What changed in this filing

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Item 1A. Risk Factors

2021-02-22 compared with 2020-02-21 · 117 added, 62 removed, 217 unchanged (45% of the section changed)

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The risks and uncertainties described in this Annual Report on Form 10-K are not the only ones we face.

Additional risks that we currently do not know about, or that we currently believe to be sufficiently important to describe here, may also impair our business operations or the trading price of our common stock.

Risks Relating to the Nature and Operations of Our Business

Additional risks that we currently do not know about, or that we do not consider sufficiently important to describe here in accordance with applicable regulations, may also impair our business operations or the trading price of our common stock.

Risks Relating to our Operations and the Nature of Our Business

The markets in which we participate are competitive, and if we do not compete effectively, our operating results could be harmed.

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Increased competition has resulted in, and in the future is likely to result in, price reductions, reduced gross margins or loss of market share.

Competitors might introduce new competitive products for the same markets that our products currently serve.

Existing competitors might introduce new competitive products for the same markets that our products currently serve.

These products may have better performance, lower prices, shorter delivery times or broader acceptance than our products.

In addition, it is possible that new competitors, including test equipment manufacturers, may offer new technologies that reduce the value of our products.

In addition, new competitors, including test equipment manufacturers, may offer comparable or new technologies that reduce the value of our products.

Also, semiconductor manufacturers may implement chip designs or methodologies that increase test throughput, reduce test content, or change their test procedures, thereby eliminating some or all of our current product advantages.

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Our future growth depends, in significant part, upon our ability to work effectively with and anticipate the future technical and operational needs of our customers and to develop and support new products and product enhancements to meet these needs on a timely and cost-effective basis.

Our customers’ needs are becoming more challenging as the semiconductor industry continues to experience rapid technological change driven by the

demand for complex circuits that are shrinking in size, are increasing in speed and functionality, and are produced on shorter cycle times and at reduced unit cost.

Our customers’ needs are becoming more challenging as the semiconductor industry continues to experience rapid technological change driven by the demand for complex circuits that are shrinking in size, are increasing in speed and functionality, and are produced on shorter cycle times and at reduced unit cost.

Successful product design, development and introduction on a timely basis require that we:

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A relatively small number of customers account for a significant portion of our revenues.

Two customers represented a combined 37% of total revenues in fiscal 2019 and one customer represented 19 % and 26% of total revenues in fiscal 2018 and 2017, respectively.

We anticipate that sales of our products to a relatively small number of customers will continue to account for a significant portion of our revenues and can, as demonstrated in fiscal 2019, drive material fluctuations in sales volume.

One customer represented 31.5% of total revenues in fiscal 2020, two customers represented a combined 36.8% of total revenues in fiscal 2019 and one customer represented 19.0% of total revenues in fiscal 2018.

We anticipate that sales of our products to a relatively small number of customers will continue to account for a significant portion of our revenues and can drive material fluctuations in sales volume.

Consolidation in the semiconductor industry may increase this concentration.

In the future, the loss of any of these customers, or cancellation, reduction or deferral of even a small number of purchases of our products by these customers could significantly reduce our revenues.

In the future, the loss of any of these customers, or cancellation, reduction or deferral of even a small number of purchases of our products by these customers, could

significantly reduce our revenues.

A decline in our customers' market share and commercial success, including their ability to compete favorably within their respective end markets, could significantly impact demand for our products and reduce our revenues.

Cancellations, reductions, deferrals or non-payment of invoices, could result from another downturn in the semiconductor industry, manufacturing delays, quality or reliability issues with our products, or from interruptions to our customers’ operations due to fire, natural disasters or other events, or other issues with the financial stability of our customers.

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Our relationships with our customers could deteriorate as a result of a variety of factors, such as if they become concerned about our ability to deliver quality products on a timely basis or to protect their intellectual property.

Many of our customers are large companies that place significant orders with us, and the consequences of deterioration in our relationship with any of these companies

could be significant due to the competitiveness of our industry and the significant influence that these companies exert in our market.

Many of our customers are large companies that place significant orders with us, and the consequences of deterioration in our relationship with any of these companies could be significant due to the competitiveness of our industry and the significant influence that these companies exert in our market.

