What changed in this filing

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Item 1A. Risk Factors

2021-02-11 compared with 2020-02-25 · 90 added, 50 removed, 398 unchanged (26% of the section changed)

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As a result, a failure of one or more of our satellites, or the occurrence of equipment failures and other related problems, would constitute an uninsured loss and could harm our financial condition.

Our satellites have a limited life and may fail prematurely, which would cause our network to be compromised and materially and adversely affect our business, prospects and profitability.

We may experience in-orbit malfunctions of our satellites, which could adversely affect the reliability of their service or result in total failure of the satellite.

Our satellites have a limited life and may fail prematurely, which could cause our network to be compromised and materially and adversely affect our business, prospects and profitability, or cause us to incur additional expense to launch replacement satellites.

We have in the past and may in the future experience in-orbit malfunctions of our satellites, which could adversely affect the reliability of their service or result in total failure of the satellite.

In-orbit failure of a satellite may result from various causes, including component failure, loss of power or fuel, inability to control positioning of the satellite, solar or other astronomical events, including solar radiation and flares, and space debris.

Other factors that could affect the useful lives of our satellites include the quality of construction, gradual degradation of solar panels and the durability of components.

Radiation-induced failure of satellite components may result in damage to or loss of a satellite before the end of its expected life.

Although we do not incur any direct cash costs related to the failure of a satellite, if a satellite fails, we record an impairment charge in our statement of operations to reduce the remaining net book value of that satellite to zero, and any such impairment charges could depress our net income for the period in which the failure occurs.

If we experience operational disruptions with respect to our commercial gateways or operations center, we may not be able to provide service to our customers.

Our commercial satellite network traffic is supported by gateways in Tempe, Arizona, and Izhevsk, Russia, for traffic within Russian boundaries, and we operate our satellite constellation from our satellite network operations center in Leesburg, Virginia.

Currently, we do not have a backup facility for our primary gateway in Arizona, and our facilities are subject to the risk of significant malfunctions or catastrophic loss due to unanticipated events and would be difficult to replace or repair and could require substantial lead-time to do so.

Material changes in the operation of these facilities may be subject to prior FCC approval, and the FCC might not give such approval or may subject the approval to other conditions that could be unfavorable to our business.

Although we do not incur any direct cash costs related to the failure of a single satellite, if a satellite fails, we record an impairment charge in our statement of operations to reduce the remaining net book value of that satellite to zero, and any such impairment charges could depress our net income for the period in which the failure occurs.

Further, a large number of such failures could shorten the expected life of our constellation, which would increase our depreciation expense, or require us to launch our ground spare satellites or even replace our constellation sooner than currently planned, either of which would increase our projected capital expenditures.

If operations at our commercial gateways or operations center were to be disrupted, we may experience interruptions in our ability to provide service to our customers.

Our commercial satellite network traffic is supported by a gateway in Tempe, Arizona, as well as a gateway in Izhevsk, Russia for traffic within Russian boundaries, and we operate our satellite constellation from our satellite network operations center in Leesburg, Virginia.

If we are unable to use our primary commercial gateway in Tempe, it could take us from one to eight hours to switch operations to our backup facility for most services, and potentially longer for some services.

During this time, our customers would be unable to use those services, and we could suffer a loss of revenue and harm to our reputation.

When operating on our backup facility, any further failure could leave us unable to offer services for an extended period.

Our gateways and operations center may also experience service shutdowns or periods of reduced service in the future as a result of equipment failures, delays in deliveries or regulatory issues.

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Risks related to our business operations

Our business has been negatively affected by the COVID-19 pandemic, actions taken to mitigate the pandemic, and economic disruptions that have resulted, but we are unable to predict the full extent or nature of these impacts at this time.

In response to the COVID-19 pandemic, many jurisdictions in the United States and around the world ordered their residents to cease traveling to non-essential jobs and to stay in their homes as much as possible.

Since March 2020, we have been conducting business with remote work for most employees, prohibition on most employee travel, and remote sales and support activities, among other modifications.

The pandemic and the steps taken to respond have also caused substantial domestic and global economic disruption, including similar restrictions on activity among our distributors, which has led to reduced sales and has limited our distributors’ ability to install or service our products.

These limitations may continue for the duration of these pandemic-related restrictions, and we or our distributors may take additional actions to respond as the situation evolves.

