed: iCUE for gamers and Elgato’s streaming suite for content creators.
+Added: iCUE for gamers and Elgato’s streaming suite for streamers and content creators.
These software platforms provide unified, intuitive performance, and aesthetic control and customization across their respective product families.
2 unchanged sentences
Product Development
+Added: Innovation is a key element of our culture and critical to our success.
Our product development efforts focus on broadening our portfolio with innovative, value-added products that provide gamers with more immersive experiences.
4 unchanged sentences
Our rigorous product development and testing is designed to give us the ability to meet the needs of our end-users consistently with well-designed, high-performance and reliable products.
+Added: We intend to continue to significantly invest in product development to support the design and development of innovative, high-quality products and solutions to maintain and enhance our competitive position.
Our marketing efforts are designed to enhance the Corsair, Elgato, Origin and SCUF brand names, to help us acquire new customers and to increase sales from our existing customers.
13 unchanged sentences
We believe direct-to-consumer sales represent a significant avenue to drive growth by facilitating increased market penetration across our product categories.
−Removed: We have divided our sales organization into four major regions—Europe (including the Middle East and North Africa), North America, Latin America and Asia Pacific (including South Africa)—and we have local language-speaking sales representatives in the countries that, in the aggregate, generate the majority of our net revenue.
−Removed: We ship our products directly to approximately 50 retailers and over 160 distributors and, through distributors, supply our products to thousands of smaller online and brick-and-mortar retailers.
−Removed: Our direct sales force supports leading online retailers, including Amazon and Newegg in North America;
−Removed: Amazon, Komplett, Mindfactory, LDLC and Scan in Europe;
−Removed: and JD, Tmall, Amazon and PC Case Gear in the Asia Pacific region.
−Removed: We also have sales relationships with leading brick-and-mortar retailers, including Best Buy and Micro Center in North America and Mediamarkt, Boulanger, Elkjop, Fnac and Dixons in Europe.
+Added: We have organized our sales organization into four major geographic regions—Europe (including the Middle East and North Africa), North America, Latin America and Asia Pacific (including South Africa)—and we have local language-speaking sales representatives in the countries that, in the aggregate, generate the majority of our net revenue.
+Added: We ship our products directly to retailers and distributors and, through distributors, supply our products to thousands of smaller online and brick-and-mortar retailers and to specialist and gaming system integrators and value-added resellers.
A small portion of our net revenue is from sales directly to original equipment manufacturers that manufacture gaming PCs.
−Removed: Our distributors sell our products primarily to online and brick-and-mortar retailers and to specialist and gaming system integrators and value-added resellers.
−Removed: Our major distributors are Ingram Micro and D&H in North America;
−Removed: S&K, Exertis and Littlebit in Europe;
−Removed: and Synnex Australia, Leader, ASK and Links in the Asia Pacific region.
In 2021, 2020 and 2019, Amazon accounted for more than 10% of our net revenue, at 26.7%, 24.6% and 25.1%, respectively.
1 unchanged sentence
We believe we have developed a global, scalable production and operations infrastructure that allows us to deliver our products cost-effectively and in a timely manner.
−Removed: We operate a facility in Taiwan where we assemble, test, package and ultimately supply nearly all of our DRAM modules and a significant portion of our liquid cooling products and prebuilt gaming systems.
+Added: We operate a facility in Taiwan where we assemble, test, package and ultimately supply nearly all of our DRAM modules and a significant portion of our customized gaming controllers, liquid cooling products and prebuilt gaming systems.
We also assemble, test, package and ultimately supply our custom-built PCs in our U.S.
facility, and our customized gaming controllers in our U.S.
−Removed: All of the other gear we sell is produced at factories operated by third parties located in China, Taiwan and
−Removed: countries in Southeast Asia.
−Removed: In some regions, we also outsource storage and shipping to third-party logistics providers around the world.
+Added: All of the other gear we sell is produced at factories operated by third parties
+Added: located in Asia.
+Added: In addition, we outsource storage and shipping to several third-party logistics providers around the world which allows us to reduce order fulfillment time, reduce shipping costs and improve inventory flexibility.
Production of most of our high-speed DRAM modules involves testing and speed sorting of both DRAM ICs and modules and retail packing in our facility in Taoyuan, Taiwan.
2 unchanged sentences
In addition to our production capabilities, our corporate planning process places particular emphasis on driving efficiencies in demand forecasting, supply chain planning, procurement cycle time, freight costs and inventory management.
−Removed: Our goal of limiting the time DRAM modules are held in our inventory to a few weeks helps mitigate any impact that this volatility may have on our gross margins.
−Removed: Furthermore, given the products we sell and the global nature of our business, freight costs can have a significant impact on our expenses.
−Removed: Because of this, we have developed a sophisticated forecasting and planning process designed to reduce the cost of transporting our products to our regional distribution hubs and finally, to our customers.
−Removed: Sales of our products are generally made pursuant to purchase orders and customers typically do not enter into long-term purchase agreements or commitments with us.
−Removed: Customer purchase orders typically call for product shipment within a few weeks, except for DRAM modules orders that are typically requested in a few days.
−Removed: Consequently, we do not believe that our order backlog as of any particular date is material or a reliable indicator of sales for any future period.
−Removed: We have experienced and expect to continue to experience seasonal fluctuations in sales due to the buying patterns of our customers and the spending patterns of gamers.
+Added: Given the products we sell and the global nature of our business, freight costs can have a significant impact on our expenses, because of this, we have developed a sophisticated forecasting and planning process designed to reduce the cost of transporting our products to our regional distribution hubs and finally, to our customers.
+Added: The COVID-19 pandemic has affected our supply chain consistent with its effect across many industries, including creating shipping and logistics challenges, increasing freight costs significantly, and placing significant limits on component supplies.
+Added: While we anticipated industry-wide supply chain tightening we took proactive inventory buffering measures in order to position us well during the second half of 2021 and going forward.
+Added: We will take additional inventory actions as appropriate to align with market demand, and will continue to leverage strong partnerships with our suppliers.
+Added: Since 2020, our revenue seasonality has been impacted positively and negatively, and thus has not followed historic patterns, by external events, such as shelter-in-place restrictions, global supply chain and logistics issues and availability of affordable GPUs, primarily caused by the COVID-19 pandemic.
+Added: Historically, prior to 2020, we have experienced and expect to continue to experience seasonal fluctuations in sales due to the buying patterns of our customers and the spending patterns of gamers.
Our net revenue has generally been lower in the first and second calendar quarters due to lower consumer demand following the fourth quarter holiday season and because of the decline in sales that typically occurs in anticipation of the introduction of new or enhanced CPUs and GPUs, which usually take place in the second calendar quarter and which tend to drive sales in the following two quarters.
2 unchanged sentences
As a consequence of seasonality, our net revenue for the second calendar quarter is generally the lowest of the year followed by the first calendar quarter.
−Removed: We expect these seasonality trends to continue.
+Added: Historical seasonal patterns may not continue in the future and have been impacted, and may be further impacted in the future, by increasing supply constraints, GPU shortages, shifts in customer behavior and the evolving impacts of the COVID-19 pandemic .
We face intense competition in the markets for all of our products.
3 unchanged sentences
We believe we compete favorably based on these factors.
−Removed: In recent years, we have added new product categories and we intend to introduce new product categories in the future.
+Added: In recent years, we have added new product categories and we intend to continue to introduce new product categories in the future.
To the extent we are successful in adding new product categories, we will confront new competitors, many of which may have more experience, better known brands and greater distribution capabilities in the new product categories and markets than we do.
2 unchanged sentences
Our competitors may be in a strong position to respond quickly to new technologies and may be able to design, develop, market, and sell their products more effectively than we can.
−Removed: In addition, some of our competitors are small or mid-sized specialty companies, which may enable them to react to changes in industry trends or consumer preferences or to introduce new or innovative products more quickly than we can.
+Added: In addition, some of our competitors are small or mid-sized specialty companies, which may enable them to react to changes in industry trends or
+Added: consumer preferences or to introduce new or innovative products more quickly than we can.
As a result, our product development efforts may not be successful or result in market acceptance of our products.
1 unchanged sentence
If we do not compete effectively, demand for our products could decline, our net revenues and gross margin could decrease and we could lose market share, which could seriously harm our business, results of operations and financial condition.
+Added: See the risk factor under the heading “Risks Related to our Business— We face intense competition, and if we do not compete effectively, we could lose market share, demand for our gear could decline and our business may be seriously harmed” in Item 1A of this Form 10-K for further details and a summary of our key competitors.
Intellectual Property
−Removed: We consider the Corsair brand to be among our most valuable assets.
−Removed: We also consider the Elgato, Origin, and SCUF brands;
−Removed: proprietary technology brands such as iCUE and Slipstream;
−Removed: and major product family brands such as Corsair ONE, Dark Core, Dominator, Glaive, Harpoon, Ironclaw, K70, Nightsword, Scimitar, Vengeance, and Void to be important to our business.
+Added: We consider the Corsair brand and its associated sub-brands to be among our most valuable assets.
Our future success depends to a large degree upon our ability to defend the Corsair brand and its associated sub-brands from infringement and, to a limited extent, to protect our other intellectual property.
We rely on a combination of copyright, trademark, patent and other intellectual property laws and confidentiality procedures and contractual provisions such as non-disclosure terms to protect our intellectual property.
−Removed: As of January 14, 2021, our patent portfolio consisted of 331 patents, for which we had 238 patents registrations globally, including utility, invention, utility model and design patents, and 93 pending applications globally.
−Removed: As of December 31, 2020, our trademark portfolio consisted of 495 trademarks, for which we had 471 registrations globally including the European Union and with the World Intellectual Property Organization, or WIPO, and 24 pending applications for registrations globally including the European Union and with the WIPO.
+Added: As of December 31, 2021, our worldwide intellectual property portfolio consisted of 291 patents issued and 104 patents pending applications, 431 trademarks issued and 36 trademarks pending applications.
+Added: We believe that our patents and trademarks and their applications are important for maintaining the competitive differentiation of our products and services, enhancing our freedom of action to sell our products and services in markets in which we choose to participate, and maximizing our return on research and development investments.
The expansion of our business has required us to protect our trademarks, domain names, copyrights, and patents and, to the extent that we expand our business into new geographic areas, we may be required to protect our trademarks, domain names, copyrights, patents and other intellectual property in an increasing number of jurisdictions, a process that is expensive and sometimes requires litigation.
−Removed: If we are unable to protect our trademarks, domain names, copyrights, patents, and other intellectual property rights, or prevent third parties from infringing upon them, our business may be adversely affected, perhaps materially.
−Removed: For additional information, see “Risk Factors—Risks Related to our Business—Our future success depends to a large degree upon our ability to defend the Corsair brand and product family brands such as SCUF, Vengeance, K70, Elgato and iCUE from infringement and, if we are unable to protect our brand and other intellectual property, our business may be seriously harmed.” We rely on a combination of copyright, trademark, patent and other intellectual property laws and confidentiality procedures and contractual provisions such as non-disclosure terms to protect our intellectual property.
−Removed: Companies in the technology industry are frequently subject to litigation or disputes based on allegations of infringement or other violations of intellectual property rights.
−Removed: See “Risk Factors—Risks Related to our Business—We are, have in the past been, and may in the future be, subject to intellectual property infringement claims, which are costly to defend, could require us to pay damages or royalties and could limit our ability to use certain technologies in the future.”