Consolidation in the semiconductor industry and within the semiconductor test equipment market could adversely affect the market for our products and negatively impact our ability to compete.

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The demand for our products depends in large part upon the number of semiconductor designs, the pace of technology and architecture transitions in chip designs and overall semiconductor unit volume.

The number of probe cards involved in a customer’s wafer testing can depend upon the number of devices being tested, the complexity of these devices, the test software program, the test equipment itself, and the utilization of chip designs featuring design-for-testability capabilities.

Customers may demand fewer probe cards or probing systems if they use test strategies that reduce the technical requirements on test equipment, improve available data on device performance earlier in the manufacturing process, or test devices later in the manufacturing process.

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The global economic and semiconductor downturns have caused and may in the future cause our operating results to decline dramatically from one period to the next.

Global economic stability can be negatively affected by a variety of factors and interrelationships, including the potential impact of Brexit, epidemics (such as the current COVID-19), military conflicts, climate change, trade barriers and other factors acting alone or in combination.

Global economic stability can be negatively affected by a variety of factors and interrelationships, including the potential impact of Brexit, epidemics and pandemics (such as the current COVID-19 pandemic), military conflicts, climate change, trade barriers and other factors acting alone or in combination.

Some of these factors can also have a more direct adverse impact upon our operations to varying degrees.

Our business depends heavily upon the development and manufacture of new semiconductors, the rate at which semiconductor manufacturers make transitions to smaller nanometer technology nodes and implement tooling cycles, the volume of production by semiconductor manufacturers and the overall financial strength of our customers, which, in turn, depend upon the current and anticipated market demand for semiconductors and products, such as servers, personal computers, automobiles and cell phones, that use semiconductors.

our customers, which, in turn, depend upon the current and anticipated market demand for semiconductors and products, such as servers, personal computers, automobiles and cell phones, that use semiconductors.

During industry downturns, semiconductor manufacturers sharply curtail their spending, including their spending on our products, which may adversely impact our revenues, gross margins and results of operations.

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Each semiconductor chip design requires a custom probe card.

Because our products are design-specific, demand for our products is difficult to forecast.

Because our probe card products are design-specific, demand for these products is difficult to forecast.

Due to our customers’ short delivery time requirements, we often design and procure materials and, at times, produce our products in anticipation of demand for our products rather than in response to an order.

Our manufacturing yields and inventory requirements, particularly for new probe card products or when we are operating at high output levels, have at times been unpredictable.

Our manufacturing yields and inventory requirements, particularly for new products or when we are operating at high output levels, have at times been unpredictable.

If we do not obtain orders as we anticipate, if we suffer manufacturing errors, or if we build additional inventory to compensate for unpredictable manufacturing yields, we could have excess or obsolete inventory that we may not be able to sell, which would likely result in inventory write-offs or material charges for scrap.

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To improve our manufacturing processes, we have incurred, and may incur in the future, substantial costs in an effort to optimize capacity and yields, open new manufacturing facilities, implement new manufacturing technologies, methods and processes, purchase new equipment, upgrade existing equipment and train technical personnel.

We have experienced, and may experience in the future, manufacturing delays and other inefficiencies in connection with implementation of these improvements and customer qualifications of new processes, which have caused and could cause in the future, our operating results to decline.

We have experienced, and may experience in the future, manufacturing delays and other inefficiencies in connection with implementation of these improvements and customer qualifications of new processes or products, which have caused and could cause in the future, our operating results to decline.

These delays and other inefficiencies may arise from a variety of factors, including disruptions to or the unavailability of sufficient electrical power as a result of insufficient electrical power infrastructure in the regions where we have manufacturing facilities such as in California.

We have also experienced, and may experience in the future, difficulties in manufacturing our complex products in volume on time, and at acceptable yields and cost and installation issues in the field due to the complexity of customer design requirements, including integration of probe cards with varying customer test cell environments and testing of semiconductor devices over a wide temperature range.

We have also experienced, and may experience in the future, difficulties in manufacturing our complex products in volume on time, and at acceptable yields and cost, and installation issues in the field, due to the complexity of customer requirements.

If we are unable to continue to reduce the time it takes for us to design and produce products, our growth could be impeded.

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The complexity and ongoing development of our product designs and manufacturing processes could lead to design or manufacturing problems.

