Item 1A. Risk Factors
ITEM 1A.
RISK FACTORS
The
ongoing COVID-19 pandemic and measures intended to prevent its spread have had, and may continue to have, a material and adverse effect
on our business and results of operations.
Global
health concerns relating to the COVID-19 pandemic and related government actions taken to reduce the spread of the virus have been weighing
on the macroeconomic environment, and the pandemic has significantly increased economic uncertainty and reduced economic activity. Small
businesses, which represent a large portion of our design customers, have been impacted particularly hard. The pandemic has resulted
in government authorities and businesses implementing numerous measures to try to contain the virus, such as travel bans and restrictions,
quarantines, shelter in place or total lock-down orders, school closures, and business limitations and shutdowns. Such measures have
contributed significantly to increased unemployment and negatively impacted consumer and business spending. Business shutdowns have disrupted
our supply chain and the manufacture or shipment of our products and delayed the rollout of our retail distribution products.
The
pandemic has caused us to modify our business practices to help minimize the risk of the virus to our employees, our customers, and the
communities in which we participate, which could negatively impact our business. We continue to permit employees to work remotely, which
subjects the Company to increased cybersecurity risks and may reduce workplace efficiency. As the availability of vaccines has increased
and COVID-19 case rates have diminished, we have gradually begun a phased reopening of our offices. We continue to employ additional
safety measures in our offices, including enhanced cleaning and sanitation, mask wearing, suspending international business travel for
our employees and limiting domestic business travel, limiting external guests visiting our offices, and holding most meetings and events
virtually. Local conditions may require us to move back under more restrictive guidelines, which could include mandatory remote work
and additional safety measures. Given the continually evolving situation, there is no certainty that the measures we have taken will
be sufficient to mitigate the risks posed by the virus.
The
full extent to which the COVID-19 pandemic will continue to impact our business, results of operations, and financial condition remains
uncertain and will depend on developments that remain uncertain and difficult to predict, including, but not limited to, the duration
and spread of the pandemic, its severity, the actions to contain the virus or treat its impact, the availability, distribution and efficacy
of vaccines, and acceptance by the population to get the vaccine and how quickly and to what extent normal economic and operating conditions
resume. Even after the COVID-19 pandemic has subsided, we may experience material and adverse impacts to our business as a result of
the virus’s global economic impact, including the availability of credit, bankruptcies or insolvencies of customers, and recession
or economic downturn.
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Any
of the issues discussed above could have a material adverse effect on our business if this continues for an extended period of time.
If we incur significant declines in customer orders, increased aging of accounts receivable or other negative consequences due to COVID-19,
the extent of which remains highly uncertain, it will have a material adverse effect on our business, financial condition and results
of operations.
While
we attempt to identify, manage, and mitigate risks and uncertainties associated with our business to the extent practical under the circumstances,
some level of risk and uncertainty will always be present. Item 1A - “Risk Factors” in the Form 10-K describes some of the
risks and uncertainties associated with our business, which we strongly encourage you to review. These risks and uncertainties have the
potential to materially affect our business, financial condition, results of operations, cash flows, projected results, and future prospects.
There have been no material changes in our risk factors from those disclosed in the Form 10-K.
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There
were no unregistered sales of the Company’s equity securities during the 2021 Quarter that were not previously disclosed in a Current
Report on Form 8-K.
ITEM 3.
DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.
MINE SAFETY DISCLOSURES
Not
Applicable.
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