+Added: For a discussion of risks attendant to intellectual property rights, see “Risk Factors—Risks Related to our Business—Our future success depends to a large degree upon our ability to defend the Corsair brand and product family brands such as SCUF, Vengeance, K70, Elgato and iCUE from infringement and, if we are unable to protect our brand and other intellectual property, our business may be seriously harmed” and “Risk Factors—Risks Related to our Business—We are, have in the past been, and may in the future be, subject to intellectual property infringement claims, which are costly to defend, could require us to pay damages or royalties and could limit our ability to use certain technologies in the future” in item 1A.
Environmental Matters
3 unchanged sentences
However, our failure to comply with present and future requirements under these laws and regulations, or environmental contamination or releases of hazardous materials on our leased premises, as well as through disposal of our products, could cause us to incur substantial costs, including clean-up costs, personal injury and property damage claims, fines and penalties, costs to redesign our products or upgrade our facilities and legal costs, or require us to curtail our operations, any of which could seriously harm our business.
−Removed: Employees and Human Capital Resources
+Added: Human Capital Resources
As of December 31, 2021, we had a total of 2,490 employees, including temporary employees and dedicated sales and software developer contractors.
7 unchanged sentences
We completed the initial public offering, or the IPO, of our common stock in September 2020 and our common stock is listed on the Nasdaq Global Select Market under the symbol “CRSR.” Our principal executive offices are located at 47100 Bayside Pkwy, Fremont, California 94538, and our telephone number is (510) 657-8747.
−Removed: Reorganization
−Removed: On September 15, 2020, a corporate reorganization, or the Reorganization, was consummated whereby the Company now owns directly and indirectly all of the operating subsidiaries and assets of Corsair that had been owned by Corsair Group (Cayman), LP, or the Parent, and Corsair Group (US), LLC, a minority interest holder.
−Removed: The Parent is a limited partnership domiciled in the Cayman Islands.
−Removed: The Parent and Corsair Group (US), LLC are under common control of the affiliates of EagleTree Capital, LP, a private equity investment firm.
−Removed: Prior to the Reorganization, the North American and international operations of the Company were conducted by certain operating subsidiaries held by separate entities, Corsair Gaming, Inc.
−Removed: and Corsair Holdings (Lux) S.à r.l., or Corsair Luxco, respectively, each of which was substantially owned by and under common control of the Parent.
−Removed: Acquisition Transaction
−Removed: On August 28, 2017, EagleTree consummated the purchase of the shares of the subsidiaries of Corsair Components (Cayman) Ltd., or Predecessor, for aggregate consideration of approximately $550 million, or the Acquisition Transaction.
−Removed: In the Acquisition Transaction, Corsair Gaming, Inc.
−Removed: acquired the interests of the operating subsidiaries conducting our North American operations and Corsair Luxco indirectly acquired the operating subsidiaries conducting our international operations.
−Removed: Corsair Components (Cayman) Ltd.
−Removed: is our Predecessor for financial reporting purposes.
Available Information
5 unchanged sentences
Chief Executive Officer and Director
−Removed: Chief Financial Officer
President and Chief Operating Officer
−Removed: Bertrand Chevalier
−Removed: Executive Vice President, Gaming
+Added: Chief Financial Officer
Vice President, Corporate Controller
9 unchanged sentences
(Hons) in Physics from The City University, London, England.
+Added: La has served as our President since January 2021 and as our Chief Operating Officer since August 2013.
+Added: La was appointed to our board of directors in December 2021.
+Added: From May 2010 to August 2013, Ms.
+Added: La served as our Senior Vice President and General Manager of our gaming PC component unit.
+Added: Previously, from April 2008 to July 2010, she served as the Vice President of Global Operations and Information Technology at Opnext, Inc., a designer and manufacturer of optical transponders for communications uses.
+Added: From 1997 to 2008, she held various positions at HP, including Director of Consumer Desktop PC, Display and Accessories for North America.
+Added: La holds a B.S.
+Added: in Electrical Engineering from San Jose State University.
Potter has served as our Chief Financial Officer since November 2019.
1 unchanged sentence
Potter worked as a business consultant, including interim Chief Financial Officer work and advising a large pension fund.
−Removed: Prior to that, from July 2011 to May
+Added: Prior to that, from July 2011 to May 2016, Mr.
Potter was Chief Financial Officer and Chief Legal Officer at Canadian Solar, a company listed on the Nasdaq Exchange.
5 unchanged sentences
and serves as the chair of its audit committee.
−Removed: Potter is a Chartered Professional Accountant (CPA), CA.
+Added: Potter is a Chartered Professional Accountant (CPA).
He received a Graduate Diploma of Public Accountancy from McGill University, and a BComm in Accounting from Concordia University.
−Removed: La has served as our President since January 2021 and as our Chief Operating Officer since August 2013.
−Removed: From May 2010 to August 2013, Ms.
−Removed: La served as our Senior Vice President and General Manager of our gaming PC component unit.
−Removed: Previously, from April 2008 to July 2010, she served as the Vice President of Global Operations and Information Technology at Opnext, Inc., a designer and manufacturer of optical gaming, modules and subsystems for communications uses.
−Removed: From 1997 to 2008, she held various positions at HP, including Director of Consumer Desktop PC, Display and Accessories for North America.
−Removed: La holds a B.S.
−Removed: in Electrical Engineering from San Jose State University.
−Removed: Bertrand Chevalier has served as our Executive Vice President, Gaming since January 2021.
−Removed: Previously, Mr.
−Removed: Chevalier served as our Chief Sales Officer from August 2020 to January 2021 and our Senior Vice President, Worldwide Sales from January 2014 to August 2020.
−Removed: From September 2013 to December 2013, he served as our Vice President of Marketing, from January 2012 to August 2013 he served as our Senior Director of Product Marketing, and from May 2010 to January 2012 he served as our Director of Channel Marketing.
−Removed: Previously, from December 1995 to May 2010, he held various positions at Hewlett Packard, Inc., including Senior Operations & Supply Chain Manager.
−Removed: Chevalier holds a Master of Engineering from Institut Catholique d’Arts et Métiers.
Lakritz has served as our Vice President, Corporate Controller since November 2017.
3 unchanged sentences
Previously, Mr.
−Removed: Lakritz also served as a Corporate Controller at Trimble, from October 2005 to September 2011.
+Added: Lakritz also served as a Corporate Controller at Trimble, from
+Added: October 2005 to September 2011.
Lakritz is a Certified Public Accountant and he earned a B.A.
9 unchanged sentences
We depend upon the introduction and success of new third-party high-performance computer hardware, particularly graphics processing units, or GPUs, and central processing units, or CPUs, and sophisticated new video games to drive sales of our gear.
−Removed: If newly introduced GPUs, CPUs and sophisticated video games are not successful, or if the rate at which those products are introduced declines, it may seriously harm our business.
+Added: If newly introduced GPUs, CPUs and sophisticated video games are not successful, if the rate at which those products are introduced declines or if such products are not readily available, it may seriously harm our business.
We face intense competition, and if we do not compete effectively, we could lose market share, demand for our gear could decline and our business may be seriously harmed.
5 unchanged sentences
The coronavirus outbreak has had, and could continue to have, a materially disruptive effect on our business.
−Removed: We have identified material weaknesses in our internal controls over financial reporting.
−Removed: If our remediation of the material weaknesses is not effective or we otherwise fail to maintain an effective system of internal controls in the future, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence in us and, as a result, the value of our common stock.
We are controlled by a single stockholder, whose interest in our business may be different than yours.
2 unchanged sentences
Our business involves significant risks, some of which are described below.
−Removed: You should consider carefully the risks and uncertainties described below, together with all of the other information contained in this Annual Report on Form 10-K such as “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our combined consolidated financial statements and related notes.
+Added: You should consider carefully the risks and uncertainties described below, together with all of the other information contained in this Annual Report on Form 10-K such as “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes.
If any of the following risks actually occurs, our business, reputation, financial condition, results of operations, revenue and future prospects could be seriously harmed.
4 unchanged sentences
Our actual results could differ materially from those anticipated in the forward-looking statements as a result of factors that are described below and elsewhere in this Annual Report.
−Removed: Unless otherwise indicated, references to our business being seriously harmed in these risk factors and elsewhere will include harm to our business, reputation, financial condition, results of operations, revenue and future prospects.
+Added: Unless otherwise indicated, references to our business being
+Added: seriously harmed in these risk factors and elsewhere will include harm to our business, reputation, financial condition, results of operations, revenue and future prospects.
Risks Related to Our Business
15 unchanged sentences
Further, our growth depends in part on our ability to introduce and successfully market new gear and categories of gear.
−Removed: For example, we entered the console controller market in 2019 following our acquisition of SCUF and in the future intend to introduce other gear designed to appeal to the console gaming market.
+Added: For example, in the last 18 months, we entered into three large new markets, namely the microphones and cameras market for content creators and the gaming monitors market for both gamers and content creators, and in the future, we intend to introduce other gear designed to appeal to these markets.
To the extent we do so, we will likely encounter competition from large, well-known consumer electronics and peripherals companies.
3 unchanged sentences
The duration and extent of the impact from the coronavirus outbreak on our business depends on future developments that cannot be accurately predicted at this time, such as the severity and transmission rate of the virus, the extent and effectiveness of containment actions and the impact of these and other factors on our employees.
−Removed: If our employees are required to work from home for many months, it could ultimately negatively impact new gear and improvements and potentially result in delays or releasing significant updates.
+Added: If a substantial number of our employees continue to work from home, it could negatively impact new gear and improvements and potentially result in delays or releasing significant updates.
If we do not execute on these factors successfully, demand for our current gear may decline and any new gear that we may introduce may not gain widespread acceptance.
2 unchanged sentences
We depend upon the introduction and success of new third-party high-performance computer hardware, particularly GPUs and CPUs, and sophisticated new video games to drive sales of our gear.
−Removed: If newly introduced GPUs, CPUs and sophisticated video games are not successful, or if the rate at which those products are introduced declines, it may seriously harm our business.
+Added: If newly introduced GPUs, CPUs and sophisticated video games are not successful, if the rate at which those products are introduced declines, or if they are not readily available, it may seriously harm our business.
We believe that the introduction of more powerful GPUs, CPUs and similar computer hardware that place increased demands on other system components, such as memory, PSUs or cooling, has a significant effect on the demand for our gear.
The manufacturers of those products are large, public, independent companies that we do not influence or control.
−Removed: As a result, our business results can be materially affected by the frequency with which new high-performance hardware products are introduced by these independent third parties, whether these products achieve widespread acceptance among gamers and whether additional memory, enhanced PSUs or cooling solutions, new computer cases or other peripheral devices are necessary to support those products.
+Added: As a result, our business results can be materially affected by the frequency with which new high-performance hardware products are introduced by these independent third parties, whether these products achieve widespread acceptance among gamers, whether such products are readily available at affordable prices and whether additional memory, enhanced PSUs or cooling solutions, new computer cases or other peripheral devices are necessary to support those products.
Although we believe that, historically, new generations of high-performance GPUs and CPUs have positively affected the demand for our gear, there can be no assurance that this will be the case in the future.
3 unchanged sentences
We also believe that sales of our gear are driven by conditions in the computer gaming industry.
−Removed: In particular, we believe that our business depends on the introduction and success of computer games with sophisticated graphics that place greater demands on
−Removed: system processing speed and capacity and therefore require more powerful GPUs or CPUs, which in turn drives demand for our DRAM modules, PSUs, cooling systems and other components and peripherals.
+Added: In particular, we believe that our business depends on the introduction and success of computer games with sophisticated graphics that place greater demands on system processing speed and capacity and therefore require more powerful GPUs or CPUs, which in turn drives demand for our DRAM modules, PSUs, cooling systems and other components and peripherals.
