What changed in this filing

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Item 1A. Risk Factors

2023-07-27 compared with 2023-04-27 · 118 added, 129 removed, 1124 unchanged (18% of the section changed)

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Our short and long-term success is subject to numerous risks and uncertainties, many of which involve factors that are difficult to predict or beyond our control.

Before making a decision to invest in, hold or sell our common stock, stockholders and potential stockholders should carefully consider the risks and uncertainties described below, in addition to the other information contained in or incorporated by reference into this Quarterly Report on Form 10-Q, as well as the other information we file with the Securities and Exchange Commission.

If any of the following risks are realized, our business, financial condition, results of operations and prospects could be materially and adversely affected.

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• We operate in a highly competitive market and face competition from large, well-established companies with significant resources, and, as a result, we may not be able to compete effectively.

• The outbreak of the SARS-CoV-2 virus and its variants and the COVID-19 disease that it causes, or similar public health crises, could have a material adverse impact on our business, financial condition and results of operations, including our manufacturing, commercial operations and sales.

• Global pandemics or similar public health crises, could have a material adverse impact on our business, financial condition and results of operations, including our manufacturing, commercial operations and sales.

• We are subject to a variety of risks due to our international operations that could adversely affect our business, our operations or profitability and operating results.

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As a medical device company, reimbursement from government and/or commercial third-party healthcare payors, including Medicare and Medicaid, is an important element of our success.

The Centers for Medicare &

Medicaid Services, or CMS, provides coverage for “Therapeutic Continuous Glucose Monitors” as durable medical equipment eligible for coverage under Medicare Part B.

The Centers for Medicare & Medicaid Services, or CMS, provides coverage for “Therapeutic Continuous Glucose Monitors” as durable medical equipment eligible for coverage under Medicare Part B.

Coverage criteria for therapeutic CGMs is determined by CMS under national coverage determinations as well as by local Medicare Administrative Contractors under local coverage determinations.

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Adverse coverage or reimbursement decisions relating to our products, or rescission or limitation of favorable determinations, by CMS, its Medicare Administrative Contractors, other state, federal or international payors, and/or third-party commercial payors could significantly reduce reimbursement, which could have an impact on the acceptance of, and demand for, our products and the prices that our customers are willing to pay for them.

As of March 31, 2023, the eight largest private third-party payors, in terms of the number of covered lives, have issued coverage policies for the category of CGM devices.

As of June 30, 2023, the eight largest private third-party payors, in terms of the number of covered lives, have issued coverage policies for the category of CGM devices.

In addition, we have negotiated contracted rates with all of those third-party payors for the purchase of our current CGM systems by their members.

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The commercial success of our products in both domestic and international markets will substantially depend on whether timely and comprehensive third-party reimbursement is widely available for individuals that use them.

CMS has recently adopted coverage guidelines for CGMs, which could have a favorable impact on us.

CMS has adopted coverage guidelines for CGMs, which could have a favorable impact on us.

Previously, Medicare coverage for CGM was only available to Medicare patients who take at least three doses of insulin a day, limiting CGM reimbursement for Medicare beneficiaries with intensive Type 1 and 2 diabetes.

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Further, the LCD also allows coverage for patients not taking insulin if the patient has a history of problematic hypoglycemia.

Nevertheless, third-party payors are increasingly attempting to contain healthcare costs by limiting both coverage and the level of reimbursement of new and existing medical devices, and, as a result, they may be restrictive, or they may not cover or provide adequate payment for our products.

restrictive, or they may not cover or provide adequate payment for our products.

In order to obtain additional reimbursement arrangements, including under pharmacy benefits, we may have to agree to a net sales price lower than the net sales price we might charge in other sales channels.

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• rapid technological change may make our technology and our products obsolete.

unwilling to insert a sensor in their body, especially if their current diabetes management involves no more than two finger sticks per day.

In addition to the risks outlined above, our G6 and G7 systems are more invasive than many other self-monitored glucose testing systems, including single-point finger stick devices, and people with diabetes may be unwilling to insert a sensor in their body, especially if their current diabetes management involves no more than two finger sticks per day.

Moreover, people with diabetes may not perceive the benefits of CGM and may be unwilling to change their current treatment regimens.

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Delays in the launch of next-generation products may result in unanticipated continuing increases in demand for current-generation products (to substitute for the unavailability of the next-generation products) which, if not adequately prepared for, may result in deficits in our ability to produce adequate amounts of the prior-generation products to meet demand at appropriate prices.

The scaling of manufacturing capacity is subject to numerous risks and uncertainties, and may lead to variability in product quality or reliability, increased construction timelines, as well as resources required to design, install and maintain manufacturing equipment, among others, all of which can lead to unexpected delays in manufacturing output.

install and maintain manufacturing equipment, among others, all of which can lead to unexpected delays in manufacturing output.

In addition, any changes to our manufacturing processes may trigger the need for submissions or notifications to, and in some cases advance approval from, the FDA or other regulatory authorities because of the potential impact of changes on our previously cleared, approved and/or authorized devices.

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Any interruption or delay in the supply of components or materials, or our inability to obtain components or materials from alternate sources at acceptable prices in a timely manner, could impair our ability to meet the demand of our customers and cause them to cancel orders or switch to competitive products.

For supply risks related to the ongoing COVID-19 pandemic see our Risk Factor entitled, “The outbreak of the SARS-CoV-2 virus and its variants and the COVID-19 disease that it causes, or similar public health crises, could have a material adverse impact on our business, financial condition and results of operations, including our manufacturing, commercial operations and sales.”

Our reliance on these outside manufacturers and suppliers also subjects us to other risks that could harm our business, including:

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• manage geographically dispersed sales and marketing operations;

current and prospective patients and maintain active oversight and auditing measures to ensure continued compliance.

• effectively train our sales and marketing personnel on the applicable advertising and promotion, and fraud and abuse laws that govern interactions with healthcare professionals and institutions as well as current and prospective patients and maintain active oversight and auditing measures to ensure continued compliance.

We currently employ sales and marketing personnel for the direct sale and marketing of our products in North America, Asia Pacific, Europe and the Middle East.

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Our distributors might not have the resources to continue to support our recent rapid growth.

Our distribution agreements with AmerisourceBergen, Byram and affiliates, Cardinal Health and affiliates (including Edgepark Medical Supplies), and McKesson, our most significant wholesalers and distributors, each generated 10% or more of our total revenue during the three months ended March 31, 2023.

