What changed in this filing

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Item 1A. Risk Factors

2023-02-24 compared with 2022-02-18 · 88 added, 71 removed, 275 unchanged (37% of the section changed)

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We must continue to innovate and to invest in research and development to improve our competitive position and to meet the test and measurement requirements of our customers.

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.

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• maintain effective marketing strategies;

• obtain and maintain intellectual property rights where necessary;

• hire and retain high performing engineering personnel;

• respond effectively to technological changes or product announcements by others;

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We depend upon the sale of our probe card products for the substantial majority of our revenues.

We derive the majority of our revenues from the sale of our probe card products, primarily to manufacturers of microprocessor, foundry & logic and memory devices, despite progress in diversifying our product offerings.

We derive the majority of our revenues from the sale of our probe card products, primarily to manufacturers of microprocessors, foundry & logic and memory devices, despite progress in diversifying our product offerings.

We anticipate that sales of probe cards will represent a substantial majority of our revenues for the foreseeable future.

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

Two customers represented a combined 31.8% of total revenues in fiscal 2021, one customer represented 31.5% of total revenues in fiscal 2020 and two customers represented a combined 36.8% of total revenues in fiscal 2019.

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.

One customer represented 19.0% of total revenues in fiscal 2022, two customers represented a combined 31.8% of total revenues in fiscal 2021 and one customer represented 31.5% of total revenues in fiscal 2020.

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, which can drive material fluctuations in sales volume, gross margins due to changes in mix, and leverage on fixed costs.

Consolidation in the semiconductor industry may increase this concentration.

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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.

Furthermore, because our probe cards are custom products designed for our customers’ unique wafer designs, any cancellations, reductions or delays can result in significant non-recoverable costs.

Furthermore, because our probe cards are custom products designed for our customers’ unique wafer designs, any cancellations, reductions or delays can result in significant non-recoverable costs, including but not limited to the potential for impairment of inventories.

In some situations, our customers might be able to cancel or reduce orders without a significant penalty.

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There has also been consolidation within the semiconductor test equipment market.

This consolidation trend could change our interactions and relationships with complementary tester, instrument, and prober suppliers and negatively impact our revenue and operating results.

This consolidation trend could change our interactions and relationships with complementary tester, instrument, and probe card suppliers, and negatively impact our revenue and operating results.

Changes in customers’ test strategies, equipment and processes could decrease customer demand for our products.

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The semiconductor industry has historically been cyclical and is characterized by wide fluctuations in product supply and demand.

From time to time, this industry has experienced significant downturns, often in connection with, or in anticipation of, maturing product and technology cycles, excess inventories and declines in general economic conditions.

From time to time, this industry has experienced significant downturns, often in connection with, or in anticipation of,

maturing product and technology cycles, excess inventories, and declines in general economic conditions.

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 impacts 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.

Global economic stability can be negatively affected by a variety of factors and interrelationships, including the impacts of epidemics and pandemics, military conflicts, climate change, trade barriers (such as the U.S.-China trade restrictions implemented during fiscal 2022) 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 that use semiconductors, such as servers, personal computers, automobiles and cell phones.

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.

Further, a protracted downturn could cause one or more of our customers to become insolvent, resulting in a loss of revenue and impacting our ability to collect on accounts receivable.

For example, in the second half of fiscal 2022, we saw a significant decline in demand for foundry & logic and DRAM products due to cyclicality in those markets.

The timing, length and severity of these cyclical downturns are difficult to predict, and our business depends on our ability to plan for and react to these cyclical changes.

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Rather, a substantial percentage of our revenues in any quarter depend upon customer orders for our products that we receive and fulfill in that quarter.

Because our expense levels are based in part on our expectations as to future revenues and to a large extent are fixed in the short term, we might be unable to adjust spending in time to compensate for any unexpected shortfall in revenues.

Accordingly, any significant shortfall of revenues in relation to our expectations could hurt our operating results.

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We must continuously improve our manufacturing processes in an effort to increase yields and product performance, lower our costs and reduce the time required for us to design, manufacture and deliver our products in volume.

If we cannot do these things, both our existing products and our new products may not be commercially successful, our revenues may be adversely affected, our customer relationships and our reputation may be harmed and our business may be materially adversely affected.

If we cannot do these things, both our existing products and our new products may not be commercially successful, our revenues and profitability may be adversely affected, our customer relationships and our reputation may be harmed, and our business may be materially adversely affected.

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 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 and China.

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.

These delays and other inefficiencies may arise from a variety of factors.

