What changed in this filing

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Item 1A. Risk Factors

2025-07-02 compared with 2024-06-28 · 71 added, 17 removed, 152 unchanged (37% of the section changed)

20 unchanged sentences

With the constant evolution of workforce dynamics, if we do not manage these changes effectively, it could materially adversely affect our culture, reputation, and operational flexibility.

We are subject to other risks that might also cause our actual results to vary materially from our forecasts, targets, or projections, including:

• Failing to anticipate the need for and appropriately invest in information technology and logistical resources necessary to support our business, including managing the costs associated with such resources;

• Failing to generate sufficient future positive operating cash flows and, if necessary, secure and maintain adequate external financing to fund our operations and any future growth;

• Interruptions in service by common carriers that ship goods within our distribution channels.

Our business and reputation are impacted by information technology system failures and network disruptions.

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System redundancy and other continuity measures may be ineffective or inadequate, and our, or our vendors', business continuity and disaster recovery planning may not be sufficient for all eventualities.

Such failures or disruptions can adversely impact our business by, among other things,

preventing access to our cloud-based systems, interfering with customer transactions or impeding the manufacturing and shipping of our products.

Such failures or disruptions can adversely impact our business by, among other things, preventing access to our cloud-based systems, interfering with customer transactions or impeding the manufacturing and shipping of our products.

These events could materially adversely affect our business, reputation, results of operations and financial condition.

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The implementation of these investments may be more costly or take longer than we anticipate, or could otherwise adversely affect our business operations, which could negatively impact our financial position, results of operations or cash flows.

Internal controls over financial reporting may not be effective at preventing or detecting material misstatements.

Because of its inherent limitations, internal controls over financial reporting may not prevent or detect material misstatements in the Company's consolidated financial statements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

We cannot guarantee that our share repurchase program will enhance long-term stockholder value, or that it will successfully mitigate the dilutive effect of employee equity awards.

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In addition, the program could affect the trading price of our Common Stock and increase volatility, and any announcement of a termination of this program may result in a decrease in the trading price of our Common Stock.

We may not be able to realize the benefits anticipated as a result of the Nu Aire acquisition.

On November 1, 2024, we completed the acquisition of Nu Aire.

The success of this acquisition will depend, in part, on our ability to realize the anticipated business opportunities and growth prospects from combining Nu Aire with our existing business.

Achieving those benefits depends on the timely, efficient, and successful execution of a number of post-acquisition events, including integrating the acquired business into the Company.

Factors that could affect our ability to achieve these benefits include:

• Difficulties in integrating and managing personnel, financial reporting, and other systems used by the acquired business;

• The failure of the acquired business to perform in accordance with our expectations;

• Failure to achieve anticipated synergies between our business units and the business units of the acquired business;

• The loss of customers of the acquired business;

• The loss of key managers and employees of the acquired business;

• Other material adverse events in the acquired business.

The process of integrating Nu Aire into our existing operations also may require additional financial resources and attention from management that would otherwise be available for ongoing development or expansion of our existing operations.

Costs associated with the acquisition have included and may include in the future significant transaction, consulting, and third-party service fees as we build up internal resources and/or engage third party providers as part of the integration of Nu Aire into our operations.

Further, because Nu Aire was a private company and was not subject to the requirements of Sarbanes-Oxley, the Nu Aire acquisition requires or will require us to incorporate additional internal controls for the acquired company, which may be difficult, costly, and time-consuming.

Although we expect to successfully integrate Nu Aire, we may not achieve the desired net benefit in the timeframe planned if the integration process takes longer than expected or is more costly than anticipated.

If the acquired company does not operate as we anticipate, it could materially impact our business, financial condition, and results of operations.

We have recently acquired Nu Aire, which was not subject to rules and regulations promulgated under the Sarbanes-Oxley Act of 2002, as amended ("Sarbanes-Oxley"), and may therefore lack the internal controls that would be required of a U.S.

public company, which could ultimately affect our ability to ensure compliance with the requirements of Section 404 of Sarbanes-Oxley.

We have recently acquired Nu Aire, Inc., which was not previously subject to the rules and regulations promulgated under Sarbanes-Oxley and accordingly was not required to establish and maintain an internal control infrastructure meeting the standards promulgated under Sarbanes-Oxley.

Our assessment of and conclusion on the effectiveness of our internal control over financial reporting as of April 30, 2025 does not include consideration of the controls of Nu Aire, which was acquired on November 1, 2024.