Likewise, we believe that the continued introduction and market acceptance of new or enhanced versions of computer games helps sustain consumer interest in computer gaming generally.
13 unchanged sentences
Our primary competitors in the market for gaming keyboards and mice include Logitech and Razer.
−Removed: Our primary competitors in the market for headset and related audio products include Logitech, Razer and Kingston through its HyperX brand.
−Removed: Our primary competitors in the gamer and creator streaming gear market include Logitech, following its acquisition of Blue Microphones, and AVerMedia.
+Added: Our primary competitors in the market for headset and related audio products include Logitech, Razer and HP through its HyperX brand.
+Added: Our primary competitors in the gamer and creator streaming gear market include Logitech,
+Added: following its acquisition of Blue Microphones, and AVerMedia.
Our primary competitors in the performance controller market include Microsoft and Logitech.
1 unchanged sentence
Our primary competitors in the market for PSUs, cooling solutions and computer cases include Cooler Master, NZXT, EVGA, Seasonic and Thermaltake.
−Removed: Our primary competitors in the market for DRAM modules include G.Skill, Kingston through its HyperX brand and Micron through its Crucial division.
+Added: Our primary competitors in the market for DRAM modules include G.Skill, Kingston and Micron through its Crucial division.
Our primary competitors in the market for prebuilt gaming PCs and laptops include Dell through its Alienware brand, HP through its Omen brand, Asus and Razer.
11 unchanged sentences
Over the past two decades, gaming has grown from a relatively niche industry to a significant segment of the global entertainment industry with a wide following across various demographic groups globally.
−Removed: This growth includes, and has been driven
−Removed: by, the rapid expansion of live game streaming by content creators and the growing popularity of professional competitive gaming, also referred to as eSports.
+Added: This growth includes, and has been driven by, the rapid expansion of live game streaming by content creators and the growing popularity of professional competitive gaming, also referred to as esports.
However, the continued growth of the video gaming industry will depend on numerous factors, many of which are beyond our control, including but not limited to:
9 unchanged sentences
As a result, any decline or slowdown in the growth of the gaming industry or the declining popularity of the gaming industry could materially and adversely affect our business.
−Removed: Further, while Newzoo has reported that there were 2.4 billion mobile gamers in 2019, we have no specific plans to attract gamers who use only mobile devices or tablets and we have no plans to develop gear specifically designed for gamers who use mobile devices or tablets.
+Added: While there were 2.6 billion mobile gamers in 2020, according to Newzoo, we have no specific plans to attract gamers who use only mobile devices or tablets and we have no plans to develop gear specifically designed for gamers who use mobile devices or tablets.
As a result, if gamers migrate to mobile devices or tablets and away from PCs and consoles, our business may be seriously harmed.
−Removed: In addition, there can be no assurance that the active demographics in gaming will continue to buy into and drive the growth in gamer culture and the games industry overall nor can there be any assurance that gaming will expand into new demographics that will drive growth.
+Added: In addition, there can be no assurance that the active demographics in gaming will continue to buy into and drive the growth
+Added: in gamer culture and the games industry overall nor can there be any assurance that gaming will expand into new demographics that will drive growth.
Further, if gamers’ interest in video games is diminished, this may seriously harm our business .
−Removed: Our growth prospects are, to a certain extent, connected with the ongoing growth of eSports and live game streaming and any reduction in the growth or popularity of eSports or live game streaming may seriously harm our business.
−Removed: The success of our business depends on eSports and live game streaming driving significant growth in the high-performance gaming and content streaming market, which could prompt strong growth in the sales of our gear.
+Added: Our growth prospects are, to a certain extent, connected with the ongoing growth of live game streaming and esports and any reduction in the growth or popularity of live game streaming or esports may seriously harm our business.
+Added: The success of our business depends on live game streaming and esports driving significant growth in the high-performance gaming and content streaming market, which could prompt strong growth in the sales of our gear.
However, there are a number of factors which could result in the esports or live game streaming markets having limited or negative impact on our sales and overall growth.
These factors include:
−Removed: our competitors marketing products that gain broader acceptance among eSports participants or streamers and content creators;
+Added: our competitors marketing products that gain broader acceptance among game streamers, esports participants and content creators;
esports amateurs and/or spectators not purchasing our gear that is utilized by esports athletes and teams or streamers and content creators, including the esports athletes and teams, and streamers we sponsor;
1 unchanged sentence
our research and development and the gear we sell failing to satisfy the increasing high-performance requirements of competitive gamers or streamers.
−Removed: Further, there are a number of factors which could result in the growth in the eSports or live game streaming markets stagnating, or even decreasing.
+Added: Further, there are a number of factors which could result in the growth in live game streaming or the esports markets stagnating, or even decreasing.
These factors include:
consumer interest in watching either live or streamed broadcasts of competitors playing video games diminishing or even disappearing;
−Removed: regulations limiting the broadcast of eSports or live streaming;
+Added: regulations limiting the broadcast of live streaming or esports;
reduced accessibility of streaming and other gaming video content, whether due to platform fragmentation, the erection of paywalls, or otherwise;
12 unchanged sentences
If we do not succeed in attracting, retaining and motivating highly qualified personnel, our business may be seriously harmed.
−Removed: Further, we also face significant competition for employees, particularly in the San Francisco Bay Area where our headquarters are located, and as a result, skilled employees in this competitive geographic location can often command higher compensation and may be difficult to hire.
+Added: Further, we also face significant competition for employees, particularly in the San Francisco Bay Area where our headquarters are located, and as a result, skilled employees in this competitive geographic location can often command higher compensation and may be
+Added: difficult to hire.
+Added: In addition, recent political and military events in Ukraine, poor relations between the United States and Russia, and sanctions by the United States and the E uropean U nion against Russia could have an adverse impact on our research and development efforts as we maintain significant research and development operations in Ukraine .
Currency exchange rate fluctuations could result in our gear becoming relatively more expensive to our overseas customers or increase our manufacturing costs, each of which may seriously harm our business.
3 unchanged sentences
dollar relative to the currency used in the countries where our gear is sold may result in an increase in the price of our gear in those countries, which may lead to a reduction in sales.
−Removed: For example, continuing uncertainty of financial conditions in Europe, including concerns regarding the United Kingdom’s exit from the European Union, and the resulting economic instability and fluctuations in the values of the Euro and British pound compared to the U.S.
−Removed: dollar have led to variations in the local currency selling prices of, and therefore affected demand for, our gear in Europe and the United Kingdom.
Likewise, because we pay our suppliers and third-party manufacturers, most of which are located outside of the United States, primarily in U.S.
3 unchanged sentences
dollar could result in significant increases in our expenses that may seriously harm our business.
−Removed: Total unit shipments of our gear tend to be higher during the third and fourth quarters of the year.
−Removed: As a result, our sales are subject to seasonal fluctuations, which may seriously harm our business.
−Removed: We have experienced and expect to continue to experience seasonal fluctuations in sales due to the spending patterns of gamers who purchase our gear.
+Added: Total unit shipments of our gear have historically been higher during the third and fourth quarters of the year.
+Added: As a result, our sales may be subject to seasonal fluctuations, which may seriously harm our business.
+Added: Since 2020, our revenue seasonality has been impacted positively and negatively, and thus has not followed historic patterns, by external events, such as shelter-in-place restrictions, global supply chain and logistics issues and availability of affordable GPUs, primarily caused by the COVID-19 pandemic.
+Added: Historically, prior to 2020, we have experienced and expect to continue to experience seasonal fluctuations in sales due to the spending patterns of gamers who purchase our gear.
Our total unit shipments have generally been lowest in the first and second calendar quarters due to lower sales following the fourth quarter holiday season and because of the decline in sales that typically occurs in anticipation of the introduction of new or enhanced GPUs, CPUs and other computer hardware products, which usually takes place in the second calendar quarter, and which tends to drive sales in the following two quarters.
As a consequence of seasonality, our total unit shipments for the second calendar quarter are generally the lowest of the year, followed by total unit shipments for the first calendar quarter.
−Removed: We expect these seasonality trends to continue.
As a result, our total unit shipments are subject to seasonal fluctuations, which may seriously harm our business.
+Added: Historical seasonal patterns may not continue in the future and have been impacted, and may be further impacted in the future, by increasing supply constraints, GPU shortages, shifts in customer behavior and the evolving impacts of the COVID-19 pandemic .
Our results of operations are subject to substantial quarterly and annual fluctuations, which may adversely affect the market price of our common stock.
18 unchanged sentences
fluctuations in the available supply of high-performance computer hardware resulting in the increased costs to gamers, which could ultimately lead to decreased demand for our gaming gear, due to factors such as component supply shortages or gamers purchasing GPUs for non-gaming purposes such as cryptocurrency mining;
+Added: tensions between Russia and the Ukraine resulting in shipments of resources from these countries being delayed, or even ceasing, which could cause the GPU shortage to last longer as the production of GPUs require resources that come from these countries such as highly purified neon gas and palladium, of which Ukraine and Russia, respectively, are the world’s leading exporters;
potential changes in trade relations arising from policy initiatives implemented by the current U.S.
13 unchanged sentences
outbreaks of pandemics, such as the novel coronavirus;
−Removed: the impact of political instability, natural disasters, war and/or events of terrorism;
+Added: the impact of political instability, natural disasters, war and/or events of terrorism, such as the tensions between Russia and Ukraine and any military conflict that may ensue, and the corresponding tensions created from such conflict between Russia, the United States and countries in Europe as well as other countries such as China;
macro-economic fluctuations in the United States and global economies, including those that impact discretionary consumer spending such as may result from the COVID-19 coronavirus outbreak;
43 unchanged sentences
We purchase those DRAM ICs, pursuant to purchase orders and not long-term supply contracts, largely from third-party distributors and, to a lesser extent, directly from those manufacturers.
−Removed: According to market share data for DRAM IC manufacturers appearing on the website of DRAM Exchange, a market research firm, Samsung, a manufacturer of DRAM ICs, had an approximately 46% share of the worldwide DRAM IC market for 2017, compared to approximately 29% for Hynix and approximately 21% for Micron in each case for the same period.
+Added: According to the most recent external market share data for the year ended December 31, 2021, DRAM IC manufacturers, Samsung, a manufacturer of DRAM ICs, had an approximately 43% share of the worldwide DRAM IC market, compared to approximately 28% for Hynix and approximately 23% for Micron in each case for the same period.
However, should supply from any of these vendors be limited, there can be no assurance that we would be able to meet our needs by purchasing DRAM ICs produced by other manufacturers or from agents and distributors.
12 unchanged sentences
significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity, including our ability to repay the indebtedness outstanding from our credit facilities.
−Removed: The extent to which the COVID-19 outbreak, including the spread of more contagious and deadly variants, ultimately impacts our business, sales, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the outbreak, its severity, the actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume.
+Added: Since early 2020, we have experienced some business disruptions due to COVID-19, including the stoppage in our factories in early 2020, disruption in our supply chain and increased distribution costs such as the elevated ocean freight costs we incurred in the second half of 2021, which led to increases in operating costs.
+Added: As a result of the COVID-19 pandemic, we are continuing to experience logistics challenges globally.
+Added: These negative financial impacts have been offset by strong revenue growth year-over-year
+Added: partly due to an increase in demand for our gear as more people are under shelter-in-place restrictions, which we believe have limited people’s access to alternative forms of entertainment and social interaction, and thus have increased the demand for home entertainment and connecting with others through content creation.
+Added: In contrast, as the COVID-19 pandemic subsides, it has, and could continue to , result in shelter-in-place and other similar restrictions being eased.
