Item 1B. Unresolved Staff Comments
Item 1B. Unresolved Staff Comments
The Company has received written comments from the Staff of the SEC (the “Staff”) in connection with the Staff’s review of our Form 10-K for the fiscal year ended December 31, 2024 and our Form 10-Q for the fiscal quarter ended October 3, 2025. While the Company has worked with the Staff to address these comments, some remain unresolved. The unresolved comments relate to the Company’s non-GAAP adjustments for the purchase of royalty interest and inventory step-up charges in connection with acquired businesses. The Staff has indicated that it believes that such adjustments are inconsistent with the interpretative guidance set forth in its Compliance and Disclosure Interpretations on Non-GAAP Financial Measures. The Company believes that it provides a complete, consistent and accurate presentation of Adjusted EBITDA in the context of the most directly comparable GAAP financial measure, uses extensive disclosure that explains how the Company calculates Adjusted EBITDA and describes how Adjusted EBITDA differs from the corresponding GAAP financial results. We continue to believe that our adjustments for these infrequent, non-recurring or integration-related items are appropriate, have submitted responses to the Staff and are continuing to engage with the Staff to resolve the comments. Until the Staff’s review is complete, the final outcome of this process cannot be predicted.
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Item 1C. Cybersecurity
Cybersecurity Risk Management and Strategy
We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information.
Our cybersecurity risk management program utilizes a variety of frameworks, including the NIST Cybersecurity Framework and CIS Critical Security Controls, as guides to help identify, assess, and manage cybersecurity risks relevant to our business. This does not imply that we meet any particular technical standards, specifications, or requirements.
Our cybersecurity risk management program is integrated with our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Our cybersecurity risk management program includes the following key elements, among others:
• risk assessments designed to help identify material cybersecurity risks to our critical systems and information;
• a team comprised of IT security and IT infrastructure personnel principally responsible for directing (1) our cybersecurity risk assessment processes, (2) our security processes, and (3) our response to cybersecurity incidents;
• the periodic use of external cybersecurity service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes;
• cybersecurity awareness training of employees and consultants with access to our IT systems; and
• a cybersecurity incident response plan and Security Operations Center (SOC) to respond to cybersecurity incidents.
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition. We face certain ongoing risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition. See “ Risk Factors – Risks Related to Government Regulation and Litigation — Our information technology infrastructure and information are vulnerable to service interruptions, data corruption, cyber-based attacks, or network security breaches, which could result in the disruption of operations or the loss of data confidentiality.”
Cybersecurity Governance
Our Board considers cybersecurity risk as critical to the enterprise and delegates the cybersecurity risk oversight function to the Audit Committee . The Audit Committee oversees management’s design, implementation and enforcement of our cybersecurity risk management program.
The Audit Committee receives reports at least quarterly from our Vice President of Information Technology and IT security leader on our cybersecurity risks, including briefings on our cyber risk management program and cybersecurity incidents. Audit Committee members also receive periodic presentations on cybersecurity topics from our internal IT security personnel, or external experts as part of the Board’s continuing education on topics that impact public companies.
Our Vice President of Information Technology , who works closely with and supervises our IT security leader, has overall responsibility for assessing and managing any material risks from cybersecurity threats. Our IT security leader has significant experience in the field and holds cybersecurity certifications from leading cybersecurity training and research institutes.
Our IT security leader helps our management team stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which include briefings from internal personnel and our SOC, threat intelligence and other information obtained from governmental, public or private sources, including external cybersecurity service providers, and alerts and reports produced by security tools deployed in the IT environment.
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