Further, unemployment has significantly increased, and financial markets are experiencing significant levels of volatility and uncertainty, which could have an adverse effect on consumer and commercial spending and negatively affect demand for our and our distributors’ products and services, particularly in markets such as aviation and recreation.

This, in turn, could negatively affect the value of our current agreements with our distributors and their willingness to enter into or renew contracts with us.

The pandemic has also negatively affected the payment of accounts receivable and collections.

One of our distributors has sought protection in bankruptcy, causing us to reduce the amount we expect to receive from them for past services.

If additional distributors seek protection in bankruptcy, it could further harm our cash flows and results of operations.

As a result of the negative effects at the outset of the pandemic, we reduced our initial revenue and earnings outlook for 2020.

Other effects of the COVID-19 pandemic and the effects of the modifications we and others have made in response are difficult to assess or predict with certainty at this time but may include risks to employee health and safety, a decline in the market price of our common stock, a prolonged economic downturn, and deterioration of the economy and consumer and commercial spending, any of which could further adversely affect our business, results of operations and/or financial condition in 2021 and beyond.

Aireon, our primary hosted payload customer, has been negatively affected by reduced air traffic as a result of the COVID-19 pandemic, which could reduce or eliminate the value of our agreements with, and ownership interest in, Aireon.

Aireon is our primary hosted payload customer, and we expect annual revenue to us from Aireon hosting, data services and power fees to be approximately $39.5 million.

In addition, if and when funds are available following a planned refinancing of its credit facility, Aireon’s parent company, Aireon Holdings, is required to redeem a portion of our ownership interest for a payment of $120.0 million, and we would then retain a common ownership interest of approximately 22% in Aireon Holdings.

Based on Aireon’s business plan and restrictions under Aireon’s debt facility, we do not expect this redemption of our ownership interest to occur for several years.

Aireon provides air traffic surveillance services to ANSPs around the world, as well as other offerings based on its collection of air traffic surveillance data.

The COVID-19 pandemic has resulted in substantially reduced air traffic worldwide, and it is uncertain when air traffic volumes will recover.

A portion of Aireon’s customers pay them on a per-flight-hour basis, and even those customers with fixed-fee arrangements may seek to renegotiate their fees in the face of dramatically reduced air traffic.

Further, Aireon’s business model requires expansion of its customer base to achieve its projected financial results, which may be substantially more difficult until air traffic volumes recover.

While our fee arrangements with Aireon do not depend on traffic volumes, if Aireon’s revenues are substantially reduced, they may not be able to pay us the contractually required hosting, data services and power fees in a timely manner or at all.

Further, Aireon may need to seek additional financing.

Any sale of equity securities by Aireon would dilute our ownership if and to the extent that we do not invest additional funds to maintain our proportional ownership interest.

If additional funding is not available, Aireon may default on its credit facility, which could result in the loss or reduction in value of our investment in Aireon, or be forced out of business, in which case we would not receive any further hosting, data or power fees, or the expected $120.0 million redemption payment, and we would lose the value of our retained investment in Aireon Holdings.

Our business plan depends on increased demand for mobile satellite services, among other factors.

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• our ability to sell our products and services in additional countries;

our ability to comply with all applicable regulatory requirements both in the United States and internationally;

• our ability to comply with applicable regulatory requirements, both in the United States and internationally;

• our ability to maintain our relationship with U.S.

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government customers, particularly the Department of Defense, which represent a significant portion of our revenue, are subject to termination.

government, through a dedicated gateway owned and operated by the Department of Defense, has been and continues to be, directly and indirectly, our largest customer, representing 22% and 20% of our revenue for the years ended December 31, 2019 and 2018, respectively.

government, through a dedicated gateway owned and operated by the Department of Defense, has been and continues to be, directly and indirectly, our largest customer, representing 22% of our revenue for each of the years ended December 31, 2020 and 2019.

We provide the majority of our services to the U.S.

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The GMSS contract provides for a six-month base term and up to four one-year options exercisable at the election of the U.S.

government, one of which has been exercised so far, and the EMSS contract provides for a seven-year term.

government, two of which have been exercised so far, and the EMSS contract provides for a seven-year term.

government may terminate these agreements, in whole or in part, at any time for its convenience.

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We license critical intellectual property and technology to operate and maintain our network and related ground infrastructure and services as well as to design, manufacture, and sell our devices.