Although management will continue to review and evaluate the effectiveness of our internal controls in light of this acquisition, we cannot provide any assurances that there will be no significant deficiencies or material weaknesses in our internal control over financial reporting.

Any significant deficiency or material weakness in the internal control structure of our acquired business may cause significant deficiencies or material weaknesses in our internal control over financial reporting, which could have an adverse effect on our business and our ability to comply with Section 404 of Sarbanes-Oxley.

Internal controls over financial reporting may not be effective at preventing or detecting material misstatements.

Because of its inherent limitations, internal controls over financial reporting may not prevent or detect material misstatements in the Company's consolidated financial statements.

We have recorded goodwill and other intangible assets in connection with the Nu Aire business acquisition.

Goodwill and other acquired intangible assets could become impaired and adversely affect our future operating results.

We account for business acquisitions as business combinations under the acquisition method of accounting in accordance with accounting principles generally accepted in the United States.

Under the acquisition method of accounting, the total purchase price is allocated to net tangible assets and identifiable intangible assets of acquired businesses based on their fair values as of the date of completion of the acquisition.

The excess of the purchase price over those fair values is recorded as goodwill.

To the extent the value of goodwill or other intangible assets become impaired, we may be required to incur material charges relating to such impairment.

We conduct our goodwill and indefinite-lived intangible asset impairment analysis annually, or more frequently if we believe indicators of impairment exist.

Our reported financial condition and results of operations reflect the balances and results of the acquired business but are not restated retroactively to reflect the historical financial position or results of operations of the acquired business for periods prior to the acquisition.

As a result, comparisons of future results against prior period results will be more difficult for investors.

In additional, there can be no guarantee that acquired intangible assets, particularly in-process research and development, will generate revenues or profits that we include in our forecast that is the basis for their fair value as of the acquisition date.

Any such impairment charges relating to goodwill or other intangible assets could have a material impact on our operating results in future periods, and the announcement of a material impairment could have a material adverse effect on the trading price and trading volume of our common stock.

As of April 30, 2025, our Condensed Consolidated Balance Sheet reflected goodwill of $12.5 million and other intangible assets, net of $17.8 million.

We are subject to other risks that might also cause our actual results to vary materially from our forecasts, targets, or projections, including:

• Failing to generate sufficient future positive operating cash flows and, if necessary, secure and maintain adequate external financing to fund our operations and any future growth;

• Interruptions in service by common carriers that ship goods within our distribution channels.

Risks Related to Operations

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Our principal raw materials are steel, including stainless steel, wood and epoxy resin.

Numerous factors beyond our control, such as general economic conditions, competition, worldwide demand, labor costs, energy costs, and import duties and other trade restrictions, influence prices for our raw materials.

Numerous factors beyond our control, such as general economic conditions, competition, worldwide demand, labor costs, energy costs, and import duties and

other trade restrictions, influence prices for our raw materials.

We have not always been able, and in the future we might not be able, to increase our product prices in amounts that correspond to increases in costs of raw materials.

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Declines in construction activity or demand for our products could materially and adversely affect our business and financial condition.

Changes in the U.S.

political or regulatory environment could affect the availability of government funding, which could negatively impact our business.

Certain of our customers may rely on government programs as a source of funding, such as medical research grants.

Funding from government agencies or government reimbursement programs often fluctuates and is subject to the political process, which is often unpredictable.

Any reduction in the availability or rate of funding or reimbursement, or delays surrounding the approval of such funding or reimbursement, may negatively impact our customers.

We face numerous manufacturing and supply chain risks.

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Suppliers may extend lead times, limit supplies, or increase prices.

If we cannot purchase sufficient products at competitive prices and of sufficient quality on a timely enough basis to meet increasing demand, we may not be able to satisfy market demand, product shipments may be delayed, our costs may increase, or we may breach out contractual commitments and incur liabilities.

In addition, some of our businesses purchase certain required products from sole or limited source suppliers for reasons of quality assurance, regulatory requirements, cost effectiveness, availability or uniqueness of design.

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Significant challenges of conducting business in foreign countries include, among other factors, geopolitical tensions, local acceptance of our products, political instability, currency controls, changes in import and export regulations, changes in tariff and freight rates and fluctuations in foreign exchange rates.