We cannot guarantee that these relationships will continue or that we will be able to maintain this volume of sales from these relationships in the future.

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In addition, certain development efforts throughout the diabetes industry, including that of the National Institutes of Health and other supporters of diabetes research are continually seeking ways to prevent, cure or improve treatment of diabetes.

Therefore, our products may be rendered obsolete by technological breakthroughs in diabetes monitoring, treatment, prevention or cure.

Therefore, our

products may be rendered obsolete by technological breakthroughs in diabetes monitoring, treatment, prevention or cure.

In selling our current CGM systems, we compete directly with the Diabetes Care division of Abbott Laboratories;

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Collectively, these companies currently account for the majority of the worldwide sales of self-monitored glucose testing systems.

Our competitors manufacturing adjunctive CGMs have also recognized expanded Medicare coverage of their CGM devices and supplies following CMS’ December 2021 final rule expanding the classification of DME under

Medicare Parts B & C to include adjunctive CGMs.

These devices now directly compete with our CGM products in the Medicare market.

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We have competed with Abbott for several years and their Libre family of CGM products.

Medtronic markets and sells a standalone glucose monitoring product called Guardian Connect both internationally and in the United States.

Medtronic markets and sells one or more standalone glucose monitoring products both internationally and in the United States.

Medtronic and other third parties have developed or are developing insulin pumps integrated with CGM systems that provide, among other things, the ability to suspend insulin administration while the user’s glucose levels are low and to automate basal and bolus insulin dosing.

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As a result, we may not be able to compete effectively against these companies or their products, which may adversely impact our business.

The outbreak of the SARS-CoV-2 virus and its variants and the COVID-19 disease that it causes, or similar public health crises, could have a material adverse impact on our business, financial condition and results of operations, including our manufacturing, commercial operations and sales.

The outbreak of the SARS-CoV-2 virus and its variants and the COVID-19 disease that it causes has been and continues to be a global pandemic, despite the current gradual decline in reported cases in the United States per the CDC’s COVID Data tracker.

The extent to which this coronavirus impacts our business and operating results will depend on future developments that are highly uncertain and cannot be accurately predicted, including new variants of the virus and new information that may emerge concerning the virus and the actions to contain it or to mitigate the COVID-19 impact, among others.

It is especially difficult to predict the impact on the global economic markets, which have been and will continue to be highly dependent upon the actions of governments, businesses, and other enterprises in response to the pandemic, as well as the effectiveness of those actions, and vaccine availability, distribution, efficacy and adoption.

The spread of COVID-19, which has caused a broad impact globally, including restrictions on travel and quarantine policies put into place by businesses and governments, may have a material economic effect on our business.

For example, such restrictions may have a substantial impact on our customers and sales cycles.

Changes in hospital or physician policies, federal, state or local regulations, prioritization of hospital or medical resources toward pandemic efforts may negatively affect the demand for our devices.

The COVID-19 pandemic has, and may continue to, put pressure on global economic conditions and overall spending for medical device products, and may cause our customers to modify spending priorities or delay or abandon purchasing decisions.

Further, if the spread of the coronavirus pandemic continues and our operations are adversely impacted, we risk a delay, default and/or nonperformance under existing agreements.

As a result of the impact of the ongoing COVID-19 pandemic and recent economic slowdown, some customers have lost, and others may lose, access to their private health insurance plan if they have lost or lose their job.

Any prolonged economic downturn or recession could result in layoffs of employees and a significant increase in unemployment in the United States and elsewhere, which may continue even after the ongoing COVID-19

pandemic is contained.

An impact to job status may extend for a prolonged period of time, beyond possible coverage periods through COBRA, or where the cost to maintain coverage may not be affordable to our customer.

As most of our customers rely on third-party payors, including government programs and private health insurance plans, to cover the cost of our products, our customers may lose coverage to our products, which may harm our business and results of operations.

We currently utilize third parties to, among other things, manufacture components and materials for our devices, and to provide services such as sterilization services and we purchase these materials and services from numerous suppliers worldwide.

The global COVID-19 pandemic has and may continue to have an adverse impact on our manufacturing and distribution capabilities.

Disruptions relating to the ongoing COVID-19 pandemic could prevent employees, suppliers, distributors, and others from accessing manufacturing facilities and from transporting our products or the components required to manufacture our products.

For example, we have experienced some supply chain disruption due to the global restrictions resulting from the ongoing COVID-19 pandemic in the manufacture of our next-generation CGM product.

Further, worldwide supply chain disruption relating to the ongoing COVID-19 pandemic has resulted in product shortages, that has and may continue to impact our ability to manufacture our devices.

If either we or any third-party parties in the supply chain for materials used in the production of our devices continue to be adversely impacted by, and/or the restrictions resulting from, the ongoing COVID-19 pandemic, our supply chain may be continue disrupted, limiting our ability to manufacture our devices.

These disruptions may, among other things, impact our ability to produce and supply products in quantities necessary to meet market demand.

We continue to take precautions to protect the health and safety of our employees, including monitoring community levels of COVID-19 according to the Center for Disease Control’s recommendations.

We continue to address other unique situations that arise among our workforce due to the ongoing COVID-19 pandemic on a case-by-case basis.

While we believe that we have taken appropriate measures to ensure the health and well-being of our employees, there can be no assurances that our measures will be sufficient to protect our employees in our workplace or that they may not otherwise be exposed to COVID-19 outside of our workplace.

If a number of our essential employees become ill, incapacitated or are otherwise unable to continue working during the current or any future epidemic, our operations may be adversely impacted.

While the potential economic impact brought by, and the duration of, the pandemic is difficult to assess or predict, it has already caused significant disruption of global financial markets.

The ultimate impact of the current pandemic, or any other health epidemic, is highly uncertain and subject to change.

We have experienced certain delays or impacts to our business, our clinical trials, our research programs, healthcare systems or the global economy as a whole as a result of the ongoing COVID-19 pandemic so far, but do not yet know the full extent of future delays or impacts.

However, these effects could have a material impact on our business, and we will continue to monitor the situation closely.

We are subject to risks associated with public health issues, including pandemics, which could have a material adverse effect on our business, financial condition and results of operations.

We are subject to risks associated with public health issues, such as the recent COVID-19 pandemic, and other events beyond our control.