Problems might result from a number of factors, including design defects, materials failure, failure of components manufactured by our suppliers to meet our specifications, contamination in the manufacturing environment, impurities in the materials used, and unknown sensitivities to process conditions such as temperature and humidity, and equipment failures.

Problems might result from a number of factors, including design defects, materials failure, failure of

components manufactured by our suppliers to meet our specifications, contamination in the manufacturing environment, impurities in the materials used, and unknown sensitivities to process conditions such as temperature and humidity, and equipment failures.

Any errors or defects could:

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• require design modifications;

• could have implications for timing of revenue recognition and associated costs;

• decrease market acceptance or customer satisfaction with these products.

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Our dependence upon sole or limited source suppliers exposes us to several other risks, including inability to obtain an adequate supply of materials, late deliveries, poor component quality, and business disruptions while we seek to identify and qualify alternative suppliers.

This could be exacerbated by certain events outside the control of either the supplier or us, such as the COVID-19 pandemic.

The occurrence of any of these risks could adversely impact our business, results of operations and financial condition.

Our operations, or those of our important suppliers, business partners and customers could be adversely affected by events outside of our control such as epidemics and natural disasters.

We may be affected by natural disasters, epidemics or other events outside of our control.

These events may impact our operations directly, or may disrupt the operations of our important suppliers, business partners and customers, in ways that can adversely affect our results of operations or financial condition.

For example, there is a developing epidemic originating in China identified as COVID-19.

The COVID-19 epidemic is resulting in restrictions on travel and business operations in China and elsewhere.

We ship a significant percentage of our products into China, and some of our customers’ operations in China are currently being negatively affected by the COVID-19 epidemic.

We have delayed or canceled certain planned events intended to promote our products and activities with businesses in China.

Some of the multi-national companies which drive the demand for our products are reporting that the COVID-19 epidemic is expected to negatively impact their operations and sales.

It remains unknown how severely global supply chains, including for parts and materials that we use to manufacture our products, have been or will be affected by this epidemic.

Similarly, the impacts of this epidemic upon the demand for our products remain uncertain.

We could experience shortages, increased costs or reduced demand for our products particularly as this epidemic continues or worsens.

In addition, the circumstances which give rise to new or existing infectious diseases becoming epidemics or pandemics with similar impacts are expected to persist indefinitely.

Another example of events outside of our control relates to the fact that our manufacturing facilities and corporate headquarters in California are located in seismically active areas.

Our operations, or those of our important suppliers, business partners and customers could be adversely affected by events outside of our control such as natural disasters, pandemics and man-made disasters.

Our business is vulnerable to the direct and indirect impact of natural and man-made disasters, such as floods, earthquakes, volcanic eruptions, nuclear accidents, acts of terrorism, epidemics, pandemics, military conflicts, climate change, and other factors acting alone or in combination.

It is also possible that future natural and man-made disasters could negatively impact the sales of our products as a result of impacts upon our customers’ ability to make or sell their products, or impacts upon our suppliers’ ability to supply components to us on a timely basis.

For example, the COVID-19 pandemic has shown the extent to which new pathogens are capable of disrupting business operations and economic activity locally and worldwide.

Epidemics and pandemics can severely disrupt global supply chains, including for parts and materials that we use to manufacture our products, and affect economic conditions in the markets for our products.

The circumstances which give rise to epidemics and pandemics from new or existing pathogens with similar impacts are expected to persist indefinitely.

Another example of events outside of our control arises from our manufacturing facilities being located in seismically active areas in California and Oregon.

The manufacturing equipment and processes that we use can be severely disrupted by seismic activity.

A significant seismic event in the areas of our operations could have a materially negative impact on our operations, financial results or financial condition.

Much of the infrastructure on which we rely for our operations is outside of our control, such as for electric power.

We have recently experienced disruptions to electrical power at some of our premises in California, especially when aging infrastructure or inadequate electric power service has been impacted by high demand, fires, and weather which may worsen over time with climate change, and other events.

Our efforts to mitigate the effects on us from interruptions in the availability of electric power, or other infrastructure, may not adequately prevent materially negative impacts on our operations, and in turn our financial results.