The effects of geopolitical instability, including as a result of Russia's invasion of Ukraine, may adversely affect us and heighten significant risks and uncertainties for our business, with the ultimate impact dependent on future developments, which are highly uncertain and unpredictable.

The effects of geopolitical instability may adversely affect us and heighten significant risks and uncertainties for our business, with the ultimate impact dependent on future developments, which are highly uncertain and unpredictable.

Ongoing geopolitical instability could negatively impact the global and U.S.

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If geopolitical instability adversely affects us, it may also have the effect of heightening other risks related to our business.

In response to the military conflict between Russia and Ukraine that began in February 2022, the United States and other North Atlantic Treaty Organization member states, as well as non-member states, announced targeted economic sanctions on Russia.

The long-term impact on our business resulting from the disruption of trade in the region caused by the conflict and associated sanctions and boycotts is uncertain at this time due to the fluid nature of the ongoing military conflict and response.

The potential impacts include supply chain and logistics disruptions, financial impacts including volatility in foreign exchange and interest rates, increased inflationary pressure on raw materials and energy, and other risks, including an elevated risk of cybersecurity threats and the potential for further sanctions.

Legal and Regulatory Compliance Risks

Our global operations are subject to the laws and regulations of numerous domestic and foreign jurisdictions.

Failure to comply with such rules may have a material adverse impact on our business and results of operations.

We maintain operations internationally and are therefore subject to laws, regulations, and other measures in the United States and other countries.

These laws can vary substantially from country to country and change from time to time.

Failure to comply with these regulations could adversely affect our business.

Under these laws and regulations, including economic sanctions laws, export laws, anti-corruption laws, anti-money-laundering laws, customs laws, and other laws that govern our organization and its operations, various government agencies may require export licenses, may seek to impose modifications to business practices, including cessation of business activities in sanctioned countries or with sanctioned persons or entities and modifications to compliance programs, which may increase compliance costs and may subject us to fines, penalties, and other sanctions.

A violation of these laws, regulations, policies, or procedures could adversely impact our business, results of operations, and financial condition.

The nature of our international operations also subjects us to local, state, regional, and national tax laws in jurisdictions around the world.

Significant judgment may be required in determining our worldwide provision for income taxes.

Tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied.

Any changes to tax laws could have a material adverse effect on our tax obligations and effective tax rate.

Our income tax obligations could be affected by many factors, including, but not limited to, changes to our corporate operating structure, intercompany arrangements, and tax planning strategies.

Although we have implemented policies and procedures designed to ensure compliance with these laws and policies, there can be no assurance that all of our employees, contractors, channel partners, and agents have complied or will comply with these laws and policies.

Further, we cannot predict any changes to these laws and policies or their interpretations in the future.

Significant changes to these laws or policies, or violations of existing laws and policies by our employees, contractors, channel partners, or agents, could result in material adverse effects on our business and results of operations.

Changes in U.S.

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trade policy could result in one or more foreign governments adopting responsive trade policies making it more difficult or costly for us to import our products or raw materials from those countries.

The new tariffs and other changes in U.S.

trade policy during the first half of calendar year 2025 have triggered retaliatory actions by affected countries, and foreign governments have instituted or are considering imposing tariffs and trade sanctions.

This, together with tariffs already imposed, or that may be imposed in the future, by the U.S., could require us to increase prices to our customers which may reduce demand, or, if we are unable to increase prices, result in lowering our margin on products sold.

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in amounts that may be in excess of the FDIC insurance limit of $250,000.

Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry of the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems.

Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties, other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems.

In the event of a failure or liquidity issues of or at any of the financial institutions where we maintain our deposits or other assets, we may incur a loss to the extent such loss exceeds the FDIC insurance limitation, which could have a material adverse effect upon our liquidity, financial condition, and our results of operations.

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While we believe we successfully navigated the risks associated with the COVID-19 pandemic and were able to successfully maintain our business operations, the extent of the impact of future COVID-19 variations or other pandemics on our business and financial results is, by nature of this type of event, highly uncertain.

The sweeping nature of pandemics makes it extremely difficult to predict how and to what extent our business and operations could be affected in the long run.

The sweeping nature of pandemics makes it

extremely difficult to predict how and to what extent our business and operations could be affected in the long run.

Our workforce, and the workforce of our vendors, service providers, and counterparties, could be affected by a pandemic, which could result in an adverse impact on our ability to conduct business.

19 unchanged sentences

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