This intellectual property and technology is essential to our ability to continue to operate our constellation and sell our services and devices.

This intellectual property and technology is essential to our

ability to continue to operate our constellation and sell our services and devices.

In addition, we are dependent on third parties to develop enhancements to our current products and services even in circumstances where we own the intellectual property.

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In addition, industry consolidation could hurt us by increasing the scale or scope of our competitors, thereby making it more difficult for us to compete.

We are dependent on third parties to market and sell our products and services.

We depend on third parties to market and sell our products and services, and their inability to do so effectively could impair our revenue and our reputation.

We select third-party distributors, in some cases on an exclusive basis, and rely on them to market and sell our products and services to end users and to determine the prices end users pay.

We also depend on our distributors to develop innovative and improved solutions and applications integrating our product and service offerings.

We also depend on our distributors to develop innovative and

improved solutions and applications integrating our product and service offerings.

As a result of these arrangements, we are dependent on the performance of our distributors to generate most of our revenue.

Our distributors operate independently of us, and we have limited control over their operations, which exposes us to significant risks.

Distributors may not commit the necessary resources to market and sell our products and services and may also market and sell competitive products and services.

Distributors may not commit the same level of resources to market and sell our products and services that we would, and these distributors may also market and sell competitive products and services.

In addition, our distributors may not comply with the laws and regulatory requirements in their local jurisdictions, which could limit their ability to market or sell our products and services.

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In addition, we may lose distributors due to competition, consolidation, regulatory developments, business developments affecting our distributors or their customers, or for other reasons.

In 2009, one of our largest competitors, Inmarsat, acquired our then largest distributor, Stratos Global Wireless, Inc., and in January 2014, Inmarsat acquired Globe Wireless, one of our service providers.

For example, the COVID-19 pandemic and the steps taken to respond are causing substantial domestic and global economic disruption, including financial difficulties and restrictions on activity among our distributors, which have led to reduced sales and limited our distributors’ ability to install or service our products.

These disruptions have also negatively affected the payment of accounts receivable and collections.

For example, one of our distributors has sought protection in bankruptcy, causing us to reduce the amount we expect to receive from them for past services.

Other distributors could similarly seek to reorganize or seek protection from creditors, including us.

These financial disruptions could also result in industry consolidation.

In 2009, one of our largest competitors, Inmarsat, acquired our then largest distributor, Stratos Global Wireless, Inc., and in 2014, Inmarsat acquired Globe Wireless, one of our service providers.

Following each acquisition, Inmarsat essentially stopped promoting sales of our products and services, and they may further reduce their efforts in the future.

Any future consolidation of our distributors would further increase our reliance on a few key distributors of our services and the amount of volume discounts that we may have to give those distributors.

Our two largest distributors, Applied Satellite Technology LTD and Marlink Group, represented approximately 10% of our revenue for the year ended December 31, 2019, and our ten largest distributors represented, in the aggregate, 31% of our revenue for the year ended December 31, 2019.

The loss of any of these distributors, or a decrease in the level of effort expended by any of them to promote our products and services, could reduce the distribution of our products and services as well as the development of new products and applications.

We rely on a limited number of key vendors for supply of equipment and services.

We currently rely on two manufacturers of our devices, including our mobile handsets, L-Band transceivers, SBD devices and Iridium Pilot terminals.

Our two largest distributors, Marlink Group and Garmin, together represented approximately 9% of our revenue for the year ended December 31, 2020, and our ten largest distributors represented, in the aggregate, 30% of our revenue for the year ended December 31, 2020.

The loss or consolidation of any of these distributors, or a decrease in the level of effort expended by any of them to promote our products and services, could reduce the distribution of our products and services as well as the development of new products and applications, which would negatively impact our revenue.

We rely on a limited number of key vendors for supply of equipment and services, the loss of any of which could cause us to incur additional costs and delays in the production and delivery of our products.

We currently rely on two manufacturers of our devices, including our mobile handsets, L-band transceivers and SBD devices.

We also utilize sole source suppliers for some of the component parts of our devices.

If any of our suppliers were to terminate its relationship with us, we may not be able to find a replacement supplier in a timely manner, at an acceptable price or at all.

Our manufacturers and suppliers may become capacity-constrained as a result of a surge in demand, a natural disaster or other event, or one or more component suppliers may decide to cease production of various components of our products, resulting in a shortage or interruption in supplies or an inability to meet increased demand.