Further, these investments may consume available cash in the short term for a presumed future benefit that may or may not occur.

These impacts have caused, and could cause in the future, our operating results and liquidity to decline.

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/or have installation issues in the field, due to the complexity of customer requirements.

These challenges, if not timely resolved could have a material adverse effect on operating results and our ability to compete effectively.

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, 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;

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

• decrease market acceptance or customer satisfaction with these products.

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In addition, prospective customers might decide not to use our products or use our products for a relatively small percentage of their requirements after we have expended significant effort and expense toward product design, development, and/or manufacture.

We obtain some of the components and materials we use in our products from a sole source or a limited group of suppliers, and the partial or complete loss of one of these suppliers could cause production delays.

We obtain some of the components and materials we use in our products from a sole source or a limited group of suppliers, and the partial or complete loss of one of these suppliers, or scarcity of raw materials from one of these suppliers, could cause production delays.

We obtain some of the components and materials used in our products, such as printed circuit board assemblies, plating materials and ceramic substrates, from a sole source or a limited group of suppliers, and in some cases alternative sources are not currently available.

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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.

This could be exacerbated by certain events outside the control of either the supplier or us, such as global, regional or national health crises or armed conflict.

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

We are dependent on the availability of certain key raw materials and natural resources used in our products and various manufacturing processes, and we rely on third parties to supply us with these materials in a cost-effective and timely manner.

Our access to raw materials may be adversely affected if our suppliers’ operations were disrupted as a result of limited or delayed access to key raw materials and natural resources, which may result in increased cost for these items.

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.

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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.

Health crises 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

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 and China, 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.

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

A significant seismic event in an area 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 electric power infrastructure.

We have previously experienced disruptions to electrical power at some of our premises in California and China, 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.

Climate change, or legal, regulatory or market measures to address climate change, may negatively affect our business and operations.

The physical impacts of climate change could adversely impact our costs and operations.

There has been public discussion that climate change may be associated with rising sea levels as well as extreme weather conditions such as more intense hurricanes, thunderstorms, tornadoes, drought, and snow or ice storms.

Extreme weather conditions may increase our costs or cause damage to our facilities, and any damage resulting from extreme weather may not be fully insured, and may also limit our ability to fully insure facilities on a cost-effective basis in the future.

Periods of extended inclement weather may inhibit construction of our capital improvement projects.

Any such events could adversely impact our costs or results of operations.

Concerns relating to climate change have led to a range of local, state, federal, and international regulatory and policy efforts to seek to address greenhouse gas (“GHG”) emissions.

In the U.S., various approaches are being proposed or adopted at the federal, state, and local government levels.

These efforts could lead to additional costs on the Company now or in the future, including increased energy and other capital or operational costs, or additional legal requirements on the Company.

These efforts could also materially increase our costs of evaluating potential manufacturing sites, or in some cases eliminate some potential locations as feasible sites.

In addition to the potential for additional GHG regulation or incentives, enhanced corporate, public, and stakeholder awareness of climate change could affect the Company's reputation or customer demand.

Climate change concerns and GHG regulatory efforts could also affect the Company's customers themselves.

We could also face pressure from these groups to adapt our physical facilities for alternative sources of energy, which may be less cost-effective than current sources.

Any of these factors, individually or combined with one or more factors, or other unforeseen factors or other impacts of climate change, could affect the Company and adversely impact our business, operations, or financial condition.

Global, regional or national health crises, such as the COVID-19 pandemic, have impacted, and could 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.

To date, these outbreaks have 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 them.

For example, a variety of health orders and regulations arising from the COVID-19 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.

The extension of existing government orders and implementation of new orders or mandates, such as government vaccine and testing mandates, could impact the availability of members of our workforce or lead to the loss of key employees, further adversely impacting our business.

I mplementation of such mandates and requirements could also have similar consequences for our suppliers, which may impact their ability to deliver the goods and services to us.

Even as the availability of vaccines has begun 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 continue to 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.

I mplementation of such mandates and requirements could also have similar consequences for our suppliers, which

may impact their ability to deliver their goods and services to us.

Even as the availability of vaccines has relieved the economic effects of the COVID-19 pandemic, new variants of the virus may continue to impede the vaccines’ efficacy, or other factors may prolong or worsen the pandemic and its direct and indirect effects upon our business.

In response, many of our employees continue to work remotely, which can increase operational risk and cybersecurity risks.