+Added: Such easing of restrictions likely has, and will continue to , result in consumers returning to other alternative forms of entertainment and interaction.
+Added: This in turn has, and could continue to, result in a decline in demand for our products.
+Added: The extent to which the COVID-19 outbreak, including the spread of more contagious and deadly variants, ultimately impacts our business, results of operations, cash flows and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the outbreak, its severity, the actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume.
Even after the COVID-19 outbreak has subsided, we may continue to experience significant impacts to our business as a result of its global economic impact, including any economic downturn or recession that has occurred or may occur in the future.
−Removed: While the extent and duration of the COVID-19 outbreak remains uncertain, the approval and distribution of vaccines could result in the pandemic subsiding in the near term.
−Removed: If and when the pandemic subsides and shelter-in-place and other restrictions are lifted, consumers may start to enjoy activities outside of the home again.
−Removed: If this occurs, demand for our products could decrease.
−Removed: Such a drop in demand could result in a decrease in revenue that would seriously harm our business.
A significant portion of our net revenue is generated by sales of DRAM modules and any significant decrease in the average selling prices of our DRAM modules would seriously harm our business.
4 unchanged sentences
Sales to a limited number of customers represent a significant portion of our net revenue, and the loss of one or more of our key customers may seriously harm our business.
−Removed: In 2020 and 2019, sales to Amazon, accounted for 24.6% and 25.1%, of our net revenue, and sales to our ten largest customers accounted for 52.7% and 51.6% of the same periods, respectively, of our net revenue.
+Added: In 2021 and 2020, sales to Amazon accounted for 26.7% and 24.6% of our net revenue, respectively.
+Added: Sales to our ten largest customers accounted for 51.7% and 52.7% of the same periods, respectively, of our net revenue.
Our customers typically do not enter into long-term agreements to purchase our gear but instead enter into purchase orders with us from time to time.
1 unchanged sentence
In addition, our customers are under no obligation to continue purchasing from us and may purchase similar products from our competitors, and some of our customer agreements contain “most favored nation” clauses.
−Removed: Further, while we maintain accounts receivables insurance for many of our customers, we do not maintain such coverage for Amazon or for any customer in China.
−Removed: As a result, if either Amazon or any customer in China were to default on its payment to us, we would not be covered by such insurance, and our business may be seriously harmed.
+Added: Further, while we maintain accounts receivables insurance for many of our customers, we do not maintain such coverage for Amazon and others.
+Added: As a result, if either Amazon or others were to default on its payment to us, we would not be covered by such insurance, and our business may be seriously harmed.
If the financial condition of a key customer weakens, if a key customer stops purchasing our gear, or if uncertainty regarding demand for our gear causes a key customer to reduce their orders and marketing of our gear, our business could be seriously harmed.
3 unchanged sentences
We have limited manufacturing facilities that only assemble our DRAM modules, custom built PCs, custom cooling and controllers, we have no guaranteed sources of supply of products or components and we depend upon a small number of manufacturers, some of which are exclusive or single-source suppliers, to supply our gear, each of which may result in product or component shortages, delayed deliveries and quality control problems.
−Removed: We maintain limited manufacturing facilities that only produce DRAM modules, custom built PCs, custom cooling and performance controllers, and as a result, we depend entirely upon third parties to manufacture and supply the gear we sell and the components used in our gear such as gaming peripherals and gaming components.
+Added: We maintain limited manufacturing facilities that only assemble DRAM modules, custom built PCs, custom cooling and performance controllers, and as a result, we depend entirely upon third parties to manufacture and supply the gear we sell and the components used in our gear such as gaming peripherals and gaming components.
Our gear that is manufactured by outsourced parties is generally produced by a limited number of manufacturers and in some instances is purchased on a purchase order basis.
−Removed: example, each model of our gaming keyboards, gaming mice, gaming headsets, computer cases, PSUs and cooling solutions is produced by a single manufacturer.
+Added: For example, each model of our gaming keyboards, gaming mice, gaming headsets, computer cases, PSUs and cooling solutions is produced by a single manufacturer.
We do not have long-term supply agreements with some of our manufacturers and suppliers.
−Removed: In addition, we carry limited inventor y of our gear, and the loss of one or more of these manufacturers or suppliers, or a significant decline in production or deliveries by any of them, could significantly limit our shipments of gear or prevent us from shipping that gear entirely.
+Added: In addition, we carry limited inventory of our gear, and the loss of one or more of these manufacturers or suppliers, or a significant decline in production or deliveries by any of them, could significantly limit our shipments of gear or prevent us from shipping that gear entirely.
Our reliance upon a limited number of manufacturers and suppliers exposes us to numerous risks, including those described below.
2 unchanged sentences
In particular, price increases by our manufacturers or suppliers could seriously harm our business if we are unable to pass those price increases along to our customers.
−Removed: Furthermore, the supply of products from manufacturers and suppliers to us could be interrupted or delayed, and we may be unable to obtain sufficient quantities of our products because of factors outside of our control.
−Removed: For example, our manufacturers and suppliers may experience financial difficulties, be affected by natural disasters or pandemics, have limited production facilities or manufacturing capacity, may experience labor shortages or may be adversely affected by regional unrest or military actions.
+Added: Further, the supply of products from manufacturers and suppliers to us could be interrupted or delayed, and we may be unable to obtain sufficient quantities of our products because of factors outside of our control.
+Added: For example, our manufacturers and suppliers may experience financial difficulties, be affected by natural disasters or pandemics, have limited production facilities or manufacturing capacity, may experience labor shortages or may be adversely affected by regional unrest or military actions, such as the recent tensions between Russia and Ukraine.
In addition, we may be slower than our competitors in introducing new products or reacting to changes in our markets due to production or delivery delays by our third-party manufacturers or suppliers.
12 unchanged sentences
Further, even if we detect any bugs or other glitches in the iCUE software or our Elgato streaming software suite we may be unable to update the affected software effectively to remediate these problems.
−Removed: In addition, in order for us to stay competitive, we need to update the iCUE software, Elgato streaming software suit and any other software utilized by our gear, to incorporate innovations and other changes to address gamers and content creators’ changing needs.
+Added: In addition, in order for us to stay competitive, we need to update the iCUE software, Elgato streaming software suite and any other software utilized by our gear, to incorporate innovations and other changes to address gamers and content creators’ changing needs.
If we are unable to update the iCUE software or our Elgato streaming software suite to include such updates or address any bugs or glitches, its use to gamers and content creators may be substantially diminished, which could seriously harm our business.
2 unchanged sentences
Our gear may suffer from design flaws, quality control problems in the manufacturing process or components that are defective or do not meet our quality standards.
−Removed: Moreover, the markets we serve are characterized by rapidly changing technology and intense competition and the pressure to continuously develop new gear and improvements and bring that gear and improvements to market quickly heightens the risks that our gear will be subject to both quality control and design problems.
+Added: Moreover, the markets we serve are characterized by rapidly changing technology and intense competition and the pressure to continuously develop new gear and improvements and bring that gear and improvements to market quickly heightens the risks that our gear will be subject to both quality
+Added: control and design problems.
Because we largely rely on third parties to manufacture our gear and the components that are used in our gear, our ability to control the quality of the manufacturing process and the components that are used to manufacture our gear is limited.
4 unchanged sentences
If we incur warranty or product redesign costs, institute recalls of gear or suffer damage to our reputation as a result of defective gear, our business could be seriously harmed.
−Removed: While we operate a facility in Taiwan that assembles, tests and packages most of our DRAM modules and certain other products, we rely upon manufacturers in China to produce a significant portion of our other products, which exposes us to risks that may seriously harm our business.
−Removed: We operate a facility in Taiwan that assembles, tests, packages and ultimately supplies nearly all of our DRAM modules and a significant portion of our cooling solutions and prebuilt and custom gaming systems.
+Added: While we operate a facility in Taiwan that assembles, tests and packages all of our DRAM modules and certain other products, we rely upon manufacturers in China and Southeast Asia to produce a significant portion of our other products, which exposes us to risks that may seriously harm our business.
+Added: We operate a facility in Taiwan that assembles, tests, packages and ultimately supplies all of our DRAM modules and a significant portion of our cooling solutions, prebuilt and custom gaming systems and custom gaming controllers.
We also assemble, test, package and ultimately supply our custom-built PCs in our U.S.
1 unchanged sentence
All of the other gear we sell, including the components used to assemble our DRAM modules, are produced at factories operated by third parties located in China, Taiwan and countries in Southeast Asia.
−Removed: The fact that all of these facilities, manufacturers, suppliers and factories are concentrated in Taiwan and China exposes us to numerous risks.
−Removed: We believe one of the most significant risks associated with this concentration in Taiwan and China is that production may be interrupted or limited because of labor shortages in southern China and by strains on the local infrastructure.
−Removed: In addition, production at facilities located in China or Taiwan, including our own manufacturing, testing and packaging facility in Taiwan, and deliveries from those facilities, may be adversely affected by tensions, hostilities or trade disputes involving China, Taiwan, the United States or other countries.
+Added: The fact that all of these facilities, manufacturers, suppliers and factories are concentrated in China, Taiwan and countries in Southeast Asia exposes us to numerous risks.
+Added: We believe one of the most significant risks associated with this concentration is that production may be interrupted or limited because of labor shortages in southern China and by strains on the local infrastructure.
+Added: In addition, production at facilities located in China, Taiwan or Southeast Asia, including our own manufacturing, testing and packaging facility in Taiwan, and deliveries from those facilities, may be adversely affected by tensions, hostilities or trade disputes involving China, Taiwan, the United States or other countries.
There is considerable potential political instability in Taiwan related to its disputes with China.
+Added: In addition, political instability in countries in Southeast Asia where we source certain components, such as Thailand, could result in delays in shipments or our inability to source certain critical components for our products.
Although we do not do business in North Korea, any future increase in tensions between South Korea and North Korea, such as an outbreak or escalation of military hostilities, or between Taiwan and China could materially adversely affect our operations in Asia or the global economy, which in turn may seriously harm our business.
−Removed: Other risks resulting from this concentration of our manufacturing facilities and our suppliers in Taiwan and China include the following:
+Added: Other risks resulting from this concentration of our manufacturing facilities and our suppliers in China, Taiwan and Southeast Asia include the following:
the interpretation and enforcement of China’s laws continues to evolve, which may make it more difficult for us to obtain a reliable supply of our gear at predictable costs;
8 unchanged sentences
We rely upon third parties to manufacture our gear and to transport and distribute our gear to our customers.
−Removed: If we do not successfully coordinate the timely and efficient manufacturing and distribution of our gear, our costs may increase, we may experience a build-up in inventory, we may not be able to deliver sufficient quantities to meet customer demand and we could lose sales, each of which could seriously harm our business.
+Added: If we do not successfully coordinate the timely and efficient manufacturing and distribution of our gear, our costs may increase, we may experience a build-
+Added: up in inventory, we may not be able to deliver sufficient quantities to meet customer demand and we could lose sales, each of which could seriously harm our business.
Our operating results are particularly sensitive to freight costs, and our costs may increase significantly if we are unable to ship and transport finished products efficiently and economically across long distances and international borders, which may seriously harm our business.
11 unchanged sentences
The laws governing customs and tariffs in many countries are complex, subject to many interpretations and often include substantial penalties for non-compliance.
−Removed: Our effective tax rate may increase in the future, including as a result of the Reorganization and recent U.S.
−Removed: tax legislation.
+Added: Our effective tax rate may increase in the future, including as a result of tax legislation changes, which may have a material adverse effect on our business, financial condition and results of operations.