The COVID-19 pandemic has impacted, and is expected to continue to negatively impact, our operations, and those of our important suppliers, business partners and customers.

We are exposed to risks associated with public health crises and outbreaks of contagious diseases, such as COVID-19.

To date, COVID-19 has had, and may continue to have, an adverse impact on our operations, our supply chains and our expenses, including as a result of precautionary measures that we take in response to COVID-19.

A variety of health orders and regulations arising from the pandemic apply to our operations and employees in the regions where we operate which have had, and will continue to have, negative affects upon our operations and business.

Even as the availability of vaccines may begin to relieve the economic effects of the COVID-19 pandemic in the future, there remains substantial risk that vaccination rates will remain slow, new variants of the virus may impede the vaccines’ efficacy, or other factors may prolong or worsen the pandemic and its direct and indirect affects upon our business.

A significant amount of our management resources have been, and will continue to be, focused on mitigating the negative impacts of COVID-19 on our business.

This has required, and will continue to require, a substantial investment of time and resources across our enterprise which may continue to negatively impact other valuable activities, such as the development of new technologies, products or capabilities.

In addition, many of our employees are working remotely for an extended period, which can increase operational risk and cybersecurity risks.

If we do not respond appropriately to the COVID-19 pandemic, or if employees, customers or others do not perceive our response positively, we could suffer damage to our reputation, which could also adversely affect our business.

We obtain some of the components and materials used in our products from a sole source or a limited group of suppliers, and in some cases alternative sources are not readily available.

The COVID-19 pandemic may heighten the risks posed by our dependence upon sole or limited source suppliers to the extent that the pandemic could disrupt the operations of one or more of these suppliers, resulting in an inability to obtain an adequate supply of materials, late deliveries or poor component quality while we seek to identify and qualify alternative suppliers.

The extent to which the COVID-19 pandemic impacts our operations and those of our important, suppliers, business partners and customers will depend on numerous evolving factors and future developments that we are not able to predict, including but not limited to:

the severity and duration of the pandemic;

governmental, business and other actions (which could include further restrictions on our operations);

the ongoing requirements of social distancing and health orders;

the impacts on our supply chain;

the impact of the pandemic on economic activity;

the extent and duration of the effect on business confidence and investments by our customers;

the effects of changes to our operations that may continue indefinitely;

the effects on our workforce and our ability to meet our staffing needs, particularly if members of our workforce are exposed or infected;

any impairments in the value of our assets;

and the potential impacts upon our internal controls, including those over financial reporting, that may result from changes in working environments and other circumstances.

All of these circumstances are highly uncertain and cannot be predicted.

In addition, the circumstances which give rise to new or existing infectious diseases becoming epidemics or pandemics with potentially similar impacts are expected to persist.

Adverse global, regional and national economic conditions resulting from the COVID-19 pandemic could have a negative effect on our business, results of operations and financial condition and liquidity.

The COVID-19 pandemic has adversely affected, and may continue to adversely affect, national, regional and global economies and financial markets.

Although the long-term macroeconomic effects of the pandemic cannot be predicted with certainty, the continued progression or persistence of the pandemic may result in global, regional or national economic slowdowns or other economic downturns.

Such downturns could curtail or delay spending by businesses and consumers which may ultimately result in reductions in the demand for our products and greater volatility in demand and supply conditions.

The COVID-19 pandemic has also increased uncertainty in global credit and financial markets.

The impacts of such uncertainty and disruptions to the availability of credit or other sources of capital as the pandemic continues or worsens, could also adversely affect our ability to access capital on favorable terms to meet our objectives.

Any of these factors could have a material adverse impact on our business, results of operations, financial condition and cash flows.

In addition, governments in several countries where we operate, including the United States, have enacted stabilization and stimulus measures in an effort to counteract some of the economic impacts of COVID-19.

The demand and business environments in which we operate have benefited from some of these measures, while the long-term economic impacts of

increased government borrowing to fund these measures may have future negative effects on certain economies.

Any significant discontinuations, reductions, or other changes to such stabilization and stimulus programs may harm our customers’ or suppliers’ financial results and financial condition, and could also have an adverse macroeconomic impact that may lead to reductions in the demand for our products.