Although we may be able to replace sole source suppliers, there could be a substantial period of time in which our products would not be available;

Our manufacturers and suppliers may become capacity-constrained, or could face financial difficulties as a result of a surge in demand, a natural disaster or other event, including the impacts of the COVID-19 pandemic.

For example, in 2020, a manufacturer of components used in several Iridium transceiver and handset products suffered a fire at its factory.

As a result, we may experience a delay in fulfilling some product orders and are evaluating replacement components and product changes.

If we fail to effectively address these issues, we could suffer delays, which could reduce our sales of those products and use of the related services and could harm our reputation.

Even if we are successful in these mitigation efforts, we may experience increased costs on the affected products.

In addition, one or more component suppliers may decide to cease production of various components of our products, resulting in a shortage or interruption in supplies or an inability to meet increased demand.

Any delay in production or delivery of our products or components by our suppliers due to an extended closure of their plants or other restrictions imposed in response to the COVID-19 pandemic could also adversely affect our business.

Although we may be able to replace or supplement sole source suppliers, there could be a substantial period of time in which our products would not be available;

any new relationship may involve higher costs and delays in development and delivery, and we may encounter technical challenges in successfully replicating the manufacturing processes.

products or services to our customers in a competitive manner, which could in turn negatively affect our financial results and our reputation.

In November 2016, we entered into a development services contract with Boeing, which will dedicate key Boeing personnel to continue the design and growth required for bringing new services and capabilities to our network.

Technological competence is critical to our business and depends, to a significant degree, on the work of technically skilled personnel, such as these Boeing contractors.

If Boeing’s performance falls below expected levels or if Boeing has difficulties retaining the personnel servicing our network development, the development of new products and services could be compromised.

In addition, if Boeing terminates its agreement with us, we may not be able to find a replacement provider on favorable terms or at all, which could impair our operations and performance.

If our manufacturers or suppliers terminate their relationships with us, fail to provide equipment or services to us on a timely basis, or fail to meet our performance expectations, we may be unable to provide products or services to our customers in a competitive manner, which could in turn negatively affect our financial results and our reputation.

Conducting and expanding our operations outside the United States creates numerous risks, which may harm our operations and compromise our ability to expand our international operations.

We have significant operations outside the United States.

We estimate that commercial data traffic originating outside the United States, excluding our Iridium OpenPort broadband data service traffic, accounted for 71% and 72% of total commercial data traffic for the years ended December 31, 2019 and 2018, respectively, while commercial voice traffic originating outside the United States, excluding Iridium OpenPort traffic, accounted for 90% of total commercial voice traffic for the years ended December 31, 2019 and 2018.

We estimate that commercial data traffic originating outside the United States, excluding our Iridium OpenPort broadband data service traffic, accounted for 72% and 71% of total commercial

data traffic for the years ended December 31, 2020 and 2019, respectively, while commercial voice traffic originating outside the United States, excluding Iridium OpenPort traffic, accounted for 91% and 90% of total commercial voice traffic for the years ended December 31, 2020 and 2019.

We cannot provide the precise geographical distribution of revenue from end users because we do not contract directly with them.

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We and our distributors are also seeking authorization to sell our services in additional countries.

The COVID-19 pandemic has, and we expect will continue to, put pressure on global economic conditions and overall spending, which could negatively affect end user adoption of our products.

Conducting operations outside the United States involves numerous risks and, while expanding our international operations would advance our growth, it would also increase our exposure to these risks.

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Other risks associated with the proposed expansion of our international operations include:

• effects of the COVID-19 pandemic, including on international economies, supply chains and travel;

• difficulties in penetrating new markets due to established and entrenched competitors;

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Any appreciation of the U.S.

dollar against other currencies will increase the cost of our products and services to our international customers and, as a result, may reduce the competitiveness of our international offerings and make it more difficult for us to grow internationally.

dollar against other currencies, including as a result of the COVID-19 pandemic, will increase the cost of our products and services to our international customers and, as a result, may reduce the competitiveness of our international offerings and make it more difficult for us to grow internationally.

Conversely, in some locations, primarily Russia, we conduct business in the local currency, and a depreciation of the local currency against the U.S.

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We have a considerable amount of debt, which may limit our ability to fulfill our obligations and/or to obtain additional financing.