If we do not respond appropriately to these health crises, 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;

Health crises may heighten the risks posed by our dependence upon sole or limited source suppliers to the extent that they 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 these health crises impact 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 each event;

governmental, business and other actions including government vaccine and testing mandates (which could include further restrictions on our operations);

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the impacts on our supply chain;

the impact of the pandemic on economic activity;

the impact on economic activity;

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

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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.

All of these circumstances are highly uncertain and cannot be predicted, and the circumstances which give rise to new or existing infectious diseases becoming epidemics or pandemics with potentially similar impacts to the COVID-19 pandemic are expected to persist.

Adverse global, regional and national economic conditions could have a negative effect on our business, results of operations, financial condition, liquidity, and access to capital markets.

A variety of factors, including natural disasters, health crises, climate change, military conflicts and other geopolitical events, may adversely affect national, regional and global economies and financial markets.

Any of these events 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.

These events may also increase uncertainty in global credit and financial markets.

The impacts of such uncertainty and disruptions to the availability of credit or other sources of capital could also adversely affect our ability to access capital on favorable terms or on a timely basis 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.

Sustained inflation could have a material adverse effect on our business, financial condition, results of operations and liquidity.

Inflation rates in the markets in which we operate have increased and may continue to rise.

Recent inflation has led us to experience higher costs related to labor, materials from suppliers, and transportation.

Our suppliers have raised their prices and may continue to raise prices, and in the competitive markets in which we operate, we may not be able to make corresponding price increases to preserve our gross margins and profitability.

If inflation rates continue to rise or remain elevated for a sustained period of time, they could have a material adverse effect on our business, financial condition, results of operations and liquidity.

We have generally been able to offset increases in these costs through various productivity and cost reduction initiatives, as well as by adjusting our selling prices to pass through some of these higher costs to our customers;

however, our ability to raise our selling prices depends on market conditions and competitive dynamics.

Given the timing of our actions compared to the timing of these inflationary pressures, there may be periods during which we are unable to fully recover the increases in our costs.

We rely on the security and integrity of our electronic data systems, managed both internally and by third parties, for our business requirements, and our business can be damaged by 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 attacks.

For example, in fiscal 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.

acts of terrorism or war, physical security breaches, computer viruses or other cyber attacks.

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 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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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 supply products to certain entities in China.

export controls to certain items which may be subject to Foreign Direct Product Rules (“FDPR”).

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.

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.

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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, in fiscal 2021, and may do so again in the future, which could have a material negative impact on our business.

We recorded restructuring charges in fiscal 2021 and 2019 and will record further restructuring charges in the near future in relation to the recent restructuring announced during fiscal 2021.

We may implement restructuring plans in the future, which would require us to take additional, potentially material, restructuring charges related to employee terminations, asset disposal or exit costs.

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.

We recorded restructuring charges in fiscal 2022 and 2021 and we may implement restructuring plans in the future, which would require us to take additional, potentially material, restructuring charges related to employee terminations, asset disposal or exit costs.

We may also be required to write-off additional inventory if our product build plans or usage of inventory experience declines, and such additional write-offs could constitute material charges.

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As a result, these expectations may impact the attractiveness of our business, the manner in which we do business, our reputation, the costs of doing business, and the willingness of these stakeholders to engage with, invest in, or retain us.

We may be further impacted by the adoption and evolution of ESG-related regulation and legislation in the jurisdictions in which we do business, which could result in increased compliance, operational, and other costs.

We may be further impacted by the adoption and evolution of ESG-related regulation and legislation in the jurisdictions in which we do business, such as the Securities and Exchange Commission disclosure requirements proposed earlier in 2022, which could result in increased compliance, operational, and other costs.

In addition, the Company has provided voluntary disclosures on ESG matters, including regarding energy usage, greenhouse gas emissions, health and safety, diversity and inclusion, and labor and human rights.

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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 are 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.

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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.

If we fail to maintain effective controls or timely implement 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.

Ineffective internal and disclosure controls could also cause stockholders to lose confidence in our reported financial information and our ability to manage our business, which would likely have a negative effect on the trading price of our securities.

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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 and pandemics (such as the current COVID-19 pandemic), 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, 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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These provisions:

• establish a classified board of directors so that not all members of our board are elected at one time (subject to shareholder approval of a declassification amendment at the 2022 annual meeting of Stockholders);

• establish a transition from a classified board of directors to a declassified board of directors, such that, until the annual shareholder meeting in 2024, not all members of our board are elected at one time;

• provide that directors may only be removed “for cause” and only with the approval of 66.7% of our stockholders;

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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