Even if maintained or expanded, such stimulus and stabilization measures may fail over the long term to mitigate the adverse economic effects of the pandemic, and may fail to prevent or exacerbate any long-term economic downturns.

As a result of the uncertain scope and duration of the COVID-19 pandemic and the uncertain timing of any national, regional or global recovery and economic normalization, we are unable to estimate the ultimate impacts on our operations and financial results.

We rely on the security and integrity of our electronic data systems, and the proper design and implementation of these systems for our business requirements, and our business can be damaged by deficiencies, disruptions, security breaches or compromises of these systems.

We rely on electronic data systems, including a variety of software and networking, computing and storage equipment and other information technologies, to operate and manage our business and to collect, process, maintain, and safeguard information, including information belonging to our customers, partners, and personnel.

Our electronic data systems may be subject to defects, failures or disruptions as a result of, among other things, natural disasters, accidents, power disruptions, telecommunications failures, deficiencies in new system designs and implementations, acts of terrorism or war, physical security breaches, computer viruses or other cyber security attacks.

For example, in June 2020, we discovered a data breach incident involving malware and related behaviors that resulted in unauthorized access to our information technology systems.

Although we do not believe this incident had any significant impacts on our production and ordinary course operations, such incidents or other system failures or disruptions could subject us to downtime and delays, compromise or loss of sensitive or proprietary information, destruction or corruption of data, financial losses from remedial actions, breaches of obligations to third parties under privacy laws or contracts, or damage to our reputation or customer relationships.

Any of the foregoing could have a material adverse effect on our business, operating results and financial condition.

In addition, we are actively implementing new electronic data systems relating to substantial parts of our business, operations and accounting.

The process of implementing and commencing our reliance on these new systems involves particularly higher risks of deficiencies or disruptions than the continued use of systems which have had a longer history of use and observed performance in the Company.

Because we conduct most of our business internationally, we are subject to operational, economic, financial and political risks abroad.

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Political developments in the United States and elsewhere may increase the risks and uncertainties associated with conducting international business, including the possibilities of greater tariffs and other trade barriers in the regions where we conduct business.

In fiscal 2019, we observed a continuing trend of increasing risks and challenges in the conduct of our international business activities, including with ongoing expanded tariffs and trade controls affecting the United States and China.

In fiscal 2020, we observed a continuing trend of increasing risks and challenges in the conduct of our international business activities, including expanded tariffs and other trade barriers affecting the United States and China.

Additionally, we are required to comply with foreign import and export requirements, customs and value added tax standards that can be unclear or complex.

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Additionally, hedging programs are inherently risky and could expose us to additional costs and risks that could adversely affect our financial condition and results of operations.

Increasingly restrictive export regulations and other trade barriers may materially harm our business.

Sales of our products to customers outside of the United States represent a significant part of our past and anticipated revenues, including sales involving exports from the United States to China.

There is a continuing trend of increasing trade barriers affecting exports and imports between the United States and China.

For example, the U.S.

Department of Commerce, Bureau of Industry and Security (BIS), has recently amended the U.S.

Export Administration Regulations to expand license requirements on exports to entities in China that may support military end uses.

These rules expand export license requirements on a broader set of items from the U.S., including many of our products and for a broader set of customers in China and elsewhere.

The BIS has also broadened the application of U.S.

export controls to items which are the foreign direct products of the U.S.

technologies which can affect a variety of customers outside of China who supplier products to certain entities in China.

There is no assurance that we will obtain any export licenses on a timely basis or at all.

There also remains considerable uncertainty regarding the interpretation and implementation of new regulations.

In addition, the reaction to these rules by governments and private businesses outside the U.S., particularly in China, may be expected to include retaliatory controls and preferences for non-U.S.

or local suppliers.

In China we are already observing stronger preferences for non-U.S.

suppliers in general, and in favor of new and existing local suppliers in particular.

These and other regulatory and policy changes, and the reactions of customers to such changes, in the U.S.

and elsewhere could materially and negatively affect our future sales and operating results.

If we fail to protect our proprietary rights, our competitors might gain access to our technology, which could adversely affect our ability to compete successfully in our markets.

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We might be subject to claims of infringement of other parties’ proprietary rights.

In the future, as we have in the past, we might receive claims that we are infringing intellectual property rights of others and inquiries about our interest in a license or assertions that we need a license to such intellectual property.