As of December 31, 2019, we had $1,810.0 million of consolidated gross indebtedness on an actual basis, consisting of $1,450.0 million of indebtedness outstanding under our Term Loan and $360.0 million of indebtedness outstanding under our senior unsecured notes, or the Notes.

In February 2020, we borrowed an additional $200.0 million under the Term Loan and redeemed the Notes in full.

As of December 31, 2020, we had $1,637.6 million of consolidated gross indebtedness on an actual basis under our Term Loan.

Our capital structure and reliance on indebtedness can have several important consequences, including, but not limited to, the following:

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If our cash flows and capital resources are insufficient to fund our debt service obligations, or to repay the Term Loan when it matures, we may have to undertake alternative financing plans, such as refinancing or restructuring our debt, selling assets or operations, reducing or delaying capital investments, or seeking to raise additional capital.

We may not be able to refinance our

debt, or any refinancing of our debt could be at higher interest rates and may require us to comply with more restrictive covenants that could further restrict our business operations.

We may not be able to refinance our debt, or any refinancing of our debt could be at higher interest rates and may require us to comply with more restrictive covenants that could further restrict our business operations.

Our ability to implement successfully any such alternative financing plans will depend on a range of factors, including general economic conditions, the level of activity in capital markets generally, and the terms of our various debt instruments then in effect.

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If we experience an event of default, the lenders may require repayment in full of all principal and interest outstanding under the Term Loan.

If we fail to repay such amounts, the lenders may foreclose on the assets we have pledged under the Term Loan , which includes substantially all of the assets of our domestic subsidiaries, including our principal operating subsidiary, Iridium Satellite.

If we fail to repay such amounts, the

lenders may foreclose on the assets we have pledged under the Term Loan, which includes substantially all of the assets of our domestic subsidiaries, including our principal operating subsidiary, Iridium Satellite.

Certain provisions in the credit agreement governing our Term Loan limit our financial and operating flexibility.

The credit agreement governing our Term Loan contains covenants that place restrictions on, among other things, our ability to:

• incur liens,

• engage in mergers or asset sales,

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The trading price of our common stock might also decline in reaction to events that affect other companies in our industry even if these events do not directly affect us.

If our stock, the market for other stocks in our industry, or the stock market in general experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition or results of operations.

If our stock, the market for other stocks in our industry, or the stock market in general

experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition or results of operations.

We may not pay dividends on our common stock in the foreseeable future.

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A change in the manner in which we provide service, or a failure to comply with any common carrier regulations that apply to us or to pay required fees, could result in sanctions including fines, loss of authorizations, or the denial of applications for new authorizations or the renewal of existing authorizations.

Use by our competitors of L-band spectrum for terrestrial services could interfere with our services.

In February 2003, the FCC adopted ATC rules that permit satellite service providers to establish terrestrial wireless networks in previously satellite-only bands, subject to certain requirements intended to ensure that terrestrial services remain ancillary to primary satellite operations.

In 2011, Ligado Networks (then known as Lightsquared) was granted a waiver at the FCC to convert Ligado Network’s L-band satellite spectrum to terrestrial use including a 10 MHz band close to the spectrum that we use for all of our services.

Repurposing of satellite spectrum by adjacent operators of L-band spectrum for terrestrial services could interfere with our services.

In February 2003, the U.S.

Federal Communications Commission, or FCC, adopted Ancillary Terrestrial Component, or ATC, rules that permit satellite service providers to establish terrestrial wireless networks in previously satellite-only bands, subject to certain requirements intended to ensure that terrestrial services remain ancillary to primary satellite operations and do not interfere with existing operators.

In 2011, the FCC granted Ligado Networks (then known as Lightsquared), or Ligado, a waiver to convert its L-band satellite spectrum to terrestrial use, including a 10 MHz band close to the spectrum that we use for all of our services.

That waiver was subsequently suspended in 2012 due to concerns about potential interference to GPS operations.

Ligado Networks sought another waiver in 2015 to modify the ATC of its L-band mobile satellite service network with a new proposal to address GPS industry concerns.

We oppose this waiver out of concern for the interference that Ligado Network’s proposed operations would cause to our operations in the L-band.

The implementation of ATC services by satellite service providers in the United States or other countries may result in terrestrial use of L-band spectrum in the 1.6 GHz band, which we use to provide our services, and such implementation may make it difficult for us to utilize the spectrum resources we require for our existing and future services.