Public health issues and crises may adversely impact our operations, supply chain and logistics network if the locations where we operate, manufacture or distribute our products;

where our raw materials or products are sourced, manufactured or distributed;

or where our third-party distributors, suppliers and other service providers operate, are disrupted, temporarily closed or experience worker shortages for a sustained period of time.

In addition, public health issues and crises may adversely impact our customers and/or their businesses due to lockdowns, labor shortages, lost access to private health insurance plans or modified spending priorities, all of which could cause a decline in demand for our products.

These disruptions could also cause economic slowdowns or increased economic uncertainty.

While we largely navigated disruptions to our business as a result of the COVID-19 pandemic, a future public health issue, pandemic or outbreak of COVID-19 could lead to delays in the manufacturing and supply of products, which could have a material adverse effect on our business, financial condition and results of operations.

Moreover, any future public health issue, such as a resurgence in COVID-19 infections, including due to new variants of the

virus for which current vaccines may not be effective, could result in the imposition of new governmental restrictions, quarantine requirements or other measures to slow the spread of the virus, which could result in closures or other restrictions that significantly disrupt our operations or those of our third-party distributors, suppliers or other service providers, or otherwise adversely affect our customers or their businesses or operations, or result in economic weakness or slowdowns in one or more of our key geographies, any of which could adversely affect our business, financial condition and results of operations.

Risks Related to our International Operations

We are subject to a variety of risks due to our international operations that could adversely affect our business, our operations or profitability and operating results.

Our operations in countries outside the United States, which accounted for approximately 29% of our revenue for the three months ended March 31, 2023, are accompanied by certain financial and other risks.

Our operations in countries outside the United States, which accounted for approximately 29% of our revenue for the six months ended June 30, 2023, are accompanied by certain financial and other risks.

In addition to our offices with manufacturing and administrative and operations in countries throughout the world, we intend to continue to pursue growth opportunities in sales outside the United States, especially in Asia and Europe.

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For example, we are building out a manufacturing facility in Malaysia.

Our international expansion efforts, including our proposed manufacturing facility in Malaysia, may not be successful and we may experience difficulties in scaling these functions from locations outside the United States and may not experience the expected cost efficiencies.

Our international expansion efforts, including our new and proposed manufacturing facilities in Malaysia and Ireland, respectively, may not be successful and we may experience difficulties in scaling these functions from locations outside the United States and may not experience the expected cost efficiencies.

Our profitability and international operations are, and will continue to be, subject to a number of risks and potential costs, including:

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The agreement sets out certain procedures for approval and recognition of medical products in each jurisdiction.

Any delay in obtaining, or an inability to obtain, any marketing approvals, as a result of the trade and cooperation agreement or otherwise, could prevent us from marketing our CGM systems in the U.K.

Any delay in obtaining, or an inability to obtain, any marketing approvals, as a result of the trade

and cooperation agreement or otherwise, could prevent us from marketing our CGM systems in the U.K.

and/or the E.U.

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Our operations and performance depend on worldwide economic and political conditions.

These conditions have been adversely impacted by continued global economic uncertainty, political instability and military hostilities in multiple geographies, including the current conflict in Ukraine, concerns over the potential downgrade of U.S.

sovereign debt and continued sovereign debt, monetary and financial uncertainties in Europe and other foreign countries, and global health pandemics.

These include potential reductions in the overall stability and suitability of the Euro as a single currency, given the economic and political challenges facing individual Eurozone countries.

These conditions have made and may continue to make it difficult for our customers and potential customers to afford our products, and could cause our customers to stop using our products or to use them less frequently.

If that were to occur, our revenue may decrease and our performance may be negatively impacted.

If that were to occur, our revenue may decrease and our

performance may be negatively impacted.

In addition, the pressure on consumers to absorb more of their own health care costs has resulted in some cases in higher deductibles and limits on durable medical equipment, which may cause seasonality in purchasing patterns.

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We may not obtain foreign regulatory authorizations or approvals on a timely basis, if at all.

Obtaining a marketing authorization from the FDA does not ensure authorization or approval by regulatory authorities in other countries will follow, and authorization or approval

by one foreign regulatory authority does not ensure authorization or approval by regulatory authorities in other foreign countries or by the FDA.

Obtaining a marketing authorization from the FDA does not ensure authorization or approval by regulatory authorities in other countries will follow, and authorization or approval by one foreign regulatory authority does not ensure authorization or approval by regulatory authorities in other foreign countries or by the FDA.

In addition, in order to obtain the authorization to market our products in certain foreign jurisdictions, in some cases we may need to obtain a Certificate to Foreign Government from the FDA.

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For example, data localization laws in some countries generally mandate that certain types of data collected in a particular country be stored and/or processed within that country.

We may be subject to inquiries, investigations and audits in Europe and around the world, particularly in the areas of consumer and data protection, which will arise in the ordinary course of business and may increase in frequency as we continue to grow and expand our operations.

expand our operations.

Legislators and regulators may make legal and regulatory changes, or interpret and apply existing laws, in ways that make our products less useful to our customers, require us to incur substantial costs, expose us to unanticipated civil or criminal liability, or cause us to change our business practices.

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Security breaches and other disruptions that compromise our information and expose us to liability could cause our business and reputation to suffer and could subject us to substantial liabilities.

The Administrative Simplification Provisions of the Health Insurance Portability and Accountability Act of 1996, as amended, and implementing regulations, or HIPAA, extensively regulate the use and disclosure of individually identifiable health information, known as “protected health information,” and require covered entities, including health plans and most health care providers, to implement administrative, physical and technical safeguards to protect the security of such information.

The Administrative Simplification Provisions of the Health Insurance Portability and Accountability Act of 1996, as amended and implemented, or HIPAA, extensively regulates the use and disclosure of certain personal information (“protected health information”) and requires covered entities, including health plans and most health care providers, to implement administrative, physical and technical safeguards to protect the security of such information.

Certain provisions of the security and privacy regulations apply to business associates (entities that handle protected health information on behalf of covered entities), and business associates are subject to direct liability for violation of these provisions.

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For example, from time-to-time, the OCR issues bulletins that outline its interpretations of HIPAA as applied to specific use cases.

On December 1, 2022, OCR issued a bulletin on the requirements under HIPAA for online tracking technologies ( e.g.