The semiconductor industry is characterized by uncertain and conflicting intellectual property claims and vigorous protection and pursuit of these rights.

The resolution of any claims of this nature, with or without merit, could be time consuming, result in costly litigation or cause product shipment delays.

In the event of an adverse ruling or settlement, we might be required to pay substantial

damages, cease the use or sale of infringing products, spend significant resources to develop non-infringing technology, discontinue the use of certain technology and/or enter into license agreements.

License agreements, if required, might not be available on terms acceptable to us or at all.

The loss of access to any of our intellectual property or the ability to use any of our technology could harm our business.

Finally, certain of our customer contracts contain provisions that require us to defend or indemnify our customers for third party intellectual property infringement claims, which would increase the cost to us of an adverse ruling or settlement.

Our industry is characterized by uncertain and conflicting intellectual property claims.

As we have in the past, we may receive claims that we are infringing intellectual property rights of others.

The resolution of intellectual property claims, with or without merit, could be time consuming, result in costly litigation with highly uncertain outcomes, or impact our delivery of products.

In the event of an adverse judgement or settlement, we might be required to pay substantial amounts, cease the use or sale of infringing products, spend significant resources to develop non-infringing technology, discontinue the use of certain technology or enter into license agreements.

License agreements might not be available on terms acceptable to us or at all.

In addition, certain of our customer contracts contain provisions that require us to defend or indemnify our customers for third party intellectual property infringement claims, which could increase the costs and negative impacts of intellectual property claims.

We have recorded restructuring, inventory write-offs and asset impairment charges in the past and may do so again in the future, which could have a material negative impact on our business.

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Any such additional charges, whether related to restructuring, asset impairment or factory underutilization may have a material negative impact on our operating results and related financial statements.

We rely on the security and integrity of our electronic data systems and our business could be damaged by a disruption, security breach or other compromise of these systems.

We rely on electronic data systems to operate and manage our business and to process, maintain, and safeguard information, including information belonging to our customers, partners, and personnel.

These systems may be subject to failures or disruptions as a result of, among other things, natural disasters, accidents, power disruptions, telecommunications failures, new system implementations, acts of terrorism or war, physical security breaches, computer viruses, or other cyber security attacks.

Such system failures or disruptions could subject us to downtimes and delays, compromise or loss of sensitive or confidential information or intellectual property, destruction or corruption of data, financial losses from remedial actions, liabilities to customers or other third parties such as under privacy laws, or damage to our reputation or customer relationships.

Any of the foregoing could have a material adverse effect on our business, operating results and financial condition.

We may not be able to recruit or retain qualified personnel.

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We could incur substantial costs, including cleanup costs, civil or criminal fines or sanctions and third-party claims for property damage or personal injury, as a result of violations of or liabilities under environmental laws and regulations or non-compliance with the environmental permits required at our facilities.

These laws, regulations and permits also could require the installation of costly pollution control equipment or operational changes to limit pollution emissions or decrease the likelihood of accidental releases of hazardous substances.

Environmental laws, regulations and permits could require the installation of costly pollution or waste control equipment or operational changes to limit waste or emissions or decrease the likelihood of accidental releases of hazardous substances.

In addition, changing laws and regulations, new laws and regulations, stricter enforcement of existing laws and regulations, the discovery of previously unknown contamination at our or others’ sites or the imposition of new cleanup requirements could require us to curtail our operations, restrict our future expansion, subject us to liability and cause us to incur future costs that could harm our operations, thereby adversely impacting our operating results and cash flow.

Natural and man-made disasters may negatively impact our business.

Our business is vulnerable to the direct and indirect impact of natural and man-made disasters, such as floods, earthquakes, volcanic eruptions, nuclear accidents, and acts of terrorism, epidemics (such as the current COVID-19), military conflicts, climate change, and other factors acting alone or in combination.

Material parts of our manufacturing and research and development operations are located in areas of California and Oregon that are prone to earthquakes and could be substantially disrupted in the event of an earthquake.

It is also possible that future natural and man-made disasters could negatively impact

the sales of our products as a result of impacts upon our customers' ability to make or sell their products, or impacts upon our suppliers’ ability to supply components to us on a timely basis.