In addition, the FCC’s decision to permit ATC services was based on assumptions relating to the level of interference that the provision of ATC services would likely cause to other satellite service providers that use the L-band spectrum.

If the FCC’s assumptions prove inaccurate, or the level of ATC services provided exceeds those estimated by the FCC, such as the proposed use by Ligado Networks, ATC services could substantially interfere with our satellites and devices, which would adversely affect our services.

Outside the United States, other countries have implemented, or are considering implementing, regulations to facilitate ATC-like services.

Ligado sought another waiver in 2015 to modify the ATC of its L-band mobile satellite service network with a terrestrial-only proposal designed to address GPS industry concerns.

In April 2020, the FCC announced that it had approved Ligado’s waiver request.

We oppose this waiver out of concern for the interference that we believe Ligado’s proposed operations would cause to our operations in adjacent L-band spectrum.

Ligado’s implementation of these services would result in terrestrial use of L-band spectrum in the 1.6 GHz band, which we use to provide our services, and such implementation may affect the performance of our system for customers of our existing and future services.

While the FCC’s decision to approve these services included conditions designed to protect other satellite services that use L-band spectrum from harmful interference, these conditions may prove insufficient, or the level of services provided may exceed those estimated by the FCC, in which case these or future terrestrial services permitted by the FCC could substantially interfere with our satellites and devices, which would adversely affect our services.

If other countries permit similar terrestrial use of L-band spectrum in the 1.6 GHz band, the performance of our system may be subject to interference there as well.

If the FCC revokes, modifies or fails to renew our licenses, or fails to grant a new license or modification, our ability to operate will be harmed or eliminated.

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The collection, storage, transmission, use and disclosure of user data and personal information could give rise to liabilities or additional costs as a result of laws, governmental regulations, and evolving views of personal privacy rights and information security standards.

We transmit, process, and in some cases store in the normal course of our business, end user data, including personal information.

We transmit, process, and in some cases store in the normal course of our business, personal information.

Many jurisdictions around the world have adopted laws and regulations regarding the collection, storage, transmission, use and disclosure of personal information.

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We could face direct expenses related to a variety of enforcement actions, government investigations, or litigation, and an interruption to our business and adverse publicity because of such enforcement actions, government investigations, or litigation.

Such enforcement actions, government investigations, or

litigation could also cause us to incur significant expenses if we were required to modify our products, our services, our infrastructure, or our existing security and privacy procedures in order to comply with new or expanded privacy and security regulations.

Such enforcement actions, government investigations, or litigation could also cause us to incur significant expenses if we were required to modify our products, our services, our

infrastructure, or our existing security and privacy procedures in order to comply with new or expanded privacy and security regulations.

In addition, if end users allege that their personal information is not collected, stored, transmitted, used or disclosed by us or our business partners appropriately or in accordance with our policies or applicable laws, or that our failure to adequately secure their personal information compromised its security, we could have liability to them or to consumer protection agencies, including claims, investigations and litigation related to such allegations.

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In addition, changing and conflicting national and local regulatory requirements may cause us to be in compliance with local requirements in one country, while not being in compliance with the laws and regulations of another.

If we fail to comply with regulations in the United States or any other country, we could be subject to substantial fines or sanctions that could make it difficult or impossible for us to operate in the United States or such other country, or we may need to make substantial additional expenditures to bring our systems, products and services into compliance with the requirements.

If we fail to comply with regulations in

the United States or any other country, we could be subject to substantial fines or sanctions that could make it difficult or impossible for us to operate in the United States or such other country, or we may need to make substantial additional expenditures to bring our systems, products and services into compliance with the requirements.

We may be unable to obtain and maintain contractually required liability insurance, and the insurance we obtain may not cover all liabilities to which we may become subject.

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If an “ownership change” were to occur, Section 382 of the Code would impose an annual limit on the amount of pre-ownership change net operating loss carryforwards and other tax attributes we could use to reduce our taxable income.

It is possible that such an ownership change could materially reduce our ability to use our net operating loss carryforwards or other tax attributes to offset taxable income, which could impact our profitability.

It is possible that

such an ownership change could materially reduce our ability to use our net operating loss carryforwards or other tax attributes to offset taxable income, which could impact our profitability.

We could be subject to adverse determinations by taxing authorities or changes to tax laws.

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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