Our effective tax rate may be impacted by changes in or interpretations of tax laws in any given jurisdiction, utilization of or limitations on our ability to utilize any tax credit carry-forwards, changes in geographical allocation of revenue and expense and changes in management’s assessment of matters such as our ability to realize the value of deferred tax assets.
+Added: In particular, the U.S.
+Added: government may enact significant changes to the taxation of business entities including, among others, an increase in the corporate income tax rate, the imposition of minimum taxes or surtaxes on certain types of income, significant changes to the taxation of income derived from international operations, and an addition of further limitations on the deductibility of business interest.
+Added: While certain draft legislation has been publicly released and is under development in Congress at this time, the likelihood of these changes being enacted or implemented is unclear.
+Added: Our effective tax rate could also increase due to several factors, including:
+Added: changes in the relative amounts of income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates;
+Added: changes in tax rates, tax treaties, and regulations or the interpretation of them;
+Added: changes to our assessment about our ability to realize our deferred tax assets that are based on estimates of our future results, the prudence and feasibility of possible tax planning strategies, and the economic and political environments in which we do business;
+Added: the outcome of current and future tax audits, examinations, or administrative appeals;
+Added: the effects of acquisitions.
In the past, we have experienced fluctuations in our effective income tax rate which reflects a variety of factors that may or may not be present in any given year.
−Removed: As a result of the Reorganization, we acquired a number of non-U.S.
−Removed: affiliated entities with substantial non-U.S.
−Removed: assets and operations.
−Removed: Following the Reorganization, we may be subject to current U.S.
−Removed: federal income taxes on the earnings of such non-U.S.
−Removed: affiliates in a manner that may adversely impact our effective tax rate.
−Removed: On December 22, 2017, the Tax Cuts and Jobs Act of 2017, or Tax Act, was enacted, which has significantly changed the U.S.
−Removed: federal income taxation of U.S.
−Removed: corporations, including by reducing the U.S.
−Removed: corporate income tax rate, limiting interest deductions, permitting immediate expensing of certain capital expenditures, adopting elements of a partially territorial tax system, revising the rules governing net operating losses and the rules governing foreign tax credits, and introducing new anti-base erosion provisions.
−Removed: The legislation is unclear in many respects and could be subject to potential amendments and technical corrections, as well as interpretations and implementing regulations by the Treasury and Internal Revenue Service, or the IRS, any of which could lessen or increase certain adverse impacts of the legislation.
−Removed: In addition, it is unclear how these U.S.
−Removed: federal income tax changes will affect state and local taxation, which often uses federal taxable income as a starting point for computing state and local tax liabilities.
−Removed: On March 27, 2020, the Coronavirus Aid, Relief and Economic Security, or CARES, Act was enacted, which provides temporary relief from certain aspects of the Tax Act that had imposed limitations on the utilization of certain losses, interest expense deductions, and minimum tax credits.
−Removed: We have recorded additional income tax benefits of $0.6 million during the year ended December 31, 2020 resulting from the enactment of the CARES Act.
In light of these factors, there can be no assurance that our effective income tax rate will not change in future periods.
−Removed: Accordingly, if this were to occur, and if our effective tax rate were to increase, our business may be seriously harmed.
+Added: Accordingly, if our effective tax rate were to increase, it may have a material adverse effect on our business, financial condition and results of operations.
Our ability to utilize our net operating losses, or NOLs, carryforwards and certain other tax attributes may be limited.
11 unchanged sentences
For example, the emergence of augmented reality and virtual reality headsets could render certain of our gamer and creator peripherals such as keyboards and mice less relevant, similar to how cloud computing could drastically reduce the need for gaming components and systems.
−Removed: If we are unable to provide new gear for augmented or virtual reality devices, our business may be seriously harmed.
+Added: If we are unable to provide new gear for augmented or virtual reality devices or to address other technological trends, our business may be seriously harmed.
In addition, government authorities and industry organizations may adopt new standards that apply to our gear.
2 unchanged sentences
Our failure to improve our gear, create new and relevant categories of gear and adapt to changing business models in a timely manner may seriously harm our business.
+Added: In addition, recent political and military events in Ukraine, poor relations between the United States and Russia, and sanctions by the United States and the European Union against Russia could have an adverse impact on our research and development efforts as we maintain significant research and development operations in Ukraine.
We order most of our gear from third-party manufacturers based on our forecasts of future demand and targeted inventory levels, which exposes us to the risk of both product shortages, which may result in lost sales and higher expenses, and excess inventory, which may require us to sell our gear at substantial discounts and lead to write-offs.
9 unchanged sentences
Over the past few years, we have expanded the number and type of gear we sell, and the geographic markets in which we sell them, and we will endeavor to further expand our product portfolio and sales reach.
−Removed: The growth of our product portfolio and the
−Removed: markets in which we sell our gear has increased the difficulty of accurately forecasting product demand.
+Added: The growth of our product portfolio and the markets in which we sell our gear has increased the difficulty of accurately forecasting product demand.
We have in the past experienced significant differences between our forecasts and actual demand for our gear and expect similar differences in the future.
10 unchanged sentences
The aggregate amount of charges incurred as a result of all of these rebates and other financial incentives is offset from our gross revenue.
−Removed: For 2020 and 2019, our gross revenue was reduced approximately by between 6% and 9% as a result of these rebates and other financial incentives.
+Added: For 2021 and 2020, our gross revenue was reduced approximately by 8% and 6%, respectively, as a result of these rebates.
In the future, we also may be required to write down inventory or receivables due to product obsolescence or because of declines in market prices of our gear.
19 unchanged sentences
In particular, we believe that our future growth depends in part on our ability to enhance our existing product lines and introduce new gear and categories of gear through acquisitions and other strategic transactions.
−Removed: There is substantial
−Removed: competition for attractive acquisitions and other strategic transactions, and we may not be successful in completing any such acquisitions or other strategic transactions in the future.
+Added: There is substantial competition for attractive acquisitions and other strategic transactions, and we may not be successful in completing any such acquisitions or other strategic transactions in the future.
Acquisitions may be particularly challenging during the COVID-19 pandemic.
14 unchanged sentences
However, notwithstanding the foregoing, there are instances when we are required to pay for gear in advance of it being manufactured and delivered to us.
−Removed: We also utilize borrowings under our revolving credit facility to provide working capital, and access to external debt financing has historically been and will likely continue to be very important to us.
+Added: We may also utilize borrowings under our revolving credit facility to provide working capital, and access to external debt financing has historically been and will likely continue to be very important to us.
As a result of any downturn in general economic conditions or conditions in the credit markets or other factors, manufacturers and suppliers may be reluctant to provide us with the same credit that they have in the past, which would require that we increase the level of borrowing under our revolving credit facility or obtain other external financing to provide for our substantial working capital needs.
Additional financing may not be available on terms acceptable to us or at all.
−Removed: In particular, our access to debt financing may be limited by a covenant in our credit facilities, which requires our Consolidated Total Net Leverage Ratio (as defined in our credit facilities) to be no greater than 8.0 to 1.0 if our revolving credit facility is more than 35% drawn.
−Removed: As a result, the restriction imposed by our debt covenants could limit, perhaps substantially, the amount we are permitted to borrow under our credit facilities or under other debt arrangements.
+Added: In particular, our access to other debt financing is limited by the negative covenant in our credit agreement restricting our ability to incur other indebtedness, as well as the financial covenants therein prohibiting our Consolidated Total Net Leverage Ratio from exceeding 3.0 to 1.0 or our Consolidated Interest Coverage Ratio being less than 3.0 to 1.0 (both tested quarterly on a trailing four fiscal quarter basis).
+Added: As a result, such restrictions could limit, perhaps substantially, the amount of indebtedness we are permitted to borrow under other debt arrangements.
To the extent we are required to use additional borrowings under our revolving credit facility or from other sources (if available and if permitted by the credit facility) to provide working capital, it could increase our interest expense and expose us to other risks of leverage.
3 unchanged sentences
We have incurred significant indebtedness under our credit facilities to fund working capital and other cash needs and we expect to incur additional indebtedness in the future, particularly if we use borrowings or other debt financing to finance all or a portion of any future acquisitions.
−Removed: In addition, the terms of our credit facilities require, and any debt instruments we enter into in the future may require, that we comply with certain restrictions and covenants.
+Added: In addition, the terms of our credit facilities require, and any debt instruments we enter into in the future may require, that we comply with certain restrictions and
These covenants and restrictions, as well as any significant increase in our indebtedness, could adversely impact us for a number of reasons, including the following:
2 unchanged sentences
This risk is increased by the fact that borrowings under our credit facilities bear interest at a variable rate.
−Removed: This exposes us to the risk that the amount of cash required to pay interest under our credit facilities will increase to the extent that market interest
+Added: This exposes us to the risk that the amount of cash required to pay interest under our credit facilities will increase to the extent that market interest increases.
Our indebtedness and debt service obligations may also increase our vulnerability to economic downturns and adverse competitive and industry conditions.
7 unchanged sentences
As a result, any breach or failure to comply with covenants contained in our debt instruments could seriously harm our business.
−Removed: Moreover, our credit facilities are secured by substantially all of our assets (including capital stock of our subsidiaries), except assets of our foreign subsidiaries and some of the shares of our foreign subsidiaries, and if we are unable to pay indebtedness secured by collateral when due, whether at maturity or if declared due and payable by the lender following a default, the lender generally has the right to seize and sell the collateral securing that indebtedness.
+Added: Moreover, our credit facilities are secured by substantially all of our assets (including capital stock of our subsidiaries), except assets of our foreign subsidiaries and shares of some of our foreign subsidiaries, and if we are unable to pay indebtedness secured by collateral when due, whether at maturity or if declared due and payable by the lender following a default, the lender generally has the right to seize and sell the collateral securing that indebtedness.
There can be no assurance that we will not breach the covenants or other terms of our credit facilities or any other debt instruments in the future and, if a breach occurs, there can be no assurance that we will be able to obtain necessary waivers or amendments from the lender or to refinance the related indebtedness on terms we find acceptable, or at all.
1 unchanged sentence
Restrictions under our credit facilities .
−Removed: We must comply with covenants under our current credit facilities, one of which requires our Consolidated Total Net Leverage Ratio (as defined in our credit facilities) to be no greater than 8.0 to 1.0 if the revolving credit facility is more than 35% drawn.
−Removed: Our Consolidated Total Net Leverage Ratio as of December 31, 2020 was 0.9 to 1.0.
−Removed: While we were in compliance with this covenant as of December 31, 2020, there can be no assurance that we will not breach these covenants in our credit facilities in the future or other covenants in our future credit facilities.
−Removed: Our credit facilities also include covenants that limit or restrict our ability to, among other things, incur liens on our properties, make acquisitions and other investments and sell assets, subject to specified exceptions.
−Removed: In addition to the covenants described in the preceding sentence, we are also prohibited from incurring indebtedness other than debt owed to the lender under our credit facilities, debt associated with certain liens permitted by our credit facilities or subordinated debt.
+Added: We must comply with covenants under our current credit facilities, which require the maintenance of a maximum Consolidated Total Net Leverage Ratio of 3.0 to 1.0 and a Minimum Consolidated Interest Coverage Ratio of 3.0 to 1.0 (as defined in our credit facilities).
+Added: Our Consolidated Total Net Leverage Ratio and Consolidated Interest Coverage Ratio were 1.1 to 1.0 and 11.5 to 1.0 as of December 31, 2021, respectively.
+Added: While we were in compliance with all applicable financial covenants under our credit facilities as of December 31, 2021, there can be no assurance that we will not breach these financial covenants in our credit facilities in the future or other covenants in our future credit facilities.