Risks Relating to Our Acquisitions

We may make additional acquisitions and investments in the future, which could put a strain on our resources, cause ownership dilution to our stockholders and adversely affect our financial results.

We may in the future make other acquisitions or investments, which may subject us to new or heightened risks.

Integrating any newly acquired businesses, products or technologies into our company could put a strain on our resources, could be expensive and time consuming, could substantially reduce our cash reserves, could cause delays in product delivery and might not be successful.

Future acquisitions and investments could divert management’s attention from other business concerns and expose our business to unforeseen liabilities or risks associated with entering new markets.

We have made acquisitions, and may make additional acquisitions or investments in the future, which could put a strain on our resources, cause ownership dilution to our stockholders or adversely affect our financial results.

Our acquisitions or investments may subject us to new or heightened risks.

Integrating any newly acquired businesses, products or technologies into our company draws upon on our resources in ways that can be expensive and time consuming.

These activities can substantially affect our financial resources, could cause delays in product delivery and might not be successful.

Acquisitions and investments can divert management’s attention and expose our business to new liabilities or risks associated with entering into new business activities.

In addition, we might lose key employees while integrating new organizations.

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Investments that we make may not result in a return consistent with our projections upon which such investments are made, or may require additional investment that we did not originally anticipate.

In addition, future acquisitions could result in customer dissatisfaction, performance problems with an acquired company, potentially dilutive issuances of equity securities or the incurrence of debt and restrictive debt covenants, contingent liabilities, possible impairment charges related to goodwill or other intangible assets or other unanticipated events or circumstances.

In addition, acquisitions can result in customer dissatisfaction, performance problems with an acquired company, potentially dilutive issuances of equity

securities or the incurrence of debt and restrictive debt covenants, contingent liabilities, possible impairment charges related to goodwill or other intangible assets or other adverse impacts or circumstances.

If any of these risks were to come about, our business, financial results and stock price could be materially and adversely affected.

If goodwill or other intangible assets that we recorded in connection with our past acquisitions become impaired, we could be required to take significant charges against earnings.

In connection with our accounting for business that we acquired, we have recorded a significant amount of goodwill and other intangible assets.

If goodwill or other intangible assets that we recorded, or will record, in connection with our acquisitions become impaired, we could be required to take significant charges against earnings.

In connection with our accounting for acquired businesses, we record a significant amount of goodwill and other intangible assets.

generally accepted accounting principles, or GAAP, we must assess, at least annually and potentially more frequently, whether the value of goodwill and other indefinite-lived intangible assets have been impaired.

Finite-lived intangible assets will be assessed for impairment in the event of an impairment indicator.

Finite-lived intangible assets are assessed for impairment in the event of an impairment indicator.

Any reduction or impairment of the value of goodwill or other intangible assets will result in a charge against earnings, which could materially adversely affect our results of operations and stockholders’ equity in future periods.

Refer to Note 2 to Notes to Consolidated Financial Statements for further details relating to our annual goodwill impairment assessment.

Risks Relating to Owning Our Stock

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As part of that process, we may discover material weaknesses in our internal controls.

In addition, we are actively implementing new electronic data systems relating to substantial parts of our business, operations and accounting.

The process of implementing and commencing our reliance on these new systems involves particularly higher risks of deficiencies or disruptions in relation to our internal controls and disclosure controls and procedures than the continued use of systems which have had a longer history of use and observed performance in the Company.

If we fail to maintain effective controls or timely effect any necessary improvement of our internal and disclosure controls, we may not have accurate information to make management decisions, our operating results could be harmed or we may fail to meet our reporting obligations.

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• announcements of mergers and acquisition transactions and the ability to successfully integrate the business activities of the acquired/merged company;

• political and global economic instability, including as a result of trade barriers, natural disasters, epidemics (such as the current COVID-19), military conflicts, climate change, and other factors acting alone or in combination.

• political and global economic instability, including as a result of trade barriers, natural disasters, epidemics and pandemics (such as the current COVID-19 pandemic), military conflicts, climate change, and other factors acting alone or in combination.

In addition, if the market for technology stocks or the stock market in general experiences loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, operating results or financial condition.

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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-K

Item 1A. Risk Factors