On December 1, 2022, OCR issued a bulletin on the

requirements under HIPAA for online tracking technologies ( e.g.

, cookies, pixels) to protect the privacy and security of health information.

This bulletin outlined OCR’s position on the use of online tracking technology vendors, when certain information received by such vendors constitutes protected health information under HIPAA, and accordingly, when business associate agreements must be executed between covered entities, like Dexcom, and such vendors.

Dexcom is assessing its responsibilities under the bulletin and determining its next steps in order to comply with OCR’s guidance in the bulletin.

We also remain subject to federal or state privacy-related laws that are more restrictive than the privacy regulations issued under HIPAA.

Dexcom has assessed its responsibilities under the bulletin and undertaken a number of initiatives to support its compliance with HIPAA and other requirements relating to online tracking technologies, including updates to its cookie banners and preference center.

These steps are in addition to measures Dexcom had taken previously and the company continues to evaluate its compliance with applicable laws and adjust its practices to address developments in the field over time.

We also remain subject to federal or state privacy-related laws outside of the privacy regulations issued under HIPAA.

These laws vary and could impose additional penalties.

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Data transfer risk remains a potential issue as certain Data Protection Authorities continue to raise concerns about the transfer of data to the United States.

Though a new framework may be put in place, it may be challenged as well.

Though a new framework to permit cross-border transfers - the EU-US Data Privacy Framework - recently came into effect, it may be challenged as well.

We expect continued costs associated with maintaining compliance with GDPR into the future, and these provisions as interpreted by EU agencies, could negatively impact our business, financial condition and results of operations.

In addition to the laws discussed above, we may see more stringent state and federal privacy legislation in the future, as the increased cyberattacks during the ongoing COVID-19 pandemic have once again put a spotlight on data privacy and security in the U.S.

and other jurisdictions.

In addition to the laws discussed above, we may see more stringent state and federal privacy legislation in the future.

We cannot predict where new legislation might arise, the scope of such legislation, or the potential impact to our business and operations.

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and other electronic security breaches.

In the ordinary course of business, we collect and store sensitive information on our network, including intellectual property, proprietary business information and personally identifiable information of individuals, such as our customers and employees.

In the ordinary course of business, we collect and store sensitive

information on our network, including intellectual property, proprietary business information and personally identifiable information of individuals, such as our customers and employees.

The secure maintenance of this information and technology is critical to our business operations.

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The hybrid workplace does, however, introduce additional operational risk, including increased cybersecurity risk.

information, limited ability to restore the systems in the event of a systems failure or interruption, greater risk of a security breach resulting in destruction, alteration or misuse of valuable information, including proprietary business information and personally identifiable information of individuals, all of which could expose us to risks of data or financial loss, litigation and liability.

These cyber risks include, among other risks, increased phishing, malware, and other cybersecurity attacks, vulnerability to, or disruptions of, our information technology infrastructure and systems to support remote operations, increased risk of unauthorized access, use or dissemination of confidential information, limited ability to restore the systems in the event of a systems failure or interruption, greater risk of a security breach resulting in destruction, alteration or misuse of valuable information, including proprietary business information and personally identifiable information of individuals, all of which could expose us to risks of data or financial loss, litigation and liability.

These threats can come from a variety of sources, including criminal hackers, state-sponsored intrusions, industrial espionage and employee malfeasance.

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As a result, cybersecurity, physical security and the continued development and enhancement of our controls, processes and practices designed to protect our enterprise, information systems and data from attack, damage or unauthorized access remain a priority for us.

As cyber threats continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any cybersecurity vulnerabilities.

As cyber threats continue to evolve, we may be required to

expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any cybersecurity vulnerabilities.

The occurrence of any of these events could result in:

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We rely on information technology and telephone networks and systems, including the Internet, to process and transmit sensitive electronic information and to manage or support a variety of business processes and activities, including sales, billing, customer service, procurement and supply chain, manufacturing, and distribution.

We use enterprise information technology systems to record, process, and summarize financial information and results of

operations for internal reporting purposes and to comply with regulatory financial reporting, legal, and tax requirements.

We use enterprise information technology systems to record, process, and summarize financial information and results of operations for internal reporting purposes and to comply with regulatory financial reporting, legal, and tax requirements.

System failures or outages, including any potential disruptions due to significantly increased global demand on certain cloud-based systems, or failures to adequately scale our data platforms and architectures support patient care could compromise our ability to perform these functions in a timely manner, which could harm our ability to conduct business or delay our financial reporting.

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These laws and regulations are extremely complex and, in many cases, still evolving.

If our operations are found to violate any of the foreign, federal, state or local laws and regulations which govern our activities, we may be subject to litigation, government enforcement actions, and applicable penalties associated with the violation, potentially including civil and criminal penalties, damages, fines, exclusion from participation in certain payor programs or curtailment of our operations.

If our operations are found to violate any of the foreign, federal, state or local laws and regulations which govern our activities, we may

be subject to litigation, government enforcement actions, and applicable penalties associated with the violation, potentially including civil and criminal penalties, damages, fines, exclusion from participation in certain payor programs or curtailment of our operations.

Compliance obligations under these various laws are oftentimes detailed and onerous, further contributing to the risk that we could be found to be out of compliance with particular requirements.

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While we make every effort to comply with applicable laws, we cannot rule out the possibility that the government or other third parties could interpret these laws differently and challenge our practices under one or more of these laws.

such laws, and potentially be awarded a share of any damages or penalties ultimately awarded to the applicable government body.

This likelihood of allegations of non-compliance is increased by the fact that under certain federal and state laws applicable to our business, individuals may bring an action on behalf of the government alleging violations of such laws, and potentially be awarded a share of any damages or penalties ultimately awarded to the applicable government body.

The FDA and the FTC share oversight of medical device promotion.

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Compliance with ongoing regulatory requirements can be complex, expensive and time-consuming.

Failure by us or one of our suppliers or distributors to comply with statutes and regulations administered by the FDA, competent authorities and other regulatory bodies, or failure to take adequate response to any observations, could result in, among other things, any of the following actions:

Failure by us or one of our suppliers or distributors to comply with statutes and regulations administered by the FDA,

competent authorities and other regulatory bodies, or failure to take adequate response to any observations, could result in, among other things, any of the following actions:

• warning letters or untitled letters that require corrective action;

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Weaknesses in process control or minute impurities in materials may cause a substantial percentage of defective products.