+Added: Our credit facilities also include covenants that limit or restrict our ability to, among other things, incur liens on our properties, make acquisitions and other investments and sell assets, in each case, subject to specified exceptions.
+Added: In addition to the covenants described in the preceding sentence, we are also prohibited from incurring indebtedness other than debt owed to the lenders under our credit facilities, debt associated with certain liens permitted by our credit facilities, certain subordinated debt and other specified exceptions.
Our credit facilities also contain restrictions on our ability to pay dividends or make distributions in respect of our common stock or redemptions or repurchases of our common stock.
−Removed: The phase-out of the London Interbank Offered Rate, or LIBOR, or the replacement of LIBOR with a different reference rate, may adversely affect interest rates.
−Removed: Borrowings under our credit facilities bear interest at rates determined using LIBOR as the reference rate.
−Removed: On July 27, 2017, the Financial Conduct Authority (the authority that regulates LIBOR) announced that it would phase-out LIBOR by the end of 2021.
−Removed: It is unclear whether new methods of calculating LIBOR will be established such that it continues to exist after 2021, or if alternative rates or benchmarks will be adopted, and currently it appears highly likely that LIBOR will be discontinued or substantially modified by 2021.
−Removed: Changes in the method of calculating LIBOR, or the replacement of LIBOR with an alternative rate or benchmark, may adversely affect interest rates and result in higher borrowing costs.
−Removed: This could materially and adversely affect our results of operations, cash flows, and liquidity.
−Removed: We cannot predict the effect of the potential changes to LIBOR or the establishment and use of alternative rates or benchmarks.
−Removed: Furthermore, we may need to renegotiate our revolving credit facility or incur other indebtedness, and changes in the method of calculating LIBOR, or the use of an alternative rate or benchmark, may negatively impact the terms of such indebtedness.
We conduct our operations and sell our gear internationally and the effect of business, legal and political risks associated with international operations may seriously harm our business.
12 unchanged sentences
difficulties enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States and European countries;
−Removed: the risk that trade to or from some foreign countries, or companies in foreign countries that manufacture our gear or supply components that are used in our gear, may be affected by political tensions, trade disputes and similar matters, particularly between China and Taiwan or between China and the United States;
+Added: the risk that trade to or from some foreign countries, or companies in foreign countries that manufacture our gear or supply components that are used in our gear, may be affected by political tensions, trade disputes and similar matters, particularly between China and Taiwan or between China and the United States or Russia and Ukraine, and the United States and Russia;
United States and foreign trade restrictions, including those that may limit the importation of technology or components to or from various countries or impose tariffs or quotas;
10 unchanged sentences
These hackers may also develop and deploy viruses, worms and other malicious software programs that attack or otherwise exploit security vulnerabilities in our systems.
−Removed: For portions of our information technology infrastructure, including business management and communication software products, we rely on products and services provided by third parties.
+Added: For example, we recently discovered the exploitation by hackers of our subsidiary SCUF’s servers, which may have enabled such hackers to collect information provided by our customers, including payment card information, which is handled by our third-party ecommerce service provider.
+Added: Such hackers utilized the credentials we had provided to another third-party to inject a script, which was active for a limited amount of time, that collected this information provided by customers.
+Added: Additionally, for portions of our information technology infrastructure, including business management and communication software products, we rely on products and services provided by third parties.
These providers may also experience breaches and attacks to their products which may impact our systems.
1 unchanged sentence
To defend against security threats, both to our internal systems and those of our customers, we must continuously engineer more secure products and enhance security and reliability features, which may result in increased expenses.
−Removed: Actual or perceived breaches of our security measures or the accidental loss, inadvertent disclosure or unapproved dissemination of proprietary information or sensitive or confidential data about us, our partners, our customers or third parties could expose us and the parties affected to a risk of loss or misuse of this information, resulting in litigation and potential liability, paying damages, regulatory inquiries or actions, damage to our brand and reputation or other serious harm to our business.
−Removed: Our efforts to prevent and
−Removed: overcome these challenges could increase our expenses and may not be successful.
+Added: Actual or perceived breaches of our security measures, those of third-parties or the accidental loss, inadvertent disclosure or unapproved dissemination of proprietary information or sensitive or confidential data about us, our partners, our customers or third parties have exposed, and may in the future could expose us and the parties affected to a risk of loss or misuse of this information, resulting in litigation and potential liability, paying damages, regulatory inquiries or actions, damage to our brand and reputation or other serious harm to our business.
+Added: Our efforts to prevent and overcome these challenges could increase our expenses and may not be successful.
We may experience interruptions, delays, cessation of service and loss of existing or potential customers.
3 unchanged sentences
federal and state or foreign laws and regulations relating to privacy and cybersecurity, and actions by regulatory authorities or changes in legislation and regulation in the jurisdictions in which we operate could have a material adverse effect on our business.
−Removed: We are subject to a variety of laws and regulations that relate to the collection, processing, storing, disclosing, using, transfer and protecting of personal data and other data and the privacy of individuals.
+Added: We are subject to a variety of laws, regulations, and industry standards that relate to the collection, processing, storing, disclosing, using, transfer and protecting of personal data and other data and the privacy of individuals.
These laws and regulations constantly evolve and remain subject to significant change.
6 unchanged sentences
These legislative proposals may add additional complexity, variation in requirements, restrictions and potential legal risk, require additional investment in resources to compliance programs, and could impact strategies and availability of previously useful data.
−Removed: Compliance with existing and emerging privacy and cybersecurity laws and regulations could result in increased compliance costs and/or lead to changes in business practices and policies, and any failure to protect the confidentiality of client information could adversely affect our reputation, lend to private litigation against us, and require additional investment in resources, impact strategies and availability of previously useful data any of which could materially and adversely affect our business, operating results and financial condition.
+Added: We are also subject to payment card association operating rules, certification requirements and rules governing electronic funds transfers, including the Payment Card Industry Data Security Standard, or PCI DSS, a security standard applicable to companies that collect, store or transmit certain data regarding credit and debit cards, holders and transactions.
+Added: Any data security incidents, such as those described above, and/or other issues involving payment card information, can constitute a failure to comply with PCI DSS, which may therefore violate payment card association operating rules and the terms of our contracts with payment networks, processors and merchant banks.
+Added: Such failure to comply may result in the loss of our ability to accept credit and debit card payments, subject us to fines, penalties, and damages.
+Added: In addition, there is no guarantee that PCI DSS compliance will prevent illegal or improper use of our payment systems or the theft, loss or misuse of data pertaining to credit and debit cards, credit and debit card holders and credit and debit card transactions.
+Added: Compliance with existing and emerging privacy and cybersecurity laws, regulations and industry standards could result in increased compliance costs and/or lead to changes in business practices and policies, and any failure to protect the confidentiality of client information could adversely affect our reputation, lead to private litigation against us, and require additional investment in resources, impact strategies and availability of previously useful data any of which could materially and adversely affect our business, operating results and financial condition.
The collection, storage, transmission, use and distribution of user data could give rise to liabilities and additional costs of operation as a result of laws, governmental regulation and risks of security breaches.
6 unchanged sentences
For example, the European Union General Data Protection Regulation, or GDPR, which came into effect on May 25, 2018, has led to more stringent operational requirements for processors and controllers of personal data, including, for example, requiring expanded disclosures about how personal information is to be used, limitations on retention of information, mandatory data breach notification requirements, and higher standards for data controllers to demonstrate that they have obtained valid consent or have another legal basis in place to justify their data processing activities.
−Removed: The GDPR provides that EU member states may make their own additional laws and regulations in relation to certain data processing activities, which could limit our ability to use and share personal data or could require localized changes to our operating model.
+Added: The GDPR provides that European Union member states may make their own additional laws and regulations in relation to certain data processing activities, which could limit our ability to use and share personal data or could require localized changes to our operating model.
Under the GDPR, fines of up to €20 million or up to 4% of the total worldwide annual revenue of the preceding financial year, whichever is higher, may be assessed for non-compliance.
These new laws also could cause our costs to increase and result in further administrative costs.
−Removed: Further, the United Kingdom’s decision to leave the EU, often referred to as Brexit, has created uncertainty with regard to data protection regulation in the United Kingdom.
−Removed: In particular, while the Data Protection Act of 2018, which “implements” and complements the GDPR, achieved Royal Assent on May 23, 2018 and is now effective in the United Kingdom, it is still unclear
−Removed: whether transfer of data from the EEA to the United Kingdom will remain lawful under GDPR.
−Removed: During the period of “transition” (i.e., until December 31, 2020), EU law will continue to apply in the United Kingdom, and the GDPR will be converted into UK law.
−Removed: Beginning in 2021, the UK will be a “third country” under the GDPR, and we may incur liabilities, expenses, costs, and other operational losses under the GDPR and applicable EU Member States, and the United Kingdom privacy laws, in connection with any measures that we take to comply with them.
+Added: Further, the United Kingdom’s decision to leave the European Union , often referred to as Brexit, means that f rom January 1, 2021, we are subject to the GDPR and also the UK GDPR, which, together with the amended UK Data Protection Act 2018, retains the GDPR in UK national law.
+Added: The UK GDPR mirrors the fines under the GDPR, e.g.
+Added: fines up to the greater of €20 million / £17.5 million or 4% of global turnover .
Although there are legal mechanisms to allow for the transfer of personal data from the United Kingdom, EEA and Switzerland to the United States, uncertainty about compliance with such data protection laws remains, and such mechanisms may not be available or applicable with respect to the personal data processing activities necessary to research, develop and market our products and services.
−Removed: For example, legal challenges in Europe to the mechanisms allowing companies to transfer personal data from the EEA to the United States could result in further limitations on the ability to transfer personal data across borders, particularly if governments are unable or unwilling to reach new or maintain existing agreements that support cross-border data transfers, such as the EU-U.S.
−Removed: and Swiss-U.S.
−Removed: Privacy Shield Frameworks.
+Added: For example, legal challenges in Europe to the mechanisms allowing companies to transfer personal data from the EEA or the United Kingdom to the United States could result in further limitations on the ability to transfer personal data across borders, particularly if governments are unable or unwilling to reach new or maintain existing agreements that support cross-border data transfers.
Specifically, on July 16, 2020, the Court of Justice of the European Union invalidated Decision 2016/1250 on the adequacy of the protection provided by the EU-U.S.
−Removed: Privacy Shield Framework.
−Removed: To the extent that we were to rely on the EU-U.S.
−Removed: Privacy Shield Framework, we will not be able to do so in the future, which could increase our costs and limit our ability to process personal data from the EU.
−Removed: The same decision also casts doubt on the alternatives to the Privacy Shield, in particular the European Commission’s Standard Contractual Clauses to lawfully transfer personal data from Europe to the United States and most other countries, and by requiring additional risk assessments increasing the regulatory burden relating to such alternatives.
−Removed: At present, there are few if any viable alternatives to the Privacy Shield and the Standard Contractual Clauses.
+Added: Privacy Shield Framework and guidance following the Decision requires risk assessments to be conducted and, in many cases additional safeguards to be implemented to transfer data under the standard contractual clauses.
+Added: These recent developments will require us to review and amend the legal mechanisms by which we make and/ or receive personal data transfers to/ in the U.S.
+Added: At present, there are few if any viable alternatives to the Standard Contractual Clauses.
+Added: As supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the standard contractual clauses cannot be used, and/or start taking enforcement action, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.
+Added: We are also subject to evolving European Union and United Kingdom privacy laws on cookies, tracking technologies and e-marketing.
+Added: In the European Union and the United Kingdom under national laws derived from the ePrivacy Directive, informed consent is required for the placement of a cookie or similar technologies on a user’s device and for direct electronic marketing.