If we are not able to maintain stringent quality controls, or if contamination problems arise, our clinical development and commercialization efforts could be delayed, which would harm our business and our results of operations.

If we are not able to maintain

stringent quality controls, or if contamination problems arise, our clinical development and commercialization efforts could be delayed, which would harm our business and our results of operations.

If we fail to meet any applicable product quality standards and our products are the subject of recalls or safety alerts, our reputation could be damaged, we could lose customers, our reputation could be harmed and our revenue and results of operations could decline.

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We have in place a compliance program, through which we seek to reduce common industry risks of noncompliance with U.S.

federal and state and applicable foreign laws in areas such as sales contracts, marketing materials, referral source relationships, programmatic offerings, and billing

practices (among others), monitor for compliance, and address non-compliance if identified.

federal and state and applicable foreign laws in areas such as sales contracts, marketing materials, referral source relationships, programmatic offerings, and billing practices (among others), monitor for compliance, and address non-compliance if identified.

If a governmental authority were to conclude that we are not in compliance with applicable laws and regulations, we and our officers, directors and employees could be subject to criminal and civil penalties, as well as administrative sanctions such as exclusion from participation in federal healthcare programs, including but not limited to Medicare and Medicaid.

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However, some of our arrangements, like many other common and non-abusive arrangements, may implicate the Anti-Kickback Statute and are not covered by a safe harbor, but nevertheless we do not believe them to present a significant risk to beneficiaries or federal healthcare programs and, as such, appear unlikely to invite government scrutiny or prosecution, warrant the imposition of sanctions, or be found to violate the statute.

However, we cannot offer assurance that the government or a whistleblower would agree with our position that certain arrangements fall within a safe harbor, or that arrangements that do not squarely meet an exception or safe harbor will not be found to violate the Anti-Kickback Statute.

violate the Anti-Kickback Statute.

Allegations of violations of the Anti-Kickback Statute can also trigger liability under the federal Civil Monetary Penalty Law and federal civil False Claims Act, thereby increasing the penalty structure for these violations.

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Consolidation among managed care organizations has increased the negotiating power of managed care organizations and other private third-party payors.

third-party payors, as well as governments, increasingly employ formularies to control costs by taking into account discounts in connection with decisions about formulary inclusion or favorable formulary placement.

Private third-party payors, as well as governments, increasingly employ formularies to control costs by taking into account discounts in connection with decisions about formulary inclusion or favorable formulary placement.

Failure to obtain or maintain timely adequate pricing or favorable formulary placement for our products, or failure to obtain such formulary placement at favorable pricing, could adversely impact revenue.

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To support current and any future additional PMA, 510(k), de novo applications or supplements, we together with our partners, must successfully complete pre-clinical studies, bench-testing, and in some cases clinical trials that will demonstrate that the product is safe and effective.

Product development, including pre-clinical studies and clinical trials, is a long, expensive and uncertain process and is subject to delays (including any potential delays due to the ongoing COVID-19 pandemic) and failure at any stage.

Product development, including pre-clinical studies and clinical trials, is a long, expensive and uncertain process and is subject to delays and failure at any stage.

Furthermore, the data obtained from the studies and trials may be inadequate to support approval of an application and the FDA may request additional clinical data in support of those applications, which may result in significant additional clinical expenses and may delay product approvals.

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Additionally, the FDA may disagree with our interpretation of the data from our pre-clinical studies, product testing, and clinical trials, or may find the clinical trial design, conduct or results inadequate to prove safety or effectiveness, and may require us to pursue the development of additional data, which could further delay the approval of our products.

If we are unable to demonstrate the safety and effectiveness of our products in our clinical trials to the FDA’s satisfaction, where clinical data are required, we will be unable to obtain regulatory approval to market our products in the United States.

unable to demonstrate the safety and effectiveness of our products in our clinical trials to the FDA’s satisfaction, where clinical data are required, we will be unable to obtain regulatory approval to market our products in the United States.

In addition, the data we collect from our current clinical trials, our pre-clinical studies and other clinical trials may not be sufficient to support FDA approval, even if our endpoints are met.

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We have received, and may continue to receive, numerous inquiries from hospitals around the country about the use of our CGM devices to remotely monitor COVID-19 patients admitted into the hospital.

Extension of CGM system use to hospitalized patients during the ongoing COVID-19 pandemic allows hospital staff to monitor glucose remotely in patients and may reduce patient/provider interactions, which could help limit viral exposure for hospital staff and help conserve personal protective equipment.

In the context of the ongoing COVID-19 pandemic,

the FDA has permitted for regulatory flexibility in a variety of specific circumstances, to expedite the development and availability of critical medical products that may be helpful in COVID-19-related efforts.

Following direct communication with the FDA regarding the potential use of our CGM devices in a hospital or other in-patient setting, the FDA notified us on April 1, 2020 that in an exercise of its enforcement discretion it will not object, in the context of the COVID-19 pandemic, to Dexcom providing CGM devices and support to users to enable real-time remote patient monitoring in hospitals and other healthcare facilities, to support COVID-19 healthcare-related efforts, so long as we provide certain FDA-specified information with respect to the unique challenges that CGM technologies can raise in the hospital environment.

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Other clinical conditions may also cause inaccurate readings.

Our provision of our CGM systems to hospitals and other healthcare facilities for use during the ongoing COVID-19 pandemic have and will continue to have the above notice.

Our provision of our CGM systems to hospitals and other healthcare facilities for use during have and will continue to have the above notice.

In February 2022, we received Breakthrough Device designation for our G6 CGM system in the hospital setting.

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Given that our CGM devices have not yet been fully evaluated or tested by either us or the FDA to the extent that would be required in standard circumstances for product development and marketing authorization, there could be unknown or unanticipated risks presented by use in this environment.

The FDA can also decide, at any time, to change its position regarding its Breakthrough Device Designation and/or enforcement discretion for our devices, and require that we seek marketing authorization for this additional intended use by submitting a 510(k) premarket notification, or that we seek and obtain Emergency Use Authorization.

The FDA may determine this policy has expired if the impact of the ongoing COVID-19 pandemic subsides or the federal public health emergency declaration is lifted and there is no longer an urgent need to use our CGM systems for remote patient monitoring during the ongoing COVID-19 pandemic.

As we are unable to predict the ultimate impact of the provision of our CGM systems to hospitals and other healthcare facilities for use during the ongoing COVID-19 pandemic at this time, we do not yet know the ultimate impact to our business or financial results.

Authorization.

The COVID-19 public health emergency declared by the Department of Health and Human Services expired on May 11, 2023.

While the end of the public health emergency does not by itself impact the FDA's ability to authorize devices for emergency use, and the FDA has published guidance for transition plans for medical devices that fall within enforcement policies issued during the COVID-19 pandemic.

We will continue to closely monitor regulatory developments that impact our products, business, or financial results, including those relating to FDA enforcement discretion and Breakthrough Device Designation for the provision of our CGM systems in the hospital setting.

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federal or state governments, foreign governments, or third-party payors.

Government and commercial payors may, in the future, consider healthcare policies and proposals intended to curb rising healthcare costs, including those that could significantly affect reimbursement for healthcare products such as our systems.

Government and commercial payors may, in the future, consider healthcare

policies and proposals intended to curb rising healthcare costs, including those that could significantly affect reimbursement for healthcare products such as our systems.

These policies have included, and may in the future include:

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Future significant changes in the healthcare systems in the United States or elsewhere could also have a negative impact on the demand for our current and future products.

These include changes that may reduce

reimbursement rates for our products and changes that may be proposed or implemented by the current or future laws or regulations.

These include changes that may reduce reimbursement rates for our products and changes that may be proposed or implemented by the current or future laws or regulations.

Risks Related to Intellectual Property Protection and Use

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We intend to vigorously pursue our claims and defenses in these cases to protect our intellectual property and to defend against Abbott’s infringement allegations.

See “Legal Proceedings” in Part I, Item 1 above for more information.

Any infringement or misappropriation claim could cause us to incur significant costs, place significant strain on our financial resources, divert management’s attention from our business and harm our reputation.

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and if the court finds the case to be exceptional, we may be required to pay attorneys’ fees for the prevailing party.

If we are found to infringe third-party copyrights or trademarks or misappropriate third-party trade secrets, based on the intellectual property at issue, a court could order us to pay statutory damages, actual damages, or profits, such as reasonable royalty or lost profits of the owners, unjust enrichment, disgorgement of profits, and/or a reasonable royalty, and the court could potentially award attorneys’ fees or exemplary or enhanced damages.

profits, and/or a reasonable royalty, and the court could potentially award attorneys’ fees or exemplary or enhanced damages.

Although patent and intellectual property disputes in the medical device area have often been settled through licensing or similar arrangements, costs associated with such arrangements may be substantial and would likely include ongoing royalties.

We may be unable to obtain necessary intellectual property licenses on satisfactory terms.

If we do not obtain any such necessary licenses, we may not be able to redesign our products to avoid infringement and any redesign may not receive FDA approval or other requisite marketing authorization in a timely

manner or at all.

Adverse determinations in a judicial or administrative proceeding or failure to obtain necessary intellectual property licenses could prevent us from manufacturing and selling our products, which would have a significant adverse impact on our business.

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We may be subject to product liability claims if our products cause, or merely appear to have caused, an injury.

Claims may be made by customers, healthcare providers or others selling our products.

Claims may be made by customers,

healthcare providers or others selling our products.

The risk of product liability claims may increase given that G6 and G7 do not require confirmatory finger sticks when making treatment decisions or finger stick tests each day for calibration, although it does require finger stick tests when symptoms do not match readings and when readings are unavailable.

The risk of claims may also increase if our products are subject to a product recall or seizure.

An example of the difficulty of complying with the regulatory requirements associated with the manufacture of our

products, we issued notifications to our customers regarding the audible alarms and alerts associated with our receivers.

An example of the difficulty of complying with the regulatory requirements associated with the manufacture of our products, we issued notifications to our customers regarding the audible alarms and alerts associated with our receivers.

Although we have insurance at levels that we believe is appropriate, this insurance is subject to deductibles and coverage limitations.

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Defending a suit, regardless of merit, could be costly, could divert management attention and might result in adverse publicity, which could result in the withdrawal of, or inability to recruit, clinical trial volunteers or result in reduced acceptance of our products in the market.

As a result of the ongoing COVID-19 pandemic, we have received and continue to receive, numerous requests from hospitals and healthcare facilities around the country regarding the use of our CGM devices to remotely monitor COVID-19 patients admitted into the hospital.

As a result of the recent COVID-19 pandemic, we have received and continue to receive, numerous requests from hospitals and healthcare facilities around the country regarding the use of our CGM devices to remotely monitor COVID-19 patients admitted into the hospital.

As noted above, in 2020, the FDA informed us that they intend to exercise enforcement discretion and will not object to our provision of G6 CGM systems to such facilities for use in the inpatient setting during the pandemic.

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Any future investigations of our executives, our managers or us could result in significant liabilities or penalties to us, as well as adverse publicity.

Even if we are found to have complied with applicable law, the investigation or litigation may pose a considerable expense and would divert management’s attention, and have a potentially negative impact on the public’s perception of us, all of which could negatively impact our financial position and

results of operations.

Further, should we be found out of compliance with any of these laws, regulations or programs, depending on the nature of the findings, our business, our financial position and our results of operations could be negatively impacted.

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Additional financing may not be available on a timely basis on terms acceptable to us, or at all.

Any additional financing may be dilutive to stockholders or may require us to grant a lender a security interest in our assets.

Any additional financing may be dilutive to stockholders or may

require us to grant a lender a security interest in our assets.

The amount of funding we may need will depend on many factors, including:

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For example, current economic conditions, including rising interest rates, inflation and a potential recession, as well as our business decisions, may reduce the value of some of our assets.

We also make investments in existing or new businesses, including investments in the international expansion of our sales efforts and the build-out of our manufacturing facility in Malaysia.

We also make investments in existing or new businesses, including investments in the international expansion of our sales efforts and the build-out of our manufacturing facility in Malaysia as well as our proposed facility in Ireland.

Additionally, we also invest in early to late-stage companies for strategic reasons and to support key business initiatives, and we may not realize a return on our equity investments.

Many such companies generate net losses and the market for their products, services, or technologies may be slow to develop or never materialize.

Many such companies

generate net losses and the market for their products, services, or technologies may be slow to develop or never materialize.

We are subject to risks associated with our equity investments including partial or complete loss of invested capital, and significant changes in the fair value of this portfolio could adversely impact our financial results.