+Added: The GDPR also imposes conditions on obtaining valid consent for cookies, such as a prohibition on pre-checked consents and a requirement to ensure separate consents are sought for each type of cookie or similar technology.
+Added: The current national laws that implement the ePrivacy Directive are highly likely to be replaced across the European Union (but not directly in the United Kingdom) by an European Union regulation known as the ePrivacy Regulation which will significantly increase fines for non-compliance.
+Added: While the text of the ePrivacy Regulation is still under development, recent European court decisions and regulators’ recent guidance are driving increased attention to cookies and tracking technologies.
+Added: If the trend of increasing enforcement by regulators of the strict approach in recent guidance and decisions continues, this could lead to substantial costs, require significant systems changes, limit the effectiveness of our marketing activities, divert the attention of our technology personnel, adversely affect our margins, increase costs and subject us to additional liabilities.
+Added: Regulation of cookies and similar technologies, and any decline of cookies or similar online tracking technologies as a means to identify and potentially target users, may lead to broader restrictions and impairments on our marketing and personalization activities and may negatively impact our efforts to understand users.
In addition, the CCPA, which came into force in 2020, creates individual privacy rights for California consumers and increases the privacy and security obligations of entities handling certain personal data.
4 unchanged sentences
California Proposition 24 would impose additional data protection obligations on companies doing business in California.
−Removed: It would also create a new California data protection agency specifically tasked to enforce the law, which would likely result in increased regulatory scrutiny of California businesses in the areas of data protection and security.
+Added: It will also create a new California data protection agency specifically tasked to enforce the law, which could likely result in increased regulatory scrutiny of California businesses in the areas of data protection and security.
The new California Privacy Rights Act takes effect on January 1, 2023 and will apply to information collected on or after January 1, 2022.
−Removed: Furthermore, information security risks have generally increased in recent years because of the proliferation of new technologies and the increased sophistication and activities of perpetrators of cyber-attacks.
+Added: Further, information security risks have generally increased in recent years because of the proliferation of new technologies and the increased sophistication and activities of perpetrators of cyber-attacks.
Hackers and data thieves are increasingly sophisticated and operating large-scale and complex automated attacks.
1 unchanged sentence
We cannot guarantee that our facilities and systems will be free of security breaches, cyber-attacks, acts of vandalism, computer viruses, malware, ransomware, denial-of-service attacks, misplaced or lost data, programming and/or human errors or other similar events.
−Removed: Any compromise or perceived compromise of the security of our systems could damage our reputation, result in disruption or interruption to our business operations, reduce demand for our products and subject us to significant liability and expense as well as regulatory action and lawsuits, which would harm our business, operating results and financial condition.
+Added: Any compromise or perceived compromise of the security of our systems could damage our reputation, result in disruption or interruption to our business operations, reduce demand for our products and subject us to
+Added: significant liability and expense as well as regulatory action and lawsuits, which would harm our business, operating results and financial condition.
In addition, any failure or perceived failure by us to comply with privacy or security laws, policies, legal obligations or industry standards, or any security incident that results in the actual or alleged unauthorized release or transfer of personal data, may result in governmental enforcement actions and investigations, including fines and penalties, enforcement orders requiring us to cease processing or operating in a certain way, litigation and/or adverse publicity, including by consumer advocacy groups, and could cause our customers to lose trust in us, which could have material impacts on our revenue and operations and could seriously harm our business.
+Added: W e may also face civil claims including representative actions and other class action type litigation (where individuals have suffered harm), potentially amounting to significant compensation or damages liabilities, as well as associated costs, diversion of internal resources, and reputational harm.
We may be adversely affected by the financial condition of retailers and distributors to whom we sell our gear and may also be adversely affected by the financial condition of our competitors.
2 unchanged sentences
In addition, a retailer or distributor experiencing financial difficulties generally increases our exposure to uncollectible receivables.
−Removed: Moreover, if one of our distributor or retailer customers experiences financial distress or bankruptcy, they may be required to liquidate their inventory of our
−Removed: gear, or similar products that compete with our gear, at reduced prices, which can result in substantial over-supply and reduced demand for our gear over the short term.
+Added: Moreover, if one of our distributor or retailer customers experiences financial distress or bankruptcy, they may be required to liquidate their inventory of our gear, or similar products that compete with our gear, at reduced prices, which can result in substantial over-supply and reduced demand for our gear over the short term.
If any of these circumstances were to occur, it could seriously harm our business.
18 unchanged sentences
As of December 31, 2021, we had approximately $317.1 million of goodwill, $225.7 million of intangible assets and $73.4 million of other long-lived assets.
−Removed: One of our strategies is to grow through acquisitions of other businesses or technologies and, if we are successful in doing so, these acquisitions may result in goodwill and other long-lived assets.
+Added: One of our strategies is to grow through acquisitions of other businesses or technologies and, if we are successful in doing so, these
+Added: acquisitions may result in goodwill and other long-lived assets.
The risk that we will be required to recognize impairment charges is also heightened by the fact that the life cycles of much of the gear we sell are relatively short, which increases the possibility that we may be required to recognize impairment charges for obsolete inventory.
2 unchanged sentences
We consider the Corsair brand to be one of our most valuable assets.
−Removed: We also consider the Elgato, Origin, and SCUF brands, proprietary technology brands such as iCUE and Slipstream, and major product family brands such as Corsair ONE, Dark Core, Dominator, Glaive, Harpoon, Ironclaw, K70, Nightsword, Scimitar, Vengeance, and Void to be important to our business.
+Added: We also consider the Elgato, Origin, and SCUF brands, proprietary technology brands such as iCUE and Slipstream, and major product family brands such as Corsair ONE, Dark Core, Dominator, Glaive, Harpoon, Ironclaw, K70, K100, Nightsword, Scimitar, Vengeance, Virtuoso and Void to be important to our business.
Our future success depends to a large degree upon our ability to defend the Corsair brand, proprietary technology brands and product family brands from infringement and to protect our other intellectual property.
2 unchanged sentences
Likewise, we hold a trademark registration on certain brands such as K70 only in the United States, Australia and New Zealand and therefore such brands do not have trademark protection in other parts of the world.
−Removed: If third parties misappropriate or infringe on our brands or we are unable to protect our brands, or if third parties
−Removed: use the Corsair, Corsair ONE, Dark Core, Dominator, Elgato, Glaive, Harpoon, iCUE, Ironclaw, K70, Nightsword, Origin, SCUF, Slipstream, Scimitar, Vengeance and Void brand names, or other brand names we maintain, to sell their products in countries where we do not have trademark protection, it may seriously harm our business.
+Added: If third parties misappropriate or infringe on our brands or we are unable to protect our brands, or if third parties use the Corsair, Corsair ONE, Dark Core, Dominator, Elgato, Glaive, Harpoon, iCUE, Ironclaw, K70, K100, Nightsword, Origin, SCUF, Slipstream, Scimitar, Vengeance, Virtuoso and Void brand names, or other brand names we maintain, to sell their products in countries where we do not have trademark protection, it may seriously harm our business.
We hold a limited number of patents and pending patent applications.
12 unchanged sentences
Use of open source software may entail greater risks than use of third-party commercial software, as open source licensors generally do not provide support, updates, warranties or other contractual protections regarding infringement claims or the quality of the code, and the wide availability of source code to components used in our products could expose us to security vulnerabilities.
−Removed: Furthermore, the terms of many open source licenses have not been interpreted by U.S.
+Added: Further, the terms of many open source licenses have not been interpreted by U.S.
courts, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to market or commercialize our products.
1 unchanged sentence
In addition, by the terms of some open source licenses, under certain conditions, we could be required to release our proprietary source code, and to make our proprietary software available under open source licenses, including authorizing further modification and redistribution.
−Removed: These claims or requirements could result in litigation and could require us to purchase a costly license or cease offering the implicated products unless and until we can re-engineer them to avoid infringement or release of our proprietary source code.
+Added: or requirements could result in litigation and could require us to purchase a costly license or cease offering the implicated products unless and until we can re-engineer them to avoid infringement or release of our proprietary source code.
This re-engineering process could require significant additional research and development resources.
18 unchanged sentences
In addition, typhoons and other severe weather systems frequently affect Taiwan.
−Removed: Most of the third-party facilities where our gear and some of the components used in our gear is manufactured are located in China, Taiwan and other areas that are known for seismic activity and other natural disasters.
+Added: Most of the third-party facilities where our gear and some of the components used in our gear is manufactured are located in China, Taiwan, Southeast Asia and other areas that are known for seismic activity and other natural disasters.
Earthquakes in any of the foregoing areas may also result in tsunamis.
1 unchanged sentence
As a result, earthquakes or other natural disasters could severely disrupt our operations, either directly or as a result of their effect on third-party manufacturers and suppliers upon whom we rely and their respective supply chains and may negatively impact the ordering patterns of our customers and may seriously harm our business.
−Removed: We have identified material weaknesses in our internal controls over financial reporting.
−Removed: If our remediation of the material weaknesses is not effective or we otherwise fail to maintain an effective system of internal controls in the future, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence in us and, as a result, the value of our common stock.
−Removed: In connection with the preparation of our 2018 audited financial statements, we identified material weaknesses in our internal controls over financial reporting.
−Removed: A material weakness is a deficiency, or a combination of deficiencies, in internal controls 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.
−Removed: These material weaknesses related to maintaining an insufficient compliment of appropriately trained resources, which resulted in the failure to identify risks related to appropriate process level controls over accounting across multiple areas of financial reporting, including inventory, income taxes, general information technology controls, warranty reserves, sales returns and web based sales.
−Removed: After these material weaknesses were identified, during 2019 management implemented a remediation plan that included hiring key accounting personnel.
−Removed: While we have taken steps to remediate these material weaknesses, there can be no assurance that these measures will significantly improve or fully remediate the material weaknesses described above.
−Removed: If we are unable to remediate the above material weaknesses, our reputation and the market price of our stock could be seriously harmed.
We are subject to various environmental laws, conflict mineral-related provisions of the Dodd-Frank Act and other regulations that could impose substantial costs upon us and may seriously harm our business.
19 unchanged sentences
We are controlled by EagleTree, whose interests in our business may be different than yours.
−Removed: As of December 31, 2020, and after giving effect to the registered secondary offering in January 2021, EagleTree beneficially owned approximately 67% of our common stock and is able to control our affairs in all cases.
+Added: As of December 31, 2021, EagleTree beneficially owned approximately 57.3% of our common stock and is able to control our affairs in all cases.
Further, pursuant to the terms of an Investor Rights Agreement between us and EagleTree, EagleTree has the right, among other things, to designate the chairman of our board of directors, as well as the right to nominate up to five out of eight directors to our board of directors as long as affiliates of EagleTree beneficially own at least 50% of our common stock, four directors as long as affiliates of EagleTree beneficially own at least 40% and less than 50% of our common stock, three directors as long as affiliates of EagleTree beneficially own at least 30% and less than 40% of our common stock, two directors as long as affiliates of EagleTree beneficially own at least 20% and less than 30% of our common stock and one director as long as affiliates of EagleTree beneficially own at least 10% and less than 20% of our common stock.
33 unchanged sentences
the outbreak of epidemics or pandemics, such as the coronavirus pandemic;
−Removed: natural disasters, terrorist acts, acts of war or periods of widespread civil unrest;
+Added: natural disasters, terrorist acts, acts of war or periods of widespread civil unrest, such as any military actions taken as a result of the tensions between Russia and Ukraine;
changes in general market and economic conditions.
2 unchanged sentences
An active, liquid and orderly market for our common stock may not be maintained.
−Removed: Prior to our initial public offering, there had been no public market for shares of our common stock.
Our stock only recently began trading on Nasdaq, but we can provide no assurance that we will be able to maintain an active trading market on Nasdaq or any other exchange in the future.
−Removed: If an active market for our common stock does not develop or is not maintained, it may be difficult for our stockholders to sell shares without depressing the market price for the shares or at all.
+Added: If an active market for our common stock is not maintained, it may be difficult for our stockholders to sell shares without depressing the market price for the shares or at all.
An inactive market may also impair our ability to raise capital by selling shares and may impair our ability to acquire other businesses, applications, or technologies using our shares as consideration.
Future sales of our common stock in the public market could cause our stock price to fall.
−Removed: If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market after the lock-up and other legal restrictions on resale described in the related prospectus dated September 22, 2020 and the prospectus dated January 21, 2021 lapse, the trading price of our common stock could decline.
−Removed: Based upon the number of shares outstanding as of December 31, 2020, we had outstanding a total of 91,934,639 shares of common stock.
−Removed: Of these shares, all of the shares of our common stock sold in the initial public offering and in the subsequent exercise of the underwriters’ option to purchase additional shares, are freely tradable, without restriction, in the public market.
−Removed: The lock-up agreements pertaining to our initial public offering will expire on March 21, 2021, or the IPO Lockups, and the lock-up agreements pertaining to our January 2021 secondary offering will expire on April 21, 2021, or the Secondary Lockups.
−Removed: We note that the Secondary Lockups, or 65.7 million shares, were initially part of the IPO Lockups.
−Removed: After the IPO Lockups expire, as of December 31, 2020 and giving effect to the January 2021 secondary offering, up to approximately 2.5 million additional shares of common stock will be eligible for sale in the public market, none of which shares are held by directors, executive officers and other affiliates and may be subject to Rule 144 under the U.S.
−Removed: Securities Act of 1933, as amended, or the Securities Act.
−Removed: After the Secondary Lockups expire, as of December 31, 2020, up to approximately 65.7 million additional shares of common stock will be eligible for sale in the public market, which is in addition to the shares eligible for sale after the IPO Lockups expire, approximately 65.4 million of which shares are held by directors, executive officers and other affiliates and may be subject to Rule 144.
−Removed: Goldman Sachs & Co.
−Removed: LLC may, however, in its sole discretion, permit our officers, directors, the selling stockholders and the other stockholders who are subject to these lock-up agreements to sell shares prior to the expiration of the lock-up agreements.
−Removed: In addition, as of December 31, 2020, approximately 10.2 million shares of common stock that are either subject to outstanding options or reserved for future issuance under our equity incentive plans became eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules, the lock-up agreements and Rule 144 and Rule 701 under the Securities Act.
−Removed: If these additional shares of common stock are sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could decline.
−Removed: As of December 31, 2020 and after giving effect to sale of our common stock by EagleTree in the secondary offering in January 2021, the holders of approximately 61.9 million shares of our common stock, or approximately 67.3% of our total outstanding common stock based upon the number of shares outstanding as of December 31, 2020, will be entitled to rights with respect to the registration of their shares under the Securities Act, subject to vesting schedules and to the lock-up agreements described above.
+Added: If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public, the trading price of our common stock could decline.
+Added: Based upon the number of shares outstanding as of December 31, 2021, we had outstanding a total of 94.5 million shares of common stock.
+Added: Of these shares, all of the shares of our common stock sold in the initial public offering and in the secondary offering in January 2021, are freely tradable, without restriction, in the public market.
+Added: As of December 31, 2021, the holders of approximately 54.2 million shares of our common stock, or approximately 57.3% of our total outstanding common stock based upon the number of shares outstanding as of December 31, 2021, will be entitled to rights with respect to the registration of their shares under the Securities Act.
Registration of these shares under the Securities Act would result in the shares becoming freely tradable without restriction under the Securities Act, except for shares purchased by affiliates.
54 unchanged sentences
Our amended and restated certificate of incorporation contains a provision renouncing our interest and expectancy in certain corporate opportunities.
−Removed: Under our amended and restated certificate of incorporation, none of EagleTree or any of its respective portfolio companies, funds or other affiliates, or any of their officers, directors, agents, stockholders, members or partners will have any duty to refrain from
−Removed: engaging, directly or indirectly, in the same business activities, similar business activities or lines of business in which we operate.
+Added: Under our amended and restated certificate of incorporation, none of EagleTree or any of its respective portfolio companies, funds or other affiliates, or any of their officers, directors, agents, stockholders, members or partners will have any duty to refrain from engaging, directly or indirectly, in the same business activities, similar business activities or lines of business in which we operate.
In addition, our amended and restated certificate of incorporation provides that, to the fullest extent permitted by law, no officer or director of ours who is also an officer, director, employee, managing director or other affiliate of EagleTree will be liable to us or our stockholders for breach of any fiduciary duty by reason of the fact that any such individual was presented with a corporate opportunity, other than specifically in their capacity as one of our officers or directors, and ultimately directs such corporate opportunity to EagleTree instead of us, or does not communicate information regarding a corporate opportunity to us that the officer, director, employee, managing director or other affiliate has directed to EagleTree.
6 unchanged sentences
Because we have substantial operations in a number of locations worldwide, tax authorities in various jurisdictions may raise questions concerning matters such as transfer pricing, whether revenues or expenses should be attributed to particular countries, the presence or absence of permanent establishments in particular countries and similar matters.
−Removed: In addition, we have engaged in a number of material restructuring transactions in various jurisdictions, including in the Acquisition Transaction, and the tax positions we have adopted in connection with these restructuring transactions may be subject to challenge.
−Removed: While we have contractual rights to indemnification in respect of certain taxable periods ending on or before the date of the Acquisition Transaction, such indemnity protection does not address all potential tax risks that may arise from such taxable periods, and there can be no assurance that we would be successful in collecting on an indemnification claim if such tax matters were to arise.
+Added: In addition, we have engaged in a number of material restructuring transactions in various jurisdictions, and the tax positions
+Added: we have adopted in connection with these restructuring transactions may be subject to challenge.
Accordingly, a material assessment by a tax authority in any jurisdiction could require that we make significant cash payments without reimbursement.
26 unchanged sentences
In addition, our brand and reputation, our sales activities or our stock price could be adversely affected if we become the subject of any negative publicity related to actual or potential violations of anti-corruption, anti-bribery or trade control laws and regulations.
+Added: As a public reporting company, we are subject to rules and regulations established from time to time by the SEC and Nasdaq regarding our internal controls over financial reporting.
+Added: We may not complete needed improvements to our internal controls over financial reporting in a timely manner, or these internal controls may not be determined to be effective, which may adversely affect investor confidence in our company and, as a result, the value of our common stock and your investment.
+Added: We are subject to the rules and regulations established from time to time by the Securities and Exchange Commission, or SEC, and Nasdaq.
+Added: These rules and regulations require, among other things, that we establish and periodically evaluate procedures with respect to our internal controls over financial reporting.
+Added: As part of these evaluations, material weaknesses in our internal controls over financial reporting may be identified.
+Added: A material weakness is a deficiency, or a combination of deficiencies, in internal controls over financial reporting such that there is a reasonable possibility that a material misstatement of a company’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis.
+Added: While we were able to remediate previously identified material weaknesses in our internal controls over financial reporting, there can be no guarantee we will not identify similar or other material weaknesses in the future and if such material weaknesses are identified, there can be no guarantee we would be able to remediate such material weaknesses.
+Added: Any material weaknesses in our internal controls may adversely affect our ability to record, process, summarize and accurately report timely financial information and, as a result, our consolidated financial statements may contain material misstatements or omissions.
+Added: Reporting obligations as a public company place a considerable strain on our financial and management systems, processes and controls, as well as on our personnel.
+Added: In addition, as a public company we are required to document and test our internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act so that our management can certify as to the effectiveness of our internal controls over financial reporting.
+Added: Likewise, our independent registered public accounting firm is required to provide an attestation report on the effectiveness of our internal controls over financial reporting in our Annual Reports on Form 10-K .
+Added: If our management is unable to certify the effectiveness of our internal controls or if our independent registered public accounting firm cannot deliver a report attesting to the effectiveness of our internal controls over financial reporting, or if we identify or fail to remediate material weaknesses in our internal controls, we could be subject to regulatory scrutiny and a loss of public confidence, which could seriously harm our reputation and the market price of our common stock.
+Added: In addition, if we do not maintain adequate financial and management personnel, processes and controls, we may not be able to manage our business effectively or accurately report our financial performance on a timely basis, which could cause a decline in our common stock price and may seriously harm our business.
We will incur significant expenses as a result of being a public company, which will negatively impact our financial performance.
11 unchanged sentences
The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.
−Removed: Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our common stock, fines, sanctions and other regulatory action and potentially civil litigation.
−Removed: As a public reporting company, we are subject to rules and regulations established from time to time by the SEC and Nasdaq regarding our internal controls over financial reporting.
−Removed: We may not complete needed improvements to our internal controls over financial reporting in a timely manner, or these internal controls may not be determined to be effective, which may adversely affect investor confidence in our company and, as a result, the value of our common stock and your investment.
−Removed: We are subject to the rules and regulations established from time to time by the Securities and Exchange Commission, or SEC, and Nasdaq.
−Removed: These rules and regulations require, among other things, that we establish and periodically evaluate procedures with respect to our internal controls over financial reporting.
−Removed: Reporting obligations as a public company place a considerable strain on our financial and management systems, processes and controls, as well as on our personnel.
−Removed: In addition, as a public company we are required to document and test our internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act so that our management can certify as to the effectiveness of our internal controls over financial reporting by the time our annual report for the year ending December 31, 2021 is due and thereafter, which will require us to document and make significant changes to our internal controls over financial reporting.
−Removed: Likewise, our independent registered public accounting firm will be required to provide an attestation report on the effectiveness of our internal controls over financial reporting in our Annual Report on Form 10-K to be filed in 2022.
−Removed: As a result, we will be required to improve our financial and managerial controls, reporting systems and procedures, to incur substantial expenses to test our systems to make such improvements and to hire additional personnel.
−Removed: If our management is unable to certify the effectiveness of our internal controls or if our independent registered public accounting firm cannot deliver a report attesting to the effectiveness of our internal controls over financial reporting, or if we identify or fail to remediate material weaknesses in our internal controls such as those described more fully above, we could be subject to regulatory scrutiny and a loss of public confidence, which could seriously harm our reputation and the market price of our common stock.
−Removed: In addition, if we do not maintain adequate financial and management personnel, processes and controls, we may not be able to manage our business effectively or accurately report our financial performance on a timely basis, which could cause a decline in our common stock price and may seriously harm our business.
+Added: Further, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our common stock, fines, sanctions and other regulatory action and potentially civil litigation.
+Added: Our business could be negatively impacted by corporate citizenship and ESG matters and/or our reporting of such matters.
+Added: Institutional, individual, and other investors, proxy advisory services, regulatory authorities, consumers and other stakeholders are increasingly focused on environmental, social and governance, or ESG, practices of companies.
+Added: As we look to respond to evolving standards for identifying, measuring, and reporting ESG metrics, our efforts may result in a significant increase in costs and may nevertheless not meet investor or other stakeholder expectations and evolving standards or regulatory requirements, which may negatively impact our financial results, our reputation, our ability to attract or retain employees, our attractiveness as a service provider, investment, or business partner, or expose us to government enforcement actions, private litigation, and actions by stockholders or stakeholders.
Unresolved Staff Comments.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.