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We cannot guarantee the outcome of these examinations.

If our effective tax rates were to increase, particularly in the United States, or in

other countries implementing legislation to reform existing tax legislation, including the European Union and Germany, or if the ultimate determination of our taxes owed is for an amount in excess of amounts previously accrued, our financial condition, operating results and cash flows could be adversely affected.

If our effective tax rates were to increase, particularly in the United States, or in other countries implementing legislation to reform existing tax legislation, including the European Union and Germany, or if the ultimate determination of our taxes owed is for an amount in excess of amounts previously accrued, our financial condition, operating results and cash flows could be adversely affected.

Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations which could subject our business to higher tax liability.

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Our stock price is highly volatile and investing in our stock involves a high degree of risk, which could result in substantial losses for investors.

Historically, the market price of our common stock, like the securities of many other medical products companies, fluctuates and could continue to be volatile in the future, especially as our business continues to grow

and our business plan continues to evolve.

From January 1, 2023 through March 31, 2023, the closing price of our common stock on the Nasdaq Global Select Market was as high as $122.92 per share and as low as $104.00 per share.

In addition, the trading prices for our common stock and other medical device companies have been highly volatile as a result of the ongoing COVID-19 pandemic.

From January 1, 2023 through June 30, 2023, the closing price of our common stock on the Nasdaq Global Select Market was as high as $130.98 per share and as low as $104.00 per share.

The market price of our common stock is influenced by many factors that are beyond our control, including the following:

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• legislation and political conditions;

• global health pandemics, such as the ongoing COVID-19 pandemic;

• the consummation, and the anticipated benefits, of our Share Repurchase Program;

• other events or factors, including the impact or perceived impact of our four-for-one forward stock split of our common stock, ongoing conflict in Ukraine, recessions, rising interest rates, inflation, local and national elections, international currency fluctuations, corruption, political instability and acts of war or terrorism .

• global health pandemics, such as the recent COVID-19 pandemic;

• other events or factors, including the, ongoing conflict in Ukraine, recessions, rising interest rates, inflation, local and national elections, international currency fluctuations, corruption, political instability and acts of war or terrorism .

Please also refer to the factors described elsewhere in this “Risk Factors” section.

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Increasing our financial leverage could affect our operations and profitability.

In October 2021, we entered into a Second Amended and Restated Credit Agreement, or the Amended Credit Agreement, with JPMorgan Chase and other syndicate lenders, which amended and restated the credit agreement, or the Credit Agreement, we had previously entered into in December 2018 and amended in May 2020.

The Amended Credit Agreement is a five-year $200.0 million revolving credit facility, or the Credit Facility.

March 31, 2023, we had no outstanding borrowings, $7.3 million in outstanding letters of credit, and a total available balance of $192.7 million under the Amended Credit Agreement.

In June 2023, we entered into the First Amendment to our Second Amended and Restated Credit Agreement, or the Amended Credit Agreement, with JPMorgan Chase and other syndicate lenders, which amended and restated the credit agreement, or the Credit Agreement, we had previously entered into in December 2018 and amended in May 2020 and October 2021, respectively.

The Amended Credit Agreement is a five-year $200.0 million

revolving credit facility, or the Credit Facility.

As of June 30, 2023, we had no outstanding borrowings, $7.3 million in outstanding letters of credit, and a total available balance of $192.7 million under the Amended Credit Agreement.

Our leverage ratio may affect the availability to us of additional capital resources as well as our operations in several ways, including:

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The Amended Credit Agreement imposes numerous financial and other restrictive covenants on our operations, including covenants relating to our general profitability and our liquidity.

As of March 31, 2023, we were in compliance with the covenants imposed by the Amended Credit Agreement.

As of June 30, 2023, we were in compliance with the covenants imposed by the Amended Credit Agreement.

If we violate these or any other covenants, any outstanding amounts under the Amended Credit Agreement could become due and payable prior to their stated maturity dates, each lender could proceed against any collateral in our operating accounts and our ability to borrow funds in the future may be restricted or eliminated.

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In May 2020, we completed an offering of approximately $1.21 billion aggregate principal amount of 0.25% senior convertible notes due 2025, or 2025 Notes, which offering we refer to as the 2020 Notes Offering.

We refer to the 2018 Notes Offering and the 2020 Notes Offering, collectively, as the Notes Offerings, and we refer to the 2023 Notes and the 2025 Notes, collectively, as the Notes.

In May 2023, we completed an offering of approximately $1.25 billion aggregate principal amount of 0.375% senior convertible notes due 2028, or 2028 Notes, which offering we refer to as the 2023 Notes Offering.

We refer to the 2018 Notes Offering, the 2020 Notes Offering, and the 2023 Notes Offering, collectively, as the Notes Offerings, and we refer to the 2023 Notes, the 2025 Notes, and the 2028 Notes, collectively, as the Notes.

As a result of the Notes Offerings, we incurred $3.31 billion principal amount of indebtedness, the principal amount of which we may be required to pay at maturity.

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• our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general corporate purposes or other purposes may be impaired.

We cannot be sure that our leverage resulting from the level of increased debt after the completion of the Notes Offerings will not materially and adversely affect our ability to finance our operations or capital needs or to

engage in other business activities.

In addition, we cannot be sure that additional financing will be available when required or, if available, will be on terms satisfactory to us.

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We are not restricted under the terms of the indentures governing the Notes from incurring additional debt, securing existing or future debt, recapitalizing our debt, or taking a number of other actions that are not limited by the terms of the indenture governing the convertible senior notes that could have the effect of diminishing our ability to make payments on the Notes when due.

The capped call transactions we entered into in connection with the pricing of the 2028 Notes may affect the value of our 2028 Notes and common stock.

In connection with the pricing of the 2028 Notes, we entered into capped call transactions, or the 2028 Capped Calls, relating to such 2028 Notes with the option counterparties.

The 2028 Capped Calls relating to the 2028 Notes cover, subject to customary adjustments, the number of shares of our common stock that initially underlie the 2028 Notes.

The 2028 Capped Calls are generally expected to reduce the potential dilution to stockholders upon any conversion of the 2028 Notes, and/or offset any cash payments that we are required to make in excess of the principal amount upon any conversion of the 2028 Notes, with such reduction and/or offset subject to a cap.

The option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock in secondary market transactions following the pricing of the 2028 Notes, as applicable, and prior to the maturity of the 2028 Notes (and are likely to do so during any observation period related to a conversion of such Notes or following any repurchase of such notes by us on any fundamental change repurchase date or otherwise).

This activity could also cause or avoid an increase or a decrease in the market price of our 2028 Notes or common stock, which could affect a holder’s ability to convert its 2028 Notes and, to the extent the activity occurs during any observation period related to a conversion of the 2028 Notes, it could affect the amount and value of the consideration that a holder will receive upon conversion of such 2028 Notes.

The potential effect, if any, of these transactions and activities on the market price of the 2028 Notes or our common stock will depend in part on market conditions and cannot be ascertained at this time.

Any of these activities could adversely affect the value of 2028 Notes or our common stock (and as a result, the amount and value of the consideration that a holder would receive upon the conversion of any 2028 Notes) and, under certain circumstances, a holder’s ability to convert its notes.

We do not make any representation or prediction as to the direction or magnitude of any potential effect that the transactions described above may have on the price of the 2028 Notes or our common stock.

In addition, we do not make any representation that the option counterparties or their respective affiliates will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.

The convertible note hedge and warrant transactions may affect the value of the 2023 Notes and our common stock.

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In addition, we do not make any representation that the option counterparties will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.

We are subject to counterparty risk with respect to the 2023 Note Hedge transactions.

The option counterparties are financial institutions, and we will be subject to the risk that any or all of them may default under the 2023 Note Hedge transactions.

Our exposure to the credit risk of the option counterparties will not be secured by any collateral.

We are subject to counterparty risk with respect to the 2023 Note Hedge transactions and the 2028 Capped Calls.

The option counterparties to the 2023 Note Hedge transactions and 2028 Capped Calls are financial institutions, and we will be subject to the risk that any or all of them may default under the 2023 Note Hedge transactions and 2028 Capped Calls, respectively.

Our exposure to the credit risk of these counterparties is not secured by any collateral.

Recent global economic conditions have resulted in the actual or perceived failure or financial difficulties of many financial institutions.

If an option counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings, with a claim equal to our exposure at that time under our transactions with that option counterparty.

If a counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings, with a claim equal to our exposure at that time under our transactions with that option counterparty.

Our exposure will depend on many factors but, generally, an increase in our exposure will be correlated to an increase in the market price and in the volatility of our common stock.

In addition, upon a default by an option counterparty, we may suffer adverse tax consequences and more dilution than we currently anticipate with respect to our common stock.

We can provide no assurances as to the financial stability or viability of the option counterparties.

We can provide no assurances as to the financial stability or viability of the counterparties with respect to the 2023 Note Hedge transactions and 2028 Capped Calls.

Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our substantial debt.

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In addition, our Credit Facility and the agreements governing the notes each contain cross-default provisions whereby a default under one agreement would likely result in cross defaults under agreements covering other borrowings.

For example, the occurrence of a default with respect to any indebtedness or any failure to repay debt when due in an amount in excess of $25.0 million, in the case of the 2023 Notes, and $50.0 million, in the case of the 2025 Notes, that causes such indebtedness to become due prior to its scheduled maturity date would cause a cross-default under the indenture governing the Notes.

For example, the occurrence of a default with respect to any indebtedness or any failure to repay debt when due in an amount in excess of $25.0 million, in the case of the 2023 Notes, $50.0 million, in the case of the 2025 Notes, and $50.0 million, in the case of the 2028 Notes, that causes such indebtedness to become due prior to its scheduled maturity date would cause a cross-default under the indenture governing the Notes.

In addition, the occurrence of a default with respect to any indebtedness or any failure to repay debt when due in an amount in excess of $25.0 million that causes such indebtedness to become due prior to its scheduled maturity date would cause a default under our Credit Facility.

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An increasing number of participants in the medical device industry are also joining voluntary ESG groups or organizations, such as the Responsible Business Alliance.

ESG provisions and initiatives are subject to change, can be unpredictable, and may be difficult and expensive for us to comply with, given the complexity of our supply chain and the outsourced manufacturing of certain components of our products.

These ESG provisions and initiatives are subject to change, can be unpredictable, and may be difficult and expensive for us to comply with, given the complexity of our supply chain and the outsourced manufacturing of certain components of our products.

If we are unable to comply, or are unable to cause our suppliers to comply, with such policies or provisions, a customer may stop purchasing products from us, and may take legal action against us, which could harm our reputation, revenue and results of operations.

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Our operations and performance depend on worldwide economic and political conditions.

These conditions have been adversely impacted by continued global economic uncertainty, political instability and military hostilities in

multiple geographies (including the conflict between Ukraine and Russia), monetary and financial uncertainties in Europe and other foreign countries, global health pandemics, rising interest rates, and domestic and global inflationary trends.

These conditions have been adversely impacted by continued global economic uncertainty, political instability and military hostilities in multiple geographies (including the conflict between Ukraine and Russia), monetary and financial uncertainties in Europe and other foreign countries, global health pandemics, rising interest rates, and domestic and global inflationary trends.

These include potential reductions in the overall stability and suitability of the Euro as a single currency, given the economic and political challenges facing individual Eurozone countries.

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Furthermore, during economic uncertainty, our customers have had job losses and may continue to have issues gaining timely access to sufficient health insurance or credit, which could result in their unwillingness to purchase products or impair their ability to make timely payments to us.

While the potential economic impact brought by and the duration of the ongoing COVID-19 pandemic may be difficult to assess or predict, it has already caused, and is likely to result in further, significant disruption of global financial markets, which may reduce our ability to access capital on favorable terms or at all.

A recession, depression or other sustained adverse market event could materially and adversely affect our business and the value of our common stock.

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Inflation has the potential to adversely affect our liquidity, business, financial condition and results of operations by increasing our overall cost structure.

The existence of inflation in the economy has resulted in, and may continue to result in, higher interest rates and capital costs, supply shortages, increased costs of labor, components, manufacturing and shipping, as well as weakening exchange rates and other similar effects.

The existence of inflation in the economy has resulted in, and may continue to result in, higher interest rates and capital costs, supply shortages, increased costs of labor, components,

manufacturing and shipping, as well as weakening exchange rates and other similar effects.

As a result of inflation, we have experienced and may continue to experience